Since the time of independence Pakistan has been facing macroeconomic exertions, such as vicious circle of poverty, less utilization of available natural resources, unfavorable political circumstances that influenced domestic economy and so on. To seize the deficiency, Pakistan has had to depend greatly on financial assistance made by distant countries. Pakistan has been seeking aid since 1947 from global lenders including International Monetary Fund (IMF), Asian Development Bank (ADB) and World Bank.This financial aid poured mostly in the form of loans or debts with high interest rates. Focal of such assistance is the socio-economic development of the country. Financial assistance once taken as a blessing, appeared as to remove all the dearth of the economy. Resultantly many of the sectors started nourishing at par. Pakistan commenced its way towards developing nation but 2005s earthquake ruined Pakistan leaving its awful economy further worsen.
Though foreign aid showered in the country but, in fact, it directly went to the bank accounts of few effluents and hence with the passage of time, it proved that foreign aid has become a curse instead of becoming blessing, not only perished the confidence of local people but corrupted more government officials. All the authorities here are now seeking more and more aid rather than to rely on their own available resources. Pakistan has already borrowed too much foreign aid in the form of loans and is still borrowing that has reached the historic over $60 billion.
Order custom essay Is Foreign Aid Is Blessing Or Curse? with free plagiarism report
Debt burden is continuously increasing so its interest rates that worth more than the debt itself. Now the economic position is so deteriorated that for the payment of interest, Pakistan tries to get more loans. Pakistan has become now an aid addict and does not make policies to develop their economy with their own domestic resources. Officials do not pay attention for the development of the technology. They just become entirely dependent on others. Major portion of aid particularly commodity aid is misappropriated by the concerned Government officials.
Moreover, when aid is in terms of commodity such as wheat etc, which many times is provided at a very nominal price, discourages local production of that commodity because of higher cost of production within the country. This situation discourages local agricultural production. If donor country has assisted in establishing imported substitution industry then raw material for the industry will have to be imported from loan given country otherwise industry will not continue its production because particular raw material is not available locally.
This causes heavy foreign exchange burden on economy. Pakistan is obtaining foreign aid for bridging gap between domestic savings and investment and also to improve balance of payments position but till now it has not been able to accomplish this task, rather both gaps are continuously increasing. Sometimes aid giving countries interfere in the defense and foreign affairs of Pakistan. That’s why it is said that there are always political strings attached to the bilateral loans. Thus this is to be reveal here that all aid is not for economic rationales but also political.
Most of the politicians misallocate the aid for its appropriate concern so to raise their pay, power and prestige. Thus aid is also promoting greed and selfishness among the leaders of the realm. Pakistan was accessed as an independent nation but Pakistan is now fully dependent on the aid drug to eradicate all the absences. As soon as a new government takes office it is out to woe the US for aid, begs from the Saudis for a few crumbs and looks to countries like China for handouts. This must stop.
To achieve self-respect and start to improve the lives of the impoverished masses the country needs corrective surgery. The starting point should be adopting a culture of austerity and simplicity. The President, Prime Minister, Army Chief and Chief Justice should be given homes and protocol of ordinary citizens. The vestiges of colonial days, the pomp of office must go. Leaders must present themselves as a role model of modesty rather to complex the masses by their luxurious stuff.
One has only to look across the border that how people present themselves in public in simple clothes, sans jewels and accessories, where ministers don’t drive in flashy imported vehicles if a role model is needed. The next step is to generate resources by taxing all. The first step should be agriculture. There is no more favorable time than now. In the past 3 to 4 years produce price including cotton have witnesses a runaway increase and most farmers have had their incomes increase by over 400 percent in three years. Income tax is a failure in Pakistan however consumption tax can be promoted.
All students going abroad for study should be required to get an NOC which would require their parents to explain the source of funds. All property purchase, vehicle purchase and airline ticket purchase should require an NTN number. Put in place consumption taxes. For examples vehicles over 1000 cc should progressively be taxed. Measures such as the above would document the economy and bring more of the black economy into the main stream. With a corrupt bureaucracy, political elite and military this may virtually impossible. So a revolution is needed to unshackle Pakistan.
Did you know that we have over 70,000 essays on 3,000 topics in our database?