Pakistani Punjab's Rejection of US Aid Hurts the Poor
The Punjab government led by PML's Shahbaz Sharif spurned 20 billion rupees ($232.55 million) in US aid slated for welfare projects in Pakistan's most populous province in the next three years, according to a report in Dawn newspaper. The popular move was motivated by politics to capitalize on a wave of anti-American anger following the US raid that killed Osama Bin Laden in Abbottabad, Pakistan.
While the amount of aid rejected is relatively small, the decision's outsized impact on the poor is now coming to light. Here are some of the projects most impacted:
1. U.S. aid could have transformed Punjab Government's Lady Willingdon Hospital in Lahore, where rats run through the halls, patients sleep three to a bed, women who require C-sections aren't getting them because only one operating room is functioning, and premature babies risk death because of a shortage of incubators, according to the Associated Press.
The hospital struggles to provide even basic care. Built by the British in the 1930s before Pakistan's independence, it was meant for 80 patients. The country's population has since exploded, forcing officials to cram 235 patients into a facility that is now run-down. Paint peels off the concrete walls and black mold covers the ceilings. Patients are forced to share beds, and sometimes women who are close to giving birth have to sit on the floor for lack of space. It has only one functioning operating room, leaving women lined up to receive cesarean sections.
The hospital has only three working infant incubators, which were donated by NGOs. The hospital is forced to use overhead warmers for other infants, leaving them more exposed to disease. The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities.
2. Another $100 million of US aid was to be used to rebuild schools in southern Punjab province that were destroyed by last year's devastating floods. An additional $10 million was meant to improve municipal services like clean water and sanitation.
3. The loss of aid for Shamaspura, a poor neighborhood in Lahore, means that its 15,000 residents will not get their only road paved, nor will they get a new sewer system.
Batool Akhtar, a poor but feisty woman quoted by the AP story, summed it up well when she said: "This is rich people denying aid meant for the poor. The government should have taken the money."
As Pakistan's ruling elite and its ghairat brigade, led by PML's Sharif brothers, engage in loud empty rhetoric about infringement of their national sovereignty by the United States, here is something to ponder:
Pakistan's tax policies are among the most regressive in the world. Direct taxes make up less than 3.5 percent of GDP, with wide ranging exemptions to powerful segments of society coupled with governance issues at Federal Board of Revenue, according to former finance minister Shaukat Tarin. The bulk of the tax receipts are collected in the form of sales tax, placing the heaviest burden on the lower-income people who spend almost all of their income on their basic needs.
Given the unwillingness of Pakistan's ruling elite to pay more in taxes, I agree with the decision of the other three provincial governments to continue to accept US economic aid. As the Punjab examples above show, refusing such aid clearly hurts the poor the most.
Pakistan would be well advised to not seek confrontation with Washington. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
3. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
4. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Can Pakistan Tell US to Take its Aid and Shove it?
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
While the amount of aid rejected is relatively small, the decision's outsized impact on the poor is now coming to light. Here are some of the projects most impacted:
1. U.S. aid could have transformed Punjab Government's Lady Willingdon Hospital in Lahore, where rats run through the halls, patients sleep three to a bed, women who require C-sections aren't getting them because only one operating room is functioning, and premature babies risk death because of a shortage of incubators, according to the Associated Press.
The hospital struggles to provide even basic care. Built by the British in the 1930s before Pakistan's independence, it was meant for 80 patients. The country's population has since exploded, forcing officials to cram 235 patients into a facility that is now run-down. Paint peels off the concrete walls and black mold covers the ceilings. Patients are forced to share beds, and sometimes women who are close to giving birth have to sit on the floor for lack of space. It has only one functioning operating room, leaving women lined up to receive cesarean sections.
The hospital has only three working infant incubators, which were donated by NGOs. The hospital is forced to use overhead warmers for other infants, leaving them more exposed to disease. The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities.
2. Another $100 million of US aid was to be used to rebuild schools in southern Punjab province that were destroyed by last year's devastating floods. An additional $10 million was meant to improve municipal services like clean water and sanitation.
3. The loss of aid for Shamaspura, a poor neighborhood in Lahore, means that its 15,000 residents will not get their only road paved, nor will they get a new sewer system.
Batool Akhtar, a poor but feisty woman quoted by the AP story, summed it up well when she said: "This is rich people denying aid meant for the poor. The government should have taken the money."
As Pakistan's ruling elite and its ghairat brigade, led by PML's Sharif brothers, engage in loud empty rhetoric about infringement of their national sovereignty by the United States, here is something to ponder:
Pakistan runs chronic budget deficits of around 5% of its GDP, and its government collects less than 10% of GDP in tax revenue which is among the lowest in the world. A big share of these deficits is funded by foreign aid and loans, making Pakistanis beholden to the interests and whims of major foreign donors and lenders.
Pakistan's tax policies are among the most regressive in the world. Direct taxes make up less than 3.5 percent of GDP, with wide ranging exemptions to powerful segments of society coupled with governance issues at Federal Board of Revenue, according to former finance minister Shaukat Tarin. The bulk of the tax receipts are collected in the form of sales tax, placing the heaviest burden on the lower-income people who spend almost all of their income on their basic needs.
Given the unwillingness of Pakistan's ruling elite to pay more in taxes, I agree with the decision of the other three provincial governments to continue to accept US economic aid. As the Punjab examples above show, refusing such aid clearly hurts the poor the most.
Pakistan would be well advised to not seek confrontation with Washington. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
3. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
4. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Can Pakistan Tell US to Take its Aid and Shove it?
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
Comments
Nonstop crises between the United States and Pakistan this year have fueled tensions within the Obama administration over what kind of relationship the two countries should have and who should be in charge of it.
The State Department has long smarted over the preeminence of military and intelligence priorities, which seems to leave diplomacy in a distant third place. The result, diplomats say, is that there is little goodwill to cushion blows such as the U.S. airstrike last month that left two dozen Pakistani soldiers dead along the Afghanistan border.
More than a week after the attack, President Obama called Pakistan’s president on Sunday to say that the deaths were “regrettable,” stopping short of an apology that many in Pakistan have called for.
The airstrike has cast a shadow over a major diplomatic gathering Monday in Bonn, Germany, that the administration hoped would help facilitate plans to wind down the Afghanistan war. Pakistan has said that it will not attend the meeting, which brings together more than 100 countries and international organizations and whose agenda includes regional and Afghan development and peace talks with the Taliban.
Secretary of State Hillary Rodham Clinton, who will lead the U.S. delegation, unsuccessfully appealed for a change of heart in a telephone call Saturday to Pakistani Prime Minister Yousuf Raza Gilani.
The U.S.-Pakistan breach has also set back Obama administration attempts to improve the brittle relationship between Pakistan and Afghanistan. Afghan President Hamid Karzai told Germany’s Der Spiegel magazine on the eve of the Bonn meeting that he thought Kabul’s closest neighbor was trying to sabotage the possibility of peace negotiations.
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Until his retirement in September, Adm. Mike Mullen, who was chairman of the Joint Chiefs of Staff, was the most public face of the bilateral relationship. Mullen’s trips to Pakistan for face-to-face meetings with Pakistan’s army chief, Gen. Ashfaq Kayani, were far more frequent than Clinton’s visits with the civilian authorities.
When an exasperated Mullen publicly accused Pakistan’s military of supporting Afghan insurgent groups in congressional testimony just before leaving office, some State Department officials said they felt blindsided.
On a subsequent visit to Pakistan in October, Clinton insisted on leading a delegation that included CIA Director David H. Petraeus and Mullen’s replacement, Gen. Martin E. Dempsey.
But the State Department’s efforts to assert at least the appearance of control over U.S. policy are regularly undermined by a steady stream of congressional visitors to Pakistan who “all want to visit Kayani,” an administration official said. “They don’t want to talk to their civilian counterparts” in Pakistan’s Parliament, “and they only want to stay a few hours,” the official said.
Retired Maj. Gen. Mahmud Ali Durrani, a former national security adviser to Gilani and Pakistani ambassador to the United States, agreed with that reality and the impression it leaves in Pakistan. “You look at the visitors from Washington,” Durrani said. “They would go and spend time with the president, then most of the serious discussions they had with the army chief.”
“In my view,” he said, “there is one and only one issue” between Pakistan and the United States, “and that is counterterrorism. And that is in the lap of the security establishment. So that, in itself, is a problem.”
http://www.washingtonpost.com/world/national-security/us-breach-with-pakistan-shows-imbalance-between-diplomatic-security-goals/2011/12/03/gIQAd2DsTO_story_1.html
"The major portion of our aid will focus on getting more than four million children into school, recruit and train 90,000 new teachers and provide more than six million text books," George Turkington, Head of the UK's Department for International Development (DFID) in Pakistan said.
During his visit to a crisis centre for women (Bedari) in Chakwal, he said the UK government would provide assistance to prevent 3,600 mother's deaths in childbirth; another half a million children from becoming under-nourished and another 400,000 couple’s access family planning and contraceptives.
The UK will also support the country to empower women by strengthening legislation on land rights, marriage rights and domestic violence and get more girls and women involved in decision making at community and federal level so that they can demand their basic rights.
Head of DFID said that over recent years, UKaid has provided 35,096 women victims of violence with counselling, refuge, rehabilitation support and legal aid.
He said that UKaid provide monthly stipends to some 680,000 poor girls to help keep them in school and provided millions of free school text books.
He said that UKaid has also facilitated 1.2 million micro finance loans to poor women, helping them to lift their families out of poverty.
The DFID official also met beneficiaries at Bedari office a local NGO.
http://www.brecorder.com/pakistan/banking-a-finance/38265-uk-likely-to-rise-aid-to-pakistan-upto-350m-pounds-.html
In a written reply to a question raised at the daily press briefing, the State Department said, “Civilian assistance to Pakistan continues and has not been interrupted since the tragic Nov. 26 incident.”
“Since the passage of the Kerry-Lugar-Berman legislation in October 2009, the U.S. government has disbursed $2.2 billion in civilian assistance, including approximately $550 million in emergency humanitarian assistance,” said the statement, adding, “In FY 2011 specifically, we disbursed approximately $855 million (not including any emergency humanitarian assistance).”
With the majority of Pakistanis claiming they see no evidence of U.S. economic assistance, Washington still struggles to fashion an effective program of civilian aid. However, data provided by the U.S. State Department created a different impression.
“In 2011 the people of the United States supported the construction of 210 kilometers of road in FATA and Khyber-Pakhtunkhwa, funded the world’s largest Fulbright exchange program, and sponsored initiatives promoting private sector growth and civil society development in Pakistan,” said the statement.
http://gantdaily.com/2012/01/20/u-s-confirms-no-interruption-in-flow-of-american-taxpayer-dollars-to-pakistan/
..The KPK governor, the UAE Ambassador and other diplomats cut a special cake. The national anthems of the two countries were also played on the occasion.
Paying tribute to the armed forces for their role in the rehabilitation of Swat and thanking the UAE government for its generous assistance, Kausar hoped that the both countries would improve trade, diplomatic, and cultural ties.
Major General Zahir Shah, Commander of the GOC 45th Engineers Division of the Pakistani Armed Forces, said 124 projects have been implemented by the Programme in Swat and the tribal areas, thanks to the strength of the UAE- Pak relations. He added that the achievements will further develop the local educational and health sector to contribute positively in overall national development.
Pakistani people expressed their gratitude toward the President His Highness Sheikh Khalifa bin Zayed Al Nahyan for the UAE humanitarian programme and assistance projects to Pakistan.
UAE will support water supply projects in Khyber Pakhtunkhwa region, Bajaur district and South Waziristan district of the country for supplying clean drinking water to the villages and urban residential areas.
The regions hit by war and natural calamities would see better water supply through 26 projects supported by the UAE authorities.
The Programme comes within the framework of the good efforts by the UAE to help Arab and Islamic countries as one of the leading donors in the field of humanitarian aid and international development around the world.
The UAE and Pakistan maintain long-standing and close friendly relations since the founding of UAE by late Sheikh Zayed bin Sultan Al Nahyan. It has been an integral part of the UAE leadership's vision to support Pakistan. UAE does not only provide support to Pakistan in the times of crises i.e. natural calamities, earthquakes and floods but also work towards maintaining Pakistan's comprehensive security, stability, economic progress and prosperity.
In line with a recently signed Memorandum of Understanding (MoU) between the two countries UAE will execute a comprehensive development plan costing an estimated amount of US$110 million to create job opportunities and develop flood-hit areas of Pakistan.
Addressing the launching ceremony, Abdullah Al Ghafli, Director of the Project, said the UAE had played a significant role in mobilising international humanitarian cooperation in support of the Pakistani brethren based on strategic and humanitarian considerations enshrined in 'our foreign policy'.
According to him, the UAE aid aims to help the Pakistani people survive calamities they face and its government to address and overcome economic woes in order to achieve sustainable development.
'Built on an integrated field study on Khyber Pakhtunkhwa Region and Tribal Areas near Waziristan, the assistance programme will be implemented in coordination with the Pakistan Army Command and other relevant government bodies,' he added.
The project calls for building and rebuilding of a number of hospitals and health clinics, establishing a new nursing institute, commissioning of water purification, water resources management stations, and extending drinking water networks. Two devastated bridges will be rehabilitated and new roads will be built by the Khalifa bin Zayed Charity Foundation.
The United States will build new Faculty of Education buildings at six Pakistani universities and renovate a seventh education facility, as part of an agreement signed Wednesday between the universities and the US Agency for International Development (USAID), said Karen Freeman, USAID Deputy Director for Pakistan.
She stated this while addressing the signing ceremony of a memorandum of Understanding for construction and rehabilitation of faculty of education buildings, says a press release. The construction will take place over the next two year and the new and renovated buildings will eventually house approximately 2,000 students of two new teaching degrees: the four year Bachelor’ Degree in Education and a two-year Associate Degree in Education in teaching that USAID helped design and introduce in order to increase quality of teacher preparation across the country and 100 faculty members each year.
“Pakistan and the United States have enjoyed a long and productive relationship that spans more than 60 years and covers a variety of fields. Today’s ceremony is yet another expression of the US Government’s long-term commitment to help build a stronger, more prosperous Pakistan,” she added.
“It gives me great pleasure to be here with you today to witness the signing of the MoU between the seven of country’s public universities and two of USAID implementing partners for the construction and rehabilitation of Faculty of Education buildings across the country. The contribution to the Pakistani education system is yet another example of the US long-term commitment to helping Pakistan address its development priorities.
“Our collaboration in higher education sector spans more than five decades. One of our first undertakings in this sector was the construction of the Institute of Education and Research at the University of Punjab in 1960s. fifty years later, this institute continues to help the country shape its education policies. Over the years, we have worked together to build more higher education institutions that have since become premier centres for knowledge and learning. I am very proud to list among such the Institute of Business administration in Karachi, the Lahore University of Management Sciences, the Faisalabad Agriculture University as well as the Peshawar Agriculture University, and many more,” she said.
Karen Freeman said: “I am happy that through today’s commitment we are continuing this tradition of supporting Pakistan in its efforts to develop strong education institutions.” She said that these new facilities will help attract and train best young minds to teaching profession and will help improve the professional knowledge and skills of many other teachers.
Higher Education Commission Chairman Dr. Javaid Laghari appreciated the efforts of the US Government for improving the quality of education across the country. The $15 million construction initiative was officially launched today at the Higher Education Commission, where representatives of the USAID signed MoU with representatives of the seven universities. As part of the agreement, the US will construct new Faculty of Education buildings at the Sardar Bahadur Khan Women University in Quetta; the Hazara University in Mansehra; the University of Education in Lahore; the University of Sindh in Hyderabad; the University of Karachi in Karachi; and the Sardar Abdul Latif University in Khairpur (Sindh). The US will also help renovate the Institute of Education and Research at the University of the Punjab.
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=90967&Cat=6&dt=2/3/2012
The White House has allocated $800 million for Pakistan’s Counterinsurgency Capability Fund (PCCF) in its budget for fiscal year 2013, whereas the State Department and USAID budget for Pakistan comes to $2.4 billion.
The budget, which will go to Congress for approval, shows a decrease of $50 million in the allocation figure for PCCF from last year. The purpose of the fund is to “build and maintain the counterinsurgency capability” of Pakistan’s security forces. The services provided by the US include human rights training, providing equipment, supplies, training and infrastructure repair.
The description of the PCCF stated in the budget documents released by the State Department state that the PCCF “enhances the capabilities of the Pakistan Army, the Pakistan Air Force, and the Frontier Corps by meeting their needs for training, equipment, and infrastructure. The PCCF will assist the Government of Pakistan to eliminate the violent extremists’ ability to operate along its border with Afghanistan. The PCCF account will draw down when the need for intensive support for engagement against terrorist organisations in Pakistan declines.”
State Department
In a press release issued by the State Department, the budget allocation requested for Pakistan for FY2013 is $2.4 billion. This includes the $800 million cited in the PCCF, and is meant for assistance to “strengthen democratic and civil institutions that provide a bulwark against extremism, and support joint security and counterterrorism efforts.
Certifications
The budget documents also outline certifications that the US secretary of State is required to make to various Congress committees before funds such as the Foreign Military Financing Program, PCCF etc. can be allocated.
According to the conditions, the Secretary must certify that Pakistan is cooperating with the US in counterterrorism efforts against the Quetta Shura, Haqqani Network, Jaish-e-Mohammad, Lashkar-e-Taiba, al Qaeda and other domestic and foreign terrorist organizations. Pakistan must not be supporting terrorist activities against the US or coalition forces in Afghanistan.
Interestingly, a condition includes that the Secretary of State must certify that, “Pakistan’s military and intelligence agencies are not intervening extra-judicially into political and judicial processes in Pakistan”
http://tribune.com.pk/story/336108/us-unveils-budget-with-trimmed-pakistan-aid-subject-to-conditions-of-course/
According to Bank’s Country Partnership Strategy Progress Report, a mid term review and implementation assessment, the Bank has responded flexibly in the face of the tremendous challenges Pakistan has gone through over the past year or so.
World Bank Country Director for Pakistan Rachid Benmessaoud said they will continue strong support to Pakistan while keeping a keen eye on implementation to ensure that these efforts translate into real results on the ground.
The progress report says the overall focus of the Bank’s strategy- to help Pakistan’s economy get back onto the path of high, sustained growth –remains valid and consistent with the overall priorities of the government of Pakistan as articulated in its New Framework for Growth Strategy. Also, the Bank support will remain centred on the original pillars of the CPS- the economic governance, human development and social protection; infrastructure and security and conflict risk reduction.
The Bank engagement over FY 12-14 is projected at up to $ 4 billion in new International Development Association (IDA) credits and International Bank for Reconstruction and Development loans. This will be supplemented by a robust programme under the Multi donors trust fund (MDTF) with initial commitment of $ 140 million and IFC support projected at $ 1.5 billion.
http://www.pakistantoday.com.pk/2012/02/wb-to-provide-5-5b-to-pakistan-in-3-years/
The slowing regional growth has led to contraction in Punjab’s share in the national economy to 54.9 per cent in 2011 from 55.5 per cent in 2000 and 55.7 per cent in 2007.
Punjab’s economy, according to the IPP, is composed of 24 per cent agriculture (17 per cent for the rest of Pakistan and 20.9 per cent for Pakistan), 21.2 per cent industry (31 per cent for the rest of Pakistan and 25.8 per cent for Pakistan) and 54.8 per cent services (52 per cent for the rest of Pakistan and 53.3 per cent for Pakistan). The provincial economy’s sectoral composition signifies relative importance of agriculture in its economy and underdevelopment of industry as compared to the rest of Pakistan, says the IPP.
The report identifies three major factors that have dragged down economic growth in Punjab in recent years: decreasing water availability for agriculture, growing energy crunch for industry and declining public sector investment in economic infrastructure.
The IPP points out that performance of agriculture plays a major part in the economic growth of the province. During the last few years, it contends, the performance of agriculture sector has been disappointing, especially of major crops that have shown little growth since 2007 due to growing water shortages and rising fertiliser prices. Wheat production was virtually stagnant and output of sugarcane and cotton dropped by 10 per cent and 17 per cent respectively. The only crop with significant growth of 26 per cent was rice. In addition, there was hardly any growth in minor crops. Given the relatively large share of agriculture in the regional (Punjab) economy, the growth rate is likely to be lower because even in good years agriculture is unlikely to average a growth rate above four to five per cent,” it underlines.
The annual average agriculture growth rate in Punjab declined to just one per cent between 2007 and 2011 from 3.3 per cent between 2000 and 2007. In contrast, the average agriculture growth rate rose to three per cent for the rest of Pakistan from 2.5 per cent.
Growing energy shortages have affected industrial output in Punjab disproportionately, according to the report. There has been cumulative drop in gas consumption in the province of 13 per cent in the last few years compared to an increase of 16 per cent in the rest of Pakistan, especially in Sindh.
Similarly, increase in electricity consumption since 2007 has been restricted to only two per cent compared to six per cent in the rest of Pakistan. Punjab’s share in the national production of cotton yarn, for example, dropped from 33 per cent in 2007 to 29 per cent in 2011 and in cotton cloth from 43 per cent to 37 per cent.
Additionally, the report underlines the weaker presence in Punjab of industry producing consumer durable and construction inputs compared to Sindh as another factor for slower growth. “In the peak of business cycle, industries producing consumer durables like automobiles and industries providing construction inputs like cement show very high growth rates. During 2003 and 2007, for example, production of automobiles showed extraordinarily high growth rate of 31 per cent. The growth rate of cement industry was also high at 18 per cent.
http://dawn.com/2012/05/21/punjabs-lost-growth-momentum/
..$80 million, earmarked by the Obama administration under the Kerry-Lugar-Brahman Act for the Pakistan Private Investment Initiative
Crowding-out of the private sector from credit channels due to reckless government borrowing has provided a unique public relations opportunity to the US. The US has said it will offer loans ranging from $500,000 to $5 million to small and medium sized business in Pakistan, to help the latter expand and create jobs.
In total, $80 million, earmarked by the Obama administration under the Kerry-Lugar-Brahman Act for the Pakistan Private Investment Initiative, will go towards providing cheaper financing and equity to small and medium enterprises (SMEs) in Pakistan.
“The United States Agency for International Development (USAID) will provide up to $24 million for an equity fund, and fund managers will be required to match the requested funding to take the size of each equity fund to at least $45 million,” said Theodore Heisler, the project manager and senior economic growth advisor to USAID.
Heisler said that co-investment was essential in bringing the size of each fund to a level where it can cover operating expenses. The US intends to create at least three funds, but is, as yet, noncommittal to the total number. US authorities are on the lookout for good fund managers, and the availability of quality managers will determine the numbers of the funds, officials have said. During the last fiscal year, the federal government borrowed Rs1.77 trillion to finance the budget deficit. The State Bank of Pakistan has already warned that due to increasing government borrowing, there is little credit available for the private sector to grow.
“Having access to finances is a challenge for SMEs, as there is little equity and debt available for the sector,” said Heisler. “The longer term goal is to help expand the market for private equity investment and provide money that is not available through banks and other international lending agencies,” he added. He said the real job growth potential lies in the SME sector, as the corporate and public sectors cannot create unlimited jobs.
Heisler said each fund will have a 10-12 year lifespan. Individual investment sizes will range from $500,000 to $5 million, but could vary depending upon requirements. The initiative has been modelled on the Polish American Enterprise Fund, which was started with $140 million and has now grown to a multi-billion dollar fund.
Heisler said the US is looking to create a private equity industry in line with global standards, as there is hardly any private equity investment fund in Pakistan. He said the other purpose was fetching foreign investment through co-investment, as investment in Pakistan is dwindling.
The US is currently looking for fund managers who have a successful history, and Heisler said that both local and international fund managers have expressed interest in the project.
To a question whether Pakistani fund managers have expressed reluctance due to doubts over long-term commitment issues with the US, the US embassy replied “we believe there will be substantial interest from local, regional and international investors”.
It further said that “the US government designed the Pakistan Private Investment Initiative after a year of research and consultations with numerous stakeholders, including the Pakistani private sector and regulatory authorities.” It added that USAID will structure the funding to ensure that it is sustainable.
http://tribune.com.pk/story/442469/credit-crunch-as-banks-turn-their-backs-on-private-sector-us-steps-in/
https://reliefweb.int/report/pakistan/241m-usaid-schemes-underway-sindh-says-murad
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It may be noted that since 2011, USAID in partnership with the provincial government has been implementing the SBEP for $165 million, including $10 million the Sindh government share. Through this partnership the SBEP improves the quality and access to education for children in Sindh by increasing and sustaining student enrollment at the primary, middle, and secondary school levels. The program is being implemented in seven districts of Northern Sindh and five towns of Karachi.
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He elaborated that major Components of SBEP include building of 106 new schools with1400 classrooms in flood-affected and other areas. Improvement of reading and numeracy skills of 750,000 children over five years, engaging up to 400 communities in the construction, operation and maintenance of schools over five years and establish effective public/private partnerships to manage these schools and ensure enrollment of at least 100,000 girls.
Syed Murad Ali Shah said that major targets of the programme are to increase knowledge and professional skills of 25,000 primary school teachers, particularly in Reading and Mathematics. “It also aimed at providing non-formal educational opportunities to 100,000 out-of-school children to enable 50,000 to transit to formal schools,” he said and added there is a target to provide capacity building opportunities to 500 government officials to implement the Sindh Government Education Reforms, increase availability of adequate health care facilities for children and train 500 government district offices/supervisors, teachers, head-teachers in developing, implementing and monitoring of Early Grade Reading Assessment (EGRA) and Early Grade Maths Assessment (EGMA).
Chairman P&D Mohammad Waseem said that so far, there have been considerable milestones achieved by SBEP that include site assessment of 875 schools completed. This assessment is helping to logically select schools for construction. Till now 33 government schools are under construction at Khairpur, Sukkur and Larkana districts. 37 SBEP targeted schools are notified as campus schools with 76 schools being consolidated and merged under government consolidation policy.
He added that the Private land owners have donated their personal land in Larkana, Sukkur and Khairpur to School Education Department for reconstruction of schools. 238 early grade teachers (Master Trainers) are trained in Reading and Mathematics Teaching Skills to further train 3,000 teachers and a comprehensive study is done by SRP to develop supplementary reading material to create a culture of reading within target schools.
Mr Wsim said that partnership with Rotary International established to equip Science and Computer Labs in hub schools and to provide reading and mathematics materials to 1,100 school libraries.
Municipal Services delivery Programme (MSDP): This programme has been launched with USAID grant of $66 million in which provincial government’s share stands at Rs926.55 million. The programme is aimed at improving and upgrading municipal services/infrastructure in six cities of the Norther Sindh. They are Jacobabad, Qambar, Shahdadkot, KN Shah, Mehar and Johi. Presently, the programme is in progress in Jacobabad and after its successful completion it would be started in other cities.
USAID has invested $10 million in establishing JIMS and expanded access to quality health care services for the residents of Jacobabad- Sindh and Balochistan. JIMS is a 133 beds hospital which offers outpatient treatment, emergency and diagnostic facilities as well as specialized services in mother and childhood center, intensive care unit and surgical facilities.
https://www.thenews.com.pk/print/923951-overline-fiscal-years-2018-19-headline-us-single-largest-grant-contributor-to-pakistan
He said the US partners with six universities on American Spaces called "Lincoln Corners" in Punjab; several exchange programs take Pakistanis to the US who contribute to Pakistan's development with their newly acquired perspective and experience after joining Pakistan-US Alumni Network (PUAN); Pakistan hosts the world's largest Fulbright Program; the US has collaborated on a range of projects in agriculture, livestock, business development/entrepreneurship, education, health, governance, and energy sectors; vocational training has enabled entrepreneurship opportunities for 10,000 youths in four districts ofSouth Punjab; the US believes that all foreign assistance and investment to Pakistan should apply the highest international standards of openness, inclusivity, transparency, and governance; the US remains one of the largest providers of civilian assistance to Pakistan.
Following are the details of the interview: —
The News/Jang: What is the current scale of cultural cooperation with Punjab, including between governments, non-governmental organizations, and the private sector.?
US CG: Our Public Affairs Section at the Consulate implements a wide range of cultural and educational programs. We work on projects to conserve cultural heritage, sites such as the restoration of the Wazir Khan Mosque and surrounding areas, and we promote economic opportunities through our exchange programs and support for women entrepreneurs. We empower the youth through sports camps and English language training, and we partner with community colleges in Punjab to collaborate with American counterparts to strengthen higher education.
We partner with six universities on American Spaces in Punjab: Lahore, Faisalabad, Sargodha, Multan, and Vehari. At these American Spaces, called "Lincoln Corners," you can find information about the United States, English language learning opportunities, US 'study abroad' advice, cultural programs, and other activities. Visitors gain free access to Wi-Fi and current and reliable information about the US through books, magazines, videos, internet databases, and programs for the public. Visitors can also access cutting-edge technology like 3D printers, virtual reality headsets, and other Makerspace technology.
We collaborate on several exchange programs to bring Pakistanis to the United States. When the exchange program participants return home, we encourage them to join our Pakistan-US Alumni Network (PUAN), through which they can contribute to the development of Pakistan with their newly acquired perspective and experience. There are over 10,000 alumni across Punjab province - a larger network than in many countries around the world. PUAN selects its own leadership every year through a democratic process and acts as a liaison between the US Mission and the community. The US government contributes seed funding for the alumni to take on projects that benefit their communities.
Lastly, through EducationUSA, we provide free advising to prospective students in Pakistan seeking to study in the United States.