ISLAMABAD: After the US, Britain, another leading donor state, has asked Pakistan to end ‘corruption’ and carry out the ‘much needed economic reforms’ including widening of tax base, warning failure in this regard could lead to the suspension of British aid to the country.
Almost all donor states and institutions have been urging Pakistan collectively for the much-needed economic reforms, as was done during the two-day Pakistan Development Forum (PDF) meeting, which ended in Islamabad on Monday.
The US and now the UK have come up with individual warnings as well cautioning Islamabad to opt for what they believe to be the right course to improve the worsening economic situation in the aftermath of devastating floods.
The demand coupled with a strong warning from the UK came through Andrew Mitchell, the British international development secretary, who was in Islamabad to attend PDF meetings.
The British minister not only interacted with finance managers but also talked at length over the issue of corruption and economic reforms in meetings with the country’s top leadership including President Asif Ali Zardari and Prime Minister Yousaf Raza Gilani.
“Britain, Pakistan’s leading development partner like the US, is deeply concerned that the external aid donations to Islamabad in the aftermath of massive floods have fallen short of the UN target owing to fears and concerns among the donors about rampant corruption in the government cadres,” a senior official said.
“The British authorities are also worried about what they believe Pakistani government sluggishness as for carrying out the sweeping economic reforms,” he said.
Pakistani authorities are demanding that the financial assistance is handed over to the government in cash directly whereas the foreign donors are reluctant to do that and instead demand the government take steps for ending corruption first and also go for taxing the rich segment of society.
“This row between Islamabad and the international donors is a serious hurdle in the way of to efforts to generate funds required for rebuilding thousands of destroyed houses, schools, roads, power plants and other installations in the flood-affected areas,” a Pakistani diplomat said.
He said the authorities had been urging the international donors to continue with the aid flows instead of any suspension adding that Islamabad was on the path of economic reforms which was evident from the recently introduced bill in the parliament for the approval of reformed General Sales Tax (GST).
