World Bank loan

THIS is with reference to Zehra Wasim Khan’s letter ‘World Bank loan’ (June 26). For the last 26 years I have worked with the Orangi Pilot Project and other national NGOs and government initiatives on infrastructure for low-income settlements and on related city-level investments.

My findings are that the government delivers infrastructure to the people of Pakistan at approximately four to five times the cost of labor and material involved. The moment a loan comes in, the cost goes up by at least 30 to 50 per cent due to foreign consultants, the posh offices that are set up for them and related costs of logistics.

Owing to international tendering and purchase conditionalities, the cost can go up by another 200 to 300 per cent, if not more. So the people of Pakistan pay back more than Rs20 for something whose cost in labor and material terms is Re1 and which the government of Pakistan delivers at about Rs4. Since repayments have to be in US dollars, the cost has increased considerably in the past in rupee terms due to the devaluation of the rupee.

All this is in addition to interest or mark-up as it is now called. Also, the employment of foreign consultants and international tendering deprives our consultants (who are as qualified as the foreign ones) and our construction companies of the opportunity to grow and develop. This is a major loss imposed on us.

According to a report prepared by Environmental Defence ADB Watch, 70 per cent of all ADB’s projects in Pakistan have been failures or are unsustainable. The ADB’s own evaluation of Karachi and Peshawar projects identifies only one project as successful and that too partially. Most of the World Bank’s investments in infrastructure and physical development projects have resulted in large-scale environmental and ecological damage, especially in rural Sindh, in addition to adversely affecting and in many cases evicting the communities they were supposed to benefit. There are numerous reports to support this claim.

The total investment through loans in the water and sanitation sectors alone since 1977 amounts to $1,982.44 million or Rs118,946 billion. There is very little to show for this enormous investment and as such it does not say much for the international consultants and companies that were employed for this work.

If we are to save ourselves from bankruptcy our persons in power (we cannot call them politicians) and our planners will have to learn how to utilize locally available funds of which there is no shortage. Most of them are wasted because of our failure to build capacity, capability, transparency and accountability in our planning and implementing agencies. One of the main reasons why we cannot do this is because of a manipulated political system which functions on the basis of buying and selling loyalties and promoting corruption.



A letter by Arif Hasan published in Dawn



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