The corrosion of a republic

The corrosion of a republic isn’t an event. It is a process. It isn’t a partisan affair. It is wholesale. It is never limited or contained. It is large scale and it metastasizes faster than you can spell out the words ‘national’, ‘finance’ and/ or ‘commission’.

Actions have consequences. When the machinations of unaccountable public-sector employees cross a certain threshold, they don’t just signify an undermining of rule of law or constitutional principle or due process or the integrity of systems. They signify a weakening and decay of the entire corpus of the state: enter: the corrosion of the republic.

Dr Anwar Shah is a Canadian economist who worked for many years at the confluence of public policy and economics in developing economies, most recently in China. Here is his 2012 assessment of the fiscal and financial impact of the 7th National Finance Commission and 18th Amendment: “While Pakistan’s federal finances are already in [a] precarious state with operating deficit at about 100% of operating revenues, this development (the 18th Amendment) will push the federal government further to the brink unless it takes corrective actions through privatization, restructuring of federal departments and tax reform. Its past record in dealing with these issues is not very admirable”.

This analysis is from twelve years ago. Those genuinely interested in learning about the policy imperative for why so many democrats, economists and public policy analysts were in favour of the 7th NFC and the 18th Amendment should read that entire 2012 World Bank paper, titled ‘Making Federalism Work – The 18th Constitutional Amendment’. It lays out the most fundamental truth about the reform moment of the 2006 to 2010 era, of which the 7th NFC and the omnibus 18th Amendment legislation were the most enduring products. That truth? Reform is a process of vigilant and unrelenting pursuit of improvements to the system – much like corrosion (its opposite), it is not an event. It is a process. So, instead of the reform that was required to be sustained through the 2006-2010 reform moment, what exactly happened in Pakistan?

Three events, closely related, zapped the energy and momentum of the reform moment of 2006-2010. The first was the plague of terrorist insurgency – starring the TTP, LeJ and Al Qaeda. The second was the assassination of Shaheed Mohtarma Benazir Bhutto. The third was the end of General Parvez Musharraf’s rule. These cataclysms – concurrent to the renewal of the Pakistani constitution’s federal spirit – split the attention of all the key decision-making institutions in the country, especially the military.

Instead of a vigilant and unrelenting pursuit of improvements to the post-18th Amendment and post-7th NFC Pakistan, the key decision-making institutions in the country adopted positions about the direction of institutional evolution in Pakistan that were informed not by the design principles behind the Charter of Democracy (May 2006) or the Lawyers’ Movement (March 2007- March 2009) or the 7th NFC (December 2009) or the 18th Amendment (April 2010). Instead, the key decision-making institutions of the country adopted positions on what should happen next based on what the TTP was doing and how to counter it, how the fallout from Shaheed Mohtarma’s assassination could be managed, and how the chain of command and coherence of the military would be sustained as the leadership transition in Pindi proceeded from Musharraf to Kiyani.

It is easy to retrospectively start the countdown of May 9, 2023 to the 2013 election, or the 2014 dharna, or the 2016 change in command of the military, or the 2017 Panama Papers case decision. Equally plausible is for that countdown to be timed to the 2006-2010 reform moment. Why? Principally because the security establishment’s search for an alternative to the mainstream political parties of the country became more desperate when those parties became united on the principles of democracy, federalism and civilian rule.

That was the underlying spirit of the 2006-2010 reform moment. This connection between key political events in the country is often understated. It needs to be stated, over and over and over again. Partly for the record, but mostly because it is so obvious that Pakistan’s elites and decision-makers are suckers for pain that the country already knows too well. This country keeps making the same mistakes. Over and over and over again.

The reason the 7th NFC is such a repeat favourite target of the security establishment? The 7th NFC transfers financial capability to the provinces in a way that should have forced the federal government to make hard decisions (‘privatization, restructuring of federal departments and tax reform’). The reason the country has adopted, sustained, grown and endured a raging fire of a debt crisis? Exactly because the federal government steadfastly refuses to make such ‘hard decisions’. It is easy (and right) to blame the security establishment for this. Yet no one can point to a single political party that has ruled Islamabad since the 2008 election and say: “Yeah, but they wanted to make hard decisions”. No. They. Did. Not.

PPP, PML-N, PTI, PDM, and now, once again, PML-N never did. JUI-F, MQM and ANP? Never did. Ironic because at least since 2008, the PPP has had an existential incentive to continue to align with the reform moment of 2006-2010. The PTI, despite starting its journey piggy-backing Rawalpindi’s muscle, has had the same incentive since 2013.

The reason February 8 was such a hopeful moment for Pakistani democracy and federalism was not that it was a surprise. The reason it was such a hopeful moment was because it could have (would have, should have) produced an alliance of the PTI and PPP anchored not in a mathematical ploy for power but rather one that was anchored in a meaningful set of structural, political, and financial incentives: the fiscal and financial rights of provinces as enshrined in the 7th NFC and as afforded by the 18th Amendment.

Of course, neither the leadership of the PPP, nor that of the PTI can see these incentives clearly – nor do these leaderships have the foresight (or hindsight) to dig through the momentary highs and lows of the daily social media and news talk show noise. It is kind of hard to be purposive and mindful about new institutional economics and the long-run importance of subsidiarity when you are either in jail, or on a run of shady compromises to try to finagle your way into constitutional offices and governing coalitions as a means of avoiding jail.

So here we are again. Yet again. Those arguing for the need to ‘reverse’ the NFC seem smart enough to realize the fire they are playing with. Then again, those who in August 2006 were so intoxicated by the hubris in Rawalpindi were smart enough to realize that caving the walls in around Nawab Akbar Bugti was a fire that would rage on. And on, and on, and on. Balochistan has been provided with extraordinary financial incentives (principally through the 7th NFC) but the fire keeps burning. Wave after wave after wave of military operations has sought to put it out. Still, the fire endures. The argument for reversing the NFC is largely the same one as the one that sought to teach Akbar Bugti a lesson. Who is teaching whom the lesson? And what is it?

In a corroding republic, public discourse seeks out and seizes upon the most obvious binaries. The costs are like the fire in Balochistan. They accumulate, like tumours upon the republic – hiding in plain sight. For years now, those who rightly worry about there not being enough money to pay the bills keep proposing the most mind-numbingly stupid solutions. Almost all solutions are about tightening the belts of the poor and offering the rich yet another amnesty, yet more subsidies, yet more TERF loans, and yet more cabinet slots. Down go university budgets, down go the public sector development programme (PSDP) monies, down go the annual development plans (ADPs) and other capital expenditures that help increase the size of the pie (at least theoretically). Up go the prices of electricity, gasoline, diesel and basic food and amenities.

The calls for revising the NFC mirror the same dynamic – just at scale. Don't be fooled. The effective argument of the anti-NFC crowd isn’t about the provinces taxing agriculture or taxing real estate. It is about the provinces adopting the same ‘tax the poor, protect the rich’ dynamics practised by the federal government.

The provinces (or at least Sindh under the PPP and Khyber Pakhtunkhwa under the PTI) will resist committing this suicide. The resulting homicide of the 2006-2010 reform moment will lead to enduring fires that the system does not know how to put out. Sadly, the corrosion of a republic isn’t an event. It is a process.

The writer is an analyst and commentator.