IRIN Interview with EU Ambassador Kurt Juul

European Union (EU) Ambassador and Head of Delegation in Pakistan Kurt Juul has told IRIN that the EU strategy in Pakistan was to prioritise primary education and health care and to encourage the government to do more in public sectors. Juul maintained that for the prosperity and wellbeing of its people, Pakistan should consider developing an educated workforce, address population growth and pursue serious economic reforms, including opening up its borders up for regional trade. QUESTION: How much is the EU aid contribution for Pakistan and how is it used? ANSWER: We have 200 million euros [US $178 million] earmarked for Pakistan, which leads to an annual aid contribution of between 20 million and 40 million euros [US $18 and 36 million], depending on ongoing programme expenditure. In Pakistan our priorities are primary health, primary education and the environment. We were involved in infrastructure projects previously. We will still consider these, but we think that primary education and health is so important for Pakistan that it really needs to have maximum attention. We are putting a lot of effort into our dialogue with the Pakistan government and with civil society. Our major programme is a 71 million euro [US $63.9 million] grant contribution to the Social Action Programme [SAP] that we channel mainly through NGOs. In Pakistan’s northern areas, we work with the Aga Khan Foundation, and have a comprehensive approach to education. We are constructing schools for boys, and we use the same facilities in the afternoon for girls, in order to get them into the system as well. We also have professional development training in Gilgit and Karachi, which is aimed at improving the quality of teachers. Through the SAP, we reimburse certain expenditure in the government’s primary health and primary education programme. It is really a pump-priming exercise, and through our efforts we try to encourage the government to do a bit more [in education and health]. But despite our relatively large budget, we recognise the need for good coordination between other donors and the host government. We cannot do everything. Q: According to the Economist Intelligence Unit, Pakistan has the highest level of illiteracy [78 percent] among the world’s emerging economies. What’s your view on education in Pakistan? A: If you take the 2.7 percent population growth rate per year with the current population of 140 million, then we can assume an increase of almost four million people a year. This is similar to the size of a small European country every year. We have not seen increases in education budgets commensurate with that. I would say that coverage and quality has not improved, and we are concerned about this as it is simply unsustainable in the long term. Q: With respect to health care, is family planning an issue that the EU is involved in? A: Yes. We have had a relatively small-scale involvement, although we recognise that there is much more that can be done. We are trying to work with the government and NGOs to improve the situation to deal with the high population growth. Q: What is your view on the water situation in Pakistan? With a regional drought, restrictions on water from the Tarbela and other dams, the indicators suggest there could be a serious water crisis approaching. Is the EU involved in drought alleviation? A: We have been approached by the Pakistan government to provide emergency aid in response to the drought issue. The EU has a drought-relief programme for displaced people in Baluchistan near the frontier with Afghanistan, where camps have been set up, and we were able to improve their conditions. In the longer term, it’s difficult to control the supply side of the drought, but something can be done about demand. I am sure that a superficial analysis in Pakistan would reveal large potential for improved water management. If in a drought situation you discover - through drilling - that the underground water table is decreasing at an alarming rate, then something must be done about it. The only thing that can be done is to better manage the demand [for water]. This means adopting physical measures to ration water, and it means introducing economic measures so that water used is paid for. Q: What’s your socioeconomic prognosis for Pakistan in the coming years? A: We have just had the Pakistan development forum. This used to be a yearly event, but with the political turmoil it was put off for a couple of years. This was a good exercise, as it allowed the donors and government to get together and have a clear view of the reform process - basically the economic and governance reform in Pakistan. Having such a comprehensive overview shows that the government is taking some hard decisions with respect to the macroeconomic framework and governance. It is important to get the numbers right in order to get donor and investor confidence back. It’s also important that Pakistan be integrated into the trade system with more liberalisation in accordance with World Trade Organisation [WTO] rules. We are specifically interested in this as the EU is Pakistan’s biggest export market by far. Pakistan exports more to the EU than it exports to Japan and the US combined. The main exports to us are textiles, rice and leather products, among a few other less traditional exports. Q: Do you see the International Monetary Fund [IMF] agreement to extend stand-by facilities to the government as a sign of confidence that Pakistan is moving in the right direction? A: I think the stand-by arrangement was a sign that the IMF was relatively satisfied with the progress made by the reform process, and this would have to be followed up by other measures. But the appetite for investing in Pakistan is still low. It is awfully easy to scare investors away, as was done after the nuclear tests and when all the regulations and restrictions were placed on the movement of capital. It is difficult to get investors back now. I think that the government’s decision to put into operation an in-depth economic reform process and its attempt to explain its strategy to partners is a positive sign. I interpret this as a measure of confidence building and a desire for transparency that will help people to understand what is happening in Pakistan. This may encourage traders and investors to come back, although now they have been scared away, this is not easy. Q: India is doing comparatively well in technology and other sectors. To what extent do you think an educated population and good health care influences investor decisions? A: Investors are interested in bigger markets. The EC position is that whatever can be done to facilitate regional cooperation would be immensely beneficial to the economy and the wellbeing of the [Pakistani] people. We can see so many advantages in opening up the borders for regional trade. But South Asia is a region where we don’t yet have an effective arrangement promoting regional trade. The South Asian Regional Cooperation [SARC] is not really operational. Investors would rather invest in a product that you can sell freely in a bigger market than in a smaller market. The fact that Pakistan is a smaller market than India is not necessarily a problem. We have smaller countries in Europe and these are not necessarily poorer. Pakistan has distinct advantages but there is a need for it to take on the internal and external challenges. For example, in order to face international competition, you need to restructure your industry. You need to take care of education so that people can find a labour force and relevant vocational and technical training. This must be clearly understood by policy makers in the country. Other countries have understood these factors, got their priorities right and have done well. And I’m sure Pakistan could do the same.