The high price of free money

At some point, when the more immediate crisis of governance has passed, this country should have a long conversation with itself about donor money in all its forms: its uses, its efficacy, and above all, its costs. The report from the Asian Development Bank (ADB) that over half of its funded projects failed to meet their goals is merely the latest reminder that just because somebody appears to be giving up something for free does not mean that such a ‘gift’ does not come with its own price.

Of all the multilateral donors in the world, the ADB has been the most generous to Pakistan over the last decade, perhaps because one of its major donors is Japan, which tends not to tie its assistance to specific political goals. Nonetheless, just because the source of the money is well-meaning does not mean that it should be accepted blindly. Indeed, one of the most disappointing findings in the ADB report is that most donor-funded social prorgrammes fail because the very goals they set out to achieve are irrelevant to the social context in which they operate.

However, given the government’s inability to raise its own finances, it often has no choice but to accept whatever programmes the donors recommend. As things stand today, there are dozens of donor organisations often trying to achieve similar goals on a small scale. Those same goals could most likely be achieved much faster were they implemented by a functioning government ministry, but instead, we choose to squander our own resources and be dependent on foreign entities for handouts.

Pakistan cannot afford the experimentation and hidden political agendas that come along with ostensibly free money. But our government is too accustomed to viewing foreign aid as a permanent revenue source to begin openly question the supposed wisdom of the donors. It should start doing so. Because no country ever became wealthy by depending on foreign donations.

Published in The Express Tribune, November 23^rd, 2013.

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