I'll admit that I was interested in the budget of the year 2013-2014 albeit from the personal perspective of how amount of tax deducted from my salary would change.
This year, when the budget was presented on 3 June 2014, my interest was non-existent. One of our newspapers, Dawn, called it a disappointing budget and gave their (hard to argue with) reasons why:
"Assessing the quality of a budget is necessarily linked to how effectively it addresses the particular challenges the economy is facing in any given period, but there are at least three basic elements that need to be looked at always: the revenue and expenditure sides; a growth strategy; and a vision for equitable growth that touches all sections of society. On all three counts, the government has offered little of substance."
"‘No relief for the poor’ was the instant reaction of most of the Pakistanis after hearing the budget speech on the evening of June 3, 2014" says the article, The Mathematics of Disappointment.
In the coverage related to the budget, there was a story that Rs 36 million was wasted in advertising for senior management positions in Pakistan's public sector organisations, positions which remain vacant as of June 2014. The article says "The key strategic institutions have faced a major decline in their performance. However, even after passage of almost a year, these institutions are being run on ad-hoc basis. Besides paying such huge amount for advertisement, the members of the Commission, the company which was hired for short-listing the candidates must have been paid from taxpayers’ money."
Here's another story in the News: One year gone, no CEOs appointed as promised, which says "Due to the unprecedented delay in the appointment of the heads of most of the institutions the performance of most of the government departments have faced decline either in their profits or their operative costs have been increased just because of not having full time head. The key strategic institutions have faced a major decline in their performance."
Is it really that hard to find and recruit people of competence and integrity, especially when some oragnisations have become dependent on bailouts? Or is it easier to throw money at a problem and hope it goes away?
The importance of institutions has been underscored in the book, Why Nations Fail, and we're more familiar with "extractive" and "inclusive" institutions, thanks to Daren Acemoglu and James Reobinson. In a Buttonwood column in the Economist, The Question of Extractive Elites, the public sector has been termed one of the two potential candidates for extractive elites in the Western economy (the other being the banking sector).
"In some countries, such as Greece, there has been a clear policy of 'clientelism' in which political parties have rewarded their supporters with jobs and benefits that have been funded by the general taxpayer. In the Anglo-Saxon world, public-sector employees now have more generous pension rights than the majority of private-sector workers."
This is not just a Western problem; it's an issue in Pakistan where people actively lobby their connections and contacts for cushy public sector posts with their pay and perks. Would these people want to transform organisations from extractive to inclusive? No! For them it's just a paycheck until they come to the end of their contract and the lobbying begins anew.
Indeed, the article Mathematics of Disappointment says "What makes the situation more painful is the persistence of unprecedented wasteful non-development expenditures and extending unprecedented perks and benefits to public office holders, high-ranking civil-military officials and judges."
The Buttonwood article goes on to say "...it does seem likely that a high level of public-sector employment reduces the extent to which creative destruction occurs and new industries develop. Workers may prefer the security of government jobs to the riskiness of joining new businesses. As European governments are discovering, public-sector unions are often the most vocal in opposing the kind of labour-market reforms needed to reduce structural unemployment."
Innovation, creativity, and the private sector being the engine of growth are just nice sounding words and phrases. They don't mean anything here and as a recent article in one of the local newspaper aptly put it, the state of corporate governance leaves much to be desired. This need not be the case! But a super cadre of bureaucrats? Really???
This year, when the budget was presented on 3 June 2014, my interest was non-existent. One of our newspapers, Dawn, called it a disappointing budget and gave their (hard to argue with) reasons why:
"Assessing the quality of a budget is necessarily linked to how effectively it addresses the particular challenges the economy is facing in any given period, but there are at least three basic elements that need to be looked at always: the revenue and expenditure sides; a growth strategy; and a vision for equitable growth that touches all sections of society. On all three counts, the government has offered little of substance."
"‘No relief for the poor’ was the instant reaction of most of the Pakistanis after hearing the budget speech on the evening of June 3, 2014" says the article, The Mathematics of Disappointment.
In the coverage related to the budget, there was a story that Rs 36 million was wasted in advertising for senior management positions in Pakistan's public sector organisations, positions which remain vacant as of June 2014. The article says "The key strategic institutions have faced a major decline in their performance. However, even after passage of almost a year, these institutions are being run on ad-hoc basis. Besides paying such huge amount for advertisement, the members of the Commission, the company which was hired for short-listing the candidates must have been paid from taxpayers’ money."
Here's another story in the News: One year gone, no CEOs appointed as promised, which says "Due to the unprecedented delay in the appointment of the heads of most of the institutions the performance of most of the government departments have faced decline either in their profits or their operative costs have been increased just because of not having full time head. The key strategic institutions have faced a major decline in their performance."
Is it really that hard to find and recruit people of competence and integrity, especially when some oragnisations have become dependent on bailouts? Or is it easier to throw money at a problem and hope it goes away?
The importance of institutions has been underscored in the book, Why Nations Fail, and we're more familiar with "extractive" and "inclusive" institutions, thanks to Daren Acemoglu and James Reobinson. In a Buttonwood column in the Economist, The Question of Extractive Elites, the public sector has been termed one of the two potential candidates for extractive elites in the Western economy (the other being the banking sector).
"In some countries, such as Greece, there has been a clear policy of 'clientelism' in which political parties have rewarded their supporters with jobs and benefits that have been funded by the general taxpayer. In the Anglo-Saxon world, public-sector employees now have more generous pension rights than the majority of private-sector workers."
This is not just a Western problem; it's an issue in Pakistan where people actively lobby their connections and contacts for cushy public sector posts with their pay and perks. Would these people want to transform organisations from extractive to inclusive? No! For them it's just a paycheck until they come to the end of their contract and the lobbying begins anew.
Indeed, the article Mathematics of Disappointment says "What makes the situation more painful is the persistence of unprecedented wasteful non-development expenditures and extending unprecedented perks and benefits to public office holders, high-ranking civil-military officials and judges."
The Buttonwood article goes on to say "...it does seem likely that a high level of public-sector employment reduces the extent to which creative destruction occurs and new industries develop. Workers may prefer the security of government jobs to the riskiness of joining new businesses. As European governments are discovering, public-sector unions are often the most vocal in opposing the kind of labour-market reforms needed to reduce structural unemployment."
Innovation, creativity, and the private sector being the engine of growth are just nice sounding words and phrases. They don't mean anything here and as a recent article in one of the local newspaper aptly put it, the state of corporate governance leaves much to be desired. This need not be the case! But a super cadre of bureaucrats? Really???
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