Aid from abroad or from home?

While the “rigour of austerity” takes hold, the Department for International Development (DfID) is seeing its budget jump by 31.9% - the biggest percentage increase in a single year ever enjoyed by any department in British peacetime history.

The sudden largesse for DfID will ensure that Britain keeps a cross-party pledge to spend 0.7% of national income on overseas development. However, some will question whether this is the correct decision.
DfID’s budget increase will certainly do much good. By 2015, British money will have helped to vaccinate 55 million children against killer diseases and have put 9 million through primary school. These are real achievements that should not be undervalued.

The sad truth, however, is that the governments running some of these countries may have the money to achieve all of the above without financial aid. Take Pakistan. Last Thursday, the International Development Committee published a report into the efficacy of British aid to Pakistan, as the UK Government is planning to double the amount of aid it provides to the troubled nation. Pakistan received £267m in British aid this year and this is due to rise to £446m in 2014/2015. The report urged DfID to focus more closely on supporting the rule of law and anti-corruption efforts.

At a time when spending cuts are taking place at home, people are wondering – why should the British Government step in to solve Pakistan’s problems? As someone of Pakistani descent, it is usually my instinct to come to the country’s defence. “Of course Pakistan is not a failing state!” and “Of course it needs and deserves aid.” The situation is, however, more complicated.

According to DfID, a developing and prospering Pakistan is in all of our interests, as it would reduce the threat of terrorism and illegal migration. Building a stable and truly democratic Pakistan would help millions of Pakistani people who live in poverty and could also build a safer world. As Home Secretary, Theresa May noted, “If you get aid right in certain parts of the world, such as Pakistan, it will reduce the possibility of terrorism on the streets of the UK.”

Leaving that aside, the problem in Pakistan appears not that the state lacks funds to build schools. Instead, the central issue seems to be how the government spends its resources. Pakistan’s national budget for 2012/2013 shows that 54% of all federal public spending goes on the army and debt servicing while education receives a mere 1.9%. Furthermore, large proportions of Pakistan’s wealthiest citizens as well as government officials pay no taxes. And herein lies the true dilemma for the British taxpayer – should UK citizens finance the substantial increase in aid to Pakistan when the wealthy Pakistani minority does not contribute?

Ultimately, aid is a good thing. It provides medicine to the sick, helps children to go to school, and gives shelter to the homeless. It can also contribute to a more peaceful world. According to the latest OECD figures, the UK is the world’s second largest donor of international aid and this is something to be proud of. But what would happen if the Government stopped giving aid to a country like Pakistan? Would rich Pakistanis start to pay tax? Would the country’s generals relax their grip and allow more spending on education? Or conversely, are the risks of cutting aid too great?

This year, Pakistan is set to hold its first elections where leadership will pass from one civilian government to another. How the next government chooses to reform is a matter for Pakistan, but some will say there needs to be reform in order to justify continued and increased aid.

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