Reforms unit rebranded: Overlapping of work runs contrary to austerity drive

Both ERU, Planning Commission to perform task of private sector development.

ISLAMABAD:

While going against its drive to consolidate different posts to cut expenditures, the Ministry of Finance has kept intact functions of a newly created slot in the Planning Commission during restructuring of the Economic Reforms Unit (ERU) in a bid to justify existence of the unit.

The ERU – originally set up to reform and restructure state-owned enterprises – has now been given the work of Actuary Office and Pension Fund while taking this function away from the regulation wing of the Ministry of Finance. But it retained all functions related to development of private sector in the country, sources say.

ERU’s name has also been rebranded as Implementation and Economic Reforms Unit (IERU) and it has been placed under Ministry of Finance Adviser Rana Assad Amin while taking it away from the administrative control of Finance Secretary Dr Waqar Masood.

To develop the private sector, Prime Minister Nawaz Sharif has already approved a new post of member private sector development and competitiveness in the Planning Commission, which falls within the purview of Minister for Planning, Development and Reform Ahsan Iqbal.

The move of the Ministry of Finance yet again indicates lack of coordination between the ministries.

The member is entitled to a salary of Management Pay Scale-I (MP-I), which is Rs5.8 million per annum, according to a notification of the finance ministry. After the creation of the post, the ministry has also approved budget for the member private sector.

To appoint the member, the Ministry of Planning has already sent a summary, seeking the premier’s nod to pick one of the three proposed candidates, according to the sources.

The duplication of work was not only against the spirit of austerity drive, but would also add to the pressure on national exchequer due to existence of two offices to perform one task, said the sources. Recently, the government has cut posts in foreign missions to save roughly Rs2 billion annually.

According to revised terms of references, the rebranded IERU will work in close partnership with all stakeholders, including the private sector. It will formulate a private sector development strategy.

It will review existing laws, rules and regulations pertaining to business environment that are obsolete, overlapping and inconsistent or unduly add to the cost of doing business. The unit will act as quality filter for new regulations and propose changes that stimulate private sector development, improve transparency, reduce cost and are consistent with international best practices.

According to the sources, the Board of Investment is already working on a plan to reduce the cost of doing business. The plan was approved by the International Monetary Fund during recently concluded talks in Dubai.

Responding to a question about duplication of work and implications for the public exchequer, Finance Minister Ishaq Dar said the ERU had been working on private sector development for years and restructuring was done to ensure quick implementation of decisions.

New head

The contract of Ministry of Finance Adviser Rana Assad Amin is going to expire in two months. While giving him extension earlier, the Prime Minister’s Office had written on his file that this would be the last extension. The government has also placed a ban on extending contracts of its employees.

Since Amin was a close confidant of Dar and playing a key role in the Ministry of Finance, there was a possibility that the government could keep him, but his job title might be changed, said the sources.

The contract of current ERU Director General Najeeb Khaqan is going to expire in May and there are chances that Amin could be appointed as the head of IERU, as the unit has already been placed under his command.

Published in The Express Tribune, February 22^nd, 2014.

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