Do we need a Charter for Change?

In public policy literature, ‘policy silos’ describe the phenomenon where policies are developed in isolation from other policy areas and without coordination.

This term highlights the negative consequences of fragmented policymaking, such as inconsistency, inefficiency, suboptimal decision-making, and poor policy delivery. Pakistan presents a compelling case study of policy silos, with numerous examples demonstrating the detrimental effects of this ad-hoc approach to governance.

First things first, let’s recognize that Pakistan is not lacking in policies. On the contrary, there is an abundance of policies and counter-policies across various sectors, each designed with specific objectives in mind. However, the implementation of these policies often occurs within isolated departmental boundaries, leading to missed opportunities for synergy and collaboration. This lack of an integrated approach results in policies that do not complement or support one another, ultimately undermining their effectiveness. This fragmentation is particularly problematic for a country like Pakistan, where interrelated challenges require cohesive and coordinated responses.

Take, for example, the development projects in Islamabad's Blue Area. Many Islamabad residents must have noticed that just a few months ago, a 1.75 km stretch of road from the F-8 signal at the Seventh Avenue intersection to the F-10 roundabout was widened. While it can be argued that an efficient mass transit system could reduce the need for road widening and thereby prevent traffic congestion and environmental degradation, let's accept the necessity (again, as an ad-hoc measure) of road widening. This project likely cost a couple of hundred million rupees.

Initially, the plan included linking the service road of the new Blue Area and Fatima Jinnah Park Gate through an overhead bridge. However, without public consultation or an environmental impact assessment (as always), the plan was abruptly changed from an overhead bridge to a pedestrian underpass. As a result, the newly constructed road is now being dug up to accommodate the underpass, leading to double expenditures: first, for the original road construction and now for its modification.

This situation could have been avoided with a holistic and participatory planning process that integrated urban development, transportation, and environmental sustainability. This project highlights the inefficiencies and added costs that arise when policies are made in isolation and then whimsically modified.

Some might argue that a few hundred million rupees spent on beautifying the capital are relatively inconsequential. However, consider another example with far greater financial implications: the energy sector in Pakistan. The country has been consistently inconsistent in pursuing the right energy mix. At one point, compressed natural gas (CNG) was heralded as the solution to our energy needs, particularly in the transport sector. This led to the mushroom growth of CNG stations and substantial investments by consumers in CNG kits for their vehicles.

However, the government soon realized it lacked the gas reserves to support this policy, and importing gas was too costly; hence, it curtailed CNG supply and raised its prices to bring them to par with petrol and diesel. Ironically, this was done a few months after the government announced duty-free CNG bus imports in 2014. The CNG pump investors and consumers lost billions of rupees due to this abrupt policy shift.

Billions of rupees may still seem negligible to some when considering government actions or inactions. Therefore, let’s examine another example of policy silos that is costing trillions of rupees now. I am referring to the power purchase agreements with independent power producers. These agreements include a ‘take-or-pay’ clause, obligating the government to make capacity payments in dollars, which have now ballooned to a staggering Rs2 trillion in capacity payment charges (CPC).

In an attempt to manage the CPC, the government may come up with another ad-hoc solution. It is considering measures to make solar power less attractive to consumers to ensure they continue to buy grid electricity, thereby reducing the CPC burden. This was done when the Special Investment Facilitation Council (SIFC) successfully brought ‘Sinosolar’, a Chinese solar panel manufacturing company, to start manufacturing panels in Karachi so that consumers could get them cheaper.

The ‘novel solution’ to reducing CPC will create an unpredictable environment for investors, consumers, and stakeholders. Discouragement of solar energy adoption will not only hinder the country's ability to meet its environmental targets but will also keep the country dependent on imported fossil fuels for conventional power plants, draining precious foreign reserves.

The use of fossil fuels will make Pakistani exports uncompetitive under the Carbon Border Adjustment Mechanism (CBAM) regime. Thus, it will be a lose-lose situation, but right now, it will help add numbers for the IMF. A coordinated approach that aligns energy, environmental, and financial policies is essential to avoid such policy dilemmas.

Another glaring example of policy silos is the untimely wheat import this year, leading to a significant crisis for wheat farmers in Pakistan. The Sustainable Development Policy Institute developed and handed over (on a pro-bono basis) a ‘Food Security Dashboard’ for the Ministry of National Food Security (MNFSR) in 2021. Among other food items, this portal provided real-time data on wheat stocks, demand, inter-district movement, and prices at the district level. It also displayed real-time data on wheat imports and their intended consumption areas. Chief secretaries were responsible for data authenticity, and provinces had started updating the data daily.

The purpose of the portal was to assist decision-makers in making data-based decisions. However, one morning, someone at MNFSR decided to discontinue the use of the portal. As a result, policymakers lost sight of the bigger picture and made the mistake of importing wheat right at harvest time, which led to a decrease in the prices of the incoming crop.

These examples are just the tip of the iceberg. Numerous policies are made hastily to qualify for loans or grants from lenders and development partners. These policies are often designed to meet the deadlines or conditionalities set by lenders or donors rather than being driven by a cohesive national strategy. This approach aggravates the problem of policy silos, as different ministries rush to implement isolated measures that satisfy specific conditions but fail to align with broader, integrated goals.

This approach also hinders the implementation of the Sustainable Development Goals (SDGs). For instance, SDG 8 (decent work and economic growth) and SDG 13 (climate action) can conflict if pursued in silos. Policies aimed at boosting economic growth through industrial expansion could increase carbon emissions, undermining climate action efforts. Similarly, aggressive climate policies without consideration for economic impacts could stifle job creation and economic growth.

To address the issue of policy silos in Pakistan, a whole-of-policy and whole-of-the-government approach is essential. This approach involves fostering inter-ministerial communication, encouraging collaborative planning, and establishing integrated policy frameworks. Providing financial and administrative incentives for departments collaborating on joint initiatives can ensure, to some extent, that policy objectives are aligned and mutually reinforcing.

Developing policy frameworks that require cross-ministerial input and review will help consider relevant perspectives before making policy decisions. Successful examples from other countries, such as integrated urban planning frameworks or cross-sectoral environmental policies, can serve as models for Pakistan.

Moreover, embracing evidence-based and data-driven policymaking is crucial for overcoming the challenges posed by policy silos. ‘Data for development’ initiatives can play a significant role in informing policy decisions and ensuring they are based on robust evidence rather than assumptions or whimsical preferences. For instance, utilizing comprehensive data analytics and triangulating energy, fiscal, and climate change data may help harmonize investments in renewable energy and fossil fuels, ensuring that environmental, balance of payments, and social goals are aligned.

After mixed results with the Charter of Democracy and unsuccessful attempts at a Charter of Economy, how about trying for a ‘Charter of Change’ – not between the government and opposition, but within government ministries and departments? By changing the policy silos culture, we can achieve more effective and efficient governance in Pakistan.

The writer heads the Sustainable Development Policy Institute. He tweets/posts @abidsuleri