Aid and Conflict in Pakistan
Aid and Conflict in Pakistan
Table of Contents
  1. Executive Summary
Keeping Turmoil at Bay in Pakistan’s Polarised Polity
Keeping Turmoil at Bay in Pakistan’s Polarised Polity
Report 227 / Asia

Aid and Conflict in Pakistan

Despite many billions of dollars, international assistance to Pakistan, particularly from the U.S., its largest donor, is neither improving the government’s performance against jihadi groups nor stabilising its nascent democracy.

Executive Summary

International, particularly U.S., military and civilian aid has failed to improve Pakistan’s performance against jihadi groups operating on its soil or to help stabilise its nascent democracy. Lopsided focus on security aid after the 11 September 2001 attacks has not delivered counter-terrorism dividends, but entrenched the military’s control over state institutions and policy, delaying reforms and aggravating Pakistani public perceptions that the U.S. is only interested in investing in a security client. Almost two-thirds of U.S. funding since 2002 ($15.8 billion) has been security-related, double the $7.8 billion of economic aid. Under an elected government, and with civilian aid levels at their highest in decades, the U.S. and other donors can still play a major part in improving service delivery, supporting key reforms and strengthening a fragile political transition vital to internal and regional stability. Re-orientation of funding from military security purposes to long-term democracy and capacity building support is the best way to guarantee the West’s and Pakistan’s long-term interests in a dangerous region. But aid policies must be better targeted, designed and executed.

Historically, Pakistan’s aid experience has been characterised by steep increases and sudden cut-offs around specific geo-strategic events, such as the anti-Soviet jihad in Afghanistan during the 1980s. That experience still informs Pakistani perceptions of U.S. assistance. As the end of 2014 deadline for the withdrawal of combat forces from Afghanistan approaches, U.S. relations with the military are at an all-time low because of Afghan safe havens in Pakistan’s tribal borderlands, as well as the closure of the NATO pipeline after the November 2011 attack on a Pakistani border post in the Federally Administered Tribal Areas (FATA). Many Pakistani stakeholders fear that the U.S. – responding to the military’s actions and policies – will again abandon its partnership with the people, and the civilian aid pipeline will be cut off.

These concerns come less than three years after the U.S. Congress passed the Enhanced Partnership with Pakistan Act in October 2009, authorising a tripling of civilian assistance to $7.5 billion over five years. The bill’s underlying goal, supported by the Obama administration, was to broaden engagement beyond a narrow relationship with the military in order to support civilian institutions and democracy. But Islamabad and Washington will have to overcome the policy divide that has defined their relationship particularly since the 2 May 2011 U.S. raid that led to the killing of al-Qaeda leader Osama bin Laden.

The goal to provide $1.5 billion annually for five years has fallen short by $414 million in fiscal year (FY) 2011 and an estimated $500 million in FY2012. Instead of scaling up its operations in Pakistan, the U.S. Agency for International Development (USAID) is trying to reduce expectations, programs and projects. As relations deteriorate, the Pakistani military, with the civilian bureaucracy’s support, has intensified oversight of and interference in aid delivery. Implementing partners, particularly international NGOs, face constant harassment, threats of closure and visa delays and refusals for staff. This has severely impacted all aspects of their operations, from hiring to program implementation. Strained bilateral relations have hampered aid delivery even in areas outside the military’s control. Most prominently, the Pakistan Muslim League (Nawaz) (PML-N)-led Punjab government has refused to accept U.S. assistance, suspending government-to-government programs in Pakistan’s largest province.

Evolving security threats, in particular kidnappings-for-ransom, have further hampered activities and staff movements, compelling some international organisations to recall staff and scale down and in some cases close operations. In the most prominent case, the International Committee of the Red Cross (ICRC), after the beheading of a kidnapped expatriate worker in Balochistan’s provincial capital, Quetta, closed offices in Peshawar, Quetta and Karachi.

The space for USAID and the international NGOs (INGOs) and Pakistani NGOs it funds is also shrinking as a result of the Obama administration’s aid policy. These organisations have limited input into program designs and strategies, and their work is constrained by an abundance of rules, regulations and reporting requirements. The decision to channel significantly more funding through Pakistani government institutions is understandable, since building the state’s capacity to deliver is vital to democratic transition. So, too, is the effort to go directly to local NGOs. However, the U.S. must partner with a broader range of NGOs that have proven, credible records but lack a presence in Islamabad or the provincial capitals. The U.S. should also consider extending successful INGO-led programs. Maintaining a balance and finding ways to utilise INGO expertise is vital to fill in gaps in local capacity and would also be useful in helping train and support local government and non-governmental organisations with limited capacity. As that capacity develops, INGOs should be incrementally phased out and their projects turned over to government institutions and local NGOs.

The U.S. administration’s focus on large, “signature” infrastructure projects as the top priority of its civilian assistance program has similarly limited USAID’s options. The policy is based less on development goals than a bid to win over the Pakistani public through projects that have high visibility and leave an enduring legacy. It depends, however, on a sluggish bureaucracy characterised by opaque, dysfunctional public procurement processes, official corruption and lack of accountability. As a result, appropriated funds get stuck in the pipeline, with USAID consequently coming under intense pressure from Congress to disburse large, unspent funds elsewhere, which risks greater waste. While Pakistan desperately needs water, electricity, roads and telecommunications, projects have to be well designed and should be balanced with support for democratic strengthening, capacity building, public education and civilian law enforcement.

Since building state capacity is vital to the democratic transition, the U.S. and other international partners should not reduce their measures of impact to a bricks and mortars game, but instead focus on improving the state’s ability to deliver not just more but better quality services. In formulating policy with major ramifications for aid delivery, they should also consult key stakeholders, including local civil society organisations and Pakistani and international NGOs with a solid track record, as well as the national and provincial legislatures.

Congress has rightly expressed strong disapproval of some of the Pakistan military’s actions. It has placed conditions on security-related assistance in existing and proposed legislation, requiring the secretary of state’s certification that the military does not subvert political and judicial processes, has ceased support to extremist groups and brings personnel responsible for human rights violations to account. Unfortunately, the administration has yet to apply such conditions rigorously. Its ability to rubber-stamp certifications in the future may, however, be limited given increasing Congressional scrutiny. It would be well served to follow the legislature’s lead by rigorously applying restrictions on military aid. Rather than throwing good money after bad in an attempt to cajole an unreliable partner into cooperating, it should shift the focus of its counter-terrorism strategy to civilian law enforcement agencies, which could deliver significant results if properly authorised and equipped by the civilian government.

For its part, Congress should not allow frustrations with the Pakistani military to affect either civilian assistance or more general engagement with the elected government and representative institutions. It should realise that willingness to spend money on Pakistan on the one hand but a reluctance to explore creative alternatives to existing programs on the other sends confused signals to the Pakistani as well as American publics. It also limits results. Civilian aid levels are still high, despite bilateral tensions, but if programming is guided by short-term security goals, the intended beneficiaries are likely to view the U.S. as at best oblivious and at worst hostile to their needs. Strengthening democratic institutions should not be seen solely as a political goal, but also as the means to stabilise a fragile country, addressing development priorities and shoring up peace in a conflict-prone region.

Islamabad/Brussels, 27 June 2012

Commentary / Asia

Keeping Turmoil at Bay in Pakistan’s Polarised Polity

Kicked out of office, former Prime Minister Imran Khan keeps denying his successor’s legitimacy. In this excerpt from the Watch List 2022 – Spring Update, Crisis Group urges the EU and its member states to help Pakistan's new government ward off violence, expand the social safety net and promote electoral reforms.

Though Pakistan’s former Prime Minister Imran Khan was ousted through a democratic, constitutional process, he has denied the new government’s legitimacy, a tack that could lead to violence. The strategy Khan has relied on since parliament passed a no-confidence vote against him on 10 April has two goals: to undermine the coalition government led by Shehbaz Sharif and to galvanise popular support for new polls. Khan accuses his political opponents, now heading a new government, of conspiring with the U.S. to remove him, and is calling on his supporters to reject “foreign-imposed regime change”. He also bears grudges against the Supreme Court for upholding the constitutionality of the no-trust vote and against the country’s powerful military for refusing to back him in the standoff. Khan’s only hope for a political comeback seems to lie in building mass opposition to Sharif’s government and forcing it to hold general elections well ahead of the scheduled 2023 date. He assumes that the military high command would back new polls, much as his relations with the top brass have soured, in order to keep political turmoil at bay. Yet his own approach – his refusal to accept the authority of the apex election body, the Election Commission of Pakistan (ECP) – dents the prospect of a peaceful post-election transfer of power.

The Sharif government has taken a resolutely different direction from that of its predecessor. It is seeking to re-engage with key diplomatic and trading partners, particularly the European Union and the U.S. In an effort to stem the economic downturn, worsened by the war in Ukraine, it has appealed to international financial institutions, including the International Monetary Fund (IMF) and the World Bank, for support. The coalition government has also taken tentative steps to improve democratic governance, including by removing some curbs on media freedom. Additionally, it has pledged to enact legislation reforming the electoral process prior to holding new polls.

The political, economic and diplomatic challenges confronting the new government are compounded by deteriorating security. Khan’s anti-Western rhetoric risks emboldening Islamist militant and jihadist forces in the country. Militant violence is already surging, particularly in Khyber Pakhtunkhwa province’s tribal belt bordering Afghanistan, straining relations between Islamabad and Kabul’s Taliban-led authorities. Political polarisation could worsen and erupt into violence, weakening parliamentary institutions, while sapping the state’s capacity to counter security threats.

To help lower these risks, the EU and its member states should:

  • Use the structured dialogues that are part of the EU-Pakistan cooperation framework to build a constructive working relationship with the new government on political, security and foreign policy issues of mutual concern, and pursue plans to hold the first official EU-Pakistan Security Dialogue. Repairing ties with Islamabad would help undo damage done by Khan’s conspiracy narrative.
     
  • Hold talks with the new government on the renewal of Pakistan’s status under the EU’s Generalised Scheme of Preferences Plus (GSP+), which provides substantial trade benefits to Islamabad and is set to expire at the end of 2022, including by moving forward with the European External Action Service’s GSP+ mission that was put on hold amid the Pakistani political crisis.
     
  • Assist Sharif’s government in expanding the social safety net, with special attention to women and girls, and in rebuilding militancy-hit regions, particularly in Khyber Pakhtunkhwa’s tribal belt abutting Afghanistan, thus thwarting militants looking to take advantage of local alienation.
     
  • Promote electoral reforms to stop the forthcoming elections from sparking violence and prepare to send an election observation mission, as past missions have helped identify problems in the electoral process.
     

The Costs of Populist Rhetoric

Since his dismissal, Khan has relied on an anti-Western narrative to attack his opponents and incite his supporters. Addressing large rallies in Karachi, Peshawar, Lahore and other cities countrywide, and using social media to spread his message to his youthful supporters, Khan has alleged that the U.S., angered by his “independent foreign policy”, conspired to remove his government. He cites as evidence a diplomatic cable, which he calls a “threat letter”, sent by Pakistan’s then-envoy to Washington after a 7 March meeting with a top State Department official. Khan claims that the U.S. was antagonised by his refusal to cancel a trip to Moscow on 24 February, the day Russia invaded Ukraine, and by his opposition to the U.S. war in Afghanistan – he says he rejected Washington’s demands for military bases in Pakistan for operations next door.

Khan’s allegations are targeted at political opponents but also the judiciary and army. He has accused the Pakistan Muslim League-Nawaz and Pakistan Peoples Party, who now spearhead the coalition government, of conniving with the U.S. to remove his Pakistan Tehreek-e-Insaf (PTI) government. Khan turned to these allegations when the opposition, supported by most of his coalition partners, moved to vote no confidence in his leadership. The charges formed the bedrock of the deputy parliament speaker’s case for dismissing the motion and President Arif Alvi’s case when on 3 April he dissolved the National Assembly. Had the dissolution stood, it would have required new polls within 90 days. But on 7 April, the Supreme Court reversed both actions as unconstitutional and the no-confidence motion went ahead, resulting in Khan’s removal on 10 April and Sharif’s election as prime minister the next day. Khan’s supporters subsequently took to social media to lambast the Court, but also Pakistan’s military leaders, who stayed neutral during the showdown.

Khan accused the new government’s entire top leadership of corruption, based on charges filed against them by his government.

Following his ouster, Khan opted to take to the streets, hoping to whip up popular sentiment against the Sharif government, as well as the PTI dissidents who had chosen to back it. Khan accused the new government’s entire top leadership of corruption, based on charges filed against them by his government. He insisted that they had bought the loyalty of those PTI lawmakers, both federal and provincial, who have lined up behind them. Most PTI members of the National Assembly, the lower house of parliament, resigned en masse upon Khan’s instructions. Khan has since asked the Supreme Court to bar those who refused to quit, and other PTI dissidents in the Punjab assembly, from legislative office for life, and many of them have been forced into hiding by PTI supporters’ threats of violence. The Court has passed over this request, but on 17 May, it did rule that votes of party defectors on no-confidence motions, or elections for prime minister or chief minister (the top office in Pakistan’s provinces), cannot be counted. That decision has direct implications for Punjab, the country’s most populous and politically weighty province, where provincial lawmakers, including some two dozen PTI dissidents, chose Sharif’s son Hamza over Khan’s nominee as chief minister in mid-April.

In this atmosphere of heightened polarisation, Khan’s call on his supporters to march on Islamabad and to remain there until his demand for new elections is met could lead to deadly violence. Accepting Khan’s conspiracy narrative at face value, the PTI base is infuriated by their leader’s ouster. With such a ready audience, Khan’s inflammatory rhetoric aimed at besieging the federal capital could fuel bloodshed, paralyse the government and force a military intervention that would lead to new polls. Indeed, some analysts believe that may be Khan’s intent. The PTI used similar tactics in 2014, when its sit-in against Nawaz Sharif’s government saw party activists attack parliament and other government buildings, bringing the administration to a standstill. Addressing a rally in late April, Khan called on the army to endorse holding “early elections”. The military, however, took no sides in the lead-up to the prime minister’s ouster and seems disinclined to change its stance in the aftermath. Khan’s attempts while prime minister to intrude on the military’s jealously guarded institutional autonomy are likely one reason for the high command’s lack of support. His meddling included a reported attempt to nominate his own man as army chief to replace the incumbent, who is set to retire in November. Army officials, meanwhile, have long been concerned about the adverse implications of the former prime minister’s anti-Western conspiracy narrative and his criticism of the EU and U.S., both key diplomatic and trading partners.

Even before Khan was ousted, army chief Qamar Javed Bajwa tacitly rebuked his anti-West and pro-Russia rhetoric, saying Pakistan has “very cordial historic relations with both camps”. Since Khan left office, however, the military has become more explicit in repudiating his specific claims, one of which is that the high command endorsed his allegations of U.S. skulduggery at a 31 March meeting of the National Security Council. In mid-April, the military spokesman reminded journalists that the Council had issued a statement following the 31 March meeting; they could read it themselves to see that it contained no mention of a U.S. “conspiracy”. As for what Khan calls the “threat letter”, the spokesman explained that the State Department official had used undiplomatic language in the 7 March meeting with the Pakistani envoy, amounting to “interference” in Pakistan’s internal affairs. The envoy’s cable – the so-called letter – had merely informed the foreign ministry of this interaction. Islamabad then sent a demarche to Washington, but that is where the matter stopped. The spokesman further rejected Khan’s claim that the U.S. asked Pakistan to provide bases on its territory. He concluded by emphasising that the high command had stayed neutral in the political standoff in accordance with the military’s constitutional role. On 22 April, in another statement, the Council expressly denied the existence of a U.S. plot to oust Khan. Nonetheless, the ex-prime minister persists in saying the army backs his claims.

Khan’s relationship with the military could be damaged beyond repair if he opts to violently oppose the Sharif government at a time when militant attacks are surging. Attacks by Pakistani Taliban militants, particularly in Khyber Pakhtunkhwa’s merged tribal districts at the border with Afghanistan, have escalated in recent weeks, killing or injuring scores of soldiers. The spike in cross-border attacks and military casualties is straining Pakistan’s ties with its Afghan Taliban allies. For the first time since the Taliban takeover in Afghanistan, Pakistani warplanes have reportedly attacked Pakistani Taliban targets in Afghan territory. At a time when the Pakistani Taliban are making a comeback, taking advantage of Afghan havens, the military high command is likely particularly concerned about Khan’s anti-Western rhetoric. His allegation that the Sharif government is “foreign-imposed” – in other words, forced upon an Islamic country by meddling Westerners – could give the Pakistani Taliban yet another rallying cry with which to raise funds, find new recruits and attack state institutions.

Opportunities and Constraints

The coalition government faces major economic challenges. GDP growth is low; the current account deficit is unsustainable; foreign exchange reserves are fast depleting; and soaring inflation rates, now driven up further by the Ukraine war and the sanctions on Russia, have raised fuel and food prices. Mending relations with the West, particularly the EU and U.S., its major trading partners, is therefore a top policy priority. Sharif and his cabinet ministers recognise that the EU, through the GSP+ and the trade benefits it provides, is a major source of much-needed assistance for Pakistan’s faltering economy, and hence they have vowed to strengthen diplomatic and trade relations with the bloc. Pakistan also needs U.S. support as it approaches the IMF and the World Bank for financial assistance, a task that the government should undertake with some urgency if it is to prevent an economic meltdown. Successful negotiations with the IMF for resumption of a multibillion-dollar loan program will require withdrawing Khan’s economically unviable populist measures, such as high subsidies for fuel and power. The government has been slow to act as prices rise and its indecision is further weakening the country’s floundering economy.

With poverty levels rising and food price inflation at an all-time high, if the government fails to provide social safety nets for the poorest and most vulnerable households, public anger could play into the opposition’s hands. The Sharif government has made some promising commitments. For instance, it has committed to continued support for the Benazir Income Support Program (BISP), which provides targeted assistance in the form of cash transfers to women who head households falling below the poverty line. Islamabad should consider using savings made by discontinuing Khan’s financial awards to loyalist parliamentarians and tax amnesty schemes to increase both the amount of BISP cash transfers and the number of grantees.

The coalition government has also moved to reverse steps taken under Khan to reduce media freedom and civil space more generally. Intolerance of criticism was a hallmark of the PTI government, with female journalists in particular bearing the brunt of party activists’ social media attacks. It has yet to become clear, however, if the Sharif government’s commitment to protect freedom of expression and association will translate into durable action.

The Sharif government could be forced to accept the military’s policy preferences.

Like its predecessor, the Sharif government could be forced to accept the military’s policy preferences. This tendency is already evident in a crackdown on criticism of the military on social media websites. The military’s red lines have even determined the new cabinet’s formation. After agreeing to include in his cabinet Mohsin Dawar, the National Assembly member from North Waziristan, the founder of the civil society-led Pashtun Tahafuz Movement and an outspoken military critic, Sharif now seems to be backtracking. Still, Dawar accompanied the prime minister when he visited Khyber Pakhtunkhwa’s North Waziristan district less than a fortnight after taking office. During the visit, Sharif pledged to improve civic facilities such as schools and health clinics. Such civic assistance should be targeted at women and girls, whose access to education, health care and other basic services has severely declined due to both militancy and military operations in this and other conflict-hit zones.

With general elections due no later than October 2023, time constraints will limit the coalition government’s capacity to carry out governance and economic reforms. It should therefore focus on the most pressing. Clarity on economic policies, including through successful negotiations with the IMF, could help address economic uncertainty, but given the tight timeline electoral reform requires a particularly urgent response. Rejecting Khan’s calls for elections before such reforms are enacted, the coalition partners intend to work in parliament to identify gaps and flaws in electoral laws and processes.

Khan’s rejection of the ECP’s neutrality and refusal to cooperate with parliament might make it difficult to obtain political ownership of the electoral reform process. The parliamentary coalition, composed of nine political parties with widely ranging ideological and regional constituencies, is fairly representative of public opinion. It should, however, also consult civil society, including women’s and rights groups, as it devises electoral reform. Moreover, respect for the ECP’s autonomy and authority will be crucial for any credible election. The ECP’s preparations for the general elections, which could be complete by May 2023, include delineating constituencies, possibly based on a new census. This exercise should ensure that all sidelined groups, including women, are properly represented. Close cooperation between the executive and election authorities will also be needed to address a sizeable gender gap, close to 20 per cent, in the registration of female and male voters. An aggressive drive, with donor support, is needed to ensure that women are issued computerised national identity cards, a prerequisite for registering as voters. The card is also required for access to financial assistance earmarked for women, such as through the BISP.

Moving Ahead

The EU should respond positively to the Sharif government’s stated desire to reset the diplomatic ties that the former prime minister’s anti-Western agenda adversely affected. Islamabad’s growing concerns about militant threats, including from across the Afghan border, offer new opportunities for a security dialogue on issues of mutual concern. The extension of badly needed economic assistance would be particularly helpful to the new government, as it faces an unprecedented economic crisis.

Brussels should also look into expanding bilateral trade and investment ties with Islamabad, notably by renewing Pakistan’s GSP+ status, while making clear that the renewal is tied to human rights, rule of law and democratic governance conditions that the EU will monitor closely in the coming months. To assess the progress Islamabad makes on these conditions and to use the leverage that renewal can bring, the European External Action Service should move forward with its GSP+ mission, which was postponed due to Pakistan’s political crisis. In its dialogue with Islamabad, the mission should particularly focus on issues pertaining to the protection of women and children, as well as the enforcement of the freedom of association and speech enshrined in Pakistan’s constitution.

The European Union should support the new government’s efforts to provide social safety nets to the poorest and most vulnerable households.

Further, the European Union should support the new government’s efforts to provide social safety nets to the poorest and most vulnerable households, worst affected by the economic crisis. It should provide financial and technical aid to assist Pakistan in giving all women computerised national identity cards to afford them access to existing social safety programs, such as the BISP, and to any new ones (as well as to the ballot box). Brussels should also work with Islamabad in helping residents of the conflict-hit zones of Khyber Pakhtunkhwa province, particularly the tribal belt on the border with Afghanistan. Women and girls, who have borne the brunt of both militancy and military operations, should be a key target of such assistance.

Finally, the EU should encourage parliamentary reforms of the electoral legal framework. It should, for instance, urge Pakistan to consider the recommendations of the 2018 election observation mission, particularly with regard to restrictions on freedom of speech and association. Brussels should also consider sending an election observation mission for the forthcoming general elections, which would, as in the case of past missions, advise the ECP and the incoming government on areas of particular interest for electoral reform. At the very least, a credible electoral process may curb the potential for electoral disputes to degenerate into violence.

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