Pakistan - International Development Committee Contents


One in three people in Pakistan live on less that 30p per day. Pakistan is likely to miss many of the Millennium Development Goals. However, like neighbouring India and Bangladesh, it is a Middle Income Country, and whilst the UK had decided to end financial grants to India, it is planning to double aid to Pakistan. Nevertheless, we see a case for maintaining bilateral aid to Pakistan not just because of the extent of poverty but due to the security situation as well as the UK's long established ties with the country. However, we cannot advocate that the British people finance, through taxation, the proposed substantial increase in development assistance to Pakistan unless there is clear evidence that the newly elected Pakistan Government is also willing to make the necessary changes so as to contribute more to improving the livelihood of its people. In the past, donor money has not been spent effectively in Pakistan for a variety of reasons. Corruption is rife in a social order based on patronage and kinship networks. Pakistan's rich do not pay taxes and exhibit little interest in improving conditions and opportunities for Pakistan's poor.

Currently, the Department for International Development's (DFID's) main programmes are in education, health and governance. Valuable work is being done. We have been impressed by the early reforms underway in the DFID supported Punjab Education Sector Roadmap. We will continue to watch its development with interest, particularly in light of the forthcoming elections in Pakistan and any resulting change in leadership in the Punjab. However, improvements could be made. We recommend that the DFID Pakistan Governance programme have a greater focus on the rule of law, anti-corruption and a robust tax base, all aspects of Prime Minister David Cameron's 'Golden Thread' theory of governance. We are sceptical of the 'scaling-up' of the DFID Maternal and New-born Health Programme in the provinces without the total redesign recommended in the analysis set out in the report of the Independent Commission on Aid Impact (ICAI) in October 2012.

We fear the DFID country strategy for Pakistan is too 'supply driven' with insufficient ownership by the Pakistani authorities. The UK development assistance programme needs a proactive partnership with evident Pakistani commitment. DFID should look for opportunities to support home grown reformers from all quarters in Pakistan; working with civil society groups and progressive parliamentarians striving for equitable political, social and economic development. How Pakistan chooses to reform is a matter for Pakistan but clearly there needs to be reform to improve the country's services and social indicators. Moreover, in order for programmes to be sustainable they should be institutionalised and not dependent on individual political leaders.

The UK, as a leading donor and long-standing friend of Pakistan, must raise the issues of corruption and tax evasion at the highest levels. They are difficult issues to address, but it is in Pakistan's interest to tackle them now for its future stability, peace and prosperity. Any short term benefits of delay in delivering much needed reforms are vastly outweighed by the longer term costs of inaction. Witnesses have pointed out that historically Pakistan has been able to water down calls for longer term internal reform, notably on taxation, because of the short term geo-political concerns of Western donor countries. This trend now has to end and the UK must work alongside other donors and especially use its influence within the IMF to encourage urgent reform within Pakistan.

In his speech to the World Economic Forum at Davos in January 2013, Prime Minister David Cameron set trade, tax and transparency as the main priorities for the UK's presidency of the G8. Increasing Pakistan's tax take as a proportion of GDP is the key indicator that the authorities in Pakistan are committed to playing their part in equitable political, social and economic development. Accordingly, any increase in the UK's Official Development Assistance to Pakistan must be conditional on Pakistan increasing its tax collection and widening the tax base. We cannot expect the people in the UK to pay taxes to improve education and health in Pakistan if the Pakistan elite is not paying income tax.

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Prepared 4 April 2013