Not So Great Expectations

What Foreign Aid Can and Can't Do In the Arab World

A sign on the wall at the American University in Cairo. (Hossam el-Hamalawy / flickr)

Shortly after assuming the presidency, Barack Obama set his sights on reorienting the United States' relationship with Pakistan. For decades, Washington had been a fair-weather friend to Islamabad, eager to work together when its own security interests were at stake, but otherwise indifferent to Pakistan's domestic challenges. But recognizing that the fates of South Asia and, ultimately, U.S. security are inextricably linked with Pakistan's stability and prosperity, Obama signed into law the Enhanced Partnership for Pakistan Act (the Kerry-Lugar-Berman bill) just a few months into his first term. The bill authorized up to $7.5 billion in aid to Pakistan's civilian government over five years and was meant to usher in a new era of partnership and bolster democracy.

Nearly three years later, reality has set in. The partnership, although initially energized by the late Richard Holbrooke, Obama's special envoy to Afghanistan and Pakistan, was hamstrung from the outset. The problems do not stem only from the U.S. drone campaign and the covert raid that killed Osama bin Laden, nor is Islamabad's failure to take on difficult domestic reforms solely to blame. The problems are also due to the United States' inability to insulate medium-term development investments from diplomatic and security pressures and its overreliance on a complicated and creaky foreign aid system to administer development programs.
Even as officials at the White House, in the State Department, and at the U.S. Agency for International Development (USAID) cope with the problems of doing development well in Pakistan, they are in danger of repeating the mistakes made there in yet another civilian aid ramp-up. This time, Washington plans to use aid for political and economic development in the Arab Spring countries: Egypt, Libya, Tunisia, and, perhaps, a few more players to be named later. The administration's starting point is a request earlier this year that Congress establish the $770 million Middle East and North Africa Incentive Fund. The
First, it is fruitless to assume that U.S. civilian assistance provides serious leverage for democratic or other reforms, particularly when a recipient's civilian government exists in the shadow of a dominant military. The cardinal rule of Pakistani politics is that the military chooses the piece of the budget pie it wants. Civilian agencies are left to fight over the crumbs. U.S. assistance has not changed that fact; it did not strengthen the civilians' hand with the military, nor did it induce it to undertake politically costly reforms such as raising energy prices. It is naive to imagine that threats to revoke U.S. civilian aid -- a small portion of GDP directed to specific projects -- carry much weight with Pakistan's military intelligence establishment or even with the civilian government. The same would be true in Egypt. Civilian aid might help get the United States a seat and a voice at the policy table on difficult technical issues. But it cannot -- on its own -- coax change where there is no political will.
Second, it is unwise to spend aid dollars without general agreement among administration officials, and with Congress, on why those dollars are being spent. An enduring source of tension within the U.S. government is the disagreement between its foreign policy and development arms about the main goal of U.S. economic assistance. The White House, U.S. diplomats, and many in Congress want an early and visible return. They are motivated by a desire to improve the United States' standing in the short run. Those in the development community want investments to improve governance over the long haul, independent of their immediate visibility and impact. In some cases, the two objectives overlap. In many others, they are at odds. The absence of a shared vision is further compounded by confusion about who is in charge of U.S. development policy, an issue that was further muddied by the creation of the special envoy for Afghanistan and Pakistan at the State Department, and which could haunt the department's new office of Middle East Transitions.
Third, a consensus in Washington on why the United States should spend aid dollars should be matched by a consensus on which activities those dollars are for. What has been missing in Pakistan -- and what the United States cannot afford to get wrong in the Middle East -- is a coherent strategy for deploying aid dollars that has buy-in across U.S. government agencies and in the countries themselves. In Washington, the assistance strategy for the Middle East should be sold to Congress as risky, but worth the risk. It should also be sold as limited in generating leverage on tough political and diplomatic issues. It should clearly articulate the goals of U.S. assistance, how policymakers will monitor progress, and how discrete U.S.-financed development projects might contribute to achieving those goals.

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