Birdsall to SRAP: Renewed Focus on Pakistan’s Economic Growth Is Spot On

This is a joint post with Beth Schwanke.

2014 is shaping up to be a pivotal year for US-Pakistan relations. The US will be pulling out of Afghanistan; the Strategic Dialogue is continuing; and Kerry-Lugar-Berman will expire. And these are just the knowns.

CGD’s Study Group on US Development Strategy in Pakistan has spent the past several years identifying where US development strategy in Pakistan has gone wrong—and identifying practical solutions for improvement. Following our latest Study Group meeting, Nancy Birdsall, president of CGD and chair of the study group, sent this open letter to Ambassador Jim Dobbins, the US Special Representative for Afghanistan and Pakistan.

So what should the US prioritize for its Pakistan development policy in the coming year?

Nancy has three recommendations for Ambassador Dobbins:

1.     Work with Congress to understand that US assistance is a useful, yet far from complete, vehicle for fostering a long-term partnership between the US and Pakistani governments. Nancy reiterates a regular theme from the Study Group: while traditional aid will never be a panacea for Pakistan, or for US-Pakistan relations, consistency and insulation from the security debate is critical.

2.     Emphasize discussion of trade and investment relations in the economics and finance pillar of the Strategic Dialogue. The SRAP’s office and others are making impressive efforts to bring the US private sector into conversations about energy; let’s hope this holds true for other key sectors. Nancy also mentions several tweaks to US policies that could be helpful to Pakistan’s development and the US-Pakistan economic relationship, including unleashing OPIC and more effective use of the Generalized System of Preferences (GSP), once reauthorized by Congress.

3.    Encourage tax, energy, and other needed reforms by Pakistan’s government. While the Pakistanis must do the heavy lifting on reforms needed for economic growth, the USG can provide technical and high-level political support in certain, limited areas. Where USG enthusiasm for reforms might prove politically sensitive within Pakistan, Nancy suggests that the US support the efforts of the IMF, World Bank, and ADB to promote home-grown Pakistani reform efforts.

We’ll be closely following the efforts around the Strategic Dialogue, so let us know your thoughts in the comments below. What else should US development policy in Pakistan prioritize?