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An agenda that does not deliver

South Asia is a region marked for its turbulent history and its endemic poverty and misgovernance. Much has been written about how certain states in India are worse off than Sub Saharan Africa in terms of social and economic indicators. Or that Pakistan and Bangladesh have millions of people struggling for a meager income to keep their families alive. The truth is that despite the recent gains made in economic growth in most South Asian economies, the structural causes of poverty persist and haunt the national planners.

The World Bank, or the rather grandiose title – the Bank – has remained a major player in the South Asian economies aiming to help these countries in reducing poverty and enhancing economic growth. The Bank has gained more traction in countries such as Pakistan and Bangladesh where the unelected executive is eager to engage with the IFIs and decisions on lending are achieved quickly. India has remained engaged but its complexity and federalism makes transactions more intensive. Having said that the country has emerged as World Bank’s favorite in the recent years. For instance, the Bank, committed USD 9.3 billion in financial assistance to India in the 2009-10 fiscal, more than the aid committed by the U.S. and the European Union. Although this is a small sum for India’s U.S. $1.2 trillion economy, it represents a sharp increase from the U.S. $2.2bn lent to India by the Bank last year  – Bank lending to India has traditionally averaged about U.S. $2.5-3bn a year. Similarly, for Pakistan the average lending level has been around $1-2bn, this has increased lately due to the recent recession and food and energy shocks. […]

November 1st, 2010|development, governance|7 Comments

Whatever happened to Kerry-Lugar?

Pakistan’s dire fiscal situation has resulted in the reduction of development spending by 40 per cent. This does not bode well for the citizens who have been tormented by an energy crisis, persistent food inflation and rampant unemployment. In these circumstances, the development assistance under the Kerry-Lugar Bill (KLB) is much needed. Pakistan’s civilian government braved a media onslaught and the ire of the security establishment for tacitly supporting the US legislation. Other than the rhetoric around the ‘conditions’ drafted in Washington, there was an unstated agreement that the development assistance was welcome.

Months have elapsed and Pakistanis have yet to witness the roll out of the KLB. Global recession and political uncertainty at home underlie the tough days for Pakistanis especially the poor. It was expected that given the urgency of the situation, USAID was going to kickstart the delivery of its interventions. Well, the progress so far has been disappointing.

First, there seems to be no public sign of a consensus within the US bureaucratic machine how the aid under KLB will be delivered. Unconfirmed media reports suggest that the political versus the bureaucratic channels are not on the same page. The ‘political’ administration is ostensibly managing USAID systems and processes. There may be strategic reasons for that but the net result is that things are delayed. Not long ago, Pakistani government’s procedures were thought to be a problem but the trajectory of US bureaucracy only proves that public sector ailments are common. […]