It is the budget season again and a chance for newly formed governments to make their mark at the beginning of their five years term in office. It seems, in both provinces and center, the demand side economics is dominant. In other words these governments have set aside large chunks of money for public sector development. But no new taxes, that are part of demand side economics, are imposed rather expenses are reduced to make up for high development expenditure and reducing funds for the private sector. In the center they call it Public Sector Development Plan (PSDP) or public sector development program. The total development expenditure, provinces and center, will be over Rs. 2 trillion. This money will be spent on building roads, schools, hospitals etc. etc.
But will this heavy expenditure of public money improve quality of life for the common man. I am not so sure about it for two reasons. First, the average corruption rate in public spending has increased to over 40% while the efficiency of bureaucrats has gone down over the years because of political meddling in hiring and appointments. Second, even if the corruption rate is 20% i.e. around Rs. 400 billion will enter the black (or undocumented) economy. This will increase the inflation which will ultimately hurt the poor rather than the rich.
To illustrate this point, let’s say a project that cost Rs. 10 million is contracted out to a company. This company will pay commissions (yes they call it commissions to make it sound ethical and halal) to government employees for not using the quality material stipulated in the terms of the contract. In other words the people involved in the project will siphon off Rs. 4 million in to their pockets and the people will get a product that in some cases not even work. There are also hidden costs that are never discussed openly. These are cost overruns and project delays. To control this corruption, government can implement an e-government initiative to ensure transparency of the projects in terms of award and execution. This system can also seek feedback from the people to make it a more participatory process. Officials that are found ineffective in managing projects on time, within budget and quality should be punished through demotions and no promotion.
In my visits to villages during 2013 elections, I noticed that the quality of execution of public sector projects in South KPK, South Punjab and Northern Sindh was of the worst quality. Below are some real life examples of wasted public money.
In one village a college building was built with a cost of Rs. 70 million. But the college could not be opened for three years because lecturers were not appointed by the education department when the project was conceived. Over the years the building eroded for lack of use and was finally handed over to the military as their camp office. In another village a hospital was built at the cost of Rs. 35 million and three doctors were appointed for it. These doctors never show up for work but get regular salaries. Bungalows were built in the hospital to house these precious doctors needed by the people but since they were never used they eroded to such a state that they have to now be demolished. But here comes the real treat for you. Now in the vicinity of the same hospital two more bungalows are built at the cost of Rs. 15 million. In these three examples the nation spent over 120 million rupees but did not get any of the services that were promised to be delivered by these PSDP outlays. Similar stories can be heard throughout Pakistan.
We need to get creative in our governance and start considering ways to spend development funds more efficiently. Here are some ideas that might produce better results. We all know that private sector schools are providing better quality education in cities and village. We can ask each village to form a trust with a private school network. Provincial Education Ministry can pre-approve education networks that can be considered for inclusion in these trusts. Elected public members form the majority of the trust while school operator nominates their members that must include the principal. These trusts then get money from the government to operate existing schools and submit proposals for new ones if needed. The education department monitors these schools to ensure compliance with syllabus; maintain minimum standards for teacher’s qualification; maintain quality of building and that performance of students are meeting the benchmarks. Any school that does not meet these minimum benchmarks consistently is asked to seek reformation of the trust by choosing new members of the trust and a different operator for the school. The government pays fees for the student enrolled in the school through a voucher system using NADRA database.
In the health sector the condition of hospitals is so bad that more deaths occur because of misdiagnosis and malpractice than the disease itself. The inventory of medicine in the public pharmacies is either of substandard quality or stolen so it never reaches the people that deserve it. A better approach could be to seek proposals from private sector doctors to build new hospitals and basic health units that are monitored by a trust in which majority is public representatives along with health care professionals. Besides supervision by the provincial health officials each trust should hire a certified auditor for not only qualitative but also quantitative performance of these healthcare facilities. Factories operating in the area should be required to pay a group health benefit for the labor employed by them. Labor can choose from any one of these facilities and enroll with them. NADRA maintains the record of employer deductions and disbursements for a small fee.
The most run down condition is of farm to market roads. In South KPK most these roads were built in the early 1990s and are in a dilapidated condition. These roads should be given priority over long haul roads for development spending. The average length of these roads is about 8-10 kms to connect with a major highway. On each road there are usually 2 or 3 villages. Villages along the road should be made responsible to maintain portion of the road that pass through their village for a minimum period of 10 years. Government should provide them an annual stipend to fill small pot holes that appear on the sides of the road because of rain and natural land erosion. Large damages can be repaired by C&W department upon the call by these committees.
The point I am trying to make by these ideas is that we have to be imaginative in our approach towards governance. All verses in the Quran related to charity and nation building instruct that education, health and social security is the responsibility of local community members. Provincial and federal governments can facilitate and finance these community efforts. Every citizen has to be an active participant in the delivery of these services rather than remain passive and dependent on government officials.
Building a nation requires contributions from all its members. Instead of focusing on building new, we have to also rethink how to efficiently manage the infrastructure we have already built. I would say spend more on improving efficiency than spending more on building new.