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AID TO PAKISTAN CONSORTIUM

AID TO PAKISTAN CONSORTIUM The Aid to Pakistan Consortium was formed in 1960 to lend coherence to the policies pursued and to programs and projects financed by the donor community The group met in Paris every spring to discuss the country’s economic plans for the following financial year It also reviewed important development issues on the basis of the documentation prepared by the World Bank and the government of Pakistan The outcome of the consortium meeting was issued in the form of a communiqué that expressed the collective impression of its members of the economic performance of Pakistan, the country’s mid-term development objectives, and the amount of foreign flows the country required in order to close the “foreign exchange gap” The communiqué usually announced an amount that the consortium members were willing to pledge to Pakistan for the following year The Consortium meeting was chaired by the World Bank vice president in charge of the region that included Pakistan The donor countries that normally attended the Paris meeting included all bilateral and multilateral donors active in the country The number of delegations attending the meeting increased over time, but the volume of assistance provided peaked in the late 1980s In the 1980s, the war in Afghanistan bestowed the status of a “front-line state” on Pakistan, and the Western donors were willing to provide generous amounts of financial assistance to the country to encourage it to resist the Soviet expansion into South Asia The end of the war against the Soviet occupation of Afghanistan and the subsequent collapse of the Soviet Union reduced Pakistan’s geopolitical importance and with it the generosity of the donor community



Over the years, the bilateral donors attending the Paris meetings included: Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States In addition to the World Bank, the Consortium also had a number of multilateral donors, including: the Asian Development Bank, the International Monetary Fund, the Islamic Development Bank, the United Nations Development Program, the International Fund for Agricultural Development, the International Finance Corporation, the Organization for Economic Cooperation and Development, the Saudi Fund for Development, the United Nations High Commissioner for Refugees, and the World Food ProgramIn the 1990s, the members of the Consortium began to put pressure on Pakistan to invest more in social development and to reduce its budget deficit Some members of the group also began to take note of Pakistan’s high defense expenditure, arguing that by committing large amounts of resources to the military, Pakistan was starving a number of sectors of vital investmentsIn 2000, the World Bank, in agreement with Pakistan, replaced the Consortium with the Pakistan Forum, chaired by the finance minister and attended by the entire aid community interested in assisting the country

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