Foreign Policy's (online) feature on Pakistan includes an article by Nancy Birdsall, Wren Elhai, and Molly Kinder on the use of foreign aid funding.
View FP's feature on Pakistan here.
By Nancy Birdsall, Wren Elhai, and Molly Kinder
SPEND AID MONEY ON DEVELOPMENT
Pakistan's worst-in-memory floods, covering a geographic area that would stretch from Maine to North Carolina, have put the country at grave risk of slipping even deeper into chaos. The floods alone are more than any government should have to bear, and Pakistan faces them handicapped by an active insurgency, an already beleaguered economy, and a fragile civilian government. Yet, if Pakistan is to be a secure, legitimate, and capable state -- as well as a reliable U.S. ally -- it must pull off a successful reconstruction effort.
Official estimates now suggest the cost of this effort could exceed the entire $30 billion annual budget of Pakistan's federal government, making donor support -- including from the United States -- absolutely critical. Before the floods, Congress had pledged $7.5 billion over five years in non-military aid to Pakistan. Now, after the floods, those in charge of spending that money must ask themselves two questions: What is the most pressing constraint on economic stability and growth in Pakistan that can be improved by U.S. aid? And how can the United States ensure the greatest bang for the American bucks spent in Pakistan?
The floods fundamentally changed the problems Pakistan faces, and pre-flood plans to build new hospitals, refurbish power plants, and drill thousands of tube wells no longer address Pakistan's top priorities. Flood-damaged infrastructure is now the main constraint to long-term economic growth and poverty reduction in the most populous and productive parts of the country. Farmers and factories need the very basics -- roads, bridges, and electricity -- before economic activity can rebound and people displaced by the floods can return to work. This year and next, the bulk of the aid money already allocated by Congress should be repurposed to rebuild schools, bridges, and the miles of roads washed away in the floods, and to restore Pakistan's devastated farmlands.
These sorts of basic reconstruction projects offer the best hope for the United States to get results for its aid spending. Most of Pakistan's long-term problems are not failures of money. They are failures of Pakistani government policy and administration in areas like energy policy, tax policy, education policy, and, of course, flood control and water management. No matter how much aid the United States and other donors give to Pakistan, sustainable development in those sectors will remain elusive unless Pakistan takes the initiative to pursue long-overdue reforms. Outside donors can't simply cut a check for that kind of reform.