Beyond political consensus, new provinces will require sound economic plans
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he debate over creating new provinces and administrative units has returned to the national political discourse. Not surprisingly, people living away from provincial capitals tend to feel that there is a gap between them and the government, development is uneven and decisions are made without proper knowledge of the situation on ground. Thus, the desire for smaller provinces goes beyond issues of identity. It speaks to dissatisfaction with the performance of the government.
There is a legitimate concern for bringing government closer to citizens. Small units can enhance representation, make the process of decision-making faster and generally increase accountability of government. A provincial government managing a smaller area may be better placed to understand local priorities and supervise service delivery with better monitoring system.
These potential benefits, however, do not settle the matter. We should first pose a question that is often overlooked prior to demarcating new boundaries: is the proposed administrative unit capable of sustaining itself economically and discharging its duties without developing a permanent dependence on federal grants?
Political acceptance can be achieved through legislation; however, economic viability cannot be attained by mere notification. A new boundary does not automatically produce additional revenue, stronger institutions or employment opportunities. Nor does the establishment of another provincial capital guarantee better schools, hospitals, roads or municipal services.
A new province would require a governor’s office, a chief minister’s secretariat, a provincial assembly, administrative departments, police structures, courts, regulatory institutions and new layers of public employment. Buildings, equipment, digital systems and official residences would also be required. These arrangements will generate substantial initial and recurring costs before the new unit delivers any measurable improvement in governance.
This does not mean that new provinces are necessarily unaffordable. It means that their benefits and costs must be examined honestly. Pakistan should not replace administrative distance with fiscal weakness or political exclusion and permanent dependence.
A comprehensive fiscal-viability assessment should be the first requirement. This exercise must determine how much revenue the proposed unit can generate, what expenditure responsibilities it will assume and how large the gap between the two is likely to be. The analysis should cover at least the first ten years rather than presenting an optimistic budget for the first year alone.
The revenue question is especially important. Provincial governments in Pakistan remain heavily dependent on transfers through the National Finance Commission awards. Their own-source revenues are generally limited relative to their expenditure needs. If a new province merely claims a share of the existing divisible pool without developing an independent revenue base, Pakistan may end up dividing the same fiscal resources among a larger number of governments.
The result could be more assemblies and secretariats, but less money available for development. Every proposal should consequently identify its economic foundations. Does the new unit have a competitive agricultural base, mineral deposits, industries, tourist attractions or developing service sectors? Is it linked to the domestic as well as foreign markets? Can it attract investment? Does it have cities capable of becoming centers of production, technology, logistics and employment?
The answers will differ from region to region. Some proposed units may possess strong agricultural potential but lack processing and storage infrastructure. Others may have minerals but require transport, energy and regulatory investment. Still others may contain large populations and significant commercial activity while suffering from weak urban governance. Economic viability should not be reduced to the present level of income. It must also consider what the region could become under competent administration and a realistic development strategy.
This is why a viability assessment should not become an instrument for dismissing less-developed regions. Some areas demanding separate status are economically weak precisely because they have suffered from prolonged administrative neglect. To argue that they cannot become provinces because they are underdeveloped amounts to punishing them for the very conditions that created the demand.
The appropriate response is to distinguish between current capacity and future potential. Where a proposed unit cannot immediately finance its responsibilities, the federal government and the parent province may need to provide transitional support. Such support, however, should be linked to a clear strategy for revenue mobilisation, institutional development and economic growth. It should not become an indefinite subsidy without performance conditions.
Pakistan, therefore, needs an independent administrative and economic viability commission. It should include experts in public finance, constitutional law, regional economics, governance, infrastructure and public administration. Its assessments should be published and debated rather than prepared behind closed doors.
The commission should examine seven broad areas: revenue capacity, economic potential, administrative expenditure, infrastructure requirements, institutional capability, dependence on federal transfers and the division of assets and liabilities. It should also analyse the effect of each proposal on the parent province and on the federation.
The distribution of assets and liabilities is particularly sensitive. Existing roads, hospitals, universities, irrigation systems, public enterprises and government properties have been financed over many years. Provincial debt, pension obligations, employee allocations and ongoing development projects will also have to be apportioned. Without agreed principles, the creation of new units could generate lengthy disputes rather than better governance.
Water, energy and natural resources present additional potential complications. Rivers, irrigation networks, electricity systems and supply chains do not follow proposed political boundaries. The new administrative map must therefore preserve economic connections and establish workable mechanisms for sharing resources. Provincial autonomy cannot mean the fragmentation of essential national and regional systems.
Each proposed province should also have a ten-year economic development plan. The plan must move beyond broad promises of prosperity. It should identify priority sectors, investment requirements, employment targets, urban growth centres and sources of public revenue. It should explain how education, healthcare, energy, transport and digital connectivity will support the proposed economic model.
The public-private partnership can help finance some infrastructure or service delivery, but it should not be assumed that it is going to be easy money. It will be difficult for newly established province with limited institutional strength to plan projects, manage contracts and make payment over time. Therefore, institutional capacity must be developed alongside physical infrastructure.
A phased transition can be safer than an immediate administrative break. During the initial period, the new and parent provinces could share selected institutions, databases and service systems. Civil servants could be allocated gradually, while financial-management and tax-administration systems are established. Federal equalisation support could be provided for a defined period against agreed readiness and performance milestones.
There should also be clarity about the objective of creating a new unit. If the purpose is improved service delivery, success must be measured through service-delivery outcomes not the number of new offices constructed or officials appointed. The indicators to watch should include school participation, primary healthcare coverage, municipal services, investment, employment, tax collection and citizen satisfaction.
Pakistan is currently suffering from stringent fiscal limitations. Debt financing, security needs and recurrent expenses take up a major portion of the budgetary resources, leaving little room for development activities. In these circumstances, administrative restructuring cannot be approached as though its financial consequences were secondary.
On the other hand, fiscal pressures cannot be used as an excuse for maintaining the current administrative system which does not work well for the benefit of the citizens anymore. It is not a choice between keeping the existing provinces and forming new ones at great cost.
Pakistan should also strengthen local governments, decentralise provincial departments, delegate financial authority and establish empowered regional administrations.
In some areas, meaningful devolution may address citizens’ concerns without immediately creating a full provincial structure. In others, the scale of political, geographic and administrative exclusion may justify a new province.
The debate must consequently move away from extreme positions. The introduction of new provinces must neither be considered a solution to all governance issues nor be dismissed as an unnecessary burden. The strength of their use lies in their design and implementation.
Pakistan does need more responsive governments. It needs public institutions that understand regional realities and can be held accountable by the people they serve. But administrative multiplication without economic transformation will merely redistribute existing weaknesses.
Before drawing new boundaries on Pakistan’s map, policymakers must demonstrate that the proposed units will produce stronger institutions, sustainable regional economies and improved public services. The real issue is not whether Pakistan can create more governments; it is whether those governments can create greater public value.
The writer, an independent consultant on sustainable development, economic growth and public infrastructure policy, can be reached via info @watproconsultants.com