Aug 17, 2011

Beggars can be ghairat mand

While rejecting foreign aid, the PML-N has failed to present a viable plan for raising alternative resources

By Zaigham Khan

Ghairat (loosely translated into English language as honour) may not be the last refuge of a politician, but it surely is a good cover to hide behind. Under fire from many directions, Pakistan Muslim League-Nawaz (PML-N) has flexed its ghairat muscles by announcing to renounce all foreign support in Punjab. Almost as an afterthought, the provincial government explained a couple of days later that soft loans from the World Bank and the Asian Development Bank remained kosher. Will this announcement make people of Punjab dance with joy?

The gesture was apparently meant to counter ultra-nationalist, anti-American parties and groups that are baying for the blood of the two largest political parties and have sights on the League's vote bank. This announcement is certain to please the party's core constituency in urban centres of relatively well-off Northern Punjab where the level of anti-American sentiment, whipped up by the electronic media, is quite high.

By making a show of defiance, the PML-N may also hope to divert attention of the people from damaging revelations made by WikiLeaks and assure its right-leaning voter that it remains as "patriotic" as any Imran Khan. However, by giving up foreign support, Punjab's ruling party runs the risk of angering people in South Punjab where millions of flood-affected families have yet to receive any meaningful support from the government in the wake of one of the most disastrous natural calamities in the nation's history.

People in the South Punjab may feel that they have been ditched by the party ruling in Lahore. In the wake of 2010 floods, PML-N vociferously opposed taking loans for recovery and reconstruction in the calamity-hit areas, insisting that the rebuilding process must be done with "our own resources". This forced the federal government to decline offers of support from international financial institutions (IFIs).

Interestingly, the party had raised no objections when the Musharraf government borrowed billions of dollars for reconstruction after 2005 Kashmir earthquake and Punjab itself is considered a good client by both the WB and the ADB.

Having received generous international help at the time of dire need, people in the flood-affected areas feel less ghairat mand and little xenophobic at the moment. They know that without foreign support their plight would be unthinkable.

Months after the disaster, the areas hit by calamity still clamour for attention and help. Thousands, perhaps hundreds of thousands, are still living in temporary shelters. This is how UNICEF Deputy Representative in Pakistan, Karen Allen, elaborated the situation, "I haven't seen levels of malnutrition this bad since the worst of the famines in Ethiopia, Darfur and Chad. It's shocking, shockingly bad."

Schools and hospitals affected by the floods have not been rebuilt so far and the situation of livelihood remains precarious. Worst of all, as another season approaches, flood protection structures remain in a condition of disrepair. In such situations, people in these areas can hardly afford the bluster and 'ghairat' of Pakistan's urban centres.

There is no doubt that effectiveness of foreign aid is an issue that needs to be debated nationally. Experts have noted that aid can create a "resource curse", much like oil or other natural resources, supporting poor governance and removing the pressure to reform. Large aid flows relieve a government from the need to create a responsive, tax collecting civil service. Aid-dependent governments consider themselves accountable to donors, not to their populations.

In Pakistan, successive governments have tried to bribe the influential groups and affluent classes through tax benefits, rents and subsidies with the help of foreign aid while ignoring the plight of the poor. Pakistan has a lower tax-to-GDP ratio than other Asian countries. A recent World Bank study has estimated that non-compliance leads to a loss of 800 billion rupees to the exchequer and half of this loss is due to corporate sector income tax evasion.

To appease its urban-based middle class voters, PML-N opposes measures to increase taxes and lower subsidies. While rejecting foreign aid, the party has failed to present a viable plan for raising alternative resources. It appears that the PML-N wants to make the poorest people of the poorest region in the province pay the cost of its 'ghairat'.

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