Trade, Not Aid –is the key to economic prosperity without compromising the 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 provides 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 provides the government or a few elites (who are responsible for the distribution of the AID) with more chances of corruption, the 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 the 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, etc.
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. The USA has provided more than $61 billion to the Islamic Republic of Pakistan in form of civilian and military Aid. In the 1980s, in the 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 the USA to Pakistan, wherein the 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 the USA, KSA, China – needed the military power of Pakistan for different purposes at different times. USA is always been the main AID provider to the country, where a major portion of AID is always dominated by the Military side as the USA needed Hard power of the country, War against USSR, War against Terrorism were the main projects where Pakistan was provided with AID as compensation to the scarifies and contribution of Pakistan to help and support the USA. But, there is always a debate – Trade, Not AID. There is always a criticism that whenever AID is provided, the major portion of AID is conditioned by the provider, very less or no options remain for Socioeconomic developments. There are examples where countries denied AID and prioritize TRADE – starting from the list of Developing countries, they are now economically prominent countries. The best example is China, which rejected AID in 1949 and concentrated on TRADE is the world’s fastest-growing and 2nd largest economy of the world after the 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 the 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 the war against terror. Mr. Khan often compares AID by the USA in the war against terror with the loss Pakistan faced in the form of finance, infrastructure losses, number of deaths, etc. Pakistan wants TRADE relations with the USA for a 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 into the economy of Pakistan but even today, the 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. The sovereignty of the country is often compromised in the case of AID – For example, the Kerry Lugar bill was accompanied by harsh conditions for 5 years. Saudi Arabia is the country that often influenced the policy of Pakistan, just because KSA was an AID provider to Pakistan like many critics believe that the 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 of 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 for the last 2 decades, because they are investing heavily in the sports industry (regardless of game, cricket, football, etc). They also rejected decade long continuous AID plan by the UK (AID of 280mn), India replied to this “AID offer” as a grain size to the economy which policymakers in India were foreseeing at that time.
Corruption prevails more in AID rather than in TRADE. For example, in the war against USSR, Pakistan was provided with notified AID – According to the Brussels group (policy-making group of EU), Most of the AID in the war against the USSR was pocketed by civilians and military ELITE as a 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 is often accompanied by such conditions which take most of the AID back to the donor. For example, Kerry Lugar Bill took a major portion of AID back to donors as the project was distributed through USAID, main employees were from donor countries – 34% of total AID were back to donors 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 a stable economy, no need to raise taxes “.
To conclude, looking at the steps taken by the present government in the Islamic Republic of Pakistan, the 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, the European Union, etc. Trade agreements with China, Russia, and many more – Looking at all this one can predict the future of the importance of TRADE for a stable economy in Pakistan.
