Shut 123 govt departments to enhance productivity: Haq

Planning Commission deputy chairman says over-regulation of the market has caused bad management of economy.

Shahbaz Rana March 07, 2011

The Planning Commission deputy chairman has urged the government to improve governance and productivity by shutting down 123 departments and organisations while privatising dozens others – a plan that is close to the US model of governance.

In an interaction with the media on Monday, Planning Commission Deputy Chairman Dr Nadeemul Haq said that markets are ‘over-regulated’ and that has resulted in slow productivity and bad management of the economy.

After the 2008 financial crisis, the world has been debating the Washington and the Beijing Consensus. The Washington Consensus talks about free market economy with a limited state role, while the Beijing Consensus revolves around the concept of monopolist state control of the market.

After the 18th Amendment, the federal government transferred five federal ministries to the provincial governments and is in the process of transferring a dozen more. However, it has not closed down or merged dozens of other departments that have failed to justify their existence.

Haq, who is advocating economic reforms, said there was a need to privatise Pakistan Railways, Pakistan Steel Mills and other loss-making corporations, while departments like tourist, motel, printing and publishing bodies should be dissolved. A 2.5 per cent annual growth rate cannot create jobs for three million individuals who are entering the market every year, said Haq.

He stressed the need for accelerating the privatisation process, but said that privatisation was not the only solution to the problem, as it is better to restructure loss-making entities and close down the departments recommended by Dr Ishrat Hussain in a report.

“The government’s job is to formulate policy and regulate the market but not to run the business,” he added. Haq urged the government to implement the National Commission for Government Reforms (NCGR) report of 2008.

The report had recommended retaining 288 government organisations out of 411. The NCGR had proposed to abolish all subordinate offices and semi-autonomous bodies.

Haq admitted that the government was lagging behind in reforms because people were resisting the change. He also criticised the policy of bringing reforms through government bodies and cabinet committees. “Reforms can only be implemented by giving financial and administrative autonomy to the heads of institutions,” he added.

Haq is working on a new growth strategy that revolves around the pillar of free market economy, good governance, planned urbanisation and productivity enhancement. He said there was resistance to the new growth strategy but the Planning Commission has been successful in generating debate on reforms.

Published in The Express Tribune, March 8th, 2011.


Meekal Ahmed | 10 years ago | Reply Agree with the above. Noble-sounding but empty words that are likely to be unimplementable in the face of fierce resistance. But I would have no objection if they are debated. In general I can agree that over-regulation does hamper innovation and stifles improvements in productivity. But there must be the regulatory institutions in place (like a fully-independent CCP which it is still not) to protect the public interest.
Radial | 10 years ago | Reply Sensible recommendations but unlikely to ever be implemented. Those 123 govt department are full of patronage employees with political connections. And don't forget how the courts (high courts and supreme court) will slow down or kill this process "in the national interest." You can see the Steel Mills and PIA examples.
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