The Pakistan Poverty Alleviation Fund (PPAF) is said to represent a pioneering effort in private-public partnerships. The initiative is funded by the World Bank, sponsored by a Rs. 500 million government endowment, and is being run almost entirely by the private sector. By their own admission, officials from the PPAF suggest that they are treading on what is generally considered government territory in terms of service-delivery on a relatively large scale. Nonetheless, they feel confident that they can meet the micro-credit needs of poor people, especially those in rural areas, and that the focus should be on efficient service-delivery rather than who does the delivering.

The PPAF experience is hardly novel. Foreign-funded non-governmental organizations (NGOs) have been operating in Pakistan, and in much of the South, for almost two decades now. Their work has encompassed a multitude of sectors including health, education, water supply, income generation, and environment. In most cases, these NGOs operate in vacuums where the state has failed to cater to the basic needs of local populations. Government-mandated programmes such as the PPAF also have a precedent in the heralded rural support programmes that have had an impact more widespread than private NGOs.

The nature of the impact of NGOs or institutions such as the PPAF on the well-being of local communities, both short-term and long-term, as well as the social phenomena of NGO intervention, are issues that can be discussed at length. More important however, is the politics of initiatives such as the PPAF, and what “public-private” partnerships of this kind really mean. Unfortunately, this is an issue that is too often glossed over by our development professionals. PPAF officials claim that donors do not interfere in the actual activities of the institution. Instead, they say, donors interfere only when the institution in question is not able to “understand the problem; doesn’t want to understand the problem or doesn’t know how to understand the problem”. And this is indeed, the crux of the issue.

PPAF officials emphasise their independence precisely because they “understand the problem” exactly the same way the World Bank understands the problem. In the PPAF set-up, there is no questioning the precepts of neo-liberalism, nor the conditionalities that the World Bank, the Asian Development Bank and other international financial institutions (IFIs) impose on Pakistan. The IFIs have loaned millions of dollars to the government of Pakistan for the Social Action Programme (SAP) and National Drainage Programme (NDP), and observed tamely as much of this money was mismanaged. The World Bank, ADB, IMF and others will happily dole out money to institutions such as the PPAF so long as the overall policy paradigm that the government of Pakistan adopts is to their liking.

Previously, structural adjustment was the modus operandi for the IFIs – the principles of private sector investment, elimination of subsidies and price supports, liberalization, and downsizing, among others, were sacred. Structural adjustment has now been replaced by the Poverty Reduction Strategy Papers (PRSPs). Tinkering here and there aside, the above-mentioned precepts have emerged in the PRSPs with even more gusto. The PRSPs are newer and more refined - they are written by recipient governments so that the IFIs do not have to face the heat when the impact of

anti-poor policies starts being felt. The PRSPs are supposedly “participatory”, involving “diverse stakeholders” at all stages to inform the policymaking process. This too is window-dressing. “Participation” is another catchphrase that the PPAF and other development organizations use regularly, much to the delight of the IFIs. Meanwhile, whether there is any genuine participation of local communities in the decision-making process is a question that few ask along the way.

Interestingly, the PPAF management does admit that donors do have an agenda of their own. In fact, they go so far as to criticize direct interventions of the donor community, pointing out that they are poorly targeted, and that the proponents of such programs are rarely interested in the long-term well-being of the intended beneficiaries. Nevertheless, the IFI agenda is hardly stifled even if there is no direct intervention. This is another one of those facts that the PPAF, the government, and most of the rest choose not to discuss.

The assertion that it matters little who implements development programmes in this country is dangerous and disturbing. It is disturbing not because non-state actors should not be involved in development activities – after all, NGOs have been involved in local service-delivery activities for two decades. Rather it is disturbing because the increasing influence of the donor agenda (the IFI agenda in particular) threatens the very sovereignty of the state itself. The state’s decision-making role in all sectors cannot and should not be substituted by any sub or supra-state actor. The fact that it is the government of Pakistan itself that is soliciting funding for private sector initiatives such as the PPAF indicates the extent to which the IFIs influence policymaking in this country. The state’s inability to make independent and organic decisions about the nature of economic relations reflects a deep-rooted problem, and one that is unlikely to be solved anytime soon.

This is not a uniquely Pakistan-specific problem. Policy-based lending has become more and more widespread, and many of the world’s poorer countries face inordinate interference from international donors. It is in these poor and indebted countries that the private sector is given the mandate to spearhead growth strategies. Ultimately, neo-liberalism relegates the public sector to a marginal role in a country’s development, not necessarily in terms of the contribution of the public sector to GDP, but in terms of the actual decision-making power vested in the public sector, particularly in key areas.

Nation-states like Pakistan are paradoxical in many ways – on the one hand, the Pakistani state is a very small player on the world stage. Its dependence on international capital is acute. On the other hand, the state comprised powerful elite’s interests that monopolise resources and decision-making within the country. And in the making of this unfortunate reality too, international capital has a very significant role. A representative of the recently reopened USAID office held a press conference in Islamabad some months ago and clearly stated that the military should have a permanent presence in any elected set-up. Donors have a distinct influence on Pakistan’s political economy. It is absolutely foolish to suggest otherwise. Of course acknowledging this fact offers little to institutions such as the PPAF, and this is exactly why they go about their business quietly while more and more institutions in this mould continue to proliferate. The question is how long can we continue pretending that it doesn’t matter?