Assistance that seldom helps
Pakistan’s external debt and liabilities stood at 63.96 billion US dollars at the end of 2014. For a population of approximately 200 million, this means that every Pakistani owes about 320 US dollars to foreigners alone — the total amount of money each of us owes is more than 1,000 US dollars. Dr Hafiz Pasha, a former finance minister, says the government of Prime Minister Nawaz Sharif has signed loan agreements of 52 billion US dollars, to be received in the next five to 10 years. These new loans will only add to our individual and collective debt burden.
According to the World Bank, there are three components of foreign aid, which is generally known as Overseas Development Assistance (ODA): loans made on concessional terms by multilateral institutions such as the International Monetary Fund, the World Bank and the Asian Development Bank; grants made by the official agencies of the 29 rich countries which are members of an international donor consortium called Development Assistance Committee (DAC); and grants made by non-DAC countries. The problem is that substantial part of foreign aid, indeed, consists of loans. Only a part of it is grants – handouts we don’t need to return – and that part has been shrinking of late.
Pakistan has received somewhere between one per cent and two per cent of ODA disbursed to all the recipient countries between 2001 and 2013. In relative terms, this figure may look small but not so in absolute terms. According to a Congressional Research Service report, prepared for the American legislature, Pakistan has received approximately 104 billion US dollars in foreign aid over a 53-year period, from 1960 to 2013. Close to 40 per cent of this money – 31 billion US dollars – was received just in 10 years between 2001 and 2013.
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