Macroeconomic Management in a Decentralised Set-up (PANEL DISCUSSION-III)

William Baldridgde


The issue of macroeconomic management in a decentralised
set-up is a big question. My part of discussion will get more down into
the nuts and bolts and as you see I will unfortunately ask a lot more
questions. I think that it is very important that all parties have begin
to equip themselves with relatively detailed knowledge of what is likely
to occur in the shape and structure of government processes as the
devolution of authority in 18th amendment begins to take place. It
occurs to me the development stakeholders or the government of Pakistan
and the provincial ministries of finance, the Planning Commission and
the CCI and potentially others even including the international
community. I think these bodes need to know how this devolution can
actually occur. What are the actions necessary to develop a transparent
budget and an auditable budget, procurements in expenditure processes at
the provincial level that were administrated by the federal level in
order to avoid macroeconomic management to continue to occur in
decentralised set-up. The current arrangement provides as far as I know
bulk of resources to be collected and controlled with the federal level.
Also there is a significant share of responsibility currently with the
federal government. These distributional arrangements will necessarily
change as the budgetary regulatory framework for the 18th amendment
becomes agreed upon. This regulatory framework is not really in place
yet. A regulatory framework would need to be enacted and implemented.
This means to me at least that an assessment of pre-18th amendment
situation is needed to provide a base line to understand how the new
structure will have to be reformed. An assessment perhaps should be done
with a review of existing policies or to sort out what were the initial
conditions going into 18th amendment. I think as federal and provincial
governments are moving towards implementation, at both budgetary and
operational levels, a few questions may be needed to be asked. One is
how will the new responsibilities assigned to the provinces be financed?
What will happen to federal government staff currently engaged in doing
all the functions will no longer be with the federal government. How
will the human and operational capacity at the provincial government
level be developed with a particular emphasis on budgeting expertise and
expenditure expertise. If there is going to be control and management at
macro level, then there is going to be a tremendous amount of capacity
required at the budgeting and expenditure level in the provinces. I
think an assessment of the provincial capacity is a good

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