ISLAMABAD: The government is considering inducting experts from the local market and abroad into all economic and technical ministries to replace the existing generalist cadre of federal secretaries and their immediate subordinates to create an efficient and modern government structure capable of steering the country out of the prevailing governance challenges.

Sources told Dawn that international lenders working with the government on structural reforms have recommended adopting the best international governance structures in which bureaucrats serve as facilitators to the private sector based on research and data-based decision-making rather than creating trouble through their control and power.

As part of the advice, the government has already taken the first step by inducting the federal secretary from the private sector to the Ministry of Information Technology and Telecom. The ministries of energy — both petroleum and power — finance, commerce, water resources, climate change and aviation are expected to follow suit.

The sources said it had also been felt at the Special Investment Facilitation Council (SIFC) — a newly created body of civil and military leadership — that the present-day bureaucracy was not capable of taking the country forward.

International lenders advise govt to adopt best governance structures

Several cases and proposals come before the government from various quarters, but get stuck or pass through the process without quality input based on best market practices because the secretary is not necessarily an expert in the field.

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Most of the critical federal ministries, particularly those on the economic side, have long been in control of the Pakistan Administrative Service (PAS) — formerly the District Management Group (DMG). For example, dozens of PAS-DMG officers have led the crucial Ministry of Finance for decades with no more than one exception.

“The mindset needs to be changed from exercising power for permits and approvals to target-oriented performance indicators on a yearly basis,” said a cabinet member familiar with the discussions. The World Bank is the key lender supporting Pakistan’s structural reforms through loans, grants and technical assistance.

They should be given targets each year, and their performance should be evaluated based on outcomes and problems solved, not months and years of completed tenure. The proposed inductions would be on the pattern of undersecretary of state in the United States, where highly qualified professionals of relevant fields are given top bureaucratic positions to improve the efficiency and output of the government.

In doing so, the government may also transfer the powers of the principal accounting officers (PAOs) from the federal secretaries to ministers who should be answerable to the cabinet, the prime minister and parliament for their decisions.

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The sources said the recent appointment of a PAS officer as head of the Federal Board of Revenue (FBR) instead of a taxation expert did also not go well with the lenders. The tax authority already suffered around Rs100bn revenue shortfall in August.

The sources said the revenue collection, according to lenders, should be driven by data and research and had appreciated the hiring of a few consulting firms by the government, but wanted this to be institutionalised.

This had to be applied to other fields as well, and decision-making should be based on targeted studies as other countries were doing in modernising their economies, including in the Middle East, where all economic, commercial and financial decisions stand outsourced to consulting firms of respective fields instead of political considerations.

“The political leadership should look at the broader policy direction,” an official said while referring to lenders.

Published in Dawn, September 19th, 2024