Reforming the executive-Part II

Ishrat Husain

The writer was governor of the State Bank of Pakistan from 1999 to 2005 and is currently director of IBA, Karachi. He has also headed the National Commission for Government Reforms
One of the main weaknesses of the present system is that once you have entered the civil service at a young age, there is no compulsion to upgrade your skills or knowledge. Career advancement is divorced from skill and knowledge acquisition and application. The promotion and placement policy should be aimed at rewarding those who perform well and demonstrate potential for shouldering higher responsibilities. The promotion policy should lay down the criteria including the weight given to the PER, training and skills acquisition, rotation of assignments, diversity of experience, complexity of jobs, etc. for each level. Training of all civil servants at all levels – cadre or ex-Cadre – should be mandatory and linked explicitly to promotion to the next grade. For this purpose, the existing training institutes will be made autonomous and provided the requisite human and professional training for engineers, scientists, accountants, health experts, educators, economists, etc., will be introduced and new institutes established to fill in the gaps.

A fair and equitable compensation system can not work well unless it is accompanied by an objective performance appraisal system. The current system of annual confidential reports (ACR) has outlived its utility and should be replaced with an open performance evaluation report (PER) system in which the goals and targets are agreed at the beginning of the year, key performance indicators to measure the achievements are established and an open discussion is held between the appraisee and the supervisor on the identification of development needs to carry out the work. A mid-year review is held to assess progress and provide feedback and the annual evaluation is held jointly through a discussion between the appraisee and the supervisor. The appraisee can then sign the report or appeal to the next in line supervisor against the findings of his immediate supervisor. This way the PER will be used mostly as a tool for the development of the individual to meet the needs of the organization. Poor or underperformers should be particularly focused upon to facilitate them to achieve better performance outcomes.

About 100 key public sector institutions in the country such as PIA, WAPDA, PSO, OGDC, Pakistan Railways, etc. have a critical impact on the economic and social outcomes. There have been serious questions about the appointments of chief executives of these organizations. Even when competent individuals were appointed, their detractors or other aspirants who lost out, carried out malicious media campaigns and virtually paralyzed the chief executive from making effective decisions. To overcome this tendency, the governance structure has to be made more transparent and merit-based so that the right man is chosen as the chief executive of the organization through a well-laid down process. A special selection board will screen, interview the candidates and prepare a short list for consideration by the prime minister. This process will minimize arbitrary discretionary powers in appointments, attract capable candidates for these key jobs and discourage the trend of hurling frivolous charges against the selected candidates.

Corruption among the majority of civil servants cannot be curbed by moral persuasion but providing them an adequate compensation package. The present compensation structure whereby officers are grossly underpaid in relation to their comparators and do not earn a decent living wage has given rise to poor morale, a sense of indifference in work, and an attitude of apathy. None of the reforms proposed in the report can succeed unless the compensation package offered to the officer cadre is substantially upgraded. To keep the wage bill of the government within the limits of fiscal deficit, it is proposed that a freeze should be imposed on fresh recruitment to lower grades except for teachers, health workers and police. Although this is a politically difficult decision, but it should also be remembered that high fiscal deficits results in high rates of inflation that undermine popular support for the political party in power. After all, government employment accounts for less than six per cent of total employment in the country and makeshift employment in the public sector cannot satisfy the voters.

The world is moving swiftly towards information and communication technology that is bringing benefits to the lives of the common citizens. E-government tools and development in digital technology offer promising prospects for improving the efficiency of government, reducing the costs of transactions, conveniencing ordinary citizens, introducing transparency and reducing discretionary powers and corruption and tracking the performance and output. Despite such potentially powerful impact of e-government the resistance, reluctance and contrived delay in its adoption are fierce. A modest beginning has been made in an ad hoc manner but a concerted effort steered and guided by the top leadership at the federal and provincial government levels is lacking. Unless serious attention is given by the country’s leadership the pace will remain uneven, the impact will be marginal and the opportunities foregone will be tremendous. The report stresses equally upon training and adaptation by those already working in the government to make the transition from a paper-based environment to electronic filing, messaging, sharing and exchanging of documents, retrieving, reporting and archiving, smooth. Transparency achieved through e-government will also help in curbing corruption and exercise of arbitrary discretionary powers by government functionaries.

Another source of grief to the citizens is caused by uneven and discriminatory application of the government rules, regulations and instructions. As these rules are not known to anyone except some limited number of lower functionaries, they exploit their power of hoarding this knowledge for their benefits. Multiple rules exist on the same subject as there has been no systematic weeding out exercise undertaken. The commission has undertaken such an exercise and weeded out and purged the multiple rules, regulations, instructions and circulars existing in the manuals, updated them and compiled a concise and accurate manual. The establishment manual has already been completed while the finance manual will be ready by December 2008. These will then be uploaded on the websites of the government of Pakistan so that they are accessible to the public at large.

One of the reasons for inefficiency in the disposal of government business is too much concentration of powers in the hands of the ministries of finance, law, establishment division and the planning commission. The ministry of finance has agreed to replace the outdated concept of the financial advisor by that of a chief financial and accounts officer in each ministry working under the direct control of the principal accounting officer (PAO), who is the secretary of the division. The full powers for re-appropriation within the approved budget will be delegated to the secretary. The secretary can further delegate some of the financial powers to the head of executive departments or other officers in the ministry. The ministries/divisions will bear the full responsibility and accountability for their actions, achievements and failure and will thus enjoy the powers to deploy the financial and human resources in the most effective manner. The commission has recommended full empowerment of the line ministries with internal controls and audit being done and the support ministries ensuing that the rules and procedures are being complied with.

In addition to these medium and long term reforms in the structure, processes and policies, the commission has made short term recommendations in four areas that affect our daily lives – education, health, the police and the land administration.

(To be concluded)

Email: husainish@gmail.com

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