Beyond Bullets and Bombs: Fixing the United States Approach to Development in Pakistan

Washington: U.S. and Pakistani development experts are urging a substantial revamp of the U.S. approach to Pakistan, saying that U.S. efforts to build prosperity in the nuclear-armed nation with a fledgling democratic government, burgeoning youth population, and shadowy intelligence services are not yet on course.

“After two years, the new U.S. approach cannot yet boast a coherent set of focused development priorities or the organization and tools to manage and adjust those priorities as conditions require,” says the report from a study group convened by the Centre for Global Development.

“The United States is way off course in Pakistan,” says CGD president Nancy Birdsall, who convened the study group and is the lead author of the report. “It’s heavily focused on security while neglecting low-cost, low-risk investments in jobs, growth, and the long haul of democracy building.”

The report says that the administration’s integrated “Af-Pak” approach—lumping Pakistan together with Afghanistan in policy deliberations and bureaucratic lines of authority—has “muddled” the Pakistan development mission. Similarly, “the integration of development, diplomacy, and defense has… left the program without a clear, focused mandate.”

It urges a revamp of the U.S. strategy toward the country, starting with greater reliance on trade—offering duty-free, quota-free access for all Pakistan exports to the U.S. market for at least five years—and increased incentives for investment, such as new forms of risk insurance and credit programs for Pakistan’s small and medium enterprises. Much of the report focuses on how to improve the U.S. aid program in the country.

Since Osama bin Laden was discovered hiding in a Pakistani garrison town, some Americans are asking if the United States should continue to provide up to $1.5 billion per year in development assistance to Pakistan. The report recommends mending, not ending the assistance program.

“Pakistan’s development and prosperity matter to the United States,” says Birdsall. “There are many problems with our support for development in Pakistan, but ending the aid program would make things even worse. We cannot walk away now. We can and must fix it.”

The report offers five procedural recommendations to get the U.S. development program on track: Clarify the mission: separate the Pakistan development program from the Afghanistan program and from the Pakistan security program.

Name a leader: put one person in charge of the development program in Washington and in Islamabad. Say what you are doing: set up a website with regularly updated data on U.S. aid commitments and disbursements in Pakistan by project, place, and recipient.

Staff the USAID mission for success: allow for greater staff continuity, carve out a greater role for program staff in policy dialogue, and hire senior-level Pakistani leadership.

Measure what matters: track not just the outputs of U.S. aid projects, but Pakistan’s overall development progress.

Among the report’s five substantive recommendations are three on better ways to deploy aid resources—including paying for verified outcomes and co financing with other donors for established education programs that are already working—and two on the largely untapped potential of trade policy and private investment.

“If we are serious about the importance of economic growth in Pakistan, aid alone is not a solution,” says Robert Mosbacher Jr., a study group member and former president of the Overseas Private Investment Corporation. “Helping the Pakistani private sector compete is an investment in a healthy Pakistani middle class that will pay taxes and hold their government accountable for spending them wisely.”

Shuja Nawaz, a study group member who has written extensively on Pakistani civil-military relations, adds: “We have seen quite clearly how American and Pakistani security interests are intertwined, if not always identical. But over the long run, the security of both nations will only be ensured if Pakistan can develop economically and politically. The United States must keep one eye on this prize—even at moments, like now, when short-term crises seem more important.”