The Calm after the Storm: Why the United States Should Recommit to the Enhanced Partnership with Pakistan Act

The Atlantic Council’s recent event on US foreign assistance to Pakistan kicked off a new round of discussion about US-Pakistan relations, which should gain momentum as we approach the Strategic Dialogue expected later this year.  Anchored in the context of the country’s recent elections and prospects for regional stability, the discussion included remarks by senior officials in the State Department, USAID, and the National Security Council as well as experts from think tanks and civil society organizations.

As CGD President Nancy Birdsall commented after speaking on the panel, the discussion “illustrated the calm that has set in after many stormy years” in US-Pakistan relations.  She stated that some credit was due to the recent historic democratic transition in Pakistan, which released pressure on the Washington-Islamabad relationship.  She also described a switch inside the US government, which has moved away from “reactive, near-panic” responses to events in Pakistan and embraced programs that are “less exciting and visible but more practical and forward-looking,” with a focus on finding ways for the US government to support the civilian government in Pakistan.

The remarks at the event had a tone of cautious optimism, with frequent references to the importance of security and stabilization.  Ambassador James Dobbins, the US Special Representative for Afghanistan and Pakistan, shared his belief that that the US and Pakistani bet on democracy and good civilian governance was beginning to pay off.  Donald “Larry” Sampler, USAID’s Acting Assistant to the Administrator in the Office of Afghanistan and Pakistan Affairs (OAPA), spoke about alignments and opportunities for the US government to bolster Pakistani efforts in critical sectors like energy, economic growth, agriculture, stabilization, health, and education.  Shuja Nawaz, Director of the Atlantic Council’s South Asia Center, raised the importance of rebuilding trust between the two governments while being modest about the amount of US assistance flows, particularly given the United States’ volatile history of support (he referenced the chart at the top of CGD’s Aid to Pakistan by the Numbers page which shows US financial flows for the past 60+ years).

In her remarks on the panel, Nancy discussed US efforts to promote and support development in Pakistan.  A video of the panel discussion is here; for the time-constrained among our readers, a summary of her remarks and recommendations follows:

1.       The US Congress should pursue the idea of a no-cost extension of the Kerry Lugar Berman (KLB) legislation.  KLB was especially important because its language insulated development assistance programs from problems of security and diplomacy.  It reflected the reality that aid does not provide political leverage, nor should short term diplomatic disruptions derail a development program with long term objectives.  By extending KLB’s timeframe from five to ten years, the US government would signal its interest in a long-term partnership with Pakistan’s civilian government to tackle fundamental issues of economic development and growth.  Even if the Congress did not approve a formal reauthorization it could signal its support for continued engagement with Pakistan on economic and social development, perhaps in the form of a Congressional Resolution.  This could provide an umbrella for the more formalized Development Dialogue we would like to see as a component of the Strategic Dialogue anticipated to re-start later this year.

2.       US money is not the point: While it is hard to pin down exactly how much KLB money has already been obligated and how it’s been spent (see our attempt here), according to the Offices of the Inspector General (OIG) of USAID and the State and Defense departments approximately $3 billion in development-related assistance was appropriated in FYs 2010-2012 with nearly $2.6 billion in obligations.  Assuming assistance continues at roughly the same levels in FY2013 and FY2014, there will be something like $2.5 billion in funding that KLB authorized that was not spent.  With a five year no-cost extension, this would come to about $500 million/year – an amount that pales in comparison to Pakistan’s GDP of approximately $230 billion per year and would be significantly less than the $2 billion of loans annually from the World Bank and Asian Development Bank in the last few years, and the likely additional $2 billion per year the government will receive from the IMF.  Bottom line: the amount of US assistance is not nearly as important as its predictability and the signal of the US commitment to Pakistan’s development that it sends to the government and the citizens of Pakistan.

Source: Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan, as of March 31, 2013.  Office of the Inspector General (OIG) for USAID and the Departments of State and Defense

3.       The United States does not have a comparative advantage in administering aid in a place like Pakistan.  The United States continues to be hindered by its defense and diplomacy objectives, and our government bureaucracy has evolved in a way that emphasizes paperwork and inputs rather than focusing on development outcomes (see Nancy’s and my recent paper for more detail and evidence to substantiate this point). Those issues aside, the United States does still have valuable assets like convening power, private investors, a dreadfully underused Overseas Private Investment Corporation (OPIC), and a large market – and should think harder about how to leverage those assets.  It’s time to revisit the discussion on Duty Free Quota Free access to the US market and find ways to increase trade and investment, both regionally and with the United States.

4.      The people of Pakistan and US taxpayers want facts, not PR, about spending and results.  The US government has a responsibility to provide information on financial obligations, disbursements, contractors, and projects to show how US taxpayer dollars are being spent.  The government is making progress on this (see here for USAID’s progress report on development goals in Pakistan, and here for the Foreign Assistance dashboard  which, while incomplete, will hopefully become a one stop shop for US spending data), but there is still much confusion.  Providing citizens and research institutions in Pakistan and the United States alike with facts is one way to sustain and reinforce the sense of partnership between US and Pakistani people.

Pakistan recently experienced its first transition of power from one democratically elected government to another, and there are promising signs that the new government was elected because of its capacity to govern.   Given the United States’ challenges in administering an aid program in Pakistan, perhaps for the time being we should let words speak louder than actions and verbalize a long term commitment as a development partner for Pakistan.  Kerry, Lugar, and Berman are all out of Congress – who’s stepping up to the plate?