Concerns regarding fair distribution of tractors under Benazir Tractor Scheme have once again highlighted the significance of transparency to rein in corruption and to foster long-term economic growth. As widely reported in the press, the scheme is suffering from lack of transparency, with its target market - the farmers - unaware about the number of tractors booked so far.
Many fear that half of 10,000 tractors have already been distributed on basis of political connections. Incidents such as this, question the governments credibility and can potentially ward off foreign inflows in the form of aids, grants and soft loans - at a time when Pakistan desperately needs them and is in the quest to gain confidence of donor community.
China, United States and Japan have already delayed aid disbursement to Pakistan due to lack of transparency and demanded of the government to ensure effective utilisation of money. Transparency issues also weaken the governments argument to channel foreign aids directly through their offices instead of channelling the funds through NGOs.
The government says providing aid through the NGOs is wasteful due to higher administrative and consultation expenses which account for 30 to 40 of the aid money. But with the prevailing level of corruption and favouritism in its own offices, the governments argument, there is no option but to use the NGOs.
Challenged by growing poverty and dearth of funds in the country, the government can not afford to misuse nor mismanage the aid. If the government fails to provide transparency and curb corruption, then long term growth will become even more unsustainable owing to fiscal constraints and lack of funds for development.
To no ones surprise, if FoDP pledges do not materialise, then the government will have to compromise on cutting Public Sector Development funds and will have to rely on bank borrowing to meet its expenditures - leading to low infrastructure developments. This means the government must be prepared to use the aid money judiciously.
In contrast to the Benazir Tractor Schemes, Benazir Income Support Programme (BISP) has been able to achieve higher level of transparency by incorporating proper disbursement and documentation mechanism. Hence, the BISP, which is closely watched by the World Bank, can act as a benchmark for other state-run welfare projects in the future.
But ensuring transparency isn the responsibility of governments bureaucratic machinery alone. The parliament has to take adequate steps as well. Its a bit uncanny to see the lawmakers summon the captain of Pakistan cricket team, Younus Khan, on alleged match fixing charges, while turning a deaf ear to a number of more serious issues such as food hoarding, cartelization, and commodity crises seen over and over in the last few years.
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