Delay U.S. aid until Islamabad reforms, report says

The United States must delay much of a $7.5 billion aid package to Pakistan until the South Asian ally riddled with corruption and anti-American militancy makes major economic reforms, according to a new report.

A task force of the Center for Global Development also questioned the effectiveness of hundreds of millions of dollars the United States already has spent in Pakistan.

“By funding Band-Aid fixes that delay outright crisis and make it easier to avoid necessary but difficult solutions, even well-implemented aid can delay enduring solutions to Pakistan’s most serious problems,” the report says.

It added that the “pure act of delaying disbursement in certain sectors will benefit both the Pakistani reform process and the ultimate effectiveness of U.S. aid.”

“Aid is only going to be a very small part of the solution in Pakistan,” said Wren Elhai, a co-author of the report, “Beyond Bullets and Bombs: Fixing the U.S. Approach to Development in Pakistan.”

He noted that Pakistan’s growth had slowed not because of a lack of aid, but because of the lack of reform, especially of the tax system and energy sector. According to some analysts, less than 2 percent of Pakistanis pay income tax and many also pay nothing for electricity.

“The U.S. can’t buy those solutions,” Mr. Elhai added.

Recent polls have found anti-U.S. sentiment rampant in Pakistan.

The center’s report faults the Obama administration’s decision to lump Pakistan and Afghanistan together under a so-called “Af-Pak” policy, saying this has “muddled” the Pakistan development mission.

“The integration of development, diplomacy, and defense has … left the program without a clear, focused mandate,” the report says.

The report comes amid calls in the United States to cut aid to Pakistan after Osama bin Laden was killed May 2 in a Navy SEAL raid barely a mile from Pakistan’s national military academy. Some members of Congress suspect Pakistan’s intelligence service were sheltering bin Laden.

At a Senate Foreign Relations Committee hearing last month, Sen. Bob Corker, Tennessee Republican, said most lawmakers want to “call time out on aid” to Pakistan.

A bill sponsored by Sens John F. Kerry, Massachusetts Democrat, and Richard G. Lugar, Indiana Republican, and Rep. Howard L. Berman, California Democrat, provides $7.5 billion in U.S. aid to Pakistan over a period of five years.

Only $179 million has been allocated to Pakistan since the bill was approved in October of 2009 because Pakistan has failed to meet the criteria spelled out in the law, Mr. Lugar, co-chairman of the Senate Foreign Relations Committee, said last month.

The center’s report said that U.S. Agency for International Development disbursed $275 million in the 2009 fiscal year and $676 million in 2010.

The report does not recommend cutting off aid to Pakistan.

“Walking away now would send a terrible signal as to why we are engaged in Pakistan,” said Mr. Elhai.

“When you have a diplomatic crisis, or a security crisis, all of a sudden what is supposed to be a long-term economic assistance program gets hijacked by short-term considerations and starts to be seen both here in the U.S. and in Pakistan as just another short-term bargaining chip and that is deadly to the long-term mission.”

The report says the high hopes for the aid package have raised unrealistic expectations, generated multiple conflicting objectives and inspired competing lines of authority.

“This toxic combination has made what would be a difficult mission under any circumstances nearly impossible,” it adds.

The report’s recommendations include giving Pakistan’s exports easier access to U.S. markets.

A USAID official, who spoke to The Washington Times on the condition of anonymity, said the agency has been careful about spending aid in Pakistan.

“USAID has avoided a rush to spend in Pakistan, instead moving deliberately to assure that the programs meet Pakistani priorities, that adequate accountability and monitoring mechanisms are in place, and that program results match the level of resources being committed,” the official added.