Nikolai Astrup is a relatively new minister for development cooperation in my home country Norway. He is himself a rich man and he represents the centrist-conservative party ‘Høyre’ in parliament. He has recently suggested that Norway should play a ‘global leadership role’ in development aid and more. Good and well, I would say, and Astrup is a smart man. Yet, I agree more with Catharina Bu, a researcher in the left-leaning think-tank ‘Agenda’, who has suggested that before he even dreams of getting Norway on the map as an aid leader, accepted by the poor countries (as I think Norway was some twenty-thirty years ago), Nikola iAstrup needs to think deeper about aid and trade than he has done till now.

I shall in today’s article discuss key aspects of Catharina Bu’s recommendations to Nikolai Astrup and the Norwegian government, because they will be of relevance to Pakistan, now when all future options are on the table regarding aid and financial assistance to the country. I shall also discuss some basic principles of aid. For Pakistan, the issues are not theoretical and philosophical, a way of getting goodwill internationally, as they mainly are for a rich man like Astrup, and the rich country Norway. For Pakistan, aid and relations with the World Bank (WB), the International Monetary Fund (IMF), and aid organisations have serious consequences, even life and death consequences for poor people.

I believe Imran Khan has earlier expressed scepticism to aid, and the WB and IMF in particular. In principle, he may even be against aid and certainly not liking to be under the thumb of the financial institutions, Americanized as they are, too.

Some twenty years ago, I was a WB staff member in Washington, and I remember well how dictatorial the institution was in its aid policies, not out of good or bad will, just out of a narrow and ideological understanding of development, and the West’s own profit of aid. That time, I dealt with West Africa and the Sahel, with emphasis on education; earlier, I had dealt with the WB in East Africa from the donor-side. Although there were some good things about the WB, it was generally not a positive development agent. In the late 1990s, Pakistan cancelled a so-called structural adjustment programme, which was in those days a corner stone of the WB policies, with emphasis on user-fees and privatization of government services in development. Later, the WB has admitted that the programmes had weaknesses or were outright wrong, but no compensation or repayment have been made to the recipient countries, including Pakistan. Many poor When I that time worked with African countries, we used to say that the WB ‘sacrificed’ a generation’s future due to the misguided policies in the social sectors; development was simply delayed so much by the ill wind cause by the WB – and the sleepy Norwegians and other Western countries bureaucrats, who let the Bank-men walk over them and the recipient countries. What a tragedy.

Hence, I am glad that Imran Khan is sceptical to the whole donor community. However, he has to be a realistic and practical politician, too. Yet, the ball is not only in his court; the donors could do something this time around, if they really want to assist ‘Naya Pakistan’, the new Pakistan, so that it indeed can take off. They could offer Pakistan to delay servicing of its foreign debt for a certain number of years, and even reduce the debt. It should be noted that about 40% of the countries in the world are in a debt crisis, or about to end there, according to IMF itself. Pakistan is not the only country in that serious situation.

My recommendation is that the donors do something significant to help Pakistan at this crucial juncture in its democratic development. Of course, if the financial institutions do what I suggest, it would mean that the bilateral donors would have to pay up for Pakistan’s debt, since the WB and IMF never ever show such leniency. A condition could be that Pakistan increases dramatically its budgets to education and health – which in any case is what PTI wishes to do, and which the donors have spoken about for decades, yes, since before the time I served in UNESCO in Pakistan from 2001-2004. There is a golden opportunity for the donors, indeed the more reasonable European Union, to do something that will help Pakistan out of the ‘education-social hole’ that it is in, much deeper than many poorer African countries, too. I would like to stress that it is the government’s education and health services that must be improved, not the private sector’s, but even that must be better regulated and controlled so the users there also get value for money. In the new Pakistan, as in all other countries, education and health, like security, should mainly be provided by the government. Some services can be implemented by the private sector if it can do it better and cheaper.

Let me now move to key aspects of more ethical and honest international trade, which I know that Imran Khan and we all consider essential. It is easy to criticise those who have done wrong in the past, yet, in a system that was actually sanctioned by the internationally community. In future, we should develop a new system and standards rather than be witch hunters.

In Christina Bu’s essay in the Oslo newspaper ‘Dagbladet’, 04.08.18, she advised the Norwegian development aid minister Nikolai Astrup to take initiative to establish an ‘International Convention for Economic Transparency’. That would make Astrup and Norway liked among ordinary people in developing countries. She says that we have over the recent years gotten more insight into how the tax havens operate, but we haven’t taken concrete steps to develop a new system and culture for how the big companies and rich people should be allowed to operate ethically. In the past, it was allowed for Nawaz Sharif and other rich businessmen to use tax havens; even today, it is allowed. We criticise it, but if the money is not being whitewashed that way (although a lot may be) it is part of what is permitted in international business. Let me recall that when I worked at a Norwegian embassy in Africa some 25 years ago, we used to transfer payment to at least one Norwegian-owned company’s Cyprus account. It was morally wrong, but legally, it was acceptable, maybe under doubt – even by those ‘honest Norwegians’.

According to researcher Christina Bu developing countries are every year losing some 200 billion dollars due to semi-legal tax evasion by multinationals and other companies owned by rich individuals and groups.

If Nikolai Astrup really wants the world to change course, as he claims, Christina Bu says in her newspaper essay that he could also blow life in a Norwegian report from the Tax Evasion Committee (‘Kapitalfluktsutvalget’) from 2009, which suggests more honest international trade. She stresses that in any case the United Nations must take the lead in establishing a new, more ethical international business system and culture. Furthermore, Christina Bu recommends that the World Trade Organization’s ‘Doha Rounds of Talks’, which started in 2001, be revived in some form to contribute to establishing more fair trade internationally, indeed between the South and North.

I believe it would be important for Pakistan to play a leading role in these broader international changes, which will benefit Pakistan concretely, but it would also show the world some of what ‘Naya Pakistan’ is all about. To go after those who have exported capital from the land, including having used tax havens, is just one aspect, as I have said above. More important is to play a constructive role on developing the new system for more ethical and honest international trade culture, indeed with regulations. Since business is often not all that ethical, it is only through the development of a new system and culture that we will all become better – and over time, even the business community will find it acceptable and even good for them as well. In the end, all would like to contribute to development and prosperity, not only amass profit, stepping on and being carried on the shoulders of  others.

 

n            The writer is a senior Norwegian social scientist with experience in research, diplomacy and development aid.