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Finding merit in the proposal
Qazi Azad
2/25/2006
THE WB Country Director Christine I Wallich seems to have irritated some people in our country by expressing herself in favour of introduction of performance indicators in public finance management at a recent function in Dhaka. Her recommendation, on a broad interpretation, may mean that the World Bank, which co-ordinates the donors' aid programmes, likes to see that performance indicators have been introduced in all public institutions being financed with public money. Without reacting in a haste one needs to carefully study what she has actually recommended and what would be the impact of acceptance of her suggestion on the process of socio-economic uplift of this country.
The World Bank and the International Monetary Fund (IMF) has serious image problems in the developing countries including Bangladesh. Many of their recommendations in these countries are known for being counter-productive. Egypt had to roll back its programme of gradual withdrawal of food subsidy taken at the insistence of the World Bank after food riots, precipitated by soaring bread prices, claimed several dozens of human lives. In this country, DESA, brought into being at the behest of the bank could not achieve miracle in improving power supply. While writing this piece, I was thrice interrupted by sudden power failure.
This particular recommendation about forming DESA has only spiralled the overhead expenditure in our power sector. It has made our people to suspect whether the World Bank at all recognises the benefits of merger in selective cases. In the 1980s, the World Bank did the blunder of withholding loan for the power sector in this country in a bid to mount pressure upon the government for reducing questionable high rate of so-called system loss. The eventual freeze on expansion of power generation facilities continues to claim a grave penalty from us in the form of production loss on account of power shortage requiring frequent load-shedding for a distributive justice to the consumers.
Call it load-shedding or distributive justice, the end-effect is nothing but power supply failures. Perhaps, we could not as yet effectively integrate ourselves with the Asian resurgence of the subsequent period because of this lingering power shortage. Our aid dependence syndrome was created by the World Bank and other donors initially under a plan to contain the spread of communism. The sudden suspension of loan for a major sector for whatever excuse meant nothing less than condemning ourselves to be suddenly on our own. No concept of management advocates actions that may paralyse a process. It all happened at a time when communism lost its vitality to spread itself. The particular action of the World Bank tended to covey a message to our nation, which is that time has come for the bank to unilaterally dictate terms for receiving its loan. The very character of Brettonwood institutions as partners in development became questionable. Isn't then the public resentment against this particular World Bank decision in this country justified?
Perhaps the World Bank and the IMF do not recognise the significance of frame of reference. These institutions suffer from serious image problems as they tend to use the experiences of the United States where their headquarters are located as their frame of reference while seeking to assist the poor countries they serve. Christine I Wallich is from the Yale University, known for being the alma mater of many American bureaucrats. It is where marvellous Clinton of mesmerising personality, the former US President, and his wife Hillary also studied. Christine must have studied Einstein's theory of relativity to satisfy her interest and she must appreciate how she has to adjust with the changed frame of reference in her new work-place to serve the country meaningfully and well. She should absorb the criticism for her suggestion without being shocked.
On a close scrutiny, it seems that, instead of criticising her, one should give the World Bank country director some credit for insisting on performance indicators for public finance management. She appears to have diagnosed the management problem in this country and discovered the root cause behind all the negatives for which we are castigated -- inefficiency, sloth and widespread corruption. Modern management goes heavy on a manager who prefers to amend a defective system instead of replacing it. In fact, nothing will help combat the said three negatives in our country more effectively than a change in our rule-based management system, evolved more than a century ago from the concept of bureaus. These rules were nothing but tools, tailored to serve the imperial purpose, and they worked. Perhaps human beings in this part of the world were then less complicated for not having interacted with the global community at that time. Otherwise, how could the trading British of the East India Company bring in arms from across the seas to fight and defeat Bengal's army and eventually spread throughout the sub-continent as the colonial power?
Under the existing traditional management system what matters most is whether one has observed the rules in managing the activities of one's office or those of the public sector mills and factories or that of a business empire like the Bangladesh Chemical Industries Corporation having a chain of production units or any other similar corporation that turns up products. It does not matter whether the net gain from their arduous management is zero or a negative. Had they been accountable for realising set targets within given budgets, things surely would have been different. Under the present system, promotions used to be previously given only on the basis of annual confidential reports. What did happen when a corrupt boss was happy with his sub-ordinate for being a willing cohort? Please draw your own conclusion for a proper grasp of the causes of decadence in many of our national sectors. The amended system gives weightage to academic records plus confidential reports. Can't one with good academic record be bad in performance or decay during the long tenure of service or a willing cohort of a corrupt boss to render the new system equally ineffective? Performance indicators in management which are synonymous with management by objectives, will help eliminate the shortcomings of both practices.
In fact, many of the western advanced countries embraced the result-oriented system of management by objectives in mid-1960s. Profounded by an airline pilot on the basis of critical path analysis done in aviation and popularised by Peter Drucker, this wonderful management system efficient in delivery, created a surge in western productivity following its introduction. Its basics still remain at the core of various other modern management systems, like creative management and quality circle, widely practised by the Japanese. Under this system, a police officer will get promotion or avoid the risk of being downgraded if the crime rate in his on her zone perceptively declines -- measurable in quantitative term, a judicial officer on the number of cases disposed of and on the number of verdicts not overturned by superior courts, an engineer for the quality of roads or buildings he or she has constructed and for minimising the cost of such constructions, a physician for the number of patients he or she has attended and for the minimum of number of patients expressing displeasure with treatment in writing to superior authorities, a bureaucrat for obtaining a quantifiable happier situation in his or her area of work.
Bosses will have similar objectives set for them by higher authorities and will require to attain those for keeping themselves on the job. How then will there be any big scope for corruption, lethargy and indifference to one's duties? It will, however, seriously impede crony culture -- a vice which afflicts many developing countries. There may be some conceptual problems in this country initially in introducing this system. The World Bank may assist the government in having it in place. The bank may arrange a series of seminars on the system with the participation of politicians, senior bureaucrats, industrialists, senior journalists and university teachers to create a greater awareness about the benefits of the system and how to make it workable. A public-private joint effort for its introduction may be suggested rather than bringing in foreign consultants to advise the government. Such consultants often prove worthless because of being strangers in a new frame of reference and thus bring discredit for the donors.
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