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Pakistan reslices revenue pie: formula for unity?

The government resolved a two-decade conflict over how to share the nation’s revenue. Redistributing wealth – even by a few percentage points – is a first step toward easing the hostilities that have fueled bloody insurgencies and stalled important energy projects.

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The technocratic title sounds nothing like a historic agreement.

But the 7th National Finance Commission Award that Pakistani federal and provincial government officials hashed out this month resolves a two-decade conflict over how to share the nation’s revenue.

By redistributing wealth – even by just a few percentage points – it marks a first step toward easing the hostilities that have fueled bloody insurgencies and stalled important energy projects.

Not bad for a country in perpetual fear of breaking into its four ethnically divided provinces.

“If you are able to get across this feeling that you are getting your due share, this obviously will help in terms of national unity,” says Kemal Siddiqi, Karachi-based editor of the Express Tribune, a Pakistani newspaper. “The next challenge could be … getting them to use that money so there’s a visible change.”

Deal could build goodwill

The deal came about after months of meetings and three days of final negotiations in Lahore that ended on Dec. 11. The federal government agreed to distribute more of the overall pot to the provinces, and dominant Punjab Province agreed to share more money with the other three (it gave up 1.27 percent and will keep 51.74 percent).

“It’s not a small achievement,” says Abida Hussain, a senior member of the ruling Pakistan People’s Party, who calls the NFC deal one of the government’s greatest accomplishments so far. “The real underlying problems [of the country] are the problems between the provinces.”

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