Friday, September 30, 2005

Economic Decision Making Process

National Economic Literacy & Budget Analysis Group formed in PDI- Actionaid Workshop

Karachi: Leading economists, elected representatives and civilsociety activists Pakistan have observed that economic policydecisions are taken by the nexus of civil military bureaucracy, rulingclique and multilateral institutions in Pakistan with no participationof civil society, opposition political parties, academia and otherimportant sections of the society.

Such observations were made in a "National Consultative Workshop onEconomic Literacy and Budget Analysis" jointly organized byParticipatory Development Initiatives (PDI) and Actionaid Pakistan onThursday in a local Hotel. The participants of the workshop formed anational level civil society 'Economic Literacy and Budget AnalysisGroup [ELBAG] with the objective of ensuring involvement of the commonpeople in the economic policy making and budget analysis processesthrough action research, capacity building, awareness, publications,advocacy seminars, conferences, workshops and other policyinterventions.

Those participated in the workshop included Senator Prof. GhafoorAhmed, Ex-Snator Mr. Taj Hyder, Mr. Mohamemd Hassan Mihniti MNA, Mr.Peter Cosgrove of Agha Khan University, Dr. Ahmed Nawaz Hakro ofQaid-e-Azam University Islamabad, Prof Mushtaq Mirani of SindhUniversity, Mr. Nasir Mansoor of Labour Education Foundation, Mr.Ashfaque Qureshi of Sindh Development Society, Mr. Srtaj Abbasi ofRootwork Balochistan, Mr. Habibullah of Devcon, Mr. Hyder Hussian ofSocial Policy and Development Center ( SPDC), Mr. Zahid Mengal of AzatFoundation Quetta, Mr. Mueed Ahmed of SDPI Islamabad, Ms Tahira AKhan and Adam Malik of Actionaid Pakistan, Mr. Sikander Brohi of PDIand others.

The participants of the workshop observed that mega projects underPublic Sector Development Program are initiated under politicalconsiderations without properly looking into the merits and demeritsof such projects. In many cases projects are initiated withoutpreparation of their feasibility report and PC-1 especially in thecase the project is initiated on the instructions of Prime Minster,president or other influential government leader. In many cases theobjectives of the projects usually do not correspondent to PublicSector Development Plan. Project completion report [PC-4] is neversubmitted to the Planning Commission. Report of the actual benefitsrealized from a project [PC-5] is also not submitted to the planningcommission and political influence works during the process ofincluding the project in the PSDP.

They further said that in many cases Cabinet takes important decisionsin place of the parliament including decisions on trade policy,investment, industry agriculture etc. They said that Parliament is thesupreme body but the economic decisions made by the parliament arealso modified by the Economic Coordination Committee of the cabinet.While discussing the role of multilateral donor agencies theparticipants observed that tying aid to specific projects by thedonors adversely affects the economic situation of the country. Forexample equipments and materials are to be purchased from the donorsand consultants are also hired from the donor country or institutions.Similarly Structural adjustment Programs, privatization andliberalization programs also affect the economy and hit the jobs andlivelihoods of the common people

They added that projects and programs are not usually formulated inthe national interest. The directives of prime ministers, insistenceof the donor community on certain programs and involvement of theministers and influences the decision making with regard to theproject / program initiation and funding

While discussing the budget process they said that no civil societyparticipation in the budget process. So-called discussions are heldwith only Chamber of Industries and Chamber of Agriculture. AssemblyMembers are not involved as they are handed over the documents on theday when the budget is presented in the assembly. Only two days aregiven to go through these technical documents, they added. They saidthat when the opposition members raise their voice during the budgetsessions ruling party members are compelled to oppose the suggestionsand objections of the opposition members even if the suggestions arevaluable. The assembly members have only authority of raising cutmotions. They have no authority for asking for the increase in thebudget of any sector. Even the Cabinet does not properly discuss thebudget as the documents are presented in the cabinet meeting, theyfurther added

In the conclusion the workshop participants recommended that civilsociety members, technocrats, opposition party leaders and therepresentatives of different sections of society should have properrepresentation on different economic decision making forums of thecountry including Planning Commission, Central Development WorkingParty (CDWP), Executive Committee of the National Economic Council(ECNEC) and National Economic Council (NEC). Civil societyorganizations, elected representatives and the representatives ofdifferent sections of society should be actively involved in thebudget making process right from the outset of the process. The elected representatives should be involved in the decisions withregard to taxation and expenditures in the budget and there should bea brainstorming session for the Assembly Members before thepreparation of the budget document. Parliamentarians should beinvolved in a more comprehensive way in the budget planning processthrough committees, debate, monitoring/oversight. Budget policies andpriorities should be set up at least 2 months in advance of the budgetspeech to allow full debate before the new fiscal year. Consultativecommittees comprised of elected representatives, civil societyorganizations and representatives of different sections of societyshould be established and should be chaired by the Ministers ofrespective departments, to allow continuous input into the budget.Discretionary powers of the executive as regards modifications to thebudget should be reduced and Parliament should approve anymodifications, including supplementary budgets, prior to expenditurestaking place. National security should be defined more narrowly toensure parliamentary accountability in defense budgets (e.g. salaries,administrative expenses, perks)

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