The murky world of foreign assistance

From the Newspaper Published September 26, 2022 

THIS is with reference to the letter ‘Aid and audit’ (Sept 11), which made for an interesting read. The concern voiced is not only valid but timely. I feel it is necessary to clarify some commonly held mis-conceptions about foreign aid that we receive.

The Neelum Cricket Stadium, the venue for Kashmir Premier League (KPL), was used as a donor village way back in 2005 where several donor agencies established for themselves a tent village in the aftermath of the earthquake.

I was then serving as finance secretary in Azad Jammu and Kashmir (AJK) and recall their parking lot that had, to be exact, 78 vehicles; all intercooler turbo vehicles equipped with satellite phones. During local demonstrations outside the settlement, a bunch of locals once gathered and chanted slogans to the effect that if one vehicle, which at the time used to cost about Rs10 million, was donated per village, it could rebuild the lives of the devastated people. It was apparently too simple a solution to be executed by the donors.

The inability on the part of government agencies to share with the public the process and flow of foreign aid leads to lack of clarity on the part of the affected people. As a result, it brings a bad name to the country as a whole, and to our people as a nation.

Having served in the government and retired some six years ago, I consider it a duty to clarify this widely held misconception in the public about foreign aid and foreign loans. I do not want to sound ungrateful, but 99 per cent of bilateral foreign aid from individual countries during such disasters comes in the form of kind; not cash.

Of this, a further 20pc is in the form of technical assistance which involves experts (consultants) from the donor country for mitigation and awareness purposes. European Union countries prefer to operate under the ambit of United Nations (UN) agencies and use them as third-party contractors to deliver aid since their presence is well established.

During the 2005 earthquake, a number of Muslim countries contributed heavily towards building houses, schools and hospitals. I recall an incident in 2005 when World Food Programme (WFP) officials met the then AJK prime minister and asked for wheat that could be fortified and distributed. Visibly upset, the prime minister asked the secretary: “I was told they are donors, but they are asking us for wheat”.

During such disasters, universal appeals are made by international agencies for support. As regards multilateral agencies, many international studies suggest that out of every US dollar collected, more than 50 per cent represents administrative costs, while the remaining is used for assistance. So, as the saying goes, there is no free lunch. There really is none. Nations must rely on themselves.

Muhammad Saleem Sethi
Islamabad

Published in Dawn, September 26th, 2022

source https://www.dawn.com/news/1711938/the-murky-world-of-foreign-assistance