Pakistan: World Bank advises ‘National Council of Ministers’ to improve functioning of federal, provincial institutions

In order to fill the vacuum for simultaneous and coordinated strengthening of policies and accountability systems, the World Bank has advised Pakistan to create a ‘National Council of Ministers’ comprising key federal and provincial representatives. The World Bank highlighted that ‘incomplete devolution’, institutional weaknesses, and poorly performing federal and provincial institutions are the key to obstructing the country’s economic situation. The Washington-based lending agency has provided policy advice, noting that current contextual factors, including deteriorating economic conditions, demographic changes, and the impact of social media, could offer opportunities for positive change in Pakistan. However, it emphasized that technocratic interventions are unlikely to bring about a swift transformation in the country’s institutional environment. According to the agency, Pakistan has not effectively implemented devolution as initiated by the 18th Amendment. As a result, the central government continues to handle many devolved functions, leading to overlaps in service delivery, increased fiscal costs, and blurred lines of accountability. This situation has weakened accountability for revenue collection and complicated tax administration. Additionally, the agency pointed out that performance reviews are infrequent, and incentives tend to reward compliance with rules rather than operational excellence. Promotions are often based on seniority and informal networks rather than qualifications. To address these challenges, the World Bank has urged the government to take immediate measures to improve coordination between different layers of government and provincial authorities. The lending agency emphasized that given the non-binding nature of decisions made by the Economic Coordination Committee and the federal cabinet on provinces, it is crucial for the Council of Common Interests (CCI) and the National Economic Council (NEC) to assume a pivotal role in promoting national policy coordination and coherence. The agency recommended the establishment of a National Council of Ministers comprising federal and provincial ministers, operating under the umbrella of the Council for Common Interests (CCI), The Down, a Pakistan-based media outlet, quoted the agency as saying. It also added that this council should be responsible for formulating and overseeing the implementation of key national policies, covering areas such as education, health, food security, agriculture, water and sanitation, and transportation. The agency also urged the newly elected government to promptly initiate efforts to build consensus on technical implementation arrangements for a decentralized system. This includes considerations like expenditure reductions, tax and revenue assignments, as well as the transfer of functions and tax instruments. The agency proposed that an appropriate constitutional body, likely the CCI, should develop an implementation plan based on the agreed-upon vision, through a consultative process with broad provisions. The bank has called for enhancements in the procedures related to public sector appointments, performance evaluation, and job security. It identified that the vested interests of senior bureaucrats are hindering the implementation of public sector reforms, as they seek to maintain the status quo. To address this, the bank emphasized the need for strong political leadership to reform the incentive structures within the public service. This reform would involve the introduction of a Performance Management System (PMS) across the public sector. Under this system, public servants would undergo assessment based on agreed-upon performance indicators, with the results influencing career advancement, salary increments, and, in cases of consistently poor performance, early retirement. Furthermore, the bank recommended strengthening the job security of all government officers. It suggested that any decision to remove a government officer from their position before the end of their appointed term should be accompanied by a written justification. Moreover, the affected individual should have the right to challenge this decision through an independent and formal process.