Kerry-Lugar Bill: Qaumey farokhtand wa chey arzaan farokhtand

Deeda-e-Beena

The entire discussion on the so called Kerry-Lugar aid package has hardly touched on its most important aspects: The Money and its “development” Aid implications for the People!

Much has been said about the political, nationalistic and mostly circumstantial aspects of this event. Here views are expressed to focus on a few of the substantive matters of this aid, ostensibly for human development. Aid, of which the stated beneficiaries are the common people – the so called Awam has to be reviewed in that context.

Up to $ 7.5 Billions in 5 years through periodic/annual reviews of which Up to $ 1.5 Billion a year may be committed for the betterment of the people of Pakistan under the Law just signed by the US President.

Even if every cent of this money goes to benefit the people, it amounts to some 8 dollars a year for every one of the 175 (the figure used in the Act) millions Pakistanis – man, woman and child on the hoof. Chicken meat to feed a person for a year would cost more. We recall that in the 1970’s US gave $ 600 millions as FEOF (Foreign Exchange Operations Fund) to Laos – a country of 2.5 millions at that time, to sustain the KIP – its currency.

Remember, three decades ago Pakistan rejected some $ 600 millions and called it Peanuts. In today’s dollars what might eventually trickle-down and reach Pakistanis may be much less in real value. So what is all this noise about?

The Buy-Back in one form or another is acknowledged an essential component of all aid – Bilateral as well as Multilateral and International aid practice it. It is more pronounced in all bilateral assistance and specifically so in the case of US aid. It is abundantly documented in the case of currently US administered Billions for development of Iraq. There is neither an Iraqi nor any US accountability for all those Billions spent and even a discussion on that in USA has now effectively ceased.

The buy – back manifests in many forms such as: programme and project formulation costs by donor’s own high paid staff and consultants; all commodities, machinery and equipment to be purchased in donor’s country; the implementation, monitoring and accountability costs by donor’s own and chosen persons under its own system as described under aid conditions and, several other means whereby the funds revert to the donor. All of these expenses are within the amount of aid announced for the recipient country and are provided for up front. What is leftover goes towar the Trickle – Down, which is not an unknown phenomenon for all of the development spending – both the Domestic budgetary spending and the External aid are equally guilty contributors to this practice. It would be a great achievement if 10% of one Dollar or a Rupee that starts at the “Source-Reservoir” finally reaches the ultimate beneficiaries – the people. Most of it disappears along the way among others to overheads, over-pricing, commissions, administrative expenditures, wastages, high salaries, consultancy fees and international and domestic corruption etc.,

Only a miniscule benefit of the largesse that may, with some luck reach the ultimate beneficiaries. This trickle – down is so slow that by the time the aid might reach the end-users, years may have passed or, the nature of the needs and the problems being addressed become irrelevant.

On Corruption itself, the aid package has merely glossed over. Whereas many extraneous factors have been narrated in great detail, this major factor inhibiting all human development activities is buried in a few lines thus:

SEC. 101. Authorization of Assistance

“To support Pakistan’s efforts to expand rule of law, build the capacity, transparency, and trust in government institutions, and promote internationally recognized human rights, including assistance such as–
(A) supporting the establishment of frameworks that promote government transparency and criminalize corruption in both the government and private sector;”

It is an indisputable fact that the third world corruption would practically disappear if the industrialised world’s own or sponsored financial, banking, investment and safe-haven systems don’t open their doors to the corrupts in the “government and private” sector as stated above.

If the Kerry-Lugar Act’s intentions are honest, the solution to all the problems is right in their own hands. All the Billions of the American Tax payer’s money envisaged in the aid to the third world countries would be saved only if thet do not permit the trillions squirreled away by the leadership of these countries, into the financial underworld of Western democracies. All the hassle would be saved and the job becomes well done!
Money and Development are not necessarily concomitant. Of course, at the end of the day some funding would be needed to deliver the goods but, long before one begins talking money a great deal of essential work to identify problems and planning for their solutions and their management needs to be done. The Act while it has blackened reams on all the extraneous and un-related factors, mentions the “details” of people related social development in the following words:
SEC. 4. Statement of Principles

(C) to promote sustainable long-term development and infrastructure projects, including in healthcare, education, water management, and energy programs, in all areas of Pakistan, that are sustained and supported by each successive democratic government in Pakistan;

This effectively endorses what Pakistan has done in social development over the years and Failed. So what is new and different now in all this largesse that will bring khush-halee?

The National Financial undertakings in social development by the third world countries are enormous but never recognised or given credit for in the documents generated by those giving aid. All International, Multi-lateral and Country to country aid specifies what the assisted country itself has to provide as their “counterpart” share. If ever it could be quantified and documented, it would easily ad up to be many times the aid being received by it. Most of the time the country fails to meet their commitments and the Programme/Project fails. That is the unfortunate story of social development aid from the third world perspective. In a left-handed manner and perhaps as an after-thought, the same SECTION 4 recognises this fact under the following statement:

United States assistance to Pakistan is intended to supplement, not supplant, Pakistan’s own efforts in building a stable, secure, and prosperous Pakistan.

Having recognized this fundamental issue, the package goes no further and is absolutely silent about how this good intention will be followed through.

Now I would like to invite here our distinguished intellectuals, economists, academics the TV talking heads, the print-media pundits and all the other “stakeholders” to do a serious job and pursue this review further to improve upon the outline above. That is an honest invitation.

The writer has been involved for some thirty five years, in administering social development aid to developing countries.

ATP’s Other Posts of this Topic

1. Kerry-Lugar Bill: Can it Bridge the Trust Deficit?
2. Text of the Final Version of Keryy-Lugar Bill