What About Pakistan?

by Pejman Yousefzadeh on March 28, 2009

Much of the attention being paid to the President’s recent speech on American policy towards Afghanistan and Pakistan has focused on the fact that more troops will transfer over to Afghanistan to fight the Taliban and al Qaeda there. But largely lost in the shuffle has been Pakistan. This isn’t really the President’s fault; his speech did focus a fair amount on Pakistan. But for commentators discussing the President’s speech, Pakistan has almost served as an afterthought once the discussion concerning Afghanistan plays itself out.

This is a shame, because when one examines the Obama speech closely, one finds that when it comes to an analysis of the Administration’s stated policy concerning Pakistan, there is something missing. Consider the following excerpts:

A campaign against extremism will not succeed with bullets or bombs alone. Al Qaeda’s offers the people of Pakistan nothing but destruction. We stand for something different. So today, I am calling upon Congress to pass a bipartisan bill co-sponsored by John Kerry and Richard Lugar that authorizes $1.5 billion in direct support to the Pakistani people every year over the next five years — resources that will build schools and roads and hospitals, and strengthen Pakistan’s democracy. I’m also calling on Congress to pass a bipartisan bill co-sponsored by Maria Cantwell, Chris Van Hollen and Peter Hoekstra that creates opportunity zones in the border regions to develop the economy and bring hope to places plagued with violence. And we will ask our friends and allies to do their part — including at the donors conference in Tokyo next month.

[. . .]

At a time of economic crisis, it’s tempting to believe that we can shortchange this civilian effort. But make no mistake: Our efforts will fail in Afghanistan and Pakistan if we don’t invest in their future. And that’s why my budget includes indispensable investments in our State Department and foreign assistance programs. These investments relieve the burden on our troops. They contribute directly to security. They make the American people safer. And they save us an enormous amount of money in the long run — because it’s far cheaper to train a policeman to secure his or her own village than to help a farmer seed a crop — or to help a farmer seed a crop than it is to send our troops to fight tour after tour of duty with no transition to Afghan responsibility.

Okay, fine. I buy this; we need to give aid to the Pakistani government. We have a lot of skin in this game and we have got to prevail in our efforts to aid both Afghanistan and Pakistan. That will require money and it can be money well spent.

Notice, however, that I wrote “can be money well spent.” It does not have to be and there is reason to be concerned that it may not be. While the President called for the Pakistani government to be more vigilant and active in the effort to defeat al Qaeda militarily, a careful perusal of the President’s speech reveals no call whatsoever for the Pakistani government to implement economic reforms that will allow it to make maximum use of any American aid.

This omission is bizarre. Take a look at the CIA World Factbook entry on Pakistan and you will find that GDP is a mere $454 billion, with GDP per capita reaching a mere $2,600. As the overview tells us:

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and declining exports of manufactures. Faced with untenable budgetary deficits, high inflation, and hemorrhaging foreign exchange reserves, the government agreed to an International Monetary Fund Standby Arrangement in November 2008. Between 2004-07, GDP growth in the 6-8% range was spurred by gains in the industrial and service sectors, despite severe electricity shortfalls. Poverty levels decreased by 10% since 2001, and Islamabad steadily raised development spending in recent years. In 2008 the fiscal deficit – a result of chronically low tax collection and increased spending – exceeded Islamabad’s target of 4% of GDP. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to 24.4% in 2008, primarily because of rising world fuel and commodity prices. In addition, the Pakistani rupee has depreciated significantly as a result of political and economic instability.

So, things ain’t pretty. And yet, there has been no statement from the Obama Administration to the effect that (a) the Pakistani government has to reform its economic system in order to ensure that American aid is actually able to help Pakistan, and (b) the United States will help on that score.

For the Obama Administration to be able to implement meaningful and positive change when it comes to Pakistan, it has to do something about the systemic problems that are keeping Pakistan’s economy down. Absent such efforts, aid from the United States may as well be thrown down a rathole. I am all for winning in Pakistan and Afghanistan. Unfortunately, the Obama Administration has left it an open question as to whether it feels the same way.

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