Promise And Premonition; Historical Context Of The US-Pakistan Relations And Emerging China Factor

A Ten-Year Assessment of the Enhanced Partnership with Pakistan Act of 2009

By Waleed Hashmi

Background

Many observers describe U.S-Pakistan affairs as torturous, mercurial, and enigmatic. Some view the two nations as “frenemies on the brink”.[i] Until recently, it had become increasingly difficult to find streams of optimism in Islamabad and Washington D.C. to suggest that positive days are ahead. While the U.S. is pursuing a political endgame in the Afghanistan War, Pakistan is burdened with domestic economic problems, a complex pandemic, and security concerns with its arch-rival India. To complicate matters further, both Pakistan and the U.S. have quarreled over the (mis)management of militant threats and sanctuaries around Pakistan’s borders. Indeed, the “trust deficit”[ii] that impedes both nations from greater cooperation does not appear too different from the wariness that existed in prior decades.

U.S. lawmakers have made attempts to reset relations with their South Asian ally, as well as provide considerable aid. Between independence and 2001, Pakistan received over $70 billion[iii] in American aid (military and non-military). Between 2002 and 2009, the majority of aid was related to defense, counter terrorism, and military support. However, a major shift in U.S. foreign policy and development occurred by way of the Enhanced Partnership with Pakistan Act of 2009, commonly known as the Kerry-Lugar-Berman bill (KLB). The legislation was promoted by Senator John Kerry as a critical step in improving long-term strategic commitment and bilateral trust:

“The heart of this bill gives the people of Pakistan $7.5 billion (Rs. 62,500 crore) over five years (2010-2014) in nonmilitary aid. This bill should be seen for what it is — a true sign of U.S. friendship to the people of Pakistan.”[iv]

Since the KLB was introduced to the Senate Foreign Relations Committee a decade ago, it has largely struggled to meet its original objectives and broader diplomatic goals. The trust deficit seems to have expanded, and Pakistan’s development indicators remain low.[v] Why was the KLB unsuccessful in achieving its targets, and does its collapse provide a larger commentary on the nature of U.S.-Pakistan relations? While the KLB was well-intentioned, its ostensible failure could be due to miscalculations in development, erratic U.S. foreign policy, and a problematic civil-military divide in Pakistan. Moreover, the KLB experience suggests that attempts to foster bilateral relations in recent history appear, on the one hand, to be promises but in fact are premonitions. The initial euphoria surrounding new legislation, in the case of U.S.-Pakistan ties, largely produces inadequate results and disgruntled actors.

Context and Construction of the Bill

2009 was, in many ways, a watershed year for Pakistan. While it was supporting U.S. efforts to defeat terrorism in Afghanistan, the internal political dynamics of the country were in flux. Democracy had seemingly been restored, as General Pervez Musharraf resigned in August of the previous year due to prospects of impeachment. The nation was recovering from Benazir Bhutto’s assassination, and struggling to contain repetitive cycles of violence in the form of suicides, bombings, and surprise attacks. The period spanning 2006-2009 was one of the bloodiest, as the number of those killed and injured soared into the thousands. Prime Minister Yousaf Raza Gillani and President Zardari were leading Pakistan at a time when the economy suffered from stagflation, state institutions clashed with armed forces, and judicial bodies had not fully been reinstated. The nation was in dire need of stability, direction, and assistance.

The KLB sought to provide some semblance of relief for the important South Asian ally. Proposed by Democratic Senator John Kerry and Republican Senator Richard Lugar, the bill was a bipartisan push for Congress to provide $1.5 billion yearly in non-military aid to Pakistan for five years. The bill was comfortably passed through Congress, and less than 30 days after being introduced, it was signed into law by President Obama. Zardari and the PPP endorsed the legislation, as the KLB was an ambitious commitment which had several developmental goals. These included emergency humanitarian relief, civilian assistance, private sector growth, regional border stabilization, and programs designed to support vital sectors like energy and health. It also targeted infrastructure, in the form of laying hundreds of kilometers of roads. The popular Fulbright Scholar Program, which allows students to study in the U.S., was also expanded by the bill.

Pakistan’s army leadership, as well as the media, were particularly critical of the KLB. The army was concerned by the language drafted in the bill, claiming it was written in a way that undermined the military. The frustration shown by Pakistan’s armed forces would only continue in years to come, placing a huge burden on U.S. diplomatic personnel at the State Department, officials at the Department of Defense, and policy makers on Capitol Hill. Many media outlets in Pakistan were skeptical of the bill. It was not uncommon to hear conspiracies and falsehoods in their programming. Some believed that the KLB was designed by a Zionist lobby, in which the Indians were involved, to bribe Pakistan and compromise its nuclear program. Media personalities feared that the bill would make Pakistan internally weak, and that it was a disingenuous attempt by the U.S. to control Pakistan because ground operations in Afghanistan were failing.

Knowing that initial reactions to the bill would be mixed, John Kerry published press releases to provide clarity for skeptics. In his statements, he argued that the bill does not impinge on Pakistan’s sovereignty; it does not expand the Predator drone program; it does not come with strings attached; and it does not require U.S. oversight on Pakistan’s military or internal affairs.

Miscalculations in Development

Since 1947, U.S. aid to Pakistan can be categorized in terms of economic assistance and military assistance. Prior to 2001, Congress obligated the highest number of funds to Islamabad in the early 1960s (mostly economic-related). Since then, U.S. aid fluctuated due to competing priorities at home and major events in the subcontinent. The Center for Global Development collected data on the history of U.S. outlays to Pakistan, as seen below. The lowest amount of aid was provided during the 1990s, partly because of Pakistan’s nuclear proliferation. Military aid understandably spiked after 9/11 and, for the first time, overtook economic assistance as the primary mode of support. The U.S. curtailed military assistance for nearly 20 years between the time period of the Indo-Pakistan War in 1965 and the Soviet invasion of Afghanistan in the early 1980s. Economic assistance during that time was provided, though it was oscillating.

[vi]

Historically, aid to Pakistan can be described as inconsistent and case-dependent. In many ways, the constant shifting of aid also tells the story of U.S-Pak relations. It has been a contentious ‘alliance’ due to opposing world-views and unpredictable behavior. Moments of harmony have often been followed by discord and silence. Ultimately, “this pattern has rendered the United States a far cry from a reliable and unwavering partner to Pakistan over the years.”[vii] Thus, the KLB’s implementation was destined for a path of doubt and disapproval. This is where the crafters of the bill may have miscalculated its efficacy and promise. Perhaps there should have been greater awareness about the historical success rate of aid to Pakistan.

It is also worth asking how the figure of $7.5 billion was determined. What calculations were made to confirm that number? Even though the KLB tripled economic assistance from prior aid, the yearly obligations of $1.5 billion seem capricious and low. Compared to Pakistan’s total GDP at the time (roughly $170 billion)[viii], the KLB’s assistance package was diminutive. Even if every program of the KLB produced its desired results, the overarching impact to Pakistan’s economy would have been insignificant. Another miscalculation that hampered the KLB was the decision to pass the legislation rather quickly. Any aid package that is as large as $7.5 billion would require ample time for bureaucratic bodies to convene and prudently decide all stipulations. Since the KLB had a massive portfolio of programs, the relevant stakeholders could be USAID, State, Commerce, Treasury, Energy, and more. However, since the bill was passed in less than one month, there may have been a higher likelihood of miscalculations in the development approach.

The five-year commitment of the bill seems to be another miscalculation by policy makers. Many would argue that development assistance should be a long-term endeavor, especially in the case of U.S. aid to Pakistan, which has been sporadic. The KLB could have seen greater success if Congress and President Obama extended it for a period longer than five years. Congressional and presidential turnover was another obstacle because it was unknown whether incoming officials would carry the same motivation and political will to support the KLB. In 2013, CGD’s Alexis Sowa advocated the idea of a no-cost extension of the KLB with the following rationale:

“By extending KLB’s time frame from five to ten years, the US government would signal its interest in a long-term partnership with Pakistan’s civilian government to tackle fundamental issues of economic development and growth. Even if the Congress did not approve a formal reauthorization it could signal its support for continued engagement with Pakistan on economic and social development, perhaps in the form of a Congressional Resolution.”[ix]

Policy leaders in Washington could have used several bureaucratic mechanisms to prolong the KLB’s lifeline. The fact that funding for the bill was cut off in 2013/2014 signaled low confidence and distrust. In retrospect, that may have been key miscalculation because relations only soured thereafter, and some in Pakistan perceived the U.S. to be repeating a history of economic abandonment.

Erratic Foreign Policy

Following the end of the Cold War, the U.S no longer needed to rely on its Truman Doctrine or any strategy of containment. Some have argued that the nature of U.S. foreign policy after 1990 morphed into a type of reactive pragmatism.[x] That is, conducting global affairs on a practical case-by-case basis, and reacting to events. While President Bush’s foreign policy was predicated on a global war on terror, there was no clear doctrine or ideology that was laid out. Two major foreign policy actions in Pakistan severely undermined the KLB’s work. The first was America’s nascent drone program, and the second was the perplexing capture of Osama Bin Laden in Abbottabad.  In addition to these events, one can point to the Raymond Davis incident, the ‘Memogate’ scandal, and the Salala attack as further irritants to the bilateral relationship.

Drone strikes in Pakistan have earned a dreadful reputation by the public, even though several operations were backed by Pakistani intelligence[xi]. Despite successfully targeting and executing high-level insurgents, many viewed the strikes unfavorably because of collateral damage to civilians. There was also a common perception that drones were violating national sovereignty and endangering human rights. The extreme unpopularity of U.S. aerial tactics not only damaged credibility, but also would have made development programs like the KLB seem suspicious and contradictory. The overlap in timing between the KLB and America’s drone program may have indicated mixed intentions to Pakistan’s government and the public, further driving conspiracies within media programming and perpetuating the people’s disapproval of the Western superpower.

The mysterious capture and killing of Osama bin Laden complicated U.S.-Pak affairs at a time when mutual distrust was already peaking. It is claimed by some that the original phone number that ultimately led to tracking bin Laden may have been provided by Pakistan – as a direct result of intelligence sharing. Nevertheless, the incident may have single-handedly cemented the idea of Pakistan being synonymous with safe havens/sanctuaries for extremists. Bin Laden’s capture in Abbottabad could have further persuaded U.S lawmakers to limit, and eventually abandon, the KLB. Akbar Zaidi notes that the “barrage of writing and analysis that has appeared since the killing of bin Laden in Pakistan has underscored this point, with such words as “duplicity” and “double game” being used extensively by U.S. analysts and policymakers alike.”[xii] These descriptions of America’s mercurial South Asian ally are still being used today. They also point to a desperate need for reconciliation and trust-building for both countries.

Given the present reality of U.S.-Pak affairs, it would be surprising to see an aid package like the KLB in the near future. Ten years ago, Congress and the President quickly obligated billions of taxpayer dollars to Pakistan’s development. The same cannot be promised today, indicating just how low the level of trust and alliance may have reached.

Civil-Military Divide

The KLB was a clear admission by the Americans that previous ways to deal with Pakistan had failed. Lawmakers saw Pakistan’s democratic restoration of 2009 as a fortuitous opportunity to support the country with development funds, and provide a gesture of goodwill. The PPP welcomed the financial support, but perhaps more so the idea of the U.S. working with civilian counterparts instead of the military when it came to Pakistan’s internal development. Unfortunately, the civil-military divisions at the time had reached a point where members of the armed forces were highly skeptical of the bill and its confidence toward Pakistan’s civilian government. The army appeared to be offended by the KLB, and believed it was an attempt to prevent the army from conducting another coup.

Though the army was no longer in power, its rhetoric gave the impression that it could still regulate and run the country. The KLB was strictly a non-military initiative, yet the army was harshly critical of the bill’s language and motives. The civil-military division was not merely on a political level. Pakistan’s armed establishment has had a disproportionate control over key sectors and industries in the country. The army naturally came to view the KLB as an external attempt to modify sectors over which it had exercised great control. If the KLB’s language was not in accordance with how the military preferred it to be, then it would certainly vocalize its opposition to the bill. Despite efforts by Senator Kerry and U.S. government officials to lobby for the bill, it became apparent that the army’s intransigence would be a massive obstacle to the KLB’s goals.

Since the KLB was not written on the army’s terms, U.S. lawmakers had the initial challenge to convince Pakistan’s security establishment that the bill was a genuine attempt to foster bilateral friendship and support the country’s economic growth. Senator Kerry used candid and honest language to persuade opponents: “even when Americans are going through a deep recession and tough economic times, the United States is pledging $7.5 billion (Rs. 62,500 crore) as a long-term commitment to Pakistan”.[xiii] The army did not seem convinced, and continued viewing the bill “as a deliberate strategic attempt by United States to weaken the Pakistani army and intelligence agency, which they believe are the last bulwarks with the ability to prevent U.S. expansion plans in the region.”[xiv] The budding U.S.-India strategic partnership, which is outside the scope of this article, was another significant source of mistrust between Washington and Islamabad.The KLB experience depicts US-Pak relations in a low-spirited light. Ten years after its formation, many of the same problems that the bill sought to alleviate are persisting. The economy is suffering from inflation, low growth, and inadequate foreign investment. China’s influence in Pakistan has multiplied, and the alleged support for extremist groups remains an issue. While the U.S. seeks reliable caretakers in the region after its departure from Afghanistan, it will have to work closely with Pakistani counterparts on cross-border affairs. The deficits in trust and bilateral cooperation may not be intractable, but certainly are problematic. Recently, New Delhi’s significant cooperation with the U.S. on security, economic, and human capital affairs could further complicate Islamabad’s geopolitical calculus.

The KLB was a noble effort to create, administer, and promote an aid package. It ultimately struggled, but it offered lessons for future engagement. Foreign assistance alone cannot lead to desired results. A nation’s foreign policy actions should, in a perfect world, complement the development work it is undertaking. It is also worth pursuing a long-term foreign assistance plan that can withstand criticisms that the KLB often received. Any successful international partnership is one that is institutionally resilient, supported by both constituencies, and impervious to turnover or change in government. Given the U.S-Pakistan history, these conditions simply cannot be achieved in 5 year increments.

The China Factor

As the KLB all but halted in 2014, Beijing’s ambitious Belt and Road Initiative (BRI) looked toward Pakistan, and established the China-Pakistan Economic Corridor (CPEC). Considered by many as the largest infrastructure initiative in history, BRI seeks to expand China’s economic diplomacy through extensive development projects and inter-regional connectivity. Pakistan had received relatively little development support from China before 2000, but found itself well-positioned to receive Chinese aid especially since domestic infrastructure networks were under-developed. Thus, CPEC focused heavily on road expansions, mass transit, energy growth, and special economic zones.

CPEC, and the broader BRI framework, has received ample criticism related to opaque business practices, debt-trap diplomacy, environmental harm, and corruption. The U.S. has perhaps led the most vocal campaign against CPEC and BRI, remarking that “Beijing is not a member of the Paris Club, and has never supported globally-recognized, transparent lending practices…China does not publish, or even report, overall figures on its official lending. So neither rating agencies, nor the Paris Club, nor IMF are able to monitor those financial transactions.”[xv] Though Beijing has regularly denied claims related to debt-traps and illegitimate development tactics, some observers have noted a change of tone in major speeches pertaining to the BRI. During the 2019 Belt and Road Forum, President Xi pledged a “debt-sustainability framework” and noted that “everything should be done in a transparent way, and we should have a zero tolerance for corruption.”[xvi] The granular impact of Xi’s statements remains unclear, but it seems that pressure from the U.S. and like-minded countries has been effective.

So what does this imply for Pakistan, which has enjoyed ongoing relations with Beijing, as well as improved ties with Washington D.C? Great power competition could have a positive impact for Islamabad, as both the U.S. and China are competing for influence and partnerships in the Asia-Pacific region. Prime Minister Khan’s National Security Advisor Moeed Yusuf noted in August that economic diplomacy, trade, and investment are priorities for the Khan administration[xvii]. According to Yusuf, Pakistan is not selective when it comes to assistance or economic engagement from China or the U.S., suggesting it is a win-win situation for Pakistan.

It is unlikely the U.S. will repeat the KLB formula for development aid. Instead, the focus on trade and investment will be key, as suggested by President Trump during the Khan visit in 2019. It may also be unlikely for CPEC to continue operations and project management in the same manner that it did during its early years, due to increased pressure from critics. Thus, Pakistan sits in a unique position as both the U.S. and China might re-examine their development models. It could be in Pakistan’s best interest to promote a positive investment climate and business reforms that encourage foreign countries to invest in its growing domestic markets. However, many observers have low confidence in the Pakistan government to implement serious changes that it needs to match its economic diplomacy goals.

Great power competition between the U.S. and China is expected to continue, despite the outcome of American elections. It will ultimately depend on Pakistan whether it pursues policies that are favorable not only for its own growth, but also to attract commercial investment and development from global powers.

Guest Analyst Waleed Hashmi received his Master’s Degree in Public Policy from George Mason University’s Schar School of Policy and Government. He resides in the Washington D.C. Metro Area.

 

[i] Mansoor, Peter. The United States and Pakistan: Frenemies on the Brink. Hoover Institution, April 26 2018. https://www.hoover.org/research/united-states-and-pakistan-frenemies-brink

[ii] Yusuf, Moeed. Trust Deficit. Dawn, January 30 2018. https://www.dawn.com/news/1386022

[iii] Zaidi, Akbar. Who Benefits from U.S. Aid to Pakistan? Carnegie Endowment for International Peace. September 21, 2011. Page 3.

[iv] Press Release. “Separating Myth from Fact on the Enhanced Partnership with Pakistan Act of 2009. October 8, 2009. https://web.archive.org/web/20120406114831/http:/kerry.senate.gov/press/release/?id=623931a0-151c-4cac-8eb2-7d9ddbd96df8

[v] Pakistan, Journey to Self-Reliance: FY2019 Country Roadmap. Data presented by USAID. https://selfreliance.usaid.gov/country/pakistan

[vi] “Aid to Pakistan by the Numbers”. Center for Global Development. September, 2013
https://www.cgdev.org/page/aid-pakistan-numbers

[vii] Ibid.

[viii] Data of annual GDP growth provided by The World Bank. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=PK

[ix] Sowa, Alexis. 2013.

[x] Kaine, Tim. “A New Truman Doctrine: Grand Strategy in a Hyperconnected World”. Foreign Affairs. July/August 2017 Issue. https://www.foreignaffairs.com/articles/2017-06-13/new-truman-doctrine

[xi] Mir, Asfandyar. The U.S. Drone War in Pakistan Revisted. Lawfare, 2018. https://www.lawfareblog.com/us-drone-war-pakistan-revisited

[xii] Zaidi, Akbar. 2011

[xiii] Press Release. “Separating Myth from Fact on the Enhanced Partnership with Pakistan Act of 2009. October 8, 2009. https://web.archive.org/web/20120406114831/http:/kerry.senate.gov/press/release/?id=623931a0-151c-4cac-8eb2-7d9ddbd96df8

[xiv] Hippel, Karin von and Shahid, Shiza. “The Politics of Aid: Controversy Asurrounds the Pakistan Aid Bill.” Center for Strategic & International Studies. October 19, 2009.

[xv] Wilson Center remarks by Ambassador Alice Wells; November 21, 2019.
https://www.wilsoncenter.org/event/conversation-ambassador-alice-wells-the-china-pakistan-economic-corridor

[xvi] Chun Han Wong & James Areddy, “China’s Xi Vows New Direction for ‘Belt and Road’ After Criticism”. April 26, 2019. https://www.wsj.com/articles/chinas-xi-vows-new-direction-for-belt-and-road-after-criticism-11556249652

[xvii] Atlantic Council remarks by NSA Moeed Yusuf. “Navigating Pakistan’s National Security Challenges; August 10, 2020. https://www.atlanticcouncil.org/event/navigating-pakistans-national-security-challenges/