About Those Billions

Over the years, the U.S. has unloaded massive amounts of aid to Pakistan, including $7.5 billion more earlier this month. But the money doesn't always wind up where it's supposed to.

By Katie Paul | Newsweek Web Exclusive 

Oct 21, 2009

It was with the best of intentions that the U.S. funneled nearly $5.3 billion to Pakistan during the Soviet occupation of Afghanistan in the 1980s. After all, that money helped strike down a Cold War adversary. But there were unintended consequences too—namely, the Taliban. Since 9/11, the U.S. has turned on the spigot again, sending more than $15 billion in assistance to Pakistan. President Barack Obama just approved another $7.5 billion this month, which triples aid while committing to another five years of funding. It also bolsters development efforts, which, according to bill coauthor Sen. John Kerry, will "build a relationship with the people [of Pakistan] to show that what we want is a relationship that meets their interests and needs."

But how effective will this round of money be? Officials at the U.S. Embassy in Islamabad have alleged that Pakistan misspent some 70 percent of the U.S. funds that paid the Pakistani military to run missions in the unwieldy provinces along the Afghan border. U.S. officials accuse Pakistan of running a double game with the money, keeping the Taliban at bay just enough to persuade American benefactors to keep their wallets open, thereby ensuring a lifeline for the country's mangled economy. All of which raises the question: will any amount of money produce results?
A big part of that answer lies in determining how much bang the United States has gotten for its buck so far—whether or not some of the money was siphoned off along the way to fund Army generals' new houses or Taliban elements. Here's an accounting of aid sent over from the United States to Pakistan in recent decades, divided into eras based on the ebbs and flows of assistance. (Figures are in historical dollars.)
1950-1964: As the Cold War heated up, a 1954 security agreement prompted the United States to provide nearly $2.5 billion in economic aid and $700 million in military aid to Pakistan.
1965-1979: With the Indo-Pakistani hostilities in the late 1960s, the United States retreated. Between 1965 and 1971, the U.S. sent only $26 million in military aid, which was cut back even further to $2.9 million through the end of the decade. Meanwhile, economic aid kept flowing, totaling $2.55 billion over the 15 years. Everything came to a halt in 1979, however, when the Carter administration cut off all but food aid after discovering a uranium-enrichment facility in Pakistan. Pakistani leader Gen. Mohammad Zia ul-Haq refused $400 million, split for economic and military aid from President Jimmy Carter, calling it "peanuts." The following year, he was rewarded with a much more attractive offer.
1979-1990: The Soviet invasion of Afghanistan changed everything. Pakistan's ISI security apparatus became the primary means of funneling covert U.S. assistance to anti-Soviet forces in Afghanistan. From 1980 to 1990, the United States ramped up its contributions for both development and military purposes, sending more than $5 billion over the course of the decade.
1991-2000: But even while Pakistan was serving a strategic Cold War purpose, concerns persisted about the country's nuclear ambitions. That gave President George H.W. Bush an easy out from the massive funding commitments in 1990, after the fall of the Soviet Union. Aid over the next decade withered to $429 million in economic assistance and $5.2 million in military assistance, a drop-off Pakistanis still cite bitterly, accusing the United States of leaving them high and dry during the decade.
2001-2009: Since 9/11, the United States has once again bolstered its funding commitments, sending nearly $9 billion in military assistance both to aid and reimburse Pakistan for its operations in the unwieldy border regions with Afghanistan. Another $3.6 billion has funded economic and diplomatic initiatives. But U.S. officials and journalists' accounts have raised concerns that such funds are not being used as intended, and not just because of the typical concerns about corruption. Documented military and civilian government deals with Taliban elements, like a 2004 agreement with Waziri militant leader Nek Mohammed, have confirmed that money intended to fight the Taliban is, in many cases, being used instead to pay them off. (Islamabad is currently battling Taliban fighters in Waziristan.) When the deals fall through, as rapidly shifting alliances in Pakistan's tribal regions often do, that money ultimately ends up funding the insurgency. U.S. officials have expressed particular concerns about the Pakistani government's links to the Haqqani network in North Waziristan, which reportedly has ties to Al Qaeda. At the same time, former president Pervez Musharraf has recently admitted to using U.S. military funding to strengthen defenses against India.
2009-2014: A new five-year, $7.5 billion assistance package was passed by Congress in September and signed by President Obama in October, with stipulations explicitly prohibiting funds from being used for nuclear proliferation, to support terrorist groups, or to pay for attacks in neighboring countries. It also puts a new emphasis on the bottom line, reserving the right to cut off aid if Pakistan fails to crack down on militants. Those restrictions have opened a rift between the military and the civilian government in Pakistan, which maintain an uneasy relationship following nearly a decade of military rule under Musharraf. Military leaders worry they are being sidelined by the increased U.S. emphasis on development and accountability, claiming the bill threatens Pakistan's sovereignty. But supporters of the bill say the restrictions are no more stringent than previous ones, and accuse Pakistani military leaders of manufacturing a crisis to undermine the civilian government.
Sources: Government Accountability Office , Center for American Progress , New York Times , Senate Foreign Relations Committee , Frontline