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Pakistan: U.S. Development Aid v. Military Intervention

Aid to Pakistan is under threat from both Congress and the public, but it would be smarter to reform the U.S. package than end it.

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Inter Press Service

Amid a spate of calls by U.S. lawmakers to slash aid to Pakistan in the aftermath of Osama bin Laden's death, an influential think tank is calling for greater patience, precision, transparency and humility in implementing Washington's 1.5-billion-dollar-a-year development aid programme.

"Mend it; don't end it," said Molly Kinder, the project director of a blue-ribbon study group convened last year by the Center for Global Development (CGD) which released the 40-page report at its headquarters here Wednesday.

The report, "Beyond Bullets and Bombs: Fixing the U.S. Approach to Development in Pakistan," nonetheless calls for major changes in Washington's approach to development assistance to the South Asian country, beginning with its separation from Washington's development efforts in neighbouring Afghanistan and from its military and security assistance programme in Pakistan itself.

In addition, it urges that the administration of President Barack Obama appoint one person to be in charge of the U.S. aid programme in Pakistan; set up a website with regularly updated information about aid disbursements; hire more senior-level Pakistan staff to administer the aid and engage more with local civil society leaders to help design it; and resist pressure to spend the money too quickly.

The report also urged the administration and Congress to approve new legislation that would spur private investment and enterprise in Pakistan by, among other measures, extending duty-free access to U.S. markets for all Pakistani exports, including textiles, and offering credit and new forms of risk insurance for both foreign and domestic companies that want to invest there.

"While effective aid is essential for strengthening public sector institutions in Pakistan, a strong private sector will play a far greater role in Pakistan's transition toward prosperity and stability," according to the study group, which was chaired by CGD President Nancy Birdsall and included nearly two dozen development and South Asia experts.

The report was released amid continuing controversy over U.S. policy towards Islamabad in the wake of the May 2 killing by U.S. Navy Seals of Al-Qaeda chief Osama bin Laden in Abbottabad, Pakistan, a hill town not far from Islamabad that is also home to Pakistan's premier military academy.

The fact that he had apparently been living there for as long as six years raised strong suspicions here that Pakistan's powerful military intelligence, the Inter-Services Intelligence (ISI) unit, must have known of his presence, although both Defence Secretary Robert Gates and Secretary of State Hillary Clinton, who visited Islamabad earlier this week, have insisted that Washington has no concrete evidence of high-level Pakistani complicity.

Despite those denials, many lawmakers have called for the administration to sharply cut or even eliminate Washington's 3.2- billion-dollar-a-year aid package.

"Right now, there's a pushback against assistance (in Congress), some against the development (assistance), some against military (aid)," noted Michael Phelan, a top staffer for Senate Foreign Relations Committee Chairman John Kerry, Thursday.

Of the total bilateral aid package, 1.5 billion dollars has been earmarked for non-military assistance since 2009 when Congress passed the Enhanced Partnership for Pakistan Act, better known as the Kerry- Lugar-Berman Act after its main Congressional sponsors. It tripled non-military aid for Islamabad.

The bill, which provides 7.5 billion dollars in development and economic assistance over five years, was designed to rebalance the U.S. bilateral aid programme, which, since the 9/11 attacks on New York and the Pentagon, had gone almost exclusively to Pakistan's army; to bolster support for the new civilian government headed by President Asif Ali Zardari; and to reassure the Pakistani public that Washington was committed to supporting the country's development over the long term and not just because it needed Islamabad's cooperation to defeat the Taliban in Afghanistan.

"Two years later, the U.S. development program is not yet on course," according to the new report, which noted a number of flaws in the programme's implementation, beginning with the unrealistically high expectations it created both here and in Pakistan when it was approved.

Indeed, seen in perspective, the 1.5 billion dollars comes to less than one percent of Pakistan's gross domestic product and only about five percent of Islamabad's federal budget. The U.S. military spends that amount in just five-and-half-days in Afghanistan, according to the report.

Moreover, the U.S. Agency for International Development (USAID) was not ready to manage such a large aid programme, with the result that less than 700 million dollars was disbursed under the programme in 2010, the first year it took effect.

Moreover, to the degree that aid has been seen as part of an integrated "Af-Pak strategy", its effectiveness in promoting development in Pakistan has been seriously undermined, according to the report.

Given the much heavier focus by the administration on security issues in Afghanistan and increasingly in Pakistan, as well, long-term development assistance in Pakistan has gotten relatively short shrift, even under the Partnership Act, which lists 11 different objectives of U.S. policy, including such aims as countering extremism and improving the standing of the United States among Pakistanis.

As a result, "aid decisions are politicized and subject to short-term pressures," and lines of authority are often muddled as different bureaucracies compete for attention and resources.

Adding to these problems is the lack of transparency with which the aid programme has been carried out, an issue which Kerry himself warned about in a May 10 letter. The lack of clear information, he wrote, "…creates confusion and unnecessary speculation in Pakistan and limits the potential of the policy community and allies at home."

Besides addressing these problems, Washington should be both more patient and selective in its approach to long-term aid in Pakistan, according to the report.

"Indeed, spending quickly without lasting impact would only confirm Pakistanis' suspicions that the United States is not a credible long- term partner, suspicions that are based on the history of American assistance to Pakistan," noted the report, stressing its recommendation that the Partnership Act aid "not be disbursed immediately", lest it be wasted or reduce the urgency of key policy reforms, such as in Pakistan's energy sector.

The report suggests a possible portfolio of long-term investments that take advantage of USAID's strengths and avoid the worst risks of doing harm.

Such initiatives include providing support for one or two major infrastructure projects, such as investing the Diamer-Basha hydropower project; co-financing innovations in education with the World Bank and the British aid agency (DfID); making health or agriculture a signature priority; and providing small-scale assistance to institutions and civil society groups that promote democratic reforms.

Jim Lobe is the Washington bureau chief of the Inter Press Service and a contributor to Right Web (http://rightweb.irc-online.org).

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