Different countries experience various growth patterns. While one country experiences economic development, others may not necessarily follow despite receiving the same amount of foreign aid and assistance from donor countries. In some instances, this is because of the recipient country’s dependence on foreign aid or the leaders’ inability to properly allocate the economic assistance coming from donor countries. The reality is the more favorable the policy environment in a developing country is, the more economic growth will be seen in the recipient country. This is not to say that economic growth is impossible in unfavorable policy environments because if the recipient country is willing to make economic reforms in their country, then improvements can be seen. However, sending financial aid to developing countries that do not want to make reforms in their economic make up can lead to the recipient country’s destruction instead of improvement. Pakistan is an example of a developing country that has become dependent on foreign aid especially after the war.
Ibrahim (2009) asserted that Pakistan has been receiving financial aid from the United States of America since 1951 and initially “received $2 billion dollars between 1953 and 1961” (p. 7). It came to a point when more than one-half of the financial aid was coming from America as Pakistan used most of the foreign aid for “Pakistan’s development budget and financing half its import bill” (p. 7), thus, America was providing around $5 billion dollars yearly.
However, the financial assistance that the U.S. extends to Pakistan is highly dependent on the country’s activities. As Ibrahim (2009) points out, when Pakistan began developing and manufacturing a uranium enrichment facility in 1979, America held off its support especially during the Indo-Pakistan war (p. 7). By the 1980s, America again extended foreign aid to Pakistan during the Soviet occupation, although the amount was not the same as before. In all, US foreign aid to Pakistan was irregular and sporadic and depended mostly on whether Pakistan was acting as an ally or not. With the help of the United States Agency for International Development (USAID) in the 1990s, Pakistan again qualified as a recipient of foreign aid, but with the declaration of the Pressler amendment in 1985 that expressly forbade financial assistance or military sales to Pakistan if Pakistan is engaged in creation of nuclear explosive devices, Pakistan was again denied help in the middle of 1990s (p. 7). By 2001 and especially after the September 11 U.S. bombings, Pakistan has been reconsidered as an ally country and began receiving financial aid once again (p. 8). In all these, what is apparent is the United States’ intention of providing help on a country that it considers as an ally and whether it could help move its operations forward or not. With the power that America has, it was able to withhold operations and assistance when Pakistan could not obtain a certification that it was not engaged in the development of nuclear devices.
While it seems that Pakistan is ravaged by war and counterinsurgency attacks, most of the foreign aid it receives from donor countries are typically used to help address issues on education, poverty, and healthcare for children, while a huge amount of the financial aid was used to sustain military efforts (Epstein & Kronstadt, 2013, p. 18), including counterterrorism operations, training Pakistani soldiers in counterinsurgency methods, and military support funds (p. 20), among others.
With all the foreign help that Pakistan is receiving, the next important questions are whether foreign aid has successfully reduced poverty and prevalence of war has decreased. In the case of Pakistan, Saeed (2013) asserted that even with the enormous financial aid that the country received in the past, the fact still remains that Pakistan has not reached a healthy, profitable, and self-sufficient economic growth. This is because whatever financial assistance it received from donor countries, a huge portion of it is either siphoned back to the donor country according to conditions and agreements of the financial assistance or is used to pay off outstanding debt from other countries. Saeed (2013) further stressed that donor countries have other agenda aside from extending financial assistance, that is, the ensure that they (donor countries) also benefit from the transaction and add more to their economic interests and gain political allies, among others (“Foreign Aid and Its Role in Economic Development”).
While prospects in Pakistan are good, still, it remains as one of the developing countries with fragile economy (Crosswell, 1999, p. 6). Epstein & Kronstadt (2013) asserted that a lot of areas in Pakistan are experiencing water shortages, electricity shortages, dilapidated homes, and insufficient healthcare facilities and services (p. 2). The education sector is not given much attention either as “nearly one-quarter of primary school age children have no formal education of some kind” (p. 2). Preventable diseases are still rampant resulting to death among women and children due to insufficient healthcare services. In addition, despite actions to counter any insurgency attacks or war in Pakistan, many Pakistanis die yearly due to terrorist attacks and bomb blasts (p. 2). But with the United States’ assistance program from 2005 to date, improvements in the health, energy, and education sectors have been noticeable. Added to this is the improvement in infrastructure that could help Pakistan improve its business relations with nearby cities and countries.
References
Crosswell, M. (1999). The development record and the effectiveness of foreign aid. Retrieved from http://fletcher.tufts.edu/Praxis/Archives/~/media/Fletcher/Microsites/praxis/xv/Crosswell.pdf
Epstein, S. B. & Kronstadt, K. A. (2013). Pakistan: U.S. foreign assistance. Congressional Research Service.
Foreign aid and its role in economic development. Retrieved from http://www.oocities.org/znuniverse/Economics_of_Planning/foreign_aid.htm
Ibrahim, A. (2009). U.S. aid to Pakistan – U.S. taxpayers have funded Pakistani corruption. Belfer Center for Science and International Affairs. Retrieved from http://belfercenter.ksg.harvard.edu/files/Final_DP_2009_06_08092009.pdf
Saeed, A. (2013). Can Pakistan do without foreign economic aid? Dawn.com. Retrieved from http://www.dawn.com/news/1053902/can-pakistan-do-without-foreign-economic-aid
