Britain is giving £300m of taxpayers’ money to a controversial programme of cash handouts in Pakistan which is accused of bankrolling the re-election campaign of Benazir Bhutto’s former party.
In evidence to a parliamentary inquiry, a leading development economist said the Benazir Income Support Programme was being used to buy support for Mrs Bhutto’s widower, President Asif Ali Zardari, and his party.
Ehtisham Ahmad, a visiting fellow at the London School of Economics, said Britain’s Department for International Development (DfID) was pouring money into a scheme riven by “clientelism”.
“It is not stolen to the extent to which previous cash transfers were stolen, but this is the mechanism – which is funded partly by DFID – to make friends and influence people. This is the re-election campaign of Mr Zardari, which is funded by DFID,” he said. “Well done.”
The Select Committee on International Development is due to publish its report into aid to Pakistan on Thursday.
Britain has rapidly expanded its assistance in recent years. Pakistan is on course to become the biggest recipient of UK aid, receiving £450m per year by 2015.
The programme has many critics. Pakistan has one of the smallest tax bases in the world and two-thirds of its politicians pay no income tax at all, yet the country can still afford an expanding nuclear arsenal.
Cash handouts are one of the key planks of British aid. Half the £300m will be given to families to help lift them out of poverty, while the rest will be used to encourage parents to send children to school.
A checklist is used to identify those in need and the government of Pakistan is spending more than £2bn over the next five years.
The programme is despised by opposition parties who complain its name means many people believe the money comes from the Bhutto family rather than the government.
It has been hit by repeated allegations of corruption and claims that officials from the Pakistan People’s Party – now led by Mrs Bhutto’s son Bilawal – have obtained lists of beneficiaries for follow-up visits in which families are told to remember where the cash has come from when they vote.
“The fact that it is called Benazir Income Support Programme tends to suggest that there is what is called clientelism,” Dr Ahmad, who held several senior positions at the IMF, told The Daily Telegraph. “The more you give the more benefit there is to the party that bears the Bhutto name.”
Critics such as Imran Khan, the former cricketer who has made corruption the centre of his push to become prime minister, also warn that Britain’s surge in aid will not produce sustainable results. The hundreds of millions of pounds remove any incentive for the Pakistani government to introduce unpopular tax reforms, he says.
He told The Daily Telegraph that BISP was nothing more than a scam to “buy votes”.
The issue has become particularly heated as the country prepares for elections on May 11.
The biggest opposition party, the PML-N, said it would overhaul the scheme and rename it the National Support Programme to avoid the taint of politicking. In a dossier of allegations, it concluded the programme was riddled with “rampant corruption, nepotism and embezzlement”.
A spokesman for DfID said the UK was politically impartial in Pakistan.
“Our development assistance is based on need and effectiveness, not politics,” he said. “The Benazir Income Support Programme Act was unanimously passed and supported by all political parties in Pakistan.”