CGD’s Report Questions Obama Administration for Spending on Pakistan;

‘Introduce Economic Reforms or Face Delay in Aid’: W. Elahi

‘The United States must delay much of a $7.5 billion aid package to Pakistan until the South Asian ally riddled with corruption and anti-American militancy makes major economic reforms,’ a new American report Published in Washington post on Thursday says.

A task force of the Center for Global Development (CGD) has also questioned the effectiveness of hundreds of millions of dollars the United States already has spent in Pakistan.

‘By funding Band-Aid fixes that delay outright crisis and make it easier to avoid necessary but difficult solutions, even well-implemented aid can delay enduring solutions to Pakistan’s most serious problems,’ the report further says.

It adds that the ‘pure act of delaying disbursement in certain sectors will benefit both the Pakistani reform process and the ultimate effectiveness of U.S. aid.’

Wren Elhai, a co-author of the report, has noted that Pakistan’s growth has slowed not because of a lack of aid, but because of the lack of reform, especially of the tax system and energy sector. According to some analysts, less than 2 percent of Pakistanis pay income tax and many also pay nothing for electricity. “The U.S. can’t buy those solutions,” Mr. Elhai added.

The Center’s report faults the Obama administration’s decision to lump Pakistan and Afghanistan together under a so-called ‘Af-Pak’ Policy, saying this has ‘muddled’ the Pakistan development mission.

‘The integration of development, diplomacy, and defense has left the program without a clear and focused mandate,’ the report says.

A bill sponsored by Senators John F. Kerry, Massachusetts Democrat, and Richard G. Lugar, Indiana Republican, and Rep. Howard L. Berman, California Democrat, provides $7.5 billion in U.S. aid to Pakistan over a period of five years.

Only $179 million has been allocated to Pakistan since the bill was approved in October of 2009 because Pakistan has failed to meet the criteria spelled out in the law, Mr. Lugar, co-chairman of the Senate Foreign Relations Committee, told last month.

The Center’s report said that U.S. Agency for International Development disbursed $275 million in the 2009 fiscal year and $676 million in 2010.

“When you have a diplomatic crisis, or a security crisis, all of a sudden what is supposed to be a long-term economic assistance program gets hijacked by short-term considerations and starts to be seen both here in the U.S. and in Pakistan as just another short-term bargaining chip and that is deadly to the long-term mission,” stressed Mr. Elhai.

The report says the high hopes for the aid package have raised unrealistic expectations, generated multiple conflicting objectives and inspired competing lines of authority.

‘This toxic combination has made what would be a difficult mission under any circumstances nearly impossible,’ it adds. The report however, does not recommend cutting off aid to Pakistan. The report’s recommendations also include giving Pakistan’s exports easier access to U.S. markets.