US should delay Pakistan aid: Study

The report called for the United States instead to open its markets.

Washington: The United States should delay much of its multibillion-dollar package to Pakistan pending economic reforms as the aid has led to official inaction and public resentment, a study said.

A task force of the Centre for Global Development, a private Washington think-tank, said on Wednesday that US assistance to Pakistan has become "muddled" with a lack of clear goals and leadership and pressure "to do too much, too quickly”.

"The United States is way off course in Pakistan," said Centre president Nancy Birdsall. "It`s heavily focused on security while neglecting low-cost, low-risk investments in jobs, growth, and the long haul of democracy building."

The study comes as more US lawmakers question aid to Pakistan -- which has totalled some USD 18 billion since the September 11, 2001 attacks -- after US forces killed Osama bin Laden near the country`s top military academy.

The United States in 2009 authorised a USD 7.5 billion, five-year package named after Senators John Kerry and Richard Lugar and Representative Howard Berman, who hoped to fight anti-Americanism in Pakistan by switching the US focus from backing the military to building the economy and civilian institutions.

But the study, the result of research that began well before the bin Laden raid, said the aid drive had paradoxically soured Pakistani public perceptions of the United States as it raised false hopes for the future.

And with Pakistani leaders now assuming a steady flow of cash from Washington, "it makes sense for them to push for that money rather than to work with their political rivals to move on key reforms," it said.

"For these reasons, we recommend that much of the USD 7.5 billion Kerry-Lugar-Berman aid package not be disbursed immediately," it said.

"Especially in sectors where serious flaws in public administration are the binding constraints to success, it would be better to backload the bulk of this extraordinary aid investment, to wait until critical policy questions are resolved."

The study acknowledged that setting conditions to assistance was an "extremely sensitive subject”. Pakistan`s powerful military raised objections in 2009 that the US aid package was violating its sovereignty.

But the report said that American assistance would be ineffective without reforms in areas such as education, energy and fiscal policy. Pakistan is beset by inadequate power, water and schools to provide for a population that by 2030 is forecast to be the world`s fourth largest, the report said.

"Pakistan must make a significant course correction if it is to join the ranks of India, Indonesia and other large Asian countries on a clear path of sustainable growth and transformation," the report said.

The report called for the United States instead to open its markets, a move it called "the single most powerful and inexpensive tool in the US policy arsenal for promoting economic growth and job creation in Pakistan”.

The vast majority of Pakistan`s exports face duties when entering the United States. Pakistan`s key product is textile production, a sector that accounts for more than a third of industrial employment in the developing country.

US lawmakers have proposed allowing duty-free import of certain goods produced along Pakistan`s troubled border with Afghanistan. But the bill has been blocked amid concerns in Congress over US trade policy.

The task force recommended that the head of the US Agency for International Development lead the Pakistan effort and urged a look at the British model. While its aid is smaller in scope, Britain has established verifiable goals such as putting four million more Pakistani children in school.

"Currently, the indicator that draws the most attention in Pakistan and in the United States is how much aid money the United States has spent," the study said.

"For a strategy intended to promote long-term development, this is a terrible metric of success."

Bureau Report

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