A New Kind of Aid for Pakistan

[BanglaBhoot]

The white paper detailing the new U.S. strategy on Pakistan and Afghanistan calls for increasing and broadening development and economic assistance to Pakistan. It echoes recent recommendations by both U.S. and Pakistani policymakers who have argued against too much emphasis on military assistance, the Bush administration's focus. Nonmilitary aid is now seen as an important tool in achieving the core U.S. objective in the region--eliminating terrorist safe havens in Pakistan and preventing them from returning. President Barack Obama called upon Congress to pass pending bills that would authorize $7.5 billion in nonmilitary aid to Pakistan for the next five years and create "reconstruction opportunity zones" to enhance regional trade and foreign investment. But security threats to U.S. personnel, lack of oversight, a weak Pakistani leadership, and mistrust between Islamabad and Washington continue to pose serious hurdles.

Of the total $12.3 billion in U.S. aid to Pakistan since 2002, less than 27 percent went toward development and economic assistance. Meanwhile, growing extremist violence and lack of access to insurgent areas has severely constrained international aid officials as well as their Pakistani counterparts. Anger over suspected U.S. unmanned drone attacks has led militants to kill and abduct (CSMonitor) foreign aid officials in Pakistan's northwest and Balochistan Province. Experts also say the United States lacks the institutional capacity to implement sophisticated, targeted development programs in Pakistan. CFR's Daniel Markey writes any increased levels of assistance programming will require significant expansion of USAID, the U.S. foreign aid agency, and the U.S. State Department.

Experts also say there are serious problems with the way U.S. aid is disbursed. A large portion of development assistance is spent on international consultants and overhead costs, which the new U.S. strategy acknowledges. Some analysts, including the RAND Corporation's C. Christine Fair, say that the United States pursues a policy of supply-driven aid (Washington Quarterly) that measures output, such as schools built, rather than services delivered, such as quality of education. This observation is disputed by Charles North, a senior official for the region at USAID, in a CFR.org podcast.

Some experts argue the aid must be tied to Pakistan's success on stemming militancy, and there should be better accountability for the money disbursed. In a major departure from previous practice, the United States will demand that Pakistan's government make greater commitments to improving security and implementing economic reform. Islamabad seeks $30 billion (Reuters) in aid and investment over the next ten years as its April 17 donor conference in Tokyo approaches. A new report by the Asia Society estimates that aid to the tune of $50 billion over the next five years (PDF) may be required to halt the country's economic deterioration, a sum that would require donations from multiple countries.

There's also been a push for enhancing economic opportunities inside Pakistan through trade. The U.S. Chamber of Commerce and the U.S.-Pakistan Business Council view expanded bilateral economic cooperation (PDF) as an essential component to achieving security goals for both countries. The United States is Pakistan's largest investor and trading partner; however, U.S. tariffs on Pakistan's textiles (over 50 percent of the country's total global exports) undermine its ability to compete in the U.S. market. A 2001 bill to ease textile trade with Pakistan never passed. Reducing tariffs might be even more difficult in the current global economic crisis. CFR Senior Fellow Isobel Coleman told CFR.org that by being closed on the trade front, the United States is punishing the same poor, rural populations in Pakistan that it is trying to help through development aid. "It should be viewed in totality," she said.

A New Kind of Aid for Pakistan - Council on Foreign Relations

 

[omerhhh]

No good will come of this aid if it isn't spent corectly and that is only gonna happen if we even accept it.

 

[BanglaBhoot]

Pakistan Aid Effort Hits Saudi Hurdle

WASHINGTON -- The Obama administration is seeking to help Pakistan raise $4 billion to $5 billion at an international aid conference in Tokyo Friday in a bid to stabilize the finances of the key counterterrorism ally.

Washington's effort, however, is coming into conflict with Saudi Arabia, which is showing only muted interest in supporting Pakistani Prime Minister Asif Ali Zardari, according to people involved in the deliberations.

Riyadh has close ties with opposition leader Nawaz Sharif, who has emerged as a serious challenger to Mr. Zardari. Mr. Sharif, a former prime minister, spent much of nearly a decade in exile in Saudi Arabia, before returning to Pakistan in late 2007.

"The big outstanding question about the conference is Saudi Arabia," said a senior official involved in the aid discussions. "They are closely aligned with Sharif."

Pakistan appears certain to get at least $4 billion from the conference. If Saudi Arabia doesn't contribute to that total, it could undermine Islamabad's efforts to meet its financial obligations. Last November, Pakistan was forced to turn to the International Monetary Fund for $7.6 billion in loans to avert a balance-of-payments crisis.

A pass by Saudi Arabia would also send a signal that it doesn't support the Zardari government. Mr. Sharif's political capital has increased significantly since opposition protests last month led to concessions by Mr. Zardari -- including an invitation to join his party's government, which the opposition leader has so far declined.

Riyadh took part in a meeting last week in Dubai to address Pakistan's finances but declined to make a formal pledge to Islamabad, according to participants in the talks. An official at the Saudi Arabia Embassy in Washington declined to comment Tuesday.

Saudi Arabia has traditionally been among Pakistan's largest aid donors and strategic allies. During the 1980s, Saudi Arabia cooperated closely with Washington and Islamabad to expel Russian troops from Afghanistan.

In recent years, however, the U.S. and Saudi Arabia have taken differing positions on Pakistan's leadership. In late 2007, Riyadh negotiated a deal with former Pakistani President Pervez Musharraf, without seeking American consent, that allowed Mr. Sharif to return home, according to U.S. and Saudi officials.

The U.S. has long voiced skepticism about Mr. Sharif, citing his ties to Islamist parties. Mr. Zardari leads Pakistan's largest political party, which is secular and largely viewed as pro-Western.

Saudi officials have voiced reservations in general about providing aid through multilateral forums because of a lack of assurance on how the money will be spent. Saudi Arabia is also giving Pakistan 80,000 to 100,000 barrels of oil per day. With oil at around $50 per barrel, this equals roughly $5 million in aid per day.

Saudi Arabia is sending a delegation to the Tokyo conference, and an Arab diplomat said he would be "surprised" if Riyadh didn't pledge some money.

The U.S. and Japan are each expected to pledge $1 billion to Mr. Zardari's government Friday, according to the officials involved in the negotiations. The European Union, the U.K. and the United Arab Emirates are each expected to pledge as much as $500 million.

"This support is crucial to assure the Pakistani people that the international community is supporting its fight against extremism," said Husain Haqqani, Pakistan's ambassador to the U.S.

The Obama administration is developing benchmarks that Pakistan must meet to receive continued assistance, something Mr. Zardari's government is fighting. Washington wants to see Islamabad's sustained commitment to democracy and the fight against al Qaeda.

In addition to the $1 billion expected to be pledged Friday, the U.S. Congress has committed to provide $7.5 billion to Islamabad over the next five years, provided it meets these benchmarks.

The Tokyo conference could also serve as another forum for senior U.S. and Iranian officials to meet. Richard Holbrooke, the Obama administration's special representative for Pakistan and Afghanistan, will head the U.S. delegation. Tehran said it is sending Foreign Minister Manouchehr Mottaki.

Earlier this month, Mr. Holbrooke met briefly in the Netherlands with Mr. Mottaki's deputy, marking one of the highest-level U.S.-Iranian encounters since the 1979 Islamic revolution in Tehran.

Mr. Holbrooke has said he wants Iranian assistance in stabilizing Afghanistan and Pakistan and fighting the surge of narcotics trafficking in the region.

Pakistan Aid Effort Hits Saudi Hurdle - WSJ.com