Sustainability: An Imperative for Improving Governance and Management in Pakistan

Author:FARIDA FAISAL
 
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Abstract

Sustainability remains an elusive goal in Pakistan. While there have been a plethora of policies, frameworks and blueprints for sustainable development with grandiose targets and optimistic timelines, Pakistan suffers from severe lags in implementation of development plans, due to ineffective monitoring and flaws in evaluation of projects (Kakakhel, 2011). This paper starts with a contextual review of the Pakistan's governance issues, business environment and efforts for sustainable development. This is followed by literature review for presenting discourse on the sustainability paradigm, reflexive governance and corporate social responsibility. The theoretical perspectives presented in extant literature are used to analyze three important sustainability initiatives in Pakistan. Finally, recommendations are presented for development planners and managers of public and private organizations regarding practical uptake and mainstreaming of sustainability approach in Pakistan.

Keywords: Sustainable development in Pakistan, Sustainability, Reflexive governance and corporate social responsibility

  1. INTRODUCTION

    Sustainable development has a new agenda as laid out by UN Synthesis Report: The Road to Dignity by 2030, calling for rethink and redesign of development policy frameworks Post-2015 (Ki-Moon, 2014). Instead of relying on a segregated approach to development, this agenda of global development supports an integrated and self-reinforcing approach to economic, social and environmental concerns. Inclusive policies fostering economic growth have positive environmental spillover effects which, in turn, leverage social progress. Strong inter-dependence and inter-linkages exist between the three aspects of sustainability.

    Given this linkage, it is not surprising that in Pakistan serious governance challenges have not only hampered economic development and policies to reduce poverty but poor governance has also negatively impacted the investment climate, undermining competitiveness of private firms and making it harder to attract foreign investment. Transformational change in the country would require private sector involvement in public sector reforms, out of the box thinking, integrated solutions, utilization of human resource and sustainability consciousness.

  2. SITUATIONAL ANALYSIS

    Sustainability remains an elusive goal in Pakistan. For unleashing the development potential of the country, optimal utilization of strategic endowments is required which is not possible without improving governance and management quality. Unfortunately, most of the reputable governance and business competitiveness indicators suggest that Pakistan is facing grave governance and management challenges (WGI, 2015; WEF 2015). The government has limited capacity to achieve durable development outcomes (World Bank, 2015). Even in the private sector, the number of companies with well-defined sustainability policies and awareness of sustainability reporting is low (PIGC, 2013).

  3. PAKISTAN'S GOVERNANCE ISSUES AND BUSINESS ENVIRONMENT

    Pakistan's governance issues are grave and alarming. The Worldwide Governance Indicators project report (WGI, 2015) reveals that in 2014 Pakistan was ranking lower than the South Asian average in terms of all six indicators of governance. The greatest governance challenge, as expected for a country going through internecine war, remained 'Political Stability and Absence of Violence/Terrorism'. Among the 215 global economies included in this project Pakistan ranked 208th, with only 7 countries being worse off on this dimension. According to the report, 'Control of Corruption' was the next severe challenge for good governance. Although after the political regime change in 2013, minimal improvements were noted in this area.

    Nevertheless, Pakistan stood at the 21.6th percentile rank, where as its neighbor India achieved 38.94th percentile, during the same time period. On the dimensions of 'Voice and Accountability' and ' Rule of Law', Pakistan's score was lower than that of its once constituent part-Bangladesh. In terms of 'Government Effectiveness', Pakistan lost a percentile rank as compared to its performance in 2013.'Regulatory Quality' appears to be the only silver lining, with an improvement of 3 percentile ranks as compared to the year before and the highest rank being scored in this dimension as compared to the other five indicators of governance (WGI, 2015).

    TABLE 1 Pakistan's Global Competitiveness Indicators 2015: Areas of Extreme Weaknesses and Relative Strengths

    Extreme RANK

    Pillar RANK* Relative Strengths

    Weaknesses *

    Business Costs Of

    139

    Terrorism

    Investor Protection

    Institutions Organized Crime 132 21

    Laws

    Reliability Of

    126

    Police

    Quality Of

    Infrastructure 129 Quality Of Roads 60

    Electricity Supply

    Health and Infant Mortality 134

    Primary Primary Education HIV Prevention 1

    Education 134

    Enrollment

    Trade tariffs, %

    137 Tax Rate % Profit 50

    Goods Market duty

    Efficiency Imports as a Buyer

    132 78

    percentage of GDP Sophistication

    Women In Labor

    136

    Force Ratio To Men

    Labor Market Hiring and Firing

    Cooperation In 48

    Efficiency Practices

    Labor Employer 131

    Relations

    Exporters

    Market Size 137 GDP(PPP) 26

    Percentage Of GDP

    Patent Applications Availability Of

    Innovation Per Million 109 Scientists and 44

    Population Engineers

    Governance ineffectiveness in Pakistan is also reflected in poor performance of private sector as revealed by the Global Competitiveness Report 2015 (WEF 2015). Pakistan was placed at 126th rank among 140 countries, showing paucity of long-term structural reforms for boosting productivity and unleashing entrepreneurial talent. Among the South Asian Association for Regional Cooperation (SAARC) member countries, it is no surprise to find India leading the way with 55th position in overall industrial competitiveness. However, it is disheartening that Pakistani business situation is even worse than Nepal (100th rank), Bhutan (105th rank) and Bangladesh (107th rank).

    According to the report Pakistani business persons identified corruption as the most problematic factor for private sector in Pakistan followed by 'Tax Rates'. From Table 1 the first perception is corroborated as despite having a reasonably high GDP, Pakistan's health and education indicators are abysmal, suggesting the presence of corrupt authorities. That some business people may be part of this corrupt group is suggested by the second perception. If 'Tax Rates' are such a big problem, how can it be that tax rate as percentage of profit is relatively low as compared to the rest of the world? It is clear that Pakistan is a country with a lot of economic and human resources, but transforming the living conditions of an average Pakistani would require re-conceptualization of the development agenda.

    PLANNING FOR SUSTAINABLE DEVELOPMENT

    There has been a plethora of policies, frameworks and blueprints for sustainable development in Pakistan with grandiose targets and optimistic timelines. Yet the country suffers from severe lags in implementation of development plans, due to ineffective monitoring and flaws in evaluation of projects (Kakakhel, 2011).

    As early as 1953 a National Planning Board (made into the Planning Commission since 1960) was set up in Pakistan for socio-economic development planning and decision-making. Five years’ development plans were formulated. Subsequently ' Perspective Plans' of 10 years or longer duration were also presented. Of the 10 five year plans presented between 1955 and 2013, only the second and third met substantial success. The status and effectiveness of the Planning Commission has also been changing. The Commission was the “nerve centre” of policy making during the Ayub Khan era (1958 – 1969). Zulfiqar Ali Bhutto's tenure (1971 – 77) was a “No Plan” phase, and the status of the Planning Commission declined. Subsequently, the commission's role is recovered but its former status as independent, apex advisory body has come under challenge.

    Since early 90s, a new generation of medium-term development planning instruments and policy reform packages have been produced in Pakistan, some at the government's own initiative but largely donor-prescribed. These include National Conservation Strategy (NCS), 1991; Interim Poverty Reduction Strategy Paper (I-PRSP), 1997; The Poverty Reduction Strategy (PRSP) – Dec. 2003; The Second Poverty Reduction Strategy Paper (PRSP II), 2007; Medium Term Development Frame work (MTDF), 2005-10; Pakistan in the 21st Century: Vision 2030, 2007; Framework for Economic Growth – Pakistan (2011); National Sustainable Development Strategy 2012.

    Pakistan has had to develop many of these 'Reform Packages' as conditionality in return for financial support, from the IMF and the World Bank and none have been fully and effectively implemented. It can therefore be said that planning for sustainable development has remained largely unproductive.

    ENVIRONMENTAL CHALLENGES AND PROTECTION EFFORTS

    Water, air, and soil pollution is rampant in Pakistan, and efforts at reversal of forests depletion, lakes, and mangroves are inadequate. On the other hand, Pakistan’s vulnerability to the negative effects of climate change has become a major concern. Conservative estimates suggest that Pakistan's environmental degradation costs are no less than 6% of the GDP and these costs impact more upon the poor (Martin et. al, 2006).

    At the same time, Pakistan has ratified and sought to implement fourteen multilateral environmental agreements (MEA’s), and actively participates in global environment-related events like Commission on Sustainable Development (CSD) and the Governing Council of UNEP. Legal and institutional arrangements for environment protection have been put in place. These include establishment of environmental protection agencies (EPA’s) at federal and provincial levels, National Conservation Strategy (NCS) in 1991, Pakistan Environmental Protection Act (PEPA) 1997...

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