February 2012

Independent research & practical ideas for global prosperity

U.S. Development Strategy in Pakistan Update

February 3, 2012 Dear Colleague, Despite political upheaval in Pakistan, U.S. interest in Pakistan's stability and prosperity remains strong. In this update we share an open letter from CGD president Nancy Birdsall about practical ways that the United States can help to strengthen Pakistan’s private sector, despite current upheavals. We also applaud recent staffing changes at USAID. And in two related pieces about the limits of leverage, Danny Cutherell considers congressional ambivalence about Pakistan and Birdsall tells a cautionary tale about Pakistan’s “thanks, but no thanks" response to IMF loans. Tired of reading? Listen to the CGD Wonkcast, in which Danny and I discuss these and other developments related to the U.S. development strategy in Pakistan. Keep an eye on these issues and other recommendations from CGD's Study Group on U.S. Development Strategy in Pakistan in our newsletter and on our website. As always, feedback and comments welcome. Sincerely, Milan Vaishnav, Postdoctoral Research Fellow
What Can the U.S. Do Now? Hint: Private Sector
Turbulent U.S.-Pakistan relations complicate much of the U.S. development strategy in Pakistan. But CGD President Nancy Birdsall suggests three steps the U.S. government can take now: expand access to Pakistani goods, support small business lending via OPIC and USAID, and help get the Diamer-Basha dam project going. Read Birdsall's open letter to Deputy Secretary of State Tom Nides. Image: Flickr user babasteve
Clap Your Hands for USAID’s “Af-Pak Hands” Program
The Pentagon's "Af-Pak Hands" initiative encourages employees to learn local languages and build area-specific expertise. CGD's Study Group on U.S. Development Strategy in Pakistan said USAID should "staff the (Pakistan) mission for success" by replicating the Pentagon's program. Kudos to USAID: it's happening.
Megabus Mega-questions & IMF Loans
Congress recently passed a "megabus" spending bill that avoids cutting off Pakistan aid, but leaves the total amount of spending undefined. Danny Cutherell discusses Congress's ambivalence and the curious but unfortunate removal of the Pakistani-American Enterprise Fund from the final bill. Meanwhile, Pakistan said "thanks, but no thanks" to more than $3 billion in loans from the International Monetary Fund (IMF). The incident offers another lesson for U.S. policymakers on why economic aid does not constitute leverage over the Pakistani government. For an update on recent developments in the U.S.-Pakistan relationship and further details about what the U.S. could be doing right now to promote development, listen to Milan Vaishnav and Danny Cutherell share their thoughts in a CGD Global Prosperity Wonkcast.