Measuring the Effectiveness of US Development Aid to Pakistan Thesis: International Politics Honors Seminar Advisor: Professor Kai-Henrik Barth Kimberly Fernandes 18/04/2011 I affirm that my paper is free of plagiarism; I have examined the citations and references in my paper and I affirm that they are complete and correct; I have verified that this version is indeed the version that I intend to submit. Kim Fernandes 2 Measuring the Effectiveness of US Development Aid to Pakistan Table of Contents Abstract 4 Chapter One: Introduction 5 The Nature and Purpose of Foreign Aid as a Tool of Foreign Policy: A Definition 6 US Development Assistance to Pakistan Since 9/11: A Brief History 8 Literature Review and Contribution of the Paper 12 Outline of the Paper 18 Chapter Two: Measuring the Effectiveness of US Aid in Achieving Diplomatic Objectives 21 The Role of Aid in Strengthening the US-Pakistan Relationship at the Elite Level 22 Aid and the Hearts and Minds of the Pakistani People 29 Chapter Three: Measuring the Effectiveness of US Aid in Achieving Development Objectives 40 Methodological Approach and Limitations 41 Counterarguments 43 What Can $7.5 Billion Do Over Five Years? 44 The Effectiveness of USAID/Pakistan’s Education Program 47 The Effectiveness of USAID/Pakistan’s Democracy and Governance Program 49 The Effectiveness of USAID/Pakistan’s Earthquake Reconstruction Activities 53 The Effectiveness of USAID/Pakistan’s Humanitarian Assistance Program 54 Kim Fernandes 3 Measuring the Effectiveness of US Development Aid to Pakistan The Effectiveness of USAID/Pakistan’s Health Program 55 The Effectiveness of USAID/Pakistan’s Economic Development and Energy Programs 56 Chapter Four: What Has Hindered the Effectiveness of US Aid to Pakistan? 59 Case Study 1: The Academy for Educational Development and USAID 59 Case Study 2: The Citizens Foundation and USAID 62 Challenges to the Work of USAID in Pakistan 66 USAID’s Internal Challenges 70 What is Wrong with US Aid? A Pakistani Perspective 75 Chapter Five: Concluding Lessons 79 Policy Recommendations for USAID 79 Policy Recommendations for the US Government 83 Policy Recommendations for the Pakistani Government 84 Concluding Remarks 85 Bibliography 88 Kim Fernandes 4 Measuring the Effectiveness of US Development Aid to Pakistan ABSTRACT This paper will examine the extent to which US development aid to Pakistan has been effective as a tool of foreign policy. To do so, the paper will measure the effectiveness of aid in achieving stated diplomatic and development purposes since 9/11. First, in examining the fulfillment of diplomatic objectives, the paper will argue that aid has undoubtedly strengthened cooperation between the American and Pakistani governments at the elite level, but has not been able to impact the hearts and minds of the Pakistani people. The US’s involvement in the region has had a far greater impact on negative public perceptions, thus rendering the impact of aid on public opinion negligible. The paper will then argue that development aid has been moderately effective in achieving development goals. In the areas of education, earthquake relief, economic growth and health, aid has seen some successes, but it has failed to achieve the same results in the areas of good governance and humanitarian assistance. This failure is due to a number of challenges within the political environment in Pakistan, as well as the internal problems faced by USAID. Kim Fernandes 5 Measuring the Effectiveness of US Development Aid to Pakistan CHAPTER ONE INTRODUCTION Since September 11, 2001, the United States has provided $7.5 billion in overseas development assistance to Pakistan1 as a complement to the hefty military aid packages that the country has received for its assistance as an American ally in the War on Terror.2 Despite this significant allocation of non-military aid in an attempt to win the war on all fronts, there is an existing consensus both within news media and amongst scholars and analysts that aid to Pakistan has not been anywhere near as effective as intended.3 As the US continues to fight a protracted war in Afghanistan, analysts remain skeptical over the Pakistani government’s level of support and commitment to eliminating the Taliban, despite the military and non-military assistance it has received from the US for nearly a decade.4 While much has been written on the misuse of US military funding by the Pakistani army,5 the literature dealing with the effectiveness of development aid remains scant. This paper will therefore set out to measure the effectiveness of US development aid to Pakistan since 9/11 by answering the following question: To what extent has US development aid to Pakistan been effective as a tool of foreign policy? 1USAID. “USAID: US-Pakistan Development Cooperation.” (http://www.usaid.gov/pk/about/index.html) 2 So far, non-military aid to Pakistan has only constituted a tenth of all foreign aid to Pakistan, as indicated in Kronstadt, K. Alan. “Pakistan and Terrorism: A Summary.” CRS Report for Congress, Foreign Affairs, Defense and Trade Division, Report Number RS22632, 27 March 2007 3 See, for example, the analysis in “Pakistan and the War,” New York Times, 7 December 2009; Kronstadt, K. Alan. “Pakistan – US Relations,” Congressional Research Service Report for Congress, No. RL33498 and Barton, Frederick and Karin von Hippel. “Afghanistan and Pakistan on the Brink: Framing US Policy Options,” Center for Strategic and International Studies, February 2009 for a sampling of the discussion in mainstream media, government documents and scholarly analyses of the ineffectiveness of aid in securing Pakistan’s cooperation in the War on Terror 4 See, for example, Office of the Press Secretary. “Remarks by the President on a New Strategy for Afghanistan and Pakistan,” The White House, 27 March 2009 and Kronstadt, “Pakistan and Terrorism” 5 See, for example, United States Government Accountability Office. Report to Congressional Requesters. “Combating Terrorism: Increased Oversight and Accountability Needed Over Pakistan Reimbursement Claims for Coalition Support Funds,” GAO-08-806, June 2008 (http://www.gao.gov/products/GAO-08-806) and United States Government Accountability Office. “Preliminary Observations on the Use and Oversight of US Coalition Support Funds Provided to Pakistan,” GAO-08-735R, 6 May 2008 (http://www.gao.gov/htext/d08735r.html) Kim Fernandes 6 Measuring the Effectiveness of US Development Aid to Pakistan The paper will argue that US development aid to Pakistan has at best been moderately effective as a tool of foreign policy. The Nature and Purpose of Foreign Aid as a Tool of Foreign Policy: A Definition At the outset, it is necessary to define what is meant by development aid as a tool of foreign policy, and to determine the objectives of such aid in order to be able to understand whether the objectives of aid have been achieved in the Pakistani context. This section will therefore rely heavily on official definitions of the nature and objectives of development aid. As defined by the Organization for Economic Cooperation and Development (OECD), overseas development assistance is any form of aid that consists of “financial and material resources provided to promote the broader economic development and welfare of developing countries.”6 Within the traditional categorization of foreign aid into security-related and economic-related assistance, development assistance includes (but is not limited to) economic assistance. Unlike a regular loan, this aid is often described as concessional, for it offers less stringent terms of repayment.7 It is therefore understood that this assistance provided to developing countries for the official purpose of development is also intrinsically political in its allocation. Particularly since the beginning of the Cold War, such assistance has typically been considered a soft power tool in the foreign policy toolkit of donor countries. A brief overview of the evolution of development aid as a tool of foreign policy indicates that the purposes of aid have historically evolved in line with changing global balances of power. Most recently, during the Cold War, the provision of non-military aid was thought to have four 6 Oxfam. “Whose Aid Is It Anyway? Politicizing Aid in Conflicts and Crises,” Oxfam, Briefing Paper 145, 10 February 2011, 7 7 Ibid., 8 Kim Fernandes 7 Measuring the Effectiveness of US Development Aid to Pakistan primary motives. Scholar Carol Lancaster defines these purposes as follows: “promoting economic and political transitions, addressing global problems, furthering democracy and managing conflict.”8 More specifically, the broad objectives guiding the United States in its allocation of foreign aid have been defined by scholar Lael Brainard as 1. Supporting the emergence of capable partners 2. Countering security threats from poorly performing states 3. Countering security threats with foreign partners 4. Countering humanitarian threats 5. Countering transnational threats9 Within the context of the US-Pakistan relationship after 9/11, these five broader purposes can be condensed and integrated into two underlying drivers of foreign assistance to Pakistan: “diplomatic and development purposes.”10 Such foreign assistance is primarily disbursed through the United States Agency for International Development (USAID). In Pakistan, the official diplomatic purposes of US non-military assistance as detailed by USAID have been twofold. First, through the provision of foreign assistance, the US has worked toward strengthening the US-Pakistan relationship of “mutual interest, mutual respect and mutual trust” at the elite level.11 Second, the US hopes to win the hearts and minds of the Pakistani people and garner their support against the Taliban and Al-Qaeda in the War on Terror.12 8 Lancaster, Carol. Foreign Aid: Diplomacy, Development, Domestic Politics. Chicago: The University of Chicago Press, 2007, Pg 48 9 Brainard, Lael. “A Unified Framework for U.S. Foreign Assistance.” In Security By Other Means: Foreign Assistance, Global Poverty and American Leadership, ed.