At the New Yorker blog, Steve Coll reports that the U.S. Congress is preparing a five-year $1.5 billion per annum non-military aid package for Pakistan, with full support from the Obama administration. (You can read the text of the legislation, entitled the "Enhanced Partnership with Pakistan Act," here.)
This step sounds impressive, until one remembers that Pakistan's population is nearly 180 million and its GDP in 2006 was about $144 billion. So the aid package amounts to around a 1 percent increase in Pakistani GDP, which works out to about $8 for each Pakistani. In other words, the U.S. Congress is going to increase their per capita income from $850 per year to about $858. (It's actually less than that, because some of the money goes to administrative expenses, auditing, and the like.)
This act might have some symbolic value, and I'm willing to assume that a few good things might get done with the money. But let's not forget that Pakistan has already received about $45 billion of U.S. economic and military aid since 1946 (measured in constant 2007 dollars), so it’s not like $1.5 billion today is going to work miracles. Moreover, because money is fungible, even careful accounting can't prevent Pakistan from shifting some of its own resources to other areas, which means the areas we are trying to help (such as education and public health) may not get that much better.
Overall, it's hard for me to believe it will have much effect on the lives of ordinary Pakistanis or do much to erode the endemic anti-Americanism there. Pakistan actually got a big influx of money after 9/11 (due in part to increased U.S. aid and also to a lot of reverse capital flight), yet the increased cash either went to the army or tended to fuel financial and real estate speculation instead of genuine economic growth. Moreover, even with the best of intentions, big aid initiatives like this one are bound to reinforce perceptions that the United States is perennially interfering in Pakistani society, which probably reinforces hostility and suspicion.
Instead of another aid package, we could probably do more to help Pakistan by removing U.S. tariffs on Pakistani exports (e.g., textiles), which would benefit Pakistani producers and American consumers alike. But that would trigger opposition from domestic interests here, so Congress will just adopt the politically convenient but less helpful step of appropriating more money.
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