Implementing RRC's recommendations
Syed Fattahul Alim | Wednesday, 20 August 2008
With the aim to remove the existing legal barriers to the promotion of investment, the government on October 10 last year formed the 17-member Regulatory Reforms Commission (RRC). The tenure of the Commission will expire next October.
So far, the RRC has made 11 recommendations for implementation by the different ministries. Of them only two such recommendations have been implemented. On this score, officials of the ministries concerned are learnt to have informed that legal complexities are behind the slow pace of implementation of the RRC recommendations.
It is worthwhile to note that the recommendation for launching a website for publication of all government gazettes by February 21, 2008 has already been implemented. In another report, RRC has recommended framing of a law which says that no gazette would be effective until it is placed on a website. The recommendation, once put into effect, will facilitate as well as increase the public's access to information about the government gazettes issued from time to time. On this score, the establishment ministry is learnt to have prepared a draft, though the process of its approval, as you would expect, is advancing slowly.
Another important recommendation made by the RRC is about the introduction of online system of registration with the Board of Investment (BoI). If implemented, the investors will be spared a lot of bureaucratic hassles and delays that they usually come up against under the existing system. However, a BoI committee formed for this purpose has recently submitted a report on this score at a meeting of BoI. Similarly, all other recommendations made by RRC deal with ways to remove various other legal hurdles to investment and thereby create a more favourable atmosphere for investment in the economy. However, all these recommendations will require more time to overcome the usual tardiness of the bureaucracy as well as the legal intricacies before they might see the light of day.
Against this backdrop a big question arises as to how the rest recommendations would be implemented once a new elected government takes office after the election. Though a caretaker government has its constitutional limitations to take major policy decisions or frame laws, it is, however, free from many obligations that an elected government often remains beholden to. Such freedom on the part of a non-elected, but otherwise, benevolent government, has also its many advantages. That kind of leverage enables it to take unpopular, but useful, decisions. Obviously, the caretaker government now in office enjoys such advantages. Needless, to say it has meanwhile taken a number of decisions that would be very hard for an elected government to take. Conversely, a political government, unless it has an extraordinary leadership that enjoys the overwhelming mandate from the people to take even unpopular decisions in the greater interest of the nation, usually fails to take strong decisions.
So, apart from the usual constraints faced by an elected governments to frame and implement a law, or taking an unpopular decision, the bureaucracy and various vested quarters and pressure groups often come in the way of implementing otherwise well-meaning and useful decisions or orders. Moreover, it is often not enough that an order is issued by the government for its onward implementation. In fact, it hardly ever happens that way. On the contrary, instances abound as to how many such government orders had been lost in oblivion due to lack of political will to see them implemented or even been just lost without leaving any trace under the stacks of files bound in red-tape.
Now the national election, as promised by the incumbent government, is round the corner. It is hoped that an elected government would be voted into office in due course of time. Against this backdrop, the present caretaker government has to be very prompt to implement many important decisions it has taken so far to rid the administration of its inertia. The recommendations of the RRC to remove the legal and bureaucratic barriers to investment constitute one such important move. But what will happen to these recommendations and many other government decisions after the election? The concern is genuine, if one considers our experience with the past elected governments. This time, repetition of the past mistakes has to be avoided at all costs.
One way of ensuring it is to oversee the progress of implementation of the decisions. So, to steer clear of any undesirable outcomes, continuous monitoring of the implementation of the government orders would be necessary. And it is truer of the RRC recommendations now under consideration.
At the moment there is no appropriate mechanism within the existing set-up of the government to oversee the progress of implementation of the recommendations made by the RRC. And with nine out of eleven recommendations remaining in limbo, the whole exercise may turn out to be futile with the change of government. It is not being meant to say here that an elected government will not look at this RRC suggestion with sympathy. In fact, there is no reason why they should not. But as noted earlier, there is always the risks that the various constituencies, the bureaucracy, the vested quarters and the characteristic sloppiness that would follow.
The Chief Executive Office (CEO) of the RRC had exactly such scenario in his mind when he suggested an extension of the tenure of the Commission, so that it may oversee the implementation of the recommendations made.
Undoubtedly, the issue merits serious consideration by the government. The positive developments such as rising trend of export of garments and other commodities in the overseas markets and the growing size of the foreign exchange reserve due to enhanced level of remittances made by the expatriate wage earners notwithstanding, the economy is hardly progressing much in terms of investments, whether local or foreign. In fact, the driving force of the economy is new investment and generation of employment that it makes happen. The existing industries including the export-oriented ones are already saturated so far as fresh employment opportunities are concerned. Even any expansion of some of the existing industries would not be able to absorb the ever-increasing population of the unemployed.
The only way to create jobs for the growing army of the unemployed is to set up more industries in the country. But for the entrepreneurs to put in their money, the necessary conditions have to be fulfilled. Needless to say, the main barriers to such entrepreneurship comes form the complicated administrative procedures and other inhibitive factors deeply rooted in our system, which need to be removed within the soonest possible time. And the RRC's recommendations in this respect would go a long way to expedite the process of more investment and hence establishment of new industries.
And it is exactly at this point that the question of extending the tenure of the RRC has arisen. The recommendations need to be put into practice both for accelerating the investment procedure, as well as to bring transparency in the entire process of issuing of a particular order by the government until its implementation.
No mechanism is foolproof. In this regard, the RRC recommendations may not all be so. But still, one needs to start from somewhere. The RRC recommendations have at least provided us with some basis to start the process of expediting and streamlining the investment procedure. Therefore, the government needs to take whatever steps are necessary to keep alive a course of action taken by RRC alive.
So far, the RRC has made 11 recommendations for implementation by the different ministries. Of them only two such recommendations have been implemented. On this score, officials of the ministries concerned are learnt to have informed that legal complexities are behind the slow pace of implementation of the RRC recommendations.
It is worthwhile to note that the recommendation for launching a website for publication of all government gazettes by February 21, 2008 has already been implemented. In another report, RRC has recommended framing of a law which says that no gazette would be effective until it is placed on a website. The recommendation, once put into effect, will facilitate as well as increase the public's access to information about the government gazettes issued from time to time. On this score, the establishment ministry is learnt to have prepared a draft, though the process of its approval, as you would expect, is advancing slowly.
Another important recommendation made by the RRC is about the introduction of online system of registration with the Board of Investment (BoI). If implemented, the investors will be spared a lot of bureaucratic hassles and delays that they usually come up against under the existing system. However, a BoI committee formed for this purpose has recently submitted a report on this score at a meeting of BoI. Similarly, all other recommendations made by RRC deal with ways to remove various other legal hurdles to investment and thereby create a more favourable atmosphere for investment in the economy. However, all these recommendations will require more time to overcome the usual tardiness of the bureaucracy as well as the legal intricacies before they might see the light of day.
Against this backdrop a big question arises as to how the rest recommendations would be implemented once a new elected government takes office after the election. Though a caretaker government has its constitutional limitations to take major policy decisions or frame laws, it is, however, free from many obligations that an elected government often remains beholden to. Such freedom on the part of a non-elected, but otherwise, benevolent government, has also its many advantages. That kind of leverage enables it to take unpopular, but useful, decisions. Obviously, the caretaker government now in office enjoys such advantages. Needless, to say it has meanwhile taken a number of decisions that would be very hard for an elected government to take. Conversely, a political government, unless it has an extraordinary leadership that enjoys the overwhelming mandate from the people to take even unpopular decisions in the greater interest of the nation, usually fails to take strong decisions.
So, apart from the usual constraints faced by an elected governments to frame and implement a law, or taking an unpopular decision, the bureaucracy and various vested quarters and pressure groups often come in the way of implementing otherwise well-meaning and useful decisions or orders. Moreover, it is often not enough that an order is issued by the government for its onward implementation. In fact, it hardly ever happens that way. On the contrary, instances abound as to how many such government orders had been lost in oblivion due to lack of political will to see them implemented or even been just lost without leaving any trace under the stacks of files bound in red-tape.
Now the national election, as promised by the incumbent government, is round the corner. It is hoped that an elected government would be voted into office in due course of time. Against this backdrop, the present caretaker government has to be very prompt to implement many important decisions it has taken so far to rid the administration of its inertia. The recommendations of the RRC to remove the legal and bureaucratic barriers to investment constitute one such important move. But what will happen to these recommendations and many other government decisions after the election? The concern is genuine, if one considers our experience with the past elected governments. This time, repetition of the past mistakes has to be avoided at all costs.
One way of ensuring it is to oversee the progress of implementation of the decisions. So, to steer clear of any undesirable outcomes, continuous monitoring of the implementation of the government orders would be necessary. And it is truer of the RRC recommendations now under consideration.
At the moment there is no appropriate mechanism within the existing set-up of the government to oversee the progress of implementation of the recommendations made by the RRC. And with nine out of eleven recommendations remaining in limbo, the whole exercise may turn out to be futile with the change of government. It is not being meant to say here that an elected government will not look at this RRC suggestion with sympathy. In fact, there is no reason why they should not. But as noted earlier, there is always the risks that the various constituencies, the bureaucracy, the vested quarters and the characteristic sloppiness that would follow.
The Chief Executive Office (CEO) of the RRC had exactly such scenario in his mind when he suggested an extension of the tenure of the Commission, so that it may oversee the implementation of the recommendations made.
Undoubtedly, the issue merits serious consideration by the government. The positive developments such as rising trend of export of garments and other commodities in the overseas markets and the growing size of the foreign exchange reserve due to enhanced level of remittances made by the expatriate wage earners notwithstanding, the economy is hardly progressing much in terms of investments, whether local or foreign. In fact, the driving force of the economy is new investment and generation of employment that it makes happen. The existing industries including the export-oriented ones are already saturated so far as fresh employment opportunities are concerned. Even any expansion of some of the existing industries would not be able to absorb the ever-increasing population of the unemployed.
The only way to create jobs for the growing army of the unemployed is to set up more industries in the country. But for the entrepreneurs to put in their money, the necessary conditions have to be fulfilled. Needless to say, the main barriers to such entrepreneurship comes form the complicated administrative procedures and other inhibitive factors deeply rooted in our system, which need to be removed within the soonest possible time. And the RRC's recommendations in this respect would go a long way to expedite the process of more investment and hence establishment of new industries.
And it is exactly at this point that the question of extending the tenure of the RRC has arisen. The recommendations need to be put into practice both for accelerating the investment procedure, as well as to bring transparency in the entire process of issuing of a particular order by the government until its implementation.
No mechanism is foolproof. In this regard, the RRC recommendations may not all be so. But still, one needs to start from somewhere. The RRC recommendations have at least provided us with some basis to start the process of expediting and streamlining the investment procedure. Therefore, the government needs to take whatever steps are necessary to keep alive a course of action taken by RRC alive.