Trade, Not AID

By Tabish Abbasi

Trade, Not Aid –is the key to economic prosperity without compromising sovereignty of any nation or country. Trade must always be given top priority over aid, regardless of the circumstances in the country.

In developing countries like Pakistan, Politicians often raise suggestions and ideas for aid instead of trade. As aid provide them with a chance of more financial power at present with compromising future of the nation and the country. Aid doesn’t come in the jurisdiction of the parliament, which provide government or few elites (who are responsible for the distribution of the aid) with more chances of corruption , politicization of aid and many other issues.

To counter this, economic policies must be designed so that parameters like Trade, not aid  – must be considered as most important point in the policy.

Developing countries at different economic (trade related) forums raised their concerns on the consequences of the aid by first world countries (by different economically joint groups). They always asked for more and better trade opportunities and facilities than providing them by Loans.

Aid is the money received by any country that is not to be returned but accompanied by certain conditions Pakistan like many other developing states provided with aid by different countries and Forums in difficult times. USA has provided more than $61 billion to the Islamic Republic of Pakistan in form of civilian and military Aid. In 1980s , during  war against USSR , Europe provided Pakistan with Aid of more than $10 Billion. Kerry Lugar Bill was one of the most prominent aid programs by USA to Pakistan, where in form of Military and civilian Aid – more than $7.7 Billion was pledged. Mainly, the Military sector of the Country is often supported by AID as different World economic Powers like USA , KSA , China – needed military power of Pakistan for different purposes at different times. USA is always been main aid  provider to the country , where the major portion of aid is always dominated by Military side as USA needed Hard power of country , War against USSR , War against Terrorism were main projects where Pakistan was provided with AID as compensation to the scarifies and contribution of Pakistan to help and support USA. But, There is always a debate  – Trade , not aid.

There is always a criticism that when ever aid  is provided , major portion of aid is conditioned by the provider ,very less or no options remains for Socio-economic developments. There are examples where countries denied aid  and prioritize trade  – starting from the list of developing countries, they are now economically prominent countries. Best example is China , who rejected aid  in 1949 and concentrated on trade  is world fastest growing and 2nd largest economy of the world after USA. Hong Kong by rejecting aid  and concentrating on trade  achieved economic development. On the other hand – Pakistan , Afghanistan and South Africa are from the list of the countries who accepted aid  , But still they are facing economic issues . Even their National policies of such countries are always been influenced by aid providers.

Prime Minister of Pakistan , Imran Khan often give emphasis on the quality development of Pakistani products and ease of access to Pakistani industries, Traders to the bigger trade markets like Europe , USA , China , etc. to provide economic stability of the country who is badly hit economically in last two decades in war against terror. Mr. Khan, often compare AID by USA in war against terror with the loss Pakistan faced in the form of finance , infrastructure losses , number of deaths , etc. Pakistan wants TRADE relations with USA for better future of the economy of the country.

Aid can provide a country with a stable economy for a short period of time but Trade is like a long term and more reliable solution. Many times aid  Programs had been injected to the economy of Pakistan but even today , country is searching for Stable and reliable economic conditions. Trade is more about self reliance while Aid is always accompanied by certain terms and conditions by Aid providers. Sovereignty of the country is often compromised in case of aid  .For example , Kerry Lugar bill was accompanied by harsh conditions for 5 years . Saudi Arabia is the country that often influenced policy of Pakistan , just because KSA was aid  provider to Pakistan, like many critics believe that Iran-Pak gas pipeline project was highly influenced by “ Persistent aid by KSA”.

Pakistan and India , both got independence in 1947 – India revised their economic policy in 1990 which resulted in exports of India , GDP growth more than 7% , Foreign direct investments automatically attracted by India due to their stable and better economic conditions. Sports in India are on the rise since last 2 decades , because they are investing heavily in sports industry (regardless of game , cricket, football etc).They also rejected decade long continuous aid plan by UK (AID of 280mn) , India replied this “aid offer” as a grain size to economy which policy makers in India were foreseeing at that time.

Corruption prevails more in aid rather than in trade . For example, in war against USSR, Pakistan was provided with notified aid.  According to Brussels group (policy making group of EU) Most of the aid in war against USSR was pocketed by Civilian and military elite as negligible amount was used for the facilitating public. Trade is the way to boost the economy of the country while aid erodes the economy of the aid receiver country. Aid often accompanied by such conditions which take most of the aid back to the donor. For example, Kerry Lugar Bill took major portion of aid back to donor as project was distributed through USAID, main employees were from donor country – 34% of total aid were back to donor in the form of consultancy.

As said by an Economist “Aid in any country is a perfect way to keep desired, incompetent or bad government in the power. As long as, AID is flowing in, there is nothing to do for the government to work for stable economy, no need to raise taxes “.

To conclude, looking at the steps taken by present government in the Islamic republic of Pakistan, focus is on trade instead of aid. Abdul Razzaq Daud (Government official) while talking to media on September 26, 2021 told that “Government of Pakistan is hoping for preferential trade deals with three main Gulf Arab states (KSA, OMAN, UAE). Adam Mulawarman Tugio (Ambassador of the Republic of Indonesia to Pakistan) on December 14, 2021 In Islamabad said that “A preferential trade agreement (PTA) already exists between both countries, now Free trade agreement (FTA) also reviewed”. Similar agreements were made between Pakistan and Uzbekistan, European Union, etc. Trade agreements with China, Russia and many more – Looking at all this one can predict future of importance of TRADE for a stable economy in Pakistan.

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