"Aid only postpones the basic solutions to crucial development problems by tentatively ameliorating their manifestations without tackling their root causes. The structural, political, economic, etc. damage that it inflicts upon recipient countries is also enormous.” These words were written in a letter to UN to refuse aid by Finance Minister Berhane Abrehe of Eritrea which is the 7th poorest nation in the world.
Can Pakistan (per capita annual income of $3000) do what Eritrea (per capita annual income of less than $700) has already done with UN aid? Say "No" to foreign aid?
Pakistan Movement for Justice party leader and cricket hero Imran Khan thinks so. Echoing the sentiments of the Eritrean minister, Imran Khan told the BBC recently that "if we don't have aid we will be forced to make reforms and stand on our own feet."
Let's examine in a little more detail the proposition that Pakistan should tell the United States to take its aid and shove it:
1. Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, according to a report by the United States Government Accountability Office.
2. Even if the entire $1.51 billion had been disbursed, it would account for only $8.39 per person, about 0.28%, a very tiny fraction of Pakistanis' per capita income of $3000 a year.
3. Pakistan ended last fiscal year in June 2011 with a small current account surplus of about half a billion US dollars. It received inflows over $40 billion in the form of export earnings ($25 billion), remittances from Pakistani diaspora ($10 billion), and FDI, FII and other accounts. The actual US aid of just $179.5 million out of over $40 billion in 2010-2011 is a negligible figure.
4. Of the $179.5 million received by Pakistan in 2010, $75 million of the US aid funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remained unspent.
Although refusing US aid will hurt the anti-poverty efforts, higher education and infrastructure development programs to some extent unless made up by raising greater tax revenues to replace it, it is theoretically possible to say No to the US aid without a big negative short-term impact on Pakistan's economy.
However, Pakistan would be well advised to not seek confrontation with Washington even after refusing US aid. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must save more, a lot more than the current 10% of GDP, to have more money for investment in the future.
3. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
4. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
5. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Impact of Foreign Aid on Economic Development in Pakistan
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
58 comments:
Good documentation, Riaz Saahab. I wonder if the PTI, for example, has done the math to this level. I wish it was easier to talk to them about substance.
I think Pakistan can copy a lot from India vis a vis
1.tax to GDP 17%
2.competetive industrial base building
etc etc
whether u like it or not but pak India etc are in the same cultural sphere and thus can learn from each other just like china learns from japan and south korea as east asians are culturally similar...
One of the few instances where i agree 100% with Riaz.. Its a great article to read.. Just a couple of minor observations and some thoughts
1. The aid of $ 8 per person is in nominal terms so compared to Pakistan's nominal per capita income of $1254, so close to about 0.65%.. But yes, still a minuscule percentage..
2. US might be providing this 1.5 billion directly, but as we all know, it has a significant control over most of the organizations providing additional aid to Pakistan, so while it may be a good idea to reject the aid, it may not be a wise one to say "Shove it" as doing that serves no purpose on the positive side, but may have implications on the negative side
3. Finally, the real deciding factor for the Pak govt (which is directed by Pak Army in matters of external affairs and defence) is the military aid/relations/toys from Washington and not the impact of loss of civilian aid
But all and all, a sound approach imho
can we say the same to our religion and come to 21st century.
For 64 yrs we did nothing to grow our industrial base or economy (unlike our neighbors), you think blogs like yours will change the mindset.
It takes pragmatism to support the shoving – Unless Pakistan shows that its the game changer in Afghanistan, the world media tune is going to play to same old music. Can they do it ? I don’t think so, they have lost the credibility with their own people...
Riaz, Another good article. Would you please shine light on why $1.2 in aid from last year unspent? Is it due to Pakistani government's incompetency or it is due to US not living up to its promises and not releasing the money?
I agree with what Imran is saying but your approach is more pragmatic.
Haseeb,
There are many reasons cited by US govt for slow disbursement of aid to Pakistan, including delays in approval and lack of identification of significant projects. But the key concern has been waste, fraud and abuse by Pak politicians and bureaucrats.
There are now reports that US is going to fund big water and energy projects such as the Bhasha dam. The $12 billion project is located on Indus River, about 200 miles upstream of the existing Tarbela Dam, 100 miles downstream from the Northern Area capital Gilgit in Gilgit-Baltistan region. The dam's reservoir would hold so much water that it could have averted last year's devastating floods. It would also provide enough electricity to end Pakistan's crippling shortages, according to a report in the Guardian newspaper. The massive dam on the Indus river would provide 4,500MW of renewable energy, making up for a shortfall causing up to 12 hours of load shedding on daily basis across Pakistan. The reservoir would be 50 miles long, holding 8.5 MAF (million acre feet) of water.
http://www.riazhaq.com/2011/09/recurring-floods-and-droughts-in.html
Pakistan's tax collection declined and fiscal deficit rose to a record 6.6% of gdp in 2010-11, according to Dawn News:
ISLAMABAD, Sept 29: The fiscal deficit during 2010-11 stood at a whopping Rs1.336 trillion — highest in the country’s history and almost 39 per cent of total expenditure and 59 per cent of revenue.
According to consolidated fiscal data released by the finance ministry, the fiscal deficit, excluding payments of electricity subsidies, was Rs1.194 trillion or 5.9 per cent of GDP. However, after inclusion of one-time off-budget electricity subsidy payments of Rs142 billion to Wapda’s power companies, the overall deficit worked out at Rs1.336 trillion or 6.6 per cent of GDP.
During 2009-10, the deficit was Rs929 billion, 6.3 per cent of GDP, and increased by Rs407 billion in a year.
Ironically, revenue collection showed a dismal performance. The total collection declined significantly to 12.5 per cent of GDP against 14.2 per cent in 2009-10, despite a series of additional tax measures introduced in March.
Tax revenue dropped to 9.4 per cent of GDP from 10 per cent achieved in the previous year.
In absolute terms, total revenues amounted to Rs2.253 trillion, an 8.3 per cent increase over Rs2.078 trillion last year.
The tax revenue increased to Rs1.699 trillion from Rs1.473 trillion, by 15.3 per cent.
The growth in total provincial revenue was slightly better at 17.8 per cent.
The total non-tax revenue also declined to 3.1 per cent of GDP from the previous year’s 4.1 per cent, showing widespread erosion of tax collection efforts against the potential.
Even in absolute terms, the non-tax revenue stood at 553.5 billion, about 8.5 per cent lower than the previous years’ Rs605 billion. The federal non-tax revenue declined to Rs491 billion from Rs537 billion — a drop of 8.5 per cent. The provincial non-tax revenues also dropped by 8.5 per cent to Rs62 billion, from Rs68 billion a year ago.
The finance ministry said the total expenditure during 2010-11 increased by 14.6 per cent to Rs3.447 trillion, from Rs3.007 trillion in 2009-10. But the revenue growth of 8.3 per cent did not keep pace with 14.6 per cent increase in expenditure, leading to the huge fiscal deficit.
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Defence expenditure increased by a massive 20 per cent to Rs451 billion from Rs375 billion in 2009-10. Total defence- and security-related grants amounted Rs682 billion (Rs232 billion for security), showing a nine per cent increase over Rs625 billion (Rs250 billion security grants) in 2009-10.
On the contrary, the development expenditure and net lending dropped from Rs653 billion in 2009-10 to Rs514 billion, showing a reduction of 21.3 per cent or Rs139 billion.
The expenditure on the public sector development programme (PSDP) dropped by 11 per cent to Rs461.5 billion from Rs517 billion.
This meant the expenditure on improving the lives of the people posted a sizable reduction when seen in the context of increased prices and deteriorating poverty situation.
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To meet the deficit, the government had to borrow a record Rs615 billion from the banking sector, up Rs311 billion from Rs304 billion in 2009-10.
The non-bank borrowing increased by 8.3 per cent to Rs472 billion from Rs436 billion.
Interestingly, external financing to bridge the deficit posted a reduction of 43 per cent to Rs108 billion from the previous year’s Rs189 billion, showing a falling international confidence to extend financing to an economy battered by a war-like situation and devastating floods.
As a result, domestic deficit financing increased by as much as 47 per cent (Rs311 billion) to Rs1.086 trillion from Rs740 billion.
http://www.dawn.com/2011/09/30/highest-ever-fiscal-deficit-at-rs1336tr.html
US Senator Lindsey Graham threatened US military action Pakistan after Adm Mullen testimony alleging that Pakistan supports attacks by Haqqanis in Afghanistan. Here are some comments by Prof Juan Cole of Univ of Michigan on Graham's statement:
Here are some problems with Graham’s startling suggestion.
The US does not have a prayer of succeeding in Afghanistan without a Pakistani partner. Pakistan is a complex place, and its civilian politicians have a different agenda than its conventional army, which in turn has a different agenda from the Inter-Services Intelligence (ISI). Even within the ISI, there appear to be secret rogue cells. Some ISI officers appear to be hooked up with the Haqqani Network and with terrorist organizations such as the Lashkar-i Tayyiba. But Pakistan has lost thousands of troops fighting the more militant Afghan and Pakistani-Pashtun fundamentalist groups, and it is not a task the US could take on by itself.
Pakistan is a nuclear state. The United States has never fought a major military engagement with a nuclear-armed country, and it would be unwise to begin now. Would you really want to take the risk that they might feel cornered and find a way to deliver a warhead against an American target? In the Cold War, the nuclear standoff was called ‘Mutual Assured Destruction’ (MAD). There is no reason to think that such considerations have lapsed or do not obtain when the US is facing a state with a smaller nuclear arsenal.
Pakistan is a close ally of China as well as trying to keep an alliance with the US. Graham’s sort of talk will have the effect of pushing Islamabad further into the arms of Beijing. China is unlikely to stand idly by as one of its major geopolitical assets in its contest with India is taken out by the United States. That is, US-Pakistan war would very likely become US-China war.
Pakistan has a regular army of 610,000 men, and can call up about 500,000 reserves if it needs to. Some 15,000 Taliban in Afghanistan have been pinning down tens of thousands of US troops, so what would happen if they faced over a million?
Pakistan’s population is at least 170 million. The US was defeated by an Iraqi insurgency in a small country of 25 million; imagine how a country 7 times more populous could tie it down.
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So now Iraq has been devastated and made supine and the US has to be on a war footing with Iran in order to “protect” Iraq from the latter. But Iraq’s Shiite government likes Iran and doesn’t see it as a threat, so Graham would be “protecting” Iraq against the will of Iraqis. Moreover, Graham doesn’t seem to think he needs to ask the Iraqi parliament whether it will permit any US troops to remain in Iraq at all.
Graham keeps trying to find a pretext for the next war, dismayed at the prospect of the US slipping into peace. He had tried to get up a war against Iran, but hasn’t had any takers.
Just as Graham wants to keep a division in Iraq because of Iran, he wants permanent bases in Afghanistan. And now he is looking for a fight with Pakistan, representing himself as “protecting” the US-installed Afghan government from Islamabad. But most Pashtuns would choose Pakistan over Graham any day of the week.
Pakistan’s alliance with the US is a marriage of convenience. Pakistan wants to see some groups, such as the Old Taliban and the Hikmatyar Hizb-i Islami, much weakened. But cells within the Inter-Serices Intelligence appear determined to retain the Haqqani Network, based in North Waziristan, as a means of projecting authority into Afghanistan. That emphasis makes Pakistan both an ally to the US in fighting some Taliban, but makes it only a partial ally, since it has its own reasons to use some of those Taliban to project its own authority and prepare for the peace after the US leaves. This difficult kind of alliance is nothing new in US history. Abruptly turning on such a complex ally and starting yet another war is madness.
Here's a Telegraph story on US climb-down in the latest spat with Pakistan:
Last month Adml Mike Mullen, in his last few days before retiring as America's most senior military officer, said the Haqqani network, one of the most feared insurgent groups in Afghanistan, was a "veritable arm" of Pakistan's ISI intelligence agency.
He accused Pakistan of exporting violence and also blamed the ISI for directing a 19hr attack on the US embassy and Nato headquarters in Kabul on September 13, as he stepped up demands that Pakistan act against Haqqani bases in North Waziristan.
His statement was the climax of a string of apparently carefully choreographed allegations by senior Administration officials – including the US ambassador to Islamabad – that Pakistan's intelligence service was closely connected to the Haqqanis.
However, with relations between the two countries close to breaking point, the US appeared to row back with a series of statements emphasising the importance of the alliance.
On Friday, President Barack Obama made a point of not endorsing Adml Mullen's accusations.
He admitted that the intelligence was not clear on the exact nature of the relationship between the ISI and the Haqqanis.
The reversal has been greeted with glee in Islamabad.
Mr Gilani, who was speaking at Bili Wala in Punjab, said an all-party conference (APC) held last week had been instrumental in forcing the US to back down.
"It is due to APC as well as the unity of Pakistan's political leaders that the US has a sent a message that they need Pakistan and that they cannot win the war without Pakistan," he said. "They have also distanced themselves from the statement of Mullen."
The climb-down also suggests the US knew it had few options to increase pressure, without risking a total breakdown in relations and the deployment of American forces to Pakistan.
"US options are limited as we don't want a larger war in south Asia," said Bruce Riedel, a former CIA officer who advised the White House on Afghanistan and Pakistan in 2009 and a fellow at the Brookings Institution think tank."
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/8804227/Pakistan-claims-victory-over-US-Haqqani-spat.html
Adm Mullen knew and said nothing about US contacts with Haqqanis when he accused Pakistan prior to retiring, according to ABC:
Eleven days ago, the United States' top military official seemed to sum up Washington's current relationship with Pakistan when he accused the country's premiere intelligence service of supporting insurgents who attacked the U.S. embassy in Kabul.
But what Admiral Mike Mullen did not say is that the U.S. had secretly met with a member of that same insurgent group -- known as the Haqqani network -- as part of efforts to find a political end to the war in Afghanistan, and that the institution that helped set up the meeting was the same intelligence agency he had condemned: the Directorate of Inter Services Intelligence, or I.S.I.
The meeting, according to two current U.S. officials and a former U.S. official, was held in the months before the Sept. 13 attack on the U.S. embassy and NATO's military headquarters, which U.S. officials have blamed on the Haqqani network. In his congressional testimony Sept. 22, Mullen called the Haqqanis a "veritable arm" of the I.S.I., but failed to mention that the I.S.I. facilitated the meeting between the U.S. and Ibrahim Haqqani, a son of founder Jalaluddin Haqqani and a major player in the group, according to a senior U.S. official.
The meeting suggests there is much more to the recent spat between Islamabad and Washington while the violence in Afghanistan has increased as U.S. troops have begun to withdraw. At stake, U.S. officials said, is how they will try to reduce the violence in Afghanistan and to what extent Pakistan will be allowed a say.
From Pakistan's point of view, military and intelligence officials have long argued that their connections with the Haqqani network -- going back decades in the Pakistani tribal areas and in Afghanistan -- can facilitate the only way to end the war: through political negotiation. But for U.S. officials, even as the debate in Washington continues over the best way to wind down the war, there was a high-level decision after the embassy attack to name and shame the I.S.I. for supporting the Haqqanis, hoping it would work where no previous pressure or incentives placed on Pakistan had worked, according to a senior Western official.
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The fact that the U.S. and Pakistani intelligence service set up the meeting with Haqqani and discussed how to stop a Haqqani attack suggests a much more nuanced -- and very often, confounding -- relationship with Pakistan's intelligence service than Adm. Mullen and other military officials have publicly admitted in the last two weeks.
The Pakistanis, in turn, have tried to portray themselves as the victims of a smear campaign headed by Mullen. As Pakistani President Asif Ali Zardari wrote in the Washington Post Friday, "While we are accused of harboring extremism, the United States is engaged in outreach and negotiations with the very same groups."
http://abcnews.go.com/Blotter/us-pakistan-struggle-haqqani-insurgents/story?id=14656079&page=2
Here are some excerpts from a CBS interview with Pak UN ambassador Haroon:
U.S.-Pakistan relations are at an all-time low. Pakistan's U.N. Ambassador Abdullah Hussein Haroon, speaking to CBS News about the allegations of Pakistani-ISI links to insurgents, said that Pakistan wants to end terrorism in his country and that Washington and Afghanistan are blaming Pakistan, making it the scapegoat for a conflict which victimizes Pakistan more than it hurts the U.S. or Afghanistan.
"For the past few months it's been the U.S. who keeps trying to put pressure by saying Pakistan this or Pakistan that," Haroon said. "That policy needs reappraisal. You need to talk as allies, don't talk down to us. This is not going to succeed. Politics should be transactional, not coercive. We want success. We don't want this mess on our doorstep for the next 100 years. It's not of our making, not of our choosing, not of our doing. We've paid the highest price for this war."
As the U.S. assesses the projected dates for the drawdown of U.S. troops and the recent spike in some types of violent incidents, a CBS News poll found that, although most Americans support the military, the American public thinks the United States should not be fighting in Afghanistan and the war has not been worth it.
Pakistan's U.N. Ambassador, who has been in his country's foreign service all his adult life, said bluntly that the U.S. had ignored the lessons of history in deciding to, and how to, invade Afghanistan.
"The Soviets lost Afghanistan by not learning the lessons of history... History is again repeating itself because the Americans have repeated the mistakes made by the Soviets and everyone else."
Haroon said U.S. leaders "overestimated their own capabilities and underestimated those of the Afghan guerillas."
The ambassador accuses the U.S. of underestimating the Taliban.
"I believe this needs to be reassessed because misappreciation of the enemy has always led to military setbacks."
Adding to his list of alleged U.S. failures, Haroon said American military commanders failed to assess the physical terrain on which they were planning to fight.
All the errors, he said, "contributed to the impasse which has resulted in Afghanistan."
As U.S.-Pakistan relations sour and anti-U.S. troop sentiment in Pakistan rises, Haroon offered some advice: "You cannot solve Afghanistan without Pakistan and Pakistan cannot be free of its own troubles without Afghanistan first being free of all its troubles. That is the conundrum."
"Whenever anyone has set a date for withdrawal in Afghanistan, before the army has effectively left their borders, their imposed government falls and runs with them towards the border. You have undermined yourselves completely... by setting an exit date."
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"We're getting treated like we're a pariah," complained Haroon. "Very, very sad shape, and it is not what we expect of a great country like America."
"Do you know why in New York, why nothing happened (this year) on September 11? You gave us a list of three people, 'help us find them,' you said. We went out of our way and did find them. The White House said fantastic, we have the people that could have harmed us and, by God's grace, nothing happened. Three key people were handed over on the 5th of September. Were people told in America that the reason that New York is safe is because Pakistan helped us capture these people?"
http://www.cbsnews.com/8301-503543_162-20116573-503543.html
Here's a recent Christine Fair opinion piece in Time magazine:
Early in the war, Pakistan was praised for its indispensable assistance — likely because the cooperation centered on a common foe: al-Qaeda. But as Pakistan watched the U.S. grow closer to India — not just passing the U.S.-India civilian nuclear deal but also encouraging India's presence in Afghanistan — it concluded that its interests and those of the U.S. were on a collision course.
In part because of that realization, Pakistan supported the Taliban's newly invigorated insurgency in Afghanistan. The Americans, however, resisted putting pressure on Pakistan for fear of compromising cooperation against al-Qaeda. Thus an ironic equilibrium was established: Pakistan received increasing financial "rewards" for its support of the global war on terrorism while it subsidized the very groups killing thousands of Americans and allies in Afghanistan.
With the American endgame in Afghanistan looming, U.S. officials can no longer ignore this duplicity. Pakistan's influence over the Afghan Taliban and other allies like the Haqqani network is a key obstacle to Afghans' being able to secure their country themselves. What is becoming increasingly clear is that a strategic relationship is not possible when strategic interests diverge so starkly. Observers on both sides are quietly asking whether the other is a problematic partner, an outright foe or both.
Read more: http://www.time.com/time/specials/packages/article/0,28804,2096478_2096477_2096476,00.html #ixzz1a9K6tjzy
Here's a Bloomberg report on Karachi stocks rally after rate cut by SBP:
The Karachi Stock Exchange 100 Index, which has climbed 0.6 percent this year, rose 2 percent to 12,092.32 at the 3:30 p.m. local time close, its highest since Aug. 2. Oil & Gas Development Co., the biggest fuel explorer, rose 3.7 percent to 141.03 rupees and Fauji Fertilizer Co., the biggest urea maker, rose 4.5 percent, to 178.06 rupees.
The State Bank of Pakistan reduced the discount rate to 12 percent from 13.5 percent, according to a statement in Karachi on Oct. 8. Three of five economists surveyed by Bloomberg News predicted a 1 percentage point cut, and the remainder forecast a 0.5 percent reduction.
Acting Governor Yaseen Anwar had room to act after Pakistan’s inflation rate dropped 2 percentage points in the past three months. A rate cut might support an economy that’s seen growing less than half the pace of fellow South Asian nations India, Bangladesh and Sri Lanka this year.
‘Attractively Priced’
“With the level of the rate cut, today’s jump was expected,” said Habib ur Rahman, who oversees 7 billion rupees ($80 million) in stocks and bonds at Atlas Asset Management Ltd. in Karachi. “I can see the market continuing to gain till December because high-yielding stocks are attractively priced.”
Global funds sold $47.1 million worth of Pakistani stocks in July and August compared with net buying of $95.6 million last year, according to central bank data.
The Karachi Interbank Offered Rate, the benchmark borrowing rate for commercial banks, fell to 11.97 percent from 12.90 percent, according to Bloomberg data. The yields on the 12-month treasury-bill and the 10-year investment bond both declined by 1 percentage point to to 12.85 percent and 12 percent respectively, according to Arif Habib Ltd., in Karachi.
The rupee, which has shed 2 percent this year and dropped to a record low on Sept. 16, declined 0.3 percent to 87.47 to the U.S. dollar. The central bank conducted what it called a “calibrated intervention” last month to stabilize the currency.
Prime Minister Syed Yousuf Raza Gilani’s government is aiming to boost economic growth to 4.2 percent in the fiscal year ending June 30, from 2.4 percent in the previous year, one of the lowest expansions in the past decade, as the country struggled to cope with floods and militant attacks.
Floods in August forced more than one million people from their homes and damaged crops in parts of southern Pakistan still recovering from last year’s worst ever monsoon inundation that devastated the region. Terror attacks in the South Asian nation have killed at least 35,000 people since 2006, according to government estimates.
Stimulating Investment
The central bank decided to slash its policy rate for a second straight meeting because of a “high probability” of meeting the inflation goal for fiscal 2012 and to stimulate investment, according to central bank’s statement. The State Bank is targeting an average inflation of 12 percent in the year ending June 30, 2012.
Consumer prices rose 10.46 percent in September from a year earlier, after climbing 12.43 percent in July, according to the Federal Bureau of Statistics.
“If the rate cut is backed by other positive factors like an ease in inflation and a pickup in growth activity, we can see the index around 14,000 points by June 2012,” said Mohammad Shoaib, who oversees the equivalent of 32 billion rupees in Pakistani stocks and bonds at Al-Meezan Investment Management Ltd. in Karachi.
http://www.businessweek.com/news/2011-10-10/pakistan-stocks-rally-after-bigger-than-forecast-rate-cut.html
Here are some interesting claims made in Financial Times about secret Zardari-Obama exchange as reported by The News:
..According to an analyst this obviously meant that President Zardari was considering firing General Kayani. The offer was sent through a prominent American citizen of Pakistani origin, investment banker and businessman Mansoor Ijaz. In an article in FT which was almost a confession, Mansoor Ijaz admitted that he received the message from a senior Pakistani diplomat and sent it to Admiral Mullen and claimed that his channel was used to “bypass the Pakistan Army and intelligence channels.”
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“Gen Ashfaq Kayani, the army chief, and his troops were demoralised by the embarrassing ease with which US special forces had violated Pakistani sovereignty. Inter-Services Intelligence, Pakistan’s feared spy service, was charged by virtually the entire international community with complicity in hiding bin Laden for almost six years. Both camps were looking for a scapegoat; Mr Zardari was their most convenient target.
“The diplomat made clear that the civilian government’s preferred channel to receive Mr Zardari’s message was Admiral Mike Mullen, chairman of the US joint chiefs of staff. He was a time-tested friend of Pakistan and could convey the necessary message with force not only to President Barack Obama, but also to Gen Kayani.
“In a flurry of phone calls and emails over two days, a memorandum was crafted that included a critical offer from the Pakistani president to the Obama administration: “The new national security team will eliminate ‘Section’ S of the ISI charged with maintaining relations to the Taliban, Haqqani network, etc. This will dramatically improve relations with Afghanistan.”
“The memo was delivered to Admiral Mullen at 14.00 hours on May 10. A meeting between him and Pakistani national security officials took place the next day at the White House. Pakistan’s military and intelligence chiefs, it seems, neither heeded the warning, nor acted on the admiral’s advice.
“On September 22, in his farewell testimony to the Senate armed services committee, Admiral Mullen said he had “credible intelligence” that a bombing on September 11 that wounded 77 US and Nato troops and an attack on the US embassy in Kabul on September 13 were done “with ISI support.” Essentially, he was indicting Pakistan’s intelligence services for carrying out a covert war against the US - perhaps in retaliation for the raid on bin Laden’s compound, or perhaps out of strategic national interest to put Taliban forces back in power in Afghanistan so that Pakistan would once again have the “strategic depth” its paranoid security policies against India always envisioned.
“Questions about the ISI’s role in Pakistan have intensified in recent months. The finger of responsibility in many otherwise inexplicable attacks has often pointed to a shadowy outfit of ISI dubbed “S-Wing”, which is said to be dedicated to promoting the dubious agenda of a narrow group of nationalists who believe only they can protect Pakistan’s territorial integrity.
“The time has come for the US State Department to declare S-Wing a sponsor of terrorism under the designation of “foreign governmental organisations”. Plans by the Obama administration to blacklist the Haqqani network are toothless and will have no material impact on the group’s military support and intelligence logistics; it is S-Wing that allegedly provides all of this in the first place. It no longer matters whether ISI is wilfully blind, complicit or incompetent in the attacks its S-Wing is carrying out. S-Wing must be stopped...........
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=9493&Cat=13
Here's an AP report on US State Dept seeking funding for aid to Pakistan:
WASHINGTON - The Obama administration is pledging robust assistance to Pakistan despite demands on U.S. finances and a sometimes rocky relationship with Islamabad, according to a status report on Afghanistan and Pakistan.
The State Department report outlines U.S. goals in the region more than a decade after the Sept. 11 terror attacks triggered the war against al Qaeda, and the progress after billions of dollars have been spent and American lives lost. It also outlines the steps forward, looking ahead to the withdrawal of U.S. combat forces by the end of 2014.
The report was delivered to Congress on Thursday. The Associated Press obtained a copy.
"Though a tremendous amount has been accomplished, we also have no illusions about the task before us," the report said about Afghanistan. "We expect that ongoing violence, lack of institutional and human capacity, discrimination against women and vulnerable groups, and Afghanistan's incredibly low economic baseline will remain difficult challenges."
The report said the U.S. has reached its "high water mark" for civilian funding and the government in Kabul must move toward establishing revenue sources. The report said the U.S. will build a foundation for the Afghans to assume responsibility for their future.
On Pakistan, the department said the relationship with Islamabad "is not always easy, but it is vital to our national security and regional interests."
In fact, the relationship has been extremely strained the last few months to the point of breaking. Secretary of State Hillary Rodham Clinton recently traveled to the region to pressure Pakistan to crack down on the Taliban-linked Haqqani network, a major threat to American forces in the region. Adm. Mike Mullen, the former chairman of the Joint Chiefs of Staff, said Pakistan's intelligence agency was a "veritable arm" of the Haqqani.
A low point came in May when U.S. forces found and killed al Qaeda leader Osama bin Laden deep inside Pakistan.
Still, the administration insisted it will continue to provide civilian aid to Pakistan, which has fallen from $1.5 billion in the 2010 fiscal year to $1.1 billion this year. The report said next year's levels are uncertain, but the administration reaffirms its "commitment to providing robust, multi-year civilian assistant to Pakistan."
Unclear is how much Congress will push to reduce funds for Pakistan as lawmakers consider spending bills for the State Department and foreign operations.
The report suggested that a low-cost route toward improving stability in the region would be expanding U.S. market access for both Pakistan and Afghanistan.
The department said it was seeking congressional authorization for creating a U.S.-Pakistan Enterprise Fund, similar to funds created in Eastern Europe and with the former Soviet states in the 1990s.
http://www.cbsnews.com/8301-201_162-57318272/u.s-pledges-financial-aid-for-pakistan/
Here's an excerpt from a Dawn report on Ambassador Munter recounting how US AID has helped Pakistan over 50 years:
The US Ambassador further said Pakistanis who doubt that US assistance has borne fruit in Pakistan would be surprised to know that they have tasted it, adding, “Pakistan’s most popular citrus fruit, the kinoo, comes from California. USAID brought kinoo seeds to Pakistan in the 1960s. Today, we are helping export Pakistan’s sweetest fruit, the mango, in the other direction.”
“In the 1950s, we brought together the University of Karachi, the University of Pennsylvania’s Wharton School of Business, and the University of Southern California to establish a campus in Karachi to meet the demand for business managers in the bustling port city.”
“USAID sponsored the project and the Institute of Business Administration became Pakistan’s first business school and one of the first outside of North America. IBA is recognized today as one of South Asia’s leading institutions,” he maintained.
Ambassador Munter said in 1965, Dr. Norman Borlaug, who later won the Nobel Prize for his contribution to agricultural research, came to Pakistan to introduce his new high-yielding variety of wheat.
“We worked with the Lyallpur Rotary Club to support a program that gave individual farmers a bushel of the new generation of seed if, when the harvest came in, they returned the bushel so we could give it to someone else. While modest in scope, this small project brought Lyallpur into the Green Revolution that in turn converted a food deficit region into an exporter of grains,” he added.
In the 1960s and ’70s, a consortium of U.S. construction firms employing Pakistanis, Americans, Brits, Canadians, Germans, and Irish built the two mighty dams of Tarbela and Mangla with USAID and World Bank financing, US Ambassador said, adding, “Those engineering feats – more complex than anywhere in the world at that time – soon accounted for 70 per cent of the country’s power output and made Pakistan a leading provider of clean energy.”
In the 1980s, the US Ambassador said, with USAID’s assistance, Pakistan’s private industry founded the Lahore University of Management Sciences.
“Pakistanis approached us with the idea for the new institution and we agreed to support it with a contribution of $ 10 million. Today, LUMS incubates the ideas and nurtures the leaders who are critical to Pakistan’s future,” he remarked.
Ambassador Munter said, since the inception of the Fulbright scholarship program, nearly 3,000 Pakistanis have studied in the United States and close to 1,000 Americans have studied in Pakistan, adding, today, the U.S. Fulbright program in Pakistan is the largest in the world.
Key to all these successes was that Pakistanis owned them.
We may have helped sow the seeds but Pakistanis made sure the flowers blossomed, he said, adding, “aid is a catalyst and its success depends on those who receive it.”
“So today, while we help complete dams in Gomal Zam and Satpara and rehabilitate power plants in Muzaffargarh and Jamshoro, only Pakistanis can put an end to circular debt by paying their bills and holding the system accountable.”
“While we work to cultivate international markets for Pakistan’s fruit and fashion, only Pakistanis can deliver quality products that can compete. While we pay for road construction in South Waziristan, only Pakistanis can provide the local population with economic opportunities to make use of those roads.
While we build schools in Azad Jammu and Kashmir and Khyber Pakhtunkhwa, only Pakistanis can ensure that qualified teachers show up to teach in them,” the US Ambassador maintained.
http://www.dawn.com/2011/11/04/pakistan-us-relationship-dogged-by-history-munter.html
Here's an excerpt from a piece by Nancy Birdsall of CGD published in Foreign Policy Magazine:
Meanwhile in Washington, debate in the U.S Congress about aid to Pakistan -- not just military aid but aid to shore up the civilian government along the lines that the late Richard Holbrooke advocated -- has grown increasingly hostile. Many in Congress assume that Washington's announced annual economic aid package of $1.5 billion provides leverage that can somehow bring both the civilian and military sides of Pakistan's government into line -- and are threatening to withdraw civilian aid in frustration with the inability or unwillingness of Pakistan's military and intelligence agencies to deal with the Haqqani Network and other threats to the security of Americans in Afghanistan.
The IMF saga makes clear that that leverage just doesn't exist. Using economic aid to push weak civilian governments into political steps they cannot take (unless they are willing to give up power altogether) doesn't work. It is even more far-fetched to imagine that the much smaller amount of U.S. civilian aid constitutes leverage with Pakistan's military and intelligence establishment, or that it's removal is a serious threat to them. If the government of Pakistan is willing to walk away from more than $3 billion of IMF money because it cannot implement a VAT, it seems unlikely that the powers that be will change their strategic calculus in Afghanistan for whatever Congress appropriates this year.
As we have emphasized before, the purpose of U.S. civilian aid to Pakistan is not to bribe or reward, nor would withholding aid be a useful punishment. Aid seldom constitutes leverage over tough domestic policy decisions, as the development community knows well. Apparently, so does the U.S. military. On the eve of his retirement, Chairman of the Joint Chiefs of Staff Adm. Mike Mullen told Congress that the U.S. needs to move beyond counterterrorism in Pakistan and focus on the development issues that constitute the foundation of that country's long run success. In his words, "isolating the people of Pakistan from the world right now would be counter-productive."
The issue is whether modest amounts of U.S. aid -- to help educate kids, create jobs, and strengthen democratic institutions -- might help give Pakistan a shot at becoming a more stable, prosperous and democratic country in the long term. Congress should be demanding evidence of that possible effect and targeting aid appropriately, rather than making superficial cuts that hurt America's image and impact in Pakistan for no apparent gain.
Nancy Birdsall is the founding president of the Center for Global Development, a Washington, DC based think tank. Milan Vaishnav is a visiting fellow and Daniel Cutherell is a policy analyst at the Center for Global Development.
http://afpak.foreignpolicy.com/posts/2011/11/04/pakistan_and_the_imf
US State Dept & Sen Feinstein defend US aid to Pakistan, according to Dawn:
WASHINGTON: The US State Department on Tuesday defended aid to Pakistan amid calls from senators for a full review of whether economic and military assistance there serves the US national interest.
“We believe our assistance to Pakistan still continues to provide dividends for the American people in trying to grow and strengthen Pakistan’s democratic institutions, boost its economy,” said spokesman Mark Toner.
“In the long term, you know, those are the kinds of things we’re seeking to achieve,” he told reporters one day after Republican Senators John McCain and Lindsey Graham made a full-throated call for reevaluating the aid.
His comments came shortly after US Senate Intelligence Committee Chair Dianne Feinstein said that cutting assistance to Pakistan would be unhelpful but warned that calls to do so had strong congressional support.
“I don’t think that’s useful,” she told reporters. “My understanding is that there’s some overtures under way to restore the relationship. Well, that’s fine, but I suspect that if a bill were to come to the floor which fenced money, the bill would have a good chance of passing,”she said.
US lawmakers have expressed mounting anger at Pakistan, accusing military and intelligence officials there of supporting the Haqqani network blamed here for attacks on US forces and targets in Afghanistan.
“I can only express my profound disappointment with the relationship” and the “deterioration” in an already troubled alliance that “goes up and down, and up and down, and up and down,” she said.
“My very strong feeling is you can’t walk both sides of the street with respect to terror,” said Feinstein.
Relations slid to a new low last month when Nato air strikes killed 24 Pakistani soldiers on the Afghan border, prompting Pakistan to boycott an international conference in Bonn on Afghanistan’s future.
“This is a very complex relationship,” Toner said, adding that the deadly border incident “was difficult for the Pakistani people, for the Pakistani government.”
“They have reacted in a way that shows how important and how significant this tragedy was for them,” Toner said.
“It’s absolutely essential that Pakistan, Afghanistan and the US, other international partners, work through this and beyond. It’s in all our interests.”
But Republican Senator Mark Kirk told AFP that McCain and Graham, who serve on the Senate Armed Services Committee, “are right.”
“Military aid to Pakistan is unsustainable, and in this time of deficits and debt, we ought to save the money,” he said, warning that if Pakistan has chose “to embrace terror and back the Haqqani network,” it should do so “without subsidies from the US taxpayer.
Kirk has also called for bolstering ties to India and “making India a military ally of the United States and to encourage India to fill the vacuum in Kabul once we leave.”
http://www.dawn.com/2011/12/07/us-state-dept-defends-pakistan-aid.html
Here's a news story on US civilian aid to Pakistan:
In a written reply to a question raised at the daily press briefing, the State Department said, “Civilian assistance to Pakistan continues and has not been interrupted since the tragic Nov. 26 incident.”
“Since the passage of the Kerry-Lugar-Berman legislation in October 2009, the U.S. government has disbursed $2.2 billion in civilian assistance, including approximately $550 million in emergency humanitarian assistance,” said the statement, adding, “In FY 2011 specifically, we disbursed approximately $855 million (not including any emergency humanitarian assistance).”
With the majority of Pakistanis claiming they see no evidence of U.S. economic assistance, Washington still struggles to fashion an effective program of civilian aid. However, data provided by the U.S. State Department created a different impression.
“In 2011 the people of the United States supported the construction of 210 kilometers of road in FATA and Khyber-Pakhtunkhwa, funded the world’s largest Fulbright exchange program, and sponsored initiatives promoting private sector growth and civil society development in Pakistan,” said the statement.
http://gantdaily.com/2012/01/20/u-s-confirms-no-interruption-in-flow-of-american-taxpayer-dollars-to-pakistan/
Here's an Asia Times piece on the importance of GCC Arabs to US power and US dollar:
There's no way to understand the larger-than-life United States-Iran psychodrama, the Western push for regime change in both Syria and Iran, and the trials and tribulations of the Arab Spring(s) - now mired in perpetual winter - without a close look at the fatal attraction between Washington and the GCC. [1]
GCC stands for Gulf Cooperation Council, the club of six wealthy Persian Gulf monarchies (Saudi Arabia, Qatar, Oman, Kuwait, Bahrain and the United Arab Emirates - UAE), founded in 1981 and which in no time configured as the prime strategic US backyard for the invasions of Afghanistan in 2001 and Iraq in 2003, for the long-drawn battle in the New Great Game in Eurasia, and also as the headquarters for "containing" Iran.
The US Fifth Fleet is stationed in Bahrain and Central Command's forward headquarters is based in Qatar; Centcom polices no less than 27 countries from the Horn of Africa to Central Asia - what the Pentagon until recently defined as "the arc of instability". In sum: the GCC is like a US aircraft carrier in the Gulf magnified to Star Trek proportions.
I prefer to refer to the GCC as the Gulf Counter-revolution Club - due to its sterling performance in suppressing democracy in the Arab world, even before Mohammed Bouazizi set himself on fire in Tunisia over a year ago.
Cueing to Orson Welles in Citizen Kane, the Rosebud inside the GCC is that the House of Saud sells its oil only in US dollars - thus the pre-eminence of the petrodollar - and in exchange benefits from massive, unconditional US military and political support. Moreover the Saudis prevent the Organization of Petroleum Exporting Countries (OPEC) - after all they're the world's largest oil producer - to price and sell oil in a basket of currencies. These rivers of petrodollars then flow into US equities and Treasury bonds.
For decades virtually the whole planet has been held hostage to this fatal attraction. Until now.
Gimme all your toys
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It's true that whoever dominates the GCC - with weapons and political support - projects power globally. The GCC has been absolutely key for US hegemony within what Immanuel Wallerstein defines as the world system.
Yet let's take a look at the numbers. Since last year Saudi Arabia is exporting more oil to China than to the US. This is part of an inexorable process of GCC energy and commodity exports moving to Asia.
By next year foreign assets held by the GCC could reach $3.8 trillion with oil at $70 a barrel. With all that non-stop "tension" in the Persian Gulf, there's no reason to believe oil will be below $100 in the foreseeable future. In this case GCC foreign assets could reach a staggering $5.7 trillion - that's 160% more than in pre-crisis 2008, and over $1 trillion more than China's foreign assets.
At the same time, China will be increasingly doing more business with the GCC. The GCC is increasingly importing more from Asia - although the top source of imports is still the European Union. Meanwhile, US-GCC trade is dropping. By 2025, China will be importing three times more oil from the GCC than the US. No wonder the House of Saud - to put it mildly - is terribly excited about Beijing.
So for the moment we have the pre-eminence of NATOGCC military, and USGCC geopolitically. But sooner rather than later Beijing may approach the House of Saud and quietly whisper, "Why don't you sell me your oil in yuan?" Just like China buying Iranian oil and gas with yuan. Petroyuan, anyone? Now that's an entirely new Star Trek.
http://www.atimes.com/atimes/Middle_East/NA20Ak02.html
Here is a News report on US Aid for Pakistani universities:
The United States will build new Faculty of Education buildings at six Pakistani universities and renovate a seventh education facility, as part of an agreement signed Wednesday between the universities and the US Agency for International Development (USAID), said Karen Freeman, USAID Deputy Director for Pakistan.
She stated this while addressing the signing ceremony of a memorandum of Understanding for construction and rehabilitation of faculty of education buildings, says a press release. The construction will take place over the next two year and the new and renovated buildings will eventually house approximately 2,000 students of two new teaching degrees: the four year Bachelor’ Degree in Education and a two-year Associate Degree in Education in teaching that USAID helped design and introduce in order to increase quality of teacher preparation across the country and 100 faculty members each year.
“Pakistan and the United States have enjoyed a long and productive relationship that spans more than 60 years and covers a variety of fields. Today’s ceremony is yet another expression of the US Government’s long-term commitment to help build a stronger, more prosperous Pakistan,” she added.
“It gives me great pleasure to be here with you today to witness the signing of the MoU between the seven of country’s public universities and two of USAID implementing partners for the construction and rehabilitation of Faculty of Education buildings across the country. The contribution to the Pakistani education system is yet another example of the US long-term commitment to helping Pakistan address its development priorities.
“Our collaboration in higher education sector spans more than five decades. One of our first undertakings in this sector was the construction of the Institute of Education and Research at the University of Punjab in 1960s. fifty years later, this institute continues to help the country shape its education policies. Over the years, we have worked together to build more higher education institutions that have since become premier centres for knowledge and learning. I am very proud to list among such the Institute of Business administration in Karachi, the Lahore University of Management Sciences, the Faisalabad Agriculture University as well as the Peshawar Agriculture University, and many more,” she said.
Karen Freeman said: “I am happy that through today’s commitment we are continuing this tradition of supporting Pakistan in its efforts to develop strong education institutions.” She said that these new facilities will help attract and train best young minds to teaching profession and will help improve the professional knowledge and skills of many other teachers.
Higher Education Commission Chairman Dr. Javaid Laghari appreciated the efforts of the US Government for improving the quality of education across the country. The $15 million construction initiative was officially launched today at the Higher Education Commission, where representatives of the USAID signed MoU with representatives of the seven universities. As part of the agreement, the US will construct new Faculty of Education buildings at the Sardar Bahadur Khan Women University in Quetta; the Hazara University in Mansehra; the University of Education in Lahore; the University of Sindh in Hyderabad; the University of Karachi in Karachi; and the Sardar Abdul Latif University in Khairpur (Sindh). The US will also help renovate the Institute of Education and Research at the University of the Punjab.
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=90967&Cat=6&dt=2/3/2012
US allocates $2.4 billion in aid for Pakistan in 2013, according to Express Tribune:
The White House has allocated $800 million for Pakistan’s Counterinsurgency Capability Fund (PCCF) in its budget for fiscal year 2013, whereas the State Department and USAID budget for Pakistan comes to $2.4 billion.
The budget, which will go to Congress for approval, shows a decrease of $50 million in the allocation figure for PCCF from last year. The purpose of the fund is to “build and maintain the counterinsurgency capability” of Pakistan’s security forces. The services provided by the US include human rights training, providing equipment, supplies, training and infrastructure repair.
The description of the PCCF stated in the budget documents released by the State Department state that the PCCF “enhances the capabilities of the Pakistan Army, the Pakistan Air Force, and the Frontier Corps by meeting their needs for training, equipment, and infrastructure. The PCCF will assist the Government of Pakistan to eliminate the violent extremists’ ability to operate along its border with Afghanistan. The PCCF account will draw down when the need for intensive support for engagement against terrorist organisations in Pakistan declines.”
State Department
In a press release issued by the State Department, the budget allocation requested for Pakistan for FY2013 is $2.4 billion. This includes the $800 million cited in the PCCF, and is meant for assistance to “strengthen democratic and civil institutions that provide a bulwark against extremism, and support joint security and counterterrorism efforts.
Certifications
The budget documents also outline certifications that the US secretary of State is required to make to various Congress committees before funds such as the Foreign Military Financing Program, PCCF etc. can be allocated.
According to the conditions, the Secretary must certify that Pakistan is cooperating with the US in counterterrorism efforts against the Quetta Shura, Haqqani Network, Jaish-e-Mohammad, Lashkar-e-Taiba, al Qaeda and other domestic and foreign terrorist organizations. Pakistan must not be supporting terrorist activities against the US or coalition forces in Afghanistan.
Interestingly, a condition includes that the Secretary of State must certify that, “Pakistan’s military and intelligence agencies are not intervening extra-judicially into political and judicial processes in Pakistan”
http://tribune.com.pk/story/336108/us-unveils-budget-with-trimmed-pakistan-aid-subject-to-conditions-of-course/
Here are excepts of an Op Ed by Andrew Michell, British secretary of DFID, published in The News:
Over the last year, the UK has worked closely with Pakistan to deliver strong results, including supporting nearly half a million children in school; providing practical job training to more than 1,100 poor people in Punjab; providing microfinance loans to more than one hundred thousand people across Pakistan so they can start small businesses and lift their families out of poverty; and helping millions of people affected by the floods in 2010 and 2011.
Education is the single most important factor that can transform Pakistan’s future. With a population that is expected to increase by 50 per cent in less than forty years, it is worrying that half the country’s adults can’t read or write, and that more than a third of primary school aged children are not in school. That’s why the UK is committed to working in partnership with Pakistan to tackle its education emergency.
If educated, healthy and working, this burgeoning youth population will provide a demographic boost to drive Pakistan’s economic growth and unlock Pakistan’s potential on the global stage.
That’s why education is the UK’s top priority and why over the next four years, the UK will work in partnership with Pakistan to:
* support four million children in school;
* recruit and train 90,000 new teachers;
* provide more than six million text book sets; and
* construct or rebuild more than 43,000 classrooms.
Every full year of extra schooling across the population increases economic growth by up to one percentage point, as more people with better reading, writing, and maths skills enter the workforce.
The UK government is also working with Pakistan to empower and protect women and girls, to end violence against them and to help harness their talent and productivity. I welcome the legislation recently passed by Pakistan’s parliament that bans domestic violence, and congratulate Pakistan on its first Oscar for an outstanding film which throws the international spotlight on the horrific crime of acid attacks on women.
Other priorities for the UK include working with Pakistan to prevent 3,600 mothers dying in childbirth; enabling 500,000 couples to choose when and how many children they have; providing practical job training (such as car mechanics, cooks, weavers, carpenters, etc) to tens of thousands of people living in poverty; and enable millions of people, half of them women, to access financial services such as microfinance loans so they can earn more money and lift their families out of poverty.
The UK’s aid to Pakistan could potentially more than double, to become the UK’s largest recipient of aid. However this increase in UK aid is dependent on securing value for money and results, and linked to the Government of Pakistan’s own progress on reform at both the federal and provincial levels. This includes taking steps to build a more dynamic economy, strengthen the country’s tax base, and tackle corruption.
http://www.thenews.com.pk/Todays-News-2-97151-UK-and-Pakistan-partners-for-the-long-term
Here's a Business Recorder report on foreign assistance received July 2011 to March 2012:
The United States remains the major grant assistance provider to Pakistan during the first nine months of the current fiscal year while the Asian Development Bank (ADB) and the World Bank have been major lenders to Pakistan by releasing $470 and $269 million respectively during the period.
The total foreign assistance received by Pakistan from July 2011 to March 2012 was $1.6 billion with US as the major grant provider despite the recent tension between the two countries.
The foreign assistance provided by the ADB and the World Bank is 'loan-based' assistance while the assistance provided by the US is 'non-loan' assistance that in other terms is called 'grant'.
According to the data available with Business Recorder, the US has provided the grant assistance of $112 million to Pakistan during the first nine months of 2011-12.
Agriculture and Livestock ($3.4m) Food Assistance ($102.7m) Health and Nutrition ($1.1m) Crisis Prevention and Disaster Reduction (1.5mdollar) and Housing and Construction ($1.8m) are the sectors for which this amount has been released by the US.
The data reveals that $470 million has been released by the ADB for various projects including the projects on Crisis Prevention and Disaster Reduction (2.9m$), Rural Development( 6.9m$), Banking, Finance and Insurance ($200m), Education ($6.5m), Energy Generation( $73m), Health and Nutrition ($4.3m), Transport ($111.4m), Governance ($0.6m), Budgetary Support( $19.7m), Agriculture and Livestock( $11.4), Urban Development ( $5m),and Environment and Natural Resources ($28.4m).
The World Bank remains the second major lender to Pakistan by disbursing $269 million.
The projects under which this amount has been released includes Banking, Finance and Insurance ($2.5m), Urban Development (34.9m), Education ($34m), Agriculture and Livestock( $15.5m), Health and Nutrition ($41.7), Trade ($1.2m), Transport ($3.3m), Energy Generation ( $23m) , Social Welfare ( $21.1m)Water and Sanitation ($0.06m), Governance ( $1.4m)and Food Assistance ($5.6million).
The data says that the Islamic Development Bank (IDB) has provided $35.1 million.
Germany 23.2 million dollars, UK 22.2 million dollar, and UN has released $26.1 million.
The data reveals that Canada has disbursed $18 million to Pakistan from July 2011 to March 2012, Switzerland 1.2 million dollars, Japan 5.2 million dollars and EU has released $13.1 million.
Spain has released $3.15 million, Norway $3.3 million, Saudi Arabia 1 million dollar, Italy $1.6 million, Netherlands $17.3 million, Sweden $7.7 million, Australia $22 million, China $0.5 million, International Private Donors $0.6 million and Ireland has disbursed $3 million.
France has disbursed, according to the document, $0.5 million, Belgium $6.8 million, Denmark $1.4 million, Luxembourg $0.8 million, and New Zealand has released $0.4 million to Pakistan from July 2011 to March 2012.
http://www.brecorder.com/money-a-banking/198/1169611/
Here's an APP report on Japanese assistance to Pakistan:
Ambassador of Japan to Pakistan Hiroshi Oe on Sunday said "National Transmission Lines and Grid Stations Strengthening Project" of Japan worth Rs30 billion, will help Pakistan save electricity used in about 2 million average households.
In an interview with APP, he said Pak-Japan project, soon after its completion, will help Pakistan in overcoming its growing energy demand.
About the major projects initiated by the Japan government, he said that Japan has been a major contributor to the development of social sectors in Pakistan.
Japan's assistance to Pakistan has added up to 1.3 trillion yen (approx. 1.5 trillion rupees) since 1954, the ambassador said.
Japan has provided technical assistance to Pakistan by receiving trainees under the Colombo Plan and provided technical training or study opportunities to over five thousand Pakistanis in Japan, he added.
He said Japan has built up about 530 schools and 130 hospitals, clinics and provided medical equipment under various Japanese assistance programmes.
To a question, he said about 30 Japanese companies are operating in Pakistan including joint ventures with Pakistani companies related to automobiles, motorcycles and service industries such as constructors, IPPs, financial institutions and trading houses.
Considering the vast potentials in Pak-Japan bilateral relationship, he said there is much more work to be done, and therefore, he cannot be complacent about the current status of ties.
Highlighting the need to enhance the potential of manpower in Japan for Pakistani youth, he said trade opportunities with Japan must expand and interactions with Japan will surely provide vast opportunities to the youth of Pakistan.
To a question, he said Pakistan is an important partner in the area of parliamentarians' exchanges.
Both the countries have Japan-Pakistan friendship groups respectively, consisting of parliamentarians from each country, working to enhance their regular interactions.
In September 2011, when the Japanese Parliamentary League for Polio Eradication visited Pakistan, they discussed the need for promoting interactions between parliamentarians of the two countries during their meeting with Pakistani parliamentarians, he said.
The ambassador expressed his determination to make utmost efforts to further strengthen bilateral relations between the two countries, focusing on the promotion of parliamentarians' exchanges of our two countries.
About the Pak-Japan cultural ties, Hiroshi Oe said Japan Embassy holds cultural events such as Ikebana workshop and demonstration, children's art and speech competition and Japan film festival throughout the year across the Pakistan.
The ambassador said JICA has been helping National Institute of Science and Technological Education (NISTE) to train science teachers who will surely play a vital role in utilizing Japanese technology in Pakistan in the future.
He said that he visited Sialkot last year and found the world's top-class manufacturing industries there. He hoped that with proper quality control and marketing, Pakistan will develop even more industries of such standard.
The year 2012 is the 60th anniversary of the establishment of the diplomatic relations between Japan and Pakistan,the Ambassador added.
Hiroshi Oe emphasized on promoting human and cultural exchanges to deepen mutual understanding between the two countries and expressed wish to work with the Pakistani government to further deepen the bilateral cooperative relations.
http://www.brecorder.com/top-news/108-pakistan-top-news/51454-japans-grid-stations-project-to-help-save-electricity-of-2mn-house-holds-ambassador-.html
Here's Daily Times on USAID project on education in Pakistan:
Administrator of the US Agency for International Development (USAID) Dr Rajiv Shah and Sindh Education Minister Pir Mazhar-ul-Haq launched the USAID-funded ‘National Reading Programme’ at Government Girls Primary/Secondary School, Sultanabad.
The programme consists of three projects - two national and one focused on Sindh - that will help train teachers, improve reading skills and numeracy, and mobilise communities to support school management. It will also increase enrollment of students and ensure student retention, especially of girls.
The programme aims at improving literacy and numeracy for nearly seven million children, provide training to over 90,000 teachers in teaching and assessment, and support the development of 3.2 million new readers–including 700,000 children in Sindh. USAID will be supporting the school with a reading programme under the Sindh Basic Education Programme (SBEP). USAID SBEP was started in 2011 and will span until 2016, with a budget of $ 155 million. “This is good because it supplements your education budget, a budget that is woefully under-funded. But more importantly, it establishes the need for accountability in school administration and management. We are both now accountable to citizens who look to us to be stewards of these resources.
http://www.dailytimes.com.pk/default.asp?page=2012\04\13\story_13-4-2012_pg7_17
Here's a Nation newspaper report on US AID chief Shah's visit to Pakistan:
Since the passage of the Kerry-Lugar-Berman legislation in October 2009, the US government has disbursed more than $2.6 billion in civilian assistance, including approximately $830 million in emergency humanitarian assistance. The US civilian assistance funds are spent in five priority sectors: energy, economic growth including agriculture, stabilisation of the border regions, education, and health.
Notably, the people of the United States supported the construction of 210 kilometres of road in FATA and Khyber Pakhtunkhwa, provided clean drinking water to half of the population of the FATA, funded the world’s largest Fulbright exchange program, and sponsored initiatives promoting private sector growth and civil society development in Pakistan.
The Administrator communicated the United States government’s continued desire to engage with Pakistan, focusing on areas of mutual interest and working through issues with trust, respect, and clarity of purpose.
In his meeting with Finance Minister Dr Abdul Hafeez Sheikh, he discussed the important role economic assistance brings to the bilateral relationship, and how US civilian assistance can create jobs and raise incomes for more Pakistanis. He said that United States has disbursed more than $2.6 billion in assistance to Pakistan since October 2009. Much of this assistance has focused on building Pakistan’s energy sector and increasing economic opportunity for Pakistanis. In the energy sector, the United States has collaborated with the Pakistani government to fund work on the Tarbela Dam and other major energy projects which have expanded Pakistan’s electricity-generation capacity by over 400 megawatts, bringing electricity to over six million Pakistanis. By the end of 2013, US assistance will have added another 900 megawatts to the national grid, providing electricity to over 14 million Pakistanis. On economic growth, the United States has trained nearly 70,000 women entrepreneurs in basic finance.
Shah also emphasised that despite challenges the broader bilateral relationship has faced, civilian assistance has remained steady and USAID looks forward to continuing to work together to support mutual objectives in the future.
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For more than six decades, the US Government has helped Pakistan develop its economy by supporting the development of its water, power, transportation, and communications infrastructure and by facilitating the establishment of Pakistan’s university system. U.S.-supported universities include IBA, LUMS, Jinnah Post-Graduate Medical Center, and many others.
In the 1960s and 1970s, the United States facilitated the Green Revolution in Pakistan, enabling the country to meet its people’s food needs. The United States also funded construction of several major power plants and dams, such as Tarbela and Mangla.
Unites States-sponsored health programs also helped eradicate malaria in the country. To this day, the United States continues to support Pakistan with extensive programs in the education, health care, economic growth, stabilisation, and energy sectors. Guests of the inauguration ceremony included representatives of the Government of Pakistan, the Parliament, civil society, implementing partners, and the media.
Meanwhile, Dr Rajiv Shah, Administrator for the United States Agency for International Development (USAID), concluded a two-day visit to Pakistan Friday during which he expressed the strong US commitment to building and improving ties with Pakistan through civilian assistance and development support.
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/islamabad/14-Apr-2012/us-vows-strong-respectful-ties-with-pakistan-shah
Here's a CSM story on US Aid in Pakistan:
USAID does not have any offices in the Federally Administered Tribal Areas (FATA) but operates out of Peshawar, a settled area adjacent to the tribal areas. Officials here recognize the threats and say security is one of the biggest challenges to their aid work, so they've found a small way to work around it.
“It is the requirement of US government to brand its aid, but we are giving waivers to projects undertaken in the Federally Administered Tribal Areas, because if they put up our logos etc, it can be life threatening,” says Mehdi Ali Khan, the communication specialist for USAID here.
Another official says USAID in Pakistan would prefer to be more transparent. Not only would it help to show that money is being put to good use, but it could build good will toward the US.
“We [would] like to get credit but it’s a complex situation. There is a war in Afghanistan. There are areas under conflict in Pakistan.... This is the reality,” he says wishing not to be named since he is not authorized to speak to the media. The official said USAID was putting up signboards that say the project is USAID funded in areas of Khyber Pakhtunkhwa (KP) in northwest Pakistan, but in areas like FATA, it just wasn’t possible.
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Violent anti-US sentiment among the public in the area has led many development organizations to decline to work with USAID altogether.
Muhammad Tahseen, who heads South Asia Partnership, a network of more than 1,000 nongovernment organizations all over Pakistan says that working with USAID can even be counterproductive to development.
Aid workers complain USAID money has a lot of strings attached that complicate their efforts. “We feel the aid has to do more with politics and not with development so we have refused to work with them,” Mr. Tahseen says.
------------
USAID has spent more than $2.6 billion dollars in the past two years. In 2011, USAID refined the strategy to focus assistance on economic growth, energy, education, health, and stabilization.
But Pakistani analysts feel that the US government has failed to change the perceptions of the public in Pakistan despite its huge commitments.
“The US had an opportunity in Pakistan. It could have engaged in a meaningful aid delivery program but it made aid subservient to foreign policy squabbles, and to military strategy in Af-Pak which fueled the public perception that US development assistance is a means to further its regional agenda,” says Raza Rumi, a leading columnist and a development consultant. “It is simply tragic that enormous amount of such aid gets squandered either through bad planning or making it hostage to political imperative.”
http://www.csmonitor.com/World/Asia-South-Central/2012/0425/Aid-to-Pakistan-2.6-billion-spent-little-ability-to-show-it
Here's an AFP story on EU aid to Pakistan:
Brussels on Monday announced a further 20 million euros in aid to victims of Pakistan's 2011 monsoon floods, as well as people displaced by conflict, bringing funding this year to 55 million euros.
While the world had responded with generosity to the country's devastating 2010 and 2011 floods, "we must not forget that millions of people are still struggling to recover, especially in the province of Sindh," said the EU's Commissioner for Humanitarian Aid, Kristalina Georgieva.
Floods in Pakistan in the summer of 2011 affected 5.8 million people, with floodwaters killing livestock, destroying crops, homes and infrastructure as the nation struggled to recover from record floods the previous year. In Sindh province, three out of four households have insufficient food.
Meanwhile, conflicts linked to army raids against insurgents have left more than 300,000 people displaced in Khyber, Pakhtunkhwa province.
In 2011, the EU executive gave 94.9 million euros to Pakistan of emergency aid due to flooding, conflict and the needs of Afghan refugees in the country.
The European Union's total assistance to Pakistan -- including aid from the Commission and member states -- amounts to 2,458 billion euros for 2009-2013, or around a third of total annual development assistance to the country.
In a ground-breaking move in February, the World Trade Organization approved a waiver allowing 75 Pakistani products duty free access to European markets for two years to help textile exports after devastating floods in 2010.
The EU is Pakistan's largest trading partner, receiving almost 30 percent of its exports -- worth almost 3 billion euros ($3.9 billion).
Pakistan's trade with the EU consists mainly of textiles, which account for more than 70 percent of its exports to European countries.
http://www.google.com/hostednews/afp/article/ALeqM5h7Y5nTEKB19m9VBwtpZN46pLG5RQ?docId=CNG.3c37098156ebc05a18aee237c9cea7e0.01
Here's a Daily Times report on US aid to Pakistan:
United States Agency for International Development (USAID) disbursed to Pakistan over $2.6 billion in economic, energy, health, education and infrastructure projects under Kerry-Lugar-Berman (KLB) Bill.
“The main emphasis of USAID assistance was on energy production, economic growth, agriculture improvement, education, health and infrastructure projects in the country,” USAID Acting Country Director Karen Freeman told newsmen Friday after function at National Institute of Health here.
“US wants prosperous, secure, stable Pakistan with improvement in all basic needs of life available to people at grassroots level. All USAID funded projects are on track,” she said adding besides producing 400 megawatts (MW) through new projects, assistance is being provided for improving existing energy projects.
She said US government through USAID provided assistance to help strengthen energy sector, enhance economic and educational opportunities available to Pakistanis, improve health care services and meet critical infrastructure needs in remote mountain areas. It also provided substantial relief, recovery assistance, such as when floods devastated the country in year 2010.
Earlier, addressing certificate distribution ceremony of disease control and prevention program, she said outbreak of infection diseases, malaria, tuberculosis, hepatitis threaten well being of entire society. Doctors training will improve their skill to face this challenge. Strong disease surveillance, analysis, control systems are imperative so that infectious diseases are stopped.
Freeman said 31 Pakistani medical officials completed four week training from intensive US funded training program in basic epidemiology designed to strengthen detection, surveillance, analysis of infectious disease at district, provincial level. Program seeks to improve public health, disease control by building capacity in epidemiology, public health surveillance and response, public health laboratories, information systems for disease surveillance. USAID provided $6.78 million for this program since year 2006.
Since inception USAID health program trained 11,000 health care providers, provided 126 ambulances, upgraded 89 community healthcare facilities. In 2010 USAID helped restore 150 schools, trained over 600 teachers in Malakand. USAID offered training in finance to 19,000 women business owners in Punjab, Sindh provinces in 2010. As part of flood relief efforts USAID established 190 mobile health clinics, helped provide safe drinking water to over 1.5 million people daily.
http://www.dailytimes.com.pk/default.asp?page=2012\06\16\story_16-6-2012_pg5_10
Here's a Dawn story on US AID projects in FATA:
The United States Agency for International Development will construct 200-kilometre roads in South and North Waziristan agencies in addition to undertaking longer term interventions in Khyber Pakhtunkhwa’s education and health sectors.
Andrew Sisson, the agency’s mission director in Pakistan, told Dawn that the USAID had already constructed over 200km roads in South Waziristan and it was planning construction of additional 200km roads primarily in North Waziristan Agency and some in South Waziristan Agency.
“It (road construction) is an excellent investment in opening the Federally Administered Tribal Areas in terms of economy and business to the rest of the country,” he said.
The US agency, he said, had provided $201 million for roads linking North Waziristan and South Waziristan to the rest of Pakistan. He said that USAID was also planning to provide more resources for roads directly to the Fata Civil Secretariat later this year.
Similarly, the USAID signed an agreement in October last year for disbursing funds for the construction of irrigation network downstream Gomal Zam dam that, he said, would irrigate 120,000 cultivable acres, benefiting thousands of farm families. Some $9 million for construction irrigation network, he said, had been released to the Water and Power Development Authority in December last.
Mr Sisson said that investment in this part of Pakistan (KP and Fata), especially for education, health, infrastructure, community level activities, irrigation and business development, remained ‘a very high priority’ of the US government.
“We are budgeting for the future..we are hopeful that the funds would come after approval by our Congress,” said Mr Sisson, adding that the Obama administration was committed to maintaining high level of aid to Pakistan even during this rocky period (of relationship).
“Despite our relations, our aid levels are high,” he said, adding that his organisation would continue building schools in Fata and KP, which was a very important part of the bilateral relationship.
He said that their assistance to Pakistan was in the interest of the people of both the countries and that it had been achieving great results. The USAID-funded projects, according to him, put 400MW to the grid last year, some 500MW would be added to the system next year, and one million children went to schools constructed by the agency over the past few years.
“We want Pakistan to succeed, to be more stable and have a more prosperous economy,” he said, adding that their interest in Pakistan would continue no matter who was in power in the US.
He said that apart from funding five major interventions in the energy sector the US was looking into making other investments to help Pakistan overcome its energy sector. “We are in discussion with the government for carrying out feasibility studies for Diamer-Bhasha dam,” said the USAID director.
He said that the USAID was also assisting the Fata secretariat and the KP to help build their capabilities. Justifying delays in the execution of infrastructure projects in the KP and Fata, Mr Sisson said “Even in the United States complicated infrastructure projects don’t go on schedule and that’s very true in Pakistan (as well).”
He said that some of the infrastructure projects were being carried out in tough regions where security formed a major impediment to the on time completion of projects.
About corruption-free use of USAID funds, he said that except for two cases in which the USAID Office of Inspector General had collaborated with National Accountability Bureau, a majority of the projects had seen apt and honest use of funds.
http://dawn.com/2012/01/26/focus-on-rebuilding-roads-in-waziristan-2/
Dr. Haq,
Whenever the code-coolies raise the issue of Foreign (Western) Aid to Pakistan, I see you dismiss them summarily with the claim that the Aid levels are "peanuts" compared to the size of our massive Economy.
And perhaps there is some truth in your view.
However, I am always surprised to see you then go on to tout FDI as the saviour of Pakistan. I see you singing songs of praise for some Malaysian consortium that is planning to build some apartments in Pakistan. I see you trumpeting the saga of some GCC company that is planning to build shopping malls in Pakistan.
All of this confuses me no end.
If it is true that Aid is not of much consequence because it is very small compared to the total size of our economy, how is FDI any different?
I have attached the World Bank data for total AID, FDI & Remittances coming into Pakistan from 1975 through to 2010.
As you can see, in each and every year-- with the exception of 2005-2008-- the AID levels are higher than FDI levels.
http://4.bp.blogspot.com/-QBwXvPNWq5Q/UDvaPANZQUI/AAAAAAAAAEo/fL2Fy9csex0/s1600/ScreenHunter_19+Aug.+27+16.35.jpg
If you look at our "dynamic Eighties" period when our Economy performed at its best, the AID levels are on average 10 times the FDI levels. So what does this mean? Was our excellent growth in the eighties driven largely by western Aid? Or was it driven by rising remittances (aslo shown) from the Gulf Oil-boom?
India also shows an interesting trend. Pre-1992 (i.e. before Post-Cold-War reforms), FDI was negligible (Soviet-Model Closed Economy) and AID & Remittances were about at the same level. After 1992 reforms, however, Remittances & FDI have clearly taken-off, while AID levels have become relatively insignificant.
http://2.bp.blogspot.com/-wd-jogv9gJw/UDvaQl9nzkI/AAAAAAAAAEw/4kOABWvbnxw/s1600/ScreenHunter_21+Aug.+27+16.35.jpg
CONCLUSION: In India's case, FDI is about 10-15 times & Remittances are 20-25 times larger than Aid levels today. In our case, Remittances are just about 3-4 times Aid levels, while FDI is barely making par.
In all of all of the above, how important do you think Aid is to our Economy? Would you please comment on this?
Thank you.
HWJ: "In all of all of the above, how important do you think Aid is to our Economy? Would you please comment on this?"
There's a big difference between foreign aid and fdi.
The only part of aid that is invested in building capacity and infrastructure is useful and impactful. Unfortunately, much of the foreign aid is wasted by bureaucrats and consultants on both sides of the transaction.
FDI is generally better used in the private sector to help the economy that aid in the public sector.
The other thing to consider is what fraction of gdp is foreign aid. Aid used to be much bigger fraction of GDP in 1960s than it is now....the trend has been down.
Here's an excerpt of USAID Pakistan director Jock Conly's interview published in PakObserver:
Q: How much amount is being spent in a year on the USAID projects in Pakistan?
A: We are seeing an increase in the amount of expenditure on the USAID projects as several projects are at an advanced stage of completion that require more expenditures. In Financial Year 2013, a huge amount of $800 million would be utilized for the development of the USAID projects in Pakistan. Earlier, the annual quantum of expenditures on the USAID project was less than this amount.
Q: Any new sectors/areas being included in the upcoming projects?
A: We have short-listed five key sectors in the USAID programme that I have mentioned earlier. We select a new project from within these five areas after consulting the stakeholders. Once the new project gets all the mandatory approvals, we start work on it immediately.
---
For example, the USAID has supported the government to generate 400 MWs of electricity per day that was sufficient for the consumption of 6 million people. We are working on more projects to support the government to generate more electricity.
------------------
Energy: Fatal Incidents at the Hyderabad Power Distribution Company Declined by 80% and Non-Fatal remained zero since January 2012 and this surprising but much-needed change is a direct result from the linemen training organized by the USAID Power Distribution Project. The project plans to train a total of 9,000 linemen from all public power distribution companies in such key skills as first aid, pole-top rescue, and modern grounding. In addition to preserving human lives and health, this effort will improve maintenance of the transmission lines. This in turn will reduce power distribution losses that are estimated at 10 percent of all electricity produced.
On October 3, U.S. Consul General Michael Dodman and Sindh Governor Ishrat-ul-Ibad launched cooperation between the USAID Power Distribution Programme and the Karachi Water and Sewage Board. Under this $900,000 initiative, USAID will upgrade 75 old water pump sets to improve Karachi’s water supply and reduce power consumption by up to 1.73 megawatts.
Economic Growth: During the month of October, the Entrepreneurs Project helped 450 women medicinal and aromatic plant collectors in Swat Valley sell more than 12,000 kilograms of medicinal and aromatic Iants. On average, each woman earned $270. Earlier, the project also trained these women to identify and collect plants without damaging their growth.
For the fourth year in a row, the USAID and FAO Balochistan Agriculture Project organized livestock markets in Killa Saifullah, Mastung, Loralai, and Zhob in connection with Eid-ul-Azha. By bringing markets closer to producers, the project reduces the cost to the farmers, increases their bargaining power, and improves their revenues. This year, more than 3,000 farmers participated in the markets from October 9-15.
Recently, USAID-supported Malakand farmers sold 100 tons of approved chip stock potato to the PepsiCo plant in Sundar Industrial Estate, Lahore. The USAID Project is linking small-scale potato producers in Malakand to large-scale buyers, helping them access greater economic rewards.
http://pakobserver.net/detailnews.asp?id=182399
US to help distribute power across public sector network
November 21, 2012
ISLAMABAD: The United States would help Pakistan in distribution of available power across the public sector network by installing 1,500 power meters at grid stations and in second phase 8,000 meters at feeders of the power distribution network, US Adviser for Ministry of Water and Power Bob Kolling informed here on Tuesday.
He said this would help monitor the power supplied to different areas of the country and to all consumer categories and an effective monitoring mechanism would be available to the power sector managers.
The US, through USAID, has decided to establish a state-of-the-art information technology (IT) infrastructure in the Ministry of Water and Power to improve to manage interaction with other stakeholders like national power control centre, national transmission and distribution company, generation, transmission, distribution companies through electronic mean (paperless regime) more efficiently manage operations and decrease losses.
In this regard, USAID Energy Adviser Timothy Moore inaugurated the Ministry of IT Centre equipped with latest facilities like main server, video conferencing facility for correspondence among stakeholders.
“Helping remove stacks of case files that build up over time may seem like a minor contribution to the energy needs of this country,” said Moore at an inauguration ceremony to launch the IT upgrade. “However, staying organised and keeping proper records is an essential part of any successful industry.”
He further informed that US is longstanding and dependable partner of Pakistan and has helped Pakistan in many projects like Tarbela Dam, Mangla Dam, transmission and distribution network. The IT infrastructure would prove a building block and help all the stakeholders in public as well as private sector to stay updated and well organised.
He said that managing interaction through IT infrastructure would help power sector to reduce power theft as well as managing load on equitable across the network. Replying to a question, he further informed that up gradation of the Guddu, Jamshoro, and Muzafaragarh power plants would be completed by June 2013 with an estimated cost of $50 million. It was also informed the overhauling of systems with US financial assistance to help enhance power generation by 128 megawatts (MW).
The USAID Power Distribution Programme supports the government of Pakistan’s efforts to reform the power sector. The programme works with Pakistan’s power distribution companies to improve performance, reduce losses, and provide better customer service through technological improvements and better work practices.
The US investment in IT infrastructure at the Ministry of Water and Power is just one part of a comprehensive US energy assistance programme, which includes renovating the power plant at the Tarbela Dam, upgrading the Guddu, Jamshoro, and Muzafaragarh power plants, and completing the construction of the new Satpara and Gomal Zam dams.
Together, these energy projects will add 900 MW to the power grid by 2013 enough power to supply electricity to an estimated two million households.
Ministry of Water and Power Special Secretary Himayatullah Khan identified the IT upgrade as a key priority to improve the flow of work, process cases efficiently, and boost the speed of interaction with subsidiary organisations.
READ MORE:
http://alturl.com/wh5oy
http://alturl.com/gka6u
http://alturl.com/vvdrp
HWJ: "US to help distribute power across public sector network"
I know what are insinuating with your links about Pak IT industry.
The fact is that the idea of smart grid is relatively new and its not been fully implemented anywhere including the leading tech power houses like the US. Most nations, including India, do not even have a fully functional national power grid yet.
If implanted as described in your comment, it will put Pakistan on a very short list of developing nations who have even a fraction of such IT in their national grid.
^^RH: "I know what are insinuating with your links about Pak IT industry.
The fact is that the idea of smart grid is relatively new and its not been fully implemented anywhere including the leading tech power houses like the US. Most nations, including India, do not even have a fully functional national power grid yet.
If implanted as described in your comment, it will put Pakistan on a very short list of developing nations who have even a fraction of such IT in their national grid"
----
I wasn't "insinuating" anything really.
If you look at the title/subject of this blog article, my point should have been clear:
Are we ready to tell the US to "take this aid and shove it"?
You say that something "will put Pakistan on a very short list of developing nations who have even a fraction of such IT in their national grid".
But what is going to put our country on this "very short list"?
US Aid, is it not?
Well? Are we really ready to tell the US to "take this aid and shove it"?
HWJ: "In all of all of the above, how important do you think Aid is to our Economy? Would you please comment on this?"
RH: "The other thing to consider is what fraction of gdp is foreign aid. Aid used to be much bigger fraction of GDP in 1960s than it is now....the trend has been down."
------
Dr. Haq,
I think you have either avoided or missed my underlying question.
In the case of our country, 2012 AID levels (3.5 Billion$) are 4 times higher than FDI levels (0.85 Billion$), and remittance levels (14 billion$) are 4 times larger than AID levels.
2012 Remittances: 14 Billion$
2012 AID: 3.5 Billion$
2012 FDI: 0.85 Billion$
http://4.bp.blogspot.com/-QBwXvPNWq5Q/UDvaPANZQUI/AAAAAAAAAEo/fL2Fy9csex0/s1600/ScreenHunter_19+Aug.+27+16.35.jpg
In India's case, 2012 FDI (50 billion$) is about 25 times Aid levels (2 Billion$) & Remittances (66 Billion$) are 33 times larger than Aid levels.
2012 Remittances: 66 Billion$
2012 AID: 2 Billion$
2012 FDI: 50 Billion$
http://2.bp.blogspot.com/-wd-jogv9gJw/UDvaQl9nzkI/AAAAAAAAAEw/4kOABWvbnxw/s1600/ScreenHunter_21+Aug.+27+16.35.jpg
In all of all of the above, relative to India, how important do you think Aid is to our Economy? Are we in a position to tell the US to "shove it"?
What is your considered opinion on this point?
Thank you.
HWJ: "What is your considered opinion on this point?"
Most developing nations rely on foreign inflows which comes in various forms including investments, remittances, aid and loans. The mix varies over time.
Here's the cumulative FDI inflow data from 2000-2010 for both India and Pakistan:
India $200 billion---about 11% of GDP
Pakistan $23 billion--about 11.5% of GDP"
According to Euromonitor as reported by Bloomberg, Pakistan's consumer spending has grown 26%, about 3.5 times faster than Asia's avg of 7.7%. This fact is being noticed by investors and FDI and FII are beginning to return to Pakistan again after a 5 year decline.
The FDI inflows increased to $125.4 million just in the single month of October as compared to $59.6 million during the same month last year, depicting a significant jump of $71.2 million, or 131 percent.
There have been several more announcements of planned investments by foreigners in various sectors ranging from FMCG to Durables.
^^^RH: Here's the cumulative FDI inflow data from 2000-2010 for both India and Pakistan:
India $200 bill--about 11% of GDP
Pak $23 bill--about 11.5% of GDP
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Dr. Haq,
Would you compute the equivalent numbers for Aid, Portfolio-equity & Remittances as well?
http://alturl.com/vbf3n
http://alturl.com/je5mw
I mean a complete intra-nation & inter-nation comparative table like this:
A) FDI Cumulative 2000-2010
India $200 bill--about 11% of GDP
Pak $23 bill--about 11.5% of GDP
A) Portfolio Cumulative 2000-2010
India $125 bill--about 7% of GDP
Pak $3 bill--about 1.5% of GDP
C) AID Cumulative 2000-2010
India $20 bill--about 1.1% of GDP
Pak $20 bill--about 10% of GDP
D)Remittances Cumulative 2000-2010
India $320 bill--about 17.5% of GDP
Pak $55 bill--about 27.5% of GDP
Once you do your own calculations to your satisfation, then we would get a good idea of how important AID is to our country in an intra-national sense (i.e. w.r.t our own FDI, Portfolio, Remit) as well as in a inter-national sense (i.e w.r.t relative proportion of Aid in India).
In addition, given that FDI has collapsed in the last two years (2011 & 12), while AID has increased, how do you think the current (2012) comparisons stand?
Please comment.
Thank you.
Here's Daily Times on US Aid (Part 2):
Water system rehabilitation in Peshawar: USAID-funded Municipal Services Programme began cleaning drainage ditches and rehabilitating tubewell pump houses in Town-1 Peshawar. This work will greatly reduce contamination of drinking water, a major cause of water-borne diseases.
Child Protection Programme: USAID’s Child Protection Programme, which ended in December 2012 after two years supported 128,000 women and children affected by the 2009 conflict between armed forces and extremist groups in Malakand and adjacent areas of FATA. The project provided Pakistanis with health care, rehabilitation services, counseling, nutrition, vaccination and support for enrollment in schools. The project also helped National Database Registration Authority (NADRA) register more than 123,000 births.
Enhances skills of FATA officials: USAID trained FATA officials from various government departments on office management, communication, media relations and public financial management. Twenty officials became master trainers on Zakat and Ushr procedures to effectively govern alms giving. These specialists will train over 500 chairmen of local Zakat committees to improve the efficiency and transparency of Zakat and Ushr distribution to FATA’s poorest citizens.
Education: USAID’s Deputy Director for Punjab Jeffrey Bakken joined FCC officials to inaugurate a USAID-funded Resource Centre at the FCC’s Public Policy and Governance Centre. The Resource Centre will support and promote empirical research in Pakistan. It houses literature, data and training facilities for students, researchers and policymakers to be used for informed decision making.
USAID Programmes to Punjab civil society: A USAID-organised workshop on education in Lahore informed Punjab’s civil society about USAID education grants, common challenges and collaboration opportunities. Approximately 60 representatives from academia, civil society, government and think tanks participated.....
http://www.dailytimes.com.pk/default.asp?page=2013\02\06\story_6-2-2013_pg5_6
Here's PakObserver on US help to improve Pak agri productivity:
Tuesday, March 12, 2013 - Islamabad—The U.S. Agency for International Development (USAID), the International Maize and Wheat Improvement Center (CIMMYT), and the Pakistan Agricultural Research Council (PARC) launched a new project to expand the use of modern technologies in Pakistan’s agriculture sector.
“Boosting Pakistan’s economy is one of our top assistance priorities. That’s why this project will work to modernize agricultural practices to increase the production and quality of livestock and horticultural goods. This in turn will enhance economic development in the country,” said USAID Country Director Jonathan M. Conly at the launch of the project in Islamabad on March 8.
Innovative technologies, introduced in Pakistan with support from the U.S. Government, spurred the Green Revolution in the 1960s and 1970s. The adoption of improved rice and wheat varieties, combined with strategic policies and investments, led to a doubling of yields and output in those two decades. With investment in research, Pakistan transformed its agricultural sector into a driver for economic growth.
Currently, Pakistan’s agricultural sector is growing at a much slower pace than other sectors. “Pakistan’s agricultural productivity has fallen behind comparable countries with similar agro-ecologies,” said Thomas Lumpkin, Director General of CIMMYT. “There is a tremendous potential for growth, but we must act now.”
Through its new four-year, $30 million project, USAID will sponsor research to encourage adoption of new technologies in agriculture, such as laser land leveling, zero tillage, residue management, introducing short duration legumes into rice-wheat cropping systems, and custom service systems for machinery.
The project will also offer short and long-term training. The U.S.-funded project will be implemented by CIMMYT and PARC in cooperation with the International Livestock Research Institute, the World Vegetable Center, the International Rice Research Institute, and the University of California, Davis.
Promoting economic growth is one of the many ways that the United States is helping to create a brighter future for the people of Pakistan. The United States funds large-scale energy projects that will provide electricity to two million households by the end of 2013. The U.S. has rebuilt and renovated 800 schools and has provided scholarships to 12,000 students to attend universities in Pakistan.
http://pakobserver.net/detailnews.asp?id=199817
Here are excerpts of Pepe Escobar's RT.com Op Ed on Iran-Pakistan pipeline:
..When Iranian President Mahmoud Ahmadinejad and Pakistani President Asif Zardari met at the Iranian port of Chabahar in early March, that was a long way after IP was first considered in 1994 – then as Iran-Pakistan-India (IPI), also known as the 'peace pipeline.' Subsequent pressure by both Bush administrations was so overwhelming that India abandoned the idea in 2009.
IP is what the Chinese call a win-win deal. The Iranian stretch is already finished. Aware of Islamabad’s immense cash flow problems, Tehran is loaning it $500 million, and Islamabad will come up with $1 billion to finish the Pakistani section. It’s enlightening to note that Tehran only agreed to the loan after Islamabad certified it won’t back out (unlike India) under Washington pressure.
IP, as a key umbilical (steel) cord, makes a mockery of the artificial – US-encouraged – Sunni-Shia divide. Tehran needs the windfall, and the enhanced influence in South Asia. Ahmadinejad even cracked that “with natural gas, you cannot make atomic bombs.”
Zardari, for his part, boosted his profile ahead of Pakistan’s elections on May 11. With IP pumping 750 million cubic feet of natural gas into the Pakistani economy everyday, power cuts will fade, and factories won’t close. Pakistan has no oil. It may have huge potential for solar and wind energy, but no investment capital and knowhow to develop them.
Politically, snubbing Washington is a certified hit all across Pakistan, especially after the territorial invasion linked to the 2011 targeted assassination of Bin Laden, plus Obama and the CIA’s non-stop drone wars in the tribal areas.
Moreover, Islamabad will need close cooperation with Tehran to assert a measure of control of Afghanistan after 2014. Otherwise an India-Iran alliance will be in the driver’s seat.
Washington’s suggestion of a Plan B amounted to vague promises to help building hydroelectric dams; and yet another push for that ultimate 'Pipelineistan' desert mirage – the which has existed only on paper since the Bill Clinton era.
---
The big winner is… China
IP is already a star protagonist of the New Silk Road(s) – the real thing, not a figment of Hillary Clinton’s imagination. And then there’s the ultra-juicy, strategic Gwadar question.
Islamabad decided not only to hand over operational control of the Arabian Sea port of Gwadar, in ultra-sensitive southwest Balochistan, to China; crucially, Islamabad and Beijing also signed a deal to build a $4 billion, 400,000 barrels-a-day oil refinery, the largest in Pakistan.
Gwadar, a deepwater port, was built by China, but until recently, the port's administration was Singaporean.
The long-term Chinese master plan is a beauty. The next step after the oil refinery would be to lay out an oil pipeline from Gwadar to Xinjiang, parallel to the Karakoram highway, thus configuring Gwadar as a key Pipelineistan node distributing Persian Gulf oil and gas to Western China – and finally escaping Beijing’s Hormuz dilemma.
Gwadar, strategically located at the confluence of Southwest and South Asia, with Central Asia not that far, is bound to finally emerge as an oil and gas hub and petrochemical center – with Pakistan as a crucial energy corridor linking Iran with China. All that, of course, assuming that the CIA does not set Balochistan on fire.
The inevitable short-term result anyway is that Washington’s sanctions obsession is about to be put to rest at the bottom of the Arabian Sea, not far from Osama bin Laden’s corpse. And with IP probably becoming IPC – with the addition of China – India may even wake up, smell the gas, and try to revive the initial IPI idea....
http://rt.com/op-edge/iran-pakistan-syria-pipeline-843/
Here's a Nation newspaper report on normalization of US-Pak ties:
WASHINGTON - America's troubled ties with Pakistan are back on track, a senior Obama Administration official has said, while cautioning that the Pakistanis can be expected "to act when it is in their interest".
"We are now on a track where the communication has started to occur again and we're making progress. But we have to be realistic in our assumptions and expectations,” he said.
"We can expect the Pakistanis to act when it is in their interest," Assistant Secretary of State Andrew J Shapiro said, without elaborating further.
Responding to questions from audience at the Council on Foreign Relations, a think-tank based here, Shapiro admitted that the relationship with Pakistan went through some challenges over the last couple of years.
"We had the Osama bin Laden raid. We had the border incident where Pakistani soldiers were killed. And so we went through a period, a difficult period, where there was not a lot of assistance flowing and our communication was not great," he said, adding, that the relationship now appears to be back on track.
Shapiro said there were a number of incidents and attacks by extremists in Pakistan recently that directly impact the interests of both the countries.
"So it makes sense for us to work with them, where we have these mutual interests, to provide them with assistance that will go after the bad guys. So we will continue to have these conversations with them about the best way to use this assistance," he said.
Referring to the improvement in US-Pak ties and the American interest in the region, Shapiro strongly advocated in favour of continuation of military assistance to Islamabad.
"We have seen some really promising signs in our dialogue with Pakistan that we think make it worthwhile to continue our security assistance to Pakistan," the State Department official said.....
http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/17-Apr-2013/ties-with-pakistan-back-on-track-says-us-official
Bill Gates' Annual Letter 2014:
In their annual letter published on Tuesday, Bill and Melinda Gates addressed a number of claims about global poverty often used to argue against giving aid to countries that need it most -- and debunked each and every one.
Read the letter in its entirety here.
Myth No. 1: Poor countries are doomed to remain poor.
Fact: Citizens of countries once said to be "trapped in poverty" are now earning competitive salaries. Since 1960, China’s income per person has increased eightfold and India’s has quadrupled. Even smaller countries are seeing vast improvements. Botswana, for example, has witnessed a 30-fold increase in per capita income, Bill Gates noted.
Myth No. 2: There is no hope for Africa.
Fact: Africa has its share of problems, but the continent has also come a long way on a number of fronts. Since 1960, the life expectancy of women in sub-Saharan Africa has increased from 41 to 57, the chairman of Microsoft said. Whereas an estimated 40 percent of African children were in school in 1970, now more than 75 percent are pursuing education. Also, the number of AIDS-related deaths dropped 38 percent in Eastern and Southern Africa between 2005 and 2011, according to the United Nations.
Myth No. 3: Helping almost every country achieve middle-income status will just make some problems worse.
Fact: It’s true that too much development can put a further strain on the environment, but that’s not reason enough to stop helping struggling countries, Bill Gates wrote. The key is simply to develop cheaper and cleaner sources of energy and to recognize that as more people become educated, they’ll be able to tackle these problems on their own.
Myth No. 4: Foreign aid is a big fat waste.
Fact: We’re not committing as much money to foreign aid as naysayers may have you think. Bill Gates noted that Norway, the most generous nation in the world, allots less than 3 percent of its budget to foreign aid. The U.S. allots less than 1 percent, which comes to about $30 billion a year.
While that certainly isn’t pocket change, the context is key, especially when considering where this money is going. It’s being spent on vaccines, education, family planning and other life-saving tools that keep children alive and empower them to become functioning members of society who can make a difference.
Myth No. 5: Aid holds back normal economic development.
Fact: Simply put, aid gives struggling countries the cushion they need to stand on their own two feet. According to Bill Gates, a number of countries that once heavily relied on aid to survive hardly get any today. Those include Botswana, Morocco, Brazil, Mexico, Chile, Costa Rica, Peru and Thailand, among others.
Myth No. 6: Saving lives leads to overpopulation.
Fact: According to Melinda Gates, parents are actually more inclined to have a lot of kids when they don’t feel certain that their children will survive. In Afghanistan, for example, the child mortality rate is very high, yet Afghan women have an average of 6.2 children each, she noted. So even though more than 10 percent of Afghan children don’t survive, the country’s population is expected to grow to 55 million from 30 million by 2050.
Myth No. 7: The world is getting worse.
Fact: Yes, there are still plenty of problems that have to be addressed, but we’ve made an incredible amount of progress and have much more to look forward to. India is on track to be officially rid of polio this year, and the world could be polio-free by 2018. Since 1990, childhood death rates have been cut in half and maternal deaths have dropped by nearly the same share, according to the World Health Organization. Anti-female genital mutilation campaigns are making progress in a number of countries, and more women in the developing world are getting access to family planning resources.
http://www.huffingtonpost.com/2014/01/21/bill-gates-annual-letter_n_4638747.html
http://annualletter.gatesfoundation.org/
Here's a Dawn story on World Bank report on infrastructure deficiency in South Asia:
ISLAMABAD: South Asia should spend as much as $2.5 trillion on infrastructure by 2020 to bring its power grids, roads and water supplies up to the standard required to serve its growing population, said a World Bank report on Wednesday.
“If South Asia hopes to meet its development goals and not risk slowing down — or even halting — growth, poverty alleviation and shared prosperity… it is essential to make closing its huge infrastructure gap a priority,” the report said in probably the first analysis of the region’s infrastructure needs.
The report, entitled “Reducing poverty by closing South Asia’s infrastructure gap”, says that “infrastructure deficiencies in South Asia are enormous, and a mix of investment in infrastructure stock and implementing supportive reforms will enable the region to close its infrastructure gap”.
Pakistan should invest $165 billion over ten years in improving infrastructure in transport, electricity, water and sanitation, solid waste, telecom and irrigation sectors, according to the report.
For the required investment in electricity sector of up to $96bn, Pakistan should generate funds through government-private sector partnership, the report said.
The average share of Pakistan in the total infrastructural investment in South Asia is only 12 per cent compared to 79 per cent by India, the report says.
http://www.dawn.com/news/1097656/s-asia-should-spend-more-to-serve-its-growing-population-report
In #Pakistan, U.S. Aid Agency’s Efforts Produce Dubious Results #USAID http://nyti.ms/1ULyRzL
KARACHI, Pakistan — The ads are a staple of Pakistani television: footage of water gushing through dams, farmers standing in green fields, a girl using a computer. At the end, the red, white and blue logo of an aid organization flashes on the screen with its slogan, “from the American people.”
The organization behind the Urdu-language ads, the United States Agency for International Development, or U.S.A.I.D., has been operating in Pakistan for more than a decade, disbursing billions of dollars. But critics say the aid has had minimal impact on the ground.
Critics accuse the agency of taking on projects with little consideration for local priorities and being over-reliant on American contractors with little development experience. At the same time, they say, much of the aid money goes toward administrative costs, and large amounts have been siphoned off by Pakistani subcontractors who fail to complete work or return raw material.
A recent lawsuit against the agency highlighted the challenges and image problem it faces in a country where American aid is often viewed with suspicion, and countries like China have been making inroads with their own programs. The case, filed in Peshawar, in northern Pakistan, by three lawyers seeking the payment of legal fees from the aid agency, accused it of abandoning the recovery of United States taxpayer money from a former contractor.
Documents and correspondence filed by the lawyers lay bare the money and equipment that went to waste in a project in Pakistan’s insurgency-hit tribal areas. One subcontractor finished only two of 12 irrigation channels he was supposed to build. Another did not return more than $27,000 worth of construction material to U.S.A.I.D., and demanded nearly $30,000 in rental charges for equipment, though there was no proof of any machinery on site.
Nadeem UL Haque, the former deputy chairman of the Planning Commission, a government agency that oversees development projects, said U.S.A.I.D. had become an “aid-outsourcing agency” and that funds largely flowed back to American contractors instead of to communities.
Despite the widespread criticism about its effectiveness, some experts also acknowledge that the agency has been the victim of anti-Americanism in Pakistan and has failed to promote some of its successes.
“I would not say it’s been a failure — they’ve invested money in energy and education — but because of anti-Americanism and their own inability to effectively communicate, this hasn’t been seen,” said Raza Rumi, a fellow at the National Endowment for Democracy in Washington, who has worked in Pakistan’s development sector. “They’ve spent so much money in F.A.T.A.,” he added, referring to the Federally Administered Tribal Areas of northwest Pakistan. “The reality is no one actually knows the result.”
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The development agency’s project at the center of the lawsuit in Peshawar was a $300 million initiative to create jobs and build roads in insurgency-torn districts in the tribal areas. One of the contractors on the project, Academy for Educational Development, a now-defunct American nonprofit organization, was accused in 2009 of submitting false claims and failing to inform U.S.A.I.D. that it was aware that its subcontractors were overcharging U.S.A.I.D., potentially by millions of dollars.
U.S.A.I.D. suspended Academy for Educational Development from United States government contracts and reached a settlement that involved the repayment of more than $5 million.
Academy for Educational Development was also awarded at least $300,000 after a drawn-out arbitration process with its Pakistani subcontractors — money that should have been returned to U.S.A.I.D. The Pakistani lawyers who filed the suit said that the aid agency had made no attempt to recover the money.
USAID has provided significant funding to HEC to expand higher education. A $150 million has been provided for world's largest Fulbright scholarship program in Pakistan for advanced graduate level education of thousands of Pakistani faculty in the United States.
#USAID Defends Its Programs in #Pakistan http://nyti.ms/1KrIj03
To the Editor:
Re “In Pakistan, U.S. Aid Agency’s Efforts Are Yielding Dubious Results” (news article, Sept. 13):
Your reporting on United States development assistance to Pakistan should not ignore that the United States Agency for International Development has contributed to dramatic improvements in the quality of life for the citizens of Pakistan.
U.S.A.I.D. assistance has helped decrease newborn deaths by 23 percent in areas in which we have worked; increased access to electricity for over 17 million Pakistanis; helped improve the reading skills of 120,000 children; and trained thousands of observers to promote fairness and participation in Pakistan’s 2013 elections.
U.S.A.I.D. is committed to holding our partners accountable when they do not meet our high standards. A whistle-blower’s call to a U.S.A.I.D.-sponsored anti-fraud hotline triggered the investigation referred to in your article, which resulted in the suspension of a contractor and recovery of $5.2 million by the United States government.
Working in close partnership with civil society and the government of Pakistan, U.S.A.I.D. has improved the lives of millions of people in Pakistan, while enhancing American national security. That should make both Americans and Pakistanis proud.
"It sounds kind of crazy to say that foreign aid often hurts, rather than helps, poor people in poor countries. Yet that is what Angus Deaton, the newest winner of the Nobel Prize in economics, has argued.
Deaton, an economist at Princeton University who studied poverty in India and South Africa and spent decades working at the World Bank, won his prize for studying how the poor decide to save or spend money. But his ideas about foreign aid are particularly provocative. Deaton argues that, by trying to help poor people in developing countries, the rich world may actually be corrupting those nations' governments and slowing their growth. According to Deaton, and the economists who agree with him, much of the $135 billion that the world’s most developed countries spent on official aid in 2014 may not have ended up helping the poor."
The idea of wealthier countries giving away aid blossomed in the late 1960s, as the first humanitarian crises reached mass audiences on television. Americans watched through their TV sets as children starved to death in Biafra, an oil-rich area that had seceded from Nigeria and was now being blockaded by the Nigerian government, as Philip Gourevitch recalled in a 2010 story in the New Yorker. Protesters called on the Nixon administration for action so loudly that they ended up galvanizing the largest nonmilitary airlift the world had ever seen. Only a quarter-century after Auschwitz, humanitarian aid seemed to offer the world a new hope for fighting evil without fighting a war.
There was a strong economic and political argument for helping poor countries, too. In the mid-20th century, economists widely believed that the key to triggering growth -- whether in an already well-off country or one hoping to get richer -- was pumping money into a country’s factories, roads and other infrastructure. So in the hopes of spreading the Western model of democracy and market-based economies, the United States and Western European powers encouraged foreign aid to smaller and poorer countries that could fall under the influence of the Soviet Union and China.
The level of foreign aid distributed around the world soared from the 1960s, peaking at the end of the Cold War, then dipping before rising again. Live Aid music concerts raised public awareness about challenges like starvation in Africa, while the United States launched major, multibillion-dollar aid initiatives. And the World Bank and advocates of aid aggressively seized on research that claimed that foreign aid led to economic development.
Deaton wasn’t the first economist to challenge these assumptions, but over the past two decades his arguments began to receive a great deal of attention. And he made them with perhaps a better understanding of the data than anyone had before. Deaton’s skepticism about the benefits of foreign aid grew out of his research, which involved looking in detail at households in the developing world, where he could see the effects of foreign aid intervention.
“I think his understanding of how the world worked at the micro level made him extremely suspicious of these get-rich-quick schemes that some people peddled at the development level,” says Daron Acemoglu, an economist at MIT.
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Instead, many of the positive things that are happening in Africa – the huge adoption in cell phones over the past decade, for example – are totally homegrown. He points out that, while the world has made huge strides in reducing poverty in recent decades, almost none of this has been due to aid. Most has been due to development in countries like China, which have received very little aid as a proportion of gross domestic product and have "had to work it out for themselves."
http://www.washingtonpost.com/news/wonkblog/wp/2015/10/13/why-trying-to-help-poor-countries-might-actually-hurt-them/
University of #California #Davis, #Pakistan launch $17M food,agriculture Center For Advanced Studies at #Faisalabad
http://www.davisenterprise.com/local-news/ucd/ucd-pakistan-launch-17m-food-ag-partnership/ …
The launch of a $17 million collaborative project linking UC Davis and Pakistan’s leading agricultural university was celebrated today at UCD, which will receive $10 million of the funds.
The new U.S.-Pakistan Center for Advanced Studies in Agriculture and Food Security, funded by the U.S. Agency for International Development, will make it possible for faculty members and graduate students from both countries to study and do research at each other’s campuses. The project also is designed to update curriculum and technical resources at Pakistan’s University of Agriculture, Faisalabad.
Present for today’s ceremonial launch were dignitaries from Pakistan, USAID and UCD.
“UC Davis has been partnering with colleagues in Pakistan since 2009, sharing expertise in agriculture from crop production to post-harvest handling,” said James Hill, associate dean emeritus of International Programs for the College of Agricultural and Environmental Sciences at UCD.
“Establishment of this new center will allow us to build on those efforts, with a renewed emphasis on an exchange of faculty and graduate students,” he said.
During its first year of funding, the center will plan several workshops to assist the University of Agriculture, Faisalabad, with technology transfer and entrepreneurship to strengthen its connections to the private sector. UCD also will initiate programs in both research and curriculum development to improve graduate studies.
Hill noted that two other Pakistan-focused projects are already underway through the International Programs office, primarily in the area of horticultural crops and agricultural extension activities.
Agriculture is the largest sector of Pakistan’s economy, providing jobs for half of that country’s labor force. Some of the traditionally important crops in Pakistan are wheat, cotton, rice, sugar cane and maize. In recent years, crops like beans, peas, lentils, onions, potatoes, chilies and tomatoes also have increased in importance, along with fruit crops such as citrus and mangoes.
The newly funded center at UCD is the most recent of several partnerships of the U.S.-Pakistan Centers for Advanced Studies, a $127 million investment from USAID, linking universities in the two countries and using applied research to solve Pakistan’s challenges in energy, water and food security.
The overall program includes construction of laboratories, research facilities and libraries in Pakistan. Other participating U.S. universities include the University of Utah and Arizona State University, focusing on water and energy, respectively.
#EU to provide €653m to #Pakistan for uplift projects in rural areas to cut #poverty. http://www.dailytimes.com.pk/business/15-Dec-2015/eu-to-provide-653m-to-pakistan-for-uplift-projects …
European Union will provide assistance of six hundred and fifty three million euros to Pakistan for rural development and reduction of poverty.
A memorandum of understanding for the EU’s Multi Indicative Programme (2014-2020) with a commitment of €653 million was signed between the government of Pakistan and European Union. The signing of the agreement was witnessed by Minister for Finance and Economic Affairs Senator Ishaq Dar and ambassadors and representatives from EU member states.
The minister on this occasion said that the government appreciates the development assistance being given to Pakistan by EU. He appreciated the fact that the new MIP was almost double the amount of the previous programme. He said that building a stable, democratic and economically vibrant Pakistan was the aim of the government.
He said that the government was committed to achieving this objective and called upon the EU and its member countries to support Pakistan in this regard.
EU Ambassador Jean-Francois Cautain said that the €653 million EU multiannual indicative programme for Pakistan set out the EU’s development strategic objectives in support of a stable and democratic Pakistan, in line with the EU-Pakistan five years engagement plan 2012-2017, which framed the relationship between the two sides.
#Aid in reverse: Net flow of $2 trillion from poor to rich nations recorded in 2012. #Trade #Investment #Interest
https://www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries
...for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.
In 2012, the last year of recorded data, developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received. If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of the United States
What this means is that the usual development narrative has it backwards. Aid is effectively flowing in reverse. Rich countries aren’t developing poor countries; poor countries are developing rich ones.
What do these large outflows consist of? Well, some of it is payments on debt. Developing countries have forked out over $4.2tn in interest payments alone since 1980 – a direct cash transfer to big banks in New York and London, on a scale that dwarfs the aid that they received during the same period. Another big contributor is the income that foreigners make on their investments in developing countries and then repatriate back home. Think of all the profits that BP extracts from Nigeria’s oil reserves, for example, or that Anglo-American pulls out of South Africa’s gold mines.
But by far the biggest chunk of outflows has to do with unrecorded – and usually illicit – capital flight. GFI calculates that developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980.
Most of these unrecorded outflows take place through the international trade system. Basically, corporations – foreign and domestic alike – report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions, a practice known as “trade misinvoicing”. Usually the goal is to evade taxes, but sometimes this practice is used to launder money or circumvent capital controls. In 2012, developing countries lost $700bn through trade misinvoicing, which outstripped aid receipts that year by a factor of five.
Multinational companies also steal money from developing countries through “same-invoice faking”, shifting profits illegally between their own subsidiaries by mutually faking trade invoice prices on both sides. For example, a subsidiary in Nigeria might dodge local taxes by shifting money to a related subsidiary in the British Virgin Islands, where the tax rate is effectively zero and where stolen funds can’t be traced.
GFI doesn’t include same-invoice faking in its headline figures because it is very difficult to detect, but they estimate that it amounts to another $700bn per year. And these figures only cover theft through trade in goods. If we add theft through trade in services to the mix, it brings total net resource outflows to about $3tn per year.
That’s 24 times more than the aid budget. In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.
Japanese Envoy to Pakistan Takashi Kurai on Saturday said his country is Pakistan’s third largest donor.
He was speaking at the 65th anniversary of diplomatic relations between Japan-Pakistan. The event was organised by the English Speaking Union of Pakistan.
Kurai said that in the 90s Japan was the biggest donor of Pakistan. He said Japanese companies want a more stable environment in Pakistan for more investment. He said that the Prime Ministers of both countries had not visited each other’s countries for a long time. He hoped that these visits would take place in the near future. He said Japan supported Pakistan in healthcare, education, infrastructure development and other fields.
The envoy also said that both countries established diplomatic relations in 1952 and since then they have enjoyed excellent relations.
He said Japan is the only country that faced the horrors and destruction of the atomic bombs during WW2, but the Japanese showed resilience and patience and made the country’s economy stable.
Khalid Malik, president of the English Speaking Union of Pakistan and secretary general Muzafar Qureshi thanked the Japanese ambassador for attending the ceremony. They also praised his efforts for further boosting bilateral relations.
http://dailytimes.com.pk/pakistan/21-Jan-17/japan-is-pakistans-third-largest-donor
#UAE #ADFD funds Dh1.5 billion (US $408 million) worth of projects in #Pakistan
http://gulfnews.com/news/uae/society/uae-funds-dh1-5-billion-worth-of-projects-in-pakistan-1.2074135
Up to Dh1.5 billion worth of sustainable development projects have been financed in Pakistan by the Abu Dhabi Fund for Development (ADFD), a new country report said on Monday.
To date, the ADFD, a national entity for development aid, has supported Pakistan with grants and concessionary loans on behalf of the Abu Dhabi government, valued at Dh1.5 billion across nine sustainable development projects.
The ADFD’s country report issued to mark Pakistan’s Independence Day on August 14, highlighted that the nine development projects have significantly contributed to improving socioeconomic conditions in the country.
The projects spanned diverse sectors, most notably transport, water and agriculture, healthcare.
Mohammad Saif Al Suwaidi, Director-General of ADFD, said ADFD’s role in financing these sustainable development projects across Pakistan underscores the fraternal relations and strong bilateral ties that the UAE and Pakistan share.
Stressing the importance the UAE places on supporting developing countries, Al Suwaidi said: “The comprehensive and wide spanning portfolio of development projects supported by ADFD in Pakistan can certainly be attributed to the strong relations between our countries as well as the wise directives, guidance and support of the Abu Dhabi government.”
Al Suwaidi added that ADFD believes in assisting beneficiary governments in achieving their economic, sustainable and development schemes and goals.
“We are pleased that our support to the Pakistani government has elevated living standards and boosted strategic growth in that country,” he said.
Notable projects
Some of the notable projects funded by ADFD in Pakistan include the Dh227 million construction of the UAE-Pakistani Friendship Road, which has helped link the southern and northern areas of the Waziristan region. The 72-km road serves three major cities and 20 villages and facilitates the movement of people and goods.
In the health sector, ADFD administered an estimated Dh107 million Abu Dhabi government grant to develop two healthcare projects in Pakistan. In 2013, ADFD provided Dh94 million to construct the Emirates Hospital — an integrated speciality medical centre equipped with 1,000 beds.
Furthermore, in 2006, ADFD allocated Dh13 million to fit out the Shaikh Zayed Hospital in Lahore with modern and internationally standardised equipment.
ADFD’s contributions in the education sector include a Dh46 million grant earmarked for training colleges. This project led to the construction of three training colleges for individuals living in remote areas. These include Warsak College in the Khyber Pakhtunkhwa province, and Wana College and Spinkai Cadet College — both located in South Waziristan.
ADFD also allocated Dh7 million to fund expansion works at the Shaikh Zayed International Academy (SZIA).
In order to ensure an adequate and reliable power supply, ADFD provided a Dh66 million loan to rehabilitate the Tarbela Dam in 1981.
ADFD and the Government of Pakistan have enjoyed strong and long-standing ties dating back to 1981. The synergies between the two sides continue to drive sustainable socioeconomic development across key sectors that benefit the citizens of Pakistan.
United States Ambassador Donald Blome joined officials from the University of Utah and the Federal Minister for Planning Development and Special Initiatives, Mr. Ahsan Iqbal, to inaugurate the International Summit on Higher Education and Workforce Development today.
https://pk.usembassy.gov/u-s-pakistan-effort-to-elevate-the-higher-education-sector/
The summit was organized by the U.S.-funded Higher Education System Strengthening Activity (HESSA) and focuses on the role of higher education in the 21st century, highlighting the fluid nature of learning and employment, and explores how universities can reposition themselves in this ever-changing landscape.
Ambassador Donald Blome celebrated the 75 years of partnership between the U.S. and Pakistan and said, “In a country where more than 60 percent of the population is below the age of 30, we must continue to help youth achieve their full potential.”
Minister Iqbal remarked that the Government of Pakistan is open to improving the higher education system and is looking into various options to capitalize on the abundant youth potential in the country. He appreciated Pakistan’s 75-year partnership with the U.S. government and celebrated the support provided by the U.S. government to academia through specialized investment in higher education. He further added that academic institutions and the public and private sectors should join hands to accelerate this development. Mr. Iqbal tasked Pakistani higher education officials to improve higher education.
Dr. Mukhtar Ahmed, Chairman of the Higher Education Commission of Pakistan (HEC), said that HEC will continue working with the U.S. government to build a cadre of experts to improve graduate employability.
Senator Keith Grover, Utah State Senator from the United States noted, “it is the ultimate goal of an institute to provide necessary skills for youth so they can positively contribute to the workforce both locally and globally.”
HESSA is supported by the United States through USAID, and is implemented in collaboration with 16 Pakistani public universities and other stakeholders, with a focus on strengthening universities’ capacity to deliver market-driven education, research, and graduate employability.
US generously provides opportunities to Pakistani students: education official
https://www.dawn.com/news/1726537
Washington has been investing generously on Pakistani students to provide them with the best education opportunities and every year more than 800 students travel to the United States (US).
This was highlighted by deputy assistant secretary Bureau of Educational and Culture Affairs of US Department of States Ethan Rosenzweig, who is currently in Pakistan on a brief visit.
Exclusively speaking to Dawn here on Thursday, the visiting US education official said there were a lot of opportunities for Pakistani students to study in his country, through scholarships and a number of exchange programmes.
“I arrived yesterday (Wednesday) and what struck me immediately was that everyone is so kind, funny and welcoming. The hospitality of the Pakistani community is something which I will remember for a long time,” said Mr Rosenzweig while sharing his experience of visiting Pakistan.
Talking about the Fulbright scholarship progamme, he said this programme was the premier international exchange programme for students, researchers and scholars. He said Pakistan had the largest US government-funded Fulbright programme in the world.
Mr Rosenzweig said the US-Pakistan relationship and Fulbright programme were beneficial to fight global challenges together such as climate change, global health and strengthening of freedom of expression and democratic values.
“Under this programme, the US government has been ensuring that students have opportunities in the US. I am so excited because our Fulbright programme is larger than any country. It is larger than Germany, larger than the United Kingdom and larger than Australia,” he said and added that he was here to celebrate the success of this programme and the important diplomatic relationship between both countries.
“I believe relationships between the two countries will be more stronger regardless of impediments occurring in Pakistan,” he added, without elaborating.
“We have over 800 Pakistanis coming to the US every year through exchange programmes. Whether its young leaders, researchers or community officials coming for a short stay, they travel to the US every year, because both the countries have been enjoying cordial bilateral and diplomatic relations.
“The US has a large alumni network of 37,000 members in Pakistan and alumni groups have been playing an important role in Pakistan by applying the experience they gained from US,” he said.
Mr Rosenzweig said that the Humphrey programme is also one of the most important programmes, under which the US invites Pakistani leaders, government officials and others to visit the country and work on pressing issues, such as climate change and global health.
He said that he was here to attend an important dialogue [Humphrey Conference], which is being attended by alumni under the theme of ‘Combatting Climate Change’, adding that he was glad to see current leaders engaged in solving challenges.
When asked about the inactive status of the six-week-long partnership programme for Pakistani journalists for the last few years, he said that he will check it out, saying, “There are so many programmes that bring professionals to the US, whether it is a short visit to travel around to meet government leaders, semester visits for students or longer visits for researchers. I want to celebrate what we have.”
To another question, he said that they also have a sports diplomacy programme and programmes for differently-abled students. “When it comes to ensuring that differently-abled students have opportunities, we are leaders in this field and are also working directly with Pakistan with specific grants to help teach differently-abled students. All students deserve great education,” he said.
Responding to a question about the recent floods in Pakistan which also damaged educational infrastructure, he said: “The US is deeply committed towards ensuring that Pakistan has the resources to recover from the flood.”
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