"Aid only postpones the basic solutions to crucial development problems by tentatively ameliorating their manifestations without tackling their root causes. The structural, political, economic, etc. damage that it inflicts upon recipient countries is also enormous.” These words were written in a letter to UN to refuse aid by Finance Minister Berhane Abrehe of Eritrea which is the 7th poorest nation in the world.
Can Pakistan (per capita annual income of $3000) do what Eritrea (per capita annual income of less than $700) has already done with UN aid? Say "No" to foreign aid? 
Pakistan Movement for Justice party leader and cricket hero Imran Khan thinks so. Echoing the sentiments of the Eritrean minister, Imran Khan told the BBC recently that "if we don't have aid we will be forced to make reforms and stand on our own feet."
Let's examine in a little more detail the proposition that Pakistan should tell the United States to take its aid and shove it:
1. Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, according to a report by the United States Government Accountability Office.
2. Even if the entire $1.51 billion had been disbursed, it would account for only $8.39 per person, about 0.28%, a very tiny fraction of Pakistanis' per capita income of $3000 a year.
3. Pakistan ended last fiscal year in June 2011 with a small current account surplus of about half a billion US dollars. It received inflows over $40 billion in the form of export earnings ($25 billion), remittances from Pakistani diaspora ($10 billion), and FDI, FII and other accounts. The actual US aid of just $179.5 million out of over $40 billion in 2010-2011 is a negligible figure.
4. Of the $179.5 million received by Pakistan in 2010, $75 million of the US aid funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remained unspent. 
Although refusing US aid will hurt the anti-poverty efforts, higher education and infrastructure development programs to some extent unless made up by raising greater tax revenues to replace it, it is theoretically possible to say No to the US aid without a big negative short-term impact on Pakistan's economy.
However, Pakistan would be well advised to not seek confrontation with Washington even after refusing US aid. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
3. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
4. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Impact of Foreign Aid on Economic Development in Pakistan
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
Threre are more reasons to migrate to Canada
1 year ago
36 comments:
Good documentation, Riaz Saahab. I wonder if the PTI, for example, has done the math to this level. I wish it was easier to talk to them about substance.
I think Pakistan can copy a lot from India vis a vis
1.tax to GDP 17%
2.competetive industrial base building
etc etc
whether u like it or not but pak India etc are in the same cultural sphere and thus can learn from each other just like china learns from japan and south korea as east asians are culturally similar...
One of the few instances where i agree 100% with Riaz.. Its a great article to read.. Just a couple of minor observations and some thoughts
1. The aid of $ 8 per person is in nominal terms so compared to Pakistan's nominal per capita income of $1254, so close to about 0.65%.. But yes, still a minuscule percentage..
2. US might be providing this 1.5 billion directly, but as we all know, it has a significant control over most of the organizations providing additional aid to Pakistan, so while it may be a good idea to reject the aid, it may not be a wise one to say "Shove it" as doing that serves no purpose on the positive side, but may have implications on the negative side
3. Finally, the real deciding factor for the Pak govt (which is directed by Pak Army in matters of external affairs and defence) is the military aid/relations/toys from Washington and not the impact of loss of civilian aid
But all and all, a sound approach imho
can we say the same to our religion and come to 21st century.
For 64 yrs we did nothing to grow our industrial base or economy (unlike our neighbors), you think blogs like yours will change the mindset.
It takes pragmatism to support the shoving – Unless Pakistan shows that its the game changer in Afghanistan, the world media tune is going to play to same old music. Can they do it ? I don’t think so, they have lost the credibility with their own people...
Riaz, Another good article. Would you please shine light on why $1.2 in aid from last year unspent? Is it due to Pakistani government's incompetency or it is due to US not living up to its promises and not releasing the money?
I agree with what Imran is saying but your approach is more pragmatic.
Haseeb,
There are many reasons cited by US govt for slow disbursement of aid to Pakistan, including delays in approval and lack of identification of significant projects. But the key concern has been waste, fraud and abuse by Pak politicians and bureaucrats.
There are now reports that US is going to fund big water and energy projects such as the Bhasha dam. The $12 billion project is located on Indus River, about 200 miles upstream of the existing Tarbela Dam, 100 miles downstream from the Northern Area capital Gilgit in Gilgit-Baltistan region. The dam's reservoir would hold so much water that it could have averted last year's devastating floods. It would also provide enough electricity to end Pakistan's crippling shortages, according to a report in the Guardian newspaper. The massive dam on the Indus river would provide 4,500MW of renewable energy, making up for a shortfall causing up to 12 hours of load shedding on daily basis across Pakistan. The reservoir would be 50 miles long, holding 8.5 MAF (million acre feet) of water.
http://www.riazhaq.com/2011/09/recurring-floods-and-droughts-in.html
Sugar mills have been one of the vehicles of political patronage in Pakistan.
In an August 2011, Zulfiqa Mirza told the media that "Asif Zardari is so generous that if you gave himn a glass of water he'd give you a sugar mill".
In Mirza's case this is definitely true as he himself admitted that he had received the permit to install his sugar mill with the help of Asif Ali Zardari, according to Daily Times.
In a Friday Times Op Ed in Sept 2011, Najam Sethi wrote that "Mr Mirza owes his great wealth (sugar mills sanctioned during the PPP's two stints in power) and power (his wife is the Speaker of the National Assembly) to Mr Zardari's largesse".
No wonder so many politicians own sugar mills that they dominate the business and control its supply and prices to enrich themselves.
The fact that Pakistanis have a sweet tooth is not lost on the nation's ruling elite, particularly the powerful political families and the Pakistani military. While the military owns Fauji sugar mills, more than 50% of the sugar in Pakistan is produced in sugar mills owned by the most powerful politicians of all major parties and their families.
Multiple sources indicate that the mills owned by President Asif Ali Zardari’s family and the ruling PPP leaders include Ansari Sugar Mills, Mirza Sugar Mills, Pangrio Sugar Mills, Sakrand Sugar Mills and Kiran Sugar Mills. Ashraf Sugar mills is owned by PPP leader and incumbent ZTBL President Ch Zaka Ashraf.
The media reports also indicate Kamalia Sugar Mills and Layyah Sugar Mills are owned by PML-N leaders. Former minister Abbas Sarfaraz is the owner of five out of six sugar mills in the NWFP. Nasrullah Khan Dareshak owns Indus Sugar Mills while Jahangir Khan Tareen has two sugar mills; JDW Sugar Mills and United Sugar Mills. PML-Q leader Anwar Cheema owns National Sugar Mills while Chaudhrys family is or was the owner of Pahrianwali Sugar Mills as it is being heard that they have sold the said mills. Senator Haroon Akhtar Khan owns Tandianwala Sugar Mills while Pattoki Sugar Mills is owned by Mian Mohammad Azhar, former Governor Punjab. PML-F leader Makhdoom Ahmad Mehmood owns Jamaldin Wali Sugar Mills. Chaudhry Muneer owns two mills in Rahimyar Khan district and Ch Pervaiz Elahi and former Minister of State for Foreign Affairs, Khusro Bakhtiar have shares in these mills.
http://www.riazhaq.com/2009/09/solving-pakistans-sugar-crisis.html
Pakistan's tax collection declined and fiscal deficit rose to a record 6.6% of gdp in 2010-11, according to Dawn News:
ISLAMABAD, Sept 29: The fiscal deficit during 2010-11 stood at a whopping Rs1.336 trillion — highest in the country’s history and almost 39 per cent of total expenditure and 59 per cent of revenue.
According to consolidated fiscal data released by the finance ministry, the fiscal deficit, excluding payments of electricity subsidies, was Rs1.194 trillion or 5.9 per cent of GDP. However, after inclusion of one-time off-budget electricity subsidy payments of Rs142 billion to Wapda’s power companies, the overall deficit worked out at Rs1.336 trillion or 6.6 per cent of GDP.
During 2009-10, the deficit was Rs929 billion, 6.3 per cent of GDP, and increased by Rs407 billion in a year.
Ironically, revenue collection showed a dismal performance. The total collection declined significantly to 12.5 per cent of GDP against 14.2 per cent in 2009-10, despite a series of additional tax measures introduced in March.
Tax revenue dropped to 9.4 per cent of GDP from 10 per cent achieved in the previous year.
In absolute terms, total revenues amounted to Rs2.253 trillion, an 8.3 per cent increase over Rs2.078 trillion last year.
The tax revenue increased to Rs1.699 trillion from Rs1.473 trillion, by 15.3 per cent.
The growth in total provincial revenue was slightly better at 17.8 per cent.
The total non-tax revenue also declined to 3.1 per cent of GDP from the previous year’s 4.1 per cent, showing widespread erosion of tax collection efforts against the potential.
Even in absolute terms, the non-tax revenue stood at 553.5 billion, about 8.5 per cent lower than the previous years’ Rs605 billion. The federal non-tax revenue declined to Rs491 billion from Rs537 billion — a drop of 8.5 per cent. The provincial non-tax revenues also dropped by 8.5 per cent to Rs62 billion, from Rs68 billion a year ago.
The finance ministry said the total expenditure during 2010-11 increased by 14.6 per cent to Rs3.447 trillion, from Rs3.007 trillion in 2009-10. But the revenue growth of 8.3 per cent did not keep pace with 14.6 per cent increase in expenditure, leading to the huge fiscal deficit.
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Defence expenditure increased by a massive 20 per cent to Rs451 billion from Rs375 billion in 2009-10. Total defence- and security-related grants amounted Rs682 billion (Rs232 billion for security), showing a nine per cent increase over Rs625 billion (Rs250 billion security grants) in 2009-10.
On the contrary, the development expenditure and net lending dropped from Rs653 billion in 2009-10 to Rs514 billion, showing a reduction of 21.3 per cent or Rs139 billion.
The expenditure on the public sector development programme (PSDP) dropped by 11 per cent to Rs461.5 billion from Rs517 billion.
This meant the expenditure on improving the lives of the people posted a sizable reduction when seen in the context of increased prices and deteriorating poverty situation.
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To meet the deficit, the government had to borrow a record Rs615 billion from the banking sector, up Rs311 billion from Rs304 billion in 2009-10.
The non-bank borrowing increased by 8.3 per cent to Rs472 billion from Rs436 billion.
Interestingly, external financing to bridge the deficit posted a reduction of 43 per cent to Rs108 billion from the previous year’s Rs189 billion, showing a falling international confidence to extend financing to an economy battered by a war-like situation and devastating floods.
As a result, domestic deficit financing increased by as much as 47 per cent (Rs311 billion) to Rs1.086 trillion from Rs740 billion.
http://www.dawn.com/2011/09/30/highest-ever-fiscal-deficit-at-rs1336tr.html
US Senator Lindsey Graham threatened US military action Pakistan after Adm Mullen testimony alleging that Pakistan supports attacks by Haqqanis in Afghanistan. Here are some comments by Prof Juan Cole of Univ of Michigan on Graham's statement:
Here are some problems with Graham’s startling suggestion.
The US does not have a prayer of succeeding in Afghanistan without a Pakistani partner. Pakistan is a complex place, and its civilian politicians have a different agenda than its conventional army, which in turn has a different agenda from the Inter-Services Intelligence (ISI). Even within the ISI, there appear to be secret rogue cells. Some ISI officers appear to be hooked up with the Haqqani Network and with terrorist organizations such as the Lashkar-i Tayyiba. But Pakistan has lost thousands of troops fighting the more militant Afghan and Pakistani-Pashtun fundamentalist groups, and it is not a task the US could take on by itself.
Pakistan is a nuclear state. The United States has never fought a major military engagement with a nuclear-armed country, and it would be unwise to begin now. Would you really want to take the risk that they might feel cornered and find a way to deliver a warhead against an American target? In the Cold War, the nuclear standoff was called ‘Mutual Assured Destruction’ (MAD). There is no reason to think that such considerations have lapsed or do not obtain when the US is facing a state with a smaller nuclear arsenal.
Pakistan is a close ally of China as well as trying to keep an alliance with the US. Graham’s sort of talk will have the effect of pushing Islamabad further into the arms of Beijing. China is unlikely to stand idly by as one of its major geopolitical assets in its contest with India is taken out by the United States. That is, US-Pakistan war would very likely become US-China war.
Pakistan has a regular army of 610,000 men, and can call up about 500,000 reserves if it needs to. Some 15,000 Taliban in Afghanistan have been pinning down tens of thousands of US troops, so what would happen if they faced over a million?
Pakistan’s population is at least 170 million. The US was defeated by an Iraqi insurgency in a small country of 25 million; imagine how a country 7 times more populous could tie it down.
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So now Iraq has been devastated and made supine and the US has to be on a war footing with Iran in order to “protect” Iraq from the latter. But Iraq’s Shiite government likes Iran and doesn’t see it as a threat, so Graham would be “protecting” Iraq against the will of Iraqis. Moreover, Graham doesn’t seem to think he needs to ask the Iraqi parliament whether it will permit any US troops to remain in Iraq at all.
Graham keeps trying to find a pretext for the next war, dismayed at the prospect of the US slipping into peace. He had tried to get up a war against Iran, but hasn’t had any takers.
Just as Graham wants to keep a division in Iraq because of Iran, he wants permanent bases in Afghanistan. And now he is looking for a fight with Pakistan, representing himself as “protecting” the US-installed Afghan government from Islamabad. But most Pashtuns would choose Pakistan over Graham any day of the week.
Pakistan’s alliance with the US is a marriage of convenience. Pakistan wants to see some groups, such as the Old Taliban and the Hikmatyar Hizb-i Islami, much weakened. But cells within the Inter-Serices Intelligence appear determined to retain the Haqqani Network, based in North Waziristan, as a means of projecting authority into Afghanistan. That emphasis makes Pakistan both an ally to the US in fighting some Taliban, but makes it only a partial ally, since it has its own reasons to use some of those Taliban to project its own authority and prepare for the peace after the US leaves. This difficult kind of alliance is nothing new in US history. Abruptly turning on such a complex ally and starting yet another war is madness.
Zubair Motiwala quoted in the WSJ story today is denying on GeoTV that Kingho has made a final decision to pull out of part of Thar coal project worth about $3 billion, not the $19 billion reported by WSJ. Motiwala says negotiations are still underway with Kingho to deal with some the issues of tariffs, security and other guarantees raised in discussions with them.
He also pointed that an MOU for a much bigger deal has just been signed with Global Mining Corporation, another Chinese co, worth closer to $20 billion for a number of projects related to Thar coal, including a power plant that will generate uo to 10,000 MW of electricity when completed.
http://www.riazhaq.com/2010/04/abundant-cheap-coal-electricity-for.html
There is some backpedaling in Washington on Mullen accusations against Pakistani after a strong reaction in Islamabad. Here's an excerpt from a Reuters' report:
Mullen, the outgoing chairman of the Joint Chiefs of Staff, softened his rhetoric on Friday, telling a ceremony marking the end of his tenure that the U.S. relationship with Pakistan was "vexing and yet vital."
"I continue to believe that there is no solution in the region without Pakistan, and no stable future in the region without a partnership," said Mullen, who sometimes referred to himself as Pakistan's best friend in the U.S. military.
Obama acknowledged on Friday that Pakistan's relationship to the militant Haqqani network, believed responsible for the Embassy attack, is murky. But he urged Islamabad to tackle the problem anyway.
"The intelligence is not as clear as we might like in terms of what exactly that relationship is," Obama said in a radio interview, when asked about the Haqqani network.
"But my attitude is, whether there is active engagement with Haqqani on the part of the Pakistanis or rather just passively allowing them to operate with impunity in some of these border regions, they've got to take care of this problem," he said.
http://www.reuters.com/article/2011/09/30/us-pakistan-usa-idUSTRE78T57X20110930
Here's an interesting Reuters' blog post talking about Pakistan nuclear weapons as a deterrent not just against India but also the United States:
Pakistan’s nuclear weapons have been conceived and developed as a deterrent against mighty neighbour India, more so now when its traditional rival has added economic heft to its military muscle. But Islamabad may also be holding onto its nuclear arsenal to deter an even more powerful challenge, which to its mind, comes from the United States, according to Bruce Riedel, a former CIA officer who led President Barack Obama’s 2009 policy review on Afghanistan and Pakistan.
Pakistan and the United States are allies in the war against militancy, but ties have been so troubled in recent years that some in Pakistan believe that the risk of a conflict cannot be dismissed altogether and that the bomb may well be the country’s only hedge against an America that looks less a friend and more a hostile power.
Last year the Obama administration said there could be consequences if the next attack in the West were to be traced backed to Pakistan, probably the North Waziristan hub of al Qaeda, the Taliban and other militant groups.No nation can ignore a warning as chilling as that, and it is reasonable to expect the Pakistan military to do what it can to defend itself.
Riedel in a piece in The Wall Street Journal says Pakistan’s army chief Ashfaq Kayani may well have concluded that the only way to hold off a possible American military action is the presence of nuclear weapons on its soil and hence the frenetic race to increase the size of the arsenal to the point that Pakistan is on track to become the fourth largest nuclear power after the United States, Russia and China.
Last month’s military action in Libya, the third Muslim nation attacked by the United States in the ten years since 9/11, can only heighten anxieties in Pakistan. Indeed Libya holds an opposite lesson for Pakistan’s security planners. This is a country that gave up a nuclear weapons programme - ironically assisted by Pakistan’s disgraced nuclear scientist A.Q.Khan – under a deal with the West following the 2003 invasion of Iraq. Suppose for a moment that Colonel Muammar Gaddafi had held on its nuclear weapons, would there have been air strikes then ?
Indeed none of the three countries attacked by the United States had nuclear weapons including, as it turned out, Iraq although the whole idea of invading it was to eliminate the weapons of mass destruction. You could further argue that this perhaps is the one reason why the United States hasn’t taken on North Korea because of its advanced nuclear programme with a bomb or two in the basement.
Kayani and the generals have therefore concluded the only reason the United States may hesitate to use force against Pakistan, should ties break down completely, will be because of the 100-odd weapons it has. It only makes sense to expand it further to make the Americans think twice before launching an action.
But such nuclear brinkmanship cannot come without consequences of its own, and one of them will be India reviewing its nuclear posture. A Pakistan battling a deadly Islamist militancy and beset with economic difficulties but on a fast track to expand its nuclear weapons programme is a nightmare scenario. Riedel says India has exercised restraint on its weapons program me, but seeing an acceleration in the Pakistani efforts, it may well step up production of its own.....
http://blogs.reuters.com/afghanistan/2011/04/09/pakistans-nuclear-weapons-a-deterrent-against-india-but-also-united-states/
Here's a Telegraph story on US climb-down in the latest spat with Pakistan:
Last month Adml Mike Mullen, in his last few days before retiring as America's most senior military officer, said the Haqqani network, one of the most feared insurgent groups in Afghanistan, was a "veritable arm" of Pakistan's ISI intelligence agency.
He accused Pakistan of exporting violence and also blamed the ISI for directing a 19hr attack on the US embassy and Nato headquarters in Kabul on September 13, as he stepped up demands that Pakistan act against Haqqani bases in North Waziristan.
His statement was the climax of a string of apparently carefully choreographed allegations by senior Administration officials – including the US ambassador to Islamabad – that Pakistan's intelligence service was closely connected to the Haqqanis.
However, with relations between the two countries close to breaking point, the US appeared to row back with a series of statements emphasising the importance of the alliance.
On Friday, President Barack Obama made a point of not endorsing Adml Mullen's accusations.
He admitted that the intelligence was not clear on the exact nature of the relationship between the ISI and the Haqqanis.
The reversal has been greeted with glee in Islamabad.
Mr Gilani, who was speaking at Bili Wala in Punjab, said an all-party conference (APC) held last week had been instrumental in forcing the US to back down.
"It is due to APC as well as the unity of Pakistan's political leaders that the US has a sent a message that they need Pakistan and that they cannot win the war without Pakistan," he said. "They have also distanced themselves from the statement of Mullen."
The climb-down also suggests the US knew it had few options to increase pressure, without risking a total breakdown in relations and the deployment of American forces to Pakistan.
"US options are limited as we don't want a larger war in south Asia," said Bruce Riedel, a former CIA officer who advised the White House on Afghanistan and Pakistan in 2009 and a fellow at the Brookings Institution think tank."
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/8804227/Pakistan-claims-victory-over-US-Haqqani-spat.html
Here are some excepts from NPR's Talk of the Nation aired today:
..."The Haqqanis have had sanctuary in Pakistan for the last 30 years, and they are extremely close to the military, the ISI. But I think it's a bit far-fetched to say that ... every attack that the Haqqanis have launched inside of Afghanistan has been directed by the Pakistanis," said Rashid.
"I think the Haqqanis have a lot of autonomy with what they do. They've been the enemy of the United States for the last 10 years, they've been fighting there alongside the Taliban with al-Qaida as well, they have close links to al-Qaida, something that Pakistan has also been fighting against. So it's a mixed bag."
"Earlier there were charges that the attacks on the Indian embassy in 2008 and 2009 were directed by the ISI, but after that, there hasn't been that kind of charge. ... [But] the Americans have been pushing the Pakistanis to go into North Waziristan, which is the tribal area where the Haqqanis are based... the Pakistanis have been resisting ... for nearly three years now. It's very clear, I think, to the American military that the Pakistanis are not going to go into North Waziristan and not going to deal with the Haqqanis. And I think that's what has prompted Adm. Mullen's comments."
Jalaluddin Haqqani heads up the network. Once, "he was a very close friend of American congressmen and senators, [and] he was a guest of President Reagan at the White House," said Rashid. He joined the Taliban "quite late, in 1996, about three years after their movement began. ... His big test came in 2001, after 9/11."
Then, Rashid met Haqqani when the Americans and Pakistanis brought Haqqani to Islamabad to try to convince him to the leave the Taliban and join the Americans in bombing Afghanistan. "Everyone tried very hard to swing him, but he would not leave the Taliban, and he went back determined to oppose the American attack in Afghanistan."
His two sons now command the Haqqani network. One, Siraj, is fluent in Arabic and has "very good contacts with some of the Gulf Arab and Saudi sheiks. A lot of money has come to them from the Middle East over the years... and he's also very close to al-Qaida, and was a close friend of Osama bin Laden."
Siddiqa said there are two views of the ISI's connection with the Haqqani network. The military perspective says "yes, it has contacts, but they're nothing more than just contacts, which any agency would have." On the ground, though, she said people are suspicious of the military's claims, and think the contacts run deeper. "Probably the truth lies somewhere in the middle."
Ambassador Lodhi says Pakistanis see American policies as confused. "Pakistan is being asked to help reach out to the Taliban because President Obama has announced ... that there is no military solution to the conflict if Afghanistan, and peace in Afghanistan can only come through a political settlement."
"So here, on the one hand," she continues, "Pakistan is being asked to reach out to the Taliban, and on the other hand Pakistan is also being asked to go after them." Thus, Pakistanis see the U.S. as following two parallel policies. "It is continuing to step up kinetic activity, while wanting a peaceful settlement. Whereas Pakistan wants to accelerate the peace process ... It doesn't feel that this fight and talk strategy is going to work in Afghanistan."
http://www.npr.org/blogs/thetwo-way/2011/10/03/141016637/who-are-the-haqqanis
Adm Mullen knew and said nothing about US contacts with Haqqanis when he accused Pakistan prior to retiring, according to ABC:
Eleven days ago, the United States' top military official seemed to sum up Washington's current relationship with Pakistan when he accused the country's premiere intelligence service of supporting insurgents who attacked the U.S. embassy in Kabul.
But what Admiral Mike Mullen did not say is that the U.S. had secretly met with a member of that same insurgent group -- known as the Haqqani network -- as part of efforts to find a political end to the war in Afghanistan, and that the institution that helped set up the meeting was the same intelligence agency he had condemned: the Directorate of Inter Services Intelligence, or I.S.I.
The meeting, according to two current U.S. officials and a former U.S. official, was held in the months before the Sept. 13 attack on the U.S. embassy and NATO's military headquarters, which U.S. officials have blamed on the Haqqani network. In his congressional testimony Sept. 22, Mullen called the Haqqanis a "veritable arm" of the I.S.I., but failed to mention that the I.S.I. facilitated the meeting between the U.S. and Ibrahim Haqqani, a son of founder Jalaluddin Haqqani and a major player in the group, according to a senior U.S. official.
The meeting suggests there is much more to the recent spat between Islamabad and Washington while the violence in Afghanistan has increased as U.S. troops have begun to withdraw. At stake, U.S. officials said, is how they will try to reduce the violence in Afghanistan and to what extent Pakistan will be allowed a say.
From Pakistan's point of view, military and intelligence officials have long argued that their connections with the Haqqani network -- going back decades in the Pakistani tribal areas and in Afghanistan -- can facilitate the only way to end the war: through political negotiation. But for U.S. officials, even as the debate in Washington continues over the best way to wind down the war, there was a high-level decision after the embassy attack to name and shame the I.S.I. for supporting the Haqqanis, hoping it would work where no previous pressure or incentives placed on Pakistan had worked, according to a senior Western official.
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The fact that the U.S. and Pakistani intelligence service set up the meeting with Haqqani and discussed how to stop a Haqqani attack suggests a much more nuanced -- and very often, confounding -- relationship with Pakistan's intelligence service than Adm. Mullen and other military officials have publicly admitted in the last two weeks.
The Pakistanis, in turn, have tried to portray themselves as the victims of a smear campaign headed by Mullen. As Pakistani President Asif Ali Zardari wrote in the Washington Post Friday, "While we are accused of harboring extremism, the United States is engaged in outreach and negotiations with the very same groups."
http://abcnews.go.com/Blotter/us-pakistan-struggle-haqqani-insurgents/story?id=14656079&page=2
Here are some excerpts from a CBS interview with Pak UN ambassador Haroon:
U.S.-Pakistan relations are at an all-time low. Pakistan's U.N. Ambassador Abdullah Hussein Haroon, speaking to CBS News about the allegations of Pakistani-ISI links to insurgents, said that Pakistan wants to end terrorism in his country and that Washington and Afghanistan are blaming Pakistan, making it the scapegoat for a conflict which victimizes Pakistan more than it hurts the U.S. or Afghanistan.
"For the past few months it's been the U.S. who keeps trying to put pressure by saying Pakistan this or Pakistan that," Haroon said. "That policy needs reappraisal. You need to talk as allies, don't talk down to us. This is not going to succeed. Politics should be transactional, not coercive. We want success. We don't want this mess on our doorstep for the next 100 years. It's not of our making, not of our choosing, not of our doing. We've paid the highest price for this war."
As the U.S. assesses the projected dates for the drawdown of U.S. troops and the recent spike in some types of violent incidents, a CBS News poll found that, although most Americans support the military, the American public thinks the United States should not be fighting in Afghanistan and the war has not been worth it.
Pakistan's U.N. Ambassador, who has been in his country's foreign service all his adult life, said bluntly that the U.S. had ignored the lessons of history in deciding to, and how to, invade Afghanistan.
"The Soviets lost Afghanistan by not learning the lessons of history... History is again repeating itself because the Americans have repeated the mistakes made by the Soviets and everyone else."
Haroon said U.S. leaders "overestimated their own capabilities and underestimated those of the Afghan guerillas."
The ambassador accuses the U.S. of underestimating the Taliban.
"I believe this needs to be reassessed because misappreciation of the enemy has always led to military setbacks."
Adding to his list of alleged U.S. failures, Haroon said American military commanders failed to assess the physical terrain on which they were planning to fight.
All the errors, he said, "contributed to the impasse which has resulted in Afghanistan."
As U.S.-Pakistan relations sour and anti-U.S. troop sentiment in Pakistan rises, Haroon offered some advice: "You cannot solve Afghanistan without Pakistan and Pakistan cannot be free of its own troubles without Afghanistan first being free of all its troubles. That is the conundrum."
"Whenever anyone has set a date for withdrawal in Afghanistan, before the army has effectively left their borders, their imposed government falls and runs with them towards the border. You have undermined yourselves completely... by setting an exit date."
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"We're getting treated like we're a pariah," complained Haroon. "Very, very sad shape, and it is not what we expect of a great country like America."
"Do you know why in New York, why nothing happened (this year) on September 11? You gave us a list of three people, 'help us find them,' you said. We went out of our way and did find them. The White House said fantastic, we have the people that could have harmed us and, by God's grace, nothing happened. Three key people were handed over on the 5th of September. Were people told in America that the reason that New York is safe is because Pakistan helped us capture these people?"
http://www.cbsnews.com/8301-503543_162-20116573-503543.html
Here's a recent Christine Fair opinion piece in Time magazine:
Early in the war, Pakistan was praised for its indispensable assistance — likely because the cooperation centered on a common foe: al-Qaeda. But as Pakistan watched the U.S. grow closer to India — not just passing the U.S.-India civilian nuclear deal but also encouraging India's presence in Afghanistan — it concluded that its interests and those of the U.S. were on a collision course.
In part because of that realization, Pakistan supported the Taliban's newly invigorated insurgency in Afghanistan. The Americans, however, resisted putting pressure on Pakistan for fear of compromising cooperation against al-Qaeda. Thus an ironic equilibrium was established: Pakistan received increasing financial "rewards" for its support of the global war on terrorism while it subsidized the very groups killing thousands of Americans and allies in Afghanistan.
With the American endgame in Afghanistan looming, U.S. officials can no longer ignore this duplicity. Pakistan's influence over the Afghan Taliban and other allies like the Haqqani network is a key obstacle to Afghans' being able to secure their country themselves. What is becoming increasingly clear is that a strategic relationship is not possible when strategic interests diverge so starkly. Observers on both sides are quietly asking whether the other is a problematic partner, an outright foe or both.
Read more: http://www.time.com/time/specials/packages/article/0,28804,2096478_2096477_2096476,00.html #ixzz1a9K6tjzy
Here's a Bloomberg report on Karachi stocks rally after rate cut by SBP:
The Karachi Stock Exchange 100 Index, which has climbed 0.6 percent this year, rose 2 percent to 12,092.32 at the 3:30 p.m. local time close, its highest since Aug. 2. Oil & Gas Development Co., the biggest fuel explorer, rose 3.7 percent to 141.03 rupees and Fauji Fertilizer Co., the biggest urea maker, rose 4.5 percent, to 178.06 rupees.
The State Bank of Pakistan reduced the discount rate to 12 percent from 13.5 percent, according to a statement in Karachi on Oct. 8. Three of five economists surveyed by Bloomberg News predicted a 1 percentage point cut, and the remainder forecast a 0.5 percent reduction.
Acting Governor Yaseen Anwar had room to act after Pakistan’s inflation rate dropped 2 percentage points in the past three months. A rate cut might support an economy that’s seen growing less than half the pace of fellow South Asian nations India, Bangladesh and Sri Lanka this year.
‘Attractively Priced’
“With the level of the rate cut, today’s jump was expected,” said Habib ur Rahman, who oversees 7 billion rupees ($80 million) in stocks and bonds at Atlas Asset Management Ltd. in Karachi. “I can see the market continuing to gain till December because high-yielding stocks are attractively priced.”
Global funds sold $47.1 million worth of Pakistani stocks in July and August compared with net buying of $95.6 million last year, according to central bank data.
The Karachi Interbank Offered Rate, the benchmark borrowing rate for commercial banks, fell to 11.97 percent from 12.90 percent, according to Bloomberg data. The yields on the 12-month treasury-bill and the 10-year investment bond both declined by 1 percentage point to to 12.85 percent and 12 percent respectively, according to Arif Habib Ltd., in Karachi.
The rupee, which has shed 2 percent this year and dropped to a record low on Sept. 16, declined 0.3 percent to 87.47 to the U.S. dollar. The central bank conducted what it called a “calibrated intervention” last month to stabilize the currency.
Prime Minister Syed Yousuf Raza Gilani’s government is aiming to boost economic growth to 4.2 percent in the fiscal year ending June 30, from 2.4 percent in the previous year, one of the lowest expansions in the past decade, as the country struggled to cope with floods and militant attacks.
Floods in August forced more than one million people from their homes and damaged crops in parts of southern Pakistan still recovering from last year’s worst ever monsoon inundation that devastated the region. Terror attacks in the South Asian nation have killed at least 35,000 people since 2006, according to government estimates.
Stimulating Investment
The central bank decided to slash its policy rate for a second straight meeting because of a “high probability” of meeting the inflation goal for fiscal 2012 and to stimulate investment, according to central bank’s statement. The State Bank is targeting an average inflation of 12 percent in the year ending June 30, 2012.
Consumer prices rose 10.46 percent in September from a year earlier, after climbing 12.43 percent in July, according to the Federal Bureau of Statistics.
“If the rate cut is backed by other positive factors like an ease in inflation and a pickup in growth activity, we can see the index around 14,000 points by June 2012,” said Mohammad Shoaib, who oversees the equivalent of 32 billion rupees in Pakistani stocks and bonds at Al-Meezan Investment Management Ltd. in Karachi.
http://www.businessweek.com/news/2011-10-10/pakistan-stocks-rally-after-bigger-than-forecast-rate-cut.html
Here are some interesting claims made in Financial Times about secret Zardari-Obama exchange as reported by The News:
..According to an analyst this obviously meant that President Zardari was considering firing General Kayani. The offer was sent through a prominent American citizen of Pakistani origin, investment banker and businessman Mansoor Ijaz. In an article in FT which was almost a confession, Mansoor Ijaz admitted that he received the message from a senior Pakistani diplomat and sent it to Admiral Mullen and claimed that his channel was used to “bypass the Pakistan Army and intelligence channels.”
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“Gen Ashfaq Kayani, the army chief, and his troops were demoralised by the embarrassing ease with which US special forces had violated Pakistani sovereignty. Inter-Services Intelligence, Pakistan’s feared spy service, was charged by virtually the entire international community with complicity in hiding bin Laden for almost six years. Both camps were looking for a scapegoat; Mr Zardari was their most convenient target.
“The diplomat made clear that the civilian government’s preferred channel to receive Mr Zardari’s message was Admiral Mike Mullen, chairman of the US joint chiefs of staff. He was a time-tested friend of Pakistan and could convey the necessary message with force not only to President Barack Obama, but also to Gen Kayani.
“In a flurry of phone calls and emails over two days, a memorandum was crafted that included a critical offer from the Pakistani president to the Obama administration: “The new national security team will eliminate ‘Section’ S of the ISI charged with maintaining relations to the Taliban, Haqqani network, etc. This will dramatically improve relations with Afghanistan.”
“The memo was delivered to Admiral Mullen at 14.00 hours on May 10. A meeting between him and Pakistani national security officials took place the next day at the White House. Pakistan’s military and intelligence chiefs, it seems, neither heeded the warning, nor acted on the admiral’s advice.
“On September 22, in his farewell testimony to the Senate armed services committee, Admiral Mullen said he had “credible intelligence” that a bombing on September 11 that wounded 77 US and Nato troops and an attack on the US embassy in Kabul on September 13 were done “with ISI support.” Essentially, he was indicting Pakistan’s intelligence services for carrying out a covert war against the US - perhaps in retaliation for the raid on bin Laden’s compound, or perhaps out of strategic national interest to put Taliban forces back in power in Afghanistan so that Pakistan would once again have the “strategic depth” its paranoid security policies against India always envisioned.
“Questions about the ISI’s role in Pakistan have intensified in recent months. The finger of responsibility in many otherwise inexplicable attacks has often pointed to a shadowy outfit of ISI dubbed “S-Wing”, which is said to be dedicated to promoting the dubious agenda of a narrow group of nationalists who believe only they can protect Pakistan’s territorial integrity.
“The time has come for the US State Department to declare S-Wing a sponsor of terrorism under the designation of “foreign governmental organisations”. Plans by the Obama administration to blacklist the Haqqani network are toothless and will have no material impact on the group’s military support and intelligence logistics; it is S-Wing that allegedly provides all of this in the first place. It no longer matters whether ISI is wilfully blind, complicit or incompetent in the attacks its S-Wing is carrying out. S-Wing must be stopped...........
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=9493&Cat=13
Here are some excerpts from an AP story on the impact Punjab govt's spurning of US aid:
......Like many government-run hospitals in Pakistan, Lady Willingdon struggles to provide even basic care. The hospital, built by the British in the 1930s before Pakistan's independence, was meant to house 80 patients. The country's population has since boomed, forcing officials to cram 235 patients into a facility that is now run-down. Paint peels off the concrete walls and black mold covers the ceilings.
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There are only three working infant incubators, which were donated by NGOs, said Mohammed Athar, the doctor who runs the nursery for premature babies. The hospital is forced to use overhead warmers for other infants, leaving them more exposed to disease, he said.
"Without incubators, it's useless," said Athar.
The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities, said Sharif, the hospital administrator.
The U.S. has financed similar efforts to transform two hospitals in southern Sindh province that treat tens of thousands of patients every year.
The head of the Punjab government, Shahbaz Sharif, tried to justify his decision to spurn American aid following the May 2 raid that killed the al-Qaida chief not far from Pakistan's equivalent of West Point. He said at the time that Pakistan needed "to break the begging bowl" and "get rid of the foreign shackles."
The U.S. operation outraged Pakistani officials because they were not told about it beforehand.
Sharif is a leading member of the main opposition party in the country, and many viewed his decision as a way to siphon votes away from the Pakistan People's Party, which controls the federal government. The Punjab government spokesman declined to comment on this interpretation.
Sharif and other members of his government are unlikely to feel much personal impact from the move to turn down U.S. aid.
Free government-run hospitals like Lady Willingdon are mainly used by the poor, who are already suffering from Pakistan's weak economy and surging inflation. Wealthier citizens opt for more expensive private institutions in Pakistan or abroad.
A large chunk of the American assistance, $100 million, was to be used to rebuild schools in southern Punjab destroyed by last year's devastating floods. An additional $10 million was meant to improve municipal services like clean water and sanitation.
The money will now be redirected to other areas of the country, said the U.S. Embassy.
Washington has continued several programs in Punjab that don't run directly through the provincial government, such as rehabilitation of power plants and small grants to female entrepreneurs in flood-affected areas, said the embassy.
The loss of aid for schools, water and sanitation also won't be felt acutely by the elite. Most send their children to private schools and live in leafy parts of Lahore dotted with Western restaurant chains, polo grounds and cosmetic surgery centers. The Sharifs own property in London worth millions of dollars.
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Life is very different for Pakistanis who live in Shamaspura, a dirt-poor part of Lahore filled with ramshackle brick houses separated by a narrow mud lane coursing with sewage. Most of the roughly 15,000 residents are fruit and vegetable vendors who make about $2 per day. They are forced to tie pieces of cloth across their faucets to filter out dirt and insects in the water.
"We have asked the government to pave our road and build us a sewer system, but they said they don't have any money," said Jumma Khan, a 55-year-old vegetable vendor......
Here's an AP report on US State Dept seeking funding for aid to Pakistan:
WASHINGTON - The Obama administration is pledging robust assistance to Pakistan despite demands on U.S. finances and a sometimes rocky relationship with Islamabad, according to a status report on Afghanistan and Pakistan.
The State Department report outlines U.S. goals in the region more than a decade after the Sept. 11 terror attacks triggered the war against al Qaeda, and the progress after billions of dollars have been spent and American lives lost. It also outlines the steps forward, looking ahead to the withdrawal of U.S. combat forces by the end of 2014.
The report was delivered to Congress on Thursday. The Associated Press obtained a copy.
"Though a tremendous amount has been accomplished, we also have no illusions about the task before us," the report said about Afghanistan. "We expect that ongoing violence, lack of institutional and human capacity, discrimination against women and vulnerable groups, and Afghanistan's incredibly low economic baseline will remain difficult challenges."
The report said the U.S. has reached its "high water mark" for civilian funding and the government in Kabul must move toward establishing revenue sources. The report said the U.S. will build a foundation for the Afghans to assume responsibility for their future.
On Pakistan, the department said the relationship with Islamabad "is not always easy, but it is vital to our national security and regional interests."
In fact, the relationship has been extremely strained the last few months to the point of breaking. Secretary of State Hillary Rodham Clinton recently traveled to the region to pressure Pakistan to crack down on the Taliban-linked Haqqani network, a major threat to American forces in the region. Adm. Mike Mullen, the former chairman of the Joint Chiefs of Staff, said Pakistan's intelligence agency was a "veritable arm" of the Haqqani.
A low point came in May when U.S. forces found and killed al Qaeda leader Osama bin Laden deep inside Pakistan.
Still, the administration insisted it will continue to provide civilian aid to Pakistan, which has fallen from $1.5 billion in the 2010 fiscal year to $1.1 billion this year. The report said next year's levels are uncertain, but the administration reaffirms its "commitment to providing robust, multi-year civilian assistant to Pakistan."
Unclear is how much Congress will push to reduce funds for Pakistan as lawmakers consider spending bills for the State Department and foreign operations.
The report suggested that a low-cost route toward improving stability in the region would be expanding U.S. market access for both Pakistan and Afghanistan.
The department said it was seeking congressional authorization for creating a U.S.-Pakistan Enterprise Fund, similar to funds created in Eastern Europe and with the former Soviet states in the 1990s.
http://www.cbsnews.com/8301-201_162-57318272/u.s-pledges-financial-aid-for-pakistan/
Here's an excerpt from a Dawn report on Ambassador Munter recounting how US AID has helped Pakistan over 50 years:
The US Ambassador further said Pakistanis who doubt that US assistance has borne fruit in Pakistan would be surprised to know that they have tasted it, adding, “Pakistan’s most popular citrus fruit, the kinoo, comes from California. USAID brought kinoo seeds to Pakistan in the 1960s. Today, we are helping export Pakistan’s sweetest fruit, the mango, in the other direction.”
“In the 1950s, we brought together the University of Karachi, the University of Pennsylvania’s Wharton School of Business, and the University of Southern California to establish a campus in Karachi to meet the demand for business managers in the bustling port city.”
“USAID sponsored the project and the Institute of Business Administration became Pakistan’s first business school and one of the first outside of North America. IBA is recognized today as one of South Asia’s leading institutions,” he maintained.
Ambassador Munter said in 1965, Dr. Norman Borlaug, who later won the Nobel Prize for his contribution to agricultural research, came to Pakistan to introduce his new high-yielding variety of wheat.
“We worked with the Lyallpur Rotary Club to support a program that gave individual farmers a bushel of the new generation of seed if, when the harvest came in, they returned the bushel so we could give it to someone else. While modest in scope, this small project brought Lyallpur into the Green Revolution that in turn converted a food deficit region into an exporter of grains,” he added.
In the 1960s and ’70s, a consortium of U.S. construction firms employing Pakistanis, Americans, Brits, Canadians, Germans, and Irish built the two mighty dams of Tarbela and Mangla with USAID and World Bank financing, US Ambassador said, adding, “Those engineering feats – more complex than anywhere in the world at that time – soon accounted for 70 per cent of the country’s power output and made Pakistan a leading provider of clean energy.”
In the 1980s, the US Ambassador said, with USAID’s assistance, Pakistan’s private industry founded the Lahore University of Management Sciences.
“Pakistanis approached us with the idea for the new institution and we agreed to support it with a contribution of $ 10 million. Today, LUMS incubates the ideas and nurtures the leaders who are critical to Pakistan’s future,” he remarked.
Ambassador Munter said, since the inception of the Fulbright scholarship program, nearly 3,000 Pakistanis have studied in the United States and close to 1,000 Americans have studied in Pakistan, adding, today, the U.S. Fulbright program in Pakistan is the largest in the world.
Key to all these successes was that Pakistanis owned them.
We may have helped sow the seeds but Pakistanis made sure the flowers blossomed, he said, adding, “aid is a catalyst and its success depends on those who receive it.”
“So today, while we help complete dams in Gomal Zam and Satpara and rehabilitate power plants in Muzaffargarh and Jamshoro, only Pakistanis can put an end to circular debt by paying their bills and holding the system accountable.”
“While we work to cultivate international markets for Pakistan’s fruit and fashion, only Pakistanis can deliver quality products that can compete. While we pay for road construction in South Waziristan, only Pakistanis can provide the local population with economic opportunities to make use of those roads.
While we build schools in Azad Jammu and Kashmir and Khyber Pakhtunkhwa, only Pakistanis can ensure that qualified teachers show up to teach in them,” the US Ambassador maintained.
http://www.dawn.com/2011/11/04/pakistan-us-relationship-dogged-by-history-munter.html
Here's an excerpt from a piece by Nancy Birdsall of CGD published in Foreign Policy Magazine:
Meanwhile in Washington, debate in the U.S Congress about aid to Pakistan -- not just military aid but aid to shore up the civilian government along the lines that the late Richard Holbrooke advocated -- has grown increasingly hostile. Many in Congress assume that Washington's announced annual economic aid package of $1.5 billion provides leverage that can somehow bring both the civilian and military sides of Pakistan's government into line -- and are threatening to withdraw civilian aid in frustration with the inability or unwillingness of Pakistan's military and intelligence agencies to deal with the Haqqani Network and other threats to the security of Americans in Afghanistan.
The IMF saga makes clear that that leverage just doesn't exist. Using economic aid to push weak civilian governments into political steps they cannot take (unless they are willing to give up power altogether) doesn't work. It is even more far-fetched to imagine that the much smaller amount of U.S. civilian aid constitutes leverage with Pakistan's military and intelligence establishment, or that it's removal is a serious threat to them. If the government of Pakistan is willing to walk away from more than $3 billion of IMF money because it cannot implement a VAT, it seems unlikely that the powers that be will change their strategic calculus in Afghanistan for whatever Congress appropriates this year.
As we have emphasized before, the purpose of U.S. civilian aid to Pakistan is not to bribe or reward, nor would withholding aid be a useful punishment. Aid seldom constitutes leverage over tough domestic policy decisions, as the development community knows well. Apparently, so does the U.S. military. On the eve of his retirement, Chairman of the Joint Chiefs of Staff Adm. Mike Mullen told Congress that the U.S. needs to move beyond counterterrorism in Pakistan and focus on the development issues that constitute the foundation of that country's long run success. In his words, "isolating the people of Pakistan from the world right now would be counter-productive."
The issue is whether modest amounts of U.S. aid -- to help educate kids, create jobs, and strengthen democratic institutions -- might help give Pakistan a shot at becoming a more stable, prosperous and democratic country in the long term. Congress should be demanding evidence of that possible effect and targeting aid appropriately, rather than making superficial cuts that hurt America's image and impact in Pakistan for no apparent gain.
Nancy Birdsall is the founding president of the Center for Global Development, a Washington, DC based think tank. Milan Vaishnav is a visiting fellow and Daniel Cutherell is a policy analyst at the Center for Global Development.
http://afpak.foreignpolicy.com/posts/2011/11/04/pakistan_and_the_imf
US State Dept & Sen Feinstein defend US aid to Pakistan, according to Dawn:
WASHINGTON: The US State Department on Tuesday defended aid to Pakistan amid calls from senators for a full review of whether economic and military assistance there serves the US national interest.
“We believe our assistance to Pakistan still continues to provide dividends for the American people in trying to grow and strengthen Pakistan’s democratic institutions, boost its economy,” said spokesman Mark Toner.
“In the long term, you know, those are the kinds of things we’re seeking to achieve,” he told reporters one day after Republican Senators John McCain and Lindsey Graham made a full-throated call for reevaluating the aid.
His comments came shortly after US Senate Intelligence Committee Chair Dianne Feinstein said that cutting assistance to Pakistan would be unhelpful but warned that calls to do so had strong congressional support.
“I don’t think that’s useful,” she told reporters. “My understanding is that there’s some overtures under way to restore the relationship. Well, that’s fine, but I suspect that if a bill were to come to the floor which fenced money, the bill would have a good chance of passing,”she said.
US lawmakers have expressed mounting anger at Pakistan, accusing military and intelligence officials there of supporting the Haqqani network blamed here for attacks on US forces and targets in Afghanistan.
“I can only express my profound disappointment with the relationship” and the “deterioration” in an already troubled alliance that “goes up and down, and up and down, and up and down,” she said.
“My very strong feeling is you can’t walk both sides of the street with respect to terror,” said Feinstein.
Relations slid to a new low last month when Nato air strikes killed 24 Pakistani soldiers on the Afghan border, prompting Pakistan to boycott an international conference in Bonn on Afghanistan’s future.
“This is a very complex relationship,” Toner said, adding that the deadly border incident “was difficult for the Pakistani people, for the Pakistani government.”
“They have reacted in a way that shows how important and how significant this tragedy was for them,” Toner said.
“It’s absolutely essential that Pakistan, Afghanistan and the US, other international partners, work through this and beyond. It’s in all our interests.”
But Republican Senator Mark Kirk told AFP that McCain and Graham, who serve on the Senate Armed Services Committee, “are right.”
“Military aid to Pakistan is unsustainable, and in this time of deficits and debt, we ought to save the money,” he said, warning that if Pakistan has chose “to embrace terror and back the Haqqani network,” it should do so “without subsidies from the US taxpayer.
Kirk has also called for bolstering ties to India and “making India a military ally of the United States and to encourage India to fill the vacuum in Kabul once we leave.”
http://www.dawn.com/2011/12/07/us-state-dept-defends-pakistan-aid.html
United Kingdom will likely to increase its aid to Pakistan upto 350 million (Pounds) a year till 2015, prioritizing uplift of education and health sectors, according to APP:
"The major portion of our aid will focus on getting more than four million children into school, recruit and train 90,000 new teachers and provide more than six million text books," George Turkington, Head of the UK's Department for International Development (DFID) in Pakistan said.
During his visit to a crisis centre for women (Bedari) in Chakwal, he said the UK government would provide assistance to prevent 3,600 mother's deaths in childbirth; another half a million children from becoming under-nourished and another 400,000 couple’s access family planning and contraceptives.
The UK will also support the country to empower women by strengthening legislation on land rights, marriage rights and domestic violence and get more girls and women involved in decision making at community and federal level so that they can demand their basic rights.
Head of DFID said that over recent years, UKaid has provided 35,096 women victims of violence with counselling, refuge, rehabilitation support and legal aid.
He said that UKaid provide monthly stipends to some 680,000 poor girls to help keep them in school and provided millions of free school text books.
He said that UKaid has also facilitated 1.2 million micro finance loans to poor women, helping them to lift their families out of poverty.
The DFID official also met beneficiaries at Bedari office a local NGO.
http://www.brecorder.com/pakistan/banking-a-finance/38265-uk-likely-to-rise-aid-to-pakistan-upto-350m-pounds-.html
Here's Express Tribune report on ADB financing of Bhasha dam:
Pakistan and the Asian Development Bank (ADB) have agreed to sign a memorandum of understanding (MoU) for technical and financial cooperation in the construction of multi-billion-dollar Diamer-Bhasha Dam.
The MoU will be inked next week, said the Ministry of Water and Power after a meeting between Water and Power Minister Naveed Qamar and the Manila-based lending agency’s Director of Energy Wing Rune Stroem on Friday.
Stroem is leading a delegation to assess detailed engineering design of the dam, which will store 8.5 million acre feet of water for irrigation purposes and generate 4,500 megawatts of electricity.
The delegation, the first formal mission on Diamer-Bhasha Dam, will also review the cost component and consider options to make it a bankable project, as the ADB alone cannot finance the full cost estimated at $11.2 billion.
The government and the ADB also agreed to organise roadshows in three different countries with the assistance of international lenders, equipment suppliers and others concerned for seeking co-financiers for the project, said the water and power ministry.
An official of the Economic Affairs Division said the ADB has not yet formally conveyed the exact size of the loan but there are indications that the agency may extend up to $4.5 billion that will meet 40 per cent of financing needs.
After a refusal in 2008, the World Bank also recently expressed its willingness to finance the project, said the official. The US has also committed to financing the project under the Kerry-Lugar Act, but it also has not given the exact size of its share in the financing.
Stroem said the mission was giving highest priority to Diamer-Bhasha Dam and looking for its early execution. Praising the progress made so far on the project and the efforts to resolve related matters, he said the project would help improve socio-economic life of people and bring prosperity in the country.
Naveed Qamar said the ADB’s role as lead financier of the project would help attract other donors and sponsors to fund mega projects in Pakistan. He said the project would be a milestone for the country’s economy and meet water and power needs.
The government is attaching high priority to the project and has completed all formalities for its construction, hinting at its approval at the Council of Common Interests, the highest constitutional body on inter-provincial matters.
Qamar said most of the land for the project had been acquired and the resettlement package was being implemented. The ADB mission also discussed the energy efficiency programme and matters relating to other mega water and power projects being executed by the government with the cooperation of the bank.
Stroem said the bank was also considering various other projects for financial and technical assistance in the water and power sector.
Matters relating to power sector reforms and rehabilitation of electricity generation companies were also discussed. The mission was told that rehabilitation of power companies was under way, which would be completed at the earliest.
http://tribune.com.pk/story/304366/diamer-bhasha-dam-adb-agrees-to-provide-technical-financial-support/
Here's a news story on US civilian aid to Pakistan:
In a written reply to a question raised at the daily press briefing, the State Department said, “Civilian assistance to Pakistan continues and has not been interrupted since the tragic Nov. 26 incident.”
“Since the passage of the Kerry-Lugar-Berman legislation in October 2009, the U.S. government has disbursed $2.2 billion in civilian assistance, including approximately $550 million in emergency humanitarian assistance,” said the statement, adding, “In FY 2011 specifically, we disbursed approximately $855 million (not including any emergency humanitarian assistance).”
With the majority of Pakistanis claiming they see no evidence of U.S. economic assistance, Washington still struggles to fashion an effective program of civilian aid. However, data provided by the U.S. State Department created a different impression.
“In 2011 the people of the United States supported the construction of 210 kilometers of road in FATA and Khyber-Pakhtunkhwa, funded the world’s largest Fulbright exchange program, and sponsored initiatives promoting private sector growth and civil society development in Pakistan,” said the statement.
http://gantdaily.com/2012/01/20/u-s-confirms-no-interruption-in-flow-of-american-taxpayer-dollars-to-pakistan/
Here's an Asia Times piece on the importance of GCC Arabs to US power and US dollar:
There's no way to understand the larger-than-life United States-Iran psychodrama, the Western push for regime change in both Syria and Iran, and the trials and tribulations of the Arab Spring(s) - now mired in perpetual winter - without a close look at the fatal attraction between Washington and the GCC. [1]
GCC stands for Gulf Cooperation Council, the club of six wealthy Persian Gulf monarchies (Saudi Arabia, Qatar, Oman, Kuwait, Bahrain and the United Arab Emirates - UAE), founded in 1981 and which in no time configured as the prime strategic US backyard for the invasions of Afghanistan in 2001 and Iraq in 2003, for the long-drawn battle in the New Great Game in Eurasia, and also as the headquarters for "containing" Iran.
The US Fifth Fleet is stationed in Bahrain and Central Command's forward headquarters is based in Qatar; Centcom polices no less than 27 countries from the Horn of Africa to Central Asia - what the Pentagon until recently defined as "the arc of instability". In sum: the GCC is like a US aircraft carrier in the Gulf magnified to Star Trek proportions.
I prefer to refer to the GCC as the Gulf Counter-revolution Club - due to its sterling performance in suppressing democracy in the Arab world, even before Mohammed Bouazizi set himself on fire in Tunisia over a year ago.
Cueing to Orson Welles in Citizen Kane, the Rosebud inside the GCC is that the House of Saud sells its oil only in US dollars - thus the pre-eminence of the petrodollar - and in exchange benefits from massive, unconditional US military and political support. Moreover the Saudis prevent the Organization of Petroleum Exporting Countries (OPEC) - after all they're the world's largest oil producer - to price and sell oil in a basket of currencies. These rivers of petrodollars then flow into US equities and Treasury bonds.
For decades virtually the whole planet has been held hostage to this fatal attraction. Until now.
Gimme all your toys
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It's true that whoever dominates the GCC - with weapons and political support - projects power globally. The GCC has been absolutely key for US hegemony within what Immanuel Wallerstein defines as the world system.
Yet let's take a look at the numbers. Since last year Saudi Arabia is exporting more oil to China than to the US. This is part of an inexorable process of GCC energy and commodity exports moving to Asia.
By next year foreign assets held by the GCC could reach $3.8 trillion with oil at $70 a barrel. With all that non-stop "tension" in the Persian Gulf, there's no reason to believe oil will be below $100 in the foreseeable future. In this case GCC foreign assets could reach a staggering $5.7 trillion - that's 160% more than in pre-crisis 2008, and over $1 trillion more than China's foreign assets.
At the same time, China will be increasingly doing more business with the GCC. The GCC is increasingly importing more from Asia - although the top source of imports is still the European Union. Meanwhile, US-GCC trade is dropping. By 2025, China will be importing three times more oil from the GCC than the US. No wonder the House of Saud - to put it mildly - is terribly excited about Beijing.
So for the moment we have the pre-eminence of NATOGCC military, and USGCC geopolitically. But sooner rather than later Beijing may approach the House of Saud and quietly whisper, "Why don't you sell me your oil in yuan?" Just like China buying Iranian oil and gas with yuan. Petroyuan, anyone? Now that's an entirely new Star Trek.
http://www.atimes.com/atimes/Middle_East/NA20Ak02.html
Here's a WAM story on UAE assistance program for Pakistan:
..The KPK governor, the UAE Ambassador and other diplomats cut a special cake. The national anthems of the two countries were also played on the occasion.
Paying tribute to the armed forces for their role in the rehabilitation of Swat and thanking the UAE government for its generous assistance, Kausar hoped that the both countries would improve trade, diplomatic, and cultural ties.
Major General Zahir Shah, Commander of the GOC 45th Engineers Division of the Pakistani Armed Forces, said 124 projects have been implemented by the Programme in Swat and the tribal areas, thanks to the strength of the UAE- Pak relations. He added that the achievements will further develop the local educational and health sector to contribute positively in overall national development.
Pakistani people expressed their gratitude toward the President His Highness Sheikh Khalifa bin Zayed Al Nahyan for the UAE humanitarian programme and assistance projects to Pakistan.
UAE will support water supply projects in Khyber Pakhtunkhwa region, Bajaur district and South Waziristan district of the country for supplying clean drinking water to the villages and urban residential areas.
The regions hit by war and natural calamities would see better water supply through 26 projects supported by the UAE authorities.
The Programme comes within the framework of the good efforts by the UAE to help Arab and Islamic countries as one of the leading donors in the field of humanitarian aid and international development around the world.
The UAE and Pakistan maintain long-standing and close friendly relations since the founding of UAE by late Sheikh Zayed bin Sultan Al Nahyan. It has been an integral part of the UAE leadership's vision to support Pakistan. UAE does not only provide support to Pakistan in the times of crises i.e. natural calamities, earthquakes and floods but also work towards maintaining Pakistan's comprehensive security, stability, economic progress and prosperity.
In line with a recently signed Memorandum of Understanding (MoU) between the two countries UAE will execute a comprehensive development plan costing an estimated amount of US$110 million to create job opportunities and develop flood-hit areas of Pakistan.
Addressing the launching ceremony, Abdullah Al Ghafli, Director of the Project, said the UAE had played a significant role in mobilising international humanitarian cooperation in support of the Pakistani brethren based on strategic and humanitarian considerations enshrined in 'our foreign policy'.
According to him, the UAE aid aims to help the Pakistani people survive calamities they face and its government to address and overcome economic woes in order to achieve sustainable development.
'Built on an integrated field study on Khyber Pakhtunkhwa Region and Tribal Areas near Waziristan, the assistance programme will be implemented in coordination with the Pakistan Army Command and other relevant government bodies,' he added.
The project calls for building and rebuilding of a number of hospitals and health clinics, establishing a new nursing institute, commissioning of water purification, water resources management stations, and extending drinking water networks. Two devastated bridges will be rehabilitated and new roads will be built by the Khalifa bin Zayed Charity Foundation.
Here is a News report on US Aid for Pakistani universities:
The United States will build new Faculty of Education buildings at six Pakistani universities and renovate a seventh education facility, as part of an agreement signed Wednesday between the universities and the US Agency for International Development (USAID), said Karen Freeman, USAID Deputy Director for Pakistan.
She stated this while addressing the signing ceremony of a memorandum of Understanding for construction and rehabilitation of faculty of education buildings, says a press release. The construction will take place over the next two year and the new and renovated buildings will eventually house approximately 2,000 students of two new teaching degrees: the four year Bachelor’ Degree in Education and a two-year Associate Degree in Education in teaching that USAID helped design and introduce in order to increase quality of teacher preparation across the country and 100 faculty members each year.
“Pakistan and the United States have enjoyed a long and productive relationship that spans more than 60 years and covers a variety of fields. Today’s ceremony is yet another expression of the US Government’s long-term commitment to help build a stronger, more prosperous Pakistan,” she added.
“It gives me great pleasure to be here with you today to witness the signing of the MoU between the seven of country’s public universities and two of USAID implementing partners for the construction and rehabilitation of Faculty of Education buildings across the country. The contribution to the Pakistani education system is yet another example of the US long-term commitment to helping Pakistan address its development priorities.
“Our collaboration in higher education sector spans more than five decades. One of our first undertakings in this sector was the construction of the Institute of Education and Research at the University of Punjab in 1960s. fifty years later, this institute continues to help the country shape its education policies. Over the years, we have worked together to build more higher education institutions that have since become premier centres for knowledge and learning. I am very proud to list among such the Institute of Business administration in Karachi, the Lahore University of Management Sciences, the Faisalabad Agriculture University as well as the Peshawar Agriculture University, and many more,” she said.
Karen Freeman said: “I am happy that through today’s commitment we are continuing this tradition of supporting Pakistan in its efforts to develop strong education institutions.” She said that these new facilities will help attract and train best young minds to teaching profession and will help improve the professional knowledge and skills of many other teachers.
Higher Education Commission Chairman Dr. Javaid Laghari appreciated the efforts of the US Government for improving the quality of education across the country. The $15 million construction initiative was officially launched today at the Higher Education Commission, where representatives of the USAID signed MoU with representatives of the seven universities. As part of the agreement, the US will construct new Faculty of Education buildings at the Sardar Bahadur Khan Women University in Quetta; the Hazara University in Mansehra; the University of Education in Lahore; the University of Sindh in Hyderabad; the University of Karachi in Karachi; and the Sardar Abdul Latif University in Khairpur (Sindh). The US will also help renovate the Institute of Education and Research at the University of the Punjab.
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=90967&Cat=6&dt=2/3/2012
"We do not require the (British) aid. It is a peanut in our total development spending," said Indian finance minister Mukherjee.
Refusal of British aid just confirms that India's ruling elite don't care for the poor in India who benefit from such aid. Their false pride trumps the needs of the poor.
And this is not the first Indian leaders have done so. In 2009, the Indian government banned the import of Plumpy'Nut nutrient bar by UNICEF to treat moderate to severe acute malnutrition rampant among Indian children. Defending the government action, Mr. Shreeranjan, the joint secretary of the Ministry of Women and Child Development, told the Reuters that "Nothing should come behind our back. Nothing should be done in the name of emergency when we have not declared an emergency."
Indian politicians do not allocate funds to replace foreign aid either, even as they embark on a massive arms build-up, becoming the world's largest importer of weapons in the process.
http://www.riazhaq.com/2010/03/malnutrition-challenge-in-india.html
Here's an Express Tribune report on 2012-2013 Fulbright scholar program in Pakistan:
Amid strained ties and mutual mistrust, the United States Educational Foundation in Pakistan has announced the world’s largest Fulbright programme in Pakistan for the 2013.
The US government’s flagship scholarship programme awards deserving Pakistani students full scholarships that cover tuition, textbooks, airfare, a stipend, and health insurance to complete their Master’s or PhD degrees in a field of their choice in universities across the US. Currently, approximately 369 students are studying in the US on Fulbright awards and another 200 will be departing in the fall of 2012.
According to Ambassador Richard Hoagland, deputy chief of mission, Pakistan’s Fulbright programme is also one of the oldest in the world. “Our agreement initiating the programme was signed on September 23, 1950 – and the first Pakistanis and Americans travelled each way in the same year. It was one of the very first agreements of its kind and has since been extended to 155 countries around the world.”
Since then, nearly 4,000 Pakistanis and over 800 Americans have participated in USEFP-administered exchange programmes.
The deadline to apply for the 2013 programme is May 16, 2012, and the application form can be downloaded from the USEFP’s website www.usefpakistan.org.
http://tribune.com.pk/story/334528/fulbright-scholarships-us-launches-worlds-largest-programme-in-pakistan/
US allocates $2.4 billion in aid for Pakistan in 2013, according to Express Tribune:
The White House has allocated $800 million for Pakistan’s Counterinsurgency Capability Fund (PCCF) in its budget for fiscal year 2013, whereas the State Department and USAID budget for Pakistan comes to $2.4 billion.
The budget, which will go to Congress for approval, shows a decrease of $50 million in the allocation figure for PCCF from last year. The purpose of the fund is to “build and maintain the counterinsurgency capability” of Pakistan’s security forces. The services provided by the US include human rights training, providing equipment, supplies, training and infrastructure repair.
The description of the PCCF stated in the budget documents released by the State Department state that the PCCF “enhances the capabilities of the Pakistan Army, the Pakistan Air Force, and the Frontier Corps by meeting their needs for training, equipment, and infrastructure. The PCCF will assist the Government of Pakistan to eliminate the violent extremists’ ability to operate along its border with Afghanistan. The PCCF account will draw down when the need for intensive support for engagement against terrorist organisations in Pakistan declines.”
State Department
In a press release issued by the State Department, the budget allocation requested for Pakistan for FY2013 is $2.4 billion. This includes the $800 million cited in the PCCF, and is meant for assistance to “strengthen democratic and civil institutions that provide a bulwark against extremism, and support joint security and counterterrorism efforts.
Certifications
The budget documents also outline certifications that the US secretary of State is required to make to various Congress committees before funds such as the Foreign Military Financing Program, PCCF etc. can be allocated.
According to the conditions, the Secretary must certify that Pakistan is cooperating with the US in counterterrorism efforts against the Quetta Shura, Haqqani Network, Jaish-e-Mohammad, Lashkar-e-Taiba, al Qaeda and other domestic and foreign terrorist organizations. Pakistan must not be supporting terrorist activities against the US or coalition forces in Afghanistan.
Interestingly, a condition includes that the Secretary of State must certify that, “Pakistan’s military and intelligence agencies are not intervening extra-judicially into political and judicial processes in Pakistan”
http://tribune.com.pk/story/336108/us-unveils-budget-with-trimmed-pakistan-aid-subject-to-conditions-of-course/
The World Bank will extend an assistance of upto $5.5 billion over FY 12-14 to support Pakistan’s poverty reduction and development agenda, reports Pakistan Today.
According to Bank’s Country Partnership Strategy Progress Report, a mid term review and implementation assessment, the Bank has responded flexibly in the face of the tremendous challenges Pakistan has gone through over the past year or so.
World Bank Country Director for Pakistan Rachid Benmessaoud said they will continue strong support to Pakistan while keeping a keen eye on implementation to ensure that these efforts translate into real results on the ground.
The progress report says the overall focus of the Bank’s strategy- to help Pakistan’s economy get back onto the path of high, sustained growth –remains valid and consistent with the overall priorities of the government of Pakistan as articulated in its New Framework for Growth Strategy. Also, the Bank support will remain centred on the original pillars of the CPS- the economic governance, human development and social protection; infrastructure and security and conflict risk reduction.
The Bank engagement over FY 12-14 is projected at up to $ 4 billion in new International Development Association (IDA) credits and International Bank for Reconstruction and Development loans. This will be supplemented by a robust programme under the Multi donors trust fund (MDTF) with initial commitment of $ 140 million and IFC support projected at $ 1.5 billion.
http://www.pakistantoday.com.pk/2012/02/wb-to-provide-5-5b-to-pakistan-in-3-years/
Here's a Harvard Gazette report on Amb. Munter talking frankly about US-Pak ties:
U.S. Ambassador to Pakistan Cameron Munter doesn’t beat around the bush: America’s relationship with Pakistan — a vital ally in securing Afghanistan’s fragile stability — has deteriorated. And when it comes to mending those frayed ties, Munter is even less sentimental.
“If we’re going to get out of what has been a very tough period, it is going to be because both countries decide they’re going to look at something bigger than themselves,” Munter said at Harvard Kennedy School (HKS) on Monday. Both sides need to ratchet down their emotions, he said.
“We call this the Turner doctrine,” Munter added, invoking “the American philosopher” Tina Turner. “What’s love got to do with it?”
Munter’s assessment, which he shared with a packed hall of HKS students and Mideast observers, came at the close of what he called “a very tough year” for the United States in Pakistan. In the beginning of 2011, the arrest and negotiated release of Raymond Davis, an American CIA contractor, caused bad blood on both sides. Two months later, an American drone strike killed nearly 50 people in North Waziristan. And not least of all, the killing of Osama bin Laden by American troops in Islamabad last May was taken as an insult to the Pakistani military, Munter said.
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In part, America’s recent failures in Pakistan stem from overpromising, Munter said. Americans, sensitive to Pakistanis’ lingering feelings of betrayal, developed a set of goals for development in Pakistan in 2008 that encompassed everything from women’s rights to water resources to telecommunications. Those lofty plans too often fell by the wayside as America pursued its military goals in the region.
“American policy began to struggle with the distinctions, or even the contradictions, of its long-term goals and its short-term goals,” he said. “We were trying so hard to reach our counterterrorism goals that we in part did damage to our own long-term goals.”
The relationship between the two countries’ militaries has suffered, and “our military presence in the country has shrunk dramatically,” Munter said. American diplomats must also account for the rising generation of Pakistani generals, part of the “lost generation” who were cut off from American training, who are “less familiar with American traditions” and perhaps less likely to see eye to eye with their Western counterparts.
Still, Pakistan has shown its commitment to fighting terrorism. The country has experienced huge losses fighting insurgents at its own borders — nearly 4,000 troops and between 30,000 and 40,000 civilians, according to Munter.
“In any other country this would be called a civil war,” he said. “It causes a fair amount of resentment in Pakistan, and we would be wise to remember what it is that they’ve lost.”
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“The only way to get past a relationship that’s fraught with anger and misunderstanding is to create a partnership,” he said. “You have to get as far away as you can from an assistance relationship.”
The bad news, Munter said, is that America is unpopular in Pakistan, with a public favorability rating of roughly 6 to 10 percent. The good news, however, is that “Pakistanis care desperately what America thinks. They want desperately for Americans to do good things in Pakistan, [and they] want to see us live up to their image of what they think Americans can do.”
“In this relationship, neither side is blameless,” Munter said. But when it comes to economic growth and stability in the Middle East, “there is a fundamental affinity between what Americans want and what Pakistanis want.”
http://news.harvard.edu/gazette/story/2012/02/less-bluster-more-action/
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