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

The issue of macroeconomic management in a decentralisedset-up is a big question. My part of discussion will get more down intothe nuts and bolts and as you see I will unfortunately ask a lot morequestions. I think that it is very important that all parties have beginto equip themselves with relatively detailed knowledge of what is likelyto occur in the shape and structure of government processes as thedevolution of authority in 18th amendment begins to take place. Itoccurs to me the development stakeholders or the government of Pakistanand the provincial ministries of finance, the Planning Commission andthe CCI and potentially others even including the internationalcommunity. I think these bodes need to know how this devolution canactually occur. What are the actions necessary to develop a transparentbudget and an auditable budget, procurements in expenditure processes atthe provincial level that were administrated by the federal level inorder to avoid macroeconomic management to continue to occur indecentralised set-up. The current arrangement provides as far as I knowbulk of resources to be collected and controlled with the federal level.Also there is a significant share of responsibility currently with thefederal government. These distributional arrangements will necessarilychange as the budgetary regulatory framework for the 18th amendmentbecomes agreed upon. This regulatory framework is not really in placeyet. A regulatory framework would need to be enacted and implemented.This means to me at least that an assessment of pre-18th amendmentsituation is needed to provide a base line to understand how the newstructure will have to be reformed. An assessment perhaps should be donewith a review of existing policies or to sort out what were the initialconditions going into 18th amendment. I think as federal and provincialgovernments are moving towards implementation, at both budgetary andoperational levels, a few questions may be needed to be asked. One ishow will the new responsibilities assigned to the provinces be financed?What will happen to federal government staff currently engaged in doingall the functions will no longer be with the federal government. Howwill the human and operational capacity at the provincial governmentlevel be developed with a particular emphasis on budgeting expertise andexpenditure expertise. If there is going to be control and management atmacro level, then there is going to be a tremendous amount of capacityrequired at the budgeting and expenditure level in the provinces. Ithink an assessment of the provincial capacity is a goodidea.