China has often proved an all-weather friend, especially when business with the traditional patron has turned cold-ish. So never mind the expected stiffness in US aid flows. Part of the disappointment will be offset by increased friendlier inflows, and hopefully, another sizeable part by proactive posturing on part of Islamabad. Two an extent, hints of both trends are found in the Bhasha-Diamer dam example.
With the world bank still non-committal, adding to our disappointment with donors, Beijing’s $4 billion assistance has come at a crucial time for Pakistan. And that the discontent has pushed Islamabad to diversify its funding base, approaching the Saudi Fund for Development and Japan Bank of International Cooperation, can rightly be seen as a long-term positive for Pakistan. Anything that forces the government machinery out of its inertia is welcome, even if it causes a hiccup or two in the process.
Funding and other bottlenecks only underscore the importance of the project. In addition to relieving the power sector’s unbearable burden, it will bring compound benefits. These include helping save foreign exchange, supplementing irrigation supplies, mitigating downstream flood damage and above all, it enhancing Tarbela’s potential life by 35 years.
At a higher government level, the project also demonstrates the virtues of prudent planning and intelligent application of foreign aid. For years our political and financial machineries have diverted aid funds to non-development heads, eroding the people’s trust to no small extent. Projects like the dam will not only aid the real economy in the long run, they will also provide crucial fiscal expansion in the immediate term. Projects that provide employment, stimulate consumerism and engineer the second round multiplier will go a long way in countering persistent stagflation. We will follow these developments closely, and press for wider application when the narrative starts taking definitive shape.
