November 21, 2020

Reforming the Government in Pakistan: Rationale, Principles,

Proposed Approach and Progress up date

Ishrat Husain1

INTRODUCTION

A legitimate question that is often raised by those working for the

government in Pakistan but not by outsiders is: Why reform the
Government? Most of them believe that things are going well and the costs
of bringing about these reforms will prove to be disruptive for the economy
as well as for administration. They further saw that we had inherited a
strong, robust system from the British that has been tried and tested over
time and there is hardly any compelling reason to bring about any major
structural changes. In order to address this question, we have to provide
the rationale for bringing about reforms in the government which is done in
Section I. Having established the business case for reforms, Section II lays
down the principles that would underpin these reforms. Finally, the
proposed approach to design and implement the reforms and the progress
made to date will be discussed in Section III.

SECTION I

Rationale for Reforms

It must be conceded at the outset that the time horizon for the
consummation and impact of the proposed reforms is long term – the next
10 to 20 years and not immediate or short term. It may also be accepted
that there are no quick fixes and therefore the rationale for this plan should
therefore be viewed in the context of the long term vision of Pakistan, the
external environment in which Pakistan will be operating as a country, the
lessons learnt from other successful developing countries, the diagnostic
studies including public opinion polls about government performance in
Pakistan and the growing expectations of the public at large.

(A) Long Term Vision and Challenges of the 21st century

Pakistan’s long term vision envisages the country to be a

developed, industrialized, just and prosperous nation at the end of the next
20-25 years. This vision is to be achieved through rapid and sustainable
development in a resource constrained economy by deploying knowledge
inputs. The transition for achieving this objective is proposed to be
managed by an intelligent and efficient exploitation of the country’s inherent
and contrived competitive advantage. To achieve this Pakistan has to

1
The views expressed in this paper are those of the author and do not, in any way, represent those of the
Government of Pakistan

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become an active participant in the globalized economy for goods, labor,
capital, technology and services, and this option has serious
consequences for the future governance of the country.

Twenty first century is a knowledge economy confronted with many

serious challenges that have no precedents in the past. Noteworthy among
them are Disruptive technological advances, changing nature of skill
composition of work force, Demographic changes with ageing population
in the West and China and younger population in South Asia and Africa,
climate change and its consequences on food, energy and water and
growing competition among emerging economies for share in international
trade. The hegemony of a unipolar world led by the US is also being
threatened by a newly emerging power i.e. China.

The imperative of integrating Pakistan in the larger global economy

and responding to these challenges, places certain essential demands and
one of them is that the structures of the state and instruments of the
government have to be redesigned to use knowledge and technology
inputs to create opportunities for increased productivity and
competitiveness. Among the 180 nations of the world which are Pakistan’s
competitors for capturing market share in the ever-expanding global
economy, only those will survive that remain agile and adapt themselves
to the changing demand patterns, supply value chain and technological
upgradation. The main actors in a country that will together impinge upon
its competitiveness and productivity are the state, market and civil society.
The respective roles of these main actors and their interrelationships have
therefore to be redefined and re-calibrated.

Following this logical sequence, the various organs of the State –

executive, judiciary and legislature – have to be assessed and evaluated
to determine whether they are capable of meeting this new challenge or
whether they need to be re-vamped to develop new capabilities and build
up new response capacity. We would in this paper like to focus on one
element of the State i.e. Executive branch and do not dwell upon the other
two i.e. the Parliament and the judiciary. We also do not directly address
the market and the civil society in this paper. The main purpose here is to
assess whether the government, its structures, processes and human
resource policies and practices can keep up with these new demands or
need modification or alteration. We do realize the limitation of this paper in
so far as it only captures only one pillar of governance system while a more
holistic picture of the dynamic interactions and the boundaries between the
State, Market and Society needs to be depicted and analyzed.

Structural economic reforms to improve Pakistan’s prospects for

competing in the globalized economy require stable, functioning,
competent and responsive institutions for implementation. But
unfortunately, we are at present caught in a difficult logjam. While the
economic reforms themselves create dislocation and displacement in the
transition period, strong working institutions provide the wherewithal and
armory to withstand these shocks thus minimizing the costs of adjustment

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and maximizing the benefits to the poor and neglected. The urgency to
build strong institutions to implement these structural reforms is therefore
quite obvious. Institutions in public sector are manned by Civil servants and
therefore reforms of civil service to achieve the long-term goals and
challenges of the 21st century become the burning issue.

(B) Lessons from other Developing Countries

The role and limitations of governments in various developing

countries have been analyzed at great length in many academic and non-
academic studies. The predominant view is that the binary postulate of
Government vs Market is totally misplaced. Governments should do what
they are capable of doing better than in the past. A strong and effective
government is needed rather than a weak and expansive government. The
all wide-encompassing government has become too cumbersome and
centralized with overlapping and competing interests, inefficient and
unresponsive to the emerging needs of the public. Civil servants are poorly
trained, sub-optimally utilized, badly motivated and ingrained with attitudes
of indifference and inertia. It has been argued by development economists
that effective government in developing countries is not only necessary due
to abundant market failures but possibly even sufficient to achieve
economic development.

A number of developing countries have successfully reformed their

governments and tackled the market failures as well as achieved rapid
economic development. How have they been able to transform the
expansive government into a well-focused, well-functioning and result
oriented effective government? The interpretation of the success of East
Asian countries such as the Newly Industrializing Countries (NICs), ASEAN
countries and China is a matter of serious debate among development
economists. Neoclassical economists attribute the success to market
friendly environment, private sector led growth and openness to trade with
the governments providing macroeconomic stability, security of person and
property, infrastructure services, promoting research and development,
and investing in education, health, science and technical training. Others
such as Wade (1990) and Amsden (1989) have argued that an
interventionist state which guided and steered a proactive industrial policy
and picked the winners, was largely responsible for the success of these
countries. By now, there is some consensus that if the labels and ideologies
are set aside the evidence overwhelmingly suggests that there are some
critical success factors of varying degrees. These factors are: -

• promote market competition, curb monopolies, cartels or

oligopolies, and rent seeking
• ensure a level playing field and entry for new comers in the market,
• exercise regulatory vigilance (but eliminate inefficient and outdated
regulations), and enforcement
• open up the economy to international trade,
• provide the way for judicial independence,

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 • provide dispute resolution mechanisms and enforce contracts,
• promote transparency, and observe the rule of law.

The role of the Government is to provide an enabling environment

for private businesses so that they can carry out production, distribution,
trade of goods and services without indulging itself in these activities
directly. A successful enabling environment requires an efficient and
competent civil service, investment in human resources, skills, well-
functioning, physical infrastructure, rules of law and equitable distribution
of benefits of growth.
More recently, Fareed Zakaria after studying weak and effective
governance in developed and developing countries over time has
concluded that competent bureaucracy and the ability to tax have been key
factors in the history of modernization. In my view, China’s stellar
performance and its transition from an impoverished country to become a
global economic power within a short span of forty years can also be largely
attributed to a meritocratic bureaucracy advantaged by highly focused
leadership. Even the appointments to political offices such as Mayors,
Governors, members of Politburo are mostly made on performance.

The other piece of empirical evidence that is beginning to gain wide

acceptance is that decentralization and greater devolution of power,
authority and resources to lower tiers of government also makes a
difference through better allocation and a more efficient utilization of
resources. Devolution also helps in moving towards a relatively more
egalitarian outcome in the provision of basic public goods services.

Another way to promote human development and deliver social

services to the poor segments of the population that has worked is through
the wider participation of the private sector, communities and civil society
organizations. Participation, besides being considered a means to further
human capabilities is also a way of choosing the right kind of projects and
ensuring that development funds are used more judiciously. Private–public
partnerships and public–NGO or Civil Society Organization partnerships
are being successfully used in many countries for the provision of
infrastructure, education, health and other social services. These
partnerships not only supplement the limited public resources and counter
the governance issues through monitoring, evaluation and corrective
actions but also enable local communities to participate in decision making
through their organizations. The reduced efficiency of public sector
expenditure can also be corrected through these partnerships. Allocation
of risks in public-private partnership takes place on the relative strengths
of the two partners.

(C) Changes in the Pakistani Scene

We now turn to the diagnostic studies and the changes that have
taken place in the landscape in Pakistan in the past several years and are
likely to affect the functioning of the government in the future. My own
research study that culminated in the book “Governing the ungovernable”

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examined the two periods of Pakistan’s history i.e. 1950-90 and the second
period 1990-2015. During the first period Pakistan had stellar performance
and was among the top economic performers in the developing world. India
during that period was growing at 3 percent per annum compared to 6
percent growth rate of Pakistan. The gap between the two economies was
5:1. India’s per capita income was much lower and poverty rate much
higher than Pakistan. In the second period Pakistan has become a laggard
even in South Asia and both India and Bangladesh overtook Pakistan in
most social and economic indicators. The size of Indian economy has
expanded ten times that of Pakistan from five times since the year 1990.
Latest data shows that Bangladesh has now overtaken Pakistan in terms
of per capita income. Bangladesh has become the second largest exporter
of ready-made Garments after China.
After reviewing many alternate hypotheses advanced in the
literature to explain these different outcomes in the two periods within the
same country my research study concluded that it was the relative
performance of the institutions of Governance that provides the most
persuasive explanation for the rise and fall of Pakistan’s economy in the
two periods. When Pakistan had strong institutions such as WAPDA which
carried out Indus Basin Works; PIDC that brought about industrial
revolution from almost a scratch; ADC which introduced high yielding
varieties of wheat and Rice seeds and fertilizers that made Pakistan self-
sufficient in food and an exporter; Planning Commission that produced five
year plans that were emulated by other developing countries and PIA which
established among others Singapore Airlines and Emirates. These are just
few examples of strong institutions manned by competent and honest
officers that made a substantial difference to the economic prospects of a
moth ridden country which was condemned by many international
observers to suffer economic collapse ready to be absorbed in the larger
India. Where these institutions stand in relation to the earlier period is quite
well known and documented. Most of them have become dysfunctional
creating more stress on the economy rather than making any contribution.
A leading economist and practitioner has observed in an article:
“A weak institutional framework hangs like a dead albatross around
the neck of the state, imposing substantial deadweight costs. It produces
untenably large inside and outside lags in policy formulation and
implementation leading to a state which is unresponsive both to internal
requirements as well as rapidly changing external environment.”
A number of commissions, committees, task forces, and working
groups in Pakistan have examined and made recommendations about the
changes in our administrative system. Unfortunately, these have not been
implemented for a variety of reasons and those who believe in status quo
and want to continue operating in their comfort zones and protecting their
turf have prevailed in stalling these reforms. Outside observers believe that
even during last ten years the quality of Secretaries to the Government and
the heads of various public sector institutions has deteriorated. But in
addition to the historical reasons there have been at least seven new
developments in Pakistan’s landscape that clearly point to the need for
reforms in the structure, processes and human resource management
policies and practices.

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 First, it is becoming increasingly apparent that the benefits of
economic growth have not been distributed equitably among the lower
income groups, backward districts, rural areas and women. Incidence of
poverty has declined but regional disparities, gender inequality and income
real distribution have intensified. Almost all studies point out that the. the
governmental machinery at the Federal, Provincial and Local Governments
have become largely unresponsive and inert in delivery of basic public
services to the common citizens. Almost all comparative country rankings,
whether originating from the World Bank* or Global Competitiveness
Report of the World Economic Forum or other think tanks and institutions
consistently rate Pakistan quite low in Public Sector Management,
Institutions and Governance. Along with the low Human Development
Indicators this weak institutional dimension makes the task of poverty
reduction, income distribution and delivery of public services quite difficult.
The impact of good economic policies upon the lower strata of our society,
particularly those who are illiterate and are not well connected, thus gets
muted. The widespread hue and cry about the absence of a trickle-down
effect of good economic policies is a manifestation of the dysfunctional
nature of our public sector governance. Government institutions have to be
strengthened to meet this challenge particularly at the grass root level i.e.
the Metropolitan areas, cities, towns, villages and neighborhoods. The
present inverse relationship in power, authority and prestige between the
senior most officers who work at levels so remote from the ordinary citizens
and those who are expected to solve the problems at the local government
level has to be reversed. In the British days the District Collector was senior
to the Secretaries of departments and he could take decisions on the spot
without making innumerable references to the capitals and getting no
response .I have seen numerous files of Section officers where these
letters were lying buried and no tracking system in place and have heard
Ambassadors complaining that their urgent telegrams were not answered
on time .

Second, the responsibilities of the government in the field of

owning, managing and operating public enterprises and corporations have
undergone significant change both in the thinking as well as action during
the last sixteen years. A large number of government owned corporations,
businesses, industrial units, banks and financial institutions and service
providers have either been privatized or ought to be privatized. The
cumulative liabilities of these public sector enterprises run into trillions and
are adding to the stock of our domestic and external debt. In power sector
the circular debt has piled up to Rs 2.2 trillion and PIA has liabilities close
to 500 billion. . This divestment will reduce the burden on the administrative
apparatus at all levels of government. The shedding of these activities by
the government would have serious repercussions for the oversight
function of the Ministries/ Departments in the post privatization period.

Third, the devolution of administrative, operational and financial

powers to provincial governments has introduced a completely new
dynamic in the Federal-Provincial relationship and allocation of tax
revenues. The devolution remains incomplete as the local governments
where most of the interaction between a citizen and the state takes place

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have suffered severe setback in the post 2008 era. The growing demands
of urbanization require effective, empowered and efficient metropolitan
corporations and municipal corporations. The Provincial Assemblies of
Punjab and KPK have passed laws to this effect which need to be
implemented. These urban corporations have to be headed by high quality
experienced civil servants assisted by a team of experts in town planning,
water supply, sanitation, solid waste disposal etc.

Fourth, the unbundling of the policy, regulatory and operational

responsibilities of the Federal ministries have shifted the focus on the policy
making, monitoring and evaluation functions. But this transition has been
incomplete, uneven and mixed across the ministries and needs to be firmly
rooted. The lack of adequate competence and knowledge of regulatory
functions would demand development of expertise in this field as well as in
policy formulation, implementation and evaluation. Autonomous regulatory
bodies have also imposed severe coordination constraints in achieving
results. The outdated skill sets in our key government agencies have to be
replaced by the emerging skills required. To illustrate this point, take the
example of the Federal Board of Revenue (FBR). It has a large number of
generalist managers, appraisers, preventive officers and tax inspectors
mostly at lower grades but very few sector specialists, data analytics
experts, qualified auditors, tax lawyers, financial modelling professionals,
public finance economists. It does not have a Research and Development
wing to carry out studies for example on tax incidence, buoyancy and
elasticities of taxes, tax gap analysis. Ministry of Finance does not possess
a Macro Economic or Fiscal policy unit manned by trained economists and
has to rely upon the expertise of the State Bank of Pakistan. A single source
of advice is not useful for complex policy making.

Fifth, some limited success has been achieved by fostering private

– public partnerships in the fields of infrastructure, education and health.
But these partnerships can only be nurtured if the government departments
and ministries have the adequate skills to design concession agreements,
B.O.T or contractual arrangements, monitoring and evaluation tools and
legal recourse to enforce the obligations and stipulations agreed by the
private sector partners. Similarly, the NGOs and community organizations
such as Rural Support Programs have been actively engaged in the
delivery of public services in the fields of education, health, water supply
etc. The government departments and ministries have to be reconfigured
to develop the capacity to design and operate these partnerships.

Sixth, there is a great deal of uncertainty and anxiety among the

members of the civil services of the country about their future career
prospects. Those specialists serving in ex-cadre jobs such as scientists,
engineers, medical doctors, accountants, etc. are demoralized because
they have limited opportunities for career progression. They also feel that
they are not treated at par with the cadre service officers in matters of
promotion and advancement. In a rapidly changing world of knowledge
economy to pretend that technical expertise or domain knowledge or
subject specialization are of lesser value in public policy formulation,
implementation and project management would be highly pernicious. WE

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employ highly paid consultants with donor money but there is nobody in
house to judge whether the analysis, findings and recommendations in
these reports are commensurate with our peculiar eco system, resource
constraints and capabilities. There is an urgent need to mainstream these
specialists in the core civil service, providing them periodic training in their
fields, career progression policies for them and performance management
indicators to evaluate their usefulness and continuation in service.

Seventh, the switch over from manual to automated processes and

the government’s commitment to move towards E-Government would
require a look at the skill mix and training requirements of the existing and
future civil servants throughout the entire hierarchy. E-Government will
itself flatten the hierarchical texture and make apparent the redundancies
in the system. At the same time, it will involve basic computer literacy at all
levels and grades, digital archiving, storage and retrieval of all files and
documents. Consequently, only a few of the clerical and subordinate staff
positions can be utilized in the future government organization. The present
ratio of 5 percent officers and 95 percent support staff is highly skewed,
induces inefficiency and preempts a large chunk of pay bill. Savings in the
officer to staff ratio would be adequate to pay higher compensation
package to the officers who form the back bone of the institutions.

(D) Expectations-Delivery Gap

The recent political history clearly points to the failure of successive

governments to live up to the expectations of the majority of their
population. This trend has become even more acute in the last decade or
so with the advent and spread of the electronic and social media. In
Pakistan every incumbent government has been voted out of power since
2008. Given the youth bulge and their exposure and awareness the
opportunities for them are not keeping pace with their aspirations. The ICT
(Information Communication Technology) revolution that has touched even
the remote areas of these countries has, in fact, tended to visualize the
disparities and contributed to higher expectations from government. On the
other hand, the capacity of the government institutions responsible for the
delivery of public goods and services has rapidly eroded and is in a
debilitating and feeble state, while a large variety of goods and services
available, advertised and visually observed on the electronic media has
whetted their appetite. They believe that the means through which they can
acquire these goods and services for themselves and their children is
through public sector employment, education and training and government
transfers. In actual practice, the allocation of public goods, services,
employment and subsidies is rationed by access to the government
functionaries or by paying bribes. As these groups have neither the right
connections nor the money to pay the bribes, they suffer from a relative
sense of deprivation while observing that the influential and well-to-do
segments of the population are preempting and enjoying the benefits of
government jobs, contracts, permits, land, etc. Large, untaxed incomes are
also accruing to the same privileged groups and individuals. The

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resentment of this poor and unconnected population is conveyed through
the only instrument they possess i.e. the vote at the time of elections.

The popular perceptions as expressed in public opinion polls, media

commentaries and editorials, articles and papers, seminars and
discussions, observations of politicians and civil society actors, all convey
with a few honorable exceptions, a negative image of the civil servants in
Pakistan and a high level of dissatisfaction with the functioning of the
Ministries, Departments, Corporations and Agencies of the different tiers of
the government. These perceptions are in contrast to the views of the civil
servants themselves who see themselves as poorly paid, highly
demoralized and stressed out individuals. They feel that they have been
unfairly treated by their political bosses and unappreciated by the general
public. Empirical studies and casual observations show that the root cause
of this disenchantment of civil society and the disillusionment of the civil
servants can be traced to structural, procedural and motivational
deficiencies in the overall system of governance. Any attempts to treat the
symptoms in an isolated manner without coming to grips with the root
causes will be counterproductive. The reform package should be
comprehensive with a clear blueprint, but the introduction of each set of
reforms could be phased and sequenced.

SECTION II

Broad Principles Underpinning the Reforms

In order to lay down the direction in which the reforms will be

undertaken, it is essential that the broad principles that will underpin these
reforms are clearly defined. The following broad principles are outlined
under each area of the reforms.

Civil Services

i) Open, transparent merit–based recruitment to all levels and grades

of public services with regional representation as laid down in the
Constitution.

ii) Performance–based promotions and career progression for all

public sector employees with compulsory training at post-induction,
mid-career and senior management levels.
iii) Equality of opportunities for career advancement to all employees
without preferences or reservations for any particular class.

iv) Replacement of the concept of Superior Services by equality

among all cadres and non-cadres of public servants.

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 v) Grant of a living wage and compensation package including decent
retirement benefits to all civil servants.

vi) Strict observance of security of tenure of office for a specified period

of time.

vii) Separate cadres of regular Civil Services at the Federal, Provincial

and local government levels co-existing with contractual
appointments.

viii) Creation of an All Pakistan National Executive Service (NES) for

senior management positions drawn through a competitive process
from among the Federal, Provincial and local government cadre, ex
cadre and non-cadre officers, those working in autonomous bodies
and other public sector entities

ix) Introduction of four specialized cadres under the NES for Economic
Management, Technical, Social Sector Management and General
Management.

Structure of Federal, Provincial and District Governments

a) Devolution of powers, responsibilities and resources from the

Provincial to local governments.

b) Establishing inter-governmental structures with adequate authority

and powers to formulate and monitor policy formulation.

c) Clear separation of policy making, regulatory and operational

responsibilities of the Ministries/Provincial departments.

d) Making each Ministry/Provincial department fully empowered,

adequately resourced to take decisions and accountable for results
through financial and performance audit.

e) Streamline, rationalize and transform the attached departments/

autonomous bodies/ subordinate offices/field offices, etc. into fully
functional arms of the Ministries for performing operational and
executive functions.

f) Reduce the number of layers in the hierarchy of each Ministry/

Provincial department to three to expedite decision making
process.

g) Cabinet Secretary to perform the main coordinating role among the

Federal Secretaries on the lines of the Chief Secretary in the
Provinces.

h) Revival and strengthening of the Secretaries Committee at the

Federal/ Provincial governments to become the main vehicle for

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 inter-ministerial coordination and dispute resolution among various
ministries.

i) District level officers interacting with the general public in day-to-

day affairs should enjoy adequate powers, authority, status and
privileges to be able to resolve the problems and redress the
grievances of the citizens.

Business Process Re-Engineering

i) All laws, rules, regulations, circulars, and guidelines issued by any

government ministry/department/agency should be available in its
most up dated version to the general public free of cost in a user-
friendly manner on the web page and in electronic and print forms
at public places. The websites should be designed in such a
manner that government-public physical interaction is brought to
the minimum and maximum services are provided online with
transparency in the application of rules and procedures.

ii) Service standards with timelines for each type of service rendered
by the Federal Government departments and bodies dealing with
public matters should be developed, widely disseminated and
posted at websites of each such department. Interaction of the
public with government offices involving financial transaction for
services like permits, taxes, fee, should be preferably done through
online or digital payment mode.

iii) Rules of business of the Federal, Provincial and District government

should be revised to make them simple and comprehensible,
empowering the Secretaries/Heads of Departments to take
decisions without multiple references, clearances and back and
forth movement of files. Post-audit of the decisions taken should be
used to ensure accountability rather than prior clearances.

iv) Delegation of financial, administrative, procurement, human

resource management powers should be revisited and adequate
powers commensurate with the authority should be delegated at
each tier of the hierarchy.

v) Estacode, Financial Rules, Accounting and Audit Rules,

Fundamental Rules and all other rules in force should be reviewed
systematically and revised to bring them in line with modern
management practices.

vi) E-Government should be gradually introduced in a phased manner.

Technological solutions, hardware and software applications are
easy parts of the process, but the most difficult aspect is the training

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 and change in the culture, attitude and practices. E-Government
should be driven by business needs rather than crafted as an
elegant technical solution. E-Government would replace the
outdated and manual files system and bring about transparency,
accountability and efficiency

SECTION III

Proposed Approach and Progress update

The lesson learnt from the experience of the National Commission for Government
Reforms (NCGR) where we aimed to prepare a comprehensive reform package after
extensive consultations with the stake holders has led us to think differently about our
approach. Although we had formed a Steering Committee headed by the President of
Pakistan and consisting of Chief Ministers this extra territorial forum did not work out as
expected. Bypassing the Federal Cabinet and not building a broader political constituency
rather than leaving the final decision making to the four Chief Ministers who considered
the reforms an erosion of their vast discretionary powers was a mistake. The second
mistake was overburdening the agenda by proposing reforms in the Federal, Provincial
and local governments, All Pakistan, Federal, provincial and District civil services at the
same time without any proper and clear sequencing. Since the NCGR Report the 18th
amendment and the 7th NFC award have drastically changed the contours of Federal-
Provincial relationship. Therefore, the task forces appointed by the PM on Civil service
reforms and restructuring of the Government have limited their recommendations to the
Federal Government only. While the provinces were represented it was left to their political
masters to decide whether they would use these recommendations in their own provinces
.It must be conceded that most reforms aimed at improving the delivery of basic public
goods and services to the common citizen lie at the doorsteps of local government and in
absence of that, the reforms at the Federal level would have much muted impact. The
whole spectrum of Local Government reforms was left to the provinces and the Punjab
and KP Assemblies have come up with legislation which would indeed strengthen the local
government system. It is not clear what would be the stance of the Sindh and Balochistan
Governments in their approach towards devolution as they have their own peculiar
considerations

Civil Service Reforms

At the Federal level, we identified that in the civil service reform would adopt the “whole
value chain of policies” approach in an integral manner. This value chain starts with (a)
Induction and Recruitment and extends to (b) Post induction and mid-career Training (c)
performance Management (d) Career progression (e) Compensation and Benefits and
finally (f) Retirement and Severance. Each one of these topics was analysed at length by
the sub groups of the Task Force, discussed at the whole Task Force meeting, discussed
at consultative sessions with stakeholders and then crystallized in form of
recommendations. AS the task force had a diverse group of membership there were at
times heated discussions, some members withdrew or resigned and others expressed

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strong dissenting views. Criticism was levied that the Task Force was dominated by the
PAS officers and had little representation from other services and the Chairman himself
was an ex CSP officer. The PAS officers dominated because the ex officio members i.e.
the Chief Secretaries and Federal Secretaries all belonged to that service. Non official
members were drawn from among the academia, private sector, also retired civil servants
belonging to PFS, PSP, IRS. More than 60 consultative sessions held at Quetta, Karachi,
Lahore, Peshawar and Islamabad including training institutes were attended by more than
1900 officers from all services, cadres, ex cadre and non-cadre. Their views were
incorporated while finalizing the recommendations.

The Task Force was of the view that unless the elements of this value chain were not
revamped any structural changes such as creation of National Executive Service would
not make much sense. So, it was proposed that each of these items and allied policies
should be taken for the consideration of the Cabinet for their approval. The status of
progress made up to date is as follows:

So far the Policies which have been approved by the Cabinet pertain to selection
of heads of public sector corporations and bodies, Training of officers,
Performance Management, Promotion Policy, Rotation and Directory Retirement
rules.
a) A transparent procedure for selection of Chief Executives, Managing
Directors and heads of public sector organizations and enterprises through
an open merit based competitive process has been put in place since 2019.
About fifty such positions have been filled so far following this procedure
which is aimed at finding the right person for the right job.
b) Systematic training of ex cadre and non cadre officers on the lines of the
Cadre services has been made mandatory for promotion. Mid career and
senior management training courses at National Institutes of Management
(NIMs) have been divided in two parts—the first half would be common
training course at NIMs while the second part would take place at the
Specialized Training Institutions (STIs) in their respective professional
fields.
c) For Performance Management, key performance indicators (KPIs) for
goals for the year would be agreed upon by the officer and the supervisor
replacing the present highly subjective evaluation process. Only top 20,
percent would be placed in Outstanding category and their annual
increments would be twice as much as those of the fully satisfactory
categories. Those who get below average performance reports would get
no increment.
d) Promotion for senior posts would no longer be based on seniority but on
the past performance reports, training institutions’ assessment and
evaluation by Selection Boards about the potential of the candidates to
occupy higher positions. Rotation among Provincial and Federal
Governments for All Pakistan Service officers would form part of the
eligibility for promotion to the next grade.
e) Under the Directory Retirement Rules which have been notified, Officers
who have been superseded or shown unsatisfactory performance
consistently would be retired after completing twenty years of service by
independent Boards.

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f) In order to attract specialized and technical skills of high order from among
the private sector and overseas Pakistanis two new streams of recruitment
have been opened up. Management Positions (MP) scales and Special
Professional Pay Scales (SPPS) scales with attractive packages much
beyond the existing BPS scales have been introduced. These positions
would be filled purely on merit through an open competitive process, policy
guidelines have been developed to recruit, remunerate, evaluate their
performance have been issued. A cabinet Committee considers the
proposals for conversion of the posts to MP and SPP scales and decides
on the basis of justification and rationale for such conversion.
g) To assist the Ministers in-charge of technical ministries, 14 posts of
Technical Advisers with expertise in that Ministry’s business have been
created in the Minister’s offices
h) It has been decided to induct the officers of the Provincial Civil Services
into the Pakistan Administrative service at grade 19 through the Federal
Public Service Commission

The proposals that are yet to be approved by the Cabinet are as follows:
i) Induction and Recruitment: After thorough discussion with the Federal
Public Service Commission the proposals for Induction and Recruitment
have been finalized and would be submitted soon for Cabinet’s approval.
The initial screening tests and selection of mandatory electives to match
the requirements of the occupational group at CSS examination are the
innovative feature of the proposed recruitment system
j) For Pay and compensation a study has been completed by PIDE but a Pay
and Pension Commission has been formed to review all proposals for
rationalizing salary structure and the current system of pensions.
k) Amendments in Efficiency and Discipline Rules and the Federal Services
Tribunal for making internal accountability more effective were finalized by
the Task Force and are under review by the Establishment Division for
presentation to the CCIR and the Cabinet
l) A proposal is under consideration to recruit technical experts on pre
identified grade 20 positions in those Divisions and Ministries that deal with
complex technical issues. The existing recruitment rules for ex cadre
positions would have to be revised so that the existing technical positions
in various grades can be filled through hiring of suitably qualified, skilled
and experienced persons from the private sector instead of promotion only
m) The Cabinet, just like the Musharraf Government and his chief Ministers
and the Prime Minister at that time, did not agree with the proposal on the
Security of tenure and adopted a policy for Federal Secretaries to be
selected by a committee consisting of Ministers and Secretaries that would
recommend a panel of three candidates to the Prime Minister against each
vacant post. The selected officers would have a fixed tenure for two years
but could be removed in the initial six months on the recommendation of
the Minister incharge. This action has been criticized by many civil servants
as it yields undue political influence in the appointment of the Secretary
of the Division. The counter argument given by the Cabinet members was
that if they were to be held accountable for results according to the
performance contract signed with the Prime Minister, they should have a

14
 say in selecting the team leader of their management team. In their opinion
this would minimize frictions and tensions that may hinder smooth
functioning of the Ministry.
.

The Cabinet has formed a Cabinet Committee on Institutional Reforms (CCIR) that meets
regularly to monitor implementation of these reforms, consider new ideas and proposals
in four areas (a) Restructuring of the federal government (b) Strengthening selected key
institutions of governance (c) Civil Service Reforms and (d) Business Process
Reengineering. The Committee consists of three Ministers, one Adviser, two Special
Assistants and Secretaries Cabinet, Establishment, Finance and Law Divisions. The
decisions of CCIR are considered by the Cabinet for ratification.

Restructuring of the Federal Government

The second Task Force on Restructuring of the Federal Government and Austerity
focused on (a) 441 organizational entities (OEs) by reviewing their functions, efficacy
and legal status, (b) revitalizing the e-office suite in the Ministries, (c) Business process
reengineering , (d) Public financial management and (e) Strengthening the Secretaries
committee for inter-ministerial coordination and resolving unsettled issues to lessen the
burden on the Cabinet and its committees.. The Cabinet formed a Committee of Ministers
and Secretaries to oversee the implementation of this report. The Committee held 37
meetings, listened to the viewpoints of the Ministries/Divisions, took decisions and made
recommendations for their official notification. This Implementation Committee was
subsequently folded into the newly formed Cabinet Committee on Institutional Reforms
with the same membership and an expanded mandate

The status of progress up to date is as follows:

• A comprehensive report on the 441 OEs was submitted to the Cabinet and
approved. The report divided all the OEs in six categories (a) those to be retained
as autonomous bodies (b) those to be retained as Executive departments (c) those
to be privatized (d) those to be transferred to the provinces (f) those to be merged
(g) those to be liquidated or wound up. This effort has reduced federal government
entities from 441 in total to 324 and reduced the configuration of entities from 14
different kinds to three i.e. Executive Departments, Autonomous Bodies and
Constitutional Bodies. Furthermore, Liquidation, merger and transfer of entities to
provinces or relevant ministries would help reduce the fixed and variable costs of
the federal government without any loss to efficiency and results.

• The Parliament approved a Public Financial Management Law for the first time in
the history of Pakistan in June 2019 devolving financial powers from the Ministry
of Finance to the line ministries and abolishing the Financial Advisers organization.
Chief Financial and Accounting officers would assist the Secretaries in discharging
their functions of financial management and sub offices of AGPR would be located
within the ministries

15
 • E-Office suite has made progress, the latest version of the software has been
tested, hardware has been procured and installed, training to the Ministry staff has
been imparted and most ministries have reached level 4. By December this year
it is expected that all ministries would have all filing and exchange of
correspondence electronically with a strong tracking system, this would not only
eliminate delays in disposal of business but also strengthen accountability. The
culture of missing files at crucial junctures would hopefully be replaced by
transparency in transactions.
• In the area of Business Process reengineering Esta code, Rules of Business and
Financial Rules are being updated, revised and posted on the websites for ready
access to all the stakeholders. The websites and web portals of all Divisions are
being reconfigured to provide as much information and data on rules, regulations,
Office memoranda, procedures, forms, policies, relevant staff officers to the public
at large as possible so that unnecessary references that remain unanswered by
Government functionaries at present are minimized.
• Implementation Committee has also recommended abolition of almost 71,000
posts which have been lying vacant for at least one year with the objective of
rightsizing and observing austerity
• Amendments in the rules of Business recommended by the Task Force and the
Secretaries Committee are being vetted by the Law and Justice Division.
• A proposal to reduce the tiers of the hierarchy in each Division from six to three
with broad banding—Deputy Secretary (BPS 19/ 20), Joint Secretary (BPS 20/21)
and Secretary (21/22) -- is under consideration by the CCIR. The positions of
Principal Staff Officer, Senior Staff Officer and Staff Officer would be created to
assist the officers occupying the three tier posts in the vertical hierarchy
• 23 training institutions engaged in training of the civil servants are being made
autonomous, empowered to take decisions, fully resourced both financially and
with quality instructional staff. Incentive structure for these institutions’
instructional staff should be brought at par with those serving the National School
of Public policy.
• Maximum limit for approval of PSDP schemes has been raised and the Division
can now approve schemes up to Rs. 2 billion
• Planning and Development Division has introduced a number of changes to
simplify the processing, approval and implementation of development schemes.
No unapproved scheme is included in the PSDP Budget allocation
• Finance Division has set up a mechanism of quarterly releases of funds on PSDP
schemes in timely manner
•
•

Strengthening key institutions of Governance

In addition to these two tasks forces the relevant Ministries dealing with key institutions
which were vital for the economy or were draining financial resources were tasked by the
Prime Minister to carry out reforms in these organizations. Most prominent among them
are the Federal Board of Revenue (FBR), Pakistan Railways (PR), Pakistan Steel Mills
(PSM), Pakistan International Airlines (PIA), Civil Aviation Authority (CAA) Competition
Commission of Pakistan CCP), Auditor General of Pakistan (AGP), Evacuee Property

16
Trust Board (EPTB), Capital Development Authority (CDA). The Cabinet has approved
the restructuring plans of PR, PSM, CAA, CCP, EPTB and CDA and their implementation
with time lines would be monitored by the CCIR on a regular basis. FBR Reforms are
being undertaken under a comprehensive framework document that delineates the
responsibility for the tasks, milestones and time lines. Tax Policy Board under the
Chairmanship of the Adviser Finance meets periodically to review the progress made and
resolve the outstanding issues hindering actions. The reform package along with the new
law governing the office of Auditor General has been drafted, agreed upon and would
soon be submitted to the Cabinet for approval. As a first step sub-offices of AGPR have
been established in 7 Ministries and these sub-offices have received appreciation

PIA is also being restructured to make it a competitive, lean and modern airline. This is
being achieved through a number of interventions including financial restructuring, HR
rationalization, organizational restructuring, fleet modernization and routes rationalization.
In order to improve the ecosystem for aviation industry, CAA is being bifurcated. The
regulatory role will be retained in the Authority whereas the airports development functions
will be entrusted into a new corporate entity to obviate the conflict of interest and also to
facilitate the joint ventures and outside investments for modernizing airport facilities.

A comprehensive restructuring plan for Pakistan Railways has been prepared and
approved by the Cabinet. It has also been submitted to the Supreme Court. PR will be
separated into 5 main constituent companies for better management. The implementation
of the plan will be supervised by CCIR. Similarly, an elaborate plan for restructuring of
CDA and ETPB has been prepared and is being implemented by concerned quarters.

17
Reforming the Government in Pakistan: Rationale, Principles & Proposed Approach 15

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