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Aid hoax
The best defence being given by our leaders and leaders of opposition parties of not ‘upsetting’ US and Nato countries is a shameless admission of “beggars can’t be choosers’. The present government lays the blame on the previous government and the previous government on the government before for initiating this vicious circle of beg more to pay off earlier begging.
Every economic and foreign policy is being made with one overarching theme – how to keep the foreign money flowing to prevent the economy from going totally under. The ‘sombre’ statements given by all their economists and think tanks say that while the reserves are dwindling and the rupee is falling, irrational people are talking about self-esteem and self-respect.
Facts speak louder than statements. In fact it is selective factual statements addressed to our innocent public that gives this false impression that there are no other economic solutions than getting aid and loans. Every day the media is full of articles justifying the dependence on foreign money and ridiculing alternatives as unrealistic. The image created on the public is that the scale and size of foreign bestowing is locally unsubstitutable. Let us look at the amount of aid we are receiving from the US and its impact on our political economy.
Most political parties are going blue over the visit of Chuck Hagel, the US defence secretary, who they say has warned Pakistan that if Nato supplies are not opened Pakistan will not get Coalition Support Funds which will severely affect the economy.
First of all, CSF is what the US owes Pakistan and not the other way around. It is our advanced services lending to them. These funds are not for economic support but as reimbursements for operational and logistical support already given by Pakistan for US-led counterterrorism operations. This is neither aid nor any US favour but a delayed payment for our services rendered for conducting US war.
According to the Congressional Research Services report published in June 2013 the total disbursements under CSF from 2002 to 2013 is $10.7 billion which means hardly a billion dollars per year. Again let me clarify that this is not aid, this is delayed payment for our services and that also at very cheap rates. The same services for US army personnel would cost them at least ten times more. Thus we are lending our services to the US at such favourable rates and then are also afraid that they may not pay us for a job that has already been done for them.
If Chuck Hagel is not paying us our money he should be taken to task by revealing the truth that US is a defaulter as they have delayed payment for the last 15 months to Pakistan.
Of the $5.1 billion in total economic aid committed for Pakistan in 2010-2013, about 24 percent was from multilateral agencies and 76 percent from bilateral sources. The US provided more than half of all bilateral commitments (56.3 percent). Japan committed 11.7 percent, Germany committed 5.5 percent, and the UAE committed 1.7 percent that same year.
Thus the US is providing $2.86 billion over a period of five years which means less than $500 million a year. This makes the total aid, direct and indirect, that we have received from 2002 to 2013 come to hardly $20 billion. Ishaq Dar recently stated that we have spent between $80 billion and $180 billion on the ‘war on terror’. At the cost of repetition, it means that despite the US owing us $160 billion we are being economically blackmailed by them.
Looking at these facts and figures, only the irrational would keep promoting the mantra of US wrath if we try to get out of this unpaid job.
The question is: can we not generate $1 billion a year internally? The answer is again based on facts. Yes, we can. After all the PM has recently announced a $1 billion dollar youth business scheme. That of course is more debt but there are many other avenues. Stop giving amnesty to tax defaulters and, according to FBR estimates, $2 billion can be generated. Foreign remittances can be enhanced easily to get $1.5 billion. Exports to non-traditional markets have a potential of $5 billion a year.
But for all this we need leadership that is not busy making personal business and political deals and compromises. It is this weakness that the US exploits and is the strength that has made the powerful BRIC countries (China, Russia, India and Brazil), all countries who spurned US aid in the worst of their times, case studies of powerful and independent nations.
While our ‘think tanks’ are promoting the indispensability of aid, the US congressional report itself has described their aid efforts as: “By most objective measures, US assistance to Pakistan since 2001 has not achieved its central goals, especially as Islamist extremism and militancy there have increased, the civilian government remains unstable, and the national economy continues to suffer.”
Like HIV AIDS, economic aid erodes the strength of a country to stand up and matter in the affairs of the local or global economy.
The writer is an analyst and a member of the PTI. Email: andleeb.abbas1@gmail.com
Aid hoax - Andleeb Abbas
The best defence being given by our leaders and leaders of opposition parties of not ‘upsetting’ US and Nato countries is a shameless admission of “beggars can’t be choosers’. The present government lays the blame on the previous government and the previous government on the government before for initiating this vicious circle of beg more to pay off earlier begging.
Every economic and foreign policy is being made with one overarching theme – how to keep the foreign money flowing to prevent the economy from going totally under. The ‘sombre’ statements given by all their economists and think tanks say that while the reserves are dwindling and the rupee is falling, irrational people are talking about self-esteem and self-respect.
Facts speak louder than statements. In fact it is selective factual statements addressed to our innocent public that gives this false impression that there are no other economic solutions than getting aid and loans. Every day the media is full of articles justifying the dependence on foreign money and ridiculing alternatives as unrealistic. The image created on the public is that the scale and size of foreign bestowing is locally unsubstitutable. Let us look at the amount of aid we are receiving from the US and its impact on our political economy.
Most political parties are going blue over the visit of Chuck Hagel, the US defence secretary, who they say has warned Pakistan that if Nato supplies are not opened Pakistan will not get Coalition Support Funds which will severely affect the economy.
First of all, CSF is what the US owes Pakistan and not the other way around. It is our advanced services lending to them. These funds are not for economic support but as reimbursements for operational and logistical support already given by Pakistan for US-led counterterrorism operations. This is neither aid nor any US favour but a delayed payment for our services rendered for conducting US war.
According to the Congressional Research Services report published in June 2013 the total disbursements under CSF from 2002 to 2013 is $10.7 billion which means hardly a billion dollars per year. Again let me clarify that this is not aid, this is delayed payment for our services and that also at very cheap rates. The same services for US army personnel would cost them at least ten times more. Thus we are lending our services to the US at such favourable rates and then are also afraid that they may not pay us for a job that has already been done for them.
If Chuck Hagel is not paying us our money he should be taken to task by revealing the truth that US is a defaulter as they have delayed payment for the last 15 months to Pakistan.
Of the $5.1 billion in total economic aid committed for Pakistan in 2010-2013, about 24 percent was from multilateral agencies and 76 percent from bilateral sources. The US provided more than half of all bilateral commitments (56.3 percent). Japan committed 11.7 percent, Germany committed 5.5 percent, and the UAE committed 1.7 percent that same year.
Thus the US is providing $2.86 billion over a period of five years which means less than $500 million a year. This makes the total aid, direct and indirect, that we have received from 2002 to 2013 come to hardly $20 billion. Ishaq Dar recently stated that we have spent between $80 billion and $180 billion on the ‘war on terror’. At the cost of repetition, it means that despite the US owing us $160 billion we are being economically blackmailed by them.
Looking at these facts and figures, only the irrational would keep promoting the mantra of US wrath if we try to get out of this unpaid job.
The question is: can we not generate $1 billion a year internally? The answer is again based on facts. Yes, we can. After all the PM has recently announced a $1 billion dollar youth business scheme. That of course is more debt but there are many other avenues. Stop giving amnesty to tax defaulters and, according to FBR estimates, $2 billion can be generated. Foreign remittances can be enhanced easily to get $1.5 billion. Exports to non-traditional markets have a potential of $5 billion a year.
But for all this we need leadership that is not busy making personal business and political deals and compromises. It is this weakness that the US exploits and is the strength that has made the powerful BRIC countries (China, Russia, India and Brazil), all countries who spurned US aid in the worst of their times, case studies of powerful and independent nations.
While our ‘think tanks’ are promoting the indispensability of aid, the US congressional report itself has described their aid efforts as: “By most objective measures, US assistance to Pakistan since 2001 has not achieved its central goals, especially as Islamist extremism and militancy there have increased, the civilian government remains unstable, and the national economy continues to suffer.”
Like HIV AIDS, economic aid erodes the strength of a country to stand up and matter in the affairs of the local or global economy.
The writer is an analyst and a member of the PTI. Email: andleeb.abbas1@gmail.com
Aid hoax - Andleeb Abbas
