The following article was published in Pakistan Today on Friday, dated 1st November 2013:
PM’s USA trip: Can Pak survive sans Aid?
By: Omer Zaheer Meer
In the aftermath of PM Mian Muhammad Nawaz Sharif’s USA visit much is left desired. The USA has refused co-operation on three major strategic issues of vital importance to Pakistan which are Pak-Iran Gas pipeline, civil-nuclear agreement and access to American markets with tax rebates like the ones granted to Bangladesh by several western countries. Instead Pak is warned of severe consequences on going ahead with the Pak-Iran gas pipeline project without offering practically attractive alternatives. USA also advocated the Indian stance re terrorism while ignoring Pakistan’s genuine demands backed up by evidences shared through official channels, of dismantling the Indian terror infrastructure in Afghanistan wreaking havoc in Pakistan.
Despite all this humiliation and that too for a country which has sacrificed over 40,000 civilian and 7,000 plus security personnel for USA by bringing home America’s “War on Terror” from neighboring Afghanistan by allying itself with USA, there is still a powerful segment of our intelligentsia claiming that Pakistan cannot survive without the American economic and military assistance, hence we have no option or control over our relationship with USA. This is a carefully crafted stance, one that is less frequently examined with out of the box critiques.
This reminds me of my research speech delivered at PINA (Pakistan Institute of National Affairs) hosted by Mr. Altaf Hassan Quraishi with participants of the likes of Mr. Mushahid Hussain Syed, Sartaj Aziz, Khurshid Kasuri, e.t.c. Let us examine if this myth hammered down the sub-conscience of an entire nation actually holds merit. It can then act as a starting point to work-out our options and review the strategic ploys we can employ to ensure deliverance of our strategic interests from the Pak-USA relationship.
Part 1 – USA’s Economic Assistance to Pakistan:
As I’ve previously discussed in another write-up published in Pakistan Today (http://www.pakistantoday.com.pk/2013/10/15/comment/get-pakistan-out-of-this-quagmire/), Pakistan has incurred material losses of over $ 100 Billion as a result of alliance with the USA in the war on terror. To date Pakistan has received a meager $ 15 Billion of which $ 10 Billion relates to Coalition Support Fund (CSF) reimbursements for expenses incurred by Pakistan in the USA led war. The CSF expense reimbursements are at the mercy of USA bureaucracy which routinely rejects up-to 40% of the claims already spent by Pakistan without providing any evidence or explanation for rejection, simply terming them “suspicious”.
It is worth mentioning here that USA officials often claim the total “monetary assistance” during this period to be $ 25 Billion but this seems to include humanitarian assistance for flood victims which mostly included provision of products of US corporations and was part of an international community initiative. Even more importantly it includes claimed funds spent directly by US through USAID with Pak having no knowledge of the purpose, amount and utilization. In all possibilities these funds were used to further American interests rather than assisting Pakistan’s ailing economy. Another major makeup of the figure quoted by American officials includes reimbursements of CSF expenses already incurred by Pak for USA.
In simple terms Pakistan’s state has received economic assistance from USA amounting to $ 5 Billion only against the losses of $ 100 Billion incurred as a direct result of becoming a front-line state in the USA led “War on Terror” over the last 12 years. The CSF reimbursements and humanitarian assistance for flood victims mostly in shape of US products delivered as part of global pledges does not count as economic assistance.
The largest economic assistance package announced in this duration was the Kerry-Lugar-Berman Bill (KLB) of 2009 promising $ 1.5 Billion/annum for 2010-2014 totaling $ 7.5 Billion. As per the last available figures at the time of writing, the actual payments received officially by the Government of Pakistan to date under “KLB” amounts to just $ 485 Million which amounts to 6.47% of the total package and 8.08% of the promised disbursements till 2013. Even out of this meager cash-flow, heavy fees are paid to “experts” leaving even lesser to be actually spent. This makes the tall claims of “heavy” economic assistance seems like a petty joke with a nuclear-armed-nation of 180 million.
An additional $ 1.6 to 2 Billion approximately is claimed to have been spent through USAID and NGO’s, over which Pakistan’s Government has no control and knows nothing about as to the purpose, deliverance or usage. Rather than actually assisting its’ non-NATO ally substantially, the US focus seems to be on data-crunching and generating media frenzy using distorted facts to psychologically subjugate Pakistan’s decision-making brains.
For the sake of argument let us assume that the whole 100% was actually paid and that too formally to the Government of Pakistan and not through the USAID. An assumed full payment to Government of Pakistan of the entire Kerry-Lugar assistance would still amount to 0.64% of the total GDP of Pakistan.
Now let us take a minute and ask ourselves which country in the world would fail with having to let go of about half a percent of its’ total GDP? And let us not forget the possible strategic and economic benefits of an independent foreign and economic policy.
This therefore dispels the myth that Pakistan cannot survive without USA’s economic assistance. I’ve discussed before the necessary steps required for an economic revival using an economic stimulus and efficient management policy eradicating the rampant corruption instead of pursuing the IMF dictated “austerity” and privatization policy currently been pursued by the incumbent Government.
In the second and last part of this write-up, I’ll examine the myth surrounding Pakistan’s “absolute” reliance on USA’s military aid and technology and whether Pakistan can defend threats to its existence without this military assistance.
The writer is a leading Economist who is also a qualified Chartered Accountant, Financial Analyst and Anti-Money Laundering Expert. He can be reached on Twitter and http://www.myMFB.com IDs of Omer Zaheer Meer or email@example.com