Nearly three years ago, the Obama administration and Congress signaled their intention to forge a civilian partnership with the new, democratically elected government of Pakistan. Motivating this reset was a sincere desire, in Washington and Islamabad, to avoid a confusion that has defined the U.S.-Pakistan relationship for decades: the conflation of security and nonsecurity objectives in the distribution of U.S. aid to Pakistan. The centerpiece of this new approach was the 2009 Enhanced Partnership with Pakistan Act, commonly referred to as the Kerry-Lugar-Berman bill, which authorized $7.5 billion in U.S. economic assistance to Pakistan over five years. Yet if the United States hopes to achieve the goals it laid out in 2009, it must change its approach now.
In Washington, much of the recent debate on Pakistan has focused on security issues, such as the role of Pakistan’s military-intelligence complex in aiding insurgent violence. Diplomatic disputes over NATO supply lines and the future of Afghanistan following America’s departure in 2014 are also hot topics. Much less attention is paid to the state of the development and economic partnership between the United States and Pakistan.
Three years since the passage of Kerry-Lugar-Berman bill, a new report by the Center for Global Development argues that U.S. development efforts in Pakistan are off course and have failed to achieve what the act’s creators and administration proponents had hoped. To be fair, this outcome is a function of several factors, many beyond the control of development policymakers. Pakistan’s development challenges run quite deep, and the civilian-led Pakistani government has repeatedly failed to enact crucial economic reforms. High-profile diplomatic incidents have also interrupted the overall dialogue, among other issues.
Over the past year, the U.S. government has made important strides in getting the development program back on course. Still, the U.S. development approach in Pakistan suffers from a number of “self-inflicted wounds”—operating at three distinct levels. At the conceptual level, U.S. efforts to clearly separate development and security activities in Pakistan—a key tenet of the Kerry-Lugar-Berman bill—have largely failed. At the strategic level, the United States has not yet succeeded in establishing a coherent development strategy that has buy-in across the U.S. government not to mention in Islamabad. And at the level of execution, the administration and Congress were overly optimistic about the ability of U.S. civilian agencies to ramp up operations quickly and extensively in Pakistan.
Conceptually, though the administration and Congress—working in good faith—hoped to erect a firewall between America’s security and development interests in Pakistan, the U.S. government’s words and deeds have often eroded whatever division may have existed. With the CIA’s fake vaccination campaign to help catch Osama bin Laden, U.S. military-intelligence agencies’ program of targeted drone strikes in the tribal areas, and congressional leaders’ decision to make economic assistance contingent on counterterrorism cooperation, many Pakistanis view U.S. “development” aid as a bribe intended to reduce anti-Americanism and buy compliance on security matters. For all the talk about U.S. foreign policy giving equal weight to defense, diplomacy, and development, in Pakistan, development has largely been subservient to the other two.
At a strategic level, U.S. development efforts have lacked clarity of vision. At the heart of the disconnect is a fundamental disagreement between the foreign policy and development arms of the U.S. government over the objectives of U.S. civilian aid. The former wants an early and visible return that will improve America’s standing; the latter wants to focus on investments in improving long-run development outcomes that may have little visibility and impact in the short run. In the absence of a shared consensus in Washington about the objectives of U.S. development efforts and the reality of multiple goals promoted by a host of powerful actors (Congress, the White House, the State Department, and USAID, in particular), there has been no coherent strategy or clearly defined leadership—in the United States and in Pakistan—on U.S. development policy.
Finally, there have been multiple failures when it comes to the execution of aid programs. USAID has struggled to implement projects in Pakistan because it has not been equipped to succeed. The agency’s prior limited presence in the country, its shortage of qualified staff, and overbearing new reporting requirements have all played a part in hampering USAID’s ability to scale up effectively. Furthermore, Washington has often prioritized the “branding” potential of development projects over their merit on purely developmental grounds. In practice, this has meant that some projects that cannot be easily labeled with U.S. flags or symbols, for instance, but are otherwise worthy have not been pursued, while others that are more easily branded but less worthy are.
Looking ahead, the United States should keep the promise it made to help build a strong and stable state and an accountable, democratic government in Pakistan. This is in the interests of Americans as well as the people of Pakistan. Yet in order to do this effectively, and in a manner that serves Pakistan’s long-term development prospects, the United States needs to significantly alter its approach. There are five steps Washington can take to make a difference:
1. Keep the economic and development policy conversation going. Independent of the size or scope of its aid program, the U.S. government should explicitly commit to maintaining policy engagement at the federal and provincial levels on Pakistan’s long-run economic and social development challenges. Although the U.S. government faces enormous difficulty spending aid money well in Pakistan, it does have a significant role and an obvious long-term interest in working closely with the technocratic and political leadership in Pakistan on the issues of significance to the country’s stability and prosperity.
2. Avoid the rush: extend the deadline for spending down Kerry-Lugar-Berman funds. Given the large amount of unobligated funds for Pakistan, the inadequacies of the aid-delivery machinery, and the acute implementation challenges, Congress and the administration should agree on a scaled-back program of development assistance for Pakistan for fiscal year 2013 and potentially beyond. The United States should adhere to the commitment to spend $7.5 billion on civilian programs, but it should extend the time horizon from five to ten years.
3. Focus on what the United States can do best. Washington should provide direct bilateral assistance only in those areas where it has a clear comparative advantage. This would include (for starters) a focus on higher education, support for innovation and civil society, and improvements to generation capacity and efficient distribution in the energy sector. In some cases, the amount of money spent might be small and the real contribution will involve technical assistance and policy dialogue. The United States should also rebalance its portfolio and look to areas outside of traditional development assistance that may help Pakistan. In fact, non-aid instruments that promote trade and investment, such as using the Overseas Private Investment Corporation to increase small business lending, may be the best assistance the United States can offer in Pakistan.
4. Channel more U.S. aid dollars through other donors. The United States can finance development assistance in Pakistan without being a direct provider of assistance through its own delivery systems. Going forward, the United States must recalibrate its program to ensure that more U.S. aid money can be delivered by other donors. For instance, the administration should take steps now to work with the Congress to channel more of the aid in the Kerry-Lugar-Berman bill through trust funds at the World Bank and the Asian Development Bank. Washington should also make it easier to take advantage of the strengths of other donors like the United Kingdom’s Department for International Development, which faces fewer security and bureaucratic restrictions in working with provincial-level public and private sector partners.
5. Prioritize transparency, not branding and logos. The U.S. government should be far less concerned with branding and much more focused on improving the transparency of U.S. development efforts. A fixation with branding aid projects shifts the U.S. government’s objective away from improving long-term development outcomes toward making sure the United States gets credit, which can be counterproductive. Requiring that all U.S.-financed projects clearly give credit to the United States paradoxically ensures that almost none will.
America’s long-term development partnership with the civilian government in Pakistan warrants a serious new effort to set it on course, but only if these conceptual, strategic, and execution challenges can be tackled effectively. To do so, the United States needs to be clear about its objectives, humble about its ability to foster sustainable progress, and patient in its efforts to help build a more effective state and expand economic opportunities over the long haul.