Beyond aid dependency

Twelve years ago, when I chose to work in Pakistan’s development sector, it was not simply a career move but a commitment to human dignity, social progress and equity. I found myself drawn to projects that sought to bridge the gap between policy and the lived realities of ordinary Pakistanis, whether by advocating for women in law enforcement, strengthening human rights protections or designing programmes for marginalised communities.

Like many of my peers, I poured my energy into initiatives that were often funded by international donors. I saw firsthand how targeted interventions could spark hope and small but meaningful change.

Today, that world is collapsing. Once seen as an enduring pillar of international solidarity, global development aid is in retreat. The US suspended over $845 million in aid projects for Pakistan, halting 39 initiatives across sectors like health, education and governance, resulting in the loss of hundreds of skilled jobs. Notably, the suspension affected an $86 million health infrastructure program and a $30.7 million scholarship fund for underprivileged students.

Simultaneously, the UK announced reducing its overseas aid from 0.5 per cent to 0.3 per cent of national income by 2027, marking its lowest level in 25 years. Germany proposed cutting 4.8 billion euros from its development and humanitarian spending, while France advanced an 800 million euro aid cut in its 2025 budget. Even traditionally generous countries like Sweden and Finland have scaled back their commitments. These retrenchments suggest a potential permanent realignment in global aid paradigms.

Donor countries, facing economic strain, are turning inward, treating aid as a dispensable luxury rather than a moral duty or stabilising force. The neo-liberal model that once drove development assistance is faltering.

Yet this funding crisis reveals a deeper flaw: the international development system was always limited. Much aid never reached beneficiaries, cycling back to donor nations via contracts to Western consultants and NGOs. Projects often lacked local input and long-term sustainability. Meanwhile, governments used aid agencies as a smokescreen to shirk developmental responsibilities, redirecting their focus and political will away from systemic, homegrown solutions.

As economist Dambisa Moyo famously argued, aid sometimes “helps the poor stay poor”, creating a cycle of dependency rather than empowerment. William Easterly’s research similarly found that foreign assistance often correlates with weaker governance and slower growth. In many cases, aid simply sustained existing power structures, delaying much-needed reforms.

Pakistan has not been immune to these structural problems. For decades, foreign aid buffered the state from making hard choices – on tax reform, public service delivery, and institutional strengthening. With tax-to-GDP ratios around 9-10 per cent of GDP, languishing among the lowest in the world, the state has historically underinvested in critical sectors like education, health, and human development. Aid served as a patchwork, masking the gaps rather than filling them sustainably.

Yet, despite its flaws, all the development work achieved cannot be dismissed. Every workshop for gender-sensitive journalism, every policy brief pushing for the rights of marginalised communities, every fellowship programme designed to empower women in public services – these efforts mattered. They touched lives. They demonstrated what is possible when resources, commitment, and community engagement align.

Therefore, the aid model’s collapse leaves professionals like me at a crossroads. We are grappling not just with shrinking job opportunities and financial insecurity but also with the emotional dissonance of seeing decades of work threatened. We are asked: Was it worth it? The answer is yes, but only if we learn from this moment and change course.

The truth is, Pakistan can no longer afford to operate within an externally driven development model. While disruptive, the global wave of aid cuts presents an urgent opportunity to rethink and rebuild a development paradigm rooted in domestic strength and strategic autonomy. A sustainable framework must be anchored in diversified local funding, a redefined role for civil society, and institutional mechanisms for accountability.

To navigate a post-aid world, Pakistan’s development sector must tap into a broader pool of domestic funding. Private philanthropy already contributes an estimated Rs240 billion annually to social causes and holds significant untapped potential if supported by clearer tax incentives and better transparency. Corporate social responsibility spending, if aligned with national priorities and channelled into meaningful partnerships with local organisations, can drive high-impact interventions. Meanwhile, the growing space for impact investment and social entrepreneurship offers new pathways to finance scalable, socially driven innovations.

This reconfiguration also demands a fundamental shift in the role of NGOs and civil society organisations. Rather than acting as passive implementers of donor projects, they must emerge as advocates of systemic, locally grounded change. With deep roots in communities, they are uniquely positioned to raise marginalised voices, influence public policy, and serve as watchdogs for equity and justice. Civil society must also function as an incubator of innovation – piloting field-tested health, education and climate resilience solutions that governments can adopt and scale.

Lastly, the government must reclaim its primary role in development and fulfil its constitutional responsibility to invest in human development through tax reform, improved budget utilisation, and institutional rebuilding. This means making serious investments in public welfare, rebuilding institutions and utilising the non-profit sector’s enviable capacity and community linkages to partner in an indigenous development paradigm.

Ultimately, development must no longer be framed as charity, but as a right that can only be secured through citizen engagement, government leadership, and locally aligned partnerships. The future of Pakistan’s development sector lies not in recreating the donor-driven models of the past but in building a resilient, homegrown ecosystem that enables long-term transformation.

The end of the old aid order is not a tragedy but a wake-up call. It is a chance to correct course and build a development model truly owned by the people it serves. So, for those of us who have spent our lives in this sector, this is not the end. It is a beginning – a harder, more uncertain one perhaps, but a more authentic one too. We will continue to stand our ground. We will continue to work for dignity, equity, and progress – not because of donor contracts, but because it is what Pakistan deserves.

The writer is a project management expert and human rights advocate who has worked on institutional reforms and development initiatives across Pakistan for over a decade.