Pakistan's economy has always been based and relied on external assistance. Britain was the initial donor for Pakistan. America has been providing massive economic and strategic support to Pakistan since the 80's. Though China has grabbed this position, but the assistance it provided is of great importance to Pakistan. And any reduction and reduction in it became causes of concern for Pakistan.
The budget passed by the United States Senate and House of Representatives announced an $8.8 billion shortfall in the amounts allotted to the US State Department and to USAID, the United States Agency for International Development. Money for the Overseas Contingency Operations Budget, which provides one-third of the funding for USAID, was also reduced while funding for the United States military was increased. According to reports, the budget shortfalls are expected to affect operations during this current year, 2018, and the following year 2019.
Extent of assistance
Since then, U.S. economic aid to Pakistan has totaled around $33.4 billion since 2002. However, details over where the money goes isn't clear, and Pakistan official reaction has downplayed the significance of the funds.
The widely reported data collected from U.S. and Pakistan government agencies suggest a huge chunk, around $14.5 billion, has gone to the Pakistani military for covering its claimed costs of anti-terror operations. Pakistan received the remaining $18.8 billion as economic assistance.
Who got the funds?
The top recipients are Afghanistan, where 8,400 US troops are deployed, about USD 4.7 billion; Israel, USD 3.1 billion; Egypt, USD 1.4 billion; Iraq, USD 1.1 billion; Jordan, USD 1 billion and Pakistan, USD 742 million. Kenya, Nigeria, Tanzania and Ethiopia each received more than USD 500 million.
How Pakistan affected
According to numbers on the USAID website, Pakistan has, over the years, received $7.7bn in aid funding, money that has gone to fund everything from educational programmes to agricultural initiatives to gender-empowerment projects. Based on US government data, Pakistan appears to receive more economic than military aid from the US.
Much of this money will soon be cut off. Pakistan and Pakistanis should worry about this. Unlike the Pakistani military, the Pakistani economic and non-governmental sectors are not poised to find alternative donors.
In some cases, the large bounty of available funds (grants peaked late in the last decade) has even generated programmes and NGOs. Not many of these are likely to survive the slaughter. In fact, many programmes and NGOs are likely to die in the near term.
Pakistani columnist Rafia zakaria wrote in an article in Dawn “The first to get hit will likely be the beneficiaries of the programmes: poor farmers that received assistance in ensuring the health of their animals, schools in Sindh whose teachers have been receiving training from literacy programmes run via USAID grants, women’s legal aid programmes and girls’ education initiatives that have also been fuelled by foreign dollars. The women and girls and farmers and others that have been benefiting from these programmes may find themselves outside shuttered classrooms and closed clinics, absent medications and health checks. As matters stand, it is unlikely that they will be able to resume services again.”
She wrote further that “Also in the path of the storm are the many middle-class Pakistanis who work at various NGOs as administrators for USAID-funded programmes. Development consultants, many of them educated in the US, who serve as go-betweens and liaisons between foreign aid grantors and local organisations or government units in Pakistan, will find their lucrative links drying up as the aid itself peters out and programmes are shuttered. With no money, there is no necessity for the folks who used their contacts in Pakistan to serve their bosses in America, write up reports and make sure everyone is happy. They are likely to be extremely unhappy in the coming months.”
The greatest total damage in Pakistan is likely to be inflicted on civil society and the NGO sector in general. Over the past decades, the constant onslaught of religious obscurantism has been tempered by the exogenous aid that permitted NGOs to continue investing in the sort of long-term programmes — literacy, health, human services — that the country and local civil society were unable to do. Now this sector stands severely imperiled and must immediately consider new methods via which the value of a vibrant civil society can be impressed upon local funders. If not, it is likely that the conservatism and unchecked consumerism that constitutes the largest forces in the country will sweep away much more than simply the NGOs.