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Aid to Pakistan: America's Headache

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Since the killing of Osama bin Laden and the shakeup in Defense and CIA personnel, aid to Pakistan -- never far off the list of ulcer-inducing topics in Washington -- has been causing the usual double doses Maalox to seem not quite enough to treat the pain.

Given the huge rifts and schisms of power in Pakistan -- an elected government, a powerful intelligence agency that often seems to side with the darkest forces of humanity, a military that runs its own agenda, and the assorted jihadists, militants, yahoos, illiterates, the Taliban and everything in between running riot in lawless territories assessing not only needs but effectiveness and performance is the hardest task.

Pakistan's economy is a basket case. Development banks ring alarm bells that the country is virtually running on empty. Add to the economic and governance woes, polls consistently show that across the board in Pakistan, the US is not regarded kindly -- by anyone, regardless of a concerted hearts and minds campaign stretching back decades.

USAID alone has spent over $5 billion in civilian aid since 2005, which makes Pakistan one of its largest recipients. (The sum total of US aid to Pakistan is close to $20 billion over a decade). President Obama wants to increase that aid through Pakistani government departments and non government organizations. But Islamabad has proven to be ill prepared and ill equipped to handle such large amounts, and local NGOs often possess even less capacity to work, are riddled with inefficiencies and are often open to outright exploitation.

(The scrupulous and highly regarded British based Oxfam has started investigating financial irregularities in their 2010 flood funds -- not from their own employees but from Pakistani charities working as partners.)

Last week a US official told the Financial Times that the US would slash its funded projects by two-thirds (down from 160 to 50) with a renewed emphasis on countering anti-American sentiment.

The radical option of cutting out and cutting all aid to Pakistan is gaining some favor in surprising quarters (though entirely unlikely to happen). The theory goes that cold turkey will drag the country out of its aid dependency and it will learn -- quickly -- how to organize its finances, deny the ascendancy of the dangerous crackpots and depend more on a highly mobile and committed middle class. Oh if that would be so.

Washington's Center for Global Development recognizes the power of the middle class but rather than abandon them to fight on behalf of the good guys the CGD suggests supporting them even more by not only creating the obvious educational and health opportunities but by developing incentives for investment, and development of small and medium private enterprises.

"They could be the best advocates for a U.S.-Pakistani relationship that goes beyond security issues -- but only if they feel like the United States is listening to them and being open and honest about what U.S. development programs are doing,´ Wren Elhai, a CGD policy analyst who worked on the recent Pakistan study, told the Huffington Post via email. "That said winning hearts and minds should not be the primary goal of US aid to Pakistan. Expanding Pakistan's middle class matters most because they will play a key role in building a strong economy and healthy democratic system there."

But with the majority of Pakistan's population skeptical at best and hostile at worst towards the US, there is also a deep vein of suspicion that aid comes with strings attached -- an unspoken demand to influence and shape Pakistan's political process and outcomes.

"There is no evidence that aid has the ability to make Pakistan's military or civilian leaders to act against what they perceive as their interests," says Wren Elhai. "Pakistan's history offers plenty of examples of donor programs that sought to leverage aid to secure economic reforms -- many of them the same reforms currently under discussion -- with nothing to show for it. The United States cares about the outcomes of Pakistan's political processes, (h)owever, it has to be more nuanced in how it tries to nudge those processes forward.

CGD also emphasizes the commitment that USAID has towards education -- spending more money in Pakistan last year than in any other country. Successful, broad based and long term education funding is necessary.

"What's important is to make sure that budget is spent in ways most likely to achieve the desired outcome, namely more kids learning more in school," says Wren Elhai.

And in the end, despite calls to 'get out of Pakistan' and 'leave them to their own devices,' this does matter to global security, and not just because of Pakistan's expanding nuclear capability. Setting performance goals for the government would strengthen its position, and create achievable conditions. Common humanity would also wish that with Pakistan on track to be the fourth largest country in the world, its citizens should live in a stable and prosperous society, no longer looking outside its borders for blame and revenge.