An interview with Dr Nadeem ul-Haque, former deputy chairman, Planning Commission

Nadeem is no stranger to Pakistan’s economy. A former IMF economist whose last full-time position in the government was as deputy chairman Planning Commission during 2010-13, where he launched the widely appreciated, ‘Framework for Economic Growth’, a project that was left unimplemented by his political bosses. Earlier, in 2007, he had also held the position of vice chancellor of Pakistan Institute of Development Economics (PIDE).

Given Nadeem’s penchant for bashing the existing civil service system, BR Research decided to pick his brains on how and what he would like changed, now that the ruling party has decided to fix the cogs of governance in this country. This discussion is mostly on civil service reforms, but ancillary topics - such as who can bring the change or setting up a market place of ideas – also feature in the edited transcript below.

 BR Research: You have been very vocal against the civil service system. What is your basic proposition?

Nadeem ul-Haque: We have a 19th century system. We are a people who have preserved colonialism, while the world has changed. We have become an independent country, we moved into the 21st century, our technology has changed, the people’s aspirations have changed, and so have their lifestyle. But we have retained a 19th century government machinery – both civil service and the legal system - and the 19th century governance mindset to carry us into the 21st century.

Perks is another legacy of the colonial era. This business of giving land to civil and military bureaucracy is the hallmark of a colonial era when the white masters used to bestow their generosity on display of loyalty by their civil servants who became the brown sahibs. That should have ended with independence. No respected nation in the world follows this model today; every country gives straight cash salary with some on-job privileges such as health and communication. That salary should be good enough to attract top talent in the government.

BRR: Is there a problem with how civil servants are selected?

NH: The civil servants in Pakistan are obviously competent and go through competitive exams. But those exams were for a different purpose. In the colonial era, the obligations of the state were to control the local land and population and extract maximum resources to take them out of the country. We are now in the 21st century, and we still have the same civil service that was meant for magisterial and extraction purpose.

A modern state has to meet the demands of public services delivery. The civil servants are now asked to manage health, education, urban design, a diverse set of SDGs, regulation, international obligations, and so forth for which they have very little competence. For example, managing a public transport system of a city is a very complex thing; it’s not the same as managing a rural society; it requires specialists. The irony is that specialists of various fields cannot enter the existing system. If they get into the system, they are treated as second class citizens or pariahs.

BRR: Is there a flaw in the structure as well, in terms of say organogram of the system? 

NH: Yes! Many. For example, district was a unit of control in the colonial era. That district was for a rural setting such as villages and tehsils, with little complex behavioural patterns. Today, we have several large cities. Our population is heavily urbanised where some scholars using satellite data say our urban population is about 70 percent. Lahore is larger than New York. Karachi is the 5th largest city in the world. Yet we are trying to manage it like a rural district where we have a DC, or a commissioner who has no idea how to professionally manage a large urban centre and its requirements of housing, health and education.

Another example of a flaw in the structure is that we have a centralised civil service system in the middle of a decentralised government that came about after the 18th Amendment. This mistake was done by the Musharraf government when they experimented with local government, and it is being repeated by the current government. No reforms will ever work, if we keep the civil service centralised in the form of colonial era.

BRR: What solution do you propose?

NH: My first thesis is that everything has to be simple because if you complicate it, it becomes useless. We need absolute decentralisation. All three governments - local, provincial and federal - should be distinct and separate and not hierarchical as they are today.  City governments of large metropolis such as Lahore should not have to report to provincial or federal government.

The governments of Lahore, Karachi and other big cities have to be independent. If they want to hire the best treasure in the world, they should be able to do so without getting caught in current web of civil services.

The way the jobs are distributed is that the federal government has all the grade 22 positions. Provincial government only has one grade 22 position. Local government has no position above the grade 18. Because everyone has to report to the Commissioner or the DC, so all the technocrats are below grade 19, which is a disaster. We have to remove this centralisation.

BRR: But Shahbaz Sharif was trying to do the same thing under the corporation model.

NH: His fault was that he was winging it; he was not trying to reform the civil service. We have to have proper reforms, where our city governments are free from any pressure.

They can hire their own people. We can ensure that provincial and federal governments are responsible for policy making, but majority of service delivery should be done locally by very competent professionals. Provincial and federal governments have the role of monitoring local governments through independent monitoring and regulatory agencies. We need a system where everyone is independent yet properly monitored.

What Shahbaz was doing was that he was keeping the DMG and PAS lobby very happy. Let’s not create parallel bodies.

We need to front load the reform. We need a 21st century technocrat who is a skilled person capable of looking at energy and education and SDGs and what not. That person should not have a life time guarantee of employment; he or she can come and go. There should be a framework available to allow lateral entry. In the current system your life is determined at the age of 26. Any competent late thirties globally recognised professional educationalist will not be allowed to be hired in the education department because he or she did not sit for competitive exams.

BRR: What plan for reforms do you then propose?

NH: Reform is always basic; it should be an evolutionary process. If you try too hard and over plan you will run aground. It will never be neat and it will never be fully planned. My suggestion is to start and have champions of change everywhere and let those guys make the changes. Know that those guys will make a mess. Be prepared to correct the mess. There is a lot of research showing that even businesses are a messy business.

As a people we have to learn that change and progress is a messy business and can’t happen without making mistakes. Everybody gets scared of reform that ‘oh it must happen neatly, slowly, sequentially’. All this is pseudo-intellectualism that does not take into account the mess we are already living in. Why are we trying to be safe? There is no mistake-proof way of doing reforms. You can’t make an omelet without breaking an egg.

BRR: Is civil service the reason why policies don’t work in Pakistan? 

NH: There is no such thing as policy unless it is well thought out, well researched, well monitored and well developed. Policy can only be made effective if the civil service is capable of research. Policy cannot be made by donors or multi-laterals or advisory committees.

Think about it, how you learnt trigonometry and algebra. You had to do the sums yourselves. If you had your tutor do the sums for you, then you learn nothing. Same thing applies for policymaking.

We can’t have effective policies unless the civil service makes it, owns it, and understands it. Equally critical is that the policy goes through the cabinet, and the ministers also own and understand it.

Ministers give guidelines and objectives.  Cabinet can then debate it and approve or disapprove it but it has to come from the civil servants because policy making is a technical thing.

One of the problems is that we are all easily impressed by success. But you can’t replicate it. Success only happens when you innovate, not when you replicate. We have to improvise; East Asian countries did not replicate. They innovated and improvised. There has to be a continuous search for solutions that address the evolving nature of problems, for which civil service must be brought into the 21st century.

BRR: You have been critical of the EACs in every government and now also of the Council of Business Leaders. What would be your chosen mechanism to listen to the needs of businesses and the needs of the people?

NH: Councils are a bad idea because you bring in people with vested interests.  These councils do not represent consumers, the poor segments, or anyone who is not a donor consultant. If I go to the council part time, I don’t have my ‘skin in the game’.

The job of the government is to set up and promote the setting up of centres of research and thinking in public and private sector places. That’s whom the government needs to listen to, because they can and should take a wholesome approach to the needs of the businesses, the producers, consumers and presents their concerns to the government.

These centres could be in universities or exist as think tanks. There should also be a research department in every part of the government. I would make sure that every ministry gives out an assessment or a sector report every quarter. I would make sure that the parliament engages in these reports every month.

When the government sets up advisory councils, it implicitly tells you that they are not interested in research. I would start research everywhere and I would begin by creating debate; it will be messy, but it will lead to new ideas and innovation.

BRR: Where do new or original ideas and local thoughts come from?

NH: A fundamental thing that we have come to grips with is that while free markets are very important, these cannot exist without the government. Development is a baby born of two parents: government and the markets. We have to have both a good government and functional markets.

A free market will not produce ideas on governance and regulations, because market has a profit-making purpose.

Those ideas have to come from the institutions encouraged and supported by the governments. One of the reasons why England took over the world that is because its society patronised research at a very early stage.

We still do not patronise research. Our governments should spend 2 percent of PSDP in research funding.

The Chinese have decided to spend 2.5 percent of GDP on research by 2025; they are already at 2.3 percent.

This is a world of research and we have no money for research.

BRR: To that end, how many businesses or industry clusters /associations have funded ideas or research for market’s sake?

NH: None! Because we have 65-year old infants (industries). We have not created competitive markets. The definition of the market place is that there has to be contestability, which happens through fresh entry. Same thing is true for the civil service. We give this 23-year-old kid the right to become a Secretary forever. Why can’t a competent person apply for that job, because we have killed contestability. We don’t think markets.

BRR: Who will bring the changes you are talking about; do the elite have any incentive to change the system on such whole scale basis?

NH: That’s a wrong question. The ‘who’ part comes later once we have understood and decided on the ‘what’ part. Our country is not resilient to change. We do respond to ideas, except that our intellectuals have failed to give ideas. Religious fundamentalism when it comes from the people, even someone like Z.A. Bhutto, a confirmed liberal, succumbed to the dictates of the market place of those fundamentalist ideas.

This is also a failure of the media. Media is so worried by the reality of politics – the he-said-she-said stuff — and so worried about who will do it, that we don’t discuss what needs to be done.