As per a Business Recorder exclusive, four critical legislations are pending due to the ruling party’s refusal to form a working relationship with members of the opposition: the State Bank of Pakistan (SBP) Act, the National Electric Power Regulatory Authority (Nepra) Act, the State-Owned Enterprise (SOE) Act and the Anti-Money Laundering (AML) Act. Passage of all four of these acts is stated as conditions of the International Monetary Fund’s 39-month 6 billion dollar Extended Fund Facility (EFF). Government
In the International Monetary Fund staff report uploaded on its website in the section on Memorandum on Economic and Financial Policies, the government of Pakistan commits to the following: (i) “to build a stronger institutional framework we will amend the SBP Act to strengthen its autonomy, governance and mandate” and submit it to parliament by end December 2019; (ii) “we will submit to parliament by end December 2019 changes to the Nepra Act to (a) ensure full automaticity of the quarterly tariff adjustments and (b) eliminate the gap between the regular annual tariff determination and notification by the government (structural benchmark);” (iii) draft a new SOE law by end December and lay it before parliament end September 2020. Key elements to include (a) a clear definition of the goals and rationale for state ownership; (b) clear definitions of the role and responsibilities of key institutions (ministries, boards, management); and (c) establishment of performance agreement procedures and responsibilities. And last but certainly of the most importance today is (iv) the government’s commitment to urgently strengthen the AML/CFT framework in line with international standards to support the country’s exit from Financial Action Task Force (FATF) list of jurisdictions with serious deficiencies by end October 2019. Thus there is a little over four and a half months left to meet a deadline which, if not met, would lead to our placement on the black list with a consequent negative impact on Pakistan’s capacity to borrow externally, including disbursement of already pledged assistance by the IMF and other multilaterals who, like the IMF, are now mandated to work with the FATF. The issuance of sukuk/Eurobonds, debt equity, would also be compromised if the country is placed on the black list.
It is thus extremely unfortunate that the government’s unceasing confrontational approach with the opposition parties has begun to seriously impact on national interest. And this can be attributed to the fact that the government does not have the numbers to pass non-money bill legislation that requires a majority approval from the two Houses of Parliament, or a majority in a joint sitting, rather than a simple majority in the National Assembly that is required for a money bill. The Pakistan Tehrik-i-Insaaf together with its coalition partners has 180 members out of a 342-strong lower house of parliament and 38 members out of a 104-member upper house giving it a deficit in a joint sitting of 6 members to attain a simple majority. Thus, unless the government resorts to horse trading, a despicable practice that undermines democratic norms as well as the constitution of the country, there is a need to ensure a working relationship with members of the opposition for the passage of critical legislation.
We do question Prime Minister Imran Khan’s inordinate focus on ensuring that past corruption be investigated and tried in courts of law and, if the accused seek plea bargain (that entails admission of guilt) they must be dealt with under the accountability law. However, the ruling party must accept that a key legislation with repercussions on national interest is pending because of its decision to hold the accused guilty as if they are already convicted and in announcing its intent to change the rules of business that govern production orders in parliament or stopping the media from coverage of those accused, though not convicted.
To conclude, it is of vital importance that the cabinet in general, and the prime minister in particular, realise that without broad-based political support it would be impossible for the government to deliver on its commitments that it has made to the IMF in its letter of intent (LoI). It is hoped that national interest shall prevail over ego and the prime minister would reach out to members of parliament across the aisle to forge a working relationship to facilitate passage of necessary legislation.
(This news/article originally appeared in Business Recorder on July 11th, 2019)