Pakistan's former Planning Commission boss, Nadeem Ul-Haq, is a busy man. When he is not producing interesting podcasts by the name of Soch Bichar, he is writing a book. The book is tentatively titled:
"Transforming Pakistan: How Development Happens!" It is an attempt to look at how the world's leading economists would study Pakistan's hopeful economic turnaround by the year 2050.
Of the many themes discussed in that study of Pakistan's transformation, the book's unpublished review draft available with BR Research offers some hard-hitting criticism of the donor-driven economic policymaking. This is a theme Nadeem has been talking about ever since he left a long career at the IMF.
One wonders why he didnâ??t speak up openly against the donor mindset while he was at the IMF. But that's a question BR Research will take up at our next tete-a-tete with him soon. In the meanwhile, here are some key quotes about donors and consultants from Nadeem's upcoming book.
"It was hard to see how these agendas were developed other than whims of officials and lobbies. For example, even though the country lost 12-15 percent of GDP in energy losses during 2008-15, hardly any serious study was done on this issue. Yet a large sum of money was spent by aid agencies on arranging dialogs/conferences and reports for trade with India- a clearly political issue. Similarly, there were long and numerous studies on many issues estimating poverty and none on growth policy, the instrument for eradicating poverty or on governance that was holding up growth and development."
In another place, Nadeem says: "smooth-talking consultants came with so-called best practice" ideas in clever PowerPoint's to say that local ideas did not matter. Development was all about copying 'best practices' which consultants would provide at exorbitant cost. They repeated the phrase 'why reinvent the wheel' often. Local professionals had only one task to follow the lead of these consultants and aid officials and mindlessly copy 'best practice'."
As a result of this, good human capital at local think tanks, academia, and the government seek prospects with donors instead; the exodus to the donor/consulting sector has been quite visible for anyone closely following Pakistan's economy.
Nadeem also highlights how government officials have an abundance of donor-sponsored research without the capacity to judge its quality. Moreover, given the gifts associated with that research (trips abroad, consulting fees, employment for kids and relatives); officials do not want to upset donors with any review.
He highlights how donors ensured "that only large consulting firms in US and Europe were eligible as contractors on projects of any size. Locals could only serve international contractors in junior positions often merely as research assistants." Sources in bilateral and multilateral agencies concur with this view. They highlight that up to 70 percent of programme or project funding goes back to donor world in lieu of high cost of consultants, office machinery such as laptops, and other project-related imports.
Despite all this, the impact of donor spending is found wanting. For instance, despite more than 20 IMF programmes in the last five decades, macro-economic stability has remained elusive. Likewise, despite "repeated loans for education and other social sector improvements, progress is not visible," writes Nadeem. Or take the case of World Bank-funded reforms for FBR that remained an epic failure. And speaking of failure, who can forget the failure of ADB's Access to Justice Programme in the bygone decade. Similarly, to date there hasn't been any publicly shared impact assessment of DFID-funded Alif Ailaan and Raftaar projects.
The sad reality is that misplaced donor-driven agenda is not some recent phenomena. It has existed since independence from the British. Writing in his memoir â??My life, my countryâ? noted Pakistani economist Parvez Hasan, recalled how the World Bank pushed its electric tube well programme in the 60s while ignoring substantial private sector diesel-operated tube well development.
The bank wanted to increase public tube wells from 2000 in 1965 to 20,000 in 1975, and 35,000 in 1985 while advocating a decline in private tube wells. Hasan writes that the bankâ??s policy was uncritically accepted by the locals, as the bank and the local economists failed to account for the serious electricity constraints. As a result, "while 1000 tube wells were developed in FY66, only about 140 were electrified and brought into operation."
This is one of many examples; Pakistanâ??s history with the bilateral and multilateral donors is replete with examples of how donor bureaucracy is found (in Hasan's words) "petty and 'neo-colonial'." So much for independence!
Then again, in the absence of home-grown ideas, imported ideas seem to be the only solution. It would be easy to criticize the civil and military bureaucracies and feudal or industrial elites who have hijacked the country's economy and allowed donors to hijack the fragile domestic thought industry. But that would be lazy and simplistic analysis.
The civil and military bureaucracies and feudal/industrial elites exist in many countries. But there must be a reason why they were able to do what they did in Pakistan. Hopefully, Nadeem and his peers would soon start looking at the cultural, religious, historical, and other normative or qualitative factors that have played a role in Pakistanâ??s perverse state-society relationship.
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