America should stop providing aid to Pakistan, which ends up supporting the country’s rich and powerful.
It should let China and Saudi Arabia do it.
Providing financial aid to poor countries around the world makes a great deal of sense for America, both on humanitarian and geopolitical grounds.The trouble is that in some cases, American foreign aid ends up supporting the lifestyles of the elite rather than the lives of the poor.
Pakistan is a case in point. For decades, Washington has been very generous to that South Asian nation , according to Akbar Zaidi, a Karachi-based political economist and Columbia University Visiting Scholar. It helped the country deal with chronic debt crisis.
Like back in December 2001, when Washington brokered a $12 billion IMF debt relief package for Islamabad, in exchange f or support to fight Islamic militancy in the region.
So w hy Pakistan is running into debt problems that require foreign aid to solve them?
Because the country’s elite is refusing to pay its fair share of taxes, according to Zaidi.
“These problems are perennial—it would be incorrect to call them a “crisis”—largely because of the Pakistani elite’s ability to avoid taxing itself,” says Zaidi. “Instead, successive governments have preferred to leverage Islamic militancy, ignoring the risks of doing so) while relying on financial aid from outside countries with geopolitical interests in the region from international financial institutions.”
The Pakistani elite , he continues, “ frightens foreigners into proving funds to stabilize the country against a self-created, false threat of extremists taking over a nuclear state.”
Meanwhile, foreign aid allows the country’s elite to live a lavish life. “This is a classic moral hazard problem: the luxury of always being bailed out has allowed the Pakistani elite to live with great impunity. Beyond responsibility in cocoons of lavish unaccountability. They feel little need to undertake structural reforms of the economy and institutions that would result in a fairer, more just, and more equitable form of government and representation.”
Instead, they prefer London, New York, and Dubai more than they do Karachi — when it comes to investing and partying with their money, that is.
That’s according to the former director of United Nations Development Programme (UNDP) for Pakistan , Marc-André Franche.
All good reasons why America should let China and Saudi Arabia, Pakistan’s new allies, support the lifestyle of their rich and powerful.