CGD in the News

Aid to Pakistan: America's Headache (Huffington Post)

June 09, 2011

Policy analyst Wren Elhai was quoted in a Huffington Post article on U.S. aid to Pakistan.

From the Article

Since the killing of Osama bin Laden and the shakeup in Defense and CIA personnel, aid to Pakistan -- never far off the list of ulcer-inducing topics in Washington -- has been causing the usual double doses Maalox to seem not quite enough to treat the pain.

Given the huge rifts and schisms of power in Pakistan -- an elected government, a powerful intelligence agency that often seems to side with the darkest forces of humanity, a military that runs its own agenda, and the assorted jihadists, militants, yahoos, illiterates, the Taliban and everything in between running riot in lawless territories assessing not only needs but effectiveness and performance is the hardest task.

Pakistan's economy is a basket case. Development banks ring alarm bells that the country is virtually running on empty. Add to the economic and governance woes, polls consistently show that across the board in Pakistan, the US is not regarded kindly -- by anyone, regardless of a concerted hearts and minds campaign stretching back decades.

USAID alone has spent over $5 billion in civilian aid since 2005, which makes Pakistan one of its largest recipients. (The sum total of US aid to Pakistan is close to $20 billion over a decade). President Obama wants to increase that aid through Pakistani government departments and non government organizations. But Islamabad has proven to be ill prepared and ill equipped to handle such large amounts, and local NGOs often possess even less capacity to work, are riddled with inefficiencies and are often open to outright exploitation.

(The scrupulous and highly regarded British based Oxfam has started investigating financial irregularities in their 2010 flood funds -- not from their own employees but from Pakistani charities working as partners.)

Last week a US official told the Financial Times that the US would slash its funded projects by two-thirds (down from 160 to 50) with a renewed emphasis on countering anti-American sentiment.

The radical option of cutting out and cutting all aid to Pakistan is gaining some favor in surprising quarters (though entirely unlikely to happen). The theory goes that cold turkey will drag the country out of its aid dependency and it will learn -- quickly -- how to organize its finances, deny the ascendancy of the dangerous crackpots and depend more on a highly mobile and committed middle class. Oh if that would be so.

Washington's Center for Global Development recognizes the power of the middle class but rather than abandon them to fight on behalf of the good guys the CGD suggests supporting them even more by not only creating the obvious educational and health opportunities but by developing incentives for investment, and development of small and medium private enterprises.

"They could be the best advocates for a U.S.-Pakistani relationship that goes beyond security issues -- but only if they feel like the United States is listening to them and being open and honest about what U.S. development programs are doing,´ Wren Elhai CGD policy analyst who worked on the CGD's recent Pakistan study, told the Huffington Post via email. "That said winning hearts and minds should not be the primary goal of U.S. aid to Pakistan. Expanding Pakistan's middle class matters most because they will play a key role in building a strong economy and healthy democratic system there."

Read it Here.