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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.
This is a joint post with Wren Elhai and Molly Kinder and firstappeared on ForeignPolicy.com’s AfPak Channel blog. Read the report of the Study Group on U.S. Development Strategy in Pakistan here. A response from Alexander Thier, head of USAID’s Office of Afghanistan and Pakistan Affairs can be found here.
For nearly two years, the United States has been trying something completely new in Pakistan. In 2009, with President Obama’s backing, Congress passed a bold piece of legislation that committed the United States to support Pakistan’s people and its economy, as opposed to focusing almost exclusively on the country’s military. The United States would try to help Pakistanis consolidate the transition to democracy they won in 2008, and -- for the first time -- it seemed the United States would place an equal emphasis on long-term development and short-term stability in Pakistan.
So far, however, this new approach has not lived up to its potential. During a recent trip to Pakistan, we listened to dozens of Pakistanis in and out of government tell us of their frustrations with the U.S. aid program and American inaction on trade and investment policies (just look at the ongoing debate about lifting tariffs on the Pakistani textile trade with the United States) that would naturally complement aid. Over the past year, a study group of American and Pakistani experts convened by the Center for Global Development have gathered to figure out what’s amiss—and how to put it right. In a report released today, we sum up the problem this way:
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.
In a new CGD report, U.S. and Pakistani development experts urge 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.
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.
It seems everyone has an opinion on what the U.S. should do with its aid to Pakistan. In recent weeks, there have been calls to freeze all assistance to Pakistan – military and economic –and calls to stay the course. Nearly three in four Americans back cuts. Many of the loudest voices in Congress have been for attaching strings to the aid (or enforcing the conditions already in place)—usually demanding that Pakistan do more to root out militant groups within its borders. But it’s worth distinguishing more carefully between military aid and economic aid. The same conditions are not right for each. The obvious example: Withholding aid that supports Pakistan’s civilian democratic government because the military or intelligence services aren’t behaving is cutting off one’s nose to spite one’s face.