Open Letter to Mosharraf Zaidi on foreign aid

Dear Mosharraf sahib,

On Wednesday, you wrote on Twitter that, “$127 million would have really transformed the Punjab. A whole dollar & forty one cents for each of its 90 million residents.” I agree that that giving 90 million people $1.40 each is not going to change anything. I am confused as to why you characterised aid this way, though, because that’s exactly why aid is not distributed this way.

If $127 million was simply being divided by the number of citizens and given in cash form, it would have very little utility. Rather, aid is distributed in a way that maximizes utility by investing in something like a $16 million grant to a hospital which will provide much more than $1.40 in value to the individuals it services. Those grants, unless I am mistaken, are not intended to constitute transformative change for the poor in Punjab, they are intended to increase the availability of medical care to the poor in Punjab. $16 million may not be sufficient, but it’s hard to argue that it’s not necessary.

According to an Associated Press report last week, the poor are suffering because of a political decision to refuse US aid.

U.S. aid could have transformed Pakistan’s largest maternity hospital, where rats run through the halls, patients sleep three to a bed, women who require C-sections aren’t getting them because only one operating room is functioning, and premature babies risk death because of a shortage of incubators.

That $16 million block grant may not have constituted transformative change for all the poor in Punjab, but it certainly would would have for the families of those who lost their babies due to lack of facilities.

The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities, said Sharif, the hospital administrator.

I know this what not your intention, but I worry that sometimes we lose sight of the fact that frustration does not feed the hungry, and ghairat does not build hospitals. As easy as it is to say that we should sacrifice all to prove a point to the Americans, we are we really saying that we are willing to sacrifice ourselves? Or are we merely willing to sacrifice our poor?

Your other point is valid – that government inefficiencies result in a lower than optimal utility of aid dollars. But this is not unique to Punjab government, or even Pakistan government. All governments struggle to maximize returns on budget spending. The ‘Occupy Wall Street’ protests are, in part at least, a sign of Americans frustration with their own government having budget priorities that don’t maximize value.

Though incompetence and even corruption undoubtedly plays a role, there are certainly other factors that may play an even larger role. In energy and health care, are we using the most efficient technologies available? What is the impact of security concerns on investor decision-making? What is the impact of perceived political instability? Is corruption simply a matter of personal greed, or are there demographic and cultural characteristics that create inefficiencies in resource allocation and distribution?

Local, provincial and national governments all have certain challenges that they face, priorities that must be weighted, and interests that must be considered in determining how to allocate budgetary spending. It’s a complicated and thankless task, which I think you understand better than I. That’s why I get so disappointed by casually dismissive statements like this.

Rather than belittling the amount of aid or government incompetence, I would like to hear more discussion about specific ways to increase budgetary efficiencies and maximize utility so that what is presently merely necessary can move towards becoming sufficient. Providing actionable policy recommendations is much more likely to lead to transformative change than complaining about the status quo, and it will give those of us who look to experts like yourself for guidance a reason to look hopeful to the future.

Kindest Regards,

Mahmood Adeel

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