Pakistan Foreign Aid Budget

Today’s Fake News: Brought to you by.. <F**k.You!>

Ethar Alali

Published in

Brexit Talk

3 min readApr 21, 2017

by Ethar Alali

So, let’s take a look at this gem.

Hello? Oh, Wrong Number!

The number is wrong. It’s £351.4 million. The number gives us a clue as to when it was created. They’ve taken the UK foreign aid budget in DOLLARS and written it in pounds. The exchange rate on that day, was 1.25498, which puts the creation of the meme at around mid-to-late December 2016 (a bit of CSI there for you ;)

Foreign Aid Budgets, Misunderstanding

Foreign Aid falls into restricted funding streams. Like CICs, Charities and Social Enterprises, who go for contract grants, those funds cannot be spent on anything else.

Foreign aid is targeted specifically at only two forms of aid. Promotion of Economic Development and Welfare (that is a citizenship thing, not benefits in the same sense as the UK system — it’s more like ERDF from Europe). The idea of welfare, as well as promoting education and thus a move out of absolutely poverty, also includes the prevention of a country from falling into a state of crisis like Yemen and thus civil war erupting and breeding disenfranchised terrorists.

Not What it Seems

However, here’s the perhaps embarrassing thing most people don’t know. It’s a LOAN not a Grant!!!

*Shock horror* ;)

This means we make money on the interest. It has to be favourable terms (it’s called “concessional finance” terms), but at the end of the day, we loan Pakistan (as a bilateral agreement, directly to them) and other countries the money and they pay it back with interest.

After all, why would Pakistan want to negotiate debt cancellation? They spend $6 billion a year servicing their Foreign Aid debts.

https://en.wikipedia.org/wiki/Foreign_aid_to_Pakistan#Debt_cancellation

Note, some of it can be a grant if the country thinks it’s appropriate, or if the proportion through an NGO or charity is a grant not a loan, but almost all countries define it as a loan. Note, the UK foreign aid budget includes Oxfam!

https://en.wikipedia.org/wiki/Development_aid

https://en.wikipedia.org/wiki/List_of_development_aid_country_donors

Now, the EU is the biggest donor by far. It loans $81 billion a year to foreign aid, of which $70bn comes from EU member states. This figure is almost 3 times the value loaned by the USA.

Also, the UK is not the biggest donors by GNI (i.e. the Gross National Income income we make). The USA are 20th in this list, but that’s perhaps hardly surprising.

Pakistan Nuclear Programme

The Pakistani Nuclear programme existed way way before foreign aid budgets were created. It came from the arms race between Pakistan and India of course, which was a very very long time ago. Our commitments to foreign aid with Pakistan only started in 2009. So we already knew it had a nuclear programme and a space program when we did it.