Reforms We Need

Dr. Ikramul Haq

Pakistan was made with a commitment to democracy and development but soon after independence, its founding generation succumbed to greed and political expediency to accommodate the Mullah and make religion central to politics. The following generation (Midnight’s Children) constituted the ignorant, self-centred and hedonistic cult of the of our political parties that has wilfully destroyed all institutions and all semblance of dignity in pursuit of power and wealth— Reform: What, Why and for Whom?, Nadeem Ul Haque

Political parties in Pakistan, learning no lessons from Panama Papers and disqualifications by Supreme Court of Pakistan directly under Article 62(1)(f) of the Constitution of Islamic Republic of Pakistan [“the Constitution”], later overturned in some cases, have failed to undertake internal reforms to purge the undesirable from their rank and file.

The cultism rampant in our political culture gives unquestionable authority to the party head to allow deserters from other parties to join, get tickets at the cost of bona fide workers. The weathercocks (lotas in colloquial term) are opportunists of the worst order. They have no commitment with their voters or manifesto of any party.

The weathercocks possessing huge (many allege dirty) money, invest in elections and then grab more for influencing the top party leaders. Many of them are tax evaders, beneficiaries of loan write-offs and engaged in organized crime. Like bureaucrats and some judges, they enjoy dual nationalities [directly or through siblings]. They keep assets abroad through offshore companies or benamidars. Yet, they were welcomed with open arms by the three leading vote-securing parties in all elections held since 2008.

The successive Chief Justices of Pakistan and chiefs of Army Staff, who matter in the land, in the wake of Constitution (Eighteenth Amendment) Act, 2010, have repeatedly vowed that local elections would be held in time! However, failed to ensure it.  The highest court of the country and hidden hands behind political maneuverings never took an effective action to purge the polity from the undesirables (lotas), who have been availing the tax amnesty schemes and getting loans write-offs as favours. On the contrary, they have been absolved of all cases pending in accountability courts.

The suo muto cases on foreign assets stashed abroad and possessing of dual nationality with huge investments abroad have fizzled out without any bearing any fruits. The rich and mighty with huge money power have been allowed to keep on stealing elections with impunity. The state institutions, supposed to check their suitability, have consistently been proved ineffective, muzzled by those that matter in the land.

The Election Commission of Pakistan (ECP), Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) could not pinpoint the defaulters during scrutiny of election papers, and only Federal Investigation Agency (FIA) on some occasions produced some worthwhile data, but the same was ignored. The voters remained as usual silent spectators having no say in the matter.

Democratization of political parties, transparent elections, accountability of all and supremacy of the Constitution alone can strengthen democracy—this is also necessary to check influence and interference of army in politics. For reforming all institutions and ensure economic progress of Pakistan, it has to be done sooner or later—better now as time is running out fast.  

It is high time that the people should demand all political parties to show maturity by immediately giving up worshipping personalities, who either head or dominate their organisations, desist from mudslinging and abusing each others. They should rather present actionable plans and strategies to ensure free and fair elections.

There should be consensus on one point: we want to make Pakistan a true democratic polity and egalitarian state. For achieving this goal, political parties must debate fundamental and comprehensive reforms in all areas with the aim to move towards the cherished goals of self-reliance and becoming a welfare state. It is not possible to make Pakistan a welfare state unless we undertake structural reforms in the prevailing politico-economic system that unjustly favours the minority elites at the expense of the majority, the less-privileged segments of society.

The outmoded laws need to be repealed and re-enacted. Inefficient justice system needs radical and fundamental changes to ensure that rights and obligations are discharged within the four corners of law. For establishing participative and meaningful social democracy we need to have a fair and just tax system. Taxes should be collected fairly and must be spent prudently providing social justice to all citizens.

We need a roadmap and concrete plans for achieving the much-desired goal of autarky leading to a welfare state. It is high time that we debate to evolve ‘National Manifesto’—a document for a prosperous Pakistan, no matter which party wins the elections, must adopt it for the next five years. This would be a great step towards national cohesion and for extending social security to all citizens.

The most neglected area is establishing democracy within political parties and making election processes transparent. We also urgently need to reform existing inefficient and corrupt institutions—the civil service reforms are long overdue. This requires fundamental reforms in all areas—not badly designed plans or half-hearted efforts. For reaping the fruits of our undeniable geo-strategic, business competitive position in the region and China-Pak Economic Corridor (CPEC), it is essential to change the basic structures of all vital state institutions to deliver and sustain a vibrant society. Reform or perish is our formidable challenge, and we must stand up to avoid the latter.

Reform in one sector ignoring the ills in the others, resorting to improving something at the cost of leaving aside the one interlinked, will not yield desired results. The case of tax reform divorced from elimination of black economy is the point in focus. The main cause of fiscal deficit is allowing an unprecedented size of underground economy to flourish and the perpetual existence of incompetent and inefficient tax machinery. Therefore, reforms in tax administration without routing the causes of parallel economy and vice versa are not going to improve our fiscal woes.

The failure of democracy in Pakistan, among many other factors, is rightly attributable to lack of democratic values within political parties—individuals who openly defy laws and avoid transparency in their affairs dominate them. It is sad to note that political parties, despite criticism from everyone, are not ready to introduce democracy within their ranks. Unless these parties reform themselves by introducing fundamental changes in their working, there is dim hope for meaningful (sustainable) democracy in Pakistan.

In all established democracies, political parties regularly hold elections, publish their audited accounts, file tax returns, disclose details of expenses and names of donors—all these elements are conspicuous by their absence in our political culture. Masses and media must join hands to launch a campaign asking political parties to meet these standards.

The salient points for consideration of all political parties and national debate to evolve a National Manifesto are summarized below:

1. Fundamental reforms in the justice system and in administrative/governance apparatuses to eliminate the causes of litigation.
2. Reforms in civil services, fair deal for employees with effective and across the board accountability.
3. Compulsory public disclosures of assets by judges, generals and high-ranking government officials.
4. Fundamental structural reforms for ensuring efficacy and accountability of all institutions.

5. Revamping of education system to end ignorance and illiteracy, and make people skilful rather than distributing paper degrees and diplomas.
6. Focal point of education should be creating a society that is tolerant, disciplined, courteous and knowledgeable—capable of making innovations and technological advances.
7. Direct elections of Senate and giving it powers to vote on Money Bill.
8. Decentralization of political, administrative and financial responsibility to local governments.
9. Education, health, housing, local policing, and all civil amenities should be provided through elected representatives of the local governments having powers to raise taxes for these purposes.
10. Digitization, transparency and accountability in the governments at all levels to enable citizens to understand and participate fully in the process of national integration.
11. Elimination of terrorism, sectarianism, bigotry, intolerance and violence through enforcement of law and by taking concrete measures to ensure social development of society based on higher values of life and humanity.
12. Strict laws and their effective implementation to curb terrorist financing, money laundering, plundering of national wealth, political write off of loans and leakages in revenue collections.
13. Devising long-term and short-term strategies to break the shackles of debt-trap, making Pakistan a self-reliant economy and ensuring social security and economic justice for all citizens.

1. Reform and strengthening of management of public finances. Transparent public sector spending coupled with efficient performance.
2. Concrete and executable plans for drastic reducing of all kinds of wasteful, non-developmental and non-combat defence expenditure.
3. Reform of technical, institutional and organizational dimensions of public finance.
4. Good governance and corruption free government structures.

18. A National Tax Authority (NTA) should collect all taxes including unified sales tax on goods and services. All federal, provincial and local taxes should be collected through NTA, manned by All-Pakistan Unified Tax Service. NTA should also disburse pensions and other social security payments to all citizens.

1. Reduction in excessive marginal tax rates making them compatible with other tax jurisdictions of the world, especially in Asia.
2. Substantial reduction in corporate rate of tax, not more than 20%. Elimination of onerous taxes and other regulations for corporate sector that are the main obstacles for domestic and foreign investments.
3. Simplification of tax laws and procedures.

What we lack most in Pakistan is open governance that is a prerequisite for participatory democracy. This doctrine recognizes the right of citizens to have access to the documents and proceedings of the government. The access to information empowers citizens to supervise the affairs of the state, performance of the public functionaries and elected representatives. Since 2010, it is fundamental right under Article 19A of the Constitution of Pakistan, though its effective enforcement, like other rights, is still not made.

In financial matters, in this era of information technology all public spending should be available on websites of all the departments/agencies/bodies so that public can scrutinise it. It will enable experts to give their input that would certainly be useful for quality spending. Media will also be in a better position to present facts, rather than creating hypes on conjectures. This would be the true implementation of Article 19A as its scope covers voluntary sharing of information by public institutions.

Access to information is the key to open government, transparency and accountability. We in Pakistan require launching a public campaign that if all the four pillars of State—Legislation, Judiciary, Executive and Media—have to be made accountable, law of Right to Information should be re-enacted allowing access to public record and free availability of what is owned by privileged classes. It will be true implementation of inalienable fundamental rights guaranteed under Article 19A of the Constitution. This alone can help establishing an open government, free of corruption and accountable to voters/citizens responsible for creating it.

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Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.