Indian Defence Review

But his most telling points are in the economic and trade area. “Then there’s trade. The U.S. market remains closed to Pakistan’s most globally competitive industry, textiles. A ‘trade not aid’ model might win Pakistani hearts and minds, and cost the U.S. taxpayer less to boot. But the Obama administration has not shown any political will to extend the same kind of tariff cuts to Pakistan that it has extended to other trading partners.

“At home in Pakistan, the government of Asif Ali Zardari has had its own problems consolidating its power and getting the economy back on track. The finance ministry has been a revolving door. Pakistan needs to grow at 7-8 percent to keep ahead of population growth, not its current target of 3 percent. Public spending has huge leakages, and taxes are burdensome. But without aid to tide the government over and trade to jumpstart more sustainable growth, the country’s immediate economic prospects are dim. Without a stronger economy, Pakistan will have a difficult, if not impossible time combating the insurgency within its own borders — an insurgency that threatens to spill over into Afghanistan,” says Shuja Nawaz, adding that the U.S. can help. He has five recommendations, as follows:

“First, the Obama administration can follow through on its promises and rapidly deploy promised development and military aid. With Washington’s urging, other donors can be spurred into action, too. Second, the U.S. can lead an effort to free trade with Pakistan, especially in key sectors like textiles and apparel. Third, the U.S. could open a dialogue on a civil-nuclear deal as a symbol that it wants to bring Islamabad into the fold of responsible nations. Fourth, Washington can help launch infrastructure projects to knit the country together and provide much-needed jobs. Lastly, the two nations could establish education centers to upgrade human capital and strengthen civil society.

The current bilateral trade of $2 billion between the neighbors could rise to more than $50 billion if the borders were opened and nontariff barriers removed.

“For its part, Pakistan must take ownership of the aid program by preparing sound project plans with performance indicators built into them. The government must rid itself of corruption and cronyism and establish institutions to better manage development and to build on recent reforms. And it could offer an olive branch to its neighbor, India, and offer to liberalize trade. The current bilateral trade of $2 billion between the neighbors could rise to more than $50 billion if the borders were opened and nontariff barriers removed. This would lift incomes on both sides of the border,” Shuja Nawaz concludes.

The Atlantic Council in its own June report, “Pakistan in the Danger Zone,” points out that the United States needs to take some immediate actions to open up its markets to more Pakistani exports by reducing tariffs on Pakistan’s exports, as it has done for dozens of other countries across the globe. It must truly roll back the stringent visa restrictions and undue checking of travellers from Pakistan, a move that has further enraged public opinion, especially among the middle class. In other words, the United States must begin to treat Pakistan as an ally so Pakistan can return the favour. For the longer run, it needs to shift to visible and effective heavy infrastructure development and energy investments and begin investing in the signature projects in the education and health sectors that will not only have a longer-term impact but also be visible to the general public as the results of U.S. assistance.

The issue of Pakistan’s Nuclear Weapons

In the general discussion of what U.S. policy towards Pakistan should be, Pakistan’s nuclear weapons arsenal and the fear of these weapons falling into the hands of the increasingly powerful terrorists in Pakistan remain unstated—largely because Pakistan has been quite categorical in maintaining that the weapons are very well secured and also because the United States has little ability to deal effectively with this development without getting into an all-out conflict with Islamabad.

“¦ what U.S. policy towards Pakistan should be, Pakistans nuclear weapons arsenal and the fear of these weapons falling into the hands of the increasingly powerful terrorists in Pakistan remain unstated”¦

The static role of the U.S. during the entire episode of Pakistan’s nuclear proliferation is a measure of just how confused the U.S.–Pakistan relationship has been. The most interesting aspects of the almost three-decades-long proliferation operation carried out by the most important Pakistani engineer associated with the country’s nuclear facilities (Abdul Qadeer Khan, a “rogue” engineer claiming to have been acting on his own) is that the operation went unhindered for nearly a decade and a half.

Islamabad did very well in convincing the Bush administration that Khan was not helped in his nefarious ventures by the Pakistani establishment at any point, and has also prevented Washington from questioning Khan by not making him available for interrogation. Islamabad must be credited for this astonishing feat, especially since the Bush administration had made nuclear nonproliferation an important crusade.