SPECIAL ARTICLE

Who Benefits from US Aid to Pakistan?

S Akbar Zaidi

Given the nature and form of the aid relationship between the us and Pakistan, this paper argues that it is not so obvious what the objectives and purpose of us aid to Pakistan really are, who it actually benefits, and whether or not, in fact, this aid goes against the interests of both or either country, benefiting neither. us aid to Pakistan may, in effect, have made things far worse for all supposed beneficiaries.

S Akbar Zaidi (sakbarzaidi@gmail.com) is a social scientist currently teaching at Columbia University, New York.
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hat would seem like a straightforward relationship and simple arithmetic, and should be a win-win situation for both, with the United States (US) government providing aid to the Government of Pakistan and to its people, appears to be a far more complicated and complex issue than one could imagine. One would expect that both governments benefit, with the US providing aid to fulfil its numerous objectives for different purposes to the Government of Pakistan and the latter too benefiting since such aid helps meet its perennial and everincreasing revenue shortfall problems. However, if ever there was a muddled, deceptive and complicated relationship between two countries on the basis of aid, it must be the one between the US and Pakistan in recent years. From what might have been a far simpler, straightforward and transparent arrangement in the cold war days of the 1960s and 1970s, and even in the 1980s following the Soviet invasion of Afghanistan when Pakistan first emerged as a front line state, the aid relationship between the US and Pakistan since 2001 has been fraught with the most complicated of cross-purposes and doublespeak, shrouded in mystery, with promises and expectations diverging between both parties. It is no longer clear what the purpose of US aid to Pakistan in the post-9/11 era really is. In some broad sense, of course, one can argue that the US wants Pakistan to assist it in its war on terror campaign and root out Al Qaida and Taliban insurgency in the region, in Afghanistan as well as Pakistan. At the same time, one would think that the US also has a keen interest in ensuring a safe and stable nuclear Pakistan, where internal stability assures a democratic future with a progressive, liberal and development-oriented government, and that there is peace in Pakistan and with its other neighbours. One could then argue, perhaps, that if such objectives are achieved, the US benefits from giving its taxpayers money to Pakistan. Similarly, one would assume that the Government of Pakistan would also benefit from aid, since this would help in making the region in and around Pakistan safer, securer and more stable, with militancy and terrorism being routed out, and that developmental aid would be used by the government carefully, providing assistance to its people. In such a scenario, both the US and Pakistan, their governments and their people, would be clear beneficiaries of this aid from the US to Pakistan. However, as this paper argues, given the nature and form of the aid relationship between the US and Pakistan, it is not so obvious what the objectives and purpose of US aid to Pakistan really are, who it actually benefits, and if in fact, this aid goes against the interests of both or either country, benefiting neither. US aid to Pakistan may, in effect, have made things far worse for all supposed beneficiaries.

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We begin with a brief history of aid given to Pakistan in years following independence, but the main focus here is the nature and consequences of US aid to Pakistan in recent years, particularly since 2001. After a short account of aid in the past, the paper examines how the aid relationship between the US and Pakistan has changed over the last decade, and focuses on the type of aid being given, examining the presumed objectives of that aid. It then looks at how the aid is being used by Pakistan, and examines if the US goals and Pakistani objectives are identical, or similar, and who has benefited from this recent aid giving/ receiving relationship.

1 Fifty Years of Aid to Pakistan 1950-2002

It is not much of an exaggeration to state that for much of its existence since independence in 1947, Pakistan has been an aiddependent country, even though it is not one of the poorest countries of the world. While numbers about the amount of aid received by Pakistan from all sources are hard to come by and have always been somewhat uncertain,1 some estimates suggest that the gross disbursement of overseas development assistance to Pakistan in the period 1960-02 (in 2001 prices), was $73.14 billion, including bilateral and multilateral sources (Anwar and Michaelowa 2004: 3). In this period, almost two-thirds of this official development assistance came from bilateral sources, with the US providing 45% of all bilateral aid given to Pakistan in this period, making it the largest single bilateral donor, by far (ibid). What is more critical in this regard is the fact that in the period 1990-98, US aid to Pakistan was almost negligible, implying that in the earlier period 1960-90, the importance of the US cannot be undermined. For example, while US aid disbursement to Pakistan in 1989 was $452 million, this fell considerably in the 1990s, falling to a mere $5.4 million in 1998 (ibid). In the decade of the 1990s, it was mainly Japan which made up the shortfall in aid to Pakistan, and because of this, in the overall 1960-02 period, Japan accounted for as much as 21% of total bilateral aid to Pakistan (ibid). Almost 30% of all aid to Pakistan bilateral and multilateral in the 1960-2002 period, came directly from the US. We do not have a breakdown of the source of multilateral aid to Pakistan in this period, but given the role, leverage and contribution of the US in such institutions, one could easily surmise that aid from the US has been of even greater volume and significance. The largest amount of US aid to Pakistan in this period was disbursed between 1962-63 and 1965, peaking to almost $2 billion in 1963-64. The lowest amount of aid given to Pakistan in the 1960-02 period, as mentioned above, was in the 1990s, particularly between 1995 and 1998. This pattern of huge variation in US aid to Pakistan clearly underlines the fact that far more than developmental concerns have been at play in the past, and various factors, most related to the US, some to Pakistans actions, have had a significant bearing on the US bilateral assistance to Pakistan. In the 1950s and 1960s, the US assistance to Pakistan may have arisen due to the latters needs for development assistance as a newly independent resource-constrained country, but one cannot ignore the fact that Pakistans leadership, particularly military leadership after the mid-1950s and more squarely after 1958, clearly aligned itself with the US on the world ideological map during the

cold war. By joining the South East Asia Treaty Organisation (SEATO) and the Central Treaty Organisation (CENTO) and by signing military and other pacts of cooperation with the US in the 1950s and 1960s, Pakistan was hoping to benefit from financial and military assistance from the US. For the US, Pakistan became an ally and a hedge against perceived Soviet expansionism in the region, especially since India had become a close friend and partner to the Soviet Union, and also against communism, more generally. Reports and studies from the 1960s suggest that the US aid to Pakistan was critical at times, and helped play a significant part in numerous development projects. Support under the Public Law 480 (PL-480), helped provide the Government of Pakistan food support at critical junctures. The United States Agency for International Development (USAID) was also active in Pakistan in the 1960s and proudly displayed its logo and banner and it seems that the US was well-received by the people of Pakistan as an ally and a friend. By 1964, overall aid and assistance to Pakistan was as much as around 5% of its gross domestic product (GDP) probably the highest ever in 63 years and is said to have been critical in giving Pakistans impetus in industrialisation and development in the early 1960s, with GDP growth rates rising to as much as 6% or 7% per annum. In 1965, when the military government in Pakistan started a war with India, the US decided to drastically cut off all (or much of) aid to Pakistan, and aid resumed, albeit at much lower levels after a few years. Most academics and scholars comparing the pre- and post-1965 war and the impact of aid on development are in agreement that aid played a crucial role in the high growth rates in the 1960s (Hasan 1998). In the 1950s and 1960s, bilateral development assistance from the US to Pakistan was also supplemented by assistance to Pakistans military, in the form of armaments, training and other resources. While military assistance was terminated in 1965 to be resumed much later, it was the Soviet invasion of Afghanistan in 1979 which ratcheted up the US development and military assistance to Pakistan as the latter became a front line state in the war against Soviet occupation. Large and undisclosed amounts of money and weapons and arms were channelled through to the mujahideen fighting against the Red Army in Afghanistan through Pakistans military and its clandestine agencies, particularly the Inter-Services Intelligence (ISI). While this aid was not meant directly for Pakistans military, there is ample evidence that chunks of funds meant for the Afghan Mujahideen were pocketed by members of Pakistans military (Nawaz 2008 and Haqqani 2005). Although Pakistans army may not have been directly involved in the first Afghan war, it did receive military aid from the US, as did Pakistans military government, money which was meant largely for the rehabilitation of Afghan refugees and for the development of roads and communication infrastructure built to create quick and easy access to Afghanistan, and perhaps also as a payback for Pakistans role in the Afghan war. However, it is important to add that unlike the positive image of US aid to Pakistan of the 1960s, the image of the US in Pakistan in the 1980s was far from positive, and once political Islam began to emerge in the region and worlds map, the US in Pakistan was seen in a much more unfavourable light in a hostile environment. The burning of the US embassy in Islamabad in 1979, and the subsequent covert
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and overt US role in Afghanistan helped create a less-than- ways in the war against terrorism focusing on a war against Al Qaida, friendly image of the US and Pakistan, even though it may have the Taliban, and all forms of terrorism and militancy in the region, been providing large sums of assistance. The popular perception in federally administered tribal areas (FATA) and Waziristan in by the Pakistani people of the US as a reliable friend changed Pakistan directly, and in Afghanistan, indirectly. The US considers considerably in the 1980s, as did the US contributions for Pakistan to be an essential ally in the war on terror since 2001, developmental assistance. and as part of its broader strategy it has asked Pakistans military The Pressler Amendment passed by the US Senate in 1985 to undertake counterterrorism operations in order to meet its severely limited the US assistance to Pakistan on account of the objectives. The coalition support fund (CSF) which was created latters covert nuclear programme. As we show above, the US for this purpose was designed to support only the costs of fighting development assistance fell from $452 million in 1989, to 1% of terrorism over and above regular military costs incurred by Pakithat in 1998 on account of sanctions imposed by the US. Even stan. Nearly two-thirds 60% of the money that the United States USAID, which had a long history of working in Pakistan, had to gave Pakistan was part of the CSF (Ibrahim 2009). The Bush close its mission in 1990. The US suspended all Table 1: Direct Overt US Aid and Military Reimbursements to Pakistan, Financial Year 2002-11 economic aid and military sales to Pakistan in Au- (Rounded to the nearest millions of dollars) Programme or Account FY 2002 FY 2006 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Programme FY 2011 gust 1990 as part of sanctions imposed in accordFY2004 (est) or Account (req) Total ance with the US laws for pursuing a clandestine 1206 28 14 56 114 f 212 f nuclear weapons programme in violation of the CN 8 24 49 54 47 43f 225 f international non-proliferation regime. The US CSFa 3,121c 964 862 731 1,019 685g 756g 8,138g g military and economic assistance to Pakistan in FC 75 25 100 the 1990s was heavily coloured by the shadows of FMF 375 299 297 297 298 300 288i 2,154 296 the Afghan war and subsequently, by sanctions IMET 3 2 2 2 2 2 5 18 4 imposed on Pakistan. It was only after 2001 that INCLE 154 32 38 24 22 88 170i 528 140 a very different US aid relationship to Pakistan, NADR 16 8 9 10 10 13 21 87 25 PCF/PCCF 400 700 1,100 1,200 in nature, form and dynamics, has emerged.
Total security-related 3,669 56 94 1,003d 46 3 22 1,224 4,893 1,313 21 29 298 32 2 6 388 1,701 1,260 28 38 337 55 1 70 10 539 1,799 1,127 22 95 394 e 11 50 4 576 1,703 1,536 30 30 347 50 50 507 2,043 1,674h 33 1,114 55 103 60 1,983 30 1,292i 142 89 42 12,562 220 286 4,785 380 17 362 144 6,038 18,756 1,665 67 1,322 1,389 3,054

2 Complicated Issues of US Aid after 9/11

The first difference from the previous patterns of the US aid to Pakistan is that there is apparently far greater public information about the nature and amount of aid given to Pakistan, as Table 1 shows, which allows us to make better-informed judgments.2 Moreover, for once, we also have clear demarcations between security related (or military) aid and aid granted in the form of economic assistance. As Table 1 reveals, from 2002 to 2010 (and not including commitments such as the Enhanced Partnership with Pakistan Act of 2009), the US has given Pakistan almost $19 billion, or over $2 billion on an average each year, with the amount rising over the last three years, with twice as much disbursed/allocated in 2010 ($3.6 billion) compared to 2007. Over the period 2002-08, only 10% of this money was explicitly for Pakistani development and as much as 75% of the money was explicitly for military purposes (Ibrahim 2009: 6). This is a particularly important distribution of resources, a point raised and discussed later although, as the table points out, in more recent years, the share of economic-related aid has risen but is still less than half.

CSH/GHCS DA ESF Food Aidb HRDF IDA MRA Total Economic-Related Grand Total

1,365h 1,595 3,039h 3,578i

3 The Purpose of Aid

One would expect that for the US the main purpose of providing large amounts of military aid to Pakistan following 9/11 was to assist in numerous
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Prepared for the Congressional Research Service by K Alan Kronstadt, Specialist in South Asian Affairs, 2 February 2010. Abbreviations: 1206: Section 1206 of the National Defence Authorisation Act (NDAA) for FY2006 (PL 109-163, global train and equip) CN: Counternarcotics Funds (Pentagon budget) CSF: Coalition Support Funds (Pentagon budget) CSH: Child Survival and Health (Global Health and Child Survival, or GHCS, from FY2010) DA: Development Assistance ESF: Economic Support Funds FC: Section 1206 of the NDAA for FY2008 (P.L. 110-181, Pakistan Frontier Corp train and equip) FMF: Foreign Military Financing HRDF: Human Rights and Democracy Funds IDA: International Disaster Assistance (Pakistani earthquake and internally displaced persons relief) IMET: International Military Education and Training INCLE: International Narcotics Control and Law Enforcement (includes border security) MRA: Migration and Refugee Assistance NADR: Non-proliferation, Anti-Terrorism, Demining, and Related (the majority allocated for Pakistan is for anti-terrorism assistance) PCF/PCCF: Pakistan Counterinsurgency Fund/Counterinsurgency Capability Fund (transferred to State Department oversight in FY2010) a. CSF is Pentagon funding to reimburse Pakistan for its support of US military operations. It is not officially designated as foreign assistance. b. PL480 Title I (loans), PL480 Title II (grants), and Section 416(b) of the Agricultural Act of 1949, as amended (surplus agricultural commodity donations). Food aid totals do not include freight costs and total allocations are unavailable until the fiscal years end. c. Includes $220 million for FY2002 Peacekeeping Operations reported by the State Department. d. Congress authorised Pakistan to use the FY2003 and FY2004 ESF allocations to cancel a total of about $1.5 billion in concessional debt to the US government. e. Includes $110 million in Pentagon funds transferred to the State Department for projects in Pakistans tribal areas (P.L. 110-28). f. This funding is requirements-based; there are no pre-allocation data. g. Congress appropriated $1.2 billion for FY2009 and $1.57 billion for FY2010, and the administration requested $2 billion for FY2011, in additional CSF for all US coalition partners. Pakistan has in the past received more than threequarters of such funds. FY2009-FY2011 may thus include billions of dollars in additional CSF payments to Pakistan. h. Includes a bridge ESF appropriation of $150 million (PL 110-252), $15 million of which was later transferred to INCLE. Also includes FY2009 supplemental appropriations of $539 million for ESF, $66 million for INCLE, $40 million for MRA, and $2 million for NADR. i. The FY2010 estimate includes supplemental appropriations of $259 million for ESF, $40 million for INCLE, and $50 million for FMF funds for Pakistan, as well as ongoing disaster relief in the food aid and IDA accounts. Sources: US Departments of State, Defence and Agriculture; USAID.

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administration requested Congress to appropriate billions of dollars to reimburse Pakistan and other nations for their operational and logistical support of the US-led counterterrorism operations. According to the previous secretary of defence Robert Gates, CSF payments have been used to support approximately nearly 100 Pakistani army operations and help to keep some 1,00,000 Pakistani troops in the field in north-west Pakistan by paying for food, clothing and housing. They also compensate Islamabad for coalition usage of Pakistani airfields and seaports (Kronstadt 2009). It seems then that the military aid the US is giving Pakistan in the form of the CSF which has until recently been the largest component of US aid in the last decade is such that the Pakistani military helps the military objectives of the US campaigns in the region, particularly along the borders of Pakistan. More recently, since 2009 a new category of security-related aid the Pakistan counter-insurgency Fund (PCF)/Pakistan counterinsurgency capability fund (PCCF) has also been granted to Pakistan, with the same or similar objectives as the CSF, with perhaps more focus on fighting insurgency within Pakistan, such as the Pakistan militarys Swat campaigns in 2009. As Table 1 shows, until 2009 economic-related aid to Pakistan has been negligible, and the primary purpose of aid to Pakistan has been those issues highlighted above, not economic support, or the building of schools and hospitals, or development, broadly defined. Until 2008, the US military assistance to Pakistan since 2001 was $7.89 billion, the large majority of which was CSF money intended as reimbursements for Pakistani assistance in the war on terror (Centre for American Progress 2008). Thirty per cent of the total aid in this period was allocated for economic and development assistance, including food aid. However, in the region where most of the counterterrorism and counter-insurgency activity were taking place in Pakistan, in FATA as much as $5.8 billion of US aid provided to Pakistan was spent, of which 96% of those funds were directed towards military operations, and only 1% towards development (ibid).

After six years of engagement in the region, the US department of defence conducted a review into US military aid to Pakistan in December 2007, and felt that while the US was spending significantly, it was not seeing any results (Ibrahim 2009: 8). This resulted in the department of defence changing the focus of military funding to Pakistan by assisting the Pakistani military with building a counter-insurgency force, and training Pakistani forces in FATA. The CSFs are supposed to be reimbursements to the Pakistan military, only in the cost incurred in fighting terrorism, over and above its normal military costs. Officially, that is intended to cover food, fuel, clothing, ammunition, billeting and medical expenses. The US has been assuming that Pakistan will use the funds for counterterrorism. But until early 2009, the US had given Pakistan the funds without attempting to set particular outcomes against terrorism which it expects (ibid: 10; emphasis added). Moreover, between 2002 and 2007, Pakistan was approved for more than $9.7 billion worth of weapon sales and the US has traditionally assumed that the military equipment will be used for counterterrorism (ibid).3 In addition, the chains of accountability of financial flows to Pakistan from the US for military assistance, were said to be very complicated with five different processes at work (ibid: 13). The US department of defence and Pakistani officials have both acknowledged,
that they had never agreed on the strategic goals that should drive how the money was to be spent or how to measure success. This culture of lack of oversight and comprehensive goals meant that the United States was offering Pakistani institutions and officials a clear incentive of misuse of US funds (ibid: 18).

4 Has the Purpose of Aid Been Achieved?

The US has given Pakistan and its military aid, primarily to conduct military manoeuvres which support the military strategy of the US in the region. Whether the Pakistani military saw and still sees the same game plan is a different issue and is discussed later. Nevertheless, one must ask the question, if at all it can be gauged, measured and answered, whether the purpose of this aid has actually been achieved? It is clearly difficult, if not quite impossible, to answer such a question where military action has been ongoing for the last decade or so, and is still continuing. Even if one could answer such broad questions, such as, has Al Qaida in the region been routed, and are the Taliban defeated, it would be almost impossible to assess to what extent the Pakistani military played a role in this objective, and whether the purpose of giving military aid to Pakistan had been achieved, even if partially. Moreover, while it seems that there have been some victories against insurgency in Afghanistan, it is equally evident that the war has not been completely won, and that counter-insurgency and counterterrorism are still equally urgent and necessary as they may have been some years ago.

Moreover, the US had inadequate procedures for checking how Pakistan spent the funds, and the guidelines issued to the US embassy staff in Islamabad did not require the staff to verify that the military in fact spent the money in the way described (ibid). Once the US gave the funds to the Pakistan government and to its military, it was no longer entitled to find out that they were spent as agreed (ibid: 21) and that the Pakistan military did not use most of these funds to fight terror, buying much conventional military equipment, leading one analyst to state that it is clear that Pakistan is not using the majority of the US money to fight terrorism or advance the US foreign policy aims for which it was allocated (ibid: 21). Azeem Ibrahim also cites nine specific examples of corruption in the Pakistani army related to military aid from the US, and argues that estimates by some western military officials put the portion of illegitimately spent funds at 70% (ibid: 22). Ibrahim has argued that Pakistani counterterrorism, the purpose of the US military aid to Pakistan, had failed until 2009. He argues that
the hope was that after 11 September 2001, Pakistan would clear terrorists from within its own borders, prevent them from using areas in north-west Pakistan as a safe haven, and help to bring the Al Qaida leaders to justice. Despite over $12 billion towards these aims, none have been achieved (ibid: 24).

5 Economic and Humanitarian Aid and Assistance

While military aid has been far substantial than economic aid post-9/11, economic and developmental aid was around 11% of all aid after 9/11 until 2007. These funds were designated for
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primary education, literacy programmes, basic health, food aid and support for democracy, governance and election support, almost all of the funds going through and disbursed through USAID. Some cash transfers were also made available to the Pakistani government, but it was not obliged to account for how this type of aid is spent in the donor country, and the US government has traditionally given these funds to the Pakistani government without strings attached, since the Pakistani government is not obliged to reveal how it is spent (ibid: 14). Not only has the US economic aid to Pakistan been heavily overshadowed by military and security-related aid to Pakistan, but until recently, has been lower than aid provided by other multilateral and bilateral donors. While the US economic assistance to Pakistan since 2001 to around 2008-09 has focused on broad social sector interventions as highlighted above, it is only recently that the US has begun to implement a longer-term strategy focusing on Pakistans frontier regions for the tribal areas sustainable development. However, for numerous obvious reasons, any development strategy in the frontier areas has, and will continue, to face insurmountable problems, especially regarding implementation, oversight, and the like. The frontier regions are not the most hospitable terrain at the best of times, and with a live war taking place in the region, most developmental efforts will be compromised. However, there is an even greater conflict in the image of the US in Pakistan, when it comes to US aid to assist Pakistans people. Soon after Pakistans devastating floods in the late summer of 2010, some aid from western and donor countries was made available on humanitarian grounds. The US emerged as one of the largest donors providing in excess of $400 million. Moreover, perhaps for the very first time in many decades, the US received a highly positive image makeover in Pakistan. Private television newsreels showed the US military troops flying helicopter sorties within Pakistan saving lives of Pakistanis stranded in parts of the flood-affected areas, and providing them with life-saving supplies, such as medicines and water and food. However, this positive image and photo-opportunity lasted all but a few days, when the same television channels were showing the footage of the destruction and death caused within Pakistan as a consequence of US drone attacks on the frontier regions. Any humanitarian and economic assistance to Pakistans people will always be seen in contrast to the consequences of military-related aid and actions.

6 The Consequences of Aid

Given the nature and form of US aid to Pakistan military, covert, unaccounted, unsupervised, etc, it becomes difficult to disentangle the direct consequences many deleterious and benefits of aid given to the country when an often undefined and obscure war on terror or counter-insurgency and counterterrorism campaign being waged in different guises for a decade. Hence, many Pakistanis have argued that on account of the US war on terror against Al Qaida and the Taliban and their supporters, in Afghanistan and Pakistan, the latter has been drawn into the US war, and has had to suffer grave consequences. They cite figures which state that as the US role has increased in the region, and as the Pakistani military has been further drawn in, it has been
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Pakistanis who have suffered. They cite figures which show that in 2003, there were 189 deaths from terrorist-related violence in Pakistan, which rose to 3,559 in 2007, and higher still since; recent announcements suggest that 30,000 Pakistanis have lost their lives in this war. Many Pakistanis would argue that on account of Pakistan being drawn into this war, the war has been brought in to Pakistani cities and towns, and was also responsible for the death of a former prime minister seeking re-election. Clearly, it is impossible to entangle the consequences of the war, and look at counterfactuals, but there is a great deal of weight in these arguments, and the US is blamed by Pakistanis for not containing terrorism in Afghanistan and exporting it to mainland Pakistan. Such impressions do not make for a friendly relationship or a positive image, something that aid is usually expected to do. Other opinions suggest that there has been the rise of militancy and insurgency and the rise of fundamentalism in Pakistan, and that most Pakistanis do not support such extreme tendencies. This view holds that with the US support and perhaps using the US pressure as an excuse, Pakistan and its military can play a leading role in rooting out terrorism in Pakistan. The drone attacks in Pakistans northern frontier are a case in point. While Pakistani leaders publicly condemn such strikes for political mileage, there is evidence and suggestions that they not only turn a blind eye to such attacks, but favour them, allowing the US to do their (the Pakistani governments) bidding. They play good cop, bad cop depending on who their audience is. Since there is such a large divide in perceptions of what the consequences of the war on terror have been for Pakistan and there is so much clouded in mystery and secrecy, it becomes difficult to comment upon whether the goals and objectives of the US and the Pakistans military are the same. At times it seems that each is using the other and there is clear deceit and mistrust in this relationship. As we have argued above, there are allegations that there has been considerable corruption in Pakistani institutions, and that some of the funds meant for military activities related to the war on terror have been diverted by the Pakistani military for more conventional weapons. Nor is this all. A large number of documents, some leaked, others obtained by journalists, suggest that there is a great deal of deceit in the USPakistan military relationship, and that the Pakistani military is, in fact, undermining the US campaign and that the Pakistani military has its own agenda. Recent reports in the US press have revealed that the Pakistani military is playing both sides, and the ISI has been protecting Taliban leaders within Pakistan. Nicholas Kristoff writes that the United States has provided $18 billion to Pakistan in aid since 9/11, yet Pakistans government shelters the Afghan Taliban as it kills American soldiers and drains the American Treasury.4 A former US ambassador to Afghanistan argued that the United States should demand that Pakistan shut down all sanctuaries and military support programmes for insurgents or else we will carry out operations against those insurgent havens, with or without Pakistani consent (Khalizad 2010). One can only imagine the consequences of such a serious step. Recent revelations by WikiLeaks only reaffirm what has been known in private circles, that there are deep clashes over

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strategic goals on issues like Pakistans support for the Afghan Taliban and tolerance of Al Qaida, and that there is frustration at American inability to persuade the Pakistan army and intelligence agency to stop supporting the Afghan Taliban and other militants, something that is conveyed to Pakistani officials by the US diplomats (Perlez et al 2010). Yet another consequence of US aid to Pakistan in the last decade has been that it perhaps inadvertently strengthens the hand of the military in comparison to Pakistans fledgling, emerging, democracy. While even Pakistani academics and scholars, and not just US state department officials, recognise that the Pakistani army is the most powerful and strongest institution in the country, there is concern that US aid to the military (even if this is primarily meant to benefit the US), only strengthens Pakistans military establishment which, as we argue, has benefited in terms of hardware and financial resources over the last decade, receiving a disproportionate amount of the assistance.

US assistance will be provided only to a government which has been elected freely, a clause which is meant to work against the attempts to undertake a military coup. While these clauses need to be welcomed, they raise a particularly problematic question: Why does a civilian, i e, non-military, assistance package require so many military conditions from a civilian government, which is weaker than the military and often unable to resist demands from the military? If, as most analysts on Pakistan agree, the military and some of its agencies are a law unto themselves, how will imposing conditions on a civilian government ensure that these conditions are adhered to by the military and its agencies?

8 Conclusions
The discussion and evidence lead to numerous conclusions, some shrouded in mystery and secrecy, others revealing duplicity, ambiguity and efforts at cross purposes. First, it is not at all clear to all parties what the objectives and purpose of US aid to Pakistan are. The US believes that this assistance to Pakistans military will encourage the army to help in the war on terror in the border regions of Pakistan. There is no real evidence that the Pakistani army is on the same page as the US administration in this regard, and whether the Pakistani government and military feel as strongly about Al Qaida and the Afghan Taliban as does the US administration. If anything, it seems that there is considerable difference of opinion and deception involved in whatever the rules of the game might be. Second, no matter whose war this is the USs a global war on terror, or Pakistans no one can deny that the repercussions on Pakistani citizens have been quite catastrophic, resulting in many thousand dead and injured. It is difficult to speculate what would have happened if a particular initiative or policy was taken or not taken; nevertheless, the impact on Pakistan has been severe. Third, in the past decade, it seems that there has been considerable oversight perhaps even deliberate in the aid relationship with Pakistan, and protocols and procedures have been ignored and not respected. Also, it seems that some amount of aid given by the US for specific purposes has been used by the Pakistani military for very different purposes. Fourth, since military aid has been twice or three times as large as economic aid, the US might have strengthened the hand of the military in Pakistans political economy, sidestepping the elected civilian government at the expense of strengthening and supporting democratic movements and institutions, having greater trust in the ability of the Pakistani military than in the civilian democratic government. Fifth, direct US economic aid does not have a critical impact on Pakistans economy because it is too small, focused on particular areas and regions, and is tied up in issues related to procedures, protocols and contractors. Economic and financial support from the International Monetary Fund, World Bank and other multilateral agencies has been far more critical to economic stability in Pakistan. However, one must add the important corollary in this regard, that the US is Pakistans most important trading partner by far, and has critical leverage over the economy. Pakistan receives 20% of its foreign remittances from the US (around $1.8
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7 Nature of Recent US Aid to Pakistan

Since 2008 or 2009, there has been a rethinking in the nature, pattern, form and amount of the US assistance to Pakistan. The first major step has been the promulgation of the Enhanced Partnership with Pakistan Act of 2009, which commits $7.5 billion in non-military aid to Pakistan over a five-year period, spending mainly on social programmes in education, healthcare, infrastructure development, poverty alleviation, and the like. However, not only is it not clear when and how the Act will actually start delivering aid to Pakistan, the fact that there was a great deal of disagreement amongst the Pakistani elite (especially the Pakistani military), shows that one could expect further debate and disagreement once it becomes fully operational. Moreover, if FATA is an area which is expected to receive special economic and developmental assistance in the form of reconstruction opportunity zones and the like, one can be sure that many of the issues which emerged earlier in the decade will re-emerge. Along with this civilian aid, a $2 billion military aid package was announced in October 2010, which is meant for Pakistan to buy American made arms, ammunitions and accessories from 2012 to 2016. The US officials hoped that the announcement will reassure Pakistan of Washingtons long-term commitments to its military needs and help bolster its anti-insurgent efforts (NYT 2010). The $1.5 billion five-year annual commitment of the Enhanced Partnership with Pakistan Act of 2009 does make a departure from the earlier (presumably unwritten) strategy which guided the US-Pakistan relations since 2001. For example, the Act lists numerous clauses which augur well for greater control and accountability of the military. There are clauses which state that Pakistans military or intelligence agencies have to stop supporting extremist and terrorist groups and that terrorist bases be dismantled. The Act prohibits the use of funds to upgrade or purchase F-16 aircraft, as has happened in the past and there is a requirement to close camps and end support to banned Pakistani organisations such as Lashkar-e-Taiba and Jamaat-ud-Dawa. Pakistan is expected to play an important role in stopping nuclear proliferation; and, importantly, according to the Act, the

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billion in 2009-10), 35% of foreign investment to Pakistan comes from the US (around $1 billion), and 18% of Pakistans exports go to the US ($3.6 billion). Sixth, it is not at all clear, who benefits from the US aid to Pakistan. There seems to be ambiguity about purpose, and hence benefit is difficult to clarify. While the Pakistani military has helped the US in its campaign or has allowed the US to conduct interventions such as drone attacks it is not clear whether this is adequate to win the war on terror or not. One gets the feeling that this may not be the case. Moreover, it becomes difficult to know what benefits the Pakistani army gets from the US military aid meant for the war on terror. One advantage seems to be that the military aid clearly earmarked for the war on terror has been treated as being fungible by the Pakistani military probably in full knowledge of the US administration to allow the Pakistani military to replenish its wider arsenal. It is difficult to argue that military aid to Pakistan has made the country safer in any way, and the results for the US may not be the same for Pakistan. Seventh, there seems to be a large shift since 2009 in the nature of US assistance to Pakistan, with far greater resources allocated to civilian aid rather than military aid. However, the aid may not have been released as yet, and may not have been very visible on the ground in Pakistan. Some conditions imposed in the nature of aid to Pakistan apply some checks and balances on the type of use of resources. Only when operational will one know of the efficacy of such measures. However, what seems odd is that a civilian aid package has numerous military conditions, and given the Pakistani governments weak control over and fear about the military, one is not sure how these
Notes
1 For data prior to 2002, different sources give conrior flicting data and it is difficult to say how much of the data is accurate. Moreover, data for nondevelopmental aid is also hard to come by. After 9/11 and 2002, data for US aid for Pakistan is more readily verifiable. 2 While information available in the public sphere is far better than in the past, we still do not know for sure if all aid data is made available. My guess is that this is probably not the case. 3 It is not clear if this $9.7 billion in five years was part of the military aid, or as seems probable, additional funds made available to Pakistans military. If this was the case, the publicly available information about US aid is severely under-reported. 4 Kristof (2010). Numerous investigative reports and articles in the New York Times suggest that this is so. See, also Dowd (2010).

conditions will be enforced. Moreover, the Pakistan government will always be able to play the moral hazard card even when conditions are infringed, and it is probable that as long as some of the US interests are being served, aid will flow despite these conditions. Leaked documents and cables from Islamabad have also confirmed what was public knowledge, that there is a great deal of interference and involvement in Pakistani politics by US officials, and the revelations have been shocking, about how much leverage the Americans were being given by the countrys civilian and military leadership to micro-manage domestic politics (Syed 2010). Another report uses stronger language with regard to Pakistans leadership: WikiLeaks precisely proves what was earlier said, i e, Pakistan has been practically reduced from a sovereign state to an American colony as the president, prime minister, top political leaders and even army chief all have been shown pleasing or taking into confidence the US ambassador the de facto viceroy of Pakistan to continue ruling the roost with the blessings of Washington (Abbasi 2010). Such commentary and accounts give a fair idea of the popular and public perception in which the relationship between the US and Pakistan exists. What seems to be clear is that it is the US administration, especially its military strategy, which needs the Pakistani military and the civilian government in Pakistan to undertake certain tasks for the US campaign in the region, far more than the Pakistanis need the US. In fact, one could even argue that Pakistan does not need the US aid and assistance at all. Nevertheless, what seems equally clear is that the US administration has far greater clout and influence over the Pakistani military and civilian government than its position warrants.
Congressional Research Service 7-5700, CRS Report for Congress, Washington. Nawaz, Shuja (2008): Crossed Swords: Pakistan, Its Army, and the Wars Within (Karachi: Oxford University Press). NYT (2010): Pakistan: Clinton Unveils Details of $2 Billion Miltary Aid Package, New York Times, 23 October. Perlez, Jane, David E Sanger and Eric Schmitt (2010): Wary Dance with Pakistan in Nuclear World, New York Times, 1 December. Syed, Baqir Sajjad (2010): WikiLeaks Bombs Rock Islamabad, Dawn, Karachi, 2 December.

Crossroads: Past Policies and Present Imperatives (Karachi: Oxford University Press). Ibrahim, Azeem (2009): US Aid to Pakistan US Taxpayers Have Funded Pakistani Corruption, Belfer Centre Discussion Paper, 2009-06, International Security Programme, Harvard Kennedy School, July. Khalizad, Zalmay (2010): Get Tough on Pakistan, New York Times, 20 October. Kristof, Nicholas D (2010): A Girl, a School and Hope, New York Times, 11 November. Kronstadt, K Alan (2009): Pakistan-US Relations,

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References
Abbasi, Ansar (2010): After the WikiLeaks Deluge, The News, Karachi, 2 December. Anwar, Mumtaz and Kathrina Michaelowa (2004): The Political Economy of US Aid to Pakistan, HWWA Discussion Paper 302, Hamburg Institute of International Economics. Centre for American Progress (2008): US Aid to Pakistan by the Numbers, Centre for American Progress, Washington DC, August. Dowd, Maureen (2010): The Great Game Imposter, New York Times, 24 November. Haqqani, Hussain (2005): Pakistan: Between Mosque and Military (Lahore: Vanguard). Hasan, Parvez (1998): Pakistans Economy at the
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