A historical overview of the volume and shape of the economic and military aid to Pakistan by the US and how will it be impacted in the current hostile relations between the two countries
Donald Trump’s public statement against Pakistan has brought the bilateral relationship between Pakistan and the US to a, yet another, halt.
The ever-fluctuating relation can best be described as transactional. Pakistan knowingly and willingly adopted its role as a client state since the very beginning. Over the course of time, it appears, Pakistan valued the relation only in terms of financial compensations; while the American support ranged from economic to technical to educational to military cooperation.
Seventy years ago, the country’s founder Muhammad Ali Jinnah is said to have asked the US to loan two billion dollars for development and defence. It was, in return, offered a few million dollars. Jinnah had sought this help boasting that Pakistan provides a buffer zone between Communist Russia and India; and a vantage point between China and the Middle East.
The pitch was later taken up by the country’s first Prime Minister, Liaquat Ali Khan, who during his US visit argued how a strategically placed Pakistan could help America beat communism.
By then, the newly elected US president Harry Truman’s Point Four programme had been introduced, which fundamentally changed the form and process of providing American aid to European countries as well as the Third World. Diverting from solely giving away capital grants, Truman’s fourth objective of the proposed foreign policy used "technical assistance" as a major tool. In his inauguration speech, Truman had stated: "The old imperialism -- exploitation for foreign profit -- has no place in our plans. What we envisage is a programme of development based on the concepts of democratic fair-dealing. All countries, including our own, will greatly benefit from a constructive programme for the better use of the world’s human and natural resources."
This kicked off a very modest economic help to Pakistan. The relations sank in between but the tide turned for better in mid-1950s when the two countries signed the Mutual Defense Assistance Treaty under which Pakistan was provided a substantial 1400 million dollar in military aid. Pakistan also became a member of SEATO and CENTO; and it allowed American military base on its soil.
"The alliance was strategically beneficial for Pakistan, which would otherwise not have been," claims V.C. Pande in his book Security and Regional Aspirations in South Asia.
Contrary to the perceived misconception, it was around the same period that, Pakistan was offered almost 350,000 dollars to acquire a nuclear reactor under the American Atoms for Peace programme. The invaluable expertise of American nuclear engineers and equipment hugely benefited Pakistan. The US also helped broker the successful Indus Water Treaty through the World Bank.
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A confidential exchange that took place back then between the US administration officials reveal that Pakistani leadership had expected more from the US in terms of monetary benefits. "… in interest [sic] healthy US Pakistan relations exaggerated expectation of certain Pakistan officials which have been self-stimulated and publicised without any US encouragement should be replaced by clearer understanding objectives and capabilities US and Pakistan’s own responsibilities," a secret memo exchange said.
The communication further stated: "Development and maintenance effective military machine, costs of which Pakistan could pay from own resources and at same time provide for minimum civilian requirements, will require growth over period of years of well balanced expanding economy". The communique also specifically mentioned that, "It is not within US financial capabilities [sic] create such an economy by massive financial donations. It must be built by Pakistan’s people and leaders as product largely their own efforts. Our willingness to support those efforts has been amply demonstrated and our aid was extended on large scale even before MDAA with Pakistan was signed".
What worried the US was that Pakistani leadership prefers America’s ‘dollar diplomacy’ over the long-lasting substantial multi-faceted partnership. Still, periodic bailouts from international financial institutions; and loan grants released by the World Bank and IMF -- for magnificent development projects like dams and barrages -- were all done on America’s behest.
The US also invested hugely in Pakistan’s agriculture sector and initiated institution-building through education outreach. It supported new universities, and funded various student exchange programmes and scholarships. These efforts might fall under aid but cannot be valued in monetary terms.
The geo-political placement that Pakistani leadership tried to sell off in its early days bore results in the early 1980s. The first monetary offer was turned down as "peanuts", which then reached to a couple of billion dollar aid deal. "By 1985, Pakistan was the fourth largest recipient of US bilateral military assistance after Israel, Egypt and Turkey. With the approval of a 4.02 billion dollars military and economic aid package in 1987, Pakistan became the second largest recipient of American aid," according to data put together by the Institute of Policy Studies (IPS).
The sharp slump in monetary aid to Pakistan and sanctions imposed post-Soviet withdrawal from Afghanistan did not last long. The post 9/11 War on Terror brought another opportunity for Pakistan to build a stronger partnership, but both countries used mistrust, or as it came to known as trust deficit, as a reason to defy ground rules.
Meanwhile, the US passed a five year aid package under Kerry Lugar Berman bill that authorised 1.5 billion dollar per year to the government of Pakistan. The backlash to the bill was fuelled by a widely held perception that the civilian government gave up too soon rather than negotiating more out of the US pocket, the Time magazine reported.
The ruckus over the monetary aid reached to such a level that the US authorities had to call out: "Take it or leave it. We are giving to Pakistan about 7.5 billion dollars aid and also listening to its complaints."
In the end, Pakistan did take the aid.
Logically, donor countries attach conditions or benchmarks with their pledges that reflect their interests. The conditions put up by the US were not met, despite the fact that Pakistan suffered terrorist attacks and took out al-Qaeda members. The so-called trust deficit hit rock bottom when Osama bin Laden, America’s enemy number one, was found in Pakistan. The Obama administration took a unilateral action to kill bin Laden, and the Pakistan’s perceived betrayal shook the US and the rest of the world.
Various US lawmakers voiced to reverse Pakistan-US friendly agreements.
The Center for Global Development says that the US obligated nearly 67 billion dollars to Pakistan between 1951 and 2011. The levels year to year have waxed and waned for decades as the US geopolitical interests in the region have shifted. Peaks in aid have followed years of neglect. This is probably the reason why the Obama administration did not discontinue cooperation, but the efforts to pay-off were slashed.
The Congress that had approved American-built P-3C Orion surveillance aircrafts later blocked the sale of F-16s. In 2010, military assistance to Pakistan had reached 2.5 billion dollars, including 1.2 billion dollars in coalition support funds.
Pakistan’s local media, citing the US authorities, has reflected that the US sanctioned more than 33 billion dollars for reimbursements to Pakistan in the past 15 years. It also mentioned that since 2002, the US gave 7.96 billion dollars in security assistance to Pakistan with an annual average of 530 million dollars. Almost 4 billion dollars out of it was given under the Foreign Military Financing. 2.35 billion dollars were provided under the Pakistan Counterinsurgency Fund and Counterinsurgency Capability Fund.
The State Department says that in 2009, the US government had committed over 6 billion dollars in civilian assistance to Pakistan, which included over one billion dollars in emergency humanitarian assistance in response to conflict and disasters like the 2010 floods. The assistance was in consultation with the government of Pakistan which covered five priority areas: energy, economic growth -- including agriculture -- community stabilisation of underdeveloped areas vulnerable to violent extremism, education, and health.
The economic and military aid by the numbers started to nose-dive months before Donald Trump administration announced that it could take severe action against Pakistan. On the other hand, Pakistan’s political and military leadership, once again, claim that they do not rely on funds from the US anymore; and hence can afford to discontinue mutual cooperation.
The fact remains that an argument over who paid what and when could be debated, just as the blame game of who did what and when can be challenged, but termination of relations would have consequences of its own. If aid or assistance comes in various shapes, types and sizes; so do proposed sanctions. It’s not only the money that the US can cut off, but Pakistan could lose its status as an ally, along with jeopardising various cultural, economic, health, development and education-related programmes that have been solely beneficial for Pakistan.