July 2010

Independent research & practical ideas for global prosperity

U.S. Development Strategy in Pakistan | July 2010

Welcome to the inaugural issue of the Center for Global Development's newsletter on U.S. development strategy in Pakistan. Each month, we highlight the latest developments in Washington and in Pakistan, drawing on the work of CGD's Study Group on U.S. Development Strategy in Pakistan. In this month's edition: basic principles for effective development aid in Pakistan, development investments in the FATA region, Senators Kerry and Lugar weigh in on the design of the U.S. aid program, and policymakers in Washington and Islamabad seek a solution to Pakistan's energy crisis.

If you find this newsletter useful, we encourage you to forward it to any others who might be interested in receiving future editions. We welcome your comments and feedback. You can reach project director Molly Kinder at mkinder@cgdev.org or (202) 416-0757.

EFFECTIVE AID: TRANSPARENT, MEASURABLE, COORDINATED

Hoping to forge a long-term partnership with Pakistan, the Obama Administration has pledged $7.5 billion in development assistance to the country over the next five years. Will it work? In an open letter to Ambassador Richard Holbrooke (the first of an ongoing series of letters on U.S. strategy in Pakistan), CGD President Nancy Birdsall emphasizes that development in Pakistan is a long-term challenge. She suggests several ways to improve the effectiveness of U.S. aid programs, including by measuring success against a short list of simple indicators and by embracing transparency in aid programming and spending. Read the open letter here (or a summary blog post here). In a related article, Molly Kinder argues that ongoing debates of U.S. Pakistan policy ignore important questions of aid effectiveness.

DEVELOPMENT IN PAKISTAN'S TRIBAL REGIONS

Roadbuilding in FATA Pakistan's tribal regions are at once the least developed areas of the country and the area where extremism poses the greatest threat to American citizens. While we might wish it were possible for large flows of aid money to bring benefits there, the truth is that spending money effectively in the tribal areas has been and continues to be extremely difficult. In her second open letter, Birdsall warns against expecting too much from aid programs in this region. She suggests using both aid and trade measures to catalyze local businesses—and emphasizes that market access is vital for Pakistan as a whole. Read the letter here, or a summary here. Wren Elhai follows up with a discussion of the thorny issues surrounding political reform for the Federally Administered Tribal Areas.

SENATORS KERRY AND LUGAR SHARE VIEWS ON U.S. AID TO PAKISTAN

Senators John Kerry and Richard Lugar, the two key Senate sponsors of the 2009 bill that tripled U.S. non-military assistance to Pakistan, have recently published their thinking on the progress of U.S. development programs. In an op-ed in Foreign Policy Magazine, Senator Lugar emphasized the need for Pakistan's leaders to set clear national objectives for development and for U.S. policy to adopt a long-term focus. More recently, Senator Kerry sent a letter to Ambassador Holbrooke in which he emphasized the need to learn from past donor experience, to enhance transparency, and to tackle policy reforms that are bottlenecks to development. You can read Holbrooke's response here. We blog about these two letters here and here.

ADDRESSING PAKISTAN'S ENERGY CRISIS

Pakistan's inability to resolve long-standing weaknesses in its power sector has contributed to an electricity shortfall that has fueled widespread public discontent and, in some cases, riots. The government has announced an action plan, which it hopes will close much of the gap in electricity provision through a combination of conservation measures and additional generation. However, crises are likely to continue until the root causes are addressed—inadequate revenue generation, fragmented and uncoordinated governance, and high levels of theft and other transmission losses. Read Nancy Birdsall's open letter on assistance to the energy sector here (or a summary blog post). One lesson—energy is one area where other donors have been quite active for several decades. Read Molly Kinder and Wren Elhai's blog summarizing donors' often-frustrating experiences in this sector.