12/26/2014

Fixing Americas Aid to Afghanistan and Pakistan | The Diplomat

Fixing Americas Aid to Afghanistan and

Pakistan
The US needs a more strategic approach in providing
assistance to the two troubled countries.
By Jordan Olmstead
December 23, 2014

Foreign assistance programs are a major component of Americas

strategy to build stable states in Afghanistan and Pakistan.
Policymakers reason that by improving governance and military
capacity in those states, the U.S. can reduce the risk of terrorist
Image Credit: isafmedia via Flickr.com
organizations like al-Qaeda and the Tehrik-i-Taliban from finding safe
haven in ungoverned spaces and planning attacks against the U.S., or
threatening Pakistans nuclear weapons. However, as NATOs presence in Afghanistan begins to draw down, the tide of
American foreign aid dollars into Afghanistan and Pakistan is receding. According to data provided by the Security Assistance
Monitor, a project of the Center for International Policy, the total amount of U.S. military and police aid to South Asia will drop
to just below $520 in fiscal year 2015, from a peak of $12.7 billion in 2011. Aid provided to South Asia by USAID under the
Foreign Assistance Act is also set to fall from a wartime peak of $6.8 billion in 2010 to $2.4 billion next year.
This precipitous decrease is unsurprising. Critics have charged American aid programs with a myriad of ills, and it is hard for
members of Congress to justify pouring billions of dollars into Pakistan and Afghanistan to consolidate gains in an already
decided war, especially when a recent Pew poll found that out of 19 options for cutting government spending, onlyreducing
foreign aid was supported by more than 40% of Americans.
While the urge to tighten the aid spigot is tempting, and in some cases quite justified, the allocation decisions reflected above
do little to address the problems associated with American assistance programs, and cut promising programs unduly.
http://thediplomat.com/2014/12/fixing-americas-aid-to-afghanistan-and-pakistan/?allpages=yes&print=yes

1/5

12/26/2014

Fixing Americas Aid to Afghanistan and Pakistan | The Diplomat

Its first important to note that in general, the prospects for foreign assistance programs yielding substantial improvements in
the quality of governance or economic development are generally slim. Critics of aid programs often point to scholarship which
finds that American aid programs have had a negligible impact on improving economic growth (here, here) democratization
(here, here), and governance in target countries. Dishearteningly, studies suggest that military aid may undermine programs
intended to promote economic development and democratic institutions.
However, like Tolstoys unhappy families, Afghanistan and Pakistan face blowback from American aid program in their own
unique ways. In Pakistan, a 2013 report from the Congressional Research Service charged that many observers question the
gains [of aid programs] to date, variously identifying poor planning, lack oftransparency and capacity [and] corruption as
major obstacles to reform.
As a response to allegations of corruption, money wasted on paying the salaries of foreign aid experts who often operated
with little accountability, and threats to aid workers (especially in the Federally Administered Tribal Areas (FATA) and
Khyber Pakhtunkhwa (KP) provinces) the U.S. government moved to channel more aid directly through Pakistani NGOs and
government agencies in 2010. Despite this shift in policy, a report issued in 2011 by the Inspectors Generals of USAID, the
State Department and the Pentagon found USAID has not been able to demonstrate measurable progress in conducting
pre-award assessments of local implementing partners and establishing oversight entities to ensure that aid funds are
protected from fraud and theft. This failure was predictable, as much of this aid was sent to dangerous locations where U.S.
personnel could not properly monitor their Pakistani partners.
While the ineffectiveness of American aid programs in Pakistan is bad, the risk that they are exacerbating corruption and
empowering groups who undermine security and democratic institutions is worse. Without proper controls, the American
government has no means to ensure aid money isnt paid to corrupt government bureaucrats to secure licenses or expedite
paperwork. They also have no way of preventing NGOs from paying protection money to militant groups like the Tehrik-iTaliban.
American military aid to Pakistan also empowers the military at the expense of democratic institutions. This is the
continuation of a historical process, according to Aqil Shah in his book The Army and Democracy: Military Politics in
Pakistan, Pakistans preparation forwar with India, aided by U.S. Cold War resources, developed and strengthened the
military to the detriment of civilian political institutions and thus fostered a sense of superiority and accomplishment in the
military, which motivates their attempts to stabilize and rationalize Pakistani politics. As a result, the nearly $350 million
Pakistan will receive in military aid in 2015, coupled with the $647 million in arms, will reinforce the resource disparity
between the military and civilian government, and undermine the prospects for institutional improvement in Pakistan by
giving the military a disincentive to submit to civilian control, according to Azeeem Ibrahim of Harvards Belfer Center for
Science and International Affairs.
http://thediplomat.com/2014/12/fixing-americas-aid-to-afghanistan-and-pakistan/?allpages=yes&print=yes

2/5

12/26/2014

Fixing Americas Aid to Afghanistan and Pakistan | The Diplomat

There is also the risk that that aid dollars will be funneled to unsavory groups. The Pakistani military, or more specifically the
ISI, is well known for funding, or otherwise maintaining relationships with terrorist groups, ranging from the Haqqani network
to Lashkar-e-Taiba. Without proper accountability measures, there is no real way to guarantee that none of the money
earmarked to support counterinsurgency operations or equipment procurement will end up in their hands. Other states have
misused American aid in this manner; a study by Oeindrila Dube of the Center of Global Development found that links
between the military and informal armed militias have led to the use of foreign military resources by illegitimate armed
groups, and as such, donor countries like the U.S. may be fueling the very groups that military aid is designed to suppress,
prolonging conflict and further weakening the state.
The aid situation in Afghanistan is even more daunting. Afghanistan was one of the poorest countries on Earth before
American invaded in 2001, and the American military had to build modern institutions largely from scratch. Unsurprisingly, a
country with such nascent institutions has had difficulties properly managing aid inflows that amount to 65 percent of its
budget. A 2011 audit found that none of Afghanistans 16 government ministries could be trusted to manage American aid.
The Customs Department provides an instructive case. According to The New York Times, the international community
spent $290 million in an effort to expedite the customs process. On first pass, their effort was successful. Processing times
have dropped and revenue has soared 20-fold. However, the system loses more than half of what it gains because
Afghanistan loses at least half of customs revenue to corruption. In effect, the U.S. aid money helped corrupt officials become
more efficient. When considered concurrently with other failed initiatives, it becomes clear how pouring cash into the eighth
most corrupt country on Earth will not improve their institutions, and indeed, aid initiatives that exacerbate corruption
undermine trust in government, which undermines the Obama Administrations goal of building a credible regime in
Afghanistan.
So, you might wonder, if the current net effect of American aid to Pakistan is negative, what is my gripe with the current
downward trend in American aid to those countries?
The answer begins with credibility. Building credibility is key for both countries. Militant groups like the Taliban (both the
Pakistani and Afghan variants) rely on lingering dissatisfaction with the central government. However, the current U.S.
strategy maintains high levels of military aid (including indirect provisions of aid through arms sales) which empowers the
military to lord over what Dr. Christine Fair calls a hollow state in her book Fighting Until the End: The Pakistan Armys
Way of War. In this scenario, a well equipped, powerful military fights a forever war against militant groups whose existence
is predicated on dissatisfaction with a corrupt, inept civilian government.
The current U.S. aid paradigm plays into this dynamic by reducing aid overall, but maintaining sizeable aid transfers to the
Afghan and Pakistani militaries. This fails to address the underlying issue of poor governance. Improving governance is
http://thediplomat.com/2014/12/fixing-americas-aid-to-afghanistan-and-pakistan/?allpages=yes&print=yes

3/5

12/26/2014

Fixing Americas Aid to Afghanistan and Pakistan | The Diplomat

imperative, yet U.S. aid programs in Afghanistan and Pakistan have failed to do this.
An ideal aid program would be guided by four key principles: targeted, conditional, tiered and post hoc. First, targeted.
Empirically, most aid programs fail to improve governance or democracy in the target country. However, recent research
suggests that there is one exception: According to a study by Steven Finkel of the University of Pittsburgh, USAID programs
targeted specifically at improving Democracy and Governance funding exert a significantimpact on democratic outcomes,
as measured by the two leading indices for measuring democracy. The majority of non-military aid the U.S. government plans
to spend in the two countries falls under this category (here, here), which is promising. While some of this money will
inevitably be swallowed up by corruption, if the net effect of democracy and governance aid is an improvement of political
institutions, the long-run benefits will be well worth it, if the U.S. can cut down on corruption and misappropriation of funds
through the next two steps.
Second, the U.S. needs a stronger conditionality policy that holds funds if the Pakistani government implements policies that
undermines governance. As noted earlier, military aid negates the positive effects of foreign aid, by empowering the military
to pursue policies that undermine good governance, amongst other things. While the Kerry-Lugar Bill that governs American
aid to Pakistan nominally makes the disbursement of aid to Pakistan contingent on a variety of factors, including pursuing
militant groups like the Haqqani network that attack American troops in Afghanistan, the State Department at Department of
Defense have the authority to issue waivers on national security grounds, which they did in 2012. Such waivers should not
be authorized in the future; helping the Pakistani military make gains on the battlefield is for naught if it continues to pursue
policies that give different, equally lethal militant groups a pass. The presence of militant groups, whatever their stripe,
undermines the Pakistani governments monopoly of force and its credibility, in turn jeopardizing the long-term viability of the
Pakistani state. Conditionality clauses should be added that punish the Pakistani and Afghan governments if they do not
implement U.S. guidelines on protecting aid funds from misuse.
Third, aid should be tiered. If the Pakistani and Afghan governments can make improvements on governance indices, like
Transparency Internationals Corruption Perceptions Index, they should be rewarded with funding for economic development
and infrastructure projects, as such initiatives are more likely to succeed in an environment with less corruption. This could be
a carrot that incentivizes government officials to undertake on anti-corruption initiatives with more zeal.
Finally, military aid should be given post hoc whenever possible. This is one way the U.S. could try and ensure that funds
allocated for contributing to the improvement of the two countrys security environment actually go to specific operations (like
Pakistans current offensive in North Waziristan) that forward those goals, instead of more questionable endeavors.
Ultimately, the task of creating credible, representative and secure states in Afghanistan and Pakistan belongs to Afghans and
Pakistanis. However, the U.S. can play a role in this process if it adopts a more strategic approach to providing assistance to
http://thediplomat.com/2014/12/fixing-americas-aid-to-afghanistan-and-pakistan/?allpages=yes&print=yes

4/5

12/26/2014

Fixing Americas Aid to Afghanistan and Pakistan | The Diplomat

the two countries.

Jordan Olmstead is a freelance writer and Research Affiliate at the Southwest Initiative for the Study of Middle Eastern
Conflict. His research focuses on institution building by sub-national groups in South Asia. You can reach him at
jchandlerolmstead@gmail.com and follow him on Twitter @jcolmstead1.

http://thediplomat.com/2014/12/fixing-americas-aid-to-afghanistan-and-pakistan/?allpages=yes&print=yes

5/5