IMF makes the Council of Common Interests go

At long last the Council of Common Interests (CCI) met after 13 months or so. The Constitution requires at least one meeting every quarter. From the United States to India and many others, a wind is blowing against constitutional norms. Pakistan is no exception. It seems the just concluded meeting was forced by the IMF conditionality. Lenders always take into account political roadblocks, the global lender of the last resort more so. Many actions and reforms agreed with the IMF but need provincial nod to go ahead. This is because these belong to the Federal List, Part II, a constitutionally determined domain of the CCI. The CCI meeting took three decisions. It approved structural benchmarks and performance criteria of the three-year Extended Fund Facility (EFF). This in effect brought the provinces on board as partners in the efforts to restrain fiscal deficit. As provinces receive a larger share of tax revenues than the federal government in the NFC’s divisible pool, some if not proportionate burden sharing is necessary. The provinces had complained that they were forced to show surpluses without their consent. This irritant has been addressed to respond to what the IMF representative in Pakistan pointed out as the need for “deepening” coordination with the provinces. She was speaking at a Sustainable Development Policy Institute (SDPI) gathering in Islamabad on December 24. She also talked about harmonising the federal GST on goods and the provincial GST on services and revealed the setting up of a working group, something not mentioned in the official communications following the CCI meeting on the same day.

All regulatory authorities fall in Part II of the Federal List. Reform of the energy sector’s governance is the major item on the IMF agenda, a lot of it relating to the regulatory authorities. The CCI, therefore, decided to amend the Oil & Gas Regulatory Authority Ordinance 2002, empowering it to notify gas tariff set by it without the involvement of federal bureaucracy and the political government. In his conference call on December 23, in Washington, the IMF Mission Chief, Ernesto Ramirez Rigo, had called for “regulators for the energy sector, to have more automaticity and the capacity to implement when necessary to support the reduction in circular debt. That’s something that is a benchmark for the end of December, and we look forward to look at those reforms.”

There were other important matters that were essentially “committeed”. Still others, such as the Higher Education Commission (HEC), did not even come up for discussion. Before the 18^th Amendment, the subject of higher education was not mentioned in any legislative list. Entry 38 of the Concurrent List related to education as a whole. The 18^th Amendment created an entirely new Entry 12, “Standards in institutions for higher education and research, scientific and technical institutions,” in the Federal List, Part II. Post-18^th Amendment, this regulatory role is what defines the HEC constitutionally. However, this was not the reason for its placement on the CCI agenda. It was rather a past CCI decision to continue the federal funding of higher education and vertical health programmes till the end of the 7^th NFC award in 2014-15. It was a temporary arrangement to facilitate provinces while they get ready to assume full responsibility. As the PML-N government could not announce the next NFC award, the arrangement continues. The latest CCI meeting set up a review committee for the health programmes, but there is no knowing whether the university funding was so assigned.

That is not to say we should not thank the IMF for reminding us of our own constitutional obligations.

Published in The Express Tribune, December 27^th, 2019.

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