Minister obtains direct donation from Pakistan

By Namini Wijedasa-Sunday, April 06, 2014

Officials express concern over bypassing of rules and procedures

The Government of Pakistan has responded to a direct call for funding from Industry and Commerce Minister Rishard Bathiudeen by pledging to give him US$ 1 million or Rs. 130 million outside of established rules and procedures.

The contribution was made bypassing the External Resources Department (ERD) of the Ministry of Finance and sets a precedent for ministers to independently canvass foreign governments and other entities for international aid. Political observers pointed out that, by the same standards, the Northern Provincial Council should also be able to conduct dealings with donors for projects of its preference.

As the Sunday Times exclusively reported in December 2013, Minister Bathiudeen approached Pakistan’s Prime Minister Nawaz Sharif to secure assistance for a housing scheme for Muslims in the North. He got the help of Prime Minister D.M. Jayaratne to forward a written appeal to Premier Sharif through Pakistan’s High Commissioner Qasim Quereshi.

The Jathika Hela Urumaya and the Janatha Vimukthi Peramuna were among those that objected to the violation of protocol and standard procedure. But now, the Pakistan High Commission has delivered a letter to Prime Minister Jayaratne, thanking him for his letter of January 19, 2014. The PM’s note was a covering document to Minister Bathiudeen’s letter requesting financial assistance for Muslim IDPs.

The response, signed by Premier Sharif, states that he is pleased to make a contribution of US$ 1 million or Rs. 130 million. He has, in effect, acceded to Minister Bathiudeen’s request for financial assistance. The money has been pledged notwithstanding the fact that neither the Prime Minister nor any Cabinet Minister is entitled to write directly to a foreign source seeking financial assistance.

An ERD spokesman said there were two ways to secure funding for projects. One was by export credit which is channeled through Exim Banks in various countries and requires Cabinet approval. The other is for ministries to seek funds through the ERD.

“The whole mandate for engaging with development partners lies with the Finance Ministry, especially the External Resources Department,” the spokesman said. “An annual needs assessment is done. Based on that, line ministries forward their project proposals to the Department of National Planning which evaluates them. Once the projects are approved, the Department of National Planning assesses whether local or foreign funding is required for implementation. If there is a foreign component, it submits the proposals to the External Resources Department.” The ERD then forwards the approved projects to various development partners forconsideration. Funding is dependent on the interest and financing capacity of the partners. “Everybody must follow these procedures,” the spokesman said. “But what happens, practically, is that some agencies and development partners directly fund NGOs. That is not correct procedure because no one knows how many dollars come into the country through direct payments.”

Asked if, for instance, the Northern Provincial Council can secure grants directly from international donors, he replied: “It can get grants, but through the ERD. It can submit proposals to the National Planning Department through the Ministry of Provincial Councils and Local Government.”

It is not yet clear how the US$1 million of Pakistani funds will be channelled to Minister Bathiudeen. It is likely that a cheque will be handed over by the Pakistan High Commissioner.