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Developmental Assistance to Pakistan: Policy Options

Alyssa Nielsen
Political Science 376 US Foreign Policy
Dr. Scott Cooper
March 16, 2016

Since the Bush administrations War on Terror strategy, Pakistan has been a key recipient of foreign aid (Hook 376). While
some money is appropriated to military aid, other money is set aside for developmental assistance. Official Developmental Assistance
(ODA) is tracked by an international organization formed originally to manage the funds of the Marshall Plan, the Organisation for
Economic Co-operation and Development (OECD 2015). The U.S. is the largest contributor of ODA. Its $30 billion contribution of
development aid in 2010 was more than double the $13 billion in aid provided each by the United Kingdom, Germany and Japan
(Hook 2014, 371). U.S. foreign assistance is mostly handled by the Agency for International Development (USAID). Total U.S.
foreign assistance accounts for less than one percent of the national budget (USAID 2014).
In FY 2015, the U.S. spent roughly $650 million in developmental assistance to Pakistan (ForeignAssistance.gov 2016). This
follows the 2010-2014 foreign aid budget for Pakistan established by the Enhanced Partnership with Pakistan Act of 2009, which
allotted $7.5 billion between 2010-2014 (USAID 2013, 1). Under the act, the U.S. obligated $3.984 billion and actually spent $3.571
billion on Pakistan assistance between the fiscal years 2010-2013 (USAID 2013, 7). In FY 2014, the USAID reported spending $575.8
million. That total was divided among six sectors: democracy and governance, $76.8 million; economic development, $249.0 million;
education and social services, $72.6 million; health, $58.7 million; humanitarian assistance, $77.2 million; and program management,
$41.4 million (USAID 2014). In the Enhanced Partnership with Pakistan Act, Congress specified why extensive aid to Pakistan was
justified and what the aid was supposed to help. For instance, the act states that Pakistan is a critical friend and ally to the United
States and that both countries share important goals, notably combatting terrorism and violent radicalism. The act also asserts that
Pakistan is to be the leader of its own development, with the U.S. playing a supplemental role. Goals of aid, as stated by the act,
include improved educational institutions and practices, stronger counterterrorism efforts, more stable Pakistani government and rule
of law, and sustained economic development (United States Congress 2010).
Now after the period of time covered by the Enhanced Partnership, it is time to reevaluate U.S. developmental assistance to
Pakistan. The U.S. must consider the effectiveness of aid, the security risks of aid, and the needs for aid.
Critics say that the U.S. billions have not produced meaningful change in Pakistan, particularly change regarding violent
extremism and perceptions of the U.S. Its hard to measure the success, with USAID pointing to improvements and long-term
prospects of peace and prosperity and with critics pointing to terrorist enclaves, including what was Bin Ladens, and continued antiAmerican sentiments. The Pakistani military did not take well to the Enhanced Partnership, frustrated about stipulations related to
civilian control over the military and saying the legislation interfered with national security, and Pakistanis receive U.S. aid with
great suspicions about the U.S.s goals and overall commitment to Pakistan (Imtiaz 2015). Bureaucracy pitfalls also plague the
effectiveness of assistance. When USAID, the Department of Commerce (DOC), the Department of Agriculture (USDA), and the
Trade and Development Agency (USTDA) concurrently run several separate projects, overlapping and overspending happens. Money
returns to those agencies to pay their employees. When USTDA hosts a conference in the U.S. for only eight Pakistani bank
representatives and when USAID sends 15 Pakistani farmers to Australia, money is wasted (USAID 2013, 12-17).
Security also presents a problem for U.S. assistance. Repeatedly, the USAIDs Quarterly Progress and Oversight Report tells
of violence against aid workers. Between October 2009 and December 2012, 44 aid workers were killed in Pakistan, 21 wounded,
and 35 abducted (USAID 2013, 3). The Department of States Bureau of International Narcotics and Law Enforcement Affairs (INL)
reported that staff had to leave Peshawar because of security concerns, and the staffs relocation adversely affected project oversight
in Khyber Pakhtunkhwa and FATA, which are a major focus of INL assistance in Pakistan (USAID 2013 23). Muhammad Nasir
suggests that terrorist groups are threatened by U.S. aid and so increase violence to combat the threat, leading to an overall decrease in
security, especially for aid workers and projects. Even education aid provokes terrorists (Nasir et al. 2012, 1139-44).
Despite the criticisms of aid inefficiency and danger, there are reasons why the U.S. assists Pakistan, and those reasons need
also to be considered when deciding the future of foreign aid to Pakistan. First, the average annual income in Pakistan is only $2,566
per person (USAID 2014). The Quarterly Report says that 60 percent of Pakistanis live on two dollars or less per day and half of the
population over the age of 15 are unemployed (USAID 2013, 12). Second, Pakistan has frequent energy shortages and resulting
blackouts, which the Quarterly Report says are a routine feature of daily life and sometimes extend for as long as 20 hours (USAID
2013, 10). The energy dilemma prevents Pakistan from effective development. Third, the Education for All Global Monitoring Report
in 2012 ranked Pakistan 113 out of 120 countries according the Education for All Development Index, and Pakistan is host to the
worlds largest population of out-of-school children (5.1 million) (USAID 2013, 31). Fourth, Pakistan is one of three countries
(Afghanistan and Nigeria) with active polio (Runde 2015, 469). Fifth, nationwide instability, poor economic prospects, and inadequate
education create a perfect breeding ground for terrorism, and Pakistan is the house of many terrorist groups. It was the hiding place of
Osama bin Laden for several years. And sixth, China stands as an alternative source of assistance for Pakistan (Imtiaz 2015). Dan
Runde argues aid should be spent in full awareness of the rise of China and that all else equal, aid that is relevant to theaters of
competition where those states [China and Russia] are engaged should have priority over theaters in which they are not engaged
(2015, 463).
In view of the general criticism of aids inefficiency, the security risks, and the needs for aid, below are two feasible policy
options for the U.S. to pursue and a judgment of which will better fit the interests of the U.S.
Option 1: Cut Back to Minimal Humanitarian Aid
The U.S. has in the past cut off assistance to Pakistan. As late as the 1990s, the U.S. halted aid entirely and shut the doors of
the USAID offices (Center for Global Development 2014). Option 1 recommends curtailing aid to just humanitarian aid. During
2011-2014, the average USAID humanitarian cost in Pakistan was $84.5 million (USAID 2014). Going forward, the U.S. should plan
to give Pakistan $85 million per year for humanitarian needs and spend less when possible. This option has many advantages. First,
there is less risk for and backlash against U.S. aid workers and their projects. Nasir warns that financial assistance for social
transformationis considered an intrusion against the established cultural values and social norms and lead to violence, even if the

intent was good (2012, 1143). Second, Pakistan is left with the responsibility to develop and stabilize the country. The responsibility,
while a burden, gives Pakistan ownership over successes. Third, wasteful, inefficient spending is stopped, and saved money can be
redirected to other countries of interest or back to the U.S. Fourth, the U.S.s aid wouldnt have to compete with Chinas. Saba Imtiaz
says Chinese aid comes without the list of conditions given by Western donors (Imtiaz 2015). Fifth, this option highlights the
American value of self-help and American skepticism of social welfare programs. Option 1 comes with a list of disadvantages too.
First, the U.S. presently contributes less of its budget to foreign assistance than the 0.7 percent expected by the OECD of all ODA
contributors (Hook 2014, 376). Because the U.S. only donates about 0.2 percent of its gross national income, the U.S. is often held in
contempt by other countries, despite contributing the most money (Hook 2014, 371-73). Second, it also leaves Pakistan to handle its
security and terrorism problems independently. The concern here is that Pakistan cannot be trusted to run effective counterterrorism
programs. By cutting aid, the U.S. cuts its expectation for allegiance and compliance from Pakistan (Hook 2014, 374). Third, it
abandons the Pakistani people. One motivation for aid is actual concern for other humans, and cutting aid sends the message that those
people are none of our concern. Fourth, this plan also abandons U.S. efforts to eradicate polio. Dan Runde argues that the fight against
global pandemics should be a priority for all countries and that the U.S. should use foreign assistance to finish the job of eradicating
polio (2015, 469). Fifth, while less aid means less challenge to the social norms of Pakistan and thus less violent backlash, it also
means less improvement in education and in equality for all people.
Option 2: Concentrated Assistance: Energy, Agriculture, Education, and Health
Concentrated assistance is a plan based on the status quo of prioritizing foreign aid to Pakistan above the aid to most other
recipients. This option allows for the U.S. to maintain high spending in Pakistan up to $750 million per year. However, some changes
should be made to reduce wastefulness and increase effectiveness. Concentrated assistance would prioritize energy, agriculture,
education, and health sectors, with an overall commitment to the security of all U.S. aid projects. Reasons for prioritization are as
follows. Energy: Power shortages across Pakistan slow development and economic growth. The Quarterly Report cites the Asian
Development Banks estimate that Pakistans power outages reduce economic growth by at least 2 percent a year (USAID 2013,
10). Agriculture: According to the Quarterly Report, the agriculture sector makes up 21 percent of the gross domestic product and 44
percent of the labor force, but it is constrained by insufficient investment and policy limitations (2013, 12). Dan Runde claims that
the U.S. has unique expertise in this sector and so is the best country to advise and assist agriculture (2015, 470). Education: While
Nasir points out the terrorist attacks against schools supported by the U.S. (2012, 1143), supporting non-extremist education is still in
the U.S. interest. The U.S.s fight against terrorism cannot condone the radical madrasahs that promote terrorism. Jessica Stern says
that many children attend extremist schools only because their parents cannot afford the alternatives and better funding for secular
education could therefore make a positive difference (Stern 2003, 39). One key to this plans education sector is ensuring the
schooling for girls and women. This will require intense advocacy and additional security measures to ensure the safety of students,
but as Runde notes, change in the status of women is directly related to the number of girls who complete high school (2015, 469).
Health: One crucial focus for U.S. health assistance should be eliminating polio in Pakistan. Another is maternal and child health. The
Quarterly Report says that in the region, Pakistan has the highest rate of stillbirths and the second-highest rates of newborn, infant,
and child mortality (USAID 2013, 35). The breakdown for how should be spent on each sector follows: Energy $250 million,
Agriculture $100 million, Education $200 million, and Health $125 million. The remaining $125 million of the $750 million budget
should be used with discretion to assist other programs of U.S. interest in Pakistan, including humanitarian aid programs. All
allotments are significantly more than present spending in each sector. Reasons to pursue Option 2 are as follows. First, it allows for
concentration on a small number of areas. The idea is to concentrate U.S. efforts so as to accomplish goals and move forward. As real
progress happens, the U.S. can eventually trust things to Pakistans sole care and can pursue other interests. By focusing more money
in fewer areas, the U.S. can invest in more than just 15 farmers at a time, wasting less money than at present. Second, it sends a clear
message of U.S. intentions for Pakistan. This is not a back-down to terrorists policy. Pakistanis will know that their wellbeing and
long-term prosperity is in the U.S.s plan. Third, the U.S. will still hold a strong influencing role in Pakistan. As Hook emphasizes, the
U.S. can leverage its aid to expect Pakistan to help combat terrorism (Hook 2014, 374). This influence is also important considering
the nuclear tensions between Pakistan and India. And, the U.S. will through this policy demonstrate what the U.S. can offer in
comparison to what China can offer. Fourth, assisting Pakistans development and alleviating poverty lessen the persuasion of
extremist rhetoric, resulting in greater long-term security. Fifth, Option 2 allows the U.S. to build its reputation among other countries.
Donor countries will see the U.S.s continued commitment to help the worlds development, and all will see the U.S.s commitment to
its values and its messianic role. Of course, Option 2 comes with a share of disadvantages as well. First, it is costly, and it is difficult to
persuade American citizens to fund projects outside U.S. borders. Second, backlash and extremist opposition is inevitable. Working in
such insecure conditions heightens risk of larger conflict in Pakistan. Third, there will still be some waste and some corruption. As
much as policy implementers try, complete efficiency is impossible, especially in an unstable state. Fourth, continuing aid despite
failures of the Pakistani government to cooperate fully with the U.S. in counterterrorism efforts may be rewarding the Pakistani
government for not complying with the U.S. and encourage further noncompliance. This criticism is poignant for those who believe
Pakistani officials knew about Osama bin Ladens refuge, as Carlotta Gall claims (Gall 2014). Fifth, many Pakistanis, including
government officials, are reluctant to work with the U.S. because they are unsure about U.S. intentions.
Ultimately, I recommend Option 2: Concentrated Assistance. Abandoning Pakistan will not help the U.S. If the U.S. cuts
assistance, Pakistan will rely more on China than ever, and Pakistans poverty can only worsen, leading to more extremism.
Concentrating our efforts on energy, agriculture, education, and health will give purpose and direction to foreign aid, and it will
simplify the oversight process. Concentrated assistance is aid with a goal. While Option 2 is more expensive than Option 1, it is also
more effective in the long-term development and stability of Pakistan. It will give us an edge on the fight against terrorism, and it will
be a demonstration of the U.S.s leadership in the world.

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