Sunday, January 17, 2010




Akhtar Ali


In 1996, I wrote a book, The Political Economy Of Pakistan, An Agenda For Reforms and Restructuring, in which I made some submissions and proposals in this respect. Personal Insurance is not a very popular concept in Pakistan. Mostly industrial assets and vehicles are insured against theft and fire etc., and that for banking reasons mostly. Employees Old Age Benefit Insurance (EOBI) was launched for the benefit of employees in manufacturing and services sector. To date 400,000 workers are benefiting under the scheme with health coverage and old age pension. Mostly large companies have come under the ambit of EOBI. There is massive corruption in EOBI,wherein the EOBI inspectors and officials collude with company owners to under-register and under-pay the annual dues. Still EOBI is providing some benefit and coverage to the poor workers.

Industrial workers in the organized sector form a very small part of the workforce. Bulk of the workforce is engaged in the following sector; a) agriculture, b) construction, c) service and trade, d) domestic workers, e) self employed and informal. Most of the workers in these sectors are not formally employed as company employees. They are mostly payed on contract or daily basis something should be done to cover them in some sort of Insurance scheme.

In the current economic thinking, in addition to the long drawn trickle down effect, direct support to the poor and building social safety nets have become an accepted approach. Benazir Income Support Program (BISP) has been launched and is being widely acclaimed domestically and by international donor community.

Lack of formal employer is a major constraint to expanding insurance net to the aforementioned sectors of agriculture, trade, construction etc., wherein the employers are too many to deal with. Levying a modest insurance cess (tax) on agricultural commodities and construction material could be a feasible way of mobilizing  resources for this purpose ie., paying the premium for insurance. Ready candidates for such cess /taxation would be cement, steel and fertilizer. A token premium should also be collected from the participating workers ie., a ta rate of Rs. 100- 200 per month, and a premium of Rs.4000-5000 per year should be paid from the funds generated from the proposed cess. Private sector insurance companies (large and responsible ones) should be involved, otherwise the scheme would be wasted either by inefficiencies and corruption of the public sector or fraudulent practices of the small insurance companies ala third party vehicle insurance.

Voluntary schemes could also be promoted especially for the domestic workers. They should be 30-40 population clusters in Pakistan of well to do and rich families which employ bulk of the domestic workers, as maids, cooks, chowkidars, gardeners, drivers, and cleaners. At least 1 million domestic workers should be working for the well to do, who may be encouraged to pay insurance premium of Rs. 200 – 300 per month per employee. It could even be made a legal requirement as well. NGOs and large insurance companies should be employed to enlist participants- employers and employees. A token premium could also be charged to the insured workers as mentioned earlier.

Fortunately there are government plans on the anvil to introduce health insurance scheme for the workers in the informal sector. A NGO with financial support from the Clinton foundation has also started working to promote and establish workers health insurance. More of such voluntary efforts should be encouraged along with the required  initiatives in this respect.


Saturday, January 16, 2010

Political Participation And Party Membership

Political Participation And Party Membership:


Akhtar Ali.


The common impression is that political parties in Pakistan discouraged general membership, and prefer to have “core workers”. The possible reason for this is the apprehension that the party may be hijacked by some “interest groups” who may manage to mobilize general party workers who may not be as ideologically committed to parties’ mission, characters and ideology, as core workers would be. Nevertheless, large pool of workers is required to maintain party organization and win elections. Thus there is a varying level of motivation to induct party members and launch membership campaigns. Reliance is usually made to induct members through personal contacts.

The ambivalent attitude is also reflected by lack of proper membership registers and databases of party members, and accurate statistics thereof, as we find this in established democracies.


Following estimates of political party membership are usually guessed by commentators;

  PPP                     20, 000.

  PML (N):           100,000.

  MQM     :            50,000.

  Jamaat E Islami: 25,000.



                             Required Number Of Workers For Political Parties :



%Votes polled 2008

Potentially allied electorate million

Required no of workers @


Guess estimates no of workers.






































Total Registered Voters
















Admittedly, the political participation in most European countries has come down from a high level in 1960s to a much reduced level in 2005. In 1960s in Austria and Scandinavian countries, political participatory rate used to be between 15-25%, which came down to a level of 5-20% in 2005. In the UK, participation rate in 1960 was 10% and came down to 2% in 2005. In Italy it came down to 4% from 12%, in Germany, the rate increased 4% in 1980s and came down to 3%; in Netherlands from 9% to 3%. A general average for Europe can be taken as 4 % that is 4 political workers out of every 100 electorates (voters).

In India, with a population of 1.0 billion and registered voters 671 million have some 60 to 80 million estimated party workers, which is more than 10% of the electorates.

In Pakistan, at a participation rate of 4%, both PPP and PML(N) should have 1.0 million strong party workers , each a slightly more. As against these members, PPP has 2% of the required number and PML 10% of the required number. By comparison in India, BJP had 30 million workers in 1980,  Shiv Sena 5 million and Congress 15 million.             

Without a strong worker base, the political parties cannot mobilize public opinion and much less resist military coups, which is a frequent requirement of political parties in Pakistan. Infact absence of core workers in required numbers is one of the major reasons, the military dictator is able to assume power so swiftly and amicably without any resistance. Military dictator goes away only when general discontentment against him and his policies becomes too widespread.

Recent success of lawyers’ movement is a case in point, proving what an organized force can achieve in the context of popular support.

If democracy is to be strengthened and re-enforced and military coups resisted and repulsed, political parties will have to strengthen their cadre by;

a)   enhancing the numbers

b)   training and motivation

c)    indoctrinating the workers with party ideology and programme.


Fortunately Pakistan Peoples Party and Pakistan Muslim League (N) have started

their membership campaigns under strong competitive pressure. We wish them success. Democracy has started paying dividends and right kinds of incentives have already started operating. It is hoped that the democratic order sustain and flourish.

Tuesday, January 12, 2010

Bankruptcy Of Punjab Government

Bankruptcy Of Punjab Government; Is It Real?


Mr. Parvez Ilahi, former chief minister of Punjab has alleged that the government of Punjab has become bankrupt, which the latter has denied. Finance minister, Mr. Shaukat Tareen has however confirmed that (excessive)  overdraft has been converted  into a long term loan at an undisclosed rate of interest. Nevertheless this is a debt. The figures on government of Punjab’s borrowing have not been released. What is bankruptcy , simply speaking, when you cannot pay your immediate dues, your cheques are dishonored. By this yard stick, Punjab government is not bankrupt. However it may have bust it’s borrowing limit. State bank of Pakistan is responsible to define and enforce such limits, which is keeping mum on the controversy. It should release the factual details.In an article, former deputy governor Ashraf Janjua has detailed the modus operandi of State Bank of Pakistan in this respect. However what seems to bbe lacking is a clear cut formula. Borrowing should be related to the assets or size of the economy.

In Germany, maximum borrowing of federal government has remained under 2.9 % of GNP over the years and of the US this limit is 1.8%. In India, states and provinces borrowing limit is 4% of the state’s GDP, and seems to be working well. Why do not we define such a straight forward formula?

Saturday, January 9, 2010

Local Government

Local Government..the New Order.

Akhtar Ali.

The new claimants to power, the Pakistan Peoples Party, the Muslim League (Nawaz), and the Awami National Party have shown hostility to local government dispensation as architected by the Musharraf regime. Traditionally the military dictatorships have patronized the local government to legitimize their rule and tried to replace the provincial and national leaders by the local   smaller leaders and new entrants. This hostility of politicians to the local government system is understandable and natural but is misplaced for obvious reasons recounted in the latter passages.

The main objections of the new provincial governments and the major parties are as follows:

  1. Local governments are corrupt.
  2. Provincial governments’ writ in the districts has been limited by the new LG system.
  3. Due to lack of executive magistracy (which they are proposing), it has become very difficult to exercise administrative powers in law and order, curtailing smuggling etc.
  4. Police has become more or less independent or autonomous due to confused control by Nazims and Public Safety Commissions.
  5. Overall provincial powers have been reduced.
  6. Performance and efficiency in the new LG system has been limited to specific sectors such as roads, and other devolved functions in education and health have suffered. Also all districts have not been able to perform well.

The new LG system seems to enjoy passive support from a wider circle of stake holders. The earlier criticism starting from total catapulting of the system has been replaced by a more balanced desire for meaningful modification of the system.

The ultra-new system has been negotiated over the past many months among the supporters and the opponents .Reportedly the proposed changes are to include the following:

  1. Curtailing the power and visibility of  Nazims wherever possible.
  2. Only including the classical functions of municipal domain like roads, water, sewerage, solid waste, excluding health and education.
  3. Somehow reviving the executive magistracy and bring in a provincial official in the districts, equal in power or more powerful than the elected Nazim.
  4. Slow down financial transfer to Local government, make it financially dependant on a daily basis .Thus paving way to partial throttling, a real destructive feature, but may be popular among the new.
  5. Bring in police function under total and direct control of the provincial home department.

One may tend to agree with the opponents that in the area of education and health no significant achievements have been noted. Perhaps it is part of the general apathy  to these two vital sectors despite proclamations to the contrary. Provincial governments may restore the formal system. But would that improve performance and service delivery. In both these sectors of education and health, policy  as well as implementation are equally important. A creative combination of shared powers and functions maybe developed to recognize the realities of policy versus implementation.


On corruption, no argument can be won or lost on this basis. All are equally corrupt, more or less, although there could be many exceptions. Various groups vie for powers to benefit from corruption.


Executive magistracy is an anachronistic colonial instrument regrettably supported by democratic forces. It is against the constitution and would not be permitted by the judicial challenges. Revival of the DMG (District Management Group) as DCs, and making the elected Nazims subservient to the former, is a sweet music for the DMG.

With the passage of time perhaps, the democratic forces, ruling and not ruling, would realize, that it is not in the interest of democracy and political power to make such changes. It has always been debatable that the police power should be entrusted to a partisan political leader, although police commissioners are elected official in the US system. However, the local conditions are different. It is hard to find a comparable, independence, maturity and integrity in one requirement.

Police could be reverted to the earlier system, but with oversight of stakeholders at the local (police station), district and provincial level, be it Public Safety Commissions or Panchayats or Committees, to thwart misuse of power by individuals or government itself.

Citizen Community Boards (CCB) have not proved to be either effective or without stigma. Citizens are not really “citizens” usually; they are special vested interest groups which manage to be inducted in the system and monopolize and exploit power and finances. Involving “people” directly in finance or execution of projects having money in it, never works. People can be good for oversight and their role should be restricted to that. CCBs may either be done away with, or modified to be oversight bodies without financial handling.

Finally and most importantly, popularly elected Local Governments are a part and parcel of the democratic system. It broadens, deepens and strengthens democracy, freedom and self rule. All democratic institutions including independent media and judiciary may at times appear to be uncomfortable to deal with, but are part of the democratic whole. Politicians and political parties should take a long term view, devoid of current and temporary loss or benefit, own the local government system and build their stakes in it.


A fundamental issue that has emerged is the primacy of power between an elected Nazim and the appointed official called, DC/DCO i.e., who reports to whom or who fires whom. In previous local body rules, Mayor used to be fired by provincial chief executive under the recommendations of the deputy commissioner (DC).Why is there so much interest in bringing the bureaucracy back by the politicians who complain to have suffered at the hands of bureaucracy and the establishment? From the point of view of the provincial governments , Nazim is a discontinuity and impediment in their power continuum leading to the districts and tehsils .A bureaucrat like a DC or DCO can be completely subservient to the dictates and directives from the CM’s or ministers’ offices , even on sundry and routine matters. The true power that is much enjoyed by our governing elites is to be able to muddle at the UC or tehsil level for awarding favors to the supporters and retributions to the opponents and getting involved in the hiring, firing and transfers of teachers, low level officials, doctors and nurses employed by the government. A Nazim is at best an inconvenience at his best and a hurdle at worst. Nazim can be from another party or may be too independent in his working style, even if he belongs to the same party. Nazim is elected by people and does not depend on the powerful, as usually DCs and DCOs do, for their promotions and assignments. A lot of structure has come to exist at the local government system which would resist and oppose domination and interference from outside.


In the NWFP and Sindh, the local bodies or government issue is a political one ,while in Punjab , it has probably more to do with the personal style of governance of the CM Punjab than any political preference of PML(N)., which may infact suffer politically due to an unwarranted opposition to an elected institution. Infact in the province of Sindh, with a coalition government in the saddle, there are significant chances of emergence of a compromise formula, and a fair and a balanced deal, taking care of the points of view of both the coalition partners. However in the other two provinces, the local government system appears to be at the mercy of the provincial governments who have been given the powers to architect their own versions of the system, seem to be hell bent to pervert and dilute the system, as there is no viable force in support of the system. At the end of the day, there may be two or more versions of the system, which may not be as bad as it may sound. There would be competition. Eventually one would win and the other will lose and go down with its supporters.


The notion that provincial governments have no role or power in the functioning of the system is not correct. They have a lot of financial and administrative power. Most of the local government employees and officials like EDOs  are the employees of the provincial government , although ideally there should have been a local government service cadre , which would also have been under provincial control for the economy of scale reasons. Provincial governments can enhance their role by taking interest in the monitoring and evaluation of projects and the line departments, even though they may not be formally involved in the execution of the projects. Monitoring and Evaluation (M&E) is an important function which can make a very useful and vital contribution to the operations of the departments and their programme and projects.

Although there are all kinds of forms, the practice of M&E is not very established in the provincial and federal governments. Only the foreign funded projects receive a modicum of M&E .


It is widely known and accepted that the local governments with some possible exceptions have not  been able to do any headway in the social sector .,or the local governments have not been as vocal in recounting their contribution in this respect , as they have been in other areas. Education is a classical loser in this country, no matter who rules at what level. Either we are not sufficiently interested in it, or are at a loss as to how to improve performance and achievement in this sector. Comparatively, perhaps, health sector gets a slightly better deal, because the patients’ sufferings and pressures manage to eke performance out of the respective departments. Instead of trying to take over the classical functions of the local bodies system, it is in the social and even economic sector that provincial governments can deliver comparatively better than the former. Some creative apportionment of functions could also be developed in these sectors, like supervision of school committees etc.


DC-the Development Commissioner and not the Deputy Commissioner.


Instead of attempting to revive the rather anachronistic executive magistracy and the deputy commissioners, it is suggested that the provincial governments appoint development commissioners in the districts, which ironically have the same rhyme and acronyms as the erstwhile DC. The function of this new DC is proposed to serve as eyes and ears of the provincial government, coordinating, horizontally and vertically among various tiers of the government, local, provincial and federal, mostly in connection with the development projects, but occasionally entrusted for some duties of operational nature. This DC would not be a part of the local government but would be a provincial official .Development projects of small and backward districts have traditionally suffered due to the lack of a supporting institution as has been proposed. It would be a great way of boosting development activity, simultaneously keeping the provincial governments informed of the performance of the local governments , albeit in the development sector. Are we ready for some creative and innovative additions?