18th amendment: A case for Provincial Autonomy

Background:
 Demand for Provincial autonomy in Jinnah’s 14 points
 Lahore Resolution and cry for Provincial autonomy
 Sheikh Mujib’s six points and Plea for Provincial autonomy
 Musical Chair Politics – 90’s era and Demand for Provincial autonomy
 Charter of Democracy (May 14, 2006)
(Provincial Autonomy: Provincial autonomy is defined as the capacity of the provinces to make relatively independent decisions
while remaining within a federation.)

History of 18th amendment:

 20 Sept 2008 President Zardari calls for the formation of committee
 Parliamentary Committee on Constitutional Reforms
 Total Members: 27
 Chairman: Razza Rabbani
 Total sessions: 77
 8 April 2010 National Assembly
 15 April 2010 Senate
 19 April 2010 Receives Presidential Assent
Key Aspects:
 Altered 1/3rd of the constitution
 Amended 102 Articles
 Rewritten the federal-provincial pact
“The most Comprehensive restructuring of the federal and provincial administration
since 1947” Senator Raza Rabbani
“New Constitutional Software of Pakistan” Dr. Saeed Shafqat
“Refurbished the hardware of the statecraft” Zahid Hussain

Merits of 18th Amendment:

1. Guarantees Fundamental Democratic Rights by inserting new articles:
10A Right to Fair Trial
“For the determination of his civil rights and obligations or in any criminal charge against him a person shall be
entitled to a fair trial and due process”

19A Right to Information

“Every citizen shall have the right to have access to information in all matters of public importance subject to
regulation and reasonable restrictions imposed by law."

25A Right to Education

“The State shall provide free and compulsory education to all children of the age of five to sixteen years in such
manner as may be determined by law."

2. Promotes Democracy by ensuring provincial autonomy:

Making Provinces self-sufficient by providing them financial autonomy
Changes in Revenue Sharing formula (NFC 160)
7th NFC Award - Vertical Distribution 42.5% to Centre and 57.5% Provinces
Clause 3(a) guarantees that Share of provinces will not be reduced
"(3A) The share of the Provinces in each Award of National Finance Commission shall not be less than the share
given to the Provinces in the previous Award.”

(NFC – National Finance Commission, According to Article 160(1), Presidents shall constitute a
commission to devise revenue sharing formula between the Centre and Provinces.
After 7th NFC award, Vertical Distribution: 42.5% to Centre and 57.5 % to Provinces.
Horizontal Distribution Indicators- Population 82%, Poverty and Backwardness 10.3 %, Revenue Generation
and Collection 5 %, Inverse Population Density 2.7%.
Share of Provinces: Punjab 51.74% Sindh 24.55% KP 14.62 % Bal 9.09%)

Delegating power to provinces to Borrow loans on their own

Inserting clause 4 in Article 167
“A Province may raise domestic or international loan…”
3. Gives autonomy to Provinces by assigning Decision Making Roles:
Devolving 46 Subjects and 17 Ministries to Federating units. Main Subjects include
 Education (school-Higher)
 Health
 Youth Affairs
 Tourism
 Local Government
“18th amendment has wedged the Centre by making provinces more autonomous”
-- Dawn, editorial
4. Paving way for effective development strategy; Sifting from “federally planned and
provincially executed” system of development to the policy of local solution for local
problems:
“Provinces are no more only the implementation arms of the centralized policies. Now they have
rights and space and they won’t be able to blame Islamabad.” --- ANP Member
5. Providing due share to the federating units by guaranteeing Joint and Equal
Ownership of natural Resources:
Inserting new clause in Article 172
(3) Subject to the existing commitments and obligations, mineral oil and natural gas within the Province or the
territorial waters adjacent thereto shall vest jointly and equally in that Province and the Federal Government.

6. Ensures greater accountability by demarcating functional roles of Central Govt and

Peripheries:
Million dollar question Whom to hold Accountable?
With the new constitutional order, both policy determination and service delivery responsibilities
have been concentrated at the provincial level. This makes it clearer to citizens which order of
government to hold to account for dysfunctional service delivery as the buck now clearly stops at
the provincial chief minister’s doorstep.
7. Encouraging People-oriented governance by pushing Governments closer to the
people:
Moving from Centralized governance mechanism to the multi-governance order.
Inserting Article 140A
"140A. Local Government:
(1) Each Province shall, by law, establish a local government system and devolve political,
administrative and financial responsibility and authority to the elected representatives of the local governments.

(2) Elections to the local governments shall be held by the Election Commission of Pakistan

8. Promoting democratic tradition of consensus based decision making for national

issues:
Appointment of Chief Election Commissioner Article 213
(2A) “The Prime Minister shall in consultation with the Leader of the Opposition in the National Assembly, forward
three names for appointment of the Commissioner to a Parliamentary Committee for hearing and confirmation of
any one person.”

Appointment of Caretaker Prime Minister Article 224

"(1A)On dissolution of the Assembly on completion of its term, or in case it is dissolved under Article 58 or Article
112, the President, or the Governor, as the case may be, shall appoint a care-taker Cabinet:

Provided that the care-taker Prime Minister shall be selected by the President in consultation with the Prime
Minister and the Leader of the Opposition in the outgoing National Assembly, and a care-taker Chief Minister shall
be appointed by the Governor in consultation with the Chief Minister and the Leader of the Opposition in the
outgoing Provincial Assembly.

9. Limiting Military adventurism by removing dictatorial tendencies from the body

polity of Jinnah’s nation:
Removing the infamous Article 58-2(b) instituted by President Musharraf, which granted the
power to unilaterally dismiss parliament under vague emergency provisions.
Article 6 High Treason
“Premature dismissal of elected governments under Article 58(2) b of the Constitution in 1990’s
before they could before they could complete their terms was a severe setback to the maturing of
democracy.” (Governing the Ungovernable, Ishrat Hussain)
10. Making federal institutions independent by providing them autonomy:
Neither president nor prime minister will have a direct role in judicial appointments under the
18th amendment. The appointments will instead be handled by a two-tier system—a Judicial
Commission will propose nominees and a special parliamentary committee split evenly between
the government and the opposition will confirm them (Article 175A). The seven-member
Judicial Commission will be chaired by the chief justice, who will effectively control four of the
seven seats (with the remaining three comprising the federal law minister, the attorney general,
and a senior lawyer of the Pakistan Bar Council).
BY passing 18th amendment, Pakistan went some way towards addressing uncertainty in
country’s political blueprint. ----Umair Javed, Column Future of Devolution
11. Provides voice to the Provinces in National Policy Formulation:
Council of Common Interests (Article 153-154)
Addition of new clause: Council shall meet every 90 Days.
Provinces can propose the agenda
12. Paves way for National Integration by addressing grievances of Federating Units:
“18th amendment has opened new Vistas of National integration in the country.”
--Dr. Saeed Shafqat (Publication, Oxford University)

Pitfalls and Risks of 18th Amendment:

1. 18th amendment: created Function-Finance-Imbalance:
“Decentralization of Function but Finance’
Hammad Azhar Federal Minister of Revenue
“In the end, it seems to be all about money and the problem is not the NFC or devolution.”
--Faisal Bari, 18th amendment unhappiness
2. Made Federal Government a Toothless Tiger: Inability of Centre to Harmonize
finance Sharing as per the needs of New problems:
“Academic Economists cite budgetary constraints placed by the NFC award on the
Federal Government” ----Dawn, Editorial
3. Devolution of Responsibility way more than the ability of Federating Units :
 “Provinces saw subsequent transfer of portfolios but did not inherit Federation’s
established government structure.” --- Excerpt from Column

4. Lack of Functional capacity of the federating units and new functional roles:
“Provincial administrative machinery lacks professional capacity and training to
deliver” -- Umair Javed
5. Joint and Equal ownership of natural resources: a breeding ground for contention:
Natural resource ownership. For political and economic union, it is important that ownership of
the country’s natural resources be vested in the nation as a whole, and that the revenues from
those resources be invested in a national heritage fund rather than being made available to any
order of government for current use. All citizens of Pakistan would hold equal shares in this fund
and receive annual dividends as done in Norway.

6. Potential for confusing and contradictory regulatory standards with

High transaction costs for business and citizens:
Even in the areas with which it is concerned, the amendment has created major anomalies. For
example, national uniform standards are required for drug approval; pharmaceutical regulations;
food and agricultural safety inspection; the control and disposal of hazardous materials and
waste; water and air pollution; highway safety standards; consumer product safety standards; and
social safety nets. These areas have now all been relegated to the provinces, creating potential for
a jungle of confusing and contradictory standards with high compliance and administration costs.
Imagine the consequences for businesses and consumers if each province were to decide to set
up its own food and drug regulatory agency as stipulated by the amendment.
7. 18th amendment- a roadblock to tax reform:
In tax areas, by reasserting the powers of the provinces to tax agricultural income, capital gains,
and services, the amendment may have blocked avenues for reform in creating a modern income
and sales tax system in Pakistan. Instead, it has strengthened opportunities for tax evasion by
enabling tax arbitrage by potential taxpayers who can now shift their income to agriculture and
business expenses from higher taxed sectors or sources of income.

8. Increased risks to macro-stability with provincial government

Ownership of financial institutions:
The 18th Amendment has also empowered provinces to borrow from domestic and international
sources, subject to conditions imposed by the National Economic Council. However, the Council
may not be able to discipline such borrowing as effectively as provinces’ own banking and other
financial and nonfinancial institutions.
 9. Federal government’s lack of access to financing instruments to
Secure a common economic union:
The amendment does not revisit the financing of the provincial governments through fiscal
transfers. The NFC awards have the twin objectives of dealing with the vertical fiscal gap and
horizontal equalization. With the devolution of social services and infrastructure responsibilities
to the provinces, the federal role in providing financing for these services to set national
minimum standards for merit services and to secure common economic union gains prominence.
At present, however, there is no instrument available to further the federal government’s
spending power to advance national objectives.
10. Potential for greater barriers to goods and factor mobility:
Finally and most importantly, the 18th Amendment has failed to institutionalize any constraints
on barriers to factor and goods mobility across the country. Instead, it has opened up the
potential for such barriers by recognizing provincial authority to discriminate against
nonresidents. Article 27(2) of the amendment overrides the safeguard against discrimination in
employment by empowering provinces and local governments to institute a three-year local
residency requirement. This poses a serious risk to economic union in Pakistan.