Donors’ pursuit of strategic agenda and conditions create conflicts whereas recipient struggles with aftereffects of the inappropriate strategy and waits for more aid to undertake expensive reforms, said Dr Nadia Tahir, Associate Professor in Economics, University of Lahore.

Sustainable Development Policy Institute (SDPI) organised a special lecture on “Does Aid Cause Conflict?” here on Tuesday. Associate Professor in Economics, University of Lahore Dr. Nadia Tahir delivered a special lecture on the topic, which was chaired by SDPI’s Senior Advisor, Ejaz Haider. Senior Advisor, Planning Commission of Pakistan Dr. Younus Jafri and Safia Aftab were also present on the occasion.

Dr Nadia discussed various dimensions of official economic assistance, conflicts and development. She said, “In case of Pakistan, aid failed to increase social sector spending and most peaks of aid were marked with inconsistent social sector allocations and low domestic savings,” which she said, has increased inequalities and social tensions.

She was of the view that strategically tied aid brings money and relaxes revenue constraints but it also takes away the power to pursue indigenous policymaking.  It also indirectly weakens the need for reforms and shuns government’s responsibilities of social development and public service delivery. She explained that Pakistan had been a major aid recipient since decades but this aid failed to supple growth and development and instead increased inequalities and social tensions.

Dr Younus, who also joined as discussant on the lecture, talked of little share of aid assistance in overall foreign investment, which currently stands at 10 per cent. He further said expectation should not be made on role of aid in growth and development, which he said, has limited role and primarily aims at filling the gaps in human development, institutional building, enhancing capacities, facilitating entrepreneurship and supporting innovation. He said, bilateral aid in early years mostly came in the form of military aid, but now multilateral aid mostly focuses on social sector and economic development.

Speaking on the occasion, Safia Aftab emphasised upon the need to have clear deliberations on various dimensions of aid. She discussed various aspects of policy aid, budgetary support and development assistance and said there is wrong notion of forced conditionality by International Financial Institutions in Pakistan.