by Fawad Kaiser 24 May 2019
Critical issues facing Pakistan today are the lack of transparency and accountability in government. From buying influence to spending public funds on personal interests, corruption is eroding public trust in fragile democratic processes, the rule of law, and public institutions. Many Asian countries today are tackling critical challenges that will determine whether they continue on a sustainable path to prosperity or fall victim to economic stagnation, social unrest, and political instability. Among these challenges are widening income disparities, persistent poverty, widespread corruption, and growing ethnic and religious conflicts. Add to this list Asia’s vulnerability to natural disasters and climate change, the unequal status of women, and weak legal protections, and the range of potential threats to the region’s future growth and development becomes daunting indeed.
Pakistan has recently received financial help from the IMF. Although many countries try to avoid knocking on the IMF’s door as the scrutiny and conditions imposed often leads to public spending cuts and falling living standards, policy analyst has seen poorest citizens hit by the “painful adjustments” that come with the fund’s policies.
The people who run the global economy wanted Pakistan to know that they understood what they had. It came from Christine Lagarde of the International Monetary Fund. The reason was simple: there were strong hints from the IMF or World Bank that the policies Pakistan Government were advocating, the so-called austerity, and financial liberalization – have contributed to weak and unequal growth, with all the political discontent that this has caused.
The government should be transparent. Transparency in government, much like an oversight in business, helps to both active combat and prevent corruption. Openness, accountability, and honesty define government transparency. In a free society, transparency is the government’s obligation to share information with citizens. It is at the heart of how citizens hold their public officials accountable. Governments exist to serve the people. Information on how officials conduct the public business and spend taxpayers’ money must be readily available and easily understood. This transparency allows good and just governance Pakistan has always guarded its stance to promote democracy. Its institutions and procedures leave much to be desired by democratic standards of legitimacy and accountability. Critics and apologists often find themselves agreeing that the country suffers from a “democratic deficit,” which undermines its legitimacy and means that it does not meet modern standards of democratic accountability.
A country claiming to be democratic commits itself to a political system and a legal order in which a conventional process of decision-making makes laws binding. It is vital, therefore, that the political system of the country meets democratic standards, and is accountable to its citizens. If it does not, it will be in danger of losing legitimacy.
The accountability of those who make political decisions to those who choose them is a fundamental part of democratic government. Indeed, it is part of a broader process of citizen control. Those who make decisions in a democracy need to gain the confidence of electors and convince them that they and their party are the right teams. The voters pass judgment on the government, endorsing what it has done, or rejecting it in favor of the opposition. It is in this sense that politicians are accountable to the public.
Developments in transparency and accountability are also critical for ensuring that the International Monetary Fund IMF is effective. Surveillance is the regular exercise of analysis, policy dialogue, and advice that the IMF carries out. A chief purpose of this exercise is to help spot potential dangers in time to allow member countries to act to avoid trouble. Such risks range from an unsustainable debt position to an accelerating inflation rate, to a misaligned exchange rate. Above all, the objective is to avoid significant economic crises, which could have adverse effects on the vast majority of a country’s population.
As with surveillance, effective IMF lending programs also require transparency and accountability. The IMF lends foreign exchange to member countries experiencing a balance of payments problems. This lending usually takes place only when all other creditors have turned their backs, and certainly under terms more favorable than would be available elsewhere. Of course, this lending is conditional on the commitment of the authorities to take specific policy actions. These policy actions are designed—by the authorities and IMF staff together—to ensure that the country’s underlying problems will be resolved, which will also enable it to repay the IMF. Without transparency and accountability, this process cannot function. The agreed policy actions may prove inadequate or inappropriate. The country’s problems may get worse, instead of better.
The IMF’s remedy for Pakistan during the current crisis has been straight out of the structural adjustment playbook: reduce public spending, cut salaries and benefits, insist that state-owned enterprises return to the private sector, reduce minimum wages and restrict collective bargaining. Between them, the IMF and the authorities are turning Pakistan into a developing country. It would be fascinating to see what sort of response Lagarde would get if she tried talking about inclusive growth to homeless people huddled on the streets of Islamabad.