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Message to Pakistan: China Will Not Replace U.S. Aid – by Daniel Wagner

The current debate in the U.S. Congress about whether and how to continue economic and military aid to Pakistan is understandably problematic. On one hand, Congress is mindful of Pakistan’s long history with the U.S., its unique geostrategic location, its significance as one of the top 7 nuclear powers and the role it plays in enabling supplies to be delivered to U.S./coalition troops in Afghanistan. On the other hand, it is conscious that Pakistan is the epicenter of global terrorism and has abused much of the aid it has been given to date by the U.S., so Congress is weighing the relative costs and benefits of continuing to deliver financial assistance to Pakistan’s government and military.

Pakistan has received more than $20 billion in U.S. economic and military aid since 2001. Although $7.5 billion in additional aid was promised by the Obama Administration between 2010 and 2014, only $180 million of the first tranche of $1.5 billion was delivered as of the end of last year. The reason is that disbursement of the aid included specific stipulations that it not be used to promote Pakistan’s nuclear program, assist terrorists, or contribute to cross-border military actions. The fact that such stipulations had to be included says a great deal about the lack of basic trust in the relationship and the history of how such aid had been misused in the past. Although other aid has been disbursed through the U.S. Agency for International Development, the U.S. government has had difficulty identifying corruption-free avenues through which to deliver the aid through Pakistan’s government.

The Obama administration identified seven high profile ‘signature’ development projects that would stand as a long-term testament to the beneficial impact of U.S. aid, and help strengthen the standing of the civilian government among the Pakistani people. However, none of these projects have reached a successful conclusion, the result of a combination of inefficiency and ineptitude at various levels of the Pakistani government. According to the U.S. Office of the Inspector General, only approximately half of the aid that has been delivered to Pakistan for this purpose has had the intended impact. Whether the objective was building a dam or constructing schools, a combination of bribery, kickbacks, corruption and collusion prevented successful disbursement of the development aid.

According to the U.S. Embassy in Islamabad, up to 70 percent of the funds given to the Pakistani military to support activities along the Afghanistan/Pakistan border have been misspent, and much has apparently been diverted to bolster Pakistan’s arsenal against India. The U.S. government has accused the Pakistanis of utilizing just enough of the money allocated to fighting the Taliban to keep it at bay, ensuring a continuation of U.S. aid. This raises serious question about whether economic or military aid should even be continued.

If the U.S. Congress were honest with itself, the answer would clearly have to be ‘no.’ If Pakistan weren’t of such geostrategic importance and did not have nuclear weapons, Congress would have terminated the aid long ago. This is the heart of the dilemma — how to maintain integrity in the relationship at a time of budget cutbacks while maintaining continuity of purpose. Pakistan has actively worked against U.S. policies and interests. How can the U.S. strike a balance between being true to itself and its interests, while at the same time drawing a line in the sand with Pakistan, saying continuation of these unacceptable forms of behavior will no longer be tolerated — as they have been for years?

If U.S. aid were cut to be off from Pakistan, what would the Pakistani government and military do? Work against U.S. interests? Become a nuclear proliferator? Share intelligence with China? It has already done or is continuing to do all of these things. So apart from some limited military benefits (i.e. acting as a supply line for U.S. forces in Afghanistan) the U.S. ultimately has little to lose if the relationship were to disintegrate even further. It has other options for supplying U.S. troops in Afghanistan, such as enhancing its military presence in Turkmenistan. Pakistan became the world’s greatest nuclear proliferator when relations with the U.S. were solid and aid was flowing — so what does the U.S. risk now? That it will do so again? If so, at least this time, the international community is in a position to do something about it.

As for Pakistan’s hope/expectation that China may come to its rescue if U.S. aid is cut off, it should consider this: China’s State Council Information Office released the country’s first white paper earlier this year on China’s foreign aid to the rest of the world. In the 60-year period between 1950 and 2009, China’s cumulative foreign aid to the entire world had totaled only $39 billion (an average of just $650 million per year). Of this, 40% of the total was grants, with the remainder divided evenly between interest-free or low-interest loans.

By contrast, according to the U.S. Congressional Research Service, for the year 2007 the U.S. had a total foreign operations budget in excess of $26 billion. While the U.S. has given as much as more than $2 billion in a single year in economic and military aid to Pakistan (peaking in the early 1960s), China’s cumulative bilateral assistance to Pakistan between 2004 and 2009 totaled just $217 million (an average of $36 million per year), and was often driven by disaster relief. So Pakistan may live in hope that China would fill the substantial void left behind by a U.S. cessation of financial assistance, but Pakistan surely knows that nothing near that amount will be forthcoming from China. Pakistan’s ally Saudi Arabia is preoccupied with its own budgetary challenges in response to this year’s developments in the Middle East and North Africa, so Pakistan should not count on it to ride to the rescue either.

Given a) the fact that Osama bin Laden was running Al Qaeda within earshot of Pakistan’s equivalent of West Point in Abbottabad, b) that so much of the aid the U.S. have given the Pakistanis has either been squandered, misused or stolen, and c) that the Pakistani government and military have clearly been pursuing their own agenda for their own benefit — which has been contrary to U.S. interests — it would be irresponsible and hypocritical of the U.S. Congress to vote to continue delivering vast quantities of aid to the Pakistanis unless they demonstrate that they will change their ways. Mere declarations of an intent to change will no longer suffice. Congress should require absolute adherence to strict limitations on future aid of all types to Pakistan. The Pakistanis are posturing at the present time, with Prime Minister Gillani in Beijing this week calling China Pakistan’s ‘best friend.’ Let us see if Pakistan sings the same tune if its economic lifeline were to be seriously curtailed or removed, and China maintains its stingy approach to foreign aid.

Daniel Wagner is CEO of Country Risk Solutions, a political risk consulting firm based in Connecticut and senior advisor to the PRS Group.

Courtesy: Huffington Post

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  • Abandoning Pakistan: Can China Fill the Vacuum? by Franz-Stefan Gady

    What would happen if the United States left Pakistan to China?

    Cutting military and economic assistance to a country in crisis is generally seen as a failure of foreign policy. Such imperial hubris can lead to a miscalculation of national interest and leave a power vacuum in the affected country. In February 1947, however, when Britain announced it could no longer support Greek nationalist forces against the communists, the United States was ready to step in, fearing a communist takeover of the country. The mutual concern of the United States and Britain in containing communism made it possible for the Attlee government to step out and for Truman to move in. Today, another such confluence of interest exists regarding Pakistan; both China and the United States have a vested interest in containing violent Islamic extremism.

    With the recent killing of Osama bin Laden and the uncertainty of Pakistan’s role, some U.S. lawmakers questioned the wisdom of continuing the multi-billion dollar civilian and military aid program to Pakistan. Amidst a struggling economy, high unemployment and global commitments, could the United States cut its aid and let China fill the vacuum?

    While at first this may seem counter to the U.S. national interest, it is important to reiterate the reason why the United States is engaged in Pakistan to begin with. The main objective of the United States in south Asia is to deny terrorists a safe haven in Afghanistan and to prevent Pakistan’s nuclear weapons from falling into the hands of extremists. With Osama bin Laden dead and the eventual withdrawal from Afghanistan potentially in sight, Pakistan is bound to play a diminishing role in U.S. strategy, while its importance for China, which is also interested in containing terrorism and stability in the region, is growing.

    In an interview for this article, an astute foreign policy commentator called the U.S.-Pakistan relationship “a fatal attraction” so strong that both sides lack reason and logic in their thinking when dealing with each other with often negative consequences. An examination of the recent history of the U.S.-PAK alliance illustrates this point. For example, it is hard to deny that from the approximate $20 billion in aid to Pakistan since 2001, most of it supported the domineering Pakistani military, which invested it, counter to U.S. demands, into military equipment aimed at deterring India. Attempts to counter this with the Kerry-Lugar Act, a $7.5 billion aid package passed by the U.S. Congress in 2009, infuriated the Pakistani public as an infringement on Pakistan’s sovereignty due to the stipulation that the military must be subordinate to the civilian government.

    At the same time, the United States continually undermines these conditions by focusing most of its diplomatic efforts on Pakistan’s military and its Chief of Army Staff, Ashfaq Kayani, rather than on the weak civilian Zardari government. As Manvendra Singh, Indian MP and chief editor of the monthly Defense and Security Alert, states, “The major obstacle in the United States’ dealings with Pakistan is that it focuses on persons rather than institutions and by doing so is undermining the democratic institutions in Pakistan.”

    The problem, however, is much bigger on the strategic geopolitical level. After spending billions of dollars in aid, if the United States succeeds in stabilizing Pakistan and Afghanistan, it will play into the hands of China, which has quietly fostered a special partnership with the Islamic Republic government for decades now — an “all weather friend” in the words of Pakistan’s government. Due to the geographic proximity, Pakistan serves China as a future gateway to the Indian Ocean, the Muslim world and a cheap source of natural resources. In the future, should the state stabilize, Pakistan also could provide alternative energy routes. Strategically, Pakistan also serves as a useful containment buffer between China and India.

    China’s activity in Pakistan has increased noticeably in the last couple of years. In 2007, Chinese investment in Pakistan was merely around $4 billion. In December 2010, Pakistani Prime Minister Syed Yusuf Raza Gilani and Chinese Premier Wen Jiabao signed deals worth around $25 billion — a remarkable increase in just three years. China also provided millions of dollars in aid for the victims of the most recent flood and for reconstruction projects. In July 2010, both countries held their third joint military exercises focused on counter-terrorism. While the exercise was little more than a PR tactic, China is genuinely worried about the potential destabilizing influence of Pakistani militants on its own Muslim minority in Xinjiang.

    China also has been one of the main weapons suppliers to Pakistan. For example, around 70 percent of Pakistan’s main battle tanks are of Chinese origin. Back in 1990, China allowed Pakistan to test its first nuclear device in Lop Nor. China also footed the bill for the Nodong and Taepodong missiles purchased by Pakistan from North Korea after the United States refused to deliver F-16 fighter jets and the Pakistani Army had to seek other means of transporting its nuclear weapons.

    China’s interest in Pakistan is manifold. First and foremost, by geographically controlling the western gateways of China, Pakistan could serve as an alternative route for its critical energy supply, which is bottlenecked in the Straits of Malacca (65 percent of Chinese energy imports — mostly crude oil– run through the strait). China is heavily investing in a railroad from the port of Gwadar — constructed with Chinese money and strategically located on the Makran coast — to the Karakoram pass leading into the Chinese autonomous region of Xinjiang. This is part of what some U.S. commentators have dubbed China’s “string-of-pearls” strategy, essentially aimed at building strategic partnerships with countries and securing ports and airfields from the South China Sea through the Strait of Malacca and across the Indian Ocean to the Arabian Gulf with the aim of securing its energy supply routes. The mouth of the Persian Gulf is only 350 km from the nearest Pakistani port. A permanently-based Chinese naval squadron in the port of Gwadar increases China’s ability to project power into the Indian Ocean and the Arabian Sea to protect Chinese flagged shipping.

    The key question: if the U.S. decides to scale back spending on Pakistan, will China correspondingly increase its aid? Pakistan is confronting a major financial crisis. In the last two decades, it has twice come to economic collapse — once in 1990 and then again in 2008. It was saved only by massive infusions from the United States, Europe, Saudi Arabia, the IMF and China. Blatantly poor management by the Musharraf and Bhutto administrations has been compounded by the global financial downturn. There is insufficient electrical power to meet the country’s needs and major cities experience periodic outages and blackouts. Food prices have escalated, as have the costs for the large amounts of oil that the country must import.

    Chinese influence in the years to come, however, will in no way approach the level of the United States, and whether Chinese support will ever match the U.S. is questionable — at least in the short term. Chinese aid is generally quieter and more subtle with fewer conditions attached and driven primarily by economic considerations. While China is interested in combating terrorism and calming its Muslim minorities, the Chinese military traditionally has not played an important role in Chinese diplomacy. Deploying Chinese troops abroad is still a very alien subject to decision makers in Beijing, and the capabilities of the Chinese Armed Forces in counterinsurgency and police training have been largely untested and can in no way compare to the United States military. There is also very little direct foreign aid flowing from China to Pakistan. Overall, Pakistan does not enjoy a high strategic priority in China’s foreign policy calculations. This, however, may change should the United States decide to trim down its efforts.

    Most observers are certain that Chinese influence will increase in Pakistan in the near future. It is an organic process as a consequence of China’s growing power, and there is little that can stop it. China, due to its geographic proximity and size, is a permanent and important presence; whereas significant U.S. involvement most likely will be fleeting. The shock of the Pressler Amendment — U.S. sanctions imposed on Pakistan and quasi-abandonment of the country after the Soviet withdrawal in the 1990s — still sits deep in Pakistan’s consciousness. In response to the killing of Osama bin Laden, the Chief of Pakistan’s Army Staff, General Ashfaq Parvez Kayani, announced that Pakistan will re-evaluate military and intelligence cooperation should Pakistan’s sovereignty be violated again. The future of U.S.-PAK relations remains uncertain at best.

    Prime Minister Attlee’s announcement in February 1947 to abandon the Greek nationalists and cede its Raj to India, amidst the worst British snowfall of the 20th century, marked the beginning of the end of Britain’s post-war global power status and induced the birth of modern Pakistan. While the United States’ presence in Pakistan is in no way comparable to the British situation in India or Greece in 1947, U.S. policy makers should bear in mind that strategic disengagement is meant to preserve rather than diminish national power. In the case of Pakistan, China might be eager to fill the vacuum should the United States decide to trim down its efforts, something that would serve the U.S. national interest well in the long term.

  • THANKS and NO AID Please,We dont Need USAID

    1.Pakistan survived without AID after the end of cold war till 9/11. Rather became nuclear power during that period.

    2. AID was always linked to war and bleeding of Pakistanis weather it be against Russians or Illusive Alqaeda

    3. USAID was never directed at Industry ( eg Steel Mill by Russians) or Trade ( eg Gawadar Port by China)or health (eg Hospitals by Arab states). Exports from Pakistan banned in USA and Europe for one reason or other.

    4. While pakistan suffering from energy crisis, USA has signed Nuclear Pact with India for Nuclear development.

    5.After billions of US dollars in aid poor remained poor, …so hell with all the F… AID,. USAID supported corruption and the dollars went back to Swiss banks and invested in Florida Ranches.

    Thank u America. Please stop the USAID. Sooner the better

    6. Why US wants to give billions of $ to Pakistan, while in America there is hue and cry over HEALTH CARE, budgets. Reason is very clear. America is hanging by a thread. If america loose Pakistan support, that will be end for America. Russia India China Iran are watching silently and wishing for that Divorce. Non of theme have any love for USA.

  • i think we should have good ties with China and Americans and our goal should be to achieve global peace. Lets not get into tiny details and play with humankind. Cause if we play with it then im afraid we could start a World war. Lets act in a sane manner and work together.