Lethal effects of bad governance impede a shift of sustained growth, as external support cannot be effective in the presence of bad governance.
According to William Easterly, the “Big Push,” must involve the investment and actions to tackle the country’s developmental constraints, which could enable a country to have the state of “takeoff.”
After a one-time shift from zero to self-sustained growth, aid would no longer be needed for the respective country. Data collected from eight countries including China, Hong Kong, India, Singapore, Thailand, Indonesia, South Korea and Taiwan, between 1950 and 1975 interestingly suggests that only the three latter recorded a positive aid to GDP ratio for their one-time shift. Similarly, a ten-year moving average between 1970 and 1999 correlating aid and growth in Africa showed a decline of per capita growth with an increase of aid as a percentage of GDP.
Recently, the US resumed the banned aid; issuing $125 million for Pakistan’s F-16 fleet. Earlier this year, the “big push” of the Pak-IMF agreement tried to knot Pakistan’s unstainable economy and growth. Pakistan has remained one of the largest recipients of the US support from time to time. In 2002, Pakistan was the highest foreign aid recipient in the world (about $2.1 billion). But unfortunately, the country has still failed to attain a self-sustained growth rate to complete a “takeoff” stage.
The paper entitled “Generous yet unpopular: developmental versus the political role of post-9/11 US aid in Pakistan,” described the failure as a consequence of an overt interest of the US aid in gaining political and security objectives rather than the country’s development
Simultaneously, a research paper on “Foreign assistance and economic growth: evidence from Pakistan 1972 – 2010,” shows the negative impact of foreign assistance on the country’s economic growth. Moreover, the USAID also fails to win the hearts and minds of a common person.
The paper entitled “Generous yet unpopular: developmental versus the political role of post-9/11 US aid in Pakistan,” described the failure as a consequence of an overt interest of the US aid in gaining political and security objectives rather than the country’s development.
Although USAID’s program has few positive outcomes in the poverty eradication, the progress is not significant in the broader context. Therefore, the multidimensional perspectives and its effects on aid’s success rate is necessary to analyse the current situation.
Indeed, IMF is a consequence of multiple causative factors (external and internal), where geopolitics intends to design specific circumstances for the IMF’s invasion in the state policy matters. Political factors, purchase of products and consultation from the donor agencies are some reasons behind limiting the aid’s effectiveness and constraining the country’s growth. Besides, a lack of political commitment provides a strong base to strengthen this external pillar.
Jeffrey Sachs in his book “End of Poverty,” explains the “poverty trap,” where no margin of income, more than survival, could be invested for future. Ultimately, the poorest cannot break this trap. Moreover, more than the poverty traps, lethal effects of bad governance impede a shift of sustained growth, as external support cannot be effective in the presence of bad governance.
On the one hand, a lack of visionary leadership creates a parasitic nation with a further trickle-down effect: an individualistic not collective thinking. Unfortunately, our leadership wants to secure the five-years tenure without foreseeing the 40-50 years’ effects on the aid prevailing nation. On the other hand, a common person wishes for a miracle without self-effort or thinking out of the box to find the solution to daily challenges. From top to bottom, everyone blames others for not having appropriate circumstances.
It is time to think out of the box to make a comprehensive plan with a far-seeing approach to evaluate and tackle the present and upcoming challenges. It is time to own your responsibility to create communal results to finish the “takeoff” stage. Without a personal self-believe and responsible behaviour, collective results, at the national level, are impossible.
As Kieran Revell puts it so thoughtfully, “it is never about what others can do for you, it must always be about what you can do for yourself and others, continue to contribute and you will continue to receive.”
Thus, the time has come to know the answers because everyone only knows the problems. The world is full of examples, which show the proven success of different interventions, time and again. Cost-effective financial strategies, comprehensive policies, wide-range investment plan and good governance are required to achieve the desired goals. We should utilise our human, business, infrastructure, natural, institutional and knowledge capital to successfully end the “takeoff” stage and become a self-sufficient nation.
The author studies public health with a focus on nutrition at the Medical University of Vienna