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25 June, 2010

Pakistan and China: BFFs

In case you missed it: Chinese firms have brokered a deal to construct two nuclear reactors for the Chashma Nuclear Complex in Pakistan. Pakistan, and in particular, Punjab (the state in which the complex can be found) suffers from chronic energy shortages. After a series of rolling black outs this April, the Punjab Chief Minister announced that there was a 6,000 Megawatt gap between the state's electricity production and demand. While not an immediate remedy, increasing the capacity of the Chashma Complex is the only tenable option Punjab has to meet its rising energy needs.  

And of course, the Chinese have are happy to help the Punjabis do just that.


The contrast between American and Chinese aid projects is striking. America prefers to buy her friends; Pakistan is one of the largest recipients of American aid money. The Kerry-Lugar Bill provides Pakistan with some $1.5 billion in non-military aid every year, and Pakistani arm purchases often exceed $3 billion on the annum. The problem with buying friends, however, is that we have little control over how they use the money we give them. Much of it disappears as it is passed from hand to hand; that which remains is blatantly misspent.   

In contrast, the Chinese eschew money payments. Their preferred method of aid is the modernization of Pakistan's infrastructure. Two nuclear reactors at Chashma, a deep sea port in Gwadar, a university in Islamabad, mines and highways in Balochistan, a gas pipeline leading straight to China - the list is a long one. In contrast to American aid, almost all of these projects are investments that will benefit Chinese businesses as much as they will help the Pakistanis. And unlike cash payments, which are here today and gone tomorrow, China investments are long term endeavors. 

This is the true difference between China and the United States. We have been outbid. Not in terms of gross dollar amounts, of course - we have given more to the Pakistanis than the Chinese have invested in the entire region. But the gifts we bring are fleeting. Long after the last American dollar has been siphoned away to some Pakistani politician's secret Dubai bank account, the Chinese will still be mining in Balochistan, maintaining the port of Gwadar, and overseeing the reactors at Chashma.

The Pakistanis are the friends of America as long as the money keeps flowing. They are friends of the Chinese forever.

Photo Credit: The Diplomat.

8 comments:

LFC said...

There is certainly more than a kernel of truth in this post.

A few qualifications, however:
-- No doubt a good deal of US aid to Pakistan is diverted or misspent, but it's hard to know how much (the Guardian article you link is from '08 and deals only w/ military aid).

-- You make it sound as if monetary aid is purely ephemeral and a complete waste. An exaggeration. Some of the Kerry-Lugar money is earmarked for improvements in Pakistan's crumbling state educational system, and if even a part of it is spent as intended it should result in some improvement. I think it's too early to judge. (At one point there was a House bill that had been introduced -- can't dig up the WashPost piece on it just now -- aimed at helping exporters (e.g. of various commodities etc) from the Western tribal areas; that also might have made some sense.)

-- It is much easier for the Chinese, being essentially neighbors of Pakistan, to do these infrastructure projects in Pakistan for the benefit of both countries (eg the port at Gwadar through which shipments to China will pass, the gas pipeline etc), than it is for the US. The US could not benefit directly from a deep sea port at Gwadar in quite the way China can. So the incentives and opportunities are somewhat different. All that said, somewhat more emphasis on concrete projects and less on cash in US aid policy toward Pakistan would probably be a good idea.

T. Greer said...

Reader IG sent the following message to me via e-mail:

"Pakistan's development is in the interests of both the United States and India. In my opinion, one of the reasons Pakistan is the way it is today is because during the partition of India, Pakistan did not get a large enough portion of the treasury, and geographically most of the active economic sectors are in India. As a general rule, any ... See Moreimpoverished community must contain radical elements willing to turn to violence to improve their lot.

Any development that improves the lives of Pakistani's is therefore in everyone's interest. What has happened here is that China is using a more effective way to develop Pakistan than we are using. Ironically as you pointed out in your blog, the Chinese are fixing things using the Free Market, while the Americans are using bureaucratic handouts that encourage corruption.

The danger is that China ends up making things worse through human rights violations and exploitation of the people and the resources. Unfortunately, Europe, America, and China all have a strong history of repeated violations of human rights and resources when it comes to multinational corporations. But, also remember that if WE are the ones who cause the human rights violations, the international outcry will be much greater than if China causes them.

Additionally, understand that in the political atmosphere of a country like Pakistan, any interference or wrongdoing by western powers will be viewed through the lens of colonialism. Because China is not a western power, Chinese operations initially come under less local scrutiny. So like you said, we are somewhat to blame for not doing this ourselves...but, being a "Western" country it would have been much harder for us to do what China is doing."

T. Greer said...

@IG and LFC-

A question for you both: to what extant was Kerry-Lugar (much less the military aid) actually meant to improve the development situation in Western Pakistan?

The legislators who wrote the bill did so for exactly this purpose. A quick perusal of the bill is enough to see that it was an attempt to raise the living standard of those on the Durand line and strengthen Pakistan's civil governance without going through Rawalpindi. I am less sure the executive sees the bill the same way. For the bill was not just about development - it was also an attempt to secure the support and cooperation of the Pakistani state. I suspect that the executive - whose job, after all, is to deal with other governments directly - tried the use the bill in just this matter. The difficulty the Senate foreign relations committee has had exercising oversight confirms this suspicion.

We thus have two metrics by which to judge the aid we give to Pakistan. The first is through the prism of development: does our aid actually improve the lives of those in Western Pakistan? The second is through the prism of alliance: does our aid endear the Pakistanis to our cause?

I cannot answer in the affirmative in either case.

The problems with development are many. As mentioned in the post, little of this aid reaches where it is intended, and oversight in rural Pakistan is almost impossible.*

The other problem with development-first strategies is that a core section of the Pakistani elite - namely, the ISI - does not want it. It is in their interests for the civil government to be weak and the border regions to be in a state of flux. Development does not fix this problem. The evidence on this matter is overwhelming - The ISI is offering financial and material support to the most dangerous insurgents calling themselves Taliban.

Every Pashtun in South Asia could have a life expectancy of 76 and average salary of $40,000 per annum and it would not mean a thing. As long as the Pakistani military believes that installing a puppet government in Afghanistan and fostering radical terrorist groups is a strategic imperative then the violence will continue.

Which brings us to the second prism. Kerry-Lugar & and all of that military aid was supposed to be the package that changed their mind. If we give you $10 billion you won't need to define your interests in terms of the failed state on your border! We banked on the fact that the Pakistanis needed our aid more than they needed "strategic depth" - or whatever their current name for it is - but we ran into the same problem as before: the Pakistanis can get away with take the money we give them to stop undermining our position and then turn around and use it to do just that.

T. Greer said...

On top of all this, there are the Chinese to think about.

Unlike the Americans, the Chinese do not particularly care if Afghanistan becomes a Pakistani vassal, or if the region remains filled with radicals, as long as the Pakistanis can ensure that these radicals will send their bombs towards New Delhi and not Beijing. More importantly, they are in a position - both geographic and political - where they can invest in Pakistani infrastructure and see get some gain out of it. On this you are absolutely correct LFC, it is much easier for the Chinese to do these infrastructure projects.

Which is exactly the point. It foolish for America to funnel so much aid into a country when we know that doing so can only help us - or anybody else, really - on the short term. Every dollar we send to Pakistan is a dollar we send to the ally of our strategic rival and the mortal enemy of the one country in the region whose interests remotely resemble our own. The sooner we wake up to this reality, the better.

T. Greer said...

*To pick a more recent example than that linked to above, one needs only read the following Dawn editorial from earlier this year:

And we wonder why our friends abroad are so hesitant to help Pakistan in its time of need. USAID’s inspector general recently posted audits of two Washington-funded programmes collectively worth $145m that apparently yielded little or no results. One sought to improve governance in Fata while the other was aimed at reforms in the education sector.

In both cases, the auditor found that the money was funnelled into an administrative void where the programme’s existence on paper was more important than its implementation....

Fakhara said...

Hi, I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

LFC said...

I think you make valid points about the difficulty of implementation and oversight (and thanks for the link to the letter from Kerry and Lugar to the State Dept.). But you also seem to believe that even if there was better implementation and even if the Kerry-Lugar money did help development in the tribal areas, it would make no difference: "Every Pashtun in South Asia could have a life expectancy of 76 and average salary of $40,000 per annum and it would not mean a thing. As long as the Pakistani military believes that installing a puppet government in Afghanistan and fostering radical terrorist groups is a strategic imperative then the violence will continue."

Two things: first, you're right that the mindset of elements in the Pakistani military and ISI needs to change, and I agree with the various people who have proposed that the way to move in this direction is some kind of agreement between Pakistan, India, the Afghan govt, the US, and maybe China and Russia as well, whereby India pledges to not use the Afghan situation as a strategic weapon in its rivalry w Pakistan and Pakistan pledges to stop supporting or tolerating militant groups' (eg the Quetta shura, the Haqqani network) use of Pakistani territory as a base for their activities in Afghanistan.

But even if no such agreement is forthcoming and elements in the Pakistani military and ISI continue to tolerate or support militant groups, that does not necessarily mean that development in the border regions is pointless. The relationship between level of development and support for militant Islamist groups is not clear -- some recent research suggests there is not much of a correlation -- but I nonetheless suspect that a more developed western Pakistan would be a less hospitable place for terrorist/militant groups to find sanctuary. That is why US policy, as least as expressed in the legislative intent of Kerry-Lugar, includes a development aspect and is not limited to unmanned CIA drones flying over the area and firing missiles at suspected militant safe houses. In theory, it makes sense to have a development emphasis as part of US policy. Whether such an emphasis can work in practice is another question and one that I don't feel competent to pass judgment on, beyond acknowledging that it will not be easy to insure that the money is going where it's supposed to. But I have rather little doubt that if every Pashtun had a life expectancy of 76 and an income of, let's say to be more realistic, even $5,000 per year, the overall situation in the border areas would look different and better than it does today.

T. Greer said...

LFC,

Your point is fair. The problem, as I see it, is that even if the region suddenly had much higher living standards than it does now the presence of ISI-backed Quetta Shura, et. all would bring the region back down again.

To put it a slightly different way - you will have a hard time maintaining high rates of female education when all of the schools are being burnt down. As it stands, the ISI believes its interests are best met by putting school-burners into power. We can pump millions into building schools, but to what end? The school-burners will still be there, and with our "ally's" blessing.