Marshall Plan for Pakistan
By Riaz Haq
CA
www.riazhaq.com
There has been much discussion but little action on the new US strategy to emphasize economic aid for Pakistan, in addition to the concerted NATO-Pakistan military action against the insurgents. The 80/20 rule, as outlined by General Petraeus, calls for 80% emphasis on the political/economic effort backed by 20% military component to fight the Taliban insurgency in both Pakistan and Afghanistan. This rule has led many to speculate about a US-backed " Marshall Plan" style effort to help Pakistan expand the economic opportunity for its young and growing population, vulnerable to exploitation by extremists.
The Marshall Plan, named after General George Marshall, the US Secretary of State after the Second World War, is credited with the rapid economic rise of Europe and Japan from the ruins of the war. The Marshall Plan aid by the US amounted to about 100 billion in today's dollars. Pakistani leadership called for their own "Marshall Plan" earlier this year, saying the country needed $30 billion over the next five years to fight Taliban and al-Qaeda militants.
The United States, United Kingdom and Western allies met in Istanbul recently to draft a $5 billion "Marshall Plan for Pakistan" to help rebuild the swaths of the country destroyed in its war against terrorism. While $5 billion will help in Pakistan's economic recovery, it is really a stretch to compare it to the $100 billion (today's dollars) US Marshall Plan for Europe after WW II.
To put it in perspective in Pakistan's context, let's consider the following: At the end of calendar year 2008 in Pakistan, remittances topped 7 billion dollars, an increase of 17 per cent year over year, led by higher remittances from oil-rich GCC countries, which grew by 30 per cent year on year. Similarly, FDI inflows jumped 100 per cent year over year to 708 million dollars for December, 2008, as the telecom, oil and gas, and financial-services sectors continued to attract foreign inventors, according a report in the Nation newspaper. Annual cash remittances from overseas Pakistanis and foreign direct investments (FDI) in Pakistan in this decade have been far larger and much more significant in economic growth than all of the well-publicized foreign aid put together.
Though the amount of aid appears to be far less than what Pakistanis need and asked for, it does seem that the Friends of Pakistan Aid Consortium, led by the US and UK, is beginning to get serious about the economic component of the fight to save nuclear Pakistan from the potential danger of falling prey to the powerful insurgency plaguing the two neighbors in West Asia.
The Telegraph of London has reported that "Friends of Democratic Pakistan, including ministers from Japan, Turkey, Saudi Arabia, Germany, France, China, Australia and the European Union, met to agree funding and draft in experts to agree a series of projects to support reconstruction efforts and shore up the country's new democratic government. Gordon Brown and Barack Obama will co-chair the group's next meeting in New York next month where the scale of funding and support will be finalized."
The British newspaper adds that " Britain is expected to take a lead role in creating an education task force to explore non-madrassah (religious) schools. It will also play a role in developing new public-private partnerships to accelerate new investment in services. “There’s a bit more openness [in Pakistan] now to discuss these things with friends, the new democratic government is opening up,” said a diplomat."
This reported plan of serious economic aid and expertise, if true, is a step in the direction. But it must not be allowed to become victim of bureaucratic red tape, incompetence and corruption. Such an effort must also address the issues of poor governance and feudal excesses in Pakistan to ensure the effectiveness of the money offered in making a real difference in the lives of the average people of Pakistan in terms of their human development and expanded economic opportunity.
