1<br />Nexus Between Aid & Security: The Case of Pakistan<br />Vaqar Ahmed (vahmed@gmail.com)<br />Muhammad Abdul Wahab(wa...
Outline<br />Linking Macroeconomy with Aid<br />Macro – Micro Impact of Foreign Resources<br />Role of Aid in Pakistan Eco...
Linking Macroeconomy with Aid<br />3<br />
Trends 2005 – 2010 ($ Billion)<br />4<br />
Macro – Micro Impact of Foreign Resources<br />5<br />
Results from CGE Model<br />A 50 percent increase in foreign savings:<br />Increase in real private consumption by 2.8 per...
Role of Aid in Pakistan Economy<br />7<br />
Debt Stock Outstanding (US $ billion)<br />8<br />
External Debt and Servicing<br />9<br />
Revenue Mobilization<br />10<br />
Plan –wise Disbursements ($ Million)<br />11<br />
Harsher Terms<br />12<br />
Top 5 Sectoral Disbursements 2000 and 2009<br />13<br />
Net ODA received per capita (current US$)<br />14<br />
Net ODA received (% of GNI)<br />15<br />
Foreign Assistance and Regional Security<br />16<br />
17<br />Three Major War Fronts<br />
Net ODA received per capita (Current US$) <br />18<br />Afghanistan<br />Sri Lanka<br />Nepal<br />Pakistan<br />
Net ODA received (% of GNI)<br />19<br />Afghanistan<br />Nepal<br />Sri Lanka<br />Pakistan<br />
Aid Towards Afghan Relief<br />20<br />
Damage to Pakistan Economy<br />21<br />
Damage to Pakistan Economy<br />This is loss to physical assets and business only. <br />This loss does not account for:<b...
Aid, Loss of Life and Damage to the Economy<br />23<br />
Aid inflows during Various Political Regimes<br />24<br />
Aid Effectiveness in Pakistan<br />25<br />
Paris Declaration Monitoring Survey<br />Around 88 percent of total ODA disbursed by the government sector was recorded in...
Paris Declaration Monitoring Survey<br />However, only three of them (WB, ADB, USAID) account together for 97% of the tota...
Paris Declaration Monitoring Survey<br />The proportion of joint missions and joint analytical work is relatively low at 1...
Priorities for Aid Policy Reform in Pakistan<br />29<br />
Development Planning Process in Pakistan <br />30<br /><ul><li>Preparation of approach paper
Formulation of technical working groups in all sectors
Preparation of sectoral chapters by working groups and their presentation before Planning Commission</li></ul>Consultation...
Planning for Growth<br />31<br />
Planning for Growth<br />32<br />
Planning for Growth<br />33<br />
Planning for (Inclusive) Growth<br />34<br />
Planning for (Inclusive) Growth<br />35<br />
Planning for (Inclusive) Growth<br />36<br />Aid Agenda that focuses on Market based solutions<br />
Policy Priorities for Aid Reform<br />Draft Foreign Assistance Policy Framework<br /><ul><li>Friends of Democratic Pakista...
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Nexus Between Aid and Security: The Case of Pakistan

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  • This slide explains the challenge for us in designing the simulations. Between 2007 and 2009 the exports have infact shown an increase. Exports show some decline in 2009 due to doemestic supply side constraints.
  • Welfare Gain associated with Dutch Disease
  • We have already seen the success of AKRSP in pk that nourishes microfinance through community led programmes.
  • We have already seen the success of AKRSP in pk that nourishes microfinance through community led programmes.
  • We have already seen the success of AKRSP in pk that nourishes microfinance through community led programmes.
  • We have already seen the success of AKRSP in pk that nourishes microfinance through community led programmes.
  • Nexus Between Aid and Security: The Case of Pakistan

    1. 1. 1<br />Nexus Between Aid & Security: The Case of Pakistan<br />Vaqar Ahmed (vahmed@gmail.com)<br />Muhammad Abdul Wahab(wahab.907@gmail.com)<br />Please do not quote without authors’ permission<br />International conference on “Policy Priorities For Foreign Aid Reform In South Asia” <br />29-30 July 2010 at lvy Room, cinnamon Grand Colombo<br />Organized by institute of Policy studies of Sri Lanka and Friedrich Ebert Stiftung, Columbo<br />1<br />1<br />
    2. 2. Outline<br />Linking Macroeconomy with Aid<br />Macro – Micro Impact of Foreign Resources<br />Role of Aid in Pakistan Economy<br />Foreign Assistance and Regional Security<br />Aid Effectiveness in Pakistan<br />Priorities for Aid Policy Reform in Pakistan<br />2<br />
    3. 3. Linking Macroeconomy with Aid<br />3<br />
    4. 4. Trends 2005 – 2010 ($ Billion)<br />4<br />
    5. 5. Macro – Micro Impact of Foreign Resources<br />5<br />
    6. 6. Results from CGE Model<br />A 50 percent increase in foreign savings:<br />Increase in real private consumption by 2.8 percent<br />Given the greater amount of foreign exchange available, imports increase by 3.7 percent. <br />However exports decline by 6.5 percent. <br />Household welfare increases for all segments [highest for rural workers]<br />6<br />Welfare Gain Vs. Dutch Disease<br />
    7. 7. Role of Aid in Pakistan Economy<br />7<br />
    8. 8. Debt Stock Outstanding (US $ billion)<br />8<br />
    9. 9. External Debt and Servicing<br />9<br />
    10. 10. Revenue Mobilization<br />10<br />
    11. 11. Plan –wise Disbursements ($ Million)<br />11<br />
    12. 12. Harsher Terms<br />12<br />
    13. 13. Top 5 Sectoral Disbursements 2000 and 2009<br />13<br />
    14. 14. Net ODA received per capita (current US$)<br />14<br />
    15. 15. Net ODA received (% of GNI)<br />15<br />
    16. 16. Foreign Assistance and Regional Security<br />16<br />
    17. 17. 17<br />Three Major War Fronts<br />
    18. 18. Net ODA received per capita (Current US$) <br />18<br />Afghanistan<br />Sri Lanka<br />Nepal<br />Pakistan<br />
    19. 19. Net ODA received (% of GNI)<br />19<br />Afghanistan<br />Nepal<br />Sri Lanka<br />Pakistan<br />
    20. 20. Aid Towards Afghan Relief<br />20<br />
    21. 21. Damage to Pakistan Economy<br />21<br />
    22. 22. Damage to Pakistan Economy<br />This is loss to physical assets and business only. <br />This loss does not account for:<br />Loss of human life<br />Loss of institutions<br />Loss of investors’ base<br />Loss of skill base <br />22<br />
    23. 23. Aid, Loss of Life and Damage to the Economy<br />23<br />
    24. 24. Aid inflows during Various Political Regimes<br />24<br />
    25. 25. Aid Effectiveness in Pakistan<br />25<br />
    26. 26. Paris Declaration Monitoring Survey<br />Around 88 percent of total ODA disbursed by the government sector was recorded in the government system. This was due to increase in budget support in 2005 and government’s action to align its budget with priorities defined in Medium Term Development Framework. <br />Out of the total ODA disbursed in 2005, 68% was disbursed by using the national procurement systems. In total, 7 out of 16 donors used the national procurement systems. <br />26<br />
    27. 27. Paris Declaration Monitoring Survey<br />However, only three of them (WB, ADB, USAID) account together for 97% of the total ODA disbursed by using national procurement systems. The vast majority of donors disbursed none or very small amounts of ODA by using the national procurement systems.<br />Out of the total ODA provided for technical cooperation in 2005, only 28% was disbursed in support of coordinated capacity development programmes.<br />27<br />
    28. 28. Paris Declaration Monitoring Survey<br />The proportion of joint missions and joint analytical work is relatively low at 12% and 41% respectively. Coordinated missions and analytical work are still only conducted on an ad-hoc basis, but there are plans in place to achieve more systematic coordination.<br />28<br />
    29. 29. Priorities for Aid Policy Reform in Pakistan<br />29<br />
    30. 30. Development Planning Process in Pakistan <br />30<br /><ul><li>Preparation of approach paper
    31. 31. Formulation of technical working groups in all sectors
    32. 32. Preparation of sectoral chapters by working groups and their presentation before Planning Commission</li></ul>Consultations with all Federal Ministries for input<br />Consultations with all Provincial Govts. for input<br />EconomicPlan<br />Sent to all Federal Ministries and Dev. Partners for comments and input<br />Sent to all Provincial Govts.<br />for comments and input<br />Finance Division<br />(Resource Availability)<br />Economic Affairs Division<br />(Foreign aid availability)<br />Finalization of draft plan by Planning Commission and its presentation before President/Prime Minister<br />Submission to National Economic Council (NEC)<br />Circulation of approved plan to all Provincial Govts. And Federal Ministries for implementation<br />Transformation of plan into viable projects/programmes<br />Requirements, programming and negotiations for external economic assistance <br />External debt management<br />
    33. 33. Planning for Growth<br />31<br />
    34. 34. Planning for Growth<br />32<br />
    35. 35. Planning for Growth<br />33<br />
    36. 36. Planning for (Inclusive) Growth<br />34<br />
    37. 37. Planning for (Inclusive) Growth<br />35<br />
    38. 38. Planning for (Inclusive) Growth<br />36<br />Aid Agenda that focuses on Market based solutions<br />
    39. 39. Policy Priorities for Aid Reform<br />Draft Foreign Assistance Policy Framework<br /><ul><li>Friends of Democratic Pakistan (FoDP)</li></ul>Consensus Building  Security Plan  Governance Plan  Socio-economic Plan<br />Kerry – Lugar Bill<br />Pakistan as a Global Player<br />37<br />
    40. 40. Conclusion<br />The empirical literature on the impact of aid on economic development in Pakistan is inconclusive<br />There are more concerning effects at that micro level where society has started to perceive aid as a compensation (and not assistance) for Pakistan’s involvement in war <br />Pakistan urgently needs a new Aid Policy for managing increased aid flows<br />Finally as the reconstruction work takes off in the war-torn areas, there will be increased need for regular/coordinated analytical work by both government and donors<br />38<br />
    41. 41. Many Thanks<br />Dr. Vaqar Ahmed<br />Planning Commission of Pakistan<br />vahmed@gmail.com<br />39<br />

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