Money Matters

Aid effectiveness

March 20, 2017
By G Farid Khan Marwat


The ultimate goal of development is to alleviate poverty and improve the standards of living of the people. For sustainable growth and development, investment in human capital is imperative and essential. Developed nations and international development agencies provide aid for the development of underdeveloped and poor nations across the globe having low Human Development Indices and poor growth.

Some nations have been successful in utilising aid for indigenous development of those countries while others failed badly due to multiple factors, including poor commitment and corrupt practices in the institutions. Critics point to the fact that donors provide assistance based on foreign and donor driven agenda and resources are being spent in such projects which have little contribution towards sustainable development of the host nations. But there is another aspect which seems more realistic that donors provide support or assistance to projects for a specified timeline and they look towards continuation or ownership of those schemes by the host nations which they unfortunately do not sustain, hence, ultimately the investment is gone wasted.

South Asia has been an important destination of foreign aid over the past decades. Since a large part of aid is disbursed for social and economic infrastructure development in South Asian countries, the volume of aid has tremendously increased in recent years.

Foreign aid has affected economic growth rate in these countries in varying manner. Pakistan has been the recipient of international aid and assistance in many fields for a long time. In 1960s, one of the major roles of the state was utilising foreign funds mainly to build water reservoirs. It was attributed as a decade of development.

With the passage of time, it was realised that people should be the centre of development and initiatives should come from the grass root community rather than imposing external models of schemes. A mushroom growth of community based organisations and local non-governmental organisations (NGOs) emerged in the last fifteen years, and several of these have given remarkable achievements in the fields of social mobilisation and community infrastructure development.

However, there are also several NGOs which have manipulated development funds through corrupt practices. Government of Pakistan has tried to keep local NGOs under a tight noose and has regulated the flow of funds which previously remained unchecked. Previously, due to the lack of check and balance, many organisations took the money that was to be spent on people’s development for their own personal benefits.

In the post conflict and post disaster situation, aid has affectively helped the affected population, whether it was post earthquake or post conflict situations in FATA. It has gone a long way in addressing the immediate needs of shelter and food of the internally displaced persons (IDPs) of Swat and tribal agencies.

The aid phenomenon is still a contested term and is challenged at various levels both in public and government circles. The Millennium Development Goals (MDGs) 2000 presented a paradigm shift in aid priorities, and target areas were identified with increased focus on reducing poverty and improving the living standards.

However, studies on the performance of NGOs and impact upon local development are still scarce and limited studies have been carried out in this regard. Several surveys have proved that NGO aid has significantly reduced infant mortality, while several bilateral aid programmes have not been successful in similar areas.

Reasons that NGO aid may be more effective than government actions is their easy accessibility to the grassroots target population, greater allocation of funds for the countries which have high infant-maternal mortality ratios, and health sector initiatives in combating polio and other deadly diseases.

Besides this, the aid provided by NGOs has contributed little towards improving literacy ratios, as only government expenditures have given remarkable results in improving literacy ratios. This demonstrates that as international donor agencies have adopted strategies for achieving targets on MDGs and Sustainable Development Goals (SDGs), their aid allocation pattern is not consistent with their avowed objectives.

Today Pakistan inhabits 180 million plus population and is faced by daunting issues of development ranging from security, unemployment to health hazards. A comprehensive home-grown strategy is needed to tackle international assistance programmes.

Greater focus should be given to attract foreign investments in human capital and social capital formations. Home-grown schemes and projects should be provided to the aid consortia accommodating the needs of the grassroots with special focus on entrepreneurship and youth skills, which will go a long way in the development of nation.

As government resources are scarce, foreign aid should be meticulously and judiciously used in improving human development indicators. Regular monitoring mechanisms are both the responsibility of the community and government agencies to check the progress and performance of local community organisations implementing development initiatives.

Without any proper monitoring mechanism and safety valves in aid mechanism, things are deemed to fail, which is already happening in several African and Asian countries, like in nearby Afghanistan where warlords are using aid funds for keeping their private armies.

The writer works at the Social Welfare and Women Development Department, Khyber Pakhtunkhwa