Pakistan’s Regulatory Framework Doesn’t Work!

Posted by FS On Friday 29 November 2013 0 comments
BY SHEMREZ NAUMAL AFZAL


Under the Musharraf regime,starting from 2002 onwards (after elections to the national and provincial assemblies were held),many new regulatory bodies and mechanisms were set up at the federal level so as to allow greater and more efficient government oversight of various economic,social,and even political spheres of life. These regulatory frameworks –whether set up as a result of negotiations or demands by international donor agencies or not –were designed to bring the state of Pakistan into the 21st century,because after the misgovernance and wholescale corruption witnessed in the 1990′s –the “decade of democracy”as it is known –both the state and the government had lost its credibility in the eyes of the general public. The best example of that is the small tax base and even lower tax collection figures that the then-Central Bureau of Revenue (now Federal Bureau of Revenue) showed in its yearly public statements –the people of Pakistan,especially the small taxpayers,did not trust the government or the state of Pakistan with their money;they did not believe that the state was adequately or effectively providing them the services that it ought to –or that their tax rupees guaranteed them;and instead of paying tax,most taxpayers (and other entities) chose to bribe employees of the government and the state in order to get any kind of work done. Even the Finance Minister of Pakistan acknowledged in 2009 that more than Rs. 500 billion worth of tax revenue was either lost (that is,not recovered by the authorities) or not properly accounted for by the tax administration and the CBR/FBR authorities. This “leakage”or hole of exorbitant proportions became a huge controversy in the Public Accounts Committee –then headed by the Leader of the Opposition,who later resigned when leakages in tax collection to the tune of the same amount continued in subsequent years.
As a result of the Pakistani state’s “modernization”after 2002,many regulatory bodies were established:the Oil and Gas Regulatory Authority (OGRA) was created to regulate the flow of natural resources from refineries and production factories to petrol pumps and eventually the ultimate consumer;the National Electric Power Regulatory Authority (NEPRA) was created to provide an overarching body that would regulate power tarriffs,electricity distribution among the provinces and in various cities and districts,and ensure that different electricity supply corporations (LESCO,IESCO,KESC,etc.) were operating within the rules and regulations set forth for them (and ultimately,with the public interest in mind);the Pakistan Electronic Media Regulatory Authority (PEMRA) was created to regulate the mushroom growth in electronic media,television channels,radio stations,and eventually the internet and social media –but the growing power of news media outlets practically disemboweled and emasculated this national body. However,other regulatory authorities are also not performing up to the mark,and there are various reasons for each of the bodies as to why they are not able to carry out their roles and responsibilities effectively so as to benefit the people of Pakistan.
While the PEMRA is now well-known to be scared of crossing any news media outlet,especially after the restoration of the independent judiciary under Chief Justice Iftikhar Muhammad Chaudhry –who believes that freedom of the media means continuing to report without any boundaries,and present opinions as “information”and “fact”,and report irresponsibly and in a biased manner whenever asked to do so by their corporate overlords (who pay their salaries,their executives’salaries,and for air-time on television advertisments),other regulatory authorities are no less effective. In fact,they are huge,burgeoning bureaucratic entities under the auspices of the Cabinet Division that continue to exact a toll on the taxpayers through the federal budget because they have to pay the exorbitant salaries of Directors,Joint Directors,Executive Directors,Senior Executive Directors,Members and Chairmen of these authorities.
It would not be wrong to say that these regulatory authorities –which are actually supposed to regulate different economic and bureaucratic entities while holding public interest supreme –are in fact beholden to corporate interests and to senior political figures when it comes to the due discharge of their functions. If Pakistan’s electronic media –especially news channels –was responsible and unbiased enough to report on the public interest (which it claims to do,but in fact only reports its own opinions so as to promote the interests of its various corporate backers) it would note how many illegal (as the Supreme Court had declared it so) CNG licenses were issued at the behest of political pressure on former OGRA chairman Tauqeer Sadiq –who was only caught after the Supreme Court was informed that the former chairman had amassed over Rs. 80 billion in the outright “sale”of these licenses,instead of having the licencees go through the regular channels and inspection procedures before the licenses were issued. Since OGRA regulates all downstream natural resource activity,it has recently started harassing petrol pump stations and owners and OMCs (oil marketing companies,like Shell,Chevron,PSO,etc.) with its new “Enforcement”department,even though the powers vested in the Ministry of Petroleum and Natural Resources’Oil department and Gas department (each headed by a Director General with over thirty years of experience in both the private and public sector,as well as scientific knowledge and background of the specific natural resource in question) have not been transferred to OGRA. Some media outlets finally figured out which senior political personality Tauqeer Sadiq was related to when he was made chairman of OGRA (and heavily recommended by this personality to the then-Prime Minister,who belonged to the same political party). But media investigations or public inquiries by the government or the superior judiciary into the widespread net of corruption and harassment established by the underlings at OGRA –starting from the Joint Executive Director level all the way up to the Member level,often with the willing,unwitting or forced support of their subordinates –have yet to even start,much less see the light of day. The problem also lies in the fact that any complain regarding OGRA is filed with the regulatory authority itself:the Federal Ombudsman or the National Accountability Bureau (long defunct and dysfunctional because it is considered “Musharraf’s tool to terrorize politicians”who are now in power) does not look into either complaints made regarding OGRA,or the massive corruption (in terms of rupees as well as misuse of state power and authority) that OGRA employees are engaged in even to this day!
The NEPRA is another big pink elephant in the room that nobody talks about:if this organization was performing its tasks and functions appropriately,rather than enjoying the exorbitant,“market-competitive”salaries (not to mention perks and privileges,and ensured pensions) that were being given to its employees for NO services rendered,then Pakistan would have accurately projected –and even made preparations and contingency plans –for the electricity dimension of the energy crisis that it is now facing. Given,NEPRA is only responsible for the electricity sector,which is only a part of Pakistan’s nearly-destroyed energy sector (with long lines for CNG whenever it is available,low gas pressure on the stove,and other energy resource problems faced by consumers and the general public at home),but the most serious facet of the energy crisis was –and is –exhibited by the long and often unannounced electricity outages (or “loadshedding”,as the term has now become known throughout the nation) which result in unnecessary pain and planning to the home consumer,which borders on psychological trauma. The economy has also suffered immensely because of consistent electricity outages,rendering large factories useless and putting hundreds if not thousands of daily-wage labourers out of work. Those factories which have developed workarounds –like petrol-powered or gas-powered generators –have had to see increased costs in operations,or received notices from the government saying that they cannot use gas for generating electricity in their factories. This has led to a mass exodus of industries and factories from Pakistan to other countries which are also facing energy crises,but have effective mechanisms in place so as to ensure that the industrial and manufacturing sector bears little to no brunt of the “loadshedding”or of interruptions in power/electricity supply. While the employees of NEPRA continued to earn their salaries for every month in the past decade,the divergence between electricity demand and electricity supply grew slowly and steadily,until it reached a point where cities would receive electricity for less than one-thirds of a day,and rural areas for only a few hours every day. Despite a renewed focus (by the government,not NEPRA) towards energy conservation,power generation (including the controversial Rental Power Projects or RPPs),and scheduled timings of power outages or “loadshedding”,the seasonal variation of Pakistan’s electricity shortfall lies anywhere between 4,000MW to 6,000MW. Politicians who love to dwell in the past raise the issue of Kalabagh dam –of support for it or opposition towards it –claiming that had the large dam been constructed,Pakistan would not have been facing the electricity problems it is facing today. And as for Thar coal and the vast amounts of coal discovered in that area –and government claims that the coal will be used for energy creation and electricity generation –any viable or concrete step to that effect has yet to be taken,and when it does,it will not bear fruit before four or five years of hard work and meticulous attention to the details of any Thar coal-related project that will serve the public interest and turn the electricity shortfall into an electricity surplus.
So what should the government do with the regulatory agencies that have fallen into its lap,which have failed to modernize the state or offer a chance for more effective governance,and which have failed to protect and promote public interest while they only protect corrupt bureaucrats and promote their exorbitant salaries and state-provided perks and privileges? Should the government do away with these federal regulatory mechanisms altogether,and let the provinces develop their own regulatory bodies –since major powers have been devolved to the provinces under the 18th Amendment –or should the government overhaul each and every single one of these regulatory authorities and revise their rules and regulations,their modes of operation,and most importantly,shuffle their staff in terms of merit and competency while kicking out those who have abused their powers and those who have no experience or reason for being in their posts?
According to the simplest definition of democracy,it is a government “for the people,by the people,of the people”,but in more than 60 years of independent governance,Pakistan’s state has yet to shake off its post-colonial tendencies,outlook and persona. In the 21st century,a modern democratic government is elected by the people,and is formed of people who belong to –or are from –those who elect them,and finally,the modern democratic government works for the people,the general public;it works day and night for their benefit,for their progress and prosperity,and to ensure a better future for the people who elected them (as well as those who did NOT elect them),their children,and their children’s children. The government is not just a name or an entity:it is a large mechanism,a framework in itself which –if deemed illegitimate by the people it governs –has no right to exist in the first place,paving way for a revolution (violent or otherwise) as the Arab Spring has shown.


    Only time will tell whether the rulers of Pakistan –those who govern Pakistan,those who are in the government of Pakistan –realize what a modern democracy is made of,what their electors want,and how to choose and progress on a path which would be a veritable means of achieving an end where the people of Pakistan enjoy prosperity,justice and peace. Because without prosperity and justice,there can be no peace…

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