Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Showing posts with label US aid. Show all posts

Saturday, June 8, 2024

Republican Congressman Exposes Powerful Israel Lobby's Bullying Tactics

In a rare act of courage by a serving congressman, Rep Thomas Massie of Kentucky has detailed strong-arm tactics of the Israel lobby to ensure unquestioning support for Israel. He said that the American Israel Public Affairs Committee (AIPAC), also known as the Israel lobby, is unique in that it has designated representatives (Massie calls them "AIPAC persons") assigned to each Republican member of Congress to ensure the lawmakers vote for bills Israel supports. Massie has now banned his assigned "AIPAC Person" from his office.

AIPAC Guy Threatening US Politician. Source: Jake Shields

In spite of working on behalf of a foreign government, "AIPAC persons" are not registered as foreign agents under FARA (Foreign Agents Registration Act). Others, such as Paul Manafort (working for Russia) and Ghulam Nabi Fai (representing Pakistan's interests), have been prosecuted, convicted and jailed for violating FARA. No other foreign country has such an organization focusing individually on each member of Congress. There is no British person or Russian person or Chinese person assigned to each member of Congress, Massie says. He has so far defied and survived the onslaught of the Israel lobby which has spent hundreds of thousands of dollars in attack ads against him to defeat him in his district. He won over 70% of the votes cast in the recent primary against his Republican challenger funded by AIPAC. Massie is a serious technology entrepreneur and a businessman. He is a graduate of Massachusetts Institute of Technology (MIT) with several inventions to his credit. He is a libertarian who opposes all foreign aid to any country, not just Israel.

Rep Thomas Massie (R-Ky)

When asked why other members of Congress do not talk about it, here's how Massie explained it to Tucker Carlson: "It doesn’t benefit anybody. Why would they want to tell their constituents that they’ve basically got a buddy system with somebody who’s representing a foreign country? It doesn’t benefit the congressman for people to know that. So they’re not going to tell you that".

Massie said the current Congress has spent more time in support of Israel than on any other issues, including domestic issues, in the last year, raising the question as to who do these Congressmen really work for: the American people who sent them to Washington to solve their problems or a foreign government?

Israel is the Largest Recipient of US Foreign Aid. Source: CFR

Massie cited several bills recently passed by the US Congress under pressure from AIPAC. Among them are billions of dollars in aid to Israel, the TikTok ban and the bill against anti-semitism which Massie describes as a ban on the New Testament that says "Jews killed Jesus". Massie has called the TikTok ban a "Trojan Horse" for First Amendment rights of free speech.

Congressman Massie's Tweet. Source: X

Massie is also opposed to aiding Israel because, as he puts it: "Approximately 1% of Gaza’s CIVILIAN population has been wiped out by Israel in 7 months. We should not fund this war".

US Military Aid to Israel. Source: CFR

Here's part of the exchange between Carlson and Massie that occurred on the Tucker Carlson show:

MASSIE: It’s like your babysitter. Your AIPAC babysitter who is always talking to you for AIPAC. They’re probably a constituent in your district, but they are, you know, firmly embedded in AIPAC.

CARLSON: And every member has something like this.

MASSIE: Every Re– I don’t know how it works on the Democrats’ side. But that’s how it works on the Republican side. And when they come to D.C., you go have lunch with them. And they’ve got your cell number and you have conversations with them. So I’ve had like–

CARLSON: That’s absolutely crazy.

MASSIE: I’ve had four members of Congress say, “I’ll talk to my AIPAC person.” And like that’s clearly what we call them, my AIPAC guy. I’ll talk to my AIPAC guy and see if I can get them to, you know, dial those ads back.

CARLSON: Why have I never heard this before?

MASSIE: It doesn’t benefit anybody. Why would they want to tell their constituents that they’ve basically got a buddy system with somebody who’s representing a foreign country? It doesn’t benefit the congressman for people to know that. So they’re not going to tell you that.

The Israel lobby showers its friendly politicians with money from wealthy Jewish donors. It also works to ensure the defeat of those politicians who dare to speak out against Israeli policies in the Middle East. As one former Democratic senator, Ernest Hollings, put it on leaving office, ‘you can’t have an Israeli policy other than what AIPAC gives you around here.’ Or as Ariel Sharon once told an American audience, ‘when people ask me how they can help Israel, I tell them: “Help AIPAC.”’

President Jimmy Carter who helped broker peace between Israel and Egypt knows the Israel lobby well. He told Amy Goodman of "Democracy Now" many years ago: "I think it’s accurate to say that not a single member of Congress with whom I’m familiar would possibly speak out and call for Israel to withdraw to their legal boundaries or to publicize the plight of the Palestinians or even to call publicly and repeatedly for good faith peace talks..... And I would say that if any member of Congress did speak out, as I’ve just described, they would probably not be back in the Congress the next term ".

The fact that Republican Congressman Massie and several progressive Democratic Congresspeople are questioning the power of the Israel lobby in shaping the US Middle East policy is an indication of a growing rebellion against the strong-arm tactics used by AIPAC to bully US elected representatives to blindly support Israel. Could it be that the mortal fear of the AIPAC is just beginning recede in Washington DC? Or is it something similar to what is happening on the US college and university campuses?

Here's a link to the full video of Tucker Carlson's interview with Rep Thomas Massie:

https://youtu.be/omBSEuFTYEo?si=8FF8UEwrwYS_IP82

Tuesday, January 9, 2018

CPEC is Transforming The Least Developed Parts of Pakistan

In a New York Times Op Ed titled "How Not to Engage With Pakistan", ex US Ambassador to Pakistan Richard G. Olson says "Its (CPEC's) magnitude and its transformation of parts of Pakistan dwarf anything the United States has ever undertaken". Olson goes on to warn the Trump Administration that "Without Pakistani cooperation, our (US) army in Afghanistan risks becoming a beached whale".

Among the parts of Pakistan being transformed by China Pakistan Economic Corridor (CPEC) are some of the least developed regions in Balochistan and Sindh, specifically Gwadar and Thar Desert. Here is more on these regions:

Gwadar Port City:

Gwadar is booming. It's being called the next Shenzhen by some and the next Hong Kong by others as an emerging new port city in the region to rival Dubai. Land prices in Gwadar are skyrocketing, according to media reports. Gwadar Airport air traffic growth of 73% was the fastest of all airports in Pakistan where overall air traffic grew by 23% last year, according to Anna Aero publication. A new international airport is now being built in Gwadar to handle soaring passenger and cargo traffic.

In addition to building a major seaport that will eventually handle 300-400 million tons of cargo in a year, China has built a school, sent doctors and pledged about $500 million in grants for an airport, hospital, college and badly-needed water supply infrastructure for Gwadar, according to Reuters.

400 Km Long Kachhi Canal From Punjab to Balochistan

The Chinese grants include $230 million for a new international airport in Gwadar, one of the largest such disbursements China has made abroad, according to researchers and Pakistani officials.

New development work in Gwadar is expected to create as many as 20,000 jobs for the local population.

Steel Bridges on Multan-Qila Saifullah Section of Highway N-70 Connecting Punjab and Balochistan. Source: Dawn

Thar Desert:

Thar, one of the least developed regions of Pakistan, is seeing unprecedented development activity in energy and infrastructure projects. New roads, airports and buildings are being built along with coal mines and power plants as part of China-Pakistan Economic Corridor (CPEC). There are construction workers and machinery visible everywhere in the desert. Among the key beneficiaries of this boom are Thari Hindu women who are being employed by Sindh Engro Coal Mining Company (SECMC) as part of the plan to employ locals. Highlighted in recent news reports are two Hindu women in particular: Kiran Sadhwani, an engineer and Gulaban, a truck driver.

Kiran Sadhwani, a Thari Hindu Woman Engineer. Source: Express Tribune

Thar Population:

The region has a population of 1.6 million. Most of the residents are cattle herders. Majority of them are Hindus. The area is home to 7 million cows, goats, sheep and camel. It provides more than half of the milk, meat and leather requirement of the province. Many residents live in poverty. They are vulnerable to recurring droughts. About a quarter of them live where the coal mines are being developed, according to a report in The Wire.

Hindu Woman Truck Driver in Thar, Pakistan. Source: Reuters

Some of them are now being employed in development projects. A recent report talked of an underground coal gasification pilot project near the town of Islamkot where "workers sourced from local communities rested their heads after long-hour shifts".

Hindu Woman Truck Driver in Thar, Pakistan. Source: Reuters

In the first phase, Sindh Engro Coal Mining Company (SECMC) is relocating 5 villages that are located in block II. SECMC is paying villagers for their homes and agricultural land.

SECMC’s chief executive officer, Shamsuddin Ahmed Shaikh, says his company "will construct model towns with all basic facilities including schools, healthcare, drinking water and filter plants and also allocate land for livestock grazing,” according to thethirdpole.net He says that the company is paying villagers above market prices for their land – Rs. 185,000 ($ 1,900) per acre.

Summary:

Ex US Ambassador Richard Olson is absolutely right in his assessment that "(CPEC's) magnitude and its transformation of parts of Pakistan dwarf anything the United States has ever undertaken". Olson goes on to warn the Trump Administration that "Without Pakistani cooperation, our (US) army in Afghanistan risks becoming a beached whale". The "magnitude" of CPEC and its "transformation" that Olson refers to is clearly visible in some of the least developed regions of Pakistan in Balochistan and Sindh provinces. Gwadar port city and Thar desert are humming with unprecedented development activity fueled by billions of dollars of funds allocated by China and Pakistan.

Wednesday, October 19, 2011

Sharifs' Folly Hurts Punjab's Poor

The Punjab government led by PML's Shahbaz Sharif spurned 20 billion rupees ($232.55 million) in US aid slated for welfare projects in Pakistan's most populous province in the next three years, according to a report in Dawn newspaper. The popular move was motivated by politics to capitalize on a wave of anti-American anger following the US raid that killed Osama Bin Laden in Abbottabad, Pakistan.

While the amount of aid rejected is relatively small, the decision's outsized impact on the poor is now coming to light. Here are some of the projects most impacted:

1. U.S. aid could have transformed Punjab Government's Lady Willingdon Hospital in Lahore, where rats run through the halls, patients sleep three to a bed, women who require C-sections aren't getting them because only one operating room is functioning, and premature babies risk death because of a shortage of incubators, according to the Associated Press.

The hospital struggles to provide even basic care. Built by the British in the 1930s before Pakistan's independence, it was meant for 80 patients. The country's population has since exploded, forcing officials to cram 235 patients into a facility that is now run-down. Paint peels off the concrete walls and black mold covers the ceilings. Patients are forced to share beds, and sometimes women who are close to giving birth have to sit on the floor for lack of space. It has only one functioning operating room, leaving women lined up to receive cesarean sections.

The hospital has only three working infant incubators, which were donated by NGOs. The hospital is forced to use overhead warmers for other infants, leaving them more exposed to disease. The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities.

2. Another $100 million of US aid was to be used to rebuild schools in southern Punjab province that were destroyed by last year's devastating floods. An additional $10 million was meant to improve municipal services like clean water and sanitation.

3. The loss of aid for Shamaspura, a poor neighborhood in Lahore, means that its 15,000 residents will not get their only road paved, nor will they get a new sewer system.

Batool Akhtar, a poor but feisty woman quoted by the AP story, summed it up well when she said: "This is rich people denying aid meant for the poor. The government should have taken the money."

As Pakistan's ruling elite and its ghairat brigade, led by PML's Sharif brothers, engage in loud empty rhetoric about infringement of their national sovereignty by the United States, here is something to ponder:

Pakistan runs chronic budget deficits of around 5% of its GDP, and its government collects less than 10% of GDP in tax revenue which is among the lowest in the world. A big share of these deficits is funded by foreign aid and loans, making Pakistanis beholden to the interests and whims of major foreign donors and lenders.

Pakistan's tax policies are among the most regressive in the world. Direct taxes make up less than 3.5 percent of GDP, with wide ranging exemptions to powerful segments of society coupled with governance issues at Federal Board of Revenue, according to former finance minister Shaukat Tarin. The bulk of the tax receipts are collected in the form of sales tax, placing the heaviest burden on the lower-income people who spend almost all of their income on their basic needs.

Given the unwillingness of Pakistan's ruling elite to pay more in taxes, I agree with the decision of the other three provincial governments to continue to accept US economic aid. As the Punjab examples above show, refusing such aid clearly hurts the poor the most.

Pakistan would be well advised to not seek confrontation with Washington. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).

All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.

Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.

Here are some of my recommendations for Pakistanis to move toward greater self-reliance:

1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.

2. They must spend more on education and heath care and human development to develop the workforce for the 21st century.

3. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.

4. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.

No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.

Related Links:

Haq's Musings

Can Pakistan Tell US to Take its Aid and Shove it?

Tax Evasion Fosters Foreign Aid Dependence

Aid, Trade, Investments and Remittances

Can Chinese Yuan Replace US Dollar?

Vito Corleone: Godfather Metaphor for Uncle Sam

Can US Aid Remake Pakistan?

South Asia Slipping in Human Development

Pakistan to Terminate IMF Bailout Early

Pakistani Military and Industrialization

Tuesday, September 27, 2011

Can Pak Tell US: "Take This Aid and Shove It!" ?

"Aid only postpones the basic solutions to crucial development problems by tentatively ameliorating their manifestations without tackling their root causes. The structural, political, economic, etc. damage that it inflicts upon recipient countries is also enormous.” These words were written in a letter to UN to refuse aid by Finance Minister Berhane Abrehe of Eritrea which is the 7th poorest nation in the world.

Can Pakistan (per capita annual income of $3000) do what Eritrea (per capita annual income of less than $700) has already done with UN aid? Say "No" to foreign aid?

Pakistan Movement for Justice party leader and cricket hero Imran Khan thinks so. Echoing the sentiments of the Eritrean minister, Imran Khan told the BBC recently that "if we don't have aid we will be forced to make reforms and stand on our own feet."

Let's examine in a little more detail the proposition that Pakistan should tell the United States to take its aid and shove it:

1. Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, according to a report by the United States Government Accountability Office.

2. Even if the entire $1.51 billion had been disbursed, it would account for only $8.39 per person, about 0.28%, a very tiny fraction of Pakistanis' per capita income of $3000 a year.

3. Pakistan ended last fiscal year in June 2011 with a small current account surplus of about half a billion US dollars. It received inflows over $40 billion in the form of export earnings ($25 billion), remittances from Pakistani diaspora ($10 billion), and FDI, FII and other accounts. The actual US aid of just $179.5 million out of over $40 billion in 2010-2011 is a negligible figure.

4. Of the $179.5 million received by Pakistan in 2010, $75 million of the US aid funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remained unspent.

Although refusing US aid will hurt the anti-poverty efforts, higher education and infrastructure development programs to some extent unless made up by raising greater tax revenues to replace it, it is theoretically possible to say No to the US aid without a big negative short-term impact on Pakistan's economy.

However, Pakistan would be well advised to not seek confrontation with Washington even after refusing US aid. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).

All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.

Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.

Here are some of my recommendations for Pakistanis to move toward greater self-reliance:

1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.

2. They must save more, a lot more than the current 10% of GDP, to have more money for investment in the future.

3. They must spend more on education and heath care and human development to develop the workforce for the 21st century.

4. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.

5. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.

No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.

Related Links:

Haq's Musings

Tax Evasion Fosters Foreign Aid Dependence

Aid, Trade, Investments and Remittances

Impact of Foreign Aid on Economic Development in Pakistan

Can Chinese Yuan Replace US Dollar?

Vito Corleone: Godfather Metaphor for Uncle Sam

Can US Aid Remake Pakistan?

South Asia Slipping in Human Development

Pakistan to Terminate IMF Bailout Early

Pakistani Military and Industrialization

Wednesday, October 7, 2009

Pakistanis See US as the Biggest Threat

As Mr. Obama met with his national security advisers for three hours to discuss Pakistan today, there was mounting opposition in Pakistan to the terms of the just approved Kerry-Lugar Bill offering $1.5 billion a year in US aid for the next five years. The US media reports suggest that the opposition is coming mainly from the powerful Pakistani military. However, it appears from a recent Gallup poll that there is growing distrust of the United States among ordinary Pakistanis as well. What seems to be adding fuel to the fire are the language and the conditions in the US aid bill that hold Pakistan implicitly responsible for all acts of terror in its neighborhood. Specifically, the bill, also known as the Enhanced Partnership with Pakistan Act, says as follows: "... ceasing support, including by any elements within the Pakistan military or its intelligence agency, to extremist and terrorist groups, particularly to any group that has conducted attacks against the United States or coalition forces in Afghanistan, or against the territory or people of neighboring countries; (B) preventing al-Qaeda, the Taliban and associated terrorist groups, such as Lashkar-e-Taiba and Jaish-e-Mohammed, from operating in the territory of Pakistan, including carrying out cross-border attacks into neighbouring countries, closing terrorist camps in the Fata, dismantling terrorist bases of operations in other parts of the country, including Quetta and Muridke, and taking action when provided with intelligence about high-level terrorist targets."

It is widely believed that, by accepting this aid package, Pakistani government is endorsing the bill's offensive language and accepting the terrorism allegations and humiliating conditions, while paving the way for a much larger US footprint in Pakistan that will undermine its sovereignty.

The Gallup poll exclusively done for Aljazeera TV and released in August shows that 59% of Pakistanis believe that the US is the biggest threat to Pakistan, followed by India(18%) and Taliban (11%) as much lesser threats. Fully 67% of the people oppose the US drone attacks against Taliban and al Qaeda in Pakistan.

The fear of the growing US presence in the region does not mean that people support the Taliban, as 41% of them favor the Pakistani military operation against the Taliban while 24% oppose it. Support for the military against the Taliban is the strongest among Sindhis at 64%, followed by 50% among Urdu-speaking Mohajirs and 49% among Pushtoons. Only 28% of Punjabis support the military operation but a smaller 25% oppose it. The people of the most populous province of Punjab appear to be the most divided on this issue, which is also in line with only 31% support for military operation among those identifying with Nawaz Sharif's Pakistan Muslim League.

In addition to the bad economy impacting many people, the fact that President Asif Ali Zardari is seen as caving in to the US demands is hurting his popularity. Only 11% approve of him while a whopping 42% think he is doing a bad job.

The Gallup results are also confirmed by a more recent IRI survey results in Pakistan. The survey released in early October by the International Republican Institute, a non-profit group promoting democracy whose board is headed by Senator John McCain, found that Pakistanis remained sharply critical of US military efforts.

Eighty percent of Pakistanis disagreed with cooperation with the United States on the "war on terror," a figure that shot up 19 points since March, the survey said.

At the same time, 86 percent agreed that Taliban and Al-Qaeda militants posed a problem for Pakistan and more than two-thirds supported a recent Pakistani army offensive on extremists.

In one of the sharpest swings, the polls showed that Pakistanis were growing increasingly pessimistic about their own economic futures. Some 58 percent of Pakistanis expected their economic situations to worsen in the coming year, up from 36 percent in March, it said.

It appears that the whole process by which the US aid package has been handled by the US and Pakistani governments is proving to be counterproductive, jeopardizing the chances of peace and stability in the region. Not only has it angered both the military and the public in Pakistan, it has the potential of seriously hurting political stability in Pakistan, further diminishing the chances of economic recovery in the near future, and it is reducing the probability of success against the perpetrators of terror. In sensitive relationships like the one between US and Pakistan, there should have been a lot more quite diplomacy and much less public display of the US pressure and growing presence in Pakistan.

Rather than further inflame the already explosive situation by unnecessary rhetoric, it is time for both governments to try and salvage the relationship, and their common fight against the terrorists, by engaging in serious damage control on both sides.

Related Links:

Kerry-Lugar Bill

Pakistani Foreign Minister Speaks to Council on Foreign Relations

IRI Poll

Gallup-Aljazeera Poll

US Aid to Pakistan

US Push to Expand in Pakistan Meets Resistance

Turning Pakistan into a Client State

Unraveling the Kerry-Lugar Controversy

Tuesday, September 29, 2009

What Does Pakistani Democracy Deliver?

In an Op Ed piece published in Pakistani newspaper "the News" recently, Ms. Farahnaz Ispahani, the wife of Pakistani Ambassador in Washington and a close Zardari aide, claims "democracy does deliver". She proudly talks about her government's success in tripling of the US non-military aid to $1.5 billion a year "to the dismay of the government's detractors and contrary to the vilification campaign going on in the country against the elected leadership".

When Ms. Ispahani says that "democracy does deliver", what she really means is that democracy delivers US aid to her government. The underlying assumption appears to be that such aid alone will solve Pakistan's current economic problems. However, she does not mention Pakistan's serious economic decline, mounting job losses and rising poverty since her party took control of the government in 2008, nor does she make any reference to the ominous conditions attached to the US aid bill and the serious concerns by the US about PPP's corrupt leadership siphoning off the funds provided by the Americans. Here is some context to the declaration of victory by Zardari's spokesperson Ispahani in getting US aid:

Pakistan's Recent Economic Performance:

According to Economic Survey 2008-09, presented by Finance Minister Shaukat Tarin, Pakistan's economy grew by a mere 2.0 percent, barely keeping pace with population growth. The growth fell significantly short of the 4.5 percent target for the year, which was already very modest compared with an average of 7% economic growth witnessed from 2001-2008.

The manufacturing sector contracted by 3.3 percent in 2008-09 as compared to expansion of 4.8 percent last year and target of 6.1 percent. Small and medium manufacturing sector maintained its healthy growth of last year at 7.5 percent.

Large-scale manufacturing experienced contraction of 7.7 percent compared with expansion of 4.0 percent in the last year and 5.5 percent target for this year. The massive contraction has been because of severe power outrages, bad governance, security environment and political disruption in 2008-2009. The services sector grew by 3.6 percent, missing the target of 6.1 percent and last year’s actual growth of 6.6 percent.

The growing lines of poor people lining up for free food paid for by philanthropists at some restaurants and charitable institutions offer significant anecdotal evidence of rising poverty from widespread job losses since last year.

US Aid Strings:

The list of conditions attached to the US aid bill, also known as Kery-Lugar bill, affect almost all of the Pakistani stakeholders, including Pakistani military, the intelligence agencies and the people of Pakistan and the government's conduct of relations with Pakistan's neighbors such as India and Afghanistan.

According to the News, the newly approved US aid will be provided in multiple installments and the US Secretary of State will have to issue a certificate on these sensitive subjects before each installment of the US aid is disbursed.

The US Secretary of State, under the direction of the president, will have to certify to the appropriate congressional committees that:

1. Pakistan is continuing to cooperate with the United States in efforts to dismantle supplier networks relating to the acquisition of nuclear weapons-related materials, such as providing relevant information from or direct access to Pakistani nationals associated with such networks;

2. Pakistan during the preceding fiscal year has demonstrated a sustained commitment to and is making significant efforts towards combating terrorist groups, consistent with the purposes of assistance described in section 201, including taking into account the extent to which the Government of Pakistan has made progress on matters such as:

(a) ceasing support, including by any elements within the Pakistan military or its intelligence agency, to extremist and terrorist groups, particularly to any group that has conducted attacks against United States or coalition forces in Afghanistan, or against the territory or people of neighboring countries;

(b) preventing al-Qaeda, the Taliban and associated terrorist groups, such as Lashkar-e-Taiba and Jaish-e-Mohammed, from operating in the territory of Pakistan, including carrying out cross-border attacks into neighboring countries, closing terrorist camps in the FATA, dismantling terrorist bases of operations in other parts of the country, including Quetta and Muridke, and taking action when provided with intelligence about high-level terrorist targets; and

(c) strengthening counter-terrorism and anti-money laundering laws; and

(3) the security forces of Pakistan are not materially and substantially subverting the political or judicial processes of Pakistan.

Renewed Corruption Charges:

It was only in 2007 that President Asif Ali Zardari returned to Pakistan under an amnesty, euphemistically called National Reconciliation Ordinance (NRO), sponsored by the Americans. However, the Americans know that the corruption charges against Zardari were credible and he, along with his late wife, was convicted in at least one case by a Swiss judge. The conviction was under appeal in Switzerland when Pakistan government withdrew all charges pursuant to the NRO signed by then President Musharraf under pressure from the Americans.

Now, the Obama administration officials are debating how much of the assistance should go directly to a government that has been widely accused of corruption, according to a report in the New York Times. The American aid officials believe that they need to assist the Pakistani economy directly in view of the renewed corruption allegations against the government of Mr. Zardari for its handling of the recent power shortages. The nation-wide power outages which have contributed to Pakistan’s first year of negative industrial growth this decade.

There have been widespread complaints in Islamabad, including by Finance Minister Shaukat Tarin, that the government had solutions to improve the power output but was refusing to implement them in order to benefit a handful of power plant operators, such as those supplying rental power at exorbitant rates, while the IPPs are not being paid for supplying power from currently underutilized installed capacity. Requests for information by Transparency International Pakistan regarding rental power contracts have been ignored by the Ministry of Water and Power. There are widespread corruption allegations against Mr. Zardari personally who has influenced the award of the 783 MW rental power contracts to a former governor of Oklahoma and his Pakistani partner.

Here is the full text of the Ispahani's opinion published in the News today:

Much to the dismay of the government's detractors and contrary to the vilification campaign going on in the country against the elected leadership, the US Senate voted on Thursday to triple non-military aid to Pakistan to roughly $1.5 billion per year.

The bill, approved unanimously, had been agreed upon between the Senate and House sponsors of legislation passed separately by each chamber earlier this year. The sponsors are Senators John Kerry and Richard Lugar. The bill has incorporated improvements over the earlier version of the Kerry-Lugar Bill passed by the Senate and the House. The vital aspect of the bill is that its language is far less prescriptive and stringent. Specific references to India as well as A Q Khan have been eliminated while the language related to nuclear proliferation is markedly toned down from "ensure access of US investigators to individual suspected" to receiving cooperation "in efforts such as providing relevant information from or direct access to Pakistani nationals associated with such networks."

On Thursday, for the first time ever, major economic powers agreed to the formation of a multi-donor trust fund (MDTF) to help the country build its tribal areas which have been the worst victim of the fight against the militants.

In an unprecedented show of solidarity President Barack Obama, President Asif Ali Zardari and Prime Minister Gordon Brown co-chaired the meeting of Friends Democratic of Pakistan (FoDP). The participants included a galaxy of world leaders, such as President Sarkozy of France, Prime Minister Berlusconi of Italy, Turkish Prime Minister Erdogan, the prime ministers of Australia and Canada and World Bank president Robert Zoellick. Foreign Minister Shah Mahmood Qureshi termed the summit a "diplomatic success," stating that it represented a vote of confidence in the Pakistani nation.

British Prime Minister Gordon Brown applauded Islamabad's campaign to rid the restive border areas of violent extremism and bring stability to the region. The British leader commended the leadership of President Zardari and the role of the armed forces for launching an effective offensive against the militants.

Earlier, US President Barack Obama reaffirmed his administration's commitment to economic cooperation with Pakistan.

The total amount of the bill passed by US Senate for FY 2009 is $3021.0 million. $1147.5 million would be given under the head of Development and Reconstruction out of which $33.5 million will be given under the head of Child Survival and Health Programme whereas Economic Support Fund would receive $1,114.0 million while $11,02 million will be made available for the country in FY2010 with $27.9 million and $1,074.3 million on Child Survival and Health Programme and Economic Support Fund respectively.

Pakistan will receive a total of $1103.1 million under the head of Security Assistance out of which foreign military financing would be $300.0 million this year whereas $700.0 million have been allocated for Pakistan Counter Insurgency Fund; $13.3 million would be spent on Non-Profit, Antiterrorism, Demining and Related Issues. International Narcotics and Law Enforcement would receive a total of $87.5 million while $2.3 million would be spent under the Head of IMET. It is worth mentioning here that $298.0 million, $22.7 million, $155.2 million and $ 4.0 million respectively would be given to the country under the same head in FY2010.

Pakistan will receive a total of $255.4 million under the head of humanitarian grant; further details are that Migration and Refugee Assistance will be given $69.6 million while Food for Progress will get $31.0 million, PL480 $36.3 million and International Disaster Assistance will be given $118.0 million in the FY 2009. Migration and Refugee Assistance will receive $20.0 million while no money has been reserved for Food for Progress, PL and International Disaster Assistance in the FY 2010. Total State Department operations will entail $2,506.0 million in this financial year whereas it would be $1602.0 million in the next financial year.

The Department of Defence will receive a total of $515.6 million in which Counter- Narcotics will receive an amount of $63.3 million this year and $38.4 million in the next financial year while $25.0 million have been reserved for FATA Authority this year. Ensuring that the present government does not face any obstacle in its democratic dispensation a condition in the bill requires that the security forces of Pakistan do not subvert judicial processes. The aim of the legislation is to promote stability in the country.

It is worth mentioning that the bill underlines the importance of supporting Pakistan's national security needs to fight the ongoing counterinsurgency and improve its border security and control. However, it does not specify any amount or percentage. This provides the administration maximum flexibility and none of the conditions can set in motion automatic sanctions.

Previously, Pakistan was governed by a dictator and that regime weakened all our important institutions like the judiciary and the parliament. Even the media was brutalised and attacked when the crunch came. Today all our institutions are working for the betterment of the people. The judiciary and the parliament are respected by the executive. The media is free to examine and comment on the working of the government. Internationally, Pakistan stands in the strongest diplomatic position in its sixty two year history. Our leaders now stand shoulder to shoulder with the leaders of other democracies. And perhaps the most important message that President Zardari sends to our nation and to the world is that democracy does indeed deliver.

Conclusion:

Even if the current Pakistani government does succeed in effectively responding to the concerns of the foreign aid donors regarding transparency in the use of funds and Pakistan's sincerity in fighting terrorism, it is extremely important to recognize that there can be no real economic progress, measurable poverty reduction and visible human development that translate into winning the hearts and minds of the people, unless there are good policies and competent governance in the country.

Related Links:

Good Governance Reform Agenda in Pakistan

Asian Development Bank Partnership with Pakistan
Pakistan Economic Survey 2008-2009

Pakistan Economic Survey 2008-2009

Pakistan Economic Slump Hurts Workers

Musharraf's Economic Legacy

Zardari Corruption Probe in Switzerland

US Fears Pakistan Aid Bill Will Feed Graft

USAID, Democracy and Governance in Pakistan

Kerry-Lugar Test

Sunday, August 30, 2009

NY Times Harpoon Aims at Heart of Pak Aid Bill

The New York Times is quoting unnamed senior Obama administration and Congressional officials as claiming that the United States is accusing Pakistan of illegally modifying American-made Harpoon anti-ship missiles to expand its capability to strike land targets, a potential threat to India.

American military and intelligence officials reportedly say they suspect that Pakistan has modified the Harpoon antiship missiles that the United States sold the country in the 1980s, a move that would be a violation of the Arms Control Export Act. Pakistan has denied the charge, saying it developed the missile itself. The United States has also accused Pakistan of modifying American-made P-3C aircraft for land-attack missions, another violation of United States law that the Obama administration has protested.

According to a senior Pakistani official, Pakistan has taken the unusual step of agreeing to allow American officials to inspect the country’s Harpoon inventory to prove that it had not violated the law, a step that the US administration officials praised.

Independent experts are also skeptical of the alleged American claims, according to Asian Defense blog. Robert Hewson, editor of Jane’s Air-Launched Weapons, a yearbook and Web-based data service, has said the Harpoon missile did not have the necessary range for a land-attack missile, which would lend credibility to Pakistani claims that they are developing their own new missile. Moreover, he said, Pakistan already has more modern land-attack missiles that it developed itself or acquired from China.

According to Tech Lahore blog, Pakistan's Raa’d missile has been mated with Mach 2 capable Mirages and is now being integrated with Pakistan’s new fighter, the JF-17. The missile can be launched from a stand-off distance of almost 500km and employs more sophisticated guidance than the Harpoon. This raises the question as to why would Pakistan want to attack land targets with a slow, bulky aircraft like the P-3, firing shorter range Harpoon missiles, when it’s air force already has almost 175 Mirage aircraft with Raa’d cruise missiles and recently added in-flight refueling capability?

“They’re beyond the need to reverse-engineer old U.S. kit,” said Mr. Hewson about Pakistan's current capabilities. “They’re more sophisticated than that.” Mr. Hewson said the ship-to-shore missile that Pakistan was testing was part of a concerted effort to develop an array of conventional missiles that could be fired from the air, land or sea to address India’s much more formidable conventional missile arsenal.

Recently, the US has signed a nuclear cooperation deal with India and offered to sell over $2 billion worth of sophisticated weaponry, further enhancing India's military might.

Coming just a week before the $7.5 billion aid-to-Pakistan bill goes to the US senate, it is clear that the timing and the motives of Eric Schmitt and David Sanger of the New York Times “leak” are highly suspicious. It fits a pattern of "leaks" in Washington to either defeat or add poison pill amendments to any legislation likely to aid to Pakistan. Such well-timed "leaks” to the New York Times, known for similar well-timed "leaks" about Iraq WMDs prior to the ill-conceived US invasion of the middle eastern nation, are most likely inspired by the Israeli and Indian lobbies in Washington who are irrevocably opposed to any US assistance to Pakistan.

Past hypocritical denials of US weapons to Pakistan while offering modern offensive weapons to India has been a blessing in disguise for Pakistani military and its defense industry. Every time US has embargoed or quibbled over some insignificant little "arms control" violations with Pakistan, Pakistanis have responded to the challenge by developing their own indigenous capabilities. Such developments not only help strengthen the nation's defenses, domestic defense production also aids in developing human skills, enhancing arms exports and providing badly-needed jobs to many.

Here's a video clip about Pakistan's arms expo IDEAS 2008:

Thursday, April 9, 2009

Can US Afghan War Remake Pakistan?

The $663 billion US defense budget for 2010 announced by Defense Secretary Robert Gates emphasizes higher spending on counterinsurgency weapon systems, and cuts back on expensive conventional weapon systems. For example, there is a huge increase in the budget for predator class armed drones, helicopter gunships, surveillance, cyber warfare and special (commando) operations. At the same time, it envisions deep cuts in spending on the expensive F22 Raptor stealth fighter, large navy ships and anti-missile defense shield.

Here is a quick summary of winners and losers in the 2010 defense budget:

Key Winners:

1. Intelligence, surveillance, reconnaissance (ISR): budget to be increased by 2 billion dollars.

2. Predator unmanned aerial vehicles (UAV): Fielding and sustaining 50 Predator-class UAVs.

3. Army aviation forces: recruiting and training of additional Army helicopter crews and increase the budget by 500 million dollars.

4. Special forces: increasing special operation personnel by more than 2,800 and buying more aircraft for the special forces.

5. F-35 fighters: Gates plans to buy more F-35 fighters in fiscal year 2010, raising the F-35 budget from 6.8 billion U.S. dollars to 11.2 billion dollars. The proposal is to double the number of F-35 Joint Strike Fighters the Pentagon buys next year -- to 30 from 14 in 2009. The F-35 is a cheaper, more multipurpose plane but it can't begin to compete with the F-22 as a fighter jet.

6. Littoral Combat Ships (LCS): Gates proposes to increase the purchase of LCS, seen as crucial to counterinsurgency operations in coastal regions and to improve inter-theater lift capacity.

7. F/A-18 fighter jets: Gates plans to buy 31 more F/A-18 fighter jets in fiscal year 2010.

8. Joint High Speed Vessel (JHSV): increasing the charter of Joint High Speed Vessel (JHSV) ships from two to four until the Pentagon's own production program begins deliveries in 2011.

Major Losers:

1. F-22 Raptor fighter jets: Gates said the Defense Department would complete its contract for 183 F-22 fighters and add four more, bringing the total to 187, before stopping the purchases.

2. VH-71 presidential helicopters: Gates said he plans to terminate the program, which had nearly doubled in cost to over US $ 13 billion and was six years behind schedule.

3. Transformation Satellite Communication System: Gates plans to cancel the program and buy two more Advanced Extremely High Frequency satellites instead.

4. CG-X next generation cruiser: Gates plans to scrap the program for now, which was initially planned to be based on the DDG-1000 design.

5. Aircraft carriers: Gates also envisions to reduce the number of aircraft carriers from 11 to 10 after 2040.

6. Future Combat Systems (FCS): Gates will restructure the Army's modernization program and cut costs.

7. Missile defense: Gates will cut annual funding for missile defense by $1.4 billion. The losers include the Airborne Laser, designed to shoot down ballistic missiles in the boost phase, and additional interceptors planned for the ground-based system in Alaska.

Combat Search and Rescue X (CSAR-X) helicopter program: Gates plans to cancel the 15-billion-dollar program to build new search and rescue helicopters.

8. Amphibious ship and sea-basing programs: Programs such as the 11th Landing Platform Dock (LPD) ship and the Mobile Landing Platform (MLP) SHIP will be delayed.

Gates characterized the budget shift as tailored to face the challenges of America at war with a host of players, many of them stateless and highly mobile, as opposed to the Cold War approach that long dominated the Pentagon's view of planning.

Gates acknowledged that his decisions would invite a lot of strong reaction.

"There's no question that a lot of these decisions will be controversial," he said at a press conference on Monday where he outlined his budget proposal. "My hope is that, as we have tried to do here in this building (Pentagon), the members of Congress will rise above parochial interests and consider what is in the best interest of the nation as a whole."

Going by the history of defense budget process, lawmakers on Capitol Hill are more interested in funneling money to their home states than in spending dollars most effectively. Democrats and Republicans both help themselves and their constituents' short-term interests while criticizing the executive branch for failing to make tough choices.

The announced US defense budget for 2010 is nearly $700 billion (more than half of the trillion dollars spent on defense by the entire world) while the total aid for the developing countries from all the rich countries is only about $60 billion, including about $20 billion from the United States, accounting for less than 1% of US annual budget.

Here are some facts about the US foreign aid program:

1. Less than half of aid from the United States goes to the poorest countries.

2. The largest recipients are strategic allies such as Egypt, Israel, Russia, Pakistan, Afghanistan and Iraq.

3. Israel is the richest country to receive U.S. assistance ($77 per Israeli compared to $3 per person in poor countries).

4. Even after the planned tripling of the US aid to Pakistan, it still amounts to less than $8 per Pakistani.

The planned $1.5 billion annual aid to Pakistan will be just over 1 percent of the $130 billion US budget for military operations in Afghanistan and Iraq. As Professor Anatol Lieven of London's King's College recently put it, "the stabilization and development of this country (Pakistan) is not merely an aspect of the war in Afghanistan, but a vital US interest in itself. Indeed, Pakistan in the long term is far more important than Afghanistan. The second is that changing Pakistani opinions will mean changing Pakistani society, and that is a project that will require massive, sustained and consistent aid over a generation." The professor adds, "Eight dollars per head is not going to transform anything much in the country. More over, the US statement emphasizes that the aid will be made conditional on Pakistan’s help to the US against the Taliban. This is a recipe for constant hold-ups, congressional blockages and the wrecking of any consistent, long-term programs."

The process of piling on all sorts of conditions by various interest groups and Indian lobbyists in Washington has already started as the aid to Pakistan bill comes up for debate in US Congress. According to Pakistan's Dawn newspaper, the first major condition for aid requires Pakistan to undertake not to support any person or group involved in activities meant to hurt India and to allow US investigators access to individuals suspected of engaging in nuclear proliferation if it wants to qualify for a threefold increase in US economic assistance. This is probably just one of many conditions that Pakistanis will see as an insult to and assault on the nation's sovereignty.

With Pakistan's growing population and rising expectations of its young people, it appears to me that the radical Islam is now spreading beyond its traditional home in NWFP and FATA to Pakistan's heartland of Punjab. It is also clear that the new generation of Pakistanis do not want to accept life under a feudal or tribal system that denies them basic human dignity. In the absence of significant economic growth (even the phenomenal 8% growth roughly equals 2.5m jobs), not enough jobs are being created for 3 million young people ready to join the work force each year, resulting in growing availability of recruits for terror outfits who pay them fairly well by local standards. According to Rand corporation estimates, the Taliban pay about $150 a month to each fighter, much higher than the $100 a month paid by the governments in the region. This fact has been amply illustrated by recent growth of the Punjabi Taliban who have been found recruited by terrorist groups for suicide bombings and violence within and outside Pakistan.

By adding more American UAVs and US troop reinforcements in Afghanistan, the commitment of significantly more money for greater firepower will remake neither Afghanistan nor Pakistan. On the contrary, it is certain to have major long-term negative repercussions for Afghanistan, Pakistan and the American interests in the region. At the very least, it is natural to expect more fighting and mounting American and civilian casualties during this year and the next few years, unless saner minds prevail and US changes course in favor of more political dialog and much greater use of soft power in the region.

Here's a video clip of Secretary Gates announcing his defense budget priorities:

Thursday, May 29, 2008

Gilani Wants "Democracy Dividend" For Pakistan

Prime Minister Yousuf Raza Gilani of Pakistan wants to "deliver democracy dividend" to the people. To understand the term "democracy dividend" you'd have to think of the 1990s in the United States. When the cold war ended, there was a "peace dividend" that went to the people of the United States. It came in the form of defense budget cuts that freed funds to stimulate the US economy and wipe out the budget deficits during the Clinton administration. It seems like a very distant memory now as the US debts are piling up again and the war in Iraq continues to be a serious drain on the US economy.

So what does Mr. Gillani have in mind about "democracy dividend" in Pakistan? Talking with Zahid Husain of the Wall Street Journal, Mr. Gilani said further U.S. assistance "will help deliver a democracy dividend to the people" after Pakistan held landmark elections for a new parliament in February. He also said further aid is needed to help provide political and economic stability as the nation seeks to fight terrorism. Pakistan has received more than $11 billion from the U.S., most of which has gone to the military, since it joined the U.S.-led fight against terrorism following the Sept. 11, 2001, attacks. Mr. Gilani didn't specify how much further assistance Pakistan is seeking. He made his case for further aid during a recent meeting in the Middle East with President Bush.

So what does Mr. Gillani offer the US in return for further assistance? The prime minister said Pakistani forces would remain deployed along the border. And he emphasized the need to increase the strength of Afghan troops on the Afghan side of the border, saying there is an inadequate force to protect against border crossings.

Mr. Gilani said he would maintain a working relationship with Mr. Musharraf for now. "I have no problem working with him, but will go by the party's decision," the prime minister said.

Based on the contents of the Wall Street Journal interview, it seems Mr. Gillani is willing to work with President Musharraf and continue to fight the war on terror alongside the US. However, convincing the US of Pakistan's seriousness would be difficult. As widely reported, there are efforts to undermine President Musharraf's powers in a new package presented by the PPP. The other irritant will be Pakistan's decision to make deals with the militants in the tribal and settled areas in defiance of the US wishes.