PAKISTAN’S checkered history of economic and political dependence on the US is once again on a treacherous trajectory, although it is hard to foresee any enduring shift without basic structural changes in the economy.

Public opinion, especially the media and the legislators of both countries, seems to be in a dour and unrelenting mood about the possibility of continuing this bond in a positive direction. This is no lovers’ quarrel that will be made up once tempers have cooled, as the relationship has morphed into a deeply flawed and soured arrangement, with serial bouts of mistrust and recriminations on both sides.

From the cosy bear hug of the Bush-Musharraf era to a short-lived but vibrant bonhomie between Shah Mehmood Qureshi and Hillary Clinton, and meetings between Kayani and Petraeus, to the eyeball-to-eyeball confrontation of spymasters, Panetta and Pasha, the official Pakistan-US relationship has nosedived sharply, since the removal of Osama bin Laden, right under the Pakistani military’s nose.

What holds together this fractured relationship between the two allies that have been militarily aligned for over five decades is the ‘carrot’ of foreign aid, including funding from other western countries and multilateral institutions, that provides the US the leverage of a ‘stick’.

Although there have been serious spats between the two countries during their alliance, the 10-year-war on terror has caused tensions between them to escalate to an unprecedented level. Pakistan’s suspected hobnobbing with and protection of Al Qaeda and Taliban elements, validated by the discovery of Osama bin Laden’s Abbottabad hideout, has become the perfect ploy for axing US aid to Pakistan. The suspension of $800m in military aid by the US — though not of great consequence in itself — can become a harbinger of more cuts if US-Pakistan relations continue to slide further.

The surges in and droughts of US foreign aid to Pakistan have closely paralleled the ups and downs in political relations between the two countries. Pakistan has been among the leading recipients of US foreign assistance both historically and in FY2010, largely because of its strategic importance to US policymakers. However, suspicions of Pakistan’s complicity in harbouring Osama bin Laden and possibly other Al Qaeda and Taliban leaders, along with budget deficit-reduction pressure in the US Congress to severely curtail overseas military commitments before the next presidential election, have put the future prospects of US aid to Pakistan in serious jeopardy.

If the aid spigot is suddenly stopped — as many US legislators are threatening and some hawks in Pakistan are eager to court — Pakistan’s worst macroeconomic fears may soon become a reality. Although such a cataclysmic scenario may not arise soon, the debate about whether or not it should be prevented from happening and its pros and cons needs to be taken seriously. The analytical difficulty with this is that there is little to indicate a period when Pakistan has not relied heavily on foreign aid, except for short periods. Based on the latter thin evidence, however, there is not much indication that Pakistan’s economic managers fared any better in these periods.

The historical record of Pakistan as an aid recipient and the US as aid-dispenser is not without blemish. Both share the responsibility for enacting the ongoing macabre dance of murder and mayhem since 9/11 and for scripting the longer epic of Pakistan’s failed development strategy, which underlies much of the violence and madness that stalks the country.

Despite the infusion of an estimated $30bn in US aid since Pakistan’s inception, we are among the most underachieving countries in terms of social and economic development in South Asia. Pakistan has had spurts of strong GDP growth in periods characterised by a combination of a high level of foreign aid and military rule, which have been largely dissipated in elitist development and mega projects of little value to the poor. Poor ‘governance’ is an overused explanation for Pakistan’s failures. More pertinent are the needed reforms in social, economic and political structures that the ruling elites have persistently upended.

Success in the business of aid is measured by how soon it becomes redundant. The famous example of giving the aid recipient a fish rod, rather than the fish, illustrates the transitory and enabling role of foreign aid. In the case of Pakistan, both givers and takers have, instead, entrenched themselves in the business — for their own selfish reasons — ad infinitum.

Other countries, such as Japan, South Korea, Thailand, Turkey and Indonesia, were once large recipients of foreign aid, including military aid. They have not only kicked the habit, but also become substantial aid givers and significantly reclaimed sovereignty and political dependence from the US.

Although foreign aid made its debut in the aftermath of the Second World War, with its showcasing of the Marshall Plan in Europe, it has undergone a series of transformations that have considerably watered down its altruistic, humanitarian and developmental nature, replacing it with political, security and hegemonic motivations. In particular, development assistance was put on the backburner and disaster relief and human development, with a pivotal role for NGOs and the private sector, given primacy. The orientation of US foreign-aid programmes changed significantly after 9/11, when foreign aid gained importance as a ‘vital cornerstone’, along with diplomacy and defence, in the US national security strategy.

It is required that both aid givers and recipients, in the context of current US-Pakistan relations, revisit the need and utilisation of foreign aid in a manner which would promote Pakistan’s long-term development and that is compatible with its autonomy and national self-respect. The US must move towards the multilateralisation of foreign aid and away from choosing and micromanaging development projects which suit its narrow strategic interests. If the US can successfully manage to extricate itself from the Afghan quagmire, it is possible that Obama may address the issue in his hoped-for second term to refashion his foreign-aid agenda.

The writer is a former professor of economics at the Quaid-i-Azam University, Islamabad.

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