A Slow Tsunami of Assistance?

This post was written by Eva Baker ('12), Mike Tierney and Michael Weissberger.

UPDATE: Sunday, August 29th:  For a different look at the issue of historical and forward-looking aid flows to Pakistan, see the excellent post by Molly Kinder and Wren Elhai from the Center for Global Development entitled "Pakistan Aid Facts."

That post is a great compliment to this one because it does a number of different things that we don't do here, such as:

1. While our historical data on U.S. assistance to Pakistan ends in 2008, Kinder and Elhai show U.S. aid projections up through FY 2011 budget request.  One very cool thing about their data (from the U.S. State Department) is that even before the floods the U.S. was planning a massive shift the sectoral allocation of aid to Pakistan away from health and education toward infrastructure projects.  One of the points of our original post was that Arab donors focused on infrastructure, whereas Western donors have not.  It appears that may not be true going forward.

2. While our data on aid to Pakistan comes directly or indirectly from donors, Kinder and Elhai also use data from the recipient (the State Bank of Pakistan), which presumably has a pretty good idea of who gave how much money to Pakistan (though this might not count some off-budget development assistance).

3.  Point #2 illustrates a shortcoming of AidData data for certain donors.  Some donors, like Saudi Arabia, do report project level data from some of their government agencies (the Saudi Fund for Development).  But they don't publish project level data (or in some cases even aggregate data) from Finance Ministries or line agencies that also allocate development assistance.  This point is addressed by Debra Shushan and Chris Marcoux here.  This may explain the huge differences between estimates of Saudi assistance to Pakistan over the past decade.  It turns out the Saudi Fund for Development has only given about $30 million over the past decade, but when all grants from all Saudi government sources are included, Pakistan reports receiving about $137 million per year between FY 2004-2009.

4. Kinder and Elhai have cooler pictures.

Speaking of cool pictures, this graphic might cause critics of Saudi stinginess to change their tune.  When calculated on a per capita basis, the Saudis are among the most generous donors to Pakistan's flood relief -- second only to...Kuwait.

Original Post from August 24...

The humanitarian crisis caused by the recent floods in Pakistan highlights both how important international assistance is in any response and recovery effort, but it also illustrates how much more efficient such a response could be. Growing estimates of the objective need (4 million homeless, many more at risk of malnutrition, waterborne disease and exposure) contrast with a shortfall of humanitarian assistance. Estimates of the amount of aid required for the relief effort have skyrocketed to around $1 billion over the coming months, which does not count the reconstruction costs.

These current appeals should be understood in the context of historical aid activities in Pakistan. It makes sense to know which donors have been providing development assistance in the recent past and which donors have “boots on the ground” in Pakistan. Much of the immediate assistance being provided by external donors is actually aid that has been re-programmed to assist in this emergency or it is in-kind assistance being provided by foreign military forces (primarily U.S.) located in the region. Therefore, it makes sense to know who the traditional donors are and whether they are operating in Pakistan. It also makes sense to know where these development projects are located at the sub-national level, since this would dramatically enhance the ability of Pakistan's government to coordinate the donor response and would enable donor organizations on the ground to efficiently re-program their own assets. Unfortunately, to date donor organizations do not report the location of their aid activities in any systematic manner.

AidData has the most complete historical picture of international assistance to Pakistan. These data include aid from traditional OECD DAC bilateral donors, multilateral development banks, multilateral grant-making agencies, and non-DAC bilateral donors (such as Saudi Arabia, Poland, Brazil, Kuwait, etc…).

 

 

Figure A illustrates the total volume of development finance dollars flowing into Pakistan between 1999 ($2 billion) and 2008 ($6 billion). These flows include all aid from official bilateral aid agencies and from multilateral aid agencies that are tracked by AidData. The massive increase in aid during 2003 is partly the result of debt rescheduling, where most of the traditional donors either forgave some portion of Pakistani official debt, or they restructured the debt to provide better terms. The apparent drop in 2009 should be ignored since not all donors have reported their aid flows for 2009 and 2010.
 


There has been much debate about the role of Arab donors in Pakistan since the floods hit a few weeks ago. Figure 1 provides a comparative view of development assistance committed by Arab donors and from the United States, the largest bilateral donor to Pakistan over this time period.

In 1998, after Pakistan tested a nuclear weapon, the U.S. suspended foreign assistance to Pakistan so that only a small amount of humanitarian aid was flowing. However, after September 11, 2001, the U.S. needed Pakistan's cooperation in order to conduct military operations in Afghanistan. Consequently, the U.S. dramatically increased foreign aid (and military assistance) to Pakistan. (The military assistance is not shown on any of these graphs). U.S. foreign aid to Pakistan increases dramatically from around $100 million in 2000 to over $1.3 billion in 2003. The amount of aid increases in the later part of 2001 and stays very high through 2008.

AidData tracks aid from 3 different “Arab bilateral donors,” including: Saudi Arabia, Kuwait, and United Arab Emirates. AidData also tracks aid from 4 multilateral agencies that are financed primarily by Arab governments, including: Islamic Development Bank, OPEC Fund for International Development, Arab Bank Economic Development in Africa, and the Arab Fund for Economic and Social Development. The last two of these multilateral agencies allocate money only to Africa and to other Arab countries. Since Pakistan is neither an Arab nor African country, we should not expect, nor do we observe any aid from these organizations. However, the other 5 Arab donors have all given some development assistance to Pakistan over the past 10 years. The ISDB has consistently given the most, while Kuwait, Saudi Arabia, the UAE, and OPEC have given relatively small amounts of aid in some years, and no aid in other years.

 

 

 


While U.S. aid has stayed relatively high over the past 8 years, ranging from $200 million to $1.3 billion per year, Arab aid to Pakistan shows a clear downward trend. By 2008, only Saudi Arabia and the ISDB were making new aid commitments to Pakistan. (2009 and 2010 should be ignored due to slow reporting by some donors.)

 


In addition to variation in the amount of aid, we also observe dramatic differences in the type of development assistance given to Pakistan by the U.S. as compared to Arab donors. Figure 3 shows the different sectors where the U.S. allocated aid to Pakistan over the past 8 years. About 60 percent of the aid has come in the form of debt relief or direct budget support. This is the most fungible type of assistance -- cash. The next largest sector is Social/Health/Education spending, followed by Food and Humanitarian assistance, which flowed in large quantities after the October 2005 earthquake in Pakistan.

Arab donors allocate their assistance overwhelmingly to infrastructure projects. Whereas the U.S. only provides 4% of its aid for infrastructure, the Arab government donors provide 100% of their aid in the infrastructure sector. The multilateral Arab donors are only slightly more diversified, but again the largest single sector for both OPEC and the ISDB is Infrastructure (as illustrated in Figure 4 and 5 below).

 

 

 


We put ISDB on a separate graph (Figure 5) because it gives so much more money than the other four and because its portfolio is the most diverse. Still, infrastructure aid dwarfs the other sectors of the ISDB portfolio. These aid flows to Pakistan are consistent with previous studies, which find that Arab donors tend to fund infrastructure projects, such as road building, airport construction, hydro-electric facilities, telecommunications, and mineral extraction. While other donors invest a larger proportion of their aid into humanitarian assistance and rapid response activities, Arab donors have traditionally been more active in the reconstruction phase of emergency response. Hence, they are often criticized for being “slow to respond” when there is a Tsunami in Indonesia (2004), an earthquake in Pakistan (2005), an earthquake in Haiti (2010) or the current massive flood in Pakistan (2010). The news coverage is very consistent, if not always fair or accurate, that oil rich Arab countries do not help quickly enough and they are not as generous as they could be. These criticisms are especially strident when the emergencies occur in predominantly Muslim countries.

However, the increased aid from Arab donors one or two years after such emergencies might simply reflect the fact that these donors have experience doing infrastructure work in their normal development projects – hence, their comparative advantage in the relief and reconstruction effort focuses on reconstruction phase.

The 2010 flood in Pakistan has provoked considerable criticism among both Western commentators and Pakistani voices about the slow response from oil rich middle Eastern donors. However, after two weeks the Saudi royal family, which is difficult to distinguish from official Saudi government aid, did pledge to raise $74 million, which is the second largest pledge behind that of the United States at $156 million.

The timeliest data on aid commitments and disbursements to relieve flooded areas of Pakistan (and other global humanitarian aid flows) is published by the UN OCHA Financial Tracking Service. The folks at the UN working on that project report official legal commitments, but they also report pledges that are "uncommitted." That system is updated daily and accessible in this spreadsheet to reflect new promises and actual dollars that are allocated.

 

Tags: aid coordination

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