Poverty Alleviation: Pakistan did not receive US $ 1.4 billion aid

Foreign Exchange reserves decline

      By Muhammad Luqman Pakistan did not receive the $1.4 billion worth of aid that various countries have promised to reduce poverty, improve social services in the tribal areas and bring in reforms in the education and health sectors, according to media reports. The countries included members of the European Union, the US, the UK, Japan and Saudi Arabia, showed the official documents of the Ministry of Finance and Economic Affairs. The amount was 30% of the total outstanding grants of $4.5 billion that various donors had committed to Pakistan, according to the official documents. The $1.4 billion is the amount that remained undisbursed till the last closing dates of the projects being undertaken through the grants. The remaining aid of $3.1 billion will materialise over a period of next three to four years. As a developing country, Pakistan historically remained dependent on foreign donors for improving conditions in the social sectors. However, questions remain on the real benefits of the foreign aid, which often does not reach to the targeted people. Having relied heavily on donors, the PPP and the PML-N governments have even appealed to foreign donors to meet the financial needs of the people affected by the military operations launched to flush out terrorists and to deal with the aftermaths of floods, daily Express Tribune reported. The main reasons for not getting the grants were delay in fulfilling the requirements put forth by the donors, according to media reports. The donors were also at fault in many cases — the most important being lack of seriousness after committing the aid fund. Out of the $2.1 billion outstanding grant that the US has committed till 2020, Pakistan has not been able to utilise $506 million before the closing dates of the projects being undertaken through the grant, showed the documents. A $55.7 million grant that the US had given in 2010 for farmers education programme has lapsed. The $35.6 million US grant for Golan Gol hydropower project also remained unutilised till the closing period. Another grant  amounting to $96.9 million by the US for ‘strengthening democracy’ also remained unutilised. Roughly, $144 million US grant given for economic opportunities remained undisbursed. The $56.5 million aid for Fata Development Programme also could not be used.   The federal government did not have any role in the utilisation or non-utilisation of the US aid. They said the US had a plan to directly disburse the money among various non-governmental organisations. The delay in hiring the subcontractors and contractors by the US authorities for the execution of their funded projects was another reason for non-disbursement of the aid. Out of $848 million outstanding aid commitments by the United Kingdom, about $365 million aid could not be timely utilised by Pakistan, according to the official documents. A $214 million UK aid for balance of payments support could not be utilised till the closing day of June last year. Similarly, the $80.2 million that the UK had given for poverty reduction also remained unutilised. A $29 million that the UK government had given for maternal and newborn children health also lapsed years ago. The UK assistance for transport, education and sub-national government also remained unutilised till the closing of these projects. Japan’s $115.6 million aid for improving, health, water and sanitation systems remained unutilised. The $17.4 million grant that Japan had given for improving the airport security system is shown as undisbursed as of September last year, according to the official documents. A $4.5 million grant for counter terrorism programme also remained unutilised. The $10 million given for improving the conditions of a child health institution in Karachi remained undisbursed. A $44.6 million aid by Italy for the citizen damage reduction programme and poverty reduction has remained undisbursed. Germany’s $17.8 million aid for addressing the issues of HIV/AIDS and Ghakkar electricity substation remained unutilized. Various projects funded by the European Union worth $215 million also remained incomplete due to non-disbursement of the aid. The undisbursed amount was nearly 38% of the total outstanding commitments given by the EU. The $78.7 million that the UAE had committed for Sindh union councils and committees remained undisbursed till August last year, which was the closing date of the project. The $23.6 million aid committed for support for technical and vocational education remained undisbursed till four months ago. Similarly, the $13 million that the UAE had given for the Sindh Education Sector project were not released. The aid commitments given for public finance management and support to democratic institutions also remained undisbursed. Saudi Arabia also did not disburse $26.6 million that the kingdom had committed for earthquake project.


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