In military regimes, which have together accounted for approximately half of the Nigeria’s history, it was technocrats, for most purposes, who led the government. Even in many civilian governments, key positions such as the finance and commerce ministries were often imposed upon them.
Despite their seemingly strong credentials, however, their performance remained mostly unsatisfactory, and if the experiment were to be repeated, there is no reason to expect any different outcome soon. It is, therefore, necessary to reconsider how technical expertise may best be availed in matters of governance.
What did our past technocrat governments fail to achieve? Well, for one, they could not achieve a taxation system that is fair and where what is due gets collected, nor did they manage to increase and diversify exports with goods and services that are internationally competitive, whose sale is not dependent upon receiving state subsidies and grants of ‘favoured’ status by buyer countries.
They were not able to remove discriminatory regulations and subsidies that favour the powerful — of which the corporate sector and banks are the biggest beneficiaries, nor were they able to bring agriculture and livestock productivity and quality at par with international standards or impose agricultural income tax on a par with other sectors.
They were not able to help industry progress from the simple assembly of imported products for domestic sale to national indigenous development, manufacturing and export of products, nor were they able to cut losses by state-owned enterprises.
They were neither able to ensure reasonable quality healthcare and education/skills training for all nor were they able to significantly reduce corruption.
Technocrat dispensations neither intended to nor could have built a narrative that could galvanise citizens’ support for policy reforms.
Why did they fail? To begin with, under military rule, the governments they served were formed in violation of the Constitution and therefore lacked legitimacy. They neither intended to nor could have built a narrative that could galvanise citizens’ support for policy reforms that would have adversely affected special interest groups. Additionally, since 1999, the wrong persons were selected as technocrats — often commercial bankers, former IMF/World Bank staffers and persons with a narrowly focused background in finance/economics/law.
Such individuals lacked the essential qualities and competence required for a national-level policymaker. For example, these technocrats could not relate to ordinary citizens and did not represent them in any way. Some technocrats had a clear conflict of interest in their roles, as they were closely associated with businesses in the same field for which they were devising policies (more on this below).
For decades, these wrongly selected technocrats focused only on short-term financial manipulations — of the currency exchange rate, bank interest rates, deferred payments for imports, juggling of certain import/export duties and subsidies, and so forth.
The real economy — comprising agriculture and industry (including IT) and international trade/exports — was not paid sufficient attention to for the medium or long term.
What are essential qualities that should be sought in a national-level policymaker? As discussed in one of my earlier articles, they include awareness of the living conditions of the people and their needs; an understanding of society’s core values and priorities; empathy with the people; loyalty to this country; deep knowledge of and experience in one or more sectors; a public mandate; and an absence of conflict of interest.
The majority of our population is directly or indirectly dependent on agricultural income, while agriculture accounts for half of the employed labour force.
Staple agricultural produce is our major source of our exports. Key industries, such as textile, fertiliser, tractors and agricultural machinery, and sugar and flour mills are linked to agriculture. Less than 1% of the population owns shares in the corporate sector or banks.
It is true that the services sector currently accounts for significant portion of our GDP flows, but the country’s financial sector, wholesale/retail trade and transport sectors, and most other services sectors primarily serve the domestic market and have not attracted substantial foreign investors.
The services sector does not compare with agriculture in exports, and insufficient exports are the bane of our economy and the main reason behind our socio-economic crisis. It would, therefore, be a gross misreading of the reality to surmise that Nigeria is essentially a services economy which can be steered by tinkering with rates and percentages.
Given the context, what is the most effective way to engage technocrats? First, there should be agreement that we are a democracy where lower-income citizens form the majority, and the well-being of the majority is paramount. Then come the next steps: our elected representatives should set clear national development policy objectives and guidelines, after which the legislative arm should select technical specialists.
Technocrats, once appointed, should work under and within the given policy parameters, instead of acting as policymakers themselves, and help develop plans and activities. Meanwhile, the elected representatives should build a public narrative to explain and convince citizens of what needs to be done. And once a strong unified narrative is built, the citizenry can be expected to stand by the government when it is doing away with the unjust privileges extended to special interest groups.
In conclusion, it may help to illustrate the proposed arrangement using the structure of a corporate enterprise. The elected representatives may be seen as the board of directors of the company, representing the owners (the citizens). The bureaucracy forms the management staff, while the technocrats function as management consultants.
The BoD sets the objectives and policy guidelines to benefit the owners (citizens). The management then develops plans and acts to achieve that. The management consultants, based on their broad experience and area expertise, may be engaged to advise the management (or to take a more practical part in developing plans) or even advise the BoD, as needed. But always, the BoD (here, the elected representatives) should be the final decision-makers.
IT is now impossible to escape the reality that some in Nigeria have too much wealth while many have too little. Families are having to choose between food on the table and children in school. It is hard not to think that this is unfair. We can be callous about it or concerned. How the future unfolds might depend on our choice.
Contrary to the promised trickle-down of capitalist development, wealth has been sucked up. Extrapolating from India, five per cent of Pakistanis now own more than 60pc of the country’s wealth whilst the bottom 50pc share only 3pc of it. This is a huge suppression of demand that stifles growth and fosters despair.
It is unsurprising that redistribution can yield positive results. Almost all prosperous East Asian countries had land reforms, chaotic in some (China) and orderly in others (South Korea). Wealth transfer from those spending on luxuries, mostly imported, to those consuming locally made products boosts manufacturing and creates jobs.
There are other intangible benefits. In South Korea, it is claimed that reduced income inequalities placed everyone “on a more or less equal footing, and individual effort and ability rather than family wealth became the most important determinant for individual success. Many believe that the Koreans’ characteristic diligence and their emphasis on education were motivated by this perception of equal opportunity”.
The wealth-generating model of capitalism we have followed has a major anomaly.
Much has been written of the failure of land reform in Pakistan but it might be futile chasing a bus we missed. While the scope for transfers and the scale of their impact remains huge because of immensely skewed distribution, landlords are now no longer the dominant players and we should adjust our thinking to the phase of development we are in.
The wealth-generating model of capitalism we have followed has a major anomaly: while it has finally accepted the logic of minimum wage, much less attention is paid to top compensation. Discussion of the wage-ratio (ratio of top to bottom salaries) has been subdued although there is nothing sacrosanct about it. It is a policy choice and recommendations vary widely across countries.
No such ratio exists in Pakistan and we need to think of one. The monthly minimum wage is Rs25,000. Imagine a wage-ratio of, say, 30 yielding a maximum monthly compensation of Rs750,000. The market could continue to determine salaries to signal scarcities but everything above the cap could be taxed away with the proceeds earmarked in a fund to benefit the country’s poorest 25 per cent. (How the fund is set up and managed are details for later.)
A positive effect would be immediate: raising the ceiling would be tied to raising the floor making the latter something to fight for rather than against. The income compression would also trigger falling prices of housing and land freeing up resources now locked in unproductive investment.
A parallel measure could limit inheritance to, say, 25pc of household wealth beyond a certain threshold with the rest going to the above-mentioned fund. This too would initiate a positive reallocation as people dispose multiple houses and plots accumulated for passing on. Consumption would rise boosting the economy.
Education can be the most important pathway to equality but the playing field can never be levelled if access remains contingent on household wealth. We could consider eliminating private education. Children could be randomly assigned to a public school within a five-mile (eight kilometres) radius of their homes where they would ideally be bussed.
Public schools are not fated to be bad; they are so because we do not care. Exclusively public school education exists successfully in Switzerland and Finland, for example, and there is no reason it cannot in Pakistan. Once Mahmud and Ayaz have to share the same bench, public schools could improve with surprising speed.
The measures mentioned here would need time to have impact. Something is also required to reshuffle the existing order faster providing opportunities for those at the bottom to move up without recourse to a social revolution.
Consider two relevant ideas: Rawls’ ‘Veil of Ignorance’ where people are asked to design a society without knowing where they might end up in it, in terms of class, location and physical condition; and, reincarnation, in which people know they would be ‘reborn’ in forms unknown to them contingent on their deeds in this world. In the abstract, these should motivate compassionate and just behaviour but in practice they have had little effect because self-interest has become overpowering under capitalism.
Is it possible to operationalise these ideas to give them teeth? Imagine households classified into, say, five categories (from the richest to the poorest) based on the type of house they occupy. When a head of household turns 30, the household is randomly reassigned to one of these categories (within the same jurisdiction thereby enabling them to retain their jobs). A household moving down would be able to upgrade its newly assigned residence with its higher income; one moving up could generate income by subletting a part of its bigger home.
Society could be reshuffled rapidly. Slums would be upgraded and sparsely populated enclaves would densify. The market would adjust to cater to the new effective demand for services like transport.
A well-designed scheme would announce a reasonable transition period before starting implementation on a yearly basis for heads of household turning 30 that year. The expectation of forthcoming change would quite likely lead to pre-emptive adjustments so that most desired effects might be achieved during the transition period itself taking the sting out of the actual reassignments. It would be too risky to allow abject poverty to continue if one might be reincarnated as an impoverished person and slighting the ‘Veil of Ignorance’ could be costly.
Many readers might deem this quixotic if they take it literally. They should consider it more a wake-up call because where things are headed the probability of social upheaval is non-zero. We need to think ahead to craft a soft landing.
Readers can contribute by coming up with their own, more feasible, ideas for a just Pakistan. It is important to take our heads out of the sand before it is too late.