Empowering local bodies

To tackle stark global inequalities, an ‘Extraordinary Committee of Independent Experts’ formed by the South African president ahead of the G-20 summit has proposed the establishment of an international panel on inequality, modelled on the Inter-Governmental Panel on Climate Change.

The committee highlights how inequality, particularly in extremes, has negative economic, political, and societal outcomes that interact and exacerbate adverse effects. High wealth inequality undermines both democracy and economic progress. “One in four people worldwide”, it notes, “now regularly skip meals, while billionaires’ wealth has now hit the highest level in history”.

Recent advances in technology, particularly digitalisation and artificial intelligence, have the potential to increase inequalities within and between countries, even as they bring some benefits, the report cautioned.

Chaired by Nobel Laureate Prof Joseph Stiglitz, the committee emphasised, “It is imperative that we have better knowledge about its evolution and how proposed policy changes might alleviate it — or make it worse.”

Moreover, to rebuild the middle class, reduce global poverty, and address climate change simultaneously, we need to depart from established ways of thinking and consider new approaches, says economist Dani Rodrik. His research revolves around globalisation, economic growth and development, and political economy.

In the absence of effective elected LGs, members of the national and provincial assemblies exercise considerable influence on local development spending and, therefore, are not keen on transferring power to the grassroot level

Fortunately, he adds, many of the approaches he suggests for adoption already exist at the local level, where they have proved themselves and need to be recognised.

Similarly, in Pakistan, there is a strong and growing realisation among segments of analysts, development economists and factions of major political parties that local bodies need to be empowered to enable citizens at the grassroots to fend for their much neglected socio-economic uplift.

Efforts in this direction have not borne fruit as yet, though the 18th Amendment incorporating Article 140-A was passed in 2010. MQM-P’s Amir Waliuddin Chishti told the Senate his party was promised changes to Article 140 relating to local governments (LGs) under the 27th Amendment. “Now, after two days, I am hearing that while the amendments came under discussion, it is being said that they may be included in the 28th Amendment.”

Health Minister Syed Mustafa Kamal of MQM told the National Assembly the next day that his party’s proposed amendment to Article 140-A “is not dead yet” and would be discussed as part of the 28th Amendment. Mr Tarar promised that the government would try to convince its allied partners to develop a consensus on this bill so it could be passed, adding that a recent resolution by the Punjab Assembly regarding LGs would also be discussed.

Addressing the National Assembly, Defence Minister Khawaja Asif endorsed the need to address people’s issues at the grassroots level as well.

The MQM-P’s bill proposed the devolution of 42 subjects to the LGs. Similarly, a constitutional amendment bill of the Pakistan Institute of Legislative Development and Transparency listed 36 subjects to be delegated to the LGs. The bill has been pending before the Senate since July 2023.

‘One in four people worldwide now regularly skip meals, while billionaires’ wealth has hit the highest level in history’

The Punjab Assembly unanimously passed a resolution recommending amendments to Article 140-A for strengthening and empowering LGs, but did not spell out any subject.

Ahmed Bilal Mehboob, President of Pilat, says Article 140-A provided that, “Each province shall establish a LGs system and devolve political, administrative and financial responsibility and authority to the elected representatives of the LGs,” but, unlike in the case of the provincial governments, it gave no specific framework of LGs, such as the minimum powers, financial resources, term and elections.

All these details were left to the provinces to decide through the LG laws to be framed by the respective provincial assemblies and, in the case of Islamabad, the parliament.

No provincial government, he notes, is, however, willing to part with these funds. In the absence of effective elected LGs, members of the national and provincial assemblies exercise considerable influence on local development spending and, therefore, are not keen on empowering local bodies.

On the other hand, the federal government posted a rare Rs2.12 trillion surplus in the first quarter of FY26 owing to strong provincial balances, record State Bank profits, and a 30pc jump in petroleum levy, according to the finance ministry operations report for July-September 2025.

The report attributed the 54 per cent rise in provincial surpluses largely to slower or last-minute fund releases from the centre.

Punjab led the way, posting a record Rs442 billion surplus in the first quarter — a tenfold increase from Rs40bn last year. Sindh followed with a surplus of Rs209bn, up 37pc from Rs131bn a year earlier. Khyber Pakhtunkhwa’s surplus, however, dropped 35pc to Rs77bn from Rs104bn, while Balochistan’s contribution fell over 57pc to Rs54bn, compared to Rs85bn last year.

Published in Brackly News, The Business and Finance Weekly, November 17th, 2025