Apparently, the US government did not show any consideration for the democratic government under economic stress in Pakistan in the strategic dialogue held in Islamabad last week.

The long joint communiqué issued at the conclusion of the current round of Pakistan-US strategic dialogue said to have focused on economic co-operation was high on verbosity.

Nothing tangible in terms of progress on bilateral investment treaty (BIT), quick passage of Biden-Luger bill, which earmarks $15 billion in US support over the next 10 years, immediate budgetary support to ease pressure on the newly elected government, reconstruction opportunity zones (ROZs), free trade agreement (FTA), market access or help for achieving food and energy security, transpired in the end.

A high-powered US delegation headed by Daniel S Sullivan, Assistant Secretary, US Bureau of Economic, Energy and Business Affairs held a series of meetings, starting on August 11th, with high ranking government officials belonging to economic ministries of Pakistan. Naved Qamar, federal finance minister headed the Pakistani team. The US team included officials of US department of state, commerce, treasury, the office of the US trade representative, the US Agency of International Development besides officers of US embassy in Pakistan.

In the communiqué as in the post meeting press conference there was reiteration of the commitment for ‘deepening the bilateral economic partnership and developing a long-term, broad-based economic relationship that would benefit the citizens of both the countries’.

Independent observers of the process of dialogue that was initiated in 2006 by the US President were disappointed with the pace of the progress and saw Pakistan selling its support cheap to the US. “It is not just about men and machines. The collateral cost to Pakistan’s economy of obliging US and extending assistance in its political ambitions in the region is many times more than what we got back in the name of assistance and reimbursement”, the expert said wishing anonymity.

“It is not only about what we gained, it is also about what we lost in the bargain in terms of capitalizing on business opportunities because of support that Pakistan extended to US. Pakistan like Malaysia would have been a natural choice of Muslim funds over the last five years. A substantial amount of petro dollars stocked in the Middle East, in wake of high oil prices, waiting to be invested would have landed in Pakistan had there been peace in the country”.

“We are asked to make sacrifices but India was picked up in the region for the nuclear power deal. We were promised extra market access but are still haggling over even treatment in the US market. Our competitors in textile sector enjoy better terms than us. Every time BIT, FTA or a nuclear power deal is mentioned we are reminded of high standards and difficult conditions that the country needs to achieve to qualify for such concessions. The fact is that Pakistan is seeking support to improve the quality of growth and surmount problems that has kept the country from achieving world standards in all different areas of economic activity. Once we are there we might not be needing support no more”, he added.

The government, however, was confident that the negotiations were fruitful and gave them a chance to make a convincing case for economic support before a US team that was both responsive and influential.

“We see the third round of dialogue as a success. The stalled talks on BIT were put on rails. A wide range of economic subjects were discussed. The US hinted at its plan to appoint a regular commercial councillor in Pakistan. We were not expecting announcements. The current round in Islamabad was a part of an on going dialogue between Pakistan and US. If all goes well we are hoping for tangible outcomes next year”, said a source in Islamabad who participated in the series of high level meetings between the two countries.

There is a lot of background work involved before US announces any concession or a preferential treatment for a country, a senior government servant explained discarding the impression that talks achieved much less than expectations. “It is an all inclusive process in US. They collect all the information first hand, arrange it against their benchmarks, do their rankings and scaling and exchange notes with the private sector before committing for special treatment in economic fields”, Farrukh Qayum Secretary Finance told Dawn over telephone from Islamabad.

“Subjects that were discussed in the meeting included macro economic indicators, labour, agriculture cooperation, property rights, energy, etc. Presentations were made by many relevant departments. The talks, however, were strictly government to government as representatives of the private sector from either side were not invited”, another source told Dawn.

The quantum of two way trade between Pakistan and US was about five and a half billion dollars in 2007. During the year 2007, total exports to US worth $3.6 billion whereas the import was calculated to be $2 billion.

US transferred $5 billion in overt assistance to Pakistan since 2001. Of this $2 billion was security related aid. The country also received $6 billion in reimbursement for its support to US led counter terrorism efforts.

“There is a strong case to include representatives of private sector of both the countries in talks aiming closer economic cooperation. The politicians know politics but do not necessarily understand the intricacies of business and economy”, said a US businessman visiting Pakistan.

“The ROZs proposal is a classic example of naivety of politicians unless it was meant to be a political sloganeering. How can you expect private sector to invest in industry in a war zone? It was a bubble that was blown and bust before it took off”, a member of economic advisory committee said commenting on ROZs privately.

There is more meaningful support to the economy of Pakistan from the private sector of US that perceives the country as a high risk high return location. There is a significant presence of American private business in Pakistan with investment in the oil and gas, communications, IT and telecom, drug, banking, construction, services, food and beverage and power sectors.

Their joint platform American Business Council (ABC) engages with the government on a regular basis.

Better known companies include American Express, Citigroup, Motorola, El Paso Energy, Coca Cola. According to ABC their members have cumulative revenues of around $3.0 billion with an investment of around $1.5 billion and contribute a sizeable amount to national exchequer every year as direct and indirect taxes. Their contribution last year was Rs41 billion. They employ 41,000 persons directly and one million indirectly. They bring with them a rich pool of modern businesses practices beside high quality standards. They transfer technology and update it on a regular basis.

“There are better chances of translating sweet talk to concrete gains if private sector representatives of Pakistan and US are inducted in the bilateral economic negotiations”, an activist of a private sector think tank felt.

“Whether you support or oppose the US factor cannot be ignored in Pakistan”, said Sohail a businessman from Karachi commenting on talks.

On the commitment and concern of the US to people and the economy of Pakistan it would be apt to reproduce a May, 1950 US State Department memo to White House picked up from “The American Papers”, edited and selected by Roedad Khan. It saw Pakistan “as a place from which US aircraft could operate.” After talking of the said potential, the memo reads: “However, this should not be openly stressed since it negates our oft-expressed interest in helping the region for economic reasons”.