Playing with basic law: Devolution Plan of Musharraf - 3

Part 3

DEVOLUTION IN PAKISTAN: REFORM OR REGRESSION? 22 March 2004

V. IMPLEMENTING DEVOLUTION

A. THE POLITICS OF DEVOLUTION

On 13 August 2001, all four provincial governments issued local government ordinances to operationalise the devolution plan. The irony was not lost on critics of the plan that the "Local Government Ordinance 2001 was prepared by the federal government but each province was directed to notify it as its own law". On 14 August, Pakistan's independence day, elected local governments were formed in 97 provincial districts and the four city districts of Karachi, Lahore, Peshawar and Quetta. Its internal contradictions leave Local Government Ordinance 2001 (LGO) open to varying interpretations and make its implementation difficult. No clear lines of authority delineate the relationship between the nazim and the bureaucratic head of a district, the DCO, who represents the centre. The LGO designates the zila nazim as the head of the district government to be assisted by the DCO but many zila nazims complained to ICG that DCOs often ignore them in administrative matters since there is no provision in the LGO to ensure their compliance with local government directives. Section 20 makes nazims personally responsible for financial losses and unlawful expenditures. Several nazims complain this creates "responsibility without authority" and leaves them vulnerable. The manner of implementation suggests that the military government is far more interested in political manipulation than political devolution. The political use of the scheme is best demonstrated by the April 2002 referendum that extended President Musharraf's term by five years with 97.5 per cent approval. The military used the newly installed nazims to help ensure a favourable outcome. They were persuaded or coerced to mobilise their constituents for a pro-Musharraf vote. Many organised and funded rallies in return for economic and political rewards.

According to some reports, union councillors were funded by local governments to campaign on Musharraf's behalf. Others were warned of the withdrawal of government support and termination of development projects in their areas if they did not cooperate.

Those who refused were also threatened with prosecution for corruption. Shah Mehmood Qureshi, then Multan District nazim and a PPP leader, said: "The provincial government wanted me to release money from the district budget for Musharraf's referendum. I refused since I could not transgress my authority". This resulted in the provincial government prosecuting him for misuse of public resources. Nafisa Shah, nazim of Khairpur district in upper Sindh, refused to attend Musharraf's referendum rally, branding it a political gimmick. Since then, district officials are transferred without her knowledge, and development funds are frequently withheld. From the start, the military has carefully controlled the pace and direction of devolution. Military personnel have remained intimately involved in the day-to-day affairs of local bodies. District transition teams, formed to facilitate the start of the new structures, were headed by military officers who called the administrative and financial shots. With the structures in place, the military has continued to oversee administration as well as the disbursement of development funds.

Several nazims in the Punjab say they have received direct orders from senior officers to undertake certain "visible development projects that could later be cited as achievements of the military government". Field officers, as well as union council nazims interviewed by ICG, say that the elected local governments have been empowered only in name and do not enjoy any meaningful administrative or financial autonomy. Of special concern is the imbalance of powers between the directly elected union councillors and the indirectly elected zila nazims. "The actual intent was to consolidate the military's power at the district level through zila nazims", says a union councillor from Quetta. "Below that level, we mostly do what previous councils did: register marriages, deaths and births". It was with this primary objective in mind, critics say, that the military's devolution plan has tilted power in local structures in favour of district and tehsil nazims. Elected councils retain only residual functions. "Devolution has stopped at the level of the district nazim", says a Baluchistan district naib nazim. "The [directly elected] district council is a rubber stamp". Given the indirect nature of their elections, district nazims are answerable to a narrow "electoral college" of union councillors. "Under the new local government scheme", says one in the Punjab, "the allocation of limited development funds is the central pivot around which political loyalties revolve". In several districts ICG visited, councillors claimed that their union councils are neglected in development projects because of their opposition to the nazim.

The nazim's need to reward supporters "has resulted in a lopsided situation where some union councils are richer and more developed than others". Hence the local government scheme has created its own pro-military elite, with strong political and financial stakes in the military-created system. As a zila nazim from the Punjab told ICG, "our loyalties should lie not with a political party or government but with General Musharraf who has really empowered the people at the grassroots". Contrary to official claims that the devolution scheme has successfully increased representation of women in government, it has done little to guarantee legal, administrative or financial responsibility for them other than the reservation of 33 per cent of local council seats. "When the local councils are powerless as a whole", asks a woman councillor from Baluchistan, "Can you imagine the extent of our influence on local affairs"? Most women councillors interviewed agree. Says one from the NWFP, "We don't get anything. We have no vote. We have no voice". Says another from Sindh, "we are mere rubber stamps. The zila council approves schemes and we are asked to vote for them". The facts speak for themselves. In the 101 districts, only two nazims are women and both come from traditionally dominant political families in Sindh. Male councillors say that since they have nominated women councillors, these are "unequal". "If the military government was really serious about giving women powers rather than appeasing donors", says a woman councillor, "it would have reserved a share of nazim slots at the district and tehsil levels". Women councillors complain that the government and NGOs raised their hopes unrealistically. Most say they have received no special training to familiarise them with the provisions of the LGO or the functioning of the local government system. Their participation in Council meetings is made even more difficult in the absence of adequate pay, though male counterparts frequently cite this problem also.

B. ADMINISTRATION AND DEVELOPMENT

1. Restructuring Administration

With the promulgation of the four provincial LGOs, the previous system of administration ceased to exist. But while elected governments took the oath of office on 14 August 2001, decentralisation of the administration took far longer. The entire divisional tier that acted both as a coordination link between the district and the province, as well as the appellate authority in the district system, was abolished. A new bureaucratic structure, with the district coordination officer (DCO) at the top and executive district officers (EDOs) heading each district department, was put in place. The administrative, financial and appellate powers of divisional officers were devolved to this restructured district administration. Staff from older local councils and municipal bodies was transferred to the district and tehsil levels. Provincial line departments such as education, health, and works were devolved to those levels and new departments, including information technology, law, and literacy, were created. The new system was flawed since it was installed in haste, reflecting the military government's need to meet its own arbitrary independence day target. Not enough preparation was devoted to implementation details. The perception within the NRB was that once the system was in place, the military's backing would ensure smooth operation. While transition modalities were worked out on paper and provincial transition mechanisms put in place, little attention was given to the actual dynamics of replacing a well-entrenched system with an unfamiliar, untested one. Even less was paid to the weak administrative capacity at local levels. Not unsurprisingly, the initial weeks were marked by confusion within the official machinery and among the public.

While teething problems were gradually removed, structural problems remain. Many administrative powers previously exercised by the district commissioner remained unspecified in the new system. Poorly defined enforcement mechanisms are another problem. While the tehsil administration enjoys quasi-judicial powers such as imposing fines, its officials find it nearly impossible to enforce their writ without the enforcement powers previously exercised by executive magistrates backed by the police. According to a Baluchistan minister, "in the previous system, the DC had executive magistrates at his disposal who could effectively check prices, food quality and encroachments. There is a vacuum now, and the writ of the state has been weakened". The NRB is critical of the "the absence of horizontal integration and the consequent inadequacy of functional co-ordination between the line departments at the division, district, and tehsil levels which lead to inefficiency and corruption, and are the root causes of the crisis of governance at the grass root level".

Coordination has grown worse. There are no hierarchical linkages between the various levels of local government, and each practically operates in isolation. "Lack of vertical linkages and coordination between tehsil and district often lead to jurisdictional conflicts", says Ahmed Wassan, a Lahore town nazim. A former Karachi DCO adds, "intra-local government coordination is zero", thus reducing the NRB's "goals of coordinated planning and coherent administration to a practical joke". The stand-alone nature of administrative changes at district level is another shortcoming. Absent wider civil service reforms at provincial and national levels that address the broader problems of poor skills, low incentives, weak capacity and widespread corruption, the ambitious changes sought by the plan have little chance. Officers of the District Management Group, who continue to run district and tehsil-level administrations, feel unfairly targeted, not least because they were completely ignored during the process that led to adoption of the devolution plan. And despite NRB claims, the district coordination officer and his deputies enjoy wider administrative and financial powers than the former DC, however reduced the new administration' s law enforcement and judicial authority may be. In addition, the current form of administrative decentralisation cannot address the issue of corruption and misuse of office unless there are corresponding changes in the lower structures of land revenue management, that is, at the level of the tehsildar/patwari (pre-independence revenue officials). Says a former federal secretary, "merely re-orienting the upper links in the chain of exploitation and corruption will only bring cosmetic changes...the common man still has to deal with the horrifying reality of bribing the patwari or the local policeman to get things done". Provincial line departments were to be devolved and new ones created at the district level.

Aided by a bureaucracy unaccustomed to change, however, provincial governments adopted a go-slow approach in devolving line ministries and relinquishing administrative controls over their staff in the districts. In some districts, several departments remained under provincial control for over a year. "There is need for the real devolution of departments of the provincial government such as health and education", says Malik Asad, district nazim of Kohat in the NWFP. "So long as the provincial government retains control, there will only be surface devolution". The precarious position of the city district government of Karachi is a case in point. Under section 182 (3) (a) of the LGO, "the control of the development authorities, water and sanitation agencies and solid waste management bodies was to be vested in a city district government". Nevertheless, citizens continue to face serious water and sanitation problems, and the Karachi Sewerage and Water Supply Board (KSWSB), the civic agency delivering water and sanitation services, remains outside the operational control of district authorities. In several poor localities of the city, water shortages have led angry residents to demonstrate outside town council offices. Elected officials fear water riots if problems persist. Says Muslim Pervez, a senior presiding officer of the city district council, "people bring their complaints to us, and we have no powers over the water board. I am afraid things could easily spiral out of control".

District authorities in Gwadar, a remote coastal district in Baluchistan, face similar problems. The provincial chief minister heads the governing body that controls the Gwadar Development Authority, and a provincially appointed director general acts as head of administration. The provincial government also retains control over the works and services department while staff salaries are deducted from the account of the district government. Says Babu Gulab, a zila nazim, "for the last two years, I have felt powerless in the face of the continued provincial control over the district's affairs".

2. Devolving Corruption?

Another key problem with the devolution scheme is the lack of checks and balances between and across the various levels of district government. There is a virtual absence of accountability of district nazims. The provincial Local Government Commission can initiate special audits and inspections of district governments but these can be at best sporadic and are not a viable substitute to permanent, institutionalised checks and balances at district level. Technically, the zila council can be an effective check on the nazim, and through its monitoring committees on the district government as a whole. By law, the council approves by-laws, taxation proposals, annual development plans and the district budget. The extensive range of financial controls and their effective exercise, however, remain contingent on the political relationship between nazims and the council headed by the naib nazim. Since the nazim and naib nazim are elected on a joint ticket, the former can wield enormous influence over the council without enduring corresponding legislative checks on his authority. The joint ticket was conceived with the ostensible goal that the naib nazim would be the link between the nazim and the council. But this interface is under severe strain because of the gross imbalance of powers between the two offices. "The naib nazim is a show piece who can't even sign a legal document", says one of those officials. In districts where the relationship is antagonistic, the naib nazim can simply refuse to summon the council when required by the nazim. In such cases, the nazim, as executive head of the district, often runs the government without consulting the council, which can at best censure his actions through non-binding resolutions. Under the LGO, the district coordination officer is the principal accounting officer of the district government. He is, however, responsible to the public accounts committee of the provincial assembly in financial matters, not to the nazim or the zila council. He also heads the district development committee (DDC), which can approve development schemes up to Rs.5 million (U.S.$90,000) "The new DCO is the financial kingpin of the district", says a provincial minister in the Punjab, "with access to a larger financial pie than the former district commissioner but without any substantial changes in contracting or other financial procedures". Consequently, corruption opportunities have increased. "The checks and balances system envisaged under devolution is practically absent or operationally ineffective" , says an EDO (Finance), in the Punjab. "This has increased the already rampant and unchecked corruption" in the province. Under the LGO, elected monitoring committees of zila, tehsil and union councils are responsible for reporting administrative malpractice and corruption in local governments to the nazim for appropriate action. But these committees exist mostly on paper. While many have been elected, there are no financial or administration provisions for their functioning. The head of a district education monitoring committee in Punjab's Khushab district told ICG, "We have no
resources or capacity to monitor governmental functions. Besides, there are no official rules of business that govern our operations". Elected councillors interviewed in Baluchistan, the NWFP and Sindh cited bureaucratic resistance as a key stumbling block: "Executive district officers who are supposed to furnish us with information rarely respond to our queries since they know we have no powers over them".

The tehsil is the designated level at which most local municipal services such as water, sanitation, and sewerage are delivered. The tehsil municipal administration (TMA) is also responsible for awarding contracts for signboards and advertisements, an area prone to opportunities for rent seeking. Since there are virtually no financial checks on the tehsil administration, and it can assign or contract out any of its functions to private and public sector organisations, allegations of corruption in contracts are rife. In theory, the zila nazim can initiate inspections of tehsil and municipal administrations but in practice, they have neither the time nor the enforcement machinery. According to a senior official in the Sindh Ministry of Local Government, "corruption is up with a new mafia of nazims, tehsil officers and contractors emerging under the devolution plan that works in unchecked collusion with respect to awards of public contracts". Access to information can enhance transparency and accountability by creating pressure on the government to take into account citizen preferences when reaching decisions. While the devolution plan claimed commitment to "information empowerment" , public and media access to information about the actions and performance of government is still subject to tight controls exercised by government. "Devolution will remain meaningless without an effective Freedom of Information Act", says a newspaper editor in Baluchistan. "The presence of legal obstructions like the Official Secrets Act practically preclude the possibility of access to any information unless explicitly declared public by the government of the day". The LGO envisages "transparent, automated information systems at all levels in each district", but little provision has been made for the lack of local information technology capacity, infrastructure and resources.

3. Development and Service Delivery

The devolution plan emphasised community involvement in development through creation of citizen community boards (CCBs). Nevertheless, the NRB took almost two years to frame by-laws. While many districts in the Punjab and some in Sindh have registered many CCBs, they can receive project-based cost sharing support from local governments only up to 80 per cent. "In rural districts," says a zila nazim from Punjab, "it is impossible to generate the remaining 20 per cent funds from communities who can barely make ends meet".

The cost sharing provision, many officials and analysts believe, effectively works against the official LGO policy of "energizing the local communities through voluntary, proactive and self-help initiatives" . An observer says that, "it seems that the concept of CCBs is more a function of the flowery rhetoric of the writers of the devolution plan aimed mostly at international donor agencies and the domestic NGO community than ground realities or real intent". Most nazims interviewed by ICG, however, argue that elected local councils have improved public access to official business. Devolution has certainly reduced the gap between state and citizen since local councillors and elected nazims are easily accessible, unlike a district commissioner. This could facilitate the local solution of day-to-day problems that were previously managed by bureaucrats in provincial capitals. In addition, budgets, prepared at district level, can reflect local priorities. Development schemes (roads, sanitation, water supply) can be locally planned and executed, thus eliminating delays involved in getting approvals from provincial or federal authorities. Yet, many senior federal and provincial as well as local government officials told ICG that the system is not working, citing as evidence the steady deterioration in delivery of basic social services like education and health.

According to one federal health official, "nazims tend to focus on quick impact projects like sanitation and sewerage rather than longer term investments in education or health". Says a critic: the plan may have facilitated the creation of new facilities and infrastructure but so did Ayub's Basic Democracy system. The real test is visible improvements in the basic living standards and services of the people. There is no evidence of that happening anytime soon. Others point out that municipal infrastructure, especially in urban areas, has come under enormous pressure as tehsil administrations try to cope with the expansion of their functions to rural areas. "Mitigating the rural-urban divide is a good idea in the long run. But at the moment, it has undermined service delivery", believes a tehsil nazim in Sindh province. Many nazims typically blame the shortage of development funds and the lack of staff capacity. "Whatever development funds we get", says Amjad Noon, zila nazim of Sargodha in the Punjab, "flow mostly through federally or provincially funded schemes, leaving districts little leeway over the planning, implementation and budgeting". Shortage of funds is a serious problem with many district and tehsil administrations struggling to pay the monthly salaries of employees. In the absence of any reliable national data, it is hard to reach definitive conclusions on the impact of devolution on service delivery but the widespread perception remains that it has done no better, if not worse, than the system it replaced.

C. FISCAL DECENTRALISATION

The bulk of local government resources come as fiscal transfers from provincially appointed provincial finance commissions (PFC) -- 98 per cent in some cases. Provinces transfer some 40 per cent of their total receipts to local governments, fuelling already widespread perceptions of encroachment on provincial autonomy. District governments, however, have limited discretion over their budgetary resources. Over 80 per cent of the money transferred is for salaries and cannot be used for any other purposes. Except in Punjab, salaries are still paid from provincial accounts. Only the non-salary component (utilities and other recurring costs), a fraction of the total expenditure, is transferred to district-controlled accounts. By and large, transfers are population rather than needs-based. Population estimates remain problematic in light of the controversial nature of the census the army conducted in 1998. In Baluchistan, for instance, the Pashtun Khwa Milli Awami Party called for a boycott of the census. Rahim Kakar, the Quetta City district nazim, said, "this resulted in an unfair PFC award for Quetta since the census grossly underestimated the city's actual population". Under the LGO, local governments can raise additional revenues through specified taxes. Previously the main source of taxation revenue for local councils was the octroi (urban) and zila tax (in rural areas) on the movement of goods in and out of the territorial jurisdiction of the council. Under IMF directives, the federal government abolished this in 1998 to remove tax distortions. To make up for the revenue loss, 2.5 per cent of the revenue generated by the centre from the new general sales tax is now allocated to provinces. Provinces transfer this directly to the tehsil administrations. Without an octroi tax, however, the taxation base of local governments (especially urban councils) is severely circumscribed. Says an economist in the Federal Planning Commission, "The LGO does not significantly increase the tax base of the district governments, without which meaningful devolution will remain elusive". The tehsil administration can collect the more lucrative urban immovable property tax (UIPT) and transfer of property tax. Any proposal for new taxation, however, requires approval of the relevant provincial authority. "Previous councils were more financially autonomous as they could raise substantive taxes", says a former chairman of the zila council and now a town nazim in the Punjab. "This is devolution with a centralised financial system". Financially starved, many districts are centralising taxation powers. In Karachi, for instance, the city district government collects the fee on advertisement billboards and posters, otherwise a tehsil fee.

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