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Policymakers view Pakistan as one of the most critical fronts in efforts to combat violent extremism. Different US administrations have taken divergent approaches on development assistance to the country. In 2010, a CGD study group drew lessons from past experiences to offer practical recommendations to US policymakers on the effective deployment of foreign assistance and other, non-aid instruments for achieving sustainable development in Pakistan. It suggested better ways to deploy aid, and ideas to unlock the potential of trade and private investment.
In a recent blog post, Pakistani economist Anjum Altaf lambasted our recent report on the US development approach to Pakistan, “More Money, More Problems,” for not being sufficiently skeptical of the US development program, especially the US aid program, in Pakistan. Dr. Altaf criticized our 2011 report too. You can review last year’s discussion here.
The debate over U.S. foreign assistance in Pakistan has grown hotter lately, with Stanford political scientist Stephen Krasner arguing in Foreign Affairs that the United States should get tough by threatening to halt aid to Pakistan to force the country into cooperating better on security matters. CGD president Nancy Birdsall responded with an article in Foreign Policy. Drawing on the recommendations of a 2011 CGD study group report, Beyond Bullets and Bombs: Fixing the U.S. Approach to Development in Pakistan, she argued that U.S. development assistance should be focused on helping to create a stable, prosperous Pakistan—goals that are in America’s own best interest and would be ill-served by trying to use the aid as a bargaining chip.
Read the Report
Washington, D.C.(June 1, 2011)-U.S. and Pakistani development experts are urging a substantial revamp of the U.S. approach to Pakistan, saying that U.S. efforts to build prosperity in the nuclear-armed nation with a fledgling democratic government, burgeoning youth population, and shadowy intelligence services are not yet on course.
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“After two years, the new U.S. approach cannot yet boast a coherent set of focused development priorities or the organization and tools to manage and adjust those priorities as conditions require,” says the report from a study group convened by the Center for Global Development.
“The United States is way off course in Pakistan,” says
CGD president Nancy Birdsall, who convened the study group and is the lead author of the report. “It’s heavily focused on security while neglecting low-cost, low-risk investments in jobs, growth, and the long haul of democracy building.”
The report says that the administration’s integrated “Af-Pak” approach—lumping Pakistan together with Afghanistan in policy deliberations and bureaucratic lines of authority—has “muddled” the Pakistan development mission. Similarly, “the integration of development, diplomacy, and defense has... left the program without a clear, focused mandate.”
It urges a revamp of the U.S. strategy toward the country, starting with greater reliance on trade—offering duty-free, quota-free access for all Pakistan exports to the U.S. market for at least five years—and increased incentives for investment, such as new forms of risk insurance and credit programs for Pakistan’s small and medium enterprises. Much of the report focuses on how to improve the U.S. aid program in the country.
Since Osama bin Laden was discovered hiding in a Pakistani garrison town, some Americans are asking if the United States should continue to provide up to $1.5 billion per year in development assistance to Pakistan. The report recommends mending, not ending the assistance program.
“Pakistan’s development and prosperity matter to the United States,” says Birdsall. “There are many problems with our support for development in Pakistan, but ending the aid program would make things even worse. We cannot walk away now. We can and must fix it.”
The report offers five procedural recommendations to get the U.S. development program on track:
Clarify the mission: separate the Pakistan development program from the Afghanistan program and from the Pakistan security program.
Name a leader: put one person in charge of the development program in Washington and in Islamabad.
Say what you are doing: set up a website with regularly updated data on U.S. aid commitments and disbursements in Pakistan by project, place, and recipient.
Staff the USAID mission for success: allow for greater staff continuity, carve out a greater role for program staff in policy dialogue, and hire senior-level Pakistani leadership.
Measure what matters: track not just the outputs of U.S. aid projects, but Pakistan’s overall development progress.
Among the report’s five substantive recommendations are three on better ways to deploy aid resources—including paying for verified outcomes and cofinancing with other donors for established education programs that are already working—and two on the largely untapped potential of trade policy and private investment.
“If we are serious about the importance of economic growth in Pakistan, aid alone is not a solution,” says Robert Mosbacher Jr., a study group member and former president of the Overseas Private Investment Corporation. “Helping the Pakistani private sector compete is an investment in a healthy Pakistani middle class that will pay taxes and hold their government accountable for spending them wisely.”
Shuja Nawaz, a study group member who has written extensively on Pakistani civil-military relations, adds: “We have seen quite clearly how American and Pakistani security interests are intertwined, if not always identical. But over the long run, the security of both nations will only be ensured if Pakistan can develop economically and politically. The United States must keep one eye on this prize—even at moments, like now, when short-term crises seem more important.”
Notes for Editors:
The Pakistan Study Group report launch will be held at 2 p.m. on June 1, at the Center for Global Development (1800 Massachusetts Ave., NW). Study group members are available for interviews with the media before or after that date. To arrange an interview please contact media relations coordinator Jbrinton@cgdev.org or call 202-416-4040.
Study Group on a U.S. Development Strategy in Pakistan:
In early 2010, the Center for Global Development convened the Study Group on a U.S. Development Strategy in Pakistan. Chaired by CGD president Nancy Birdsall, the study group comprises experts in aid effectiveness, development economics, and national security and includes several prominent Pakistani thought leaders. The objective of the study group is to offer practical and timely recommendations to U.S. policymakers on the effective deployment of foreign assistance and non-aid instruments for achieving sustainable development in Pakistan. More information on the Study Group on a U.S. Development Strategy in Pakistan, including a full list of members is available on CGD’s website.
The Center for Global Development:
The Center for Global Development works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for us all. The policies and practices of the rich and the powerful—in rich nations, the emerging powers, international institutions, and global corporations—have significant impacts on the world’s poor people. CGD aims to improve these to expand opportunities, reduce inequalities, and improve lives everywhere. As a nimble, independent, nonpartisan, and nonprofit think tank, the Center combines world-class scholarly research with policy analysis and innovative outreach and communications to turn ideas into action.
Even an avid consumer of the news and commentary on Obama’s speech on the Middle East yesterday could easily miss his proposals for supporting job-creating economic growth and development in the region. But long after we have forgotten the media bluster over a possible shift (or not!) in U.S. policy towards Israel and Palestine, the president’s seemingly modest suggestions on development just might be making a difference.
The one that intrigues me most involves putting the European Bank for Reconstruction and Development to work in the Middle East and North Africa.