Posts Tagged growth

South Asia is a region marked for its turbulent history and its endemic poverty and misgovernance. Much has been written about how certain states in India are worse off than Sub Saharan Africa in terms of social and economic indicators. Or that Pakistan and Bangladesh have millions of people struggling for a meager income to keep their families alive. The truth is that despite the recent gains made in economic growth in most South Asian economies, the structural causes of poverty persist and haunt the national planners.

The World Bank, or the rather grandiose title – the Bank – has remained a major player in the South Asian economies aiming to help these countries in reducing poverty and enhancing economic growth. The Bank has gained more traction in countries such as Pakistan and Bangladesh where the unelected executive is eager to engage with the IFIs and decisions on lending are achieved quickly. India has remained engaged but its complexity and federalism makes transactions more intensive. Having said that the country has emerged as World Bank’s favorite in the recent years. For instance, the Bank, committed USD 9.3 billion in financial assistance to India in the 2009-10 fiscal, more than the aid committed by the U.S. and the European Union. Although this is a small sum for India’s U.S. $1.2 trillion economy, it represents a sharp increase from the U.S. $2.2bn lent to India by the Bank last year  – Bank lending to India has traditionally averaged about U.S. $2.5-3bn a year. Similarly, for Pakistan the average lending level has been around $1-2bn, this has increased lately due to the recent recession and food and energy shocks. (more…)

Pakistan’s dire fiscal situation has resulted in the reduction of development spending by 40 per cent. This does not bode well for the citizens who have been tormented by an energy crisis, persistent food inflation and rampant unemployment. In these circumstances, the development assistance under the Kerry-Lugar Bill (KLB) is much needed. Pakistan’s civilian government braved a media onslaught and the ire of the security establishment for tacitly supporting the US legislation. Other than the rhetoric around the ‘conditions’ drafted in Washington, there was an unstated agreement that the development assistance was welcome.

Months have elapsed and Pakistanis have yet to witness the roll out of the KLB. Global recession and political uncertainty at home underlie the tough days for Pakistanis especially the poor. It was expected that given the urgency of the situation, USAID was going to kickstart the delivery of its interventions. Well, the progress so far has been disappointing.

First, there seems to be no public sign of a consensus within the US bureaucratic machine how the aid under KLB will be delivered. Unconfirmed media reports suggest that the political versus the bureaucratic channels are not on the same page. The ‘political’ administration is ostensibly managing USAID systems and processes. There may be strategic reasons for that but the net result is that things are delayed. Not long ago, Pakistani government’s procedures were thought to be a problem but the trajectory of US bureaucracy only proves that public sector ailments are common. (more…)

My latest analysis published by The News

We continue to bemoan the failure of democratic norms to take root in our governance culture. True, that the repeated extra-constitutional interventions and direct or indirect military rule have rendered democratic governance as a distant and seemingly unattainable goal. In addition, the emergence of non-state actors, sometimes more powerful than the state itself has also led to formidable and multiple centres of power. In such a milieu, achieving the sustainability of democratic process is a Herculean task. Whilst the intentions of our unelected state institutions and their overt and covert non-state partners are clear, the behaviour of the political elites is confounding.

Not unlike the past, the divisiveness of Pakistan’s political elites has entered into a decisive phase. Fissures are apparent in the post-2008 political accord that led to the unanimous election of the Prime Minister, Yousaf Raza Gilani. The first cleavage, now a recurrent pattern, has emerged in Sindh where the coalition partners — the Pakistan People’s Party (PPP) and the Muttahida Qaumi Movement (MQM) — are pitted against each other for political control of urban Sindh. The latest skirmish is rooted in the evolving arrangements for the local governments and who will end up controlling the third tier of government. However, there is an ethnic dimension to it as well. Karachi remains besieged by sectarian, provincial, and linguistic ghosts that apparently are alive and kicking.

The second disruption in the political compact that led to a transition towards representative rule is unfolding in the shape of a brewing discord between the ruling PPP and the opposition Pakistan Muslim League (Nawaz). The PML-N rules the Punjab and thereby has a stake in the system and power matrix but it is also striving to maintain its ‘opposition’ status. This is why a dual strategy is evident where a few firebrand leaders of PML-N take a hard line against the federal government and the President Asif Ali Zardari. The party does not want to rock the system it says but also considers ‘options’ that lead to a mid-term election or even the premature exit of the President from the office in the wake of Supreme Court rulings on the National Reconciliation Ordinance. (more…)