Can Punjab break the US aid begging bowl?

Published: June 8, 2011
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The writer is a researcher pursuing a doctorate at the University of Melbourne 
syed.ali@tribune.com.pk

The writer is a researcher pursuing a doctorate at the University of Melbourne syed.ali@tribune.com.pk

The discovery and killing of Osama bin Laden has sparked a debate both in the US and Pakistan about our post-9/11 strategic relationship. Most Pakistanis now increasingly see aid as a crude attempt to buy friendship and to alleviate antipathy towards US drone attacks in our tribal areas.

Although foreign aid has long been used by powerful countries to win and reward allies, the use of aid has become increasingly controversial, especially at a time when the US itself is broke and its official audits show that many of the nations to whom the money is given to do not hold positive views about the US, and nor is the aid used for the purposes intended.

In view of these ongoing developments, the Punjab government has announced its intention to break the begging bowl of aid. The provincial government qualified this assertion: The province would not accept US aid, but remains open to loans and grants from other sources such as the Asian Development Bank, the World Bank and other friendly countries.

While some bilateral aid from other countries may still trickle into Pakistan, many of our current donors would be much less generous without US backing. The influence of the US on multilateral agencies like the IMF and the World Bank is also well established.

The Punjab government claims that its rejection of conditional American aid would build pressure on the federal government to follow suit. Yet the fact remains that the national economy, including that of our largest province, is faring miserably at the moment.

Certainly, denying people who already have little access to basic amenities, which aid can help secure, seems unfair. It is these people who would bear the brunt of such a move. It remains to be seen what will become of the health, education and solid waste management projects that were supposed to be funded by US aid, and how the resource gap resulting from the rejection of American assistance will be filled.

Punjab’s chief minister claims that the province will achieve self-reliance by effectively taxing urban property, cutting non-development expenditures, and taking more stringent austerity measures. He has also demanded recovery of loans written off on a political basis. Although these are welcomed moves, one wonders if their half-hearted implementation will enable the Punjab government to stand on its own feet. Currently, the province is confronting a massive overdraft and sluggish growth, growing poverty and unbearable inflation. Yet the provincial government remains non-committed on the implementation of tax on income from agriculture. Neither have any decisions been taken to address the problem of inequitable land holdings which are a root cause of rural poverty. Nor has any intention to curb incentives and concessions enjoyed largely by big businesses been made public.

If the biggest province in our country is really serious in its resolve to become self-reliant, it needs to go beyond the political rhetoric and squarely deal with the practical issues mentioned above, while assuring that it is not the poor people who have to face the brunt of the knee-jerk bravado.

Published in The Express Tribune, June 9th, 2011.

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Reader Comments (8)

  • Faheem Jehangir
    Jun 9, 2011 - 4:26AM

    Unwise political decision!! I think the Punjab Govt should have considered ‘policy conditionality’ and ‘tied aid’ as irrational practices (partly) hampering the positive development outcomes rather rejecting US foreign assistance completely. If CM wants to do some good, he should work on reducing transaction costs and building state capacity. Recommend

  • Jun 9, 2011 - 10:33AM

    Whenever I hear the slogans of breaking the begging bowls raised by Sharif Brothers and its party I recall their previous enterprise in the name of “Qarz Uttaro Mulik Bachao” and no one knows where the millions rupees people deposited the then Nawaz government accounts had gone and definitely all the money disappeared into their personal pockets.
    Sharif Brothers and PML-N always believe in playing games with words and in actions they are contrary to their promises. During his tenure, Chief Minister Punjab has miserably failed to deliver the masses of the province. Sasti Roti is a fun played with the peoples and there is no restraints in corruption in Punjab-administered departments. Despite fooling the people, for God’s sake do some practical beneficiary works for the people. Recommend

  • Ahmer Ali
    Jun 9, 2011 - 11:32AM

    Assalam-o-Allaikum Warahmatullah.This shall be the most difficult task for the Punjab government but not impossible and this the most difficult task can be converted into the most easiest task with the help of Federal government and the whole Punjab’s nation.When any one takes step for good then the others help and in this regard not even Federal government but the all provinces and the whole Pakistani nation could adopt the policy of self-reliance and could stand on their own feet so that US’ interference could be eradicated from the Pakistan.Recommend

  • BruteForce
    Jun 9, 2011 - 12:02PM

    That is the thing. When you say I dont care if US isolates me, you are not only asking being isolated by the US, you will also be isolated by EU, Japan,most of the G20 Countries.,etc(certainly more than half of World’s GDP) and also by institutions like IMF, WB, who give a lot of loan to Pakistan.

    You ask for isolation from the US at your own peril! Not to forget, remittances from the West will come to naught, the same remittances Pakistanis are so proud of now and generating so much Forex.

    Look at countries who are isolated from the US and who are its allies. North and South Koreas are the best examples. I see Pakistan heading towards being the next North Korea. Just too much in common with it, politically, economically and geo-politically.Recommend

  • Shahid Orakzai
    Jun 9, 2011 - 12:25PM

    Tough I am not a big od the sharif bradran, i welcome the move. Necessasity is the mother of invention. They surely have to look for alternate sources and a soul search. This can be a point when the punjab governmewnt can really focus on its own capabilities.

    Good luck PunjabRecommend

  • All BS
    Jun 9, 2011 - 1:00PM

    According to the FY12 Budget, the biggest recipient of foreign aid will be Punjab at PKR 20.5bn, Sindh at PKR 9.45bn and KP at PKR 6.1bn. Punjab government is lying, but then whats new….

    http://finance.gov.pk/budget/foreignassistance2011_12.pdfRecommend

  • Meekal Ahmed
    Jun 9, 2011 - 2:53PM

    This is politics. Punjab’s threat is phoney.

    We won’t have to hold our breath much longer. The Punjab budget is round the corner.

    Last year, despite the billions it got from the NFC award, Punjab came out with a “tax-free” budget with a spending plan that was breathtakingly absurd.

    They and the other provinces should be reminded that they have to come up with an aggregate surplus of Rs 125 billion to make the consolidated budget deficit of 4% of GDP stick. Recommend

  • Grace
    Jun 10, 2011 - 12:30AM

    Good for the Punjab government; I am sure Punjab will be self sufficient in no time.Recommend

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