Inherent Flaws Of Foreign Assistance

ByUmair Jalali

Teaches in The Royal Colosseum and is an avid sports fan

Dated

September 18, 2022

Umair Jalali describes a harmful situation

Despite billions of dollars given as international assistance and loans Pakistan remains one of the most impoverished countries on the planet. The manipulation of the system by a privileged class has enabled successive ruling oligarchies to shun democratic accountability, buy votes and maintain their domestic patronage networks. There are many inherent flaws of foreign assistance in Pakistan.

Adding to the negative repercussions is it has encouraged Pakistan’s elites to view party politics as a game of probability and state institutions as tools with which to reward clients and punish rivals. Foreign assistance has certainly assisted the ruling class to ignore the violent and domestically focused proxy groups which are gaining popularity within their vastly unequal and polarised quarters.

All these factors feed off the elite’s ignorance of the widespread discontent among their own clients and speak the political language of the man on the street. The groups are also able to promote a brand of localised justice that mixes laws into a particularly exclusionary and violent jurisprudence that further threatens the rights of hapless citizens.

The system thoroughly monopolised by the elite without widespread public approval that has badly weakened the country. It is very obvious that personalised and non-institutionalised governance has already degraded the integrity and conviction of decision-making. It is also visible that the excessive concern with security has hogged the national resources causing a deep and harmful neglect shown to the national economy and has also impeded the human development of the people.

The result of the pursuance of narrow self-interests is that Pakistan has become a weak state heavily dependent on others and the most significant indication of this dependence is the consistent need of foreign assistance without which the country’s finances cannot survive.

Inherent Flaws Of Foreign Assistance

The most problematic aspect of this weakness is that the foreign donors take undue advantage of Pakistan’s vulnerability as has happened in case of America and Saudi Arabia. It should be strongly imbued in the national policy imperatives that foreign financial assistance is never based upon altruism or the simple act of giving away money to those who need it. In this context even the Chinese BRI makes no secret of the fact that it would serve China’s interests.

Instead of giving the money to the many governments involved in the BRI, the Chinese have created schemes of structured debts whereas the projects are expected to attract their own revenue. At that point, the recipient government is to pay back the money that it has received from the Chinese. This constitutes the most difficult aspect of this matter and is required to be addressed profoundly.

Another difficulty with foreign assistance is that a considerable bulk of foreign amount is utilised by international partners implying the absence of a fully integrated development strategy or programme for the country in development field. Such outsourcing of country priorities and development strategy and implementation goes against any recognised concept of management and is very harmful in the long run.

The most worrying aspect of this development strategy is that when such projects end, experienced and trained project staff are let go causing a knock-on effect on government capacity, as its regular staff has missed out on that experience and training in programme design, documentation and implementation oversight. The end result is that institutional learning and memory are lost and there is no way available to compensate for this loss.

Inherent Flaws Of Foreign Assistance

Looking at the case of Pakistan it becomes clear that on the one hand, the country’s expenditures and imports far exceed its revenues and exports. It is never kept in view that a prudent and mature country does not require international agencies to coerce it towards prudent financial management but things have come to a pass that foreign donors, both bilateral and multilateral sources now insist on fulfilling the conditions laid by them. Such a situation takes away the initiative from the receiving state restricting the national priorities.

The only solution to this problem lies is to live within the available means and to desist from pursuing security-oriented policies that may help to reduce pressure on national finances. Moreover, export destinations and export goods must be diversified and exports orders should be won in open competition avoiding the tendency to rely on receiving favoured nation status as such concession could be withdrawn and can be utilised as a potent tool for the donors.

Right now such status is reported to be in jeopardy as the granting group, the EU, is undergoing financial difficulties owing to the Russian-Ukraine conflict. Along with this it is also required to increase self-reliance in producing defence equipment and it would be made possible with a defence strategy which is necessarily different from the strategies of developed countries. It would be more appropriate if defence expenditure can also be financed by manufacturing and exporting military equipment but under civilian financial management. The Weekender

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