Dr. Faisal Bari
Within public policy making circles in the country, it seems that the more things change the more they stay the same. And policy making, instead of being based on evidence and clear thinking, is almost always driven by the short term imperatives and hence ends up producing too many unforeseen consequences, unintended results, and doing the same things over and over, including making the same mistakes again and again. But, while it might have unintended consequences, policy choices always seem to benefit the minority in power, connected to those in power and forming the elite of the country.
Maybe a few examples will help us understand the issue. Recently a provincial government has announced that it is thinking of reintroducing public transport system in the larger urban areas. The argument, of course, is that it is almost impossible to manage the traffic in even a reasonable sized city of today without a well functioning public transport system. One can take as many examples as one likes, from the developed world or the developing, and almost of these will confirm the hypothesis given above. But was it not the same set of people who had decide, barely a decade or so ago, that public transport was too expensive and inefficient and the cities of Pakistan should have private transport only. The Punjab Urban Transport Corporation (PUTC) was dismantled and then lucrative contracts were offered to private sector providers of transport. What has changed in the last decade?
Of course we saw how the experiments in provision of private transport have gone. The fares went up on all routes, many routes were underserved, a lot of companies made good profits, there were some concerns, largely ignored, about lack of regulation of the private companies and their drivers, more people were forced to buy their own transport, increasing traffic congestion issues, parking space issues and environmental issues; but in the end, we have come to the conclusion that we need public transport provision, as in most big cities around the world.
One of the experiments was even more instructive. In Rawalpindi and Islamabad we had the entire saga of Varan played out for the public. A private firm was given a contract, there were a lot of issues with the quality of service the private party provided, there were issues of the rise in fares as well, but most importantly, there were a number of incidents related to the safety of service being provided by Varan: many innocent people were injured or died in accidents involving Varan buses. And then there were battles between the government and the company in question, Varan pulled out of providing the service and now, after a number of years, it is coming back. But, and this is the interesting part, through all of this saga, have we learnt how to handle private provision, have we created a more effective regulation mechanism that is going to look out for public interest now that Varan is coming back, or have all of these things been swept under the carpet.
Even more importantly, in all of this process who suffered and who made money? Clearly owners of Varan did not go broke, nor did the policymakers, bureaucrats or politicians suffer any consequences for poor policymaking. It was the people who got injured or killed in the process and people who could not get cheap, reliable and dependable transport in the city who suffered. Similarly, who gained from the closing down of PUTC? The bureaucrats if they did not gain anything from awarding large contracts to private service providers did not lose anything as well. The public lost cheap service. The private parties made profits, as they should have of course. Selling off the property that PUTC had in the city and around (there used to be a bus depot on Ferozepur Road in Lahore a couple of decades ago) must have fetched money.
If the government is going to bring back public transport now • and an efficient public transport system is essential for improving the traffic, fuel, and environment concerns • it may end up benefiting a lot of policymakers, importers, and companies again. But one hopes that the people will benefit from this decision as well. Since we have not heard of how the provision is going to be better regulated and managed this time round, one remains sceptical about the outcomes being promised.
The issue is not limited to transport only. Over the years, in most areas of public policy shoddiness, short-sightedness, and corruption (if public interest is not paramount it is corruption) has been visible everywhere. The finance minister recently said that the government is planning to privatise a lot of public enterprises on an accelerated basis in the next year. The parties now in power were opposing different tenants of the privatisation programme of the pervious government when they were in opposition. Since they have not announced how their privatisation process has been or will be altered and if the lacunas of the last government’s policy have been removed, what should one make of the minister’s announcement? Have we come up with a better regulatory regime? Or are we going to have a repeat of the Steel Mill case?
We privatised the cement sector in the 1990s. Since then how many times has the Monopoly Control Authority (MCA) investigated the sector and pronounced against them that the firms in the sector have been involved in price fixing? And even the new Competition Authority has investigated the sector; but have we come up with a better regulatory mechanism for dealing with such things? Of course, not. Yet we are going to go ahead with an even more aggressive programme for privatisation because the short-term imperative of the government in power demands that some cash be generated against the family silver that remains. Public interest be damned and the future as well.
Punjab government has announced that in a bid to improve the public sector education system it is going to upgrade a number of existing schools into “model” schools. The aim of improving public sector education system is laudable: clearly we need to do that. But how did the minister come up with the idea that it is by creating a certain number of “model” schools that the improvement is going to happen through? Where is the evidence for it? We have had the Central Models and other schools like it for a long time now. They might be good schools in themselves but where is the evidence that suggests that such a move will improve the entire system of public schools in the province. Or was it just the case that the government needed to announce something on the burning issue of school improvement and this was the only policy option that had not been tried for a number of years, and especially by the previous government and so it was picked up, dusted and announced. A better option could have been: i) a review of what the previous government had tried such as Parha Likha Punjab, vouchers through PEF, and so on, ii) a debate on what looked promising and what did not, and then iii) announcement of a policy based on the results of the debate.
One could go on to examples from social protection area too: Zakat and Bait-ul-Maal and now the announcement of Benazir Cards by federal government and Food Stamp Programme by the Punjab, but it would be a case of belabouring the obvious.
It is not the case that in any of the issues mentioned there is not enough evidence that could guide policymaking. We know public transport is important for sizeable cities, there are hundreds of cities in hundreds of countries that are running such systems as well. We know public education is a must. There is hardly any country in the world where the responsibility for primary and secondary level education is not, almost exclusively, with the government. We know how regulatory mechanisms need to be independent and need to be set-up prior to privatisation (and not after or during privatisation of the sector). We know that these things take time and consistent effort to set-up and improve. But, we carry on going round in circles, repeat the same basic mistakes, and continue to benefit the few at the expense of the many.
Will the new governments, coming in the wake of many years of martial rule and new awakenings in the middle-class, break these shackles?
The writer is an associate professor at LUMS and an economic analyst
The Nation, 7/7/2008