FODP forum: Around 50% aid pledges were not new
The government has received only $926 million out of the pledged $6.1 billion.
ISLAMABAD:
Around 50 per cent of aid pledges made by international donors on the platform of Friends of Democratic Pakistan (FODP) two years ago were not fresh funds and only reconfirmed old commitments.
Official documents show that out of $6.1 billion pledged by a group of 17 states and multilateral donors in Tokyo in April 2009, around $2.9 billion or 47.6 per cent were to come from commitments made in the past.
The FODP meeting had been convened after Pakistan appealed to world powers that even after getting loans from the International Monetary Fund the country was facing a deficit of $4 billion in external receipts and payments over two years.
The donors promised to bail out Pakistan but so far many of the pledges have not materialised.
“It was a deception that we came to know later,” said former finance minister Shaukat Tarin while talking to The Express Tribune.
Tarin said the government had put in place a plan under which the country would invest domestic resources in agriculture and manufacturing sectors while donors would provide funds for education, health and poverty alleviation.
“That did not happen and it was my biggest mistake to allocate $2 billion in the 2009-10 budget out of the commitments made in FODP meeting,” said Tarin.
He said all the donors started making excuses later, saying that they would disburse the money through their organisations that was against the spirit of the FODP meeting.
Pakistan has again budgeted that almost $1 billion will be received through FODP funds this year.
Out of $6.1 billion in pledges, the government has so far received only $926 million through official channels and another $596 million was handed over to non-governmental organisations, but the government does not have a complete record.
Japan, along with the World Bank (WB), hosted the FODP meeting. Interestingly, both Japan and WB reconfirmed their old commitments instead of making new ones. Japan committed $1 billion and WB promised release of $300 million.
Though Japan has disbursed $264 million through official channels, WB has not yet made any disbursement.
The European Union had committed $640 million but the new commitment was only $114 million. “The European Union at that time did not tell us that it was not a new commitment,” said Tarin.
Italy made a commitment of $93 million, but there was nothing new in it. The same was the case with the Netherlands which promised to give $121 million.
The German government reconfirmed $155 million in aid while Australia pledged $137.2 million, in which the fresh amount was only $14.7 million, show official documents. The Asian Development Band renewed its old commitment of $300 million.
The Islamic Development Bank promised to give $250 million, of which half of the amount was from previous commitments. South Korea committed $200 million with only $40 million in new pledges, but nothing has so far been disbursed.
Officials of the finance ministry admitted that half-hearted attempts by the government to undertake reforms in tax and power sectors did play a role in providing an opportunity to the donors to deceive Pakistan.
Published in The Express Tribune, January 11th, 2011.
Around 50 per cent of aid pledges made by international donors on the platform of Friends of Democratic Pakistan (FODP) two years ago were not fresh funds and only reconfirmed old commitments.
Official documents show that out of $6.1 billion pledged by a group of 17 states and multilateral donors in Tokyo in April 2009, around $2.9 billion or 47.6 per cent were to come from commitments made in the past.
The FODP meeting had been convened after Pakistan appealed to world powers that even after getting loans from the International Monetary Fund the country was facing a deficit of $4 billion in external receipts and payments over two years.
The donors promised to bail out Pakistan but so far many of the pledges have not materialised.
“It was a deception that we came to know later,” said former finance minister Shaukat Tarin while talking to The Express Tribune.
Tarin said the government had put in place a plan under which the country would invest domestic resources in agriculture and manufacturing sectors while donors would provide funds for education, health and poverty alleviation.
“That did not happen and it was my biggest mistake to allocate $2 billion in the 2009-10 budget out of the commitments made in FODP meeting,” said Tarin.
He said all the donors started making excuses later, saying that they would disburse the money through their organisations that was against the spirit of the FODP meeting.
Pakistan has again budgeted that almost $1 billion will be received through FODP funds this year.
Out of $6.1 billion in pledges, the government has so far received only $926 million through official channels and another $596 million was handed over to non-governmental organisations, but the government does not have a complete record.
Japan, along with the World Bank (WB), hosted the FODP meeting. Interestingly, both Japan and WB reconfirmed their old commitments instead of making new ones. Japan committed $1 billion and WB promised release of $300 million.
Though Japan has disbursed $264 million through official channels, WB has not yet made any disbursement.
The European Union had committed $640 million but the new commitment was only $114 million. “The European Union at that time did not tell us that it was not a new commitment,” said Tarin.
Italy made a commitment of $93 million, but there was nothing new in it. The same was the case with the Netherlands which promised to give $121 million.
The German government reconfirmed $155 million in aid while Australia pledged $137.2 million, in which the fresh amount was only $14.7 million, show official documents. The Asian Development Band renewed its old commitment of $300 million.
The Islamic Development Bank promised to give $250 million, of which half of the amount was from previous commitments. South Korea committed $200 million with only $40 million in new pledges, but nothing has so far been disbursed.
Officials of the finance ministry admitted that half-hearted attempts by the government to undertake reforms in tax and power sectors did play a role in providing an opportunity to the donors to deceive Pakistan.
Published in The Express Tribune, January 11th, 2011.