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45–127 PDF 2008

S. HRG. 110–564

U.S. FOREIGN ASSISTANCE TO PAKISTAN

HEARING

BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL

DEVELOPMENT AND

FOREIGN ASSISTANCE, ECONOMIC AFFAIRS, AND

INTERNATIONAL ENVIRONMENTAL PROTECTION

OF THE

COMMITTEE ON FOREIGN RELATIONS

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

DECEMBER 6, 2007

Printed for the use of the Committee on Foreign Relations

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

COMMITTEE ON FOREIGN RELATIONS

JOSEPH R. BIDEN, JR., Delaware, Chairman

CHRISTOPHER J. DODD, Connecticut

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

BARBARA BOXER, California

BILL NELSON, Florida

BARACK OBAMA, Illinois

ROBERT MENENDEZ, New Jersey

BENJAMIN L. CARDIN, Maryland

ROBERT P. CASEY, JR., Pennsylvania

JIM WEBB, Virginia

RICHARD G. LUGAR, Indiana

CHUCK HAGEL, Nebraska

NORM COLEMAN, Minnesota

BOB CORKER, Tennessee

JOHN E. SUNUNU, New Hampshire

GEORGE V. VOINOVICH, Ohio

LISA MURKOWSKI, Alaska

JIM DEMINT, South Carolina

JOHNNY ISAKSON, Georgia

DAVID VITTER, Louisiana

ANTONY J. BLINKEN, Staff Director

KENNETH A. MYERS, JR., Republican Staff Director

SUBCOMMITTEE ON INTERNATIONAL DEVELOPMENT AND FOREIGN

ASSISTANCE, ECONOMIC AFFAIRS, AND INTERNATIONAL ENVIRONMENTAL PROTECTION

ROBERT MENENDEZ, New Jersey, Chairman

JOHN F. KERRY, Massachusetts

BARBARA BOXER, California

BARACK OBAMA, Illinois

ROBERT P. CASEY, JR., Pennsylvania

CHUCK HAGEL, Nebraska

BOB CORKER, Tennessee

LISA MURKOWSKI, Alaska

JIM DEMINT, South Carolina

(II)

CONTENTS

Page

Boucher, Hon. Richard A., Assistant Secretary of State for South and Central

Asian Affairs, Department of State, Washington, DC ...................................... 5

Prepared statement .......................................................................................... 8

Responses to questions submitted for the record by Senator Joseph Biden 64

Responses to questions submitted for the record by Senator Robert

Menendez ....................................................................................................... 67

Corker, Hon. Bob, U.S. Senator from Tennessee .................................................. 4

Hagel, Hon. Chuck, U.S. Senator from Nebraska, prepared statement ............. 3

Hathaway, Dr. Robert, Asia Program Director, the Woodrow Wilson International Center for Scholars, Washington, DC ................................................. 49

Prepared statement .......................................................................................... 52

Korb, Dr. Lawrence J., senior fellow, Center for American Progress, Washington, DC ............................................................................................................. 42

Prepared statement .......................................................................................... 43

Kunder, Hon. James R., Acting Deputy Administrator, U.S. Agency for International Development, Washington, DC ............................................................ 12

Prepared statement .......................................................................................... 13

Responses to questions submitted for the record by Senator Robert

Menendez ....................................................................................................... 69

Menendez, Hon. Robert, U.S. Senator from New Jersey, opening statement .... 1

Schaffer, Hon. Teresita C., director, South Asia Program, Center for Strategic

and International Studies, Washington, DC ...................................................... 37

Prepared statement .......................................................................................... 40

(III)

(1)

U.S. FOREIGN ASSISTANCE TO PAKISTAN

THURSDAY, DECEMBER 6, 2007

U.S. SENATE, COMMITTEE ON FOREIGN AFFAIRS, SUB- COMMITTEE ON INTERNATIONAL DEVELOPMENT AND

FOREIGN ASSISTANT, ECONOMIC AFFAIRS, AND INTERNATIONAL ENVIRONMENTAL PROTECTION,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:30 p.m., in room

SD–419, Dirksen Senate Office Building, Hon. Robert Menendez,

chairman of the subcommittee, presiding.

Present: Senators Menendez, Feingold, Casey, Lugar, Hagel, and

Corker.

OPENING STATEMENT OF HON. ROBERT MENENDEZ, U.S.

SENATOR FROM NEW JERSEY

Senator MENENDEZ. This hearing will come to order. I want to

express from the outset that we’re a strong believer in democracy

and free speech but we are also a believer in order. So, we expect

our audience to act accordingly within that context.

Pakistan is currently in the midst of its worst political crisis

since the October 1999 military coup when then-Army Chief General Pervez Musharraf overthrew the democratically elected government. After September 11, our relationship with Pakistan became more complex and urgent. As has become all too clear, the

U.S. policies and assistance toward Pakistan since September 11,

while not without some successes, have failed to neutralize western

militants or reduce religious extremism. These policies have failed

to contribute sufficiently to the stabilization of neighboring Afghanistan and failed to secure civilian governance and rule of law in

Pakistan.

This subcommittee’s intention is to conduct a broad reevaluation

of the policies that are shaped by the U.S. assistance package to

this important ally. Since our policies are often best understood by

following the numbers, we are here today, in part, to look at those

numbers.

The United States has provided about $10 billion in financial assistance to Pakistan since 2001. In spite of that $10 billion, alQaeda and the Taliban have a safe haven in the FATA region.

Osama bin Laden is still on the loose in the region. Anti-Americanism remains high and Pakistan’s President has repeatedly exercised the powers of a dictator. Do we dare call our policies in that

respect a success?

What I want to discuss today is how we should be using our assistance to develop and support a moderate center in Pakistan. My

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concern is that we may be spending this money to simply prop up

a dictatorial ruler with a poor and worsening record and in so

doing, we may be alienating a large and important moderate

center.

I understand President Bush doesn’t think that President

Musharraf crossed the line on November 3, when he instituted

emergency rule and then simultaneously arrested thousands of political opposition figures, human rights activists and lawyers. But

in my judgment, he did cross the line. President Bush even characterized Musharraf as someone who truly believes in democracy. But

even his own Department of State had the wherewithal to say that

they were, ‘‘deeply disturbed’’ by the events in Pakistan.

So what does the Department of State do in response? As a start,

Secretary Rice announced that they were conducting a ‘‘review’’ of

the assistance to Pakistan. I was encouraged to hear that this review was taking place and sent a letter to Secretary Rice requesting that the review be completed promptly and that she report

back to this subcommittee. However, it turned out that what I

assumed to be a careful and comprehensive strategic and programmatic review might have instead been simply a statutory review of any legal triggers that might restrict the flow of U.S. assistance; legal triggers that the administration largely opposed in the

first place and largely do not exist.

So I look forward to hearing more about this today since the subcommittee still has not received any details of this review. Now, we

all have a lot of questions to answer today. As the chair of the subcommittee, I am constantly looking at how our foreign assistance

resources can be spent more effectively and Pakistan is no exception, especially in light of the fact that a significant segment of the

Pakistani population views U.S. support for the Musharraf government as being an impediment to, rather than a facilitator of, the

process of democratization. In addition, the recent political turmoil

provides an even greater justification for careful review of our assistance program, the strategy behind the assistance and the

progress being made.

Now, since the Coalition Support Funds comprise about 60 percent of the overall assistance package to Pakistan, it’s hard to have

a serious discussion about U.S. assistance to Pakistan without also

discussing the Coalition Support Funds. It’s like trying to read a

book when 60 percent of the lines in the text have been redacted.

I invited Secretary of Defense Gates to come and testify or to send

those who could testify and not only did he decline but he couldn’t

find anyone on his staff who could speak knowledgeably about the

Coalition Support Funds for this hearing. Apparently, the only two

individuals that have any knowledge about this are out of town for

this hearing. I hope this doesn’t mean that there are only two people in the entire Department of Defense who have substantive

knowledge of the $6 billion that we have provided to Pakistan in

Coalition Support Funds since 2001.

I’m aware of the jurisdictional designations regarding these

funds but I believe that the administration needs to work together

so that the American people can trust that their government has

a clear picture, a clear strategy, and a clear path toward progress.

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So here’s the first question. Are we getting the most bang for our

buck? What happens if Pervez Musharraf is suddenly no longer the

leader of Pakistan? Have we put too much emphasis on individuals

at the expense of institutions? Have we engaged a few Pakistanis

at the top while simultaneously alienating tens of millions of others? Have we compromised the long-term structural progress because we have been distracted by a short-term security imperative?

Now let me be clear. I do believe we have a short-term security

imperative. Pakistan’s support to help root out terrorists is very

important for the security of our country and the stability of the

region. I don’t believe, however, that we need to sacrifice democracy and the road toward democracy in order to achieve our national security.

Last month’s events in Pakistan have highlighted the concern

that we have. We have to ask if our assistance programs are

achieving the goals that we have set and after $10 billion, have we

really improved our security?

I look forward to the testimony of our witnesses. I want to welcome particularly Ambassador Boucher, who has been, as a result

of his service, ill for a while and is coming, I guess, to one of his

first public appearances. You look great, Ambassador. It’s a hard

way to lose weight but we’re glad you’re back with us, and of

course, Mr. Kunder, and before we hear from you, I want to turn

to the distinguished ranking member of the subcommittee, Senator

Hagel.

STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM

NEBRASKA

Senator HAGEL. Mr. Chairman, thank you and I, too, add my

welcome to our witnesses as well as our second panel of witnesses

that will follow the administration testimony. I have a prepared

statement that I would ask be included for the record.

Senator MENENDEZ. Without objection.

Senator HAGEL. And would leave any further comments I have

to the time we have for questions.

Mr. Chairman, thank you.

[The prepared statement of Senator Hagel follows:]

PREPARED STATEMENT OF HON. CHUCK HAGEL, U.S. SENATOR FROM NEBRASKA

Mr. Chairman, thank you for convening this important hearing regarding Pakistan and U.S. assistance. I want to join you in welcoming Assistant Secretary Richard Boucher, Acting Deputy Administrator Jim Kunder, and the second panel of

distinguished experts.

Pakistan today is in the middle of its most significant domestic political crisis in

nearly a decade. At the same time, Pakistani politicians are confronted with an

unyielding threat of Islamic extremism. The outcomes of these events in Pakistan

remain unclear—and undetermined—but carry significant implications for regional

stability and security—and America’s interests.

The United States would welcome a more stable political process in Pakistan,

where leading opposition figures and parties can openly and fairly compete for political office. We would welcome further education and economic reforms. We would

welcome having Pakistan-Afghanistan relations that are framed not by tension and

difference, but by common interests. We would welcome joint United States-Pakistan-Afghanistan efforts in the border regions that would begin to chip away at this

stronghold of extremism: Al-Qaeda and the Taliban. And, of course, sustained

progress toward improved relations between India and Pakistan—two nuclear powers—would carry significant regional security implications.

4

In all, this region represents one of the most geostrategically significant areas of

the world for the United States. America’s interests in Pakistan are framed by Pakistan as a country—and go well beyond any one man. And, since 2001, Pakistan has

been one of our most important and significant partners across nearly all of our interests in that region. And, the nearly $10 billion in U.S. assistance to Pakistan

since 2001 reflects this reality.

In the last several months, we have watched as the political crisis in Pakistan

has deepened with setbacks in democratic reform, and extremist forces have sought

to exploit the situation with gains against any and all Pakistani politicians—and in

Afghanistan.

Yet, the U.S. must recognize that our influence in Pakistan is limited. We do not

have the capability to control the course of events there—as is the case with nearly

every other country around the world. We must take great care not to overextend—

overreach—in an attempt to push, or force, Musharraf too far, too fast. He has

taken off the uniform. He has pledged to end emergency rule on December 16. He

has pledged to hold free and fair parliamentary elections.

The United States should continue its quiet, firm diplomatic engagement with

President Musharraf and all elements of Pakistani politics. Our objective should be

to help move Pakistan toward some level of political consensus, rather than a deepening of the political crisis that will only work in the favor of the extremists.

Public admonishments, punitive conditions, and absolute demands are unlikely to

be productive. That is particularly the case now, when the situation in Pakistan remains fluid.

At a time when global opinion of the United States is at an all-time low, we must

take care to avoid creating a situation in Pakistan where going down the right path

is seen as doing America’s bidding.

Today’s hearing is focused on understanding the scope, breadth, and objectives of

U.S. assistance to Pakistan. Is direct budgetary support an effective use of assistance? What is the administration’s assessment of the $5.7 billion in direct assistance to the Pakistani military? How effective has U.S. assistance been in meeting

the long-term economic, educational, and health needs of Pakistani society? How

does the administration evaluate the results of spending on International Military

and Education Training (IMET)? Is the administration considering any changes to

military or economic assistance to Pakistan?

Mr. Chairman, thank you, again, for holding this important hearing.

Senator MENENDEZ. Thank you.

Senator Lugar.

Senator LUGAR. I’m waiting.

Senator MENENDEZ. Waiting for questions. Senator Casey, do you

have any opening statement?

Senator CASEY. No.

Senator MENENDEZ. Senator Corker.

STATEMENT OF HON. BOB CORKER, U.S. SENATOR FROM

TENNESSEE

Senator CORKER. Thank you, Mr. Chairman. I was—last week

sat down with President Musharraf and former Prime Minister

Bhutto and I have a slightly different perspective than what you

just laid out but I think I’ll wait until we have a little discussion

and talk about that but I appreciate you having this hearing. I

think it’s always healthy to review our aid and to look and make

sure that we’re getting our money’s worth, if you will, through the

aid that we supply. I think it’s also helpful to sort of understand

the circumstances on the ground and some of the things that are

actually taking place there. But I appreciate you chairing this

meeting and I hope that we can approach this in a way that’s not

partisan but really looks after our country’s interests and I’m sure

that’s what you intend to do.

Senator MENENDEZ. With that, Ambassador Boucher, thank you

for coming. It’s great to see you and in the interests of time, we’d

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ask you to try to summarize your testimony in about 7 minutes.

Of course, your full testimony will be included in the record.

STATEMENT OF HON. RICHARD A. BOUCHER, ASSISTANT SECRETARY OF STATE FOR SOUTH AND CENTRAL ASIAN

AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

Mr. BOUCHER. Thank you very much, Senator. It’s a pleasure to

be here and this is one of the first public things that I’ve done since

I’ve come back to work about 10 days ago. A lot has happened in

Pakistan in the last few months and what I’d like to do is talk a

little bit about the questions you raised about our aid program;

how is it spent, where does it go, and what does it do and then talk

a little bit about our main focus right now. I think we have to start

from the premise that Pakistan’s success as a nation, as a stable,

moderate, prosperous and democratic nation, is really essential to

our security and our future as well as the security and future of

166 million people. It’s a key ally in a key region for the war on

terror. Stabilizing Pakistan is essential in stabilizing Afghanistan

but also in the broader Muslim world in showing what can be done

in a stable, prosperous Muslin democracy. It can be an anchor of

achievement or an impossible obstacle to success and we’re determined to keep working at it to make it a success and to give the

people of Pakistan a success.

Over the last—let’s say since 9/11, I think, you have to look at

the big picture first, I guess, and say that Pakistan has actually

moved forward considerably. Its growth of the media has been

enormous and almost all the ones that were shut down are back

on the air. The growth of civil society has been spectacular. There

is strong support for the judiciary although the judiciary, as in previous periods, has had problems. There have been reforms in education. There has been enormous economic growth that has doubled

the GDP and opened up economic opportunity to many, many more

of the citizens. And they’ve carried forward on the fight against extremists and terrorists, both in the border area and also in the

maritime sphere, where for the second time, Pakistan is now heading up the taskforce that patrols the seas near Pakistan and in

that area.

Despite many, many difficulties, some—many of them self-imposed, Pakistan is making a historic transition at this time. They

now do have a civilian President. The political party leaders are

back and they are moving toward the election of a civilian Prime

Minister. United States assistance to Pakistan is designed to help

them to deal with these problems and overcome the challenges that

they face.

If you look at it in general terms this year, the biggest categories

would be dealing with the terrorist threat and security threats and

narcotics problems. That’s about $338 million this year in our assistance program. Expanding health and education is about $257

million this year. Making a successful transition to democracy is

about $55 million. Providing economic opportunities to the citizens

of Pakistan is about $87 million and there’s about $100 million still

in earthquake relief out of the money that was pledged a couple of

years ago after the earthquake.

6

I think we should also note that this year is marked by the startup of some programs, special programs for the tribal and border

areas of Pakistan where the terrorists and extremist problem has

been most acute. We are supporting a tribal area development

strategy that was developed by the Pakistanis in conjunction with

AID and I’m sure Mr. Kunder can talk more about that. But that

will be about $750 million spread over 5 years so we’ve gotten close

to $150 million for that this year.

We’re also starting to support the transformation to the Frontier

Corp, which is the local armed force in that area. There are actually three armed forces that are local. So supporting the conversion

of local armed forces into a capable fighting force so that the army

doesn’t have to come in from outside to maintain security in that

area and that’s starting up this year with some funds but they are

requesting a supplemental in future budgets to try to continue that

process.

Third of all, we’re looking to help create reconstruction opportunity zones that we’ve been working on since the President announced them in March 2006 and we have legislation that we hope

to see presented to the Congress and hopefully passed by the Congress in the near future that would allow duty-free entry into the

United States of products that are made in the border areas of

Pakistan and in Afghanistan. The economic feasibility studies say

that this could help with economic growth and job creation in these

areas so that people go to work in regular enterprises instead of

pickup ones.

The goal, I think that we share with the Pakistani Government,

the Pakistani people, is to achieve a stable transition right now to

civilian rule. It hasn’t gone the way we would have liked. There

have been plenty of bumps in the road and we’ve spoken out, as

you know, about some of those things that have happened. And we

have reviewed our assistance programs, especially after the imposition of emergency law in early November.

First, from a legal standpoint, as you noted, but second, also

from a policy standpoint. We do share your interest in knowing

that our aid is effective and that our aid goes to the people that

it is intended for. In keeping with that, we have decided to make

some changes in the way we spend a good chunk of our budget,

which is the $200 million that’s heretofore been spent through the

Pakistani budget, as shared objectives. It had macroeconomic goals

as well as specific goals in education, health, and other areas. But

we’ve decided at this point that we’ll take that $200 million this

year and spend it directly through aid projects and contracts and

we will define those projects and supervise those contracts through

the regular aid mechanisms so that we know exactly how the

money is being spent and exactly who it is going to so it does reach

the children of Pakistan who need education, the mothers and children and others who need the health care and the people who need

jobs and job training. So that is one of the changes that we’ve decided to make after our consideration and frankly, after consulting

with a number of people up here on the Hill.

The other, I think, is a determination on our part and on their

part to support the fight against extremism and terrorism. And you

know, I think you’ve watched the news. You see there is a major

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military operation going on in the Swat Valley right now where the

Pakistani Army is going up to try to rid that area of the al-Qaeda,

Taliban, and other terrorists who have taken refuge up there and

who have been broadcasting antigovernment, anti-Western, antieverybody propaganda in trying to instill their kind of governance

in that area. So that’s been going on.

You mentioned the Coalition Support Funds and I’ll make a

point now that perhaps we’ll differ on again and again throughout

the hearing but we—those are reimbursements. We don’t see those

as assistance. We don’t lump them in with the other categories of

assistance. It’s about $5.3 billion since 9/11. It’s a program that

was authorized by the Congress to reimburse allies and friends in

the war on terror for their expenses and that money goes to reimburse the Pakistanis for the expenses that they incur in terms of

food, ammunition, operating expenses, fuel—all those things that

they incur in terms of fighting the war on terror. It’s the money

that supports the Pakistani men and women who are fighting and

dying in the war on terror. And indeed, Pakistan has lost as many

as 1,000 members of their armed forces security services in the war

on terror, including 250 people since July. So they’ve incurred expenses, which we try to reimburse for and unfortunately, they’ve

incurred loss of life as well, which nobody can reimburse them for.

Our goal at this point is to keep working with Pakistan, to keep

working especially on the transition and ensuring a credible election. We’ve had democracy and election programs going for a number of years. We’ve bought transparent ballot boxes. We’ve helped

with computerizing the voter lists. We’ve helped with training electors and voters and election observers. We’re going to field an

observer team. We have about, I think it’s 45 people from the

International Republican Institute and about 25 more from AID, 40

observers from the Republican Institute and about 25 more that

AID is financing. The Embassy is going to field teams. They have

a whole plan to go out and cover as many as they can of 84 districts that they feel are the most critical ones and we’ve been encouraging other governments working with people like the British,

who are sending observers, encouraging people like the Europeans

and the Japanese to send observers as well.

So we have a very comprehensive program that has been going

on for some time, to try to make this election as credible, as transparent as possible. The government has pledged to a transparent

election. They’ve pledged to keep the military and the intelligence

services out of it. They’ve pledged to have transparent counting.

There are going to be a lot of charges in Pakistan after the election. It’s never—not going to be perfect. But we want to see an election that represents the will of the Pakistani people and gives them

real choice over their leaders.

Finally, sir, let me just say, there are other institutions, there

are a number of institutions in Pakistan that it’s important for us

to work with. With the government and a newly elected Prime Minister, whoever that may be; with the army, which is a vital institution for securing and stabilizing the nation and they have a new

chief there; with the new civilian——

Senator MENENDEZ. Excuse me. I would just advise members of

the audience that we all might have comments to make. But we’re

8

not going to have them here in this setting. We appreciate your opportunity to be in a public setting to hear what witnesses are saying but we are not going to allow commentary on them.

The committee will be in order. The gentleman will be seated. I

would ask the officer to have the person be removed.

Ambassador.

Mr. BOUCHER. Thank you. In addition, we do have a new civilian

President, President Musharraf, as a civilian and exactly how he

is—what his role is going to be, how he is going to interact with

the political parties. It is going to be interesting to see how that

evolves in the Pakistani system. Then you have civil society, business, political actors, media—really, I think, a new environment

there and so we hope in January to see a credible election. We

think making this successful transition to civilian leadership is the

best and most solid basis for the nation to go forward, including

ridding itself from the threats and terrorism and extremism and

we think the United States should continue to support that process

of change in Pakistan and we’ll work with you and them to make

sure that we support that in the best way possible.

Thank you, sir.

[The prepared statement of Mr. Boucher follows:]

PREPARED STATEMENT OF HON. RICHARD A. BOUCHER, ASSISTANT SECRETARY OF

STATE FOR SOUTH AND CENTRAL ASIAN AFFAIRS, STATE DEPARTMENT, WASH- INGTON, DC

Mr. Chairman and members of the committee, I would like to thank you for the

opportunity to be here today to discuss developments in Pakistan and U.S. assistance to this critical country. As I’m sure you can imagine, no other policy priority

has consumed more of my attention over the past several months. The United

States wants to see Pakistan succeed in its transition to an elected civilian-led democracy, to become a moderate, democratic, Muslim nation committed to human

rights and the rule of law. All of our assistance programs are directed toward helping Pakistan achieve these goals. This is a long-term undertaking that will require

years to accomplish. There will be obstacles in the road.

President Musharraf’s November 3 imposition of a state of emergency—including

reshuffling the Supreme Court, curtailment of press freedom, and arrests and detention of journalists, lawyers, human rights advocates, political activists and party

leaders—was a setback. His subsequent retirement as Army Chief of Staff on

November 28, his inauguration for a second term as President on November 29 and

his commitment to lift the State of Emergency on December 16 represent the most

recent developments in this long, sometimes troubling and sometimes encouraging,

chain of events. While we had hoped to see this transition unfold differently, we are

encouraged that at the end of this chain will be parliamentary elections, currently

scheduled for January 8, that we hope will lead to the formation of a civilian-led

government, under a civilian President for the first time since 1999. This would

indeed be a significant step forward for Pakistani democracy and a major accomplishment for the Pakistani people.

These results seemed unlikely a month ago, and are owed primarily to the Pakistani people’s demand for democracy, evidenced by the resilient and steadfast commitment of the democratic supporters in Pakistan, and the constant pressure from

the international community, especially the United States. However, this progress

does not mean that democratic success is yet fully assured. The upcoming parliamentary election will be the next big step along Pakistan’s bumpy path toward

democracy. I should also note that Members of the Senate have recently visited

Pakistan to reiterate the message of the importance of a restoration of democracy

to that country. Senators Bennett and Corker, in their meetings with President

Musharraf and other political leaders, made an important contribution to our shared

efforts, and I thank them for that.

It is our fervent hope that these elections will be free, fair, transparent, and credible. We are working closely with Pakistani officials and U.S., Pakistani, and international civil society organizations to ensure that these elections are as transparent

as possible. The U.S. has provided significant assistance over the past several

9

months in support of democracy and voter education programs in the runup to what

will hopefully be a free and fair election. Do we expect the election will be flawless?

No. In any general election in a nation with 166 million people and a checkered history of democracy, there are going to be problems. Our hope is that with all the

preelectoral spadework that has been done by the International Republican Institute, the National Democratic Institute, by Embassy Islamabad, and with the large

international and domestic monitoring teams funded by the U.S., and hopefully the

EU, Pakistan will be able to avoid the large-scale and systematic distortions that

have marred elections in the past.

But elections are not the only measure of democracy. Democracy requires accountable government institutions, including an independent judiciary, protection of individual human rights, a free and dynamic press, an atmosphere promoting open

debate, and a vibrant civil society. Pakistan is making progress toward these goals.

Democracy also requires freedom from the violent extremism that operates outside

of the rule of law. Unfortunately, violent extremist groups have expanded their influence in the border area between Pakistan and Afghanistan. From there these

groups threaten not only the nascent democracies in Pakistan and Afghanistan, but

also security in the wider region and the world. Denying these groups safe-haven

and ousting them from Pakistani territory is central to our conduct of the war on

terrorism. And, as the Pakistanis clearly recognize, ending extremism is essential

to the future success and stability of their nation.

Pakistan is, of course, our indispensable ally in that struggle. The Government

of Pakistan is at war with a violent minority that is seeking to undermine a largely

peaceful, law-abiding Pakistani citizenry deserving of the freedoms their country

heralded at its inception. In many ways, it is the indispensable partner in our

worldwide struggle against violent extremism. Pakistan shares a 1,600-kilometer

border with Afghanistan and is a key factor in the success or failure of the Afghan

and international effort there. With 166 million people, Pakistan is a leading Muslim country whose future will help determine the future stability and prosperity of

the region—a region of increasing importance to the United States. It can also serve

as a potential model for our relationships with the Islamic world.

Pakistan is a nation facing enormous challenges, and it is clearly in our interest

to help Pakistan to meet those challenges. Despite averaging 7 percent annual

growth in their Gross Domestic Product over the last 5 years, many parts of the

country remain desperately poor. This is especially true in the areas along the border with Afghanistan and in no place more so than in the Federally Administered

Tribal Areas. These areas have the worst social and economic conditions in all of

Pakistan. In some parts of the tribal areas, 135 of every 1,000 children under the

age of 5 die early, often due to treatable ailments. The female literacy rate is as

low as 3 percent in some areas. There is little access to safe drinking water or to

even rudimentary health care, and public education is largely nonexistent.

One reason for these calamitous social indicators is that the writ of the central

government in the underdeveloped tribal areas is, as it has been throughout history,

marginal at best. These areas are remote and isolated. This isolation, coupled with

social and economic deprivation, makes them particularly attractive ‘‘targets of opportunity’’ for violent extremists. Al-Qaeda, Taliban, and other violent extremists

have exploited these populations and the areas that they inhabit as hideouts and

safe havens. The lack of adequate educational infrastructure makes traditional

madrassah schools and other unregulated private schools the only alternative.

Worse, a small but nonetheless worrisome number of these schools serve as indoctrination centers for extremist combatants and would-be suicide bombers. The area’s

proximity to Afghanistan makes it an ideal recruiting ground and a staging area

for cross-border operations by Taliban and other violent extremist groups operating

against Afghan and NATO forces in southern and eastern Afghanistan. Past efforts

by the Pakistani Government to establish a presence or exert its control in these

areas have met significant resistance. Al-Qaeda has used the absence of a military

presence to increase its training, planning, and recruiting capacity in hideouts in

these undergoverned parts of Pakistan.

Though the Pakistani Government has generally remained firm in its resolve to

confront the violent extremist forces in the tribal areas militarily, it has become

clear to Islamabad, as it has to America, that a purely military solution will not

work. What is required is a comprehensive ‘‘frontier strategy’’ consisting of military

and civilian security, social and economic development, and political engagement in

these ungoverned areas. And that means nothing less than bringing the frontier

areas, traditionally undergoverned and underdeveloped, into the mainstream of the

Pakistani body politic.

10

U.S. ASSISTANCE: MONEY BEHIND OUR PRIORITIES

The United States is seeking to help Pakistanis build an economically healthy,

stable, and democratic Pakistan. To this end, since 2002 we have provided economic

assistance totaling $2.4 billion. These funds have supported education reform, including training teacher in modern teaching techniques, building schools in the

tribal areas, providing scholarships and fostering science and technology cooperation

between the U.S. and Pakistan. We have also funded governance programs designed

to assist independent radio, reform political parties, train Parliament members in

drafting laws, strengthen Pakistan’s Election Commission, promoted grassroots

service delivery and reduce gender-based violence. U.S.-funded economic growth programs have, among other things, worked to improve the competitiveness of Pakistani businesses, provided microfinance and encouraged more effective agriculture

techniques. We have also supported refugee programs and funded rebuilding efforts

following the 2005 earthquake.

Fighting terrorism is, of course, a preeminent goal of U.S. policy in Pakistan. In

support of that goal, since 2002 the United States has provided security assistance

to Pakistan totaling $1.9 billion. This has included $1.2 billion in Foreign Military

Financing, $244 million in Department of State counternarcotics funding and $87

million in Department of Defense counternarcotics funding and $37.2 million in section 1206 counterterrorism funding. These funds have been used to help Pakistan

prosecute the war on terror along the Pakistan-Afghan border. This money has gone

to purchase tactical radios, TOW missiles, Bell 412 and COBRA helicopters, and

night-vision goggles. In addition, we provide counterinsurgency training, improve

counterinsurgency strike capability and train more effective Pakistani military leaders. Another purchase under Foreign Military Financing—P–C3C Orion aircraft—

is crucial for maritime surveillance and Pakistan’s participation in and leadership

of Combined Task Force-150 patrolling the Horn of Africa and the Arabian Sea. In

addition, we have provided $5.3 billion in Coalition Support Funds to reimburse

Pakistan for expenses incurred in the war on terror. The United States has also recently begun to implement a 5-year, $750 million

development strategy for Pakistan’s frontier region that supports the Government

of Pakistan’s 9-year, $2 billion program for the tribal areas’ sustainable development. The people of the tribal areas need to have a stronger connection to their central government if they are to resist violent extremism effectively and over the long

term. The plan seeks to develop the capacity of tribal area authorities and local

leaders to plan, administer, implement, and monitor development assistance programs; to strengthen the strategic communication capacity of civilian administration

bodies; and to improve planning and coordination between civilian and security

organizations.

In addition, the plan seeks to more effectively address security concerns in the

tribal areas, which is a prerequisite for a successful development strategy. To accomplish this, we have been working with and will continue to work with the Pakistani Government to increase the size and enhance the capabilities of the three law

enforcement entities that have a traditional presence in the tribal areas and whose

ranks are filled with predominantly locally recruited ethnic Pashtuns. I believe

these pieces of our assistance to Pakistan are some of the most crucial elements of

the war on terror. These forces are doing much of the fighting against the Taliban,

al-Qaeda, and other violent extremist groups in the tribal areas and elsewhere in

the Northwest Frontier Province, such as Swat.

REVIEWING U.S. ASSISTANCE

When the State of Emergency was announced on November 3, the Department

of State examined our assistance programs to determine whether the Emergency

would negatively impact our ability to continue assistance. We concluded that imposition of a state of emergency did not at that time trigger any automatic aid cutoffs.

However, it was also clear that taking a thorough look at our assistance programs

across the board was warranted.

Barring further setbacks, we have come to some important conclusions. We believe that maintaining funding levels for Economic Support Funds and Foreign Military Financing is crucial. Doing otherwise would not further our interests with

Pakistan at a time when Pakistan plays a critical role in the war on terrorism and

is about to have elections that need to be free, fair, and credible. As you in the Congress do, we would want to be quite clear on what our money supports. Thus, we’ve

made the decision that the $200 million in Fiscal Year 2008 Economic Support

Funds used for budget support will be projectized to ensure money is targeted at

the most urgent priorities. We believe these funds can be most productively used

for programs that directly benefit the Pakistani people and will make Pakistan a

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stronger and more secure ally in the war against terrorism. We have the capacity

to do so, as proved during the October 2005 earthquake. Foreign Military Financing

to the Government of Pakistan’s counterterrorism program is another area we could

not want to cut, as cuts would be counterproductive to military-to-military programs

and could affect Pakistan’s willingness to continue to support coalition access to

Afghanistan. Our $300 million per year in Economic Support Funds and $300 million in For- eign Military Financing for Pakistan are part of a 5-year, $6 billion Presidential

commitment made by President Bush in 2004, with funding to be provided from fiscal year 2005 to fiscal year 2009. This commitment supports our long-term, broadbased strategic partnership with Pakistan. Programs like these I’ve just outlined,

combined with complementary projects that create jobs, help address the fundamental economic problems that block Pakistan’s progress and stability. It is the people of Pakistan to whom we want to demonstrate our long-term commitment—and

the Department of State believes firmly that now is not the time to cut assistance

levels.

OVERSIGHT

Our strategic goals in Pakistan are broad and our programs will require strong

oversight to ensure that our assistance is accomplishing our foreign policy goals. We

have been clear with the Government of Pakistan in our conversations on development cooperation that we would need to work closely with one another in monitoring and accounting for the use of our assistance. The bulk of U.S. assistance to

this region will be implemented through contractors and grantees, and will be monitored per standard USAID and inspector general oversight guidelines. I will defer

to my colleague from USAID, whose understanding of these mechanisms is much

greater than my own.

Security assistance is typically subject to even more stringent monitoring and

evaluation requirements than other foreign assistance programs. The Government

of Pakistan has entered into an agreement regarding end-use and retransfer and

security of defense articles provided on a grant basis. Each Letter of Offer and

Acceptance pursuant to the Foreign Military Sales program contains end-use, retransfer, and security obligations.

Coalition Support Funds are a Department of Defense program to reimburse waron-terrorism partners for logistic, military, and other expenses incurred in supporting U.S. operations. Pakistan’s Coalition Support Fund claims are validated by

the U.S. Embassy in Islamabad and by U.S. Central Command. The Department of

Defense’s Office of Comptroller further evaluates each claim to ensure that the costs

are reasonable and credible. After this validation, the Department of State must

concur on the reimbursement and the Office of Management and Budget must be

consulted. The Office of the Secretary of Defense (Comptroller) then prepares a determination for the Deputy Secretary of Defense to sign, as well as a formal notification to Congress. Only after a 15-day notification period expires are funds released

to the Defense Security Cooperation Agency for repayment to Pakistan. Embassy

Islamabad is working with the Department of Defense and the Government of Pakistan to make the Coalition Support Funds reimbursement process more supportive

of U.S. policy goals and to ensure that we get maximum value for the money expended. Embassy Islamabad has, on more than one occasion, denied or sent claims

back to the Government of Pakistan for further clarification.

CONCLUSION

The United States assistance policy in Pakistan is a multifaceted and strongly

monitored array of programs, ranging from support for Pakistani military efforts to

oust militant extremists from the border area with Afghanistan, to on-going support

for rebuilding following the 2005 earthquake, to working with Pakistani civil society

organizations to train election monitors to ensure credible elections. U.S. engagement with Pakistan is a centerpiece in our efforts to combat extremism worldwide

and of our work with the developing countries in advancing economic and social development and promoting the growth of democracy. All of our efforts in Pakistan

are geared toward creating the vibrant, modernizing, and democratic state that

Pakistanis desire and U.S. policy envisions as a partner in advancing stability and

development in a key region of the world.

Mr. Chairman, thank you again for inviting me today. I look forward to taking

your questions.

Senator MENENDEZ. Thank you.

Mr. Kunder.

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STATEMENT OF HON. JAMES R. KUNDER, ACTING DEPUTY

ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC

Mr. KUNDER. Thank you, Mr. Chairman. In my written statement, I’ve tried to answer in detail each of the questions the committee asked about the expenditure of approximately $2.1 billion of

U.S. foreign assistance since 2000, by USAID and what I would

like to do, just very briefly highlight items I’ve included in this

chart in front of the committee and in each of the statements.

What this chart attempts to address, Mr. Chairman, is your fundamental questions about whether we’re trying to take on the longterm development issues facing Pakistan.

Essentially, this tries to lay out what we believe to be some of

the critical development challenges in our four major areas of U.S.

foreign assistance, which are education, health care, governance,

and economic growth. For example, education is our largest single

sector of assistance to the Pakistani people. We have looked at data

like the ones I’ve listed there, 5 to 6 million school-age children out

of school, increased enrollments in madrassas and we’ve designed

our program around the kinds of issues that will address the specific development challenge. For example, building more schools,

training more teachers, working with administrators, assisting the

Pakistani Government in developing a more modern curriculum,

awarding higher education scholarships within the country and

then also post-graduate training in education in the United States.

I won’t go through each one of these, but what we believe we’re

doing, sir, is to try to take on the critical development challenges

identified by our staff on the ground, by the World Bank, and certainly by the Pakistani Government itself. There are some very

profound development challenges in this country of 160 million people and I throw that out because some of the numbers are, in fact,

large for assistance numbers but Pakistan is one of the 10 largest

countries in the world, and across that very large country, we’ve

got data that indicates, for example, that less than half of the primary age cohort of children is currently enrolled in school. I’m not

talking about junior high school, high school students. If we just

look at the primary school cohort, grades 1 to 6, fewer than half

of Pakistani children are actually in a school setting, and those

kinds of numbers indicate that we’ve made some very serious advances, very significant advances, and I completely agree with

what Richard said about those.

We have seen a substantial increase in the economic growth rate

in the country. We have seen increases in primary school enrollment. We’ve seen increases in the literacy rate. We’ve seen

increases in child survival rates but we have very profound development challenges still facing us and facing the Pakistani Government.

In addition to answering the committee’s questions in my written

statement, I would just like to emphasize two other areas where

there is going to be dramatic change or new direction in our program. One is, as Richard mentioned, we are planning to increase

dramatically our assistance in the Federally Administered Tribal

Areas (FATA). The Government of Pakistan has a very comprehensive and, we believe, well-designed development plan to address the

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root causes of extremism in the FATA region. We plan to be major

supporters of that effort. That is an area where we can provoke a

reaction, if we don’t proceed in a measured and analytical and thorough fashion. But we believe there are real development opportunities in the northwest and we plan to increase dramatically our support to that region.

The second is—I would emphasize what Richard just mentioned about the ‘‘projectization,’’ as we would call it, of the $200 million

per year that we have been providing in cash transfers to the

Pakistani Government. That $200 million was carefully monitored

in terms of what the outcomes were. We had agreed with the

Pakistani Government on what we expected the money to be spent

for in education, health care, and so forth and then we tracked

whether they were actually expending the money in those areas.

But what Richard has announced here today is another step toward increased engagement directly by moving that from a cash

transfer into projects that we will manage on the ground in these

four critical areas of education, health care, governance, and economic growth.

As Richard mentioned, we are heavily engaged. I just spoke with

our staff in Islamabad in the last couple of days about our preparations for upcoming elections. We intend to use every tool in our

toolkit to ensure that those elections are free, open, and transparent, and if the Chair would just allow me 30 more seconds, I

would like to introduce, seated two chairs behind me, Mr. Agha

Mohammad Asim, a member of our Pakistani staff from Islamabad

who happens to be in town for training. We invited him to come

here today so he could see American democracy in action.

Mr. Asim is one of the ways we reach out to the broader Pakistani public. Mr. Chairman, to answer your question, our staffing

ratio in Islamabad is probably pretty typical. We have 10 American

Foreign Service officers on the ground and 44 Pakistani professionals. This is one of the best ways that the United States gets

its message across and we wanted to invite Mr. Asim to join us

here today. I’m pleased to answer any questions that the committee

has, sir.

Thank you.

[The prepared statement of Mr. Kunder follows:]

PREPARED STATEMENT OF HON. JAMES R. KUNDER, ACTING DEPUTY ADMINISTRATOR,

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID), WASHINGTON, DC

Mr. Chairman, other distinguished members of the committee, thank you for inviting me to appear before you today to discuss the critically important topic of

‘‘U.S. Assistance to Pakistan.’’

I would like to incorporate your questions and structure my testimony around

three core themes today, laying out USAID’s strategy for Pakistan, the impact that

USAID has achieved, and the support that we provide to priorities of both the U.S.

Government, and the Pakistani people.

THE USAID STRATEGY

In discussing strategy, it may be useful to provide some historic context. United

States foreign assistance to Pakistan began in 1948 with education as one of our

major priorities. This has included programming in partnership with Pakistanis at

both the national and local levels. In 1987 we funded the establishment of the Lahore University of Management Sciences (LUMS)—now the premier institution of

higher education in Pakistan. USAID’s support to higher education also helped to

build a cadre of expertise and leadership in the areas of public administration, eduVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
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cation, health, and business. In the health sector, USAID’s support for childhood

mortality has contributed to a one-third reduction over the last four decades.

Our relationship with Pakistan changed abruptly in the 1990s when USAID

halted its assistance to Pakistan due to the Pressler amendment. Enacted in 1985,

the Pressler amendment specifically prohibited U.S. assistance or military sales to

Pakistan unless annual Presidential certification was issued that Pakistan did not

possess a nuclear explosive device. This certification was denied in October 1990,

triggering wide-ranging sanctions against Pakistan. In 1995, USAID closed its mission and pulled out of Pakistan.

In early 2001, USAID received specific legislative authority to work directly with

the Government of Pakistan in education, which was the precursor to the current

program. Post 9/11, the U.S. again redefined its relationship with Pakistan. In 2002,

USAID came back to reengage our Pakistani allies in the war on terror to deal with

issues of poverty, lack of access to a quality education, and substandard health care

alternatives for their children.

What is USAID’s strategy and objective in Pakistan?

USAID’s strategy and objective is to help Pakistan develop into a moderate, prosperous, and democratic nation by addressing some of the most pressing needs of the

Pakistani people: Education for their children; health care, especially for mothers

and children; economic opportunities, particularly jobs for young people; and building democratic institutions and practices to help the Pakistani people gain a voice

in their government.

How has this strategy been translated into specific programs?

Pakistan needs to respond to the urgent problems facing its children and youth

by providing a quality basic and higher education program which will give them the

skills to find jobs in the modern economy. The U.S. is helping upgrade public education, placing emphasis on improving the quality and affordability of Pakistan’s

public schools. This allows parents of limited means to pursue educational opportunities for their children beyond religiously oriented madrassahs. At the same time,

we are aware that an educated population will pave the way for long-term and lasting benefits for all Pakistanis—economically, socially, and politically.

USAID also recognizes that the level of health in Pakistan, particularly maternal

and child health is among the worst in the world. USAID’s program is helping save

the lives of thousands of Pakistani mothers and children from illnesses which can

be prevented—such as polio and tuberculosis.

USAID developed a program to promote democracy and governance in Pakistan

in order to help the Pakistani people develop more responsive political parties, and

the legislative, civil, and legal institutions needed to change this status quo.

Economic recovery and growth has begun, but is not yet providing the rural poor

opportunities to improve their livelihoods, nor is it producing enough jobs to keep

pace with Pakistan’s burgeoning population. USAID has undertaken activities to

help Pakistan compete in the world arena—by providing microfinance and larger

loans for small- and medium-sized business and boosting the competitiveness of industries such as furniture, marble, and granite that can potentially be exported.

What is the strategy driving the various components of this support? What are the

goals?

USAID’s strategy in Pakistan addresses four major development areas: Education;

maternal and child mortality; democratic institutions and civil society; rates of poverty and unemployment. Components of the program give particular attention to relieving these constraints in the earthquake-affected areas and in the FATA.

Pakistan’s education sector faces immense challenges. Of 22 million children between the ages of 5 and 9, only 42 percent attend school. Historically, less than half

of Pakistani children who enroll in school complete 5 years of schooling; for every

100 children beginning first grade, only 6 complete grade 12. Poor teaching and

learning results in students leaving the system with no capacity for critical thinking, or much worse, remain illiterate. Male literacy (65 percent) is much higher than

adult female literacy (40 percent); the disparity is more pronounced in rural areas

(58 percent for men and 29 percent for women). Teacher absenteeism is high and

many schools are in disrepair. Pakistan has several excellent universities, but social

and economic costs place higher education beyond the reach of most poor students,

especially women.

USAID’s education goal is, ‘‘Increase Knowledge, Training, and Infrastructure to

Develop High Quality Education Programs.’’ USAID’s existing education strategy

supports basic and higher education. USAID has supported the following components of the Government of Pakistan’s education reform strategy: Improving education policies and administrative and management capacity; providing support to

15

teacher education and professional development; improving access to education by

building and upgrading schools; and addressing special needs in the FATA and the

earthquake-affected areas. The current program increases access to higher education by providing needs or merit-based scholarships to Pakistani students and by

supporting the world’s largest Fulbright scholarship program.

Health indicators in Pakistan continue to be among the worst in the world. Seventy-eight of every 1,000 live births result in infant deaths and 350–500 mothers

per 100,000 die every year from pregnancy and delivery complications. Other health

problems afflict thousands more; these include malaria, communicable diseases including tuberculosis and acute respiratory infections. Pakistan remains one of only

four countries worldwide that suffer from endemic polio.

Pakistan’s unhealthy population puts a huge burden on national resources and

stifles economic growth. Good health improves learning and increases labor productivity, leading to improvement in other crucial indicators such as literacy and economic growth. Healthier people can contribute economically and are less likely to

lose hope and turn to extremism. USAID’s maternal and child health program has

already produced tangible improvements in the lives of Pakistanis, a major objective

of the USG’s Muslim Outreach Initiative.

USAID has adopted several approaches to improve democracy and governance in

Pakistan.

One of the goals of U.S. foreign policy in Pakistan is to strengthen the country’s

democratic institutions and practices. Legislatures, in particular, can play a strong

and positive role in governance. USAID efforts to strengthen democracy support: (1)

Improved representation and responsiveness of national and provincial legislatures;

(2) greater civil society, media, and political party engagement in policy dialog; (3)

devolution of authority and operation to local government institutions, making them

more responsive to the public; and (4) strengthening the electoral system and public

oversight of the election process.

In the long term, USAID’s work to strengthen democratic institutions will help

establish a stable and democratic future for the people of Pakistan. In the immediate future, this work will encourage Pakistan to hold free, fair, and credible elections in early January 2008. USAID provides assistance to Pakistan for voter education, political party development, computerization of the voting rolls, training of

political poll watchers, and domestic and international election observation missions

to ensure that Pakistan follows a path of democratic change.

Economic growth in Pakistan has averaged 7 percent over the past 5 years, which

has resulted in a decrease in the percentage of Pakistanis living below the poverty

line from 33 percent at the end of the 1990s to around 25 percent today. However,

not all Pakistanis have benefited from this sustained economic growth; income distribution particularly in the rural areas remains very unequal.

The Government of Pakistan has made progress on major economic reforms,

including restructuring the financial and telecommunications sectors; foreign and

domestic investment; strengthening state regulatory entities; and devolving governance and fiscal management responsibilities to the local level. The multilateral development banks have played a substantial role in the reform effort, from technical

advice to budget support. Positive impacts from these efforts include robust economic indicators, record levels of foreign investment, and the largest foreign reserve

levels in Pakistan’s history. These results, in combination with Pakistan’s strong

support for the war on terrorism, have led to increased donor investments in social

sector support in recent years.

Continued economic growth will produce more jobs, which can accelerate and

thwart those who would recruit the unemployed for terrorism. Given Pakistan’s

demographic bulge (63 percent of the population is under age 24), job creation is

paramount.

USAID’s programs support the Government of Pakistan’s strategy to reduce

poverty and encourage economic growth, and are helping create new employment

opportunities for poor Pakistanis, especially in rural areas. USAID/Pakistan has increased economic opportunities for the poor by: (1) Increasing community development programs, especially small infrastructure projects; (2) increasing access to

microfinance in rural and urban areas; and (3) assisting small and medium enterprises in key sectors, helping them to generate improved employment opportunities.

Nonproject assistance provides cash to support mutually agreed upon objectives.

Since September 11, the U.S. has provided very substantial nonproject assistance

to the Government of Pakistan. A $600 million Economic Support Funds (ESF)

grant in November 2001 (FY 2002) paid down debt owed to the U.S., the World

Bank, and the Asian Development Bank. The Government agreed to disburse the

equivalent amount of rupees to support a dozen social sector line items in the Federal budget. (In fact, the rupee disbursements for the agreed upon social sector proVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
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grams far exceeded the equivalent of $600 million.) In FY 2003, approximately $186

million in ESF was used to fund the subsidy cost of debt relief for the Government

of Pakistan and that forgave $1 billion in outstanding U.S. official debt, approximately one-third of its outstanding U.S. debt at that time. No conditionality was

attached to the FY 2003 program. Beginning in FY 2005, the U.S. has been providing $200 million annually in nonproject assistance.* Dollars are exchanged for rupees, and the Government of Pakistan and the USG negotiate and agree on the purposes for which the Government

of Pakistan will use those rupees.

[* This is part of a larger administration commitment to Pakistan that began in FY

2005 and continues through FY 2009 of $300 million per year in economic assistance

and $300 million per year in military assistance.]

Now, as Assistant Secretary Boucher has indicated, in FY 2008, the full $300 million in Economic Support Funds will be projectized. This additional project funding

will be implemented through U.S. contractors and grantees who would work with

provincial and local governments as well as Pakistani NGOs and private sector organizations. We are still developing the program plans but we expect that the additional programming will impact three program areas. The first is education, which

we believe is fundamental to Pakistan’s forward progress toward democracy, prosperity, and stability. Our approach to education assistance in Pakistan is comprehensive—training teachers, building schools, providing scholarships with the

premise that these actions will reduce the number of children exposed to extremist

teachings. Second, we will direct resources to improving child and maternal health,

thereby allowing the U.S. to visibly touch the lives of millions of Pakistanis and fill

a critical need. Third is an economic element—we want to expand job training for

unemployed youth, generate jobs by building small infrastructure in communities,

and help farmers get out of poverty.

Earthquake reconstruction began after the devastating earthquake on October 8, 2005. The USG pledged to spend $200 million over 4 years on a wide range of activities to rebuild the area. Individual activities were undertaken to clear rubble, help

the landless get housing, rebuild schools and health facilities, improve health conditions, and increase rural incomes. Systemic changes were also targeted to improve

the capacity of the health and education systems, and to increase economic activity

by helping important industries to expand and generate more jobs.

Fiercely independent, some people in FATA do not want to be governed by the

Government in Islamabad. Some feel alienated from the Government of Pakistan because they have received very little. Security concerns make it difficult for the government to provide social services, and the lack of social services make it more difficult for the Government of Pakistan to increase security in the FATA. USAID’s

strategy is to improve economic and social conditions in the FATA through a broad

range of programs consistent with the Government of Pakistan’s FATA Sustainable

Development Program.

What is the detailed breakdown of all USAID support to Pakistan since fiscal year

2000?

The following table provides a breakdown of funding since 2000 per USAID sector.

Education ................................................................................................ $256 million

Democracy and Governance .................................................................. 84 million

Emergency Economic Assistance .......................................................... 1.6 billion

Economic Growth ................................................................................... 70 million

Health ..................................................................................................... 169 million

Earthquake and Reconstruction ........................................................... 106 million

Program Support ................................................................................... 9 million

FATA ....................................................................................................... 105 million

Total ................................................................................................. 2.4 billion

THE IMPACT OF USAID IN PAKISTAN

Are these goals being achieved?

Since 2002, USAID has achieved the following:

In education:

• More than 400,000 children have benefited from USAID education programs—

resulting in a 15.5-percent increase in student enrollment in USAID-supported

school districts.

• USAID trained 45,600 teachers and administrators in improved teaching techniques. These people were then observed to be practicing what they had learned

17

in the classroom setting. These techniques positively affect student achievement

and educational advancement.

• USAID awarded 906 in-country higher education scholarships since the program started in 2004. Since 2005, 235 Pakistanis started master’s or Ph.D.

studies in the U.S.

In health:

• USAID’s support to the tuberculosis efforts in Pakistan helped district governments improve diagnosis and treatment quality, and provide better access to

public care facilities for TB patients. This has helped the case detection rate to

reach the WHO standard of 70 percent, and meet an 85-percent treatment success rate.

• Since 2004, the number of children vaccinated during every national immunization polio day campaign rose from 29.8 million to 33.5 million. The number of

polio cases dropped from 40 in 2006 to 18 in November 2007—with most areas

not experiencing an outbreak for over 2 years.

• USAID has trained 1,404 traditional birth attendants since 2004—preventing

unnecessary deaths from obstetric complications.

In democracy:

• USAID has helped the Electoral Commission of Pakistan to curb vote tampering

by updating the national voter registration list, computerizing electoral rolls,

improving election complaints, and providing transparent ballot boxes and security seals for the January 8, 2008, elections. USAID has also provided voter

education, political party assistance, and training and support of domestic and

international observers.

• USAID trained 1,290 local leaders (including 283 women) in budget oversight,

leadership skills and participatory planning for better service delivery. In one

of the targeted six districts, USAID-trained public health workers began to

track the usage of medicines in clinics, and have prevented stock shortages

using information technology.

In economic growth:

• USAID provided over 350,000 microfinance loans in 25 rural districts and periurban areas—generating business opportunities for over 100,000 entrepreneurs.

• USAID’s competitiveness program has brought together businesspeople in six

sectors. These business people developed strategies to improve their industries’

competitiveness in the global marketplace. USAID’s $11 million investment generated over $50 million in new private investment and over $102 million in government support—creating more productive businesses and employees.

What determined the mix of programs across sectors?

USAID sectoral activities address the root causes of poverty and instability in

Pakistan. Lack of education and poor health impede productivity. An absence of economic opportunity and political choice fuels frustration and violence.

In the spring of 2001, USAID received specific legislative authority to work on

education with the Government of Pakistan. USAID’s Pakistan Planning Framework document of May 2001 states that USAID received this authority in response

to ‘‘the grave state of the public education systems and the belief that a poorly educated populace impedes economic development and more readily supports extremist

actions.’’

Thus, from the beginning of USAID’s reengagement with Pakistan, education has

played the central role. When USAID reestablished a full mission presence in Pakistan in the wake of the September 11, 2001, attacks, programs to address needs in

health, economic growth, and democracy were added creating the current robust assistance program. Administration commitments made in conjunction with high-level

negotiations have played a role in further program selection, e.g., the commitments

to provide $300 million per year from FY 2005–09 for economic aid ($100 million

in project support and $200 million in nonproject or budget support), $50 million

per year from FY 2007–09 for earthquake reconstruction, and $750 million over 5

years (FY 2007–2011) for sustainable development in the FATA. All these activities

are directed toward the overarching goal of helping Pakistan develop into a moderate, prosperous, and democratic nation. These activities also complement existing

programs of other donors in the country, such as the U.K.’s Department for International Development, or in other cases working jointly on programs such as with

the Government of Japan in the FATA education response.

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What oversight mechanisms are in place to ensure that this assistance is being used

for legitimate purposes?

All USAID contracts and grants are supervised by trained personnel to ensure the

activities spend resources in order to obtain the agreed-upon objectives. Regular financial audits are performed. Evaluations of projects after they end—and in some

cases earlier—are part of our business approach. USAID has been hiring additional

staff to increase project monitoring.

SUPPORTING USG AND PAKISTANI PRIORITIES

To achieve the end-state of a prosperous, moderate, and stable country, the

United States and the Government of Pakistan are working together very closely

to strengthen opportunities for Pakistanis. USAID has been very responsive to the

evolving situation in Pakistan—supporting the earthquake relief efforts, assisting

with Cyclone Yemyin this past summer, and in developing a long-term plan to address the needs of the tribal areas.

What proportion of USAID assistance is spent in the FATA region?

We estimate that USAID allocated 6 percent of funds for FY 2002–07 to activities

in the FATA.

What are the goals for assistance in this region and are they being achieved?

The goals of USAID’s assistance program to the FATA are to help the Government of Pakistan integrate the people of this strategically critical region into the

rest of the country—economically, socially, and politically—to give the people of the

FATA a stake in Pakistan’s development and to help them experience the economic

and social benefits and services that come with this integration. Most importantly,

this program will work on strengthening the capacity of local government institutions in the FATA to address the needs of citizens there.

USAID has designed a comprehensive program for the region that addresses the

major constraints that impede development in the region, with a focus on promoting

economic growth through development of small and medium enterprises, markets,

education, job training, health care, and community development activities.

How is the civilian assistance coordinated with the U.S. support for the Pakistani

military?

Coordination takes place at weekly FATA meetings which are chaired by the

DCM and attended by representatives of the U.S. military, USAID, and all other

members of the Embassy team that provide assistance to FATA. Similarly, thrice

weekly country team meetings chaired by the Ambassador, address coordination

issues. The U.S. Embassy has recently filled a FATA assistance coordinator position

in Islamabad.

Does USAID have a strategy to sustain support for Pakistani institutions over the

long-term?

USAID builds sustainability into the design of each program. The major role of

USAID technical assistance is to undertake the training and capacity-building that

will ensure we leave behind teams and institutions in place that have the skills and

systems needed to keep programs operating after USAID projects end. These efforts

form the heart of USAID activities worldwide. Thus, in earthquake reconstruction,

we not only rebuild schools, but also work with communities and schools to improve

the quality of classroom instruction and establish parent and teacher groups that

will take responsibility for upkeep and maintenance of school buildings. In higher

education, we have a long history of creating and sustaining high-quality schools

that provide leadership for Pakistan. In health, USAID’s work supports public and

private institutions that provide services and strengthen human resources for health

care. These include district-level governmental institutions as well as commercial institutions providing health care products to communities and individuals.

In FATA, we face many development challenges. However, one of the largest components is capacity-building of the FATA government so that it can more effectively

govern this territory.

CONCLUSION

Mr. Chairman, although we have come a long way in Pakistan, no one seeks to

underestimate the challenges ahead. Recent events have shown that the road back

to democracy in Pakistan isn’t as smooth as we would expect it to be. Our commitment is to the people of Pakistan, as they embark upon a long-term development

course. The strong, long-term U.S. commitment that we display is making the difference, and it must continue with intensity.

19

We at the U.S. Agency for International Development appreciate all that your

committee does to support this most important endeavor. Thank you again for this

opportunity to appear before this committee. I look forward to taking your questions.

Senator MENENDEZ. Thank you for your testimony. We’ll start

with 7-minute rounds and the Chair will recognize himself.

You know, Mr. Secretary, I listened to your testimony. I read

your testimony and it is fair to say we have no particular criticism.

We’re happy with Pakistan because all I heard verbally is that

we’re pretty much happy with the way things are.

Mr. BOUCHER. No; I think we’ve been quite critical. We were

quite critical with the state of emergency. We were very critical in

20

the crackdown on the media. We’ve been critical of some of the arrangements made for the election. We just keep pushing and try

to overcome these obstacles. I think in terms of our assistance programs, I think we can be quite proud of what we’ve done to help

the education system, the health care system, things like that and

economic growth.

Senator MENENDEZ. Why do we take 6 years to come to the con- clusion that the $200 million that we are now providing was much

better served in having it be programmatically delineated versus

just giving it to the Pakistani Government?

Mr. BOUCHER. This money was part of the Presidential commitment that started in 2004 and I think at that time, the decision

to do it this way was in part based on the fact that we didn’t think

we had the ability at that point, to spend all $200 million on the

economic side. Jim, you might been around and know that better

than me. But I think also, as the situation evolves, as it develops

and as there are concerns about sort of the gross, the general nature of some of the budgetary support, even though we know its

goal is to increase spending in certain categories so they have increased health care spending by 59 percent in the last couple of

years; education spending by 58 percent because in part of our support. But even though we know the macroeconomic effects and the

budgetary effects, I think everybody with the state of emergency as

with recent events felt they wanted more direct knowledge——

Senator MENENDEZ. Obviously, we are unhappy about something

if we have come to the conclusion after this experiential factor that

we as a government are better served, as are the Pakistani people,

by having a programmatic designation of a significant amount of

money, $200 million versus continuing to just have it flow. I heard

Mr. Kunder try to suggest that everything was great with what we

did and I heard you make a statement that you’ve made a major

decision to move in a different direction. You know, it seems to me

that we obviously have found some significant reason to change the

course.

Mr. BOUCHER. I think we heard a lot of concerns on the Hill and

we shared those concerns, given the recent turmoil and the politics

that we all wanted to know more specifically that our money was

going to the kids who deserve a better education and the mothers

and children who deserve better health care.

So, it was—we had a discussion within the administration. The

economists said no, you’re better off doing it as budgetary and macroeconomic support because it serves both the economic benefit and

an education and health care benefit. But I think we all kind of decided it was better at this juncture to make sure it was spent directly on the people we wanted to target with that money.

Senator MENENDEZ. Let me turn to the Coalition Support Funds.

I know you want to distance yourself from it. The reality is that

on November 5 of this year, the State Department Deputy spokesperson, Tom Casey, when asked about aid figures for Pakistan,

gave a figure of $9.6 billion since 2001. Now, that obviously includes Coalition Support Funds. Otherwise he’s way off base.

But I’m sure he’s not that off base so clearly. He was talking

about the Coalition Support Funds as aid and I look in your testimony of today, on page 7 and you say in your testimony, ‘‘The

21

Department of State must concur on the reimbursement.’’ We’re

speaking about Coalition Support Funds and the Office of Management and Budget must be consulted. Embassy Islamabad is working with the Department of Defense and the Government of Pakistan to make the Coalition Support Funds reimbursement process

more supportive of U.S. policy goals and to ensure that we get

maximum value for the money expended and Embassy Islamabad

has, on more than one occasion, denied or sent claims back to the

Government of Pakistan for further clarification.’’

So it seems to me that the State Department has a significant

role to play here, even though you want to distance yourself from

it. I would be interested in what is it that the Embassy has done

when it has denied or sent claims back that it thought was not appropriate. What role is the Embassy playing in trying to make

sure, quote from your words, ‘‘that we get maximum value for the

money expended?’’

Mr. BOUCHER. Sir, I’m glad to address these funds. Just try to

remember, they have a slightly different character than the assistance money. This is not in general, adding to the money

available——

Senator MENENDEZ. Well, it’s all our citizens’ money.

Mr. BOUCHER. It’s all our citizens’ money and we want to make

sure it pays—it goes to the ends that the Congress appropriated it

for, frankly and that is to support the people who are fighting and

dying in the war on terror.

Our Embassy has a role. First they receive the receipts from the

Pakistani Government. They review them. They ask questions

about them. They try to identify the exact purposes, make sure

that the receipts are well substantiated. Then they pass them on

to the Central Command, which validates the link to our military

operations so that it is seen clearly as a part of the war on terror.

Then it goes to the Department of Defense Comptroller that evaluates to ensure the costs are reasonable and credible. Then they do

a determination by the Deputy Secretary of State, send a notification to the Congress. It comes up here for 15 days and then the

Comptroller releases funds to the Defense Security Corporation.

Senator MENENDEZ. Well, I appreciate you reading——

Mr. BOUCHER. A lot of people go through them.

Senator MENENDEZ [continuing]. The procedure. That’s not my

question. Maybe let me try to synthesize it better since I know you

were the Department spokesperson for one time and can deal very

well in foiling with words.

The question is, Does the Department of State and your Embassy, other than this perfunctory role you just described, do anything to ‘‘make sure that we get the maximum value for the money

expended’’? Other than saying, yeah, this is appropriately in accordance and pass it on.

Mr. BOUCHER. Yes; and I think the——

Senator MENENDEZ. What exactly is that?

Mr. BOUCHER. I think the most direct way that takes place is at

the interface between the Embassy and the Pakistanis. It is the

Office of Defense cooperation the Embassy that does it but the Embassy Ambassador is responsible. They look at the receipts. They

ask questions. They ask, you know, who is this fuel for? What’s

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that—where has that road been built? And they look at it to make

sure that in their mind, before it goes up this long chain of people

to review, it really is directed at the ends it has been appropriated

for; that is, fighting the war on terror.

We are constantly working with the Pakistanis, sometimes holding up receipts, asking questions; sometimes rejecting them. But

we’re constantly working with them to make sure that they know

that we want to spend our money, we want to reimburse them for

real costs that they incur in fighting the war on terror and not for

more general costs they might incur.

Senator MENENDEZ. Not for like putting the police and the military on the streets arresting lawyers and doing all of those activities that we just saw. So I hope we’re not reimbursing them for

that.

Mr. BOUCHER. That’s right.

Senator MENENDEZ. Because when they’re doing that, they’re obviously not fighting terrorism.

Mr. BOUCHER. OK, exactly.

Senator MENENDEZ. I have more questions but I’ll turn to the

distinguished ranking member, Senator Hagel.

Senator HAGEL. Mr. Chairman, thank you. You, in your testimony, Secretary Boucher, noted a couple of times the state of emergency conditions in Pakistan emergency rule. My question is, If in

fact, President Musharraf lifts the emergency rule on December

16—by December 16—do you believe then that—and you touched

upon this to some extent in your comments—that there can be free,

fair elections held in January or February of parliamentary and

local elections?

Mr. BOUCHER. I do think they can have a good election. They can

have a credible election. They can have a transparent election and

a fair election. It’s not going to be a perfect election. One would not

want to have such disruption with the media and the political parties this close to any election. That obviously changes the atmosphere a bit but I think particularly if we keep working at it and

they keep working at it and they do what they’ve pledged, what

President Musharraf and the political party leaders have pledged.

They can have an election that really does reflect the choices made

by the people of Pakistan.

Senator HAGEL. Do you believe that he, in fact, will lift the emergency rule by December 16?

Mr. BOUCHER. I think he has made a very, very clear public

statement that he will do so and whenever he has done something

like that, for example, on taking off the uniform and becoming a

civilian, he’s carried through on it, at least in recent months. So

yes; I do believe he will lift it on December 16.

Senator HAGEL. Mr. Kunder, do you wish to respond to this question?

Mr. KUNDER. We’ve put in place, working with the electoral commission, widespread distribution of transparent ballot boxes, building up the kinds of observer systems so with regard to technical

support, I believe that many of the tools will be in place to guarantee a free and fair election.

Senator HAGEL. Mr. Secretary, what would be your analysis of

former Prime Ministers Bhutto and Sharif’s political impact on the

23

elections and on politics in general and the direction of Pakistan

as they have now returned?

Mr. BOUCHER. Senator, I want to make sure you ask that question of some of the experts on Pakistan who are coming after me

and I’ll listen very intently to their answers because they really—

they have probably a broader and longer perspective than I do.

I do think it is important for the election that the major political

party leaders are back. Each of them has faced different circumstances in being out of the country. Some of those were resolved and they were able to come back and I do think that given

the nature of politics in Pakistan, where there is a lot of personality involved, there’s a lot of sort of loyalty to parties based on

families and leaders, that their return helps mobilize major political forces in Pakistan and that will lead to a better contest. So I

think, in the end, it’s a good thing for the election to have those

people back in the country, leading their parties.

Senator HAGEL. So it’s a positive effect?

Mr. BOUCHER. Yes.

Senator HAGEL. Mr. Kunder, would you wish to respond?

Mr. KUNDER. Nothing on that one, sir.

Senator HAGEL. Let me turn to the IMET assistance. Could you

explain a little bit how those IMET funds have been used, are

being used, what you believe has been achieved through the IMET

program?

Mr. BOUCHER. Sir, I think around the world, IMET is one of the

most important programs that we have. It’s the way of connecting

with military leaders in other countries, many of whom sometimes

get involved with politics; but hopefully don’t. But we also do a lot

of professional training, not just in how to shoot guns and command units but how to act professionally, how to work with civilian

authority, how to engage in the appropriate practices for an army,

human rights practices, and things like that and I think the kind

of training they get in the United States is very good.

There was a period when we didn’t do any training for the Pakistani Army so there is a group, a cohort of officers that have not

had a lot of training and what we’re trying to do with our IMET

money now, is to continue the long-term engagement of the Pakistani Army and the training that we’ve done but also play a little

catchup, too, and make sure that we are training and working with

some of those officers who missed out on an experience in the

United States.

You talk to individuals in Pakistan, as in other places, and you

find that the experience of getting military training in the United

States, along with American military, not only improves them as

officers, as officers in terms of their carrying forth the battle but

also in terms of the way they respond to civilian authority, the way

they respect the rights of civilians that they might encounter along

the way and I think it is a positive impact. So we’ve had substantial programs these last few years and we want to continue that.

Senator HAGEL. Mr. Kunder, do you want to say anything?

[No response.]

Senator HAGEL. Secretary, you testified and I think this is in

your written testimony that the Embassy and DOD are working to

make sure that Coalition Support Funds are, in your words, more

24

supportive of U.S. policy goals and you, I think, noted this in your

response to the chairman on a review of assistance programs recently. My question is, What are the concerns that have prompted

this effort, this question about or assurance that these funds are

more supportive of U.S. policy goals, the previous close to $6 billion. Have they not been supportive of U.S. policy goals or where

have they not been supportive? Can you clarify that?

Mr. BOUCHER. You know, I think—let me say, I do think it definitely has been supportive of U.S. policy goals and the number I

have, I think, is $5.3 billion. But I understand also the committee

just got today some information, some responses from the Defense

Comptroller and they’re the ultimate authority on these things.

Looking through what they’ve got, I’m not sure I see a number

but anyway, I guess the way I would characterize it is since this

is a reimbursement, we look at receipts. I’d say for the last year

or more, we’ve been asking more questions about those receipts to

make absolutely sure they are for the things that they are intended

for.

Second of all, I would say we’ve had more of a dialog recently

with the Pakistanis, saying hey, you know, what we want to do is

pay for this, that, and the other. I’ve been out to the border. I’ve

seen the fishing scouts who guard the border down near Quetta

and they’ve got some things provided through our narcotics program but they’re missing night vision equipment. There are a lot

of guys out there that need various kinds of support and you do

more border posts, we’ll do more support for them.

So more of a dialog in terms of saying, here’s what we really

want to reimburse you for. These are the kinds of things that we’d

like to see you do and we’ll be glad to reimburse you for them.

Senator HAGEL. Mr. Kunder, would you like to respond?

Mr. KUNDER. There has been, as Richard said earlier, frankly sir,

a raging debate about the best way to do this. I mean, purely from

a technical point, there are a lot of my colleagues who would say,

if you really want to build the long-term institutions of Pakistan,

probably the best thing you can do is work in a cash transfer mechanism with the Ministry of Education, with the Ministry of Health

instead of bringing in outside experts from the American consulting

community and the American NGO community. So we’ve had a serious debate about this.

Just to take a second to explain how this works—we have sat

down with the Ministry of Education, for example, and if we’ve

agreed that a certain portion of the cash transfer would go to that

Ministry, we’ve worked out in pretty good detail whether that

money would then generate more resources for teacher training

academies and then we’ve tracked whether, in fact, the budget line

item for that went up. So I believe there has been accountability

and there has been impact.

But now what we’d like to be able to say is, maybe there’s a particularly innovative program in Sindh province or in a city somewhere that we really want to focus attention on, and that’s the

added value that you get for moving to a projectized system where

we’ll be more directly involved. From a technical point of view, it’s

been a pretty solid debate about what is the right way to get the

kind of maximum systems impact you want to have in Pakistan.

25

Senator HAGEL. Thank you.

Mr. Chairman, thank you.

Senator MENENDEZ. Thank you, Senator Hagel.

Senator Feingold.

Senator FEINGOLD. Thank you very much, Mr. Chairman. I

thank the witnesses. To begin, I’m very concerned that the administration support for President Musharraf is shortsighted and misguided. Obviously, serious questions remain about President

Musharraf’s assistance in fighting al-Qaeda, which has strengthened and reconstituted itself on the border between Pakistan and

Afghanistan. Meanwhile, the extraordinary and antidemocratic

measures President Musharraf has taken are inconsistent with

American values and likely to increase the appeal of extremist

groups in that country. So I’d like to have, at this point, each of

you address the impact of our support for President Musharraf has

had on stability and democracy in Pakistan.

Mr. BOUCHER. I guess I would say that, I mean, first you have

to understand. The man is the leader of Pakistan, Pakistan’s key

ally. We work with him and his government as a key ally in the

war on terror and he is someone who has set broad strategic goals

for the country that are indeed compatible with ours, of moving it

away from extremism, of opening up the economy, of emphasizing

better education and other services for the citizens.

We’ve also worked, as you’ve noted, in our aid programs. We’ve

spent a lot of money on education, a lot of money on health, a lot

of money on economic growth, where they’ve achieved remarkable

successes, which have benefited people throughout the country.

We’re now spending more money on developing the tribal areas,

giving these people there an opportunity to find jobs, to get education, to get health care. And that goes along with the Pakistani

program. We’re putting in $750 million over 5 years. They’re putting in $1 billion in the same timeframe. So their money is going

in there, too. So we cooperate on these things.

I think our assistance, frankly, in some of these areas that directly benefit the Pakistani people, is probably underappreciated

for a variety of reasons. But we do work with the government and

we look forward now to a democratic transition. We’ve seen bumps

in the road, mistakes, setbacks, an emergency rule, which we thoroughly disagreed with, a crackdown on the media, we thoroughly

disagreed with and then we’ve seen some of those things pulled off

and for better or for worse, through all these problems, we’re going

to have a different situation in a couple months. We will have a

civilian President. We will have a civilian elected Prime Minister.

We’ll have a different Chief of the Army and a different sort of political configuration in Pakistan between the different parties and

the different people and the different centers of power. Power will

be more dispersed and we’ll work with that situation, too.

Senator FEINGOLD. I want a chance to follow up here. I listened

to your answer. Bumps in the road? This is a lot more, Mr. Boucher, than bumps in the road. This is a frightful situation of an attack on a democracy and my question to you was regarding the impact our support for President Musharraf has had on stability and

democracy in Pakistan, not how you can justify what he has done.

26

What impact has our support had on stability and democracy in

Pakistan? Are you saying it hasn’t had any negative impact?

Mr. BOUCHER. I think that our emphasis, our pressure on moving

to a democratic transition has had an impact on President

Musharraf. Part of the reason why we are in a period of transition

to democracy right now, part of the reason why there are political

leaders in Pakistan contesting elections that will be held in a

month, part of the reason why the state of emergency, once imposed, is going to be lifted soon, is because of the role of the United

States because we do—it works both ways. Yes; we support what

the Pakistani Government is doing against terror but we also push

very hard for the transition to democracy.

Senator FEINGOLD. Mr. Kunder, do you want to respond?

Mr. KUNDER. Just to supplement, sir, what I mentioned in my

opening statement, is that the aid that has gone in has, in large

part, gone to institutions of the Pakistani Government, like the

Independent Electoral Commission or to strengthening the Parliament and, we believe, have continued to support the long-term

growth of democracy or have gone directly to benefit the Pakistani

people.

Senator FEINGOLD. Let me go to human rights. The State

Department’s 2007 Report on Human Rights gives Pakistan poor

marks on human rights, citing police corruption, lack of judicial

independence and serious gender discrimination. Can I ask you

gentlemen how we’re addressing these concerns in our aid programs?

Mr. BOUCHER. Do you want to take that one?

Mr. KUNDER. Well, specifically sir, you mentioned the judicial

sector. This is an area where we are, in fact, spending a large number of our democracy and governance funds to strengthen the independent judiciary, to strengthen the legislative functions of the government and so while I take your point, sir, my point is that we

are, in fact, addressing those issues head on with our aid program.

Senator FEINGOLD. Well, give me more specifically, update me on

how State and USAID development and application of conditions,

benchmarks or goals is being done. What—give me a little more detail on what you’re doing.

Mr. KUNDER. I have to say, I’d have to read it. I don’t read the

Human Rights Report every week, sir. But the judicial system is

an area where, for example, what we’ve done is offer technical assistance to build up the judicial research capacity, to build up the

institutions in the Parliament. I can tell you, specifically, there was

not the kind of legislative recordkeeping, there was not the kind of

staff support for the individual parliamentarians and what we

looked at was a long-term, institution-building perspective. We did

not put conditions on the Parliament as part of receiving that aid

but rather, we looked at what we thought were the underlying elements of fragility in the democracy and tried to design the programs around strengthening democracy in the long run.

On the electoral commission side, we’ve tried to strengthen the

Independent Electoral Commission as an institution and then put

in place the—as I mentioned earlier, literally the transparent ballot

boxes, the corps of election observers and then strengthening the

political parties to become more issue oriented in their discussions.

27

So what we tried to do is assess the underlying weaknesses in the

system and then put some of the resources into those areas.

Mr. BOUCHER. Well, if I could add something, sir?

Senator FEINGOLD. Yes, please.

Mr. BOUCHER. A couple examples—$13 million of our money this

year is for local government and decentralization. These are programs that work on a local level to develop representatives for the

people, better local government systems and gender issues are

always a part of those projects, as they are throughout our aid

programs.

In our education programs, one of the emphases is keeping girls

in school and there are a variety of very innovative programs, reading programs and things, just building dorms near the schools.

We’re doing this up in the tribal areas so that the girls can be safe

when they go to school and that’s trying to redress gender issues,

gender problems that have been throughout Pakistan.

So better local governance in particular, is an area of emphasis

as well as, as I say, gender issues permeate our aid programs

throughout.

Senator FEINGOLD. I thank the witnesses. Thank you, Mr. Chairman.

Senator MENENDEZ. Senator Lugar.

Senator LUGAR. I’d like to inquire more about the election preparation. As your testimony points out, the state of emergency is to

be lifted on December 16 and the election is scheduled for January

8. That is just 23 days after the emergency is lifted and although

the Republican and Democratic institutes, the Embassy, others

have been setting up the transparent election system and various

other aspects, which you have experienced, a question arises. As

you say, in a country of 160-some million people, a good many of

them lacking literacy, the school children you pointed out and

adults, certainly at this point, confusion as to who the competitors

are, who in fact, will be running in this election? The communication to a country this large and this diverse or the alternatives, is

to say the least, daunting.

Now, it’s a Pakistani decision. I’d assume we’d take that for

granted and try to do the best that we can to be helpful. But at

the same time the undercurrents, at least of accusations in Pakistan, are that President Musharraf, fearing that the supreme court

was going to rule adversely on his election, displaced the supreme

court and declared a state of emergency, claiming that he was

fighting terrorism, while many in Pakistan would claim he was attempting to preserve his Presidency. Now he has appointed new

judges who have ruled in his favor partially and he is President

again while others remain displaced from the judiciary.

Having been an observer of many elections in Latin America during a period, and all around the world, there was a fairly well developed system of electoral competition. There were parties. There

were persons who could be identified as candidates, whether the

people voting were literate or not, with symbols in nature utilized

so that people could make choices, even if they could not identify

names or words; and at this particular point, it’s not clear any of

the above is a part of this procedure in Pakistan. So I just inquire

the two of you as experts on the ground, is it our hope that the

28

two leaders that have returned, Mr. Sharif and Ms. Bhutto, will in

fact be identified as two competitors? Will Pakistanis see that they

have a choice between the two and that somehow a majority may

form behind one or the other party and on the basis of this, some

type of parliamentary majority might be formed that would be a

check and balance with President Musharraf and/or the commander in chief of the armed forces or the courts; what is the most

optimistic outcome of this scenario with the election on January 8?

Mr. BOUCHER. Senator, you know from your experience observing

elections that an election, a good election is not made on election

day. It’s made in the months that preceded it; in fact, in the years

that preceded it and we’ve had a large number of political programs, election programs going since about 2004, most of them—

big funding was in 2006–07. We’ve been working with the parties,

with the election commission. We’ve worked on voter lists, ballot

boxes, counting procedures, voter education—just a whole slew of

things to try to prepare the field. Journalists—teaching journalists,

getting American journalists to go over and talk to Pakistani journalists about how to report and cover an election and how to do—

we’re financing parallel counts.

Senator Daschle has led two or three, several delegations going

back months ago, way before the emergency, to go out and look at

the election systems and look at what needed to be done to improve

them. We’ve taken his recommendations. We’ve taken recommendations of political parties. We’ve taken recommendations of voting

experts who have been out there working and tried to push on the

things that we thought were most crucial, like having a good voter

list, which there is a good voter list but probably—it was missing

a lot of people and the court intervened and fixed it, perhaps in a

way that may not have fixed it properly but we’ve pushed a lot on

transparent counting so that every stage of the way, there is good

count and numbers can’t be inserted throughout there and indeed,

President Musharraf and the election commission have promised a

transparent vote count.

Senator LUGAR. Mr. Boucher, let me just say, I accept now the

fact that you’ve done this technical work. Are we even assured the

two leaders are going to run at all?

Mr. BOUCHER. We—no, we don’t know for sure. They have not

declared for sure but the last part of the question I should answer

is that there has been a lot of politicking in Pakistan throughout.

These leaders have been exiled but their parties have remained

strong and active within Pakistan. Their return, I think, gives

them leadership in the election. They have a lot of automatic support from the faithful and they have the opportunity now to sort

of go out and try to build that to a broader base. It makes it a better election. It’s not necessarily going to make it as good as it

should be.

Senator LUGAR. Well, who will people vote for if the two leaders

do not run?

Mr. BOUCHER. Who will they vote for?

Senator LUGAR. Yes. Who——

Mr. BOUCHER. Well, because it’s parliamentary, you have party

candidates with symbols at each district level throughout the country. If the parties decide to boycott, I presume their people would

29

not be on the ballot but I think, at least they’re talking about the

conditions under which they would participate. So we’ll have to see.

Certainly, we think that everybody—having everybody participate,

having the leaders take an active role, would improve the quality

of the election and improve the ability of the Pakistani people to

see their choices reflected in the outcome.

Senator LUGAR. Let me just ask this. Regardless of who is

elected, does the potential President or Prime Minister, Parliament

or anyone else, share our fight against the Taliban and against

al-Qaeda? Even after we see the parliamentary situation resolve

itself, arise and come about, is there actually a sharing of our concerns? Is it not a fact that Pakistan has supported the Taliban historically?

Mr. BOUCHER. They have and they changed that. I mean, that

was a decision they made very shortly after 9/11. It was a big decision for them and what we’ve done since then is try to work with

them to get them to carry that out. I would say—my basic answer

would be yes. All the major political party leaders do share our

goals and share the goal of ridding Pakistan of extremism and not

having it be a haven for al-Qaeda and other extremists. Some

would go about it perhaps in different ways. Some may share those

goals more than others but I think our intention is to work with

whoever is elected and work with all the institutions of society,

from the army and the Presidency to the civil society and the business community, to try to help Pakistan with what we think the

vast majority of the Pakistani people want and that’s a stable,

democratic, and prosperous society.

Senator LUGAR. Thank you.

Thank you, Mr. Chairman.

Senator MENENDEZ. Thank you, Senator Lugar.

Senator Casey.

Senator CASEY. Thank you, Mr. Chairman. I want to thank you

both for your testimony today and your service to our government.

Mr. Secretary, Secretary Boucher, I was struck by one of the first

sentences in your testimony, your written testimony. At the beginning of the second paragraph, you state and I quote, ‘‘President

Musharraf’s November 3rd imposition of a state of emergency, including reshuffling the supreme court, curtailment of press freedom

and arrest and detention of journalists, lawyers, human rights advocates, political activists and party leaders, was a setback.’’

I have to tell you, I mean, part of what’s in the room today is

a real concern about credibility and a concern about how we

present information. Now, there are a lot of ways to describe that

list and I had an exhaustive list of problems and we could add to

them. But I think to describe it as a ‘‘setback’’ is really downplaying the grave concerns that we have and I think that people in

Pakistan and human rights and legal experts the world over have

concerns about. So you can address it or not but I think there are

better ways to describe—that list of problems doesn’t even begin to

describe what’s been happening there.

Mr. BOUCHER. I take the point, sir. I don’t think—I’ve never been

given to dramatic terms of phrase. I do think, you know, we made

very clear in public and in private, this was a very serious problem.

It was a serious mistake and it created serious trouble for the elecVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 PAKASSIST sforel1 PsN: sforel1
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tions. Thankfully, much of this has been reversed to some extent.

Political party leaders and activists are back out of jail. Most—

almost all, I think, all but GEOTV, the TV stations are back on the

air. The radio stations are pretty much back. I heard today about

one more that was back on the air. The lawyers are out there demonstrating. Human rights and civil society people have been released. We still do have a state of emergency, which is a serious—

you know, it’s a real distortion of the election process but despite

all that, we seem to be heading back in the right direction and

some of these serious mistakes are being reversed.

Senator CASEY. I take you at your word. I hope that your description reflects the reality on the ground. But let me move on to a related point. It’s within that context of how we talk about this country but in particular, how we discuss the forthcoming election and

I think there’s a crisis of confidence there, too, that this election,

no matter what you can put on a piece of paper as it pertains to

changes that have been made or safeguards in place for the election, there is a real concern, I think, that even if you have—and

I know that your colleague talks about USAID on page 8 of your

testimony, sir, about the USAID help for the electoral commission

and what’s been happening there. But some have a real concern

about the electoral commission, how it’s put together and whether

or not that commission can not only be independent but it can execute the way it has to execute to have a free and fair election. I’d

ask each of you to comment, if you can, on how that commission

was put together and whether or not you have concerns about the

membership of it or the constitution of it or the methods or the

methodology that was used to put it together. What can you tell

us about that commission?

Mr. BOUCHER. I guess what I’d start by saying is, I can come up

with a long list of problems in this election. The voter lists still

aren’t completely straight. The counting process, we think has improved. We think there are plenty of safeguards. We’re not clear

it’s going to be fully transparent. We certainly pressed and hoped

for that and worked to that.

The election commission has been, I would say, somewhat neutral but often ineffective. We’ve tried to get them to work with all

the political parties and indeed; they’ve done that a little bit but

not half as much as we think they should have. We think, throughout this process, they should have spent more time listening to the

political parties and taking onboard their concerns and criticism

and trying to fix those things. They’ve done a little bit of that but

not enough.

There are dozens more. We have experts in the election commission pushing on these things every day. The Embassy pushes on

them. We’re still pushing on them. The big think coming up is the

election. We have to make it as good and as credible as possible.

Senator CASEY. Sir.

Mr. KUNDER. I take your point, sir. I would not say that I depend

solely on the electoral commission to drive all these processes.

That’s why we’re trying, and in response to your question and Senator Lugar’s question, we’ve got some pretty smart, tough-minded

people at State and USAID and the party institutes out there,

thinking this through. We’ve been on the phone to them. We’re tryVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 PAKASSIST sforel1 PsN: sforel1
31

ing to distill our lessons from what just happened in Venezuela

with the referendum there. We learned some additional things,

some lessons we’re trying to apply, especially on, for example, critical linkages between observers and the media because if observers

are getting certain election results at 11 p.m. and they can get that

to the media and then you’re announcing the results at 11 and

midnight and 1 a.m., it’s a little bit hard to change the election results at 8 o’clock in the morning. So we’re trying to take our best

lessons learned and try to build both on the civil society side and

on the electoral commission side, the best tools we can to guarantee

as free and fair an election as possible.

Senator CASEY. I’ve only got about a minute left. I want to get

in one other major question. It pertains to their nuclear program

and also the impact of potential terrorist activity as it pertains to

their nuclear program. What can you tell us and I guess this is

more directed to Mr. Boucher, what can you tell us, if anything,

about whether or not—and I hope the answer to this is no—

whether or not there has been any deterioration or weakening of

their command and control infrastructure within their military or

otherwise, as it pertains to their nuclear capability in the context

of all this unrest?

Mr. BOUCHER. We would answer no to that. We don’t think there

has been a weakening. They—we’re, I think, fairly confident that

they have the proper structures and safeguards in place to maintain the integrity of their nuclear forces and not to allow any compromise.

Senator CASEY. Thank you very much.

Senator MENENDEZ. Thank you.

Senator Corker.

Senator CORKER. Mr. Chairman, thank you. I appreciate it and

I appreciate both of you coming to testify today. I want to say to

the Secretary that we had an excellent visit last Thursday with

Ambassador Peterson and with former Prime Minister Bhutto and

President Musharraf and I know that you used the word, a bump

in the road and Senator Feingold took issue with that and I know

that I would just say that none of us really look at it as just a

bump in the road and I know you didn’t mean that. It was obvious

that your Ambassador there is taking very seriously some of the

miscues that occurred before and is stressing heavily with all of us

and certainly with them, as we did with them, the need for fair and

free elections, transparent elections.

I would say to Senator Lugar that I was struck in meeting with

Ms. Bhutto at her home in the dining room, with her strong desire

to counter terrorism and I think that sometimes we forget the fact

that terrorism is a far greater threat to Pakistan itself internally

than it is even to us today, here. So I think they do, in fact, take

it very seriously.

I was also struck by the—sort of the emotional impact, if you

will, to President Musharraf in taking off his uniform. Somebody

who had been in the military for 40 years and the impact on him

and we remarked jokingly how good his suit looked on him instead

of having the uniform and it actually did look sharp. But you know,

I think he is very committed to being legitimate and trying to do

those things to make him legitimate.

32

I do have concerns, like everyone here, that the infrastructure is

not in place for that to occur; that those underneath him, mayors

at the local level, the transporting of ballets, all those things, can,

in fact, cause the election certainly to not be viewed as legitimate

and not happen as legitimate and we have stressed heavily with

him the fact that international observers need to be allowed in the

country; that no visas should be denied and I think that’s one area

that can greatly taint this process.

I’d love for you to remark, if you might, about anything you’re

doing to ensure that international observers are allowed in the

country and that no one in that regard is barred.

Mr. BOUCHER. Sir, let me, Senator, if I can, just start by thanking you for going to Pakistan and for what you did there. It’s very,

very strong supporters of congressional travel and I read the cables

on your meetings and I think you really helped us advance the

agenda and show that all Americans, from all parts of the government and throughout the body of politics in the United States want

to push, want to see this to be a stable and safe transition and we

want to see a result and a good election and an election that is free

and fair and that they fix a lot of these real problems that they

have created or allowed to persist, even at this late stage. There

are many things they can do to help make the elections more free

and more credible and that’s what we are continuing to push for

and you are.

The terrorism directed against Mrs. Bhutto on her return; that

the rallies that were held on her return is one of the most horrible

acts of terrorism that has occurred in Pakistan in a long time and

I think it just shows that the terrorists are as much against this

election as anybody is. They want to stop political forces from coming in. They want to stop moderate political forces from coming in

and they want to stop the Pakistani people from being able to

choose their government because they certainly would not be

chosen.

On the observer question, we do think that having observers

there, along with things like the parallel vote count and the transparent ballot boxes; all these things we’ve talked about but having

observers is one of the most important, one of the best things we

can do to help ensure a fair and free election. There are 20,000 domestic observers that we’ve helped train through a project with

the—one of our cooperating partners—I can look it up but 20,000

domestic observers. They are the bulk in the eyes and ears at the

polling places. In addition, there will be observers from the United

States, Britain, other countries and as I said, we’re encouraging

Europeans and others to go as well. We’ve talked to the government. The government has said they welcome observers, that they

will issue the visas, that they will facilitate the work of the observers as they go in and we’ll hold them to that standard.

Senator CORKER. I think anything we might do to even help facilitate it and I think even in our government, which is very, very

different, we have sometimes difficulty in calls and things to be

carried out beneath, if you will, to the satisfaction that we’d like

and I think that anything you might do through our offices there,

really, to put the word out to international observers to facilitate

even that visa process. I think that he was visibly stunned at some

33

of those—you know, I hope this was the case. It appeared that it

was sincere—stunned that some of those visas had been denied and

I think, wants to do what is necessary but I think we may need

to help in that regard and I think a big outreach on our part would

be very useful in this regard.

Mr. BOUCHER. Absolutely, sir.

Senator CORKER. Let me just ask a couple questions. How long

has it been since there has been a peaceful transition of power in

Pakistan.

Mr. BOUCHER. Let me commend the experts to you one more

time. I don’t think any of these previous transitions can be described as very smooth or peaceful. They were all the result of——

Senator CORKER. I think it’s been about 60 years——

Mr. BOUCHER. Since the beginning.

Senator CORKER. I think that—while certainly I think a hearing

to justify the aid that we’re spending and I think for us to constantly analyze, I think for us to actually see what occurs over the

next couple months is maybe most appropriate for us and to actually do everything we can to ensure these elections are free and

fair and transparent and to hold him at his word. I think we’ll

know very soon whether this is actually occurred or not and I do

wonder whether that’s not a better time to even look at where our

aid is going and how it is being measured. I’d love to have any response you might give in that regard.

Mr. BOUCHER. I think that’s true. We will be working with a new

situation in Pakistan, a new Government, a new Prime Minister as

well as a civilian President Musharraf, a new head of the army and

we’ll, I think, continue to work with people and talk to them about

their priorities and how we can help but also look at the situation

and decide how to spend our money.

Senator CORKER. We’ve had a situation where we’ve had a leader

who has acted as the political leader but also the military leader.

I know that most people believe General Kiyani will be the new

military leader there. My sense is that is something that could be

very good for us; that we’d have one person totally focused on political issues. We then would have a military leader that is solely focused on terrorism and solely focused on military activities. I’d love

for you to respond to that.

Mr. BOUCHER. I think that’s true. I think part of this transition

is because of the strength, the growth of civil society, the strength

of the democratic forums, the pressure from people like us from

outside but part of it is also because the army was tired of being

blamed for everything; tired of being blamed for university admissions and the price of sugar and everything else and wants to get

back to their real job, their real work and so I think everybody felt

it was time to make this transition in Pakistan.

Senator CORKER. So just to summarize this segment, I know my

time is up. It seems that we actually have an opportunity over the

next couple months, if we keep the pressure on and the partnership

going, to actually have a peaceful transfer. We actually have an opportunity to potentially have a military leader that may even be

stronger as a partner because of more full focus and I think that

maybe it’s good for our country to focus on trying to make sure this

all occurs in an appropriate way over the next 60 days and then

34

reassess how our aid levels ought to be, based on the situation at

hand. Is that correct?

Mr. BOUCHER. I do think that’s true. I think however it turns

out, it’s very important for us to maintain a substantial level of assistance for Pakistan because we want them to be able to fight the

war on terror. We want them to be able to develop their democracy.

We want them to be able to educate their children, take care of the

babies and the health care needs of the population and recover

from the earthquake. Those fundamental interests of the United

States in seeing success in Pakistan in developing as a nation and

fighting the war on terror are not going to change too much but

how we go about it, how we work with a new situation is going to

change and we’ll have to be open to making any adjustments that

are appropriate in the way we spend our money.

Senator CORKER. Thank you and thank you, Mr. Chairman.

Senator MENENDEZ. Thank you. I do have one other set of questions, some of it is derived from what I’ve heard here, and I just

have got to make sure I hear you right, Mr. Secretary.

You know, in America, we have an election process that takes a

year and a half to try to get to its ultimate conclusion. What you

described as a bump in the road when people like Chavez do what

they do in their country, we have much more specific language

about that. So do you want to reiterate for me again that in response to Senator Lugar that when you take to these facts, you

have the leaders of the opposition parties exiled from their country

until recently? You have an emergency proclamation that is lifted

23 days before the election and you have the rest of the people who

only just recently were released and all of those facts leads us to

believe that the election is going to be, as you said, an election that

is good, transparent, and fair. That’s what you’re telling the

committee?

Mr. BOUCHER. I think those were all very bad things. Those were

all very negative for the process but they are reversible. The fact

that there are the leaders back, that there is politicking going on

means there is a chance and we all ought to work for it.

Senator MENENDEZ. And it will be good, transparent, and fair?

Your words, not mine.

Mr. BOUCHER. It can be good, transparent, and fair.

Senator MENENDEZ. Even with all of that as a background?

Mr. BOUCHER. Even with all that——

Senator MENENDEZ. Even with 28 days to the election?

Mr. BOUCHER. Even—because it wasn’t just those 28 days.

Senator MENENDEZ. It’s not just a question of 28 days. I can set

a series of efforts to try to professionalize an election but if then

I take the candidates and have them out of the country, if I then

take my opponents and arrest them, if I shut down the press, if I

ultimately don’t lift the proclamation until less than a month before the election, I think that in other parts of the world, we’d have

a much different view.

Mr. BOUCHER. I think we were very clear, sir, on the emergency.

We were very clear on the media. We’ve been very clear on the

need for the political transition of the President. I don’t—you know,

I don’t know what the proper metaphor is. We were heading toward a transition. We were working on all these issues to make the

35

election free and fair. We got hit by a car along the way. It was

a serious problem, made it much more difficult. We managed to reverse some of the effects of the declaration of emergency and we

have a shot at doing a good election. I think you and others ought

to try to make it that way.

Senator MENENDEZ. I want to look at the other comment you

made that however it turns out, substantial funds have to continue

to flow. That’s the reality of what we’re dealing with here in terms

of the security equation to this and it’s not an insignificant equation. But I think you pretty much said it. However it turns out, significant funds have to continue to flow so I think maybe we should

be a little intellectually honest about this and say that that’s really

where our interest is but trying to move democracy down the road

suggests that the framework that you describe can possibly be

good, fair, and transparent is mind-boggling for me.

But let me ask one other set of questions here. No. 1, yes or no,

Did the strategic review that the Secretary of State announced as

it relates to Pakistan funding, produce any change outside of the

$200 million going to programmatic versus general support for

ESF?

Mr. BOUCHER. At this point, we haven’t decided on any other

changes.

Senator MENENDEZ. Is this review continuing?

Mr. BOUCHER. We’ll keep the situation under review because as

we said, we’re coming up on some big events.

Senator MENENDEZ. But does it——

Mr. BOUCHER. And those will determine how we spend our

money.

Senator MENENDEZ. Does it have an end to it? Is there going to

be a report about what the strategic review provided?

Mr. BOUCHER. I don’t think there will be a formal report. We’re

glad if, you know, some time after the election, after we see how

that turns out, we’re glad to come back before the Congress and the

committee and try to explain, if we have any further conclusions.

Senator MENENDEZ. It sounds to some of us that the strategic review was just to swage the bump in the road along the way.

Mr. BOUCHER. Sir, I know I said bump in the road but I said a

lot of other things, too, and I do agree with you, these were terrible

events that shouldn’t have happened.

Senator MENENDEZ. Let me ask one last set of questions. A witness on the next panel, who we’ll hopefully have up shortly, paraphrased to some of the opinions that several of them have, says the

following: ‘‘The United States has made no effort to distinguish between military assistance, which is useful for our common counterterrorism efforts and aid with little or no connection to the war

against al-Qaeda nor made provisions of the latter contingent upon

cooperation with combating the extremists hiding in the FATA region and elsewhere in Pakistan.’’ They also go on to say that the

United States has ‘‘established economic and development programs that have frequently been unfocused, poorly conceived, or

lacking in responsible oversight.’’ How would you respond to that,

Mr. Kunder?

Mr. KUNDER. I would respectfully disagree. I read the statement.

I just saw that it was a stand-alone statement so I’d like to see

36

what analysis—if I have time, I’ll sit and listen to the next panel

but I simply disagree with that. As I tried to lay out in my testimony, we think our development program has been very carefully

focused on what we think are the long-term problems facing the

Pakistani people.

If I could just make one more comment, sir, I think this whole

question about whether we review a program after an election and

so forth is important. The Foreign Assistance Act, as you know, has

not been rewritten in more than four decades now and buried in

there is language that talks about how we’re using foreign assistance to support our national security objectives and there’s a lot of

language in there that talks about how we’re trying to advance

human progress. I think the kinds of issues that Senator Corker

raised are very profound issues because to some extent, numbers

should vary as democratic performance varies but, it’s a long-term

process, and we should continue investing in the institutions in a

big, poor country like Pakistan, to some extent, regardless of who

the President or Prime Minister is, and I think it’s on that issue

that this debate turns because some of us think that regardless of

who wins this election, the literacy of Pakistani citizens is critically

important to our country in the long term.

So, to some extent, yes, we need to be doing reviews and we need

to be examining who wins or loses elections but I think also buried

in the Foreign Assistance Act, for those of us who are trying to be

guided by law, is a lot of language that tells us to stick with it and

turn the country around. These are profound issues, which I suspect I will not resolve with this statement.

Senator MENENDEZ. I think that’s why probably everybody universally wants to work to turn the country around. They want literacy for the Pakistani people. They want those things that would

help strengthen civil society. I just question about the way we’re

going about it.

Mr. KUNDER. Yes, sir.

Senator MENENDEZ. Last, $10 billion later, Mr. Secretary, has

the United States had access to A.Q. Khan, the Pakistani scientist

who gave nuclear weapon——

Mr. BOUCHER. We have not had direct access.

Senator MENENDEZ. $10 billion later? Do we not believe we

should have access?

Mr. BOUCHER. We’ve had good cooperation. We’ve had information. We’ve seen them provide information to the international

community so they can follow up and destroy the network.

Senator MENENDEZ. $10 billion later, we have not had access.

Mr. BOUCHER. We’ve had good cooperation in getting information——

Senator MENENDEZ. But not direct access?

Mr. BOUCHER. But not direct access, yes sir.

Senator MENENDEZ. Thank you.

Mr. BOUCHER. Can I address the military side of your question?

Because the FMF funds and you sort of made reference to them,

they’re very much focused on things that help in the war on terror—tow missiles, helicopters, P3s that help them do the maritime

patrols that will help them support the maritime patrols that

they’re already doing. So very much a lot of those—that $300 milVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 PAKASSIST sforel1 PsN: sforel1
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lion that goes to FMF annually is support for equipment and

needs, training that will help them in the war on terror.

Senator MENENDEZ. It also gives them the ability to strengthen

their military beyond on the war on terrorism, does it not?

Mr. BOUCHER. I would say that it’s not—if you think of it sort

of as the old NATO and the Warsaw Pact, they’ve had an army

that was designed to defend the Plains of Punjab. This is money

that’s more attuned to the kind of things you have to do against

extremism and terrorism.

Senator MENENDEZ. Any other Senator? If not, thank you both

for your testimony. We’ll keep the record open for a few days and

any questions that may be submitted to you, we’ll ask for your expeditious response. Thank you for your testimony.

Mr. KUNDER. Thank you very much.

Mr. BOUCHER. Thank you, sir.

Senator MENENDEZ. Let me welcome the second panel to our

hearing today. We want to thank all of our witnesses for joining

us: Ambassador Teresita Schaffer; the director of the South Asia

Program at the Center for Strategic and International Studies; Dr.

Lawrence Korb, the senior fellow at the Center for American

Progress, and Dr. Robert Hathaway, the director of the Asia Program at the Woodrow Wilson International Center for Scholars.

We’re going to proceed to opening statements of all of our witnesses. Just as we had for our first panel, we ask you to synthesize

it in approximately 7 minutes and we will, of course, include your

full statement for the record.

With that, Ambassador Schaffer, it’s good to hear from you.

STATEMENT OF HON. TERESITA C. SCHAFFER, DIRECTOR,

SOUTH ASIA PROGRAM, CENTER FOR STRATEGIC AND

INTERNATIONAL STUDIES, WASHINGTON, DC

Ms. SCHAFFER. Thank you, Mr. Chairman, and thank you, Senator Hagel, for inviting me to share my thoughts this afternoon at

a critical time in Pakistan’s history and in the long and turbulent

history of United States/Pakistan relations.

Pakistan’s location alone will guarantee that the United States

needs to remain engaged with Pakistan over the long term. This

is a hearing that I was told was about foreign assistance, which is

not the only tool the United States brings to bear on this situation

but it is a very important and highly visible one.

I believe that the United States needs to use its aid to invest in

Pakistan’s future and in the long-term viability of a decently governed state. At the same time, we don’t want to encourage policies

we find perverse or at variance with U.S. interests. These principles are not as contradictory as they may sound and I think they

give us a pretty good guide to structuring our assistance in the

future.

Let me start with U.S. economic assistance, which is our best instrument for investing in Pakistan’s future. I believe we should

shift the balance of our assistance toward economic aid and reduce

the percentage of military assistance. I would suggest a ratio of

about 2 to 1, between economic aid and security-related aid and I’m

not including Coalition Support Funds in that calculus.

38

Within the economic assistance portfolio, our assistance should

all be given in the form of projects rather than cash or budget support and I was delighted to hear that the administration wants to

move in this direction. I am much less sanguine that Mr. Kunder

about how meaningful it is to do the accounting exercise involved

in having the receiving government prove how they have spent our

cash money. All too often, the needle doesn’t move in terms of the

percentage of GDP that’s being devoted to these efforts, which is

what ought to mean something to us.

We need to invest in Pakistan’s people, particularly education

and health and I know those are important on AID’s list. These

sectors have been disastrously underfunded for over three decades

and our aid should help redress that balance. But our investments

also need to be visible to the people they are supposed to help. I

actually agree with what Mr. Kunder said about institution-building but I think at a time when anti-Americanism is at such a high

point, that it’s important to capture people’s imagination. For example, we might want to encourage visits by Project HOPE and

similar special teams and then try to use them to drain people who

will continue to staff rural clinics after the big white bird has left.

I’m not going to address Coalition Support Funds other than to

say that I strongly support efforts to increase the accountability of

how the money is spent.

On military assistance, I think my colleagues may have more to

say. My only point is that we need to give priority to those things

that directly support counterterrorism and counterinsurgency and

things like F–16s are hard to justify on that basis. I know that the

F–16 transaction has a lot of emotional baggage in Pakistan so I’m

not here recommending that we pull the plug on that. I’m only

suggesting that it is possible within the category of military assistance, to be selective and to calibrate that to our larger foreign policy goals.

You asked what impact U.S. assistance has on Pakistan’s internal security and on its path toward democracy. The honest answer

is, not very much. The United States, as you have just heard, has

funded some valuable programs designed to improve election transparency and I certainly support those. I should say that I was a

member of an NDI delegation that visited Pakistan in May and we

spent a lot of time looking at the election procedures. We put out

a very specific list of things that needed to change. I’m glad that

the U.S. Government is now focusing on things like precinct by precinct announcements of election results. This was one of the things

we picked up. There are lots of problems and they need to be dealt

with.

But overall, U.S. policy toward Pakistan, until very recently,

gave no serious attention to encouraging democracy. In the past 6

months that has begun to change and Ambassador Patterson has

undertaken a remarkable outreach campaign to show United

States support for a free press and free and fair elections. Unfortunately, I think her efforts are undercut by broad statements from

the White House and elsewhere, suggesting that Musharraf is

indispensable.

Mr. Chairman, I would suggest to you that working with Pakistan is indispensable but that no one leader merits that designaVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 PAKASSIST sforel1 PsN: sforel1
39

tion. What Pakistan needs to be able to work with us over the long

term is a government that enjoys widely accepted legitimacy and

is capable of pushing back against violent extremists that are challenging the writ of the state. I’m actually more concerned about the

extremists’ challenge in places that are within the settled areas of

Pakistan, like the Swat Valley.

Legitimacy was never President Musharraf’s strong point and he

has lost popularity, legitimacy and ultimately, much of his political

strength during the 9 months since he first tried to fire the Chief

Justice. To me, this means that the United States should now focus

on the process of elections rather than picking a candidate. An ugly

election, which is likely unless things get turned around very

quickly, will not settle the issue of Pakistan’s governance or of its

ability to defend the legitimate authority of the state.

Institution-building is absolutely vital, but I was distressed that

the judiciary figured only very belatedly in the two previous witnesses’ account of what institutions we need to support and when

Mr. Kunder said we were supporting the judiciary, he was referring entirely to technical assistance at the lower levels. This is

needed but there also needs to be an independent higher judiciary.

Your final question deals with the proposed assistance package

for the Federally Administered Tribal Areas known as FATA. I

support a major U.S. assistance package. The stakes could not be

higher, both for our efforts in Afghanistan and for Pakistan’s future

as a decently governed modernizing moderate state.

Once the Pakistan Army went into FATA under heavy U.S. pressure, they started a process that they now have to finish, integrating this largely ungoverned region into the Pakistani state and

society. This has involved, and will involve, heavy sacrifices for

them. It requires a three-pronged strategy: Military, political, and

economic. The part that we can help with is the third prong or the

economic one.

Let’s be clear. There is no school solution to the economic problems of the region. The social structures that once ran it are problematic and now largely destroyed without a good substitute in

place. Whatever we do will involve risks, risks that it won’t work

and high risks that some of the money will go astray.

I think we need to try anyway, in spite of these risks, but we

need to be both strategic and flexible in our funding. The two key

objectives are job creation and popular impact, and the popular impact needs to be structured so that both Pakistan and the United

States are seen in a favorable light. We need to gain the support

of tribal leaders to the extent that they are still in place. In the

short term, this probably means an emphasis on public works, especially for roads and infrastructure and on health.

I wouldn’t start with education, though. That’s a cause I’ve been

pushing passionately for decades. However, it is not welcomed by

tribal leaders and an effective program desperately needs their

buy-in. I think that will work better on the second wave rather

than the first.

But we also ought to experiment and encourage the Pakistan

Government to experiment with ways of encouraging job creation

through business development. Reconstruction opportunity zones

40

are a great idea but right now, this region doesn’t produce anything exportable.

Why? The entrepreneurial talent is there. Part of what’s missing

is capital, not just microcredit but financing for small- and medium-sized businesses that can employ people. Part of what’s missing is equipment, not necessarily complex and fragile equipment

but tools that will permit those with some skill—marble cutting,

furniture-making or some similar craft—to get greater economic

benefit from it. Part of what’s missing is infrastructure, especially

roads and electricity. It’s not just a question of building more. It

may also be necessary to set up the system so that potential employers can access it and pay for it without the distribution lines

having to go through nonpaying customers first.

We should encourage the agencies and the U.S. Government,

whose expertise lies in encouraging business in tough places and

here, I’m thinking particularly of OPIC, to go in there and try out

a few things. Some of them may fail. That’s what happens if you

try something tough but if some succeed, we may sow the seeds of

progress in the most demanding and most important challenge facing Pakistan.

Thank you.

[The prepared statement of Ms. Schaffer follows:]

PREPARED STATEMENT OF HON. TERESITA C. SCHAFFER, DIRECTOR, SOUTH ASIA

PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON, DC

Mr. Chairman, Senator Hagel, thank you for inviting me to share my thoughts

with you at a critical time in Pakistan’s history and in U.S.-Pakistan relations.

United States ties with Pakistan have had a long history of turbulence and of contradictions. That is still true today: Pakistan is a critical partner in our struggle

to keep terrorists out of South and Central Asia. It is also a troubled country, struggling to fulfill the people’s desire for democracy and for good governance. Pakistan’s

location next to Afghanistan, where the United States has a major military presence

and where a Taliban-led insurgency is under way, and next to India, with whom

Pakistan has a major unresolved dispute, guarantees that we will need to remain

involved for many years to come. Assistance is not the only tool that the United

States brings to bear on this situation, but it is a very important one, and a highly

visible one.

I believe that the United States needs to use its aid to invest in Pakistan’s future

and in the long-term viability of a decently governed state. At the same time, we

don’t want to encourage policies we find perverse or at variance with U.S. interests.

These principles are not as contradictory as they sound, and I think they give us

a pretty good guide to structuring our assistance in the future.

U.S. economic assistance is our best instrument for investing in Pakistan’s future.

We should shift the balance of our assistance toward economic aid, and reduce the

percentage of military assistance. I would suggest a ratio of about 2:1 between economic aid and security-related aid (not including Coalition Support Funds).

Within the economic assistance portfolio, our assistance should all be given in the

form of projects rather than cash or budget support. This is more labor-intensive

for AID, but it is the only way to ensure that our money is supporting what we want

it to. Dispensing cash in return for a statement that the receiving government has

spent the equivalent amount on agreed development objectives is usually an accounting exercise that glosses over the fact that the government is not spending its

own resources on these objectives.

We should invest in Pakistan’s people—primarily education and health. These sectors have been disastrously underfunded for over three decades. We need to help

redress that balance. Our investments need to be visible to the people they are supposed to help. The only recent time when U.S. assistance boosted people’s attitudes

toward the U.S. was 2 years ago, when the U.S. military provided such effective

earthquake relief. Health spending could have some of the same effect. Together

with the policy-related programs that we usually do, for example, we could capture

people’s imaginations by encouraging visits by Project Hope and similar special

41

teams—and then using them to train people who will continue to staff rural clinics

after the special teams have left.

The largest single expenditure in our assistance profile is Coalition Support

Funds. Technically, it’s not assistance but reimbursement, but it is a major part of

our budget. I support the calls for greater accountability of how this money is spent.

Others plan to address how our military assistance funds are spent, so I will not

get into detail on this subject, except to say that the most important part of our

military assistance is the part that directly supports counterterrorism and counterinsurgency operations. That needs to be the priority.

You asked what impact U.S. assistance has on Pakistan’s internal security and

on its path toward democracy. The honest answer is, not very much. The U.S. has

funded some valuable programs designed to improve election transparency, and I

certainly support those. But overall U.S. policy toward Pakistan until very recently

gave no serious attention to encouraging democracy in Pakistan. In the past 6

months, that has begun to change, and Ambassador Patterson has undertaken a remarkable outreach campaign to show U.S. support for a free press and free and fair

elections. Her efforts are, alas, undercut by broad statements from the White House

and elsewhere suggesting that Musharraf is ‘‘indispensable.’’

Mr. Chairman, I would suggest to you that working with Pakistan is indispensable, but that no one leader merits this designation. What Pakistan needs,

to be able to work with us over the long term, is a government that enjoys widely

accepted legitimacy and is capable of pushing back against violent extremists that

are challenging the writ of the state. Legitimacy was never President Musharraf’s

strong point, and he has lost popularity, legitimacy, and ultimately much of his political strength during the 9 months since he first tried to fire the Chief Justice. To

me, this means that we ought to focus on the process of elections rather than picking a candidate. An ugly election—which is likely unless things get turned around

quickly—will not settle the issue of Pakistan’s governance or of its ability to defend

the legitimate authority of the state. That goes beyond the scope of this hearing,

but will profoundly affect the effectiveness of our assistance.

Your final question deals with the proposed assistance package to the Federally

Administered Tribal Areas (FATA). I support a major U.S. assistance package for

this area. The stakes could not be higher, both for our efforts in Afghanistan and

for Pakistan’s future as a decently governed, modernizing, moderate state.

Once the Pakistan Army went into FATA, under heavy pressure from the U.S.,

they started a process that they are now obliged to finish—integrating this largely

ungoverned region into the Pakistani state and society. It has involved, and will involve, heavy sacrifices for them. Accomplishing this task requires a three-pronged

strategy: Military, political, and economic. Our package can help with the economic

program; the Pakistan military will need to develop a more effective military approach; and the political part of the puzzle is largely lacking.

So our aid package contributes to only one of the three key ingredients in a FATA

strategy. Let’s be clear: There is no ‘‘school solution’’ to the economic problems of

the region. The social structures that once ran the region are problematic, and are

now largely destroyed, without a good substitute in place. So whatever we do will

involve risks—risks that it won’t work, and high risks that some of the money will

go astray.

This has led some people I respect to recommend that we stay away from funding

development in FATA. I disagree: I think we need to try, and we need to accept

those risks. But we need to be both strategic and flexible in our funding. The two

most important objectives are job creation and popular impact; and the popular impact needs to be structured so that both Pakistan and the United States are seen

in a favorable light. We need to operate in ways that will gain the support of the

tribal leaders, to the extent they are still in place. In the short term, this probably

means an emphasis on public works (especially for roads and other infrastructure)

and on health. I wouldn’t start with education, though that’s a cause I’ve been pushing passionately for decades. However, it is not welcomed by tribal leaders, and an

effective program needs their buy-in. We will, therefore, be more effective if we

make education an issue for the ‘‘second wave’’ rather than the first.

But we ought also experiment, and encourage the Pakistan Government to experiment, with ways of encouraging job creation through business development. The Reconstruction Opportunity Zones that the administration supports are a great idea

in principle, but right now, this region produces little or nothing that’s exportable.

Why? Entrepreneurial talent is there. Part of what’s missing is capital—not just

microcredit, but financing for small- and medium-sized businesses that can employ

people. Part of what’s missing is equipment, not necessarily complex and fragile

equipment but tools that will permit those with some skill in marble-cutting, furniture-making, or some similar craft to get greater economic gain from it. EquipVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
42

ment leasing might be a good way to fill this gap. Part of what’s missing is infrastructure, especially roads and electricity. It’s not just a question of building more,

there may also be a need to set up the system so that potential employers can access

it (and pay for it) without the distribution lines having to go through nonpaying customers first.

We should encourage the agencies in the U.S. Government whose expertise lies

in encouraging business in tough places—I’m thinking especially of OPIC—to go in

there and try out a few things. Some of them may fail—that’s what happens if you

try something tough. But if some succeed, we may sow the seeds of progress in the

most demanding and most important challenge facing Pakistan.

Senator MENENDEZ. Thank you.

Dr. Korb.

STATEMENT OF DR. LAWRENCE J. KORB, SENIOR FELLOW,

CENTER FOR AMERICAN PROGRESS, WASHINGTON, DC

Dr. KORB. Thank you very much, Chairman Menendez, Ranking

Member Hagel, Senator Lugar. I appreciate the opportunity to appear before you today. I can’t think of a more critical issue facing

the country than our relationships with Pakistan and obviously foreign assistance plays a key role in our ability to influence events

there.

There’s no doubt about the fact that Pakistan is a difficult ally.

It has nuclear weapons, as you pointed out before. It’s a nuclear

proliferator and it has allowed the Taliban and al-Qaeda to reconstitute itself on its borderlands from which they are causing us

problems in Afghanistan and could be a potential for launching

attacks around the world.

I believe that our current foreign assistance strategy no longer

serves U.S. national interest nor is aligned with the values our

country stands for and I think we must rethink our aid package.

It’s important to keep in mind that we’ve had an on-again, offagain relationship with Pakistan in the aid area. If you go back

and you take a look going back to the beginning of the cold war

up until 2001, it’s been—we’ve changed several times but one thing

becomes clear. During that period, if you take a look, there was

more economic aid than military aid. Since 2001, we’ve tilted the

balance the other way and emphasized much more in military assistance than the economic assistance.

Now as was pointed out here earlier that if you take a look at the—about, somewhere between $10 and $11 billion in foreign assistance to Pakistan since 9/11, about 60 percent goes to the Coalition Support Funds. I think it’s unfortunate that people from the

Department of Defense are not here to talk about that but if you

take a look at that, you’ll find out that while we consider it a form

of repayment rather than assistance, it’s very hard to tell where all

of that money is going.

Another 15 percent has been spent on security assistance and

again, as has been pointed out here, a lot of that goes to purchase

major weapon systems such as F–16s, which would be certainly

more applicable for a conventional war with what the Pakistanis

perceive as their major rival, India.

Fifteen percent has gone toward budget support or direct cash

transfers to the Government of Pakistan and only 10 percent has

been used specifically for development and humanitarian assistance. I believe that this has got to change and I’ve got a couple of

recommendations that I’d like to put forward.

43

First of all, when giving our aid, we need to develop a relationship with the people of Pakistan. We need to focus on institutions

not individuals and we cannot let particular changes of government

or particular leaders influence our relationship with the Pakistan

people. And in order to maintain our influence with Pakistan, we

must engage with all of Pakistan’s institutions and promote—place

a greater emphasis on promoting democracy, economic development

and education, which leads to my second recommendation.

We need to expand nonmilitary aid. As has been pointed out

already, the best we can calculate and this is one of the other

things that’s very frustrating. It’s hard to find out how much aid

is going and who is in charge of it in terms of the coordination but

it seems about 75 percent has gone to security-related assistance.

I support Senator Biden’s proposal to guarantee approximately $1.5

billion as a baseline for nonsecurity-related aid as a sound recommendation. He says unconditional but I don’t think unconditional should mean unmonitored or unaudited, which leads to my

third recommendation.

I think we need to increase the transparency and coordination of

our aid. As you’ve seen with the Special Inspector General for Iraq,

we instructed you many times that the aid doesn’t get to where it’s

supposed to and I think what we need to have is the same level

of scrutiny with our relationship with the money we give to Pakistan.

There should be conditions on the aid. I agree there should be

a baseline but over and above that, there should be conditions and

one of them—and I’ve been urging this before the Congress and

publicly for the last 2 years, is on the debriefing of A.Q. Khan. I

think that is very, very critical that we find out because the proliferation of weapons, of nuclear weapons and them possibly falling

into the wrong hands is a tremendous threat to our security.

I think we also need to maintain a continuing relationship with

the Pakistani military. As my colleague will point out, everybody

knows that the new Army Chief of Staff went to Leavenworth. We

don’t want to publicize that too much because we don’t want him

to be seen as a tool of the United States. But if you take a look

at the number of military officers from countries around the world,

Pakistan is not near where it needs to be. It’s below countries such

as Egypt and Jordan and we need to increase that number.

Then finally, we need a regional approach. As we’ve seen in so

many conflicts around the world, we can’t do it by ourselves. We

need to reengage with all the countries in the region, including

China, India, and Saudi Arabia.

In the final analysis, a stable and friendly Pakistan is critical to

our interests in South Asia as well as the Middle East but our aid

policy has to ensure that we maintain that stability and the good

relations and I hope that this hearing is the beginning of a renewal

of that process.

Thank you.

[The prepared statement of Dr. Korb follows:]

PREPARED STATEMENT OF DR. LAWRENCE J. KORB, SENIOR FELLOW, CENTER FOR

AMERICAN PROGRESS, WASHINGTON, DC

Chairman Menendez, Ranking Member Hagel, and members of the Senate Foreign Relations Subcommittee on International Development and Foreign Assistance,

44

I appreciate the opportunity to appear before you with these distinguished experts

to discuss the critical subject of reassessing our foreign assistance to Pakistan. I

cannot think of any issue more important to our future security and I commend you

for holding this hearing.

Recent developments in Pakistan are deeply troubling to U.S. interests both in

the country and in the region. Without question, Pakistan is at best a difficult ally

and poses some of the most complex and dangerous challenges to the security of the

United States. Not only is it a nuclear-armed state and a nuclear proliferator, but

it has allowed al-Qaeda and the Taliban to establish safe havens in its territory

from which it is able to conduct terrorist operations in Afghanistan, Pakistan, and

around the world. Furthermore, Pakistan faces growing instability as extremist elements have gained control in the border regions and as democratic forces finally

begin to challenge President Musharraf’s increasingly autocratic rule.

The Bush administration has been a steadfast supporter of President Musharraf

since he said he would help the United States in our war against the Taliban and

al-Qaeda following the September 11 attacks. Since that time, the United States has

provided nearly $11 billion in aid to Pakistan, mostly to the Pakistani military to

support what can only be described as a discombobulated policy.

I believe that the policy of the Bush administration toward Pakistan is no longer

serving U.S. national security interests; nor is it aligned with the values that our

country stands for. Part of the problem with our policy is how we, and ultimately

the Pakistanis, allow our aid to be allocated. Congress must rethink its U.S. aid

package. While not the only factor, this aid gives us some leverage to influence

events in Pakistan and enhance our security interests.

Before providing a short list of recommendations on future foreign assistance, I

will outline briefly the history of U.S. aid to Pakistan, and analyze current aid levels

to Pakistan. This will place these recommendations in their proper context.

HISTORY OF U.S. AID TO PAKISTAN

Over the past half century, the United States assistance to Pakistan has been

intermittent. As a result of a 1954 mutual defense assistance agreement, the United

States provided nearly $2.5 billion in economic aid and nearly $700 million military

aid to Pakistan between 1954 and 1964. (Since the United States first began its aid

program to Pakistan, our assistance has come in many forms from a number of different agencies. Throughout the report, I have broken down our aid assistance into

two broad categories: Wide-ranging economic aid and purely military aid. It is important to note that the category of economic aid includes large amounts of Security

Support Assistance (SSA) as well as other security-related loans and grants.)

The Indo-Pakistani conflicts of 1965–1971 led the United States to suspend nearly

all aid to Pakistan (as well as to India) assisting them almost exclusively with economic aid for the next 15 years ($1.45 billion in economic aid, $26 million in military assistance from 1965–1971; $1.1 billion in economic aid, $2.9 million in military

assistance from 1972–79).

In 1979, the Carter administration suspended all aid to Pakistan (except for food

aid) because of Pakistan’s development of a uranium enrichment facility. With the

invasion of Afghanistan by the Soviet Union, U.S. assistance again increased dramatically, and this high level of aid continued throughout the 1980s as Pakistan

became the intermediary and central staging ground for covert U.S. support to antiSoviet forces in Afghanistan. Aid rose from around $60 million in economic and development assistance in 1979 to more than $600 million per year in the mid-1980s.

In total, the U.S. gave $3.1 billion in economic assistance and $2.19 billion in military assistance from 1980 until 1990.

Even while the U.S. was pumping large amounts of aid into Pakistan and Afghanistan to help defeat the Soviets, concern within the U.S. about Pakistan’s nuclear

ambitions led Congress in 1985 to pass the Pressler amendment to the Foreign

Assistance Act. The Pressler amendment required the President to certify that Pakistan did not have a nuclear weapon for the fiscal year in which aid is to be provided.

Throughout the 1980s, President Reagan and George H.W. Bush certified that Pakistan did not; however in 1990 the elder President Bush refused to confirm that

Pakistan did not have nuclear technology, and as a result most economic and all

military aid was cut off. Aid to Pakistan dropped dramatically from 1991 to 2000

to a mere $429 million in economic assistance and $5.2 million in military assistance. The U.S. blocked delivery of major military equipment, including approximately 28 F–16 jets that Pakistan had already paid for. Pakistan continued to receive only a small amount of economic assistance, mostly in the form of food aid

and counternarcotics support. Aid to Pakistan was further restricted after its 1998

nuclear tests and General Musharraf’s 1999 coup.

45

Not surprisingly, this on-again, off-again history of U.S. assistance has left the

people of Pakistan and its leaders with serious concerns about the depth and reliability of the U.S. commitment to their well-being. This was especially true after

the withdrawal of the Soviet Union from Afghanistan in 1988 and the end of the

cold war when many leaders in this country mistakenly concluded that Pakistan

had lost much of its strategic and geopolitical value. Aid levels reflected this belief,

they dropped from $726 million in 1988 to $24 million 4 years later (after President

George H.W. Bush refused to certify Pakistan did not possess a nuclear weapon).

This has led many Pakistanis to conclude that they could not count on us and that

the U.S. is an unreliable ally at best.

Squares= Economic Aid Triangles= Military Aid

USAID Greenbook of Foreign Assistance. All figures are in millions of dollars. All figures are

in historic dollars. http://qesdb.cdie.org/gbk/index.html.

CURRENT U.S. AID TO PAKISTAN

Our current aid to Pakistan has been characterized by a lack of accountability,

transparency, coordination, and shortsightedness. Immediate U.S. security-related

goals, while critical in our efforts in the current fight against radical extremism, undermine and are often contradictory to our long-term strategic objectives for the

country and the region. An analysis of where current U.S. assistance is going is an

indication of our priorities and our long-term challenge in Pakistan.

The best estimate is that since 2001, the United States has given about $10.6 billion in foreign assistance to Pakistan. It appears to be distributed as follows:

• Sixty percent of U.S. aid has gone toward Coalition Support Funds (CSF). These

funds are given to reimburse the Government of Pakistan for its efforts in what

the Bush administration labels the ‘‘Global War on Terrorism’’ (GWOT). They

are considered by the U.S. administration to be a repayment rather than assistance. However, since there has been little accountability or transparency of this

funding, it is uncertain if in fact these funds are being used to fight the GWOT.

• Fifteen percent, or close to $1.6 billion, has been spent on security assistance.

The Pakistanis have used the majority of these funds to purchase major weapons systems, such as F–16s, for possible use in a conventional war with India,

the country they perceive as their major strategic threat.

• Another 15 percent has gone toward budget support or direct cash transfers to

the Government of Pakistan. This money is supposed to provide macroeconomic

stability and to free up funds for social spending, but few transparent accountability mechanisms are built in.

• The remaining 10 percent has been used specifically for development and humanitarian assistance.

46

This breakdown makes it clear that the vast majority of current U.S. assistance

goes to the Pakistani military. This is exactly the opposite of our aid policy prior

to 2001, where military aid was the smaller portion. Comparatively little has gone

toward economic development, institution building, or education assistance despite

the fact that improvements in these fields are central to eradicating extremism,

which thrives in the absence of development. The areas of most concern to the

United States, the borderlands of Pakistan—where al-Qaeda and the Taliban

thrive—have some of the lowest human development indicators in the world.

Approximately 60 percent of the population lives below the national poverty line and

female literacy is 3 percent in this area, among the lowest in the world. People’s

livelihoods in this area depend on subsistence agriculture and smuggling of items,

such as opium and weapons.

It is also important to note that because of a lack of transparency, the exact

amount of total aid to Pakistan is unknown. This lack of transparency is an enormous impediment to understanding not only our aid’s ultimate destination but also

its effectiveness. Furthermore, there is little coordination among the various agencies of the U.S. Government which disperse aid to Pakistan. The various departments and agencies responsible for allocating aid to Pakistan are each responsible

for only one aspect of the total program in Pakistan and oversee fragmented pieces

of the overall assistance picture. While this practice is not limited to our aid to Pakistan, it is a part of a much larger problem which will be discussed later on in the

recommendations section.

These problems notwithstanding, the magnitude of U.S. aid to Pakistan and the

importance of Pakistan to U.S. national security demand that Congress answer the

question: Is this aid advancing our long-term goals both within Pakistan in particular and the region in general?

To answer this question, it is important first to define current objectives for U.S.

aid to Pakistan. The Bush administration’s primary focus is on short-term military

objectives, specifically counterterrorism measures. These include the killing, capturing, and detaining of domestic and international terrorists. The priority given to

this goal is reflected in the distribution of the aid package. As noted above, the vast

majority of assistance is directed toward coalition-related activities in fighting terrorism, benefits to the Pakistani military in the form of security assistance, and direct cash transfers, to be used essentially at the government’s discretion. In all, this

represents an overwhelming proportion of the aid given since 9/11, 75 percent or

some $7.5 billion.

While the Pakistani security forces have provided some assistance in the killing

and capturing of a number of high-profile al-Qaeda terrorists and other militants,

this purely militaristic approach has not been effective in defeating the extremists.

In fact, as last summer’s National Intelligence Estimate revealed, in the Pakistani

borderlands al-Qaeda and the Taliban have reestablished their command and control and have reconstituted their training camps for suicide bombers and other extremists. Cross-border attacks into Afghanistan from Pakistan have increased dramatically in the last year. Moreover Talibanization is increasing all throughout

Pakistan, as members of the Taliban have gained control in the Northwest Frontier

Province and increased suicide attacks throughout the country.

The allocation of military aid by the Musharraf government has only compounded

the problem. It has committed an overwhelming portion of security-related aid to

noncounterterrorism related programs and weaponry, which have little to do with

U.S. national security. For example, instead of Pakistan spending the bulk of U.S.

assistance on counterterrorism measures (such as training, hardware, and equipment) for regular and irregular Pakistani military forces, the vast majority of our

foreign military financing (FMF) has gone toward the purchase of major weapons

systems such as F–16 fighters and other aircraft, antiship, and antimissile capabilities. In FY 2006, Musharraf’s government signed an arms deal with the U.S. for

$3.5 billion, making Pakistan the largest recipient of U.S. arms in the world in that

year; this amount nearly matches the total value of all Foreign Military Sales (FMS)

program purchases by Pakistan from the United States for the entire period from

1950 to 2001 (in current dollars). These systems have no role in counterterrorism

missions against al-Qaeda and the Taliban but are geared primarily to fight India,

which Pakistan sees as its major conventional rival.

Apart from killing and capturing some key leaders, the Pakistani military has

been very ineffective at meeting U.S. goals. In fact, on September 6, 2006, it actually signed a deal with tribal leaders in North Waziristan to withdraw the Army

and leave the area under the control of the militants. Three months later, al-Qaeda

and the Taliban used this deal to consolidate their control over the tribal regions

on the border with Afghanistan. It is only now, more than 6 years after the September 11 attacks, that the Bush administration, in collaboration with the Pakistani

47

Government, has finally begun working on a counterinsurgency strategy along the

borderlands of Pakistan to address the safe havens for al-Qaeda and the Taliban

and the growing extremism.

Recently, the administration has outlined a plan to enlist tribal leaders to fight

against al-Qaeda and the Taliban. The primary objective of this plan will be training, equipping, and financing a tribal paramilitary force, the Frontier Corps. The

proposal is modeled on the U.S. success in allying with local Sunnis against alQaeda in Al Anbar province in Iraq. However, the circumstances in Pakistan are

fundamentally different from Iraq. The conditions, which caused Iraqi Sunnis to

turn against a foreign al-Qaeda presence, do not exist in the Federally Administered

Tribal Areas (FATA). The Taliban is an indigenous force with deep roots in the area,

and it is supported by many of the tribes that this plan would attempt to enlist.

In the absence of reliable allies or a coherent strategy, flooding an unstable, hostile

region with money and arms is a recipe for disaster. The last thing that Pakistan

needs is more unaccountable, unconstitutional, and uncontrollable militias. We

should rather give priority to the political and administrative integration of FATA

and the extension to this area of constitutional, legal, and other public services.

Combating extremism and terrorism in Pakistan will require much more than

military solutions. The Bush administration has almost exclusively focused on these

elements, despite the recognition in its own National Security Strategy of 2006 that

democratic forces are in fact the real antidotes to terrorism.

The U.S. Agency for International Development’s (USAID) plan to provide $750

million in economic assistance to the Federally Administered Tribal Areas (FATA)

is a move in the right direction. While this may be a good start, it is late in the

game. Furthermore, it is unclear what the strategy is, or whether realistic accountability mechanisms can be put in place in such an unstable area. Moreover, given

that the region is openly hostile to foreign influence, the U.S. must be cautious

about putting a ‘‘Made in America’’ stamp on our assistance. In many of the programs already in place in FATA, aid is delivered anonymously to avoid the complications of association with the U.S. Government.

RECOMMENDATIONS

In considering the configuration of aid to Pakistan, it is important to keep in mind

the warning of Defense Secretary Donald Rumsfeld, ‘‘Are we capturing, killing, or

deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training, and deploying against us?’’

In analyzing the current structure of U.S. assistance to Pakistan, I am convinced

this is not the case. Battling extremism and terrorism in the long term in Pakistan

will require a shift in U.S. aid toward Pakistan. I recommend the following actions

to bring about this shift:

Developing a relationship with the people of Pakistan

In order to effectively battle extremism and terrorism in Pakistan, the U.S. must

shift from an aid policy centered in short-term military cooperation with an individual leader to one focused on developing a long-term relationship with Pakistan

and its people. In order to maintain our influence in Pakistan, we must engage with

all of Pakistan’s institutions and place a much greater emphasis on promoting democracy, economic development, and education. Throughout the country, ties to the

Pakistani military will continue to be important, but the U.S. must balance support

for the military with support for democratic development.

Expand nonmilitary aid

The United States should expand aid toward nonmilitary elements in Pakistan,

addressing the roots of the growing threats of extremism and terrorism and supporting democratic forces in Pakistan. As noted above, 75 percent of our current aid

(more than $7 billion since September 11, 2001) has gone to security-related assistance. This must change. Nonmilitary aid should be increased and directed toward

strengthening governmental institutions, moderate education, economic development

and civil society. As part of this, we must be careful about how we provide aid, as

assistance from the United States will be looked on with suspicion. We must be

wary of a ‘‘Made in America’’ tag. Senator Biden’s proposal to guarantee approximately $1.5 billion as a baseline for nonsecurity-related aid unconditionally is a

sound recommendation and should be supported. But unconditional cannot mean

unmonitored or unaudited.

Increase transparency and coordination

U.S. aid toward Pakistan must be more transparent and coordinated. There has

been insufficient oversight of how U.S. taxpayer dollars have been spent in Pakistan

48

and insufficient coordination within the U.S. Government. The Special Inspector

General for Iraqi Reconstruction (SIGIR) has been a critical tool in determining the

impact and efficacy of billions of dollars in reconstruction money to Iraq. The overwhelming financial burden to the United States, not to mention the stakes of the

effort in Pakistan, call for the same level of financial oversight in Pakistan. Similarly, the National Security advisor and his staff should ensure that all U.S. agencies are on the same page.

Condition Aid

Congress should condition some portion of the military aid on future political developments in Pakistan’s transition to a more democratic future. While this is not

feasible for all military assistance, Congress should put conditions on aid for bigticket weapon systems. Conditions should have performance criteria including: Ensuring that the State of Emergency is lifted as planned; releasing political prisoners;

restoring of the constitution (including restoration of the rights of assembly, free

speech, and other civil liberties); and restoring civilian rule of law and an independent judiciary. In addition, the U.S. must insist on debriefing A.Q. Khan to learn

the full extent of his proliferation activities. The ability of Saudi Arabia to get

Musharraf to allow former Prime Minister Sharif to return from exile demonstrates

that outsiders can influence the Pakistanis.

Maintain a relationship with the Pakistani military

Conditioning aid on political developments is obviously a difficult balancing act.

The military has been and will remain a major force in uniting the country, and

its cooperation is essential to the fight against al-Qaeda and by extension, our efforts to stabilize Pakistan. The United States needs to maintain its military-to-military contacts, even while threatening a withdrawal of some aid from the military

if it refuses to give more priority to counterinsurgency operations.

CONCLUSION

These recommendations should not and cannot occur within a vacuum. Several

diplomatic, political, and military steps are also necessary to achieve an enduring

relationship with Pakistan. Our aid must move beyond a largely transactional relationship between the United States and Pakistani leaders toward addressing the

country’s main drivers of instability and extremism. Our aid must empower the secular, civilian, democratic political leaders to bring real improvements in the lives

of everyday Pakistanis.

Pakistan has a strong and influential moderate majority. If that majority is not

allowed to express itself and voice its grievances with the government, this group

will build an alliance of convenience with Muslim extremists who, today, are still

in the minority. To prevent this, we must move away from a personal relationship

with whoever is controlling Pakistan at a particular time to a long-term relationship

with Pakistan’s people and institutions. To put it bluntly, the U.S. must engage the

Pakistani people, not just its rulers.

The U.S. should also adopt a regional approach. This will include reengaging with

all the countries in the region including China and India, renewing our focus in

Afghanistan, and beginning a phased U.S. troop withdrawal from Iraq in order to

provide more forces for Afghanistan, the real central front in the GWOT.

This will allow the U.S. to address core issues that are relevant to the Pakistani

people. These include existential concerns with India, the occupation of Iraq, core

Palestinian issues as well as our inconsistent policies on human rights and nuclear

weapons.

A stable and friendly Pakistan is critical to the United States interests in South

Asia as well as the Middle East. While our continued relationship and vast foreign

assistance gives us leverage in Pakistan, we must begin to reassess our current aid

policy as well as our overall strategy toward Pakistan and with its people in order

to maintain our influence in the country over the long term. I hope that this hearing

will be the beginning of this process.

Senator MENENDEZ. Thank you.

Dr. Hathaway.

49

STATEMENT OF DR. ROBERT HATHAWAY, ASIA PROGRAM DIRECTOR, THE WOODROW WILSON INTERNATIONAL CENTER

FOR SCHOLARS, WASHINGTON, DC

Dr. HATHAWAY. Thank you, Mr. Chairman. I appreciate being

asked to testify today. Thank you, Senator Hagel and Senator

Lugar, for being here. I need to say that I speak just for myself and

certainly not for my institution, the Woodrow Wilson Center.

Mr. Chairman, I want to applaud you for your lead on this issue,

your leadership, for your interest in the issue. I noted in the letter

that you wrote to Secretary Rice last month, to which you referred,

that you had raised sweeping questions about whether we were

getting good value for the $10-plus billion we’ve spent in Pakistan

since 2002. You didn’t remark publicly today but I think it’s worth

pointing out that you also, in this letter, took pains to emphasize

that you value Pakistan as a strategic ally and that your concerns

about the purposes to which United States assistance is being put

and about its effectiveness don’t in any way suggest that you have

doubts about whether or not this is an important relationship for

us.

To the contrary, I take your interest in this issue as a signal that

you believe this is a very important relationship and that’s why we

have to make it work. I’d like to simply concur in that judgment

and if I have critical things to say today, it certainly doesn’t suggest that I in any way think we can afford to, or ought to, abandon

Pakistan.

I’d like to touch—I’d planned to spend all my time talking about

aid but I would like to shorten what I planned to say because I’d

like to respond to a couple of other things that have come up. First

of all, I want to associate myself with what my two colleagues here

have said. I think their advice is very well taken. I think all of us

agree that we have not gotten good value for the money we have

spent in Pakistan. I say this as someone who cares about Pakistan,

who thinks that Pakistan is going to play a large role, for good or

ill, in the coming years. I think this is really a wasted opportunity

on our part. As a taxpayer, I also resent that we have not gotten

better value for our money. I think we can do better but equally

important, I think we have to do better.

Given the modest record we have compiled with our aid program

in recent years, I’m pleased to hear that a review of the aid program is underway, but I would like to join you, Mr. Chairman—

and I really am emphasizing one thing and then raising a second

point. You cannot have a serious review of the aid program if you

simply fence off the three quarters of that aid which goes through

the Department of Defense. Now, I know this raises certain jurisdictional questions for this committee, but I would urge you, Mr.

Chairman, and the other members of the committee, to perhaps

think about joining forces with other committees to do a thorough

going top-to-bottom review of the entire package of aid and other

transfers to Pakistan in recent years. Otherwise, I don’t think

we’re going to get very far.

The other thing I would like to say about this review is that I’m

extremely troubled by the notion that it’s going to be carried out

exclusively by agencies in the executive branch. I’m not sure you’re

going to get the level of thoroughness or incisiveness if you ask

50

those who are responsible for the program themselves, to then give

you a critical assessment of it, and I would urge you to go to another independent body—maybe the GAO, maybe an ad hoc congressional group. I’ll leave that to you but if we’re going to have

a serious review of what I think is an important issue, then I think

it has to be done correctly.

Another point, I think it’s important to reiterate that despite our

rather indifferent record in Pakistan in recent years, American aid

can make a difference. There has been a reference, I think several

times already today, to the timely American response and the generous response in the aftermath of the horrific Kashmir earthquake

2 years ago. Clearly, we saved lives and clearly we made friends.

Pakistanis even 2 years later, continually make a point of thanking

Americans who visit their country, for the American response.

This episode, to me, underscores the fact that aid can be effective; that aid can win friends for the United States. But it also

serves to highlight the missed opportunities that characterize, I

think, so much of the rest of our program.

If I may now, I’d like to skip away from aid a bit and refer to

a couple of other things that have been said. A sense—some in this

discussion, some outside this room, a sense that some people feel

that things have turned a corner; that things are now heading in

a better direction in Pakistan. They refer, for instance, to President

Musharraf’s resignation from the army, the fact that you now have

a firm date for the election, the fact that Musharraf has promised

to lift the state of emergency in 10 days, to the fact that the two

most prominent opposition politicians have returned to the country.

Mr. Chairman, this represents a fundamental misrepresentation

of the actual situation in Pakistan. Things are not getting markedly better. Pakistan still faces a very real and indeed, even a

growing crisis. Just this week, professors and students at one of

Pakistan’s most prestigious universities were arrested for doing

nothing more than criticizing the imposition of the state of emergency. Just this week, new blows were struck against the judiciary

in what appears to be an effort to impinge upon the independence

of the judiciary. Just this week, it was ruled that Nawaz Sharif

was ineligible to run in the elections next month.

A great deal of stock has been placed on the fact that emergency

rule is to be lifted in 10 days but this is not going to return us to

the status quo ante. You will still have restrictions on the media.

Someone earlier today talked about virtually all the radio and

television stations are back on the air, but only those who have

signed a pledge not to ridicule the government, not to criticize the

government, in fact, are back on the air. Restrictions even after the

end of emergency rule will be placed on politicians and on political

assembly. The charges that have been lodged against the lawyers

will remain in place. The judges that were fired will still be fired.

It will still be permissible for civilians to be tried by military

tribunals.

So, I don’t think that we can assume that things will simply be

grand once the emergency rule is lifted. I would remind you what

also has been referred to, that serious observers, both inside Pakistan and outside observers, have been talking for well over a year

about the difficulties of having genuinely free and fair elections.

51

One of your colleagues, former Senator Daschle, went to Pakistan

in October, before the imposition of emergency rule, and he came

back and issued a report expressing very grave concern whether or

not there was a possibility of having genuinely free elections. Those

concerns have not yet been adequately addressed.

So, I would simply suggest that one of my nightmares is that we

wake up on the 9th of January, the day after the elections, and we

find ourselves faced with a new Parliament, which has been selected by patently fraudulent means; that has no credibility, that

has no legitimacy in the eyes of the vast majority of the Pakistani

people and then what do we do?

Rather than finding ourselves in that position, and here I’d like

to associate myself with something that Senator Corker said,

rather than finding ourselves in that position, I hope very much

that we put a great deal of pressure on the Pakistani Government

at this point. Now, I think I would disagree with Senator Corker’s

assessment that we are putting pressure. I don’t think we’re putting nearly as much pressure as we ought to. I would refer you to

President Bush’s ABC interview just a couple weeks ago, where he

praised Musharraf—this is after the imposition of emergency rule,

where he praised Musharraf for his democratic credentials. I would

refer you, as Ambassador Schaffer mentioned a moment ago, to the

repeated references by senior American officials to Musharraf as

‘‘indispensable.’’ I think these types of messages simply send the

wrong signals to the Pakistanis, including to our friends or those

who should be our natural allies in Pakistan. They feel betrayed

by us and I would hope that between now and January 8 as well

as afterward, we would make it clear that Americans stand not

with an individual—or not, frankly, with a political party, but with

the country and with the people of Pakistan.

Last, if I may, simply address—because, Mr. Chairman, you read

two statements from my testimony and our previous panel took

issue with them. If I might simply address both of those issues

very briefly.

You first of all read my passage saying the United States has

made no effort to distinguish between military assistance useful for

our counterterrorism efforts and that which has little use in combating al-Qaeda. I, in fact, had in mind things like F–16s, like airto-air missiles. To the best of my knowledge, al-Qaeda has neither

a navy nor an air force. One can, I think, perhaps make a minimal

argument that in a broad, generalized way, this may help the Pakistani Army, maybe confidence, maybe something else. But the

troops on the ground, particularly the paramilitary forces in the

tribal areas, they don’t have night vision goggles, we just heard.

They don’t have protective vests. In some cases, they apparently

don’t even have proper boots. If we’re providing or making available these other types of major systems and simultaneously not

providing the things that are clearly and directly related to

counterterrorism, then I think perhaps we’re making a wrong judgment.

My last point, Mr. Chairman, you read my comment about economic and development programs that frequently have been

unfocused, poorly conceived or lacking in responsible oversight. Let

me just give you two examples so you’ll know what I had in mind.

52

Two examples don’t prove the case but I do think they’re illustrative.

I think it’s well documented. In fact, I’ve gotten this from a very

senior AID official that we have provided hospitals and clinics in

Pakistan with these very fancy surgical lights which don’t cast a

shadow, and with autoclaves and other equipment that requires

electricity, only to find that these hospitals don’t have electricity

and that moreover, there are no plans to hook them into the electrical grid. So I asked, how is this possible? And I was told, we

signed a contract with a firm who provides this equipment. We go

back and ask the firm, how come this is the case and the firm, the

contractor says, it’s not our business. We didn’t sign a contract to

provide electricity or to make sure this equipment was used. We

simply signed the contract to provide the equipment.

A different case, again, a story I’ve heard from a senior AID official. We are giving scholarships to young Pakistanis to study in the

United States and I absolutely applaud this, but I’m also aware of

a particular instance where we awarded a scholarship to a young

man from the tribal area who spoke no English, who speaks no

Urdu. He speaks Baluch. So he was asked, through a translator,

so how is he going to benefit from this experience? And after further questions, it turned out, in fact, there was no possibility of

him benefiting and in fact, all his family had been killed in the

tribal areas and the chances of him even going to school were very

minimal. The chances of him then returning to Pakistan were virtually nonexistent.

Again, two examples don’t prove a case but they are the types

of things I had in mind. I could go on at greater length. I’m not

going to try your patience.

Thank you for your interest in this.

[The prepared statement of Dr. Hathaway follows:]

PREPARED STATEMENT OF DR. ROBERT M. HATHAWAY, ASIA PROGRAM DIRECTOR,

WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS, WASHINGTON, DC

EXECUTIVE SUMMARY

• U.S. assistance to Pakistan since 2002 has been far too heavily weighted in

favor of military assistance, without requiring or even expecting commensurate

results in the struggle against extremism.

• We have made no effort to distinguish between military assistance useful for

our common counterterrorism efforts, and aid with little or no connection to the

war against al-Qaeda, nor made provision of the latter contingent upon cooperation in combating the extremists hiding in FATA and elsewhere in Pakistan.

• We have allowed a blanket justification of counterinsurgency to be used to

rationalize assistance programs and arms sales with minimum or nonexistent

connection to that objective.

• America’s seemingly open-ended largesse to the Pakistani military has encouraged the widespread belief in Pakistan that the United States sides with that

country’s dictators rather than its democrats. In this fashion, we have alienated

potential friends and embittered those Pakistanis who share our values and our

vision for their country.

• We have established economic and development programs that have frequently

been unfocused, poorly conceived, or lacking in responsible oversight.

• We have required neither stringent accountability mechanisms for our aid,

nor the sorts of performance benchmarks we routinely impose on other aid

recipients.

General precepts for thinking about American assistance to Pakistan:

53

1. American aid as a two-way bargain

American assistance, to Pakistan as to all recipients, is not simply an act of altruism. The United States has every right to expect something in return for U.S. aid.

Administration officials have never adequately explained why Washington should

not require that vigorous U.S. support requires vigorous Pakistani support in

return.

2. Failure to balance U.S. objectives

The administration has allowed its understandable preoccupation with punishing

those responsible for 9/11 to obscure other equally important priorities—combating

domestic extremism within Pakistan; building strong political institutions; supporting constitutionalism and the rule of law; stopping the leakage of dangerous nuclear technology.

3. Beware of a counterterrorism justification that justifies all

The administration has justified virtually all U.S. assistance to Pakistan in terms

of counterterrorism. To the extent that the Pakistani security apparatus has been

employed since November 3 in rounding up lawyers, opposition politicians, journalists, and human rights activists, it is difficult to argue that unconditional backing

for Pakistan’s military supports the war against terrorism.

4. Inaction conveys messages just as forcefully as action

Pakistanis will draw conclusions about Washington’s position and preferences regardless of whether the White House or Congress endorses or condemns, issues

tepid equivocations, or remains absolutely silent. Under these circumstances, it behooves us to stand with those who should be our natural friends in Pakistan.

5. Be mindful of history, but not bullied by it

If the United States and Pakistan are to build a successful partnership for the

long haul, the stripping away of the mythology behind this relationship—of which

the narrative of American perfidy is a prime example—must be a priority.

6. Be sensitive to Pakistani political realities

It will be extremely difficult, if not impossible, to obtain Pakistani cooperation for

any U.S. action that suggests American dictation. This is especially true in the field

of counterterrorism.

7. Be modest in our expectations

We should be very careful not to overestimate the amount of influence U.S. aid

gives us. The United States has very little ability to force Musharraf—or any other

Pakistani leader—to act contrary to what he believes his interests are, or to compel

Pakistan to do what it would not otherwise do. As an instrument of coercion, U.S.

aid is an exceedingly blunt weapon.

8. Build for the future

American assistance, if employed deftly, gives the United States tools with which

to nudge Pakistan in desired directions. At a minimum, we can do a better job of

laying the groundwork for a post-Musharraf United States-Pakistan partnership

that would enjoy broad popular support in both countries. By supporting those Pakistanis whose values parallel our own, U.S. aid can help prepare the way for a more

sustainable relationship in the long run.

Finally, Congress should insist upon a thorough review of U.S. assistance to Pakistan since 2001, including assistance funneled through the Department of Defense.

This review ought to be conducted by a fully independent body, and not simply by

the Department of State.

Pakistan’s post-9/11 partnership with the United States has brought Islamabad

diplomatic support, political protection, international legitimacy, and immense sums

of aid. Yet, Pakistan is a huge disappointment to many Americans. In their eyes,

there exists a gaping disconnect between the strong backing and abundant assistance Washington has provided Islamabad over the past half dozen years, and what

the United States has received from Pakistan in return.

Notwithstanding the close official partnership between Washington and Islamabad that has developed since 2001, Pakistan today is a scary place for Americans.

Polls suggest that it is one of the most anti-American countries in the world. Since

9/11, Islamist political parties harboring a vision for Pakistan, that produces nightmares for Americans, have achieved unprecedented prominence. Pakistan’s Federally Administered Tribal Areas (FATA) along the Pakistan-Afghanistan border proVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
54

vide a safe haven for the al-Qaeda terrorists responsible for the September 11, 2001,

attacks on the United States, as well as for Taliban insurgents battling U.S. and

NATO forces in neighboring Afghanistan. Suicide bombings and wanton violence are

increasingly common in the settled areas of Pakistan, provoking warnings of a

‘‘creeping Talibanization’’ of the country. Many informed analysts worry that

Pakistan is in danger of becoming the center of global Islamic terrorism. Rather

than close relations producing a Pakistan comfortable for Americans, the post-9/11

partnership between the two seems to have tied the United States to a Pakistan

inimical to American interests and American values.

I appear before this committee today as a firm supporter of the United StatesPakistan partnership. I believe that American national interests require a cooperative and mutually supportive relationship with Pakistan. I salute the courage and

leadership displayed by President Musharraf in the days after 9/11, when he aligned

his country with the United States in the effort to punish those responsible for the

horrific attacks on New York and Washington. And I am a strong advocate of a robust U.S. assistance program for Pakistan.

Indeed, it is for these very reasons that I am troubled by the nature of the American assistance program to Pakistan in recent years, and most especially by the failure of this program to bring the results we had hoped for.

• In my judgment, U.S. assistance to Pakistan since 2002 has been far too heavily

weighted in favor of military assistance, without requiring or even expecting

commensurate results in the struggle against extremism. • We have made no effort to distinguish between military assistance useful for

our common counterterrorism efforts, and aid with little or no connection to the

war against al-Qaeda, nor made provision of the latter contingent upon cooperation in combating the extremists hiding in FATA and elsewhere in Pakistan. • We have allowed a blanket justification of counterinsurgency to be used to rationalize assistance programs and arms sales with minimum or nonexistent connection to that objective. • We have largely ignored the impact that America’s seemingly open-ended largesse to the Pakistani military has had in encouraging the widespread belief

in Pakistan that the United States sides with that country’s dictators rather

than its democrats. In this fashion, we have alienated potential friends and embittered those Pakistanis who share our values and our vision for their country. • We have established economic and development programs that have frequently

been unfocused, poorly conceived, or lacking in responsible oversight. • We have required neither stringent accountability mechanisms for our aid, nor

the sorts of performance benchmarks we routinely impose on other aid recipients. Indeed, in our eagerness to solidify our post-9/11 partnership with

Islamabad, it has sometimes seemed as if we were simply throwing money at

Pakistan, without asking whether it was being used in ways that would promote American objectives.

But most troubling of all, we do not seem to have accomplished very much with

the more than $10 billion we have provided Pakistan since 2001.

• Clearly this assistance has not enabled the Pakistan military to eliminate the

safe havens on Pakistani soil enjoyed by al-Qaeda and the Taliban.

• It has not prevented militants based in Pakistan from slipping across the border

into Afghanistan and attacking American and NATO forces, as well as Afghan

civilians loyal to President Karzai.

• It does not seem to have assisted in bringing internal stability to Pakistan.

• It manifestly has not promoted either democracy or a respect for human rights

and the rule of law in Pakistan.

• It has not given us a Pakistani leadership prepared to do American bidding—

though certainly this is not the intent of U.S. assistance, nor should we ever

expect that U.S. aid will produce a compliant recipient government.

• While U.S. assistance has played a useful role in addressing the basic human

needs of some Pakistanis, Pakistan’s deficiencies in this area are so great that

American aid has been little more than a drop in the bucket.

• And obviously, if the polls about anti-Americanism in Pakistan are to be believed, this $10 billion has not won many friends for the United States.

And indeed, this $10 billion figure that is customarily mentioned represents only

part of the story. The size of the classified transfers from Washington to Islamabad

can only be guessed at. Some analysts suggest covert payments may have exceeded

$10 billion, raising the total U.S. assistance package to Pakistan over the past 6

years to something approaching $20 billion.

There is, fortunately, one significant exception to this otherwise discouraging

record. Pakistanis of all political persuasions acknowledge the importance of U.S.

55

aid in the immediate aftermath of the October 2005 Kashmir earthquake. Without

a doubt, there are people alive today only because of the timeliness and generosity

of the American response. More than 2 years later, Pakistanis still make a point

of thanking Americans for their help in the days and weeks following the earthquake. This episode underscores the fact that aid can be effective, and thus serves

to highlight the missed opportunities that characterize much of the rest of the U.S.

assistance program to Pakistan since 2001.

Those who believe in the importance of the United States-Pakistan partnership,

and all those concerned that taxpayer money be spent wisely, need to ask why,

given the magnitude of American assistance to Pakistan over the past 6 years, and

given the commitment and good intentions of countless hard-working American officials and their Pakistani colleagues, the U.S. assistance program has produced such

indifferent results. There are, I believe, a number of explanations:

• First, the sheer size of the problem presented by Pakistan. With 160 or more

million people and woefully low rankings on virtually all measures of human

security, Pakistan presents monumental development challenges. Its political

and educational institutions are similarly deficient. Patience and a long-term vision are absolutely essential when considering assistance to Pakistan. Progress

is unlikely to come quickly, or cheaply. • Also handicapping American assistance efforts was the absence of a U.S. aid infrastructure in Pakistan, because of the termination of virtually all U.S. assistance programs in that country in the 1990s, as a result of the Pressler amendment. • Washington’s preoccupation with the war on terrorism, as the United States

has defined that war, has given the U.S. Department of Defense an insurmountable advantage in shaping the American aid program for Pakistan. This has ensured that the bulk of U.S. assistance would be military in nature, and would

be directed toward the Pakistani military. As important as the security dimension of our relationship with Pakistan is, this heavily military tint to U.S. aid

has served to limit its long-term effectiveness. • The U.S. aid effort in Pakistan has also been skewed by the ease of working

with the Pakistani military, in some respects the only functioning institution in

the country. This too has encouraged an approach in Washington that gives

precedence to the security component of the relationship.

• And finally, the political reality in Washington is that it is infinitely easier for

the Pentagon to secure congressional approval for large sums of money to be

spent overseas than for the State Department and its aid arm. This is a political fact of life at any time, but the shock of 9/11 tilted the political balance

in Washington even further toward the Pentagon.

Given the modest record of the American aid program in Pakistan in recent years,

I am pleased that a review of the U.S. assistance program to Islamabad is now

under way. However, I am troubled that Congress apparently intends that this review should be carried out primarily by the executive branch. I would suggest that

the historical record of such reviews over the years raises questions whether a study

conducted by the agencies, and perhaps even the same individuals, responsible for

the program in the first place will meet the level of independence, thoroughness,

and incisiveness Congress expects.

In addition, I am even more concerned by indications that moneys funneled to

Pakistan through the U.S. Department of Defense will fall outside the purview of

this review. Inasmuch as the great majority of U.S. assistance to Pakistan in recent

years has come from the Pentagon—most notably, Coalition Support Funds (CSF)—

I cannot conceive of any serious review that ignores DOD funding. I recognize that

CSF is not customarily considered foreign assistance, but is ostensibly to reimburse

the Pakistani military for expenses incurred in the joint fight against terrorists. But

accounting procedures for these transfers appear so lax that it is impossible to say

with any confidence how much of the CSF spigot actually reimburses Pakistan for

counterterrorism operations. I would urge this committee, Mr. Chairman, perhaps

working with other Senate committees, to provide for a thorough-going review of all

U.S. aid and other transfers to Pakistan since 2001 by a fully independent body.

U.S. ASSISTANCE AND THE POLITICAL CRISIS IN PAKISTAN

Since the imposition of emergency rule in Pakistan last month, Washington has

seen considerable discussion concerning how the United States should react to this

unfortunate development. Some of this discussion has featured calls for the suspension of some or all of the U.S. assistance program to Pakistan. Other analyses have

viewed the declaration of emergency rule as a further indication that U.S. policy in

Pakistan has failed, and called for a rethinking of the entire U.S. aid program. With

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this as the context, I offer a handful of general observations that ought to guide U.S.

decisionmakers in thinking about American assistance, both between now and the

Pakistani parliamentary elections announced for January 8, 2008, and beyond that

point as well.

1. American aid as a two-way bargain

Some analysts argue that since supporting Pakistan at this crucial time is so

clearly in the U.S. interest, this should be sufficient justification for the Pakistan

aid program. We should not, so this argument goes, expect anything specific from

Pakistan in return.

I reject this argument. American assistance, to Pakistan as to all recipients,

should be thought of as a two-way bargain, not simply an act of altruism. The

United States has every right to expect something in return for U.S. aid. It is not

unreasonable, for instance, to demand that U.S. assistance be spent and managed

efficiently, honestly, and only for the purposes for which it is intended. It is not unreasonable to insist that U.S. aid not be used to undermine other important U.S.

objectives. These expectations apply to all recipients of American assistance.

In the case of Pakistan, administration officials have never adequately explained

why Washington should not expect that vigorous U.S. support requires vigorous

Pakistani support in return. At no point, so far as I know, has a senior American

official made the commonsense observation that a Pakistani failure to live up to its

commitments in our joint enterprise will lessen U.S. obligations in this mutual partnership. Nor has the administration ever spelled out at what point Pakistani misbehavior would cause Washington to rethink the virtues of the blank check. It is

little wonder, then, that the results of America’s support for Pakistan have been so

meager.

2. Failure to balance U.S. objectives

The United States has a long history of failing to calibrate its objectives for Pakistan in a balanced fashion. The national priorities of the two countries have seldom

lined up precisely, although neither has been eager to draw attention to this disconnect. In the early decades of the cold war, Washington allowed its desire for a

staunch anti-Communist ally in South Asia to blind it to the fact that for Pakistan,

India was the real enemy. As a consequence, American officialdom was also largely

oblivious to the impact its military assistance to Islamabad was having in New

Delhi—a shortsightedness that greatly handicapped America’s relations with the region’s largest power.

Following Moscow’s invasion of Afghanistan in 1979, U.S. policymakers eager to

arm Afghan opponents of the Soviet occupiers paid scant attention to the extremist

views of the Afghan jihadis their Pakistani friends were recruiting with CIA funds.

Many of those whom we are fighting today first honed their insurgent skills with

American guns and moneys.

In the aftermath of the September 11th horror, the administration has allowed

its understandable preoccupation with punishing those responsible for the attacks

to obscure other equally important priorities—combating domestic extremism within

Pakistan, building strong political institutions, supporting constitutionalism and the

rule of law, stopping the leakage of dangerous nuclear technology. This, too, has

skewed the overall U.S. assistance program to Pakistan by channeling the overwhelming preponderance of U.S. assistance to institutions and personnel who are

frequently least sympathetic to the progressive, moderate Pakistan we wish to see

established.

3. Beware of a counterterrorism justification that justifies all

A senior administration official in the immediate aftermath of Musharraf’s November 3 imposition of emergency rule stated that while all U.S. aid to Pakistan

would be reviewed, Washington would be ‘‘mindful not to do anything that would

undermine ongoing counterterrorism efforts.’’ Such a declaration would seem to

make eminently good sense, were it not for the fact that the administration has

tended to explain and defend virtually all U.S. assistance to Pakistan in terms of

counterterrorism. One wonders whether Musharraf did not read this official’s remarks to mean that he could safely ignore calls from the administration to restore

constitutional rule.

Of course we must avoid any action that disrupts military operations against our

enemies. But to the extent that the Pakistani security apparatus has been employed

since November 3 in rounding up lawyers, opposition politicians, journalists, and

human rights activists—people who should be America’s natural allies and best

friends—it is difficult to argue that unqualified backing for Pakistan’s military supports the war against terrorism.

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4. U.S. inaction conveys messages just as forcefully as action

Well-intentioned persons will warn against appearing to meddle in Pakistani

affairs by threatening to suspend, pare, reprogram, or otherwise alter the U.S. assistance package at a sensitive moment in Pakistan’s political life. Given the

present unpopularity of the United States in Pakistan, this is not advice to be dismissed. But it ignores the reality of American power.

In fact, U.S. influence in Pakistan is so pervasive that silence or inaction on

Washington’s part constitutes meddling just as much as blustery rhetoric or coercive

legislation. Pakistanis will draw conclusions about Washington’s position and preferences regardless of whether the White House or Congress endorses or condemns,

issues tepid equivocations, or remains absolutely silent. These conclusions will not

simply influence the actions of Pakistan’s central actors. They will also further the

perception in Pakistan that the United States is trying to manipulate political

events in that country.

In other words, given America’s power and influence, it is literally impossible to

avoid meddling, ever if that is Washington’s intent. Counsel to stay out of affairs

we do not fully understand, no matter how wise in theory, does not provide adequate guidance to policymakers.

Under these circumstances, it behooves us to stand with those who should be our

natural friends in Pakistan—small ‘‘d’’ democrats, human rights activists, civil society, the media, and the lawyers who have led the protests against the government’s

attack on judicial independence. Doing so not only supports our values, it also helps

lay the groundwork for an enduring United States-Pakistan partnership once, as is

inevitable, Musharraf passes from the scene. And—although this is not guaranteed—it may also help garner public support in Pakistan for a serious fight against

extremism.

Congressional actions taken, or not taken, with respect to the aid program in

Pakistan, either before the January 8 polling or after that election, should reflect

an awareness that Washington’s every step will be closely scrutinized in Pakistan.

Congress should not hesitate to act, if action becomes appropriate, for fear of appearing to manipulate or meddle in Pakistani events.

5. Be mindful of history, but not bullied by it

Administration officials are rightly sensitive to the widespread perception in Pakistan that the United States is an unreliable ally, that Washington uses Pakistan

for its own purposes and then walks away, and therefore that Pakistani decisionmakers ought not put all their eggs into the American basket. This at times has

produced an American approach that subordinates contentious issues for fear of exacerbating Pakistani distrust or apprehensions of abandonment.

This narrative of American ‘‘betrayal’’—widely endorsed in the United States as

well as in Pakistan—points to the termination of most U.S. assistance to Pakistan

in 1990 (pursuant to the Pressler amendment) as a result of Pakistan’s nuclear

weapons program as exhibit No. 1. It is something of a mystery why this historical

memory emphasizes only the American half of the ‘‘betrayal,’’ while ignoring the fact

that Pakistan repeatedly lied to the United States about its nuclear activities over

a period of many years, even though Islamabad knew full well that U.S. law required invocation of the Pressler amendment unless Washington could certify that

Pakistan’s nuclear program was exclusively peaceful in nature.

If the United States and Pakistan are to build a successful partnership for the

long haul, the stripping away of the mythology behind this relationship—of which

this narrative of American perfidy is a prime example—must be a priority. In considering possible action on the U.S. aid program to Pakistan, American policymakers must take Pakistani sensibilities into account. But U.S. officials should not

be cowed by a distorted mythology of American betrayal.

6. Be sensitive to Pakistani political realities

American officials must accept the fact that both the Musharraf government and

any likely successor government will be constrained in what it feels able to do by

Pakistani public opinion. While Musharraf is sometimes viewed as a military dictator, in fact his freedom of action is determined in part by what he believes the

public will tolerate. And one factor in his current low standing among the Pakistan

public today—though by no means the only one—is the widespread perception that

he has sacrificed Pakistani interests in order to cozy up to the Americans.

‘‘Busharraf’’ is a widely used term of derision for the Pakistani President.

Under these circumstances, it will be extremely difficult, if not impossible, to obtain Pakistani cooperation for any U.S. action that suggests American dictation.

And this is undoubtedly how many Pakistanis would interpret any effort to create

benchmarks or impose conditions on future U.S. assistance. This is not an argument

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against congressional action of this sort; under many circumstances, such action

may make eminent good sense. But American decisionmakers should not move in

this direction without being mindful of the probable reaction in Pakistan.

This warning against actions that might be perceived as American bullying or coercion will be equally valid for any government that may be formed following next

month’s elections, and especially should that government be headed by Benazir

Bhutto, who already seems to have lost support in Pakistan because of the perception that she is America’s preferred candidate.

Such cautions against the perception of American dictation pertain particularly to

counterterrorism. The war in Afghanistan, so utterly justified in American eyes, is

hugely unpopular among Pakistanis. Expecting Pakistanis to demonstrate their

gratitude for American assistance by working closely with the United States against

Taliban and al-Qaeda fighters in FATA or elsewhere in Pakistan is to court disappointment.

7. Be modest in our expectations

We should be very careful not to overestimate the amount of influence over Pakistan U.S. aid gives us. Many Americans assume, without much reflection or analysis, that Washington’s lavish aid to Islamabad affords the United States immense

political leverage over Pakistan. Other analysts point to America’s vastly superior

strength vis-a-vis Pakistan as the source for this supposed leverage. In either case,

so the argument goes, the United States should be able to use this leverage to persuade, entice, or coerce Pakistan into a more effective counterterrorism partnership

and/or a more democratic political system.

It is, however, no easy matter to translate great power into influence. Members

of this committee will surely recall that neither the threat (in the 1980s) nor the

imposition (in the 1990s) of U.S. sanctions terminating American assistance was

sufficient to persuade Islamabad to toe the American line on its nuclear program.

The difficulty of leveraging even a huge aid program into political clout was once

again illustrated last month by the administration’s inability to dissuade President

Musharraf from declaring emergency rule.

In reality, the United States has very little ability to force Musharraf—or any

other Pakistani leader—to act contrary to what he believes his interests are, or to

compel Pakistan to do what it would not otherwise do. While American assistance

serves a variety of U.S. interests, its utility as leverage is highly overvalued. As an

instrument of coercion, U.S. aid is an exceedingly blunt weapon.

Unfortunately, the administration has gone to the other extreme, and in essence

given Pakistan a free hand, no matter how half-hearted or incomplete its collaboration with the United States. Not only has this approach eliminated whatever modest

leverage our aid program might have given us. In the eyes of many Pakistanis, it

has also placed the United States on the wrong side in Pakistan’s domestic political

struggle for a more democratic government.

8. Build for the future

In fact, American assistance, if employed deftly, can give the United States tools

with which to nudge Pakistan in desired directions. The U.S. Congress could lay out

political or economic benchmarks in return for the continuation of certain forms of

U.S. assistance, especially that unrelated to the battle against extremism or designed to meet basic human needs. Assistance to meet basic human needs, such as

medical care, clean water, and schools, should in my judgment never be held hostage to the performance of a particular Pakistani Government; it constitutes one of

the most tangible signs of a U.S. commitment to a long-term partnership with the

Pakistani people.

What of using the American aid program now either to punish Musharraf for his

declaration of emergency rule, or to pressure him to open up the system and permit

genuinely free and fair elections in the near future? In truth, the likelihood of successfully pushing Musharraf to embrace the sorts of democratic reforms that might

well end his hold on power is not very great.

Nonetheless, actions that bear no fruit in the near-term may produce significant

results in the longer term. Ronald Reagan’s denunciations of the ‘‘evil empire’’ did

not cause the Soviet Union to collapse, but his words inspired hope and courage

throughout the former Soviet bloc, and won countless friends for the United States.

And so it might be in Pakistan. At a minimum—and perhaps this is the most that

one can reasonably expect—we might do a better job of laying the groundwork for

a post-Musharraf United States-Pakistan partnership that would enjoy broad popular support in both countries. Using the U.S. assistance program as a form of coercion may not bring short-term gains. But by speaking out on behalf of what we call

American values, and by supporting those Pakistanis whose values parallel our own,

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U.S. aid may help prepare the way for a more sustainable relationship in the long

run.

MUSHARRAF IS NOT PAKISTAN

Pakistanis are fond of saying that events in their country are determined by the

three As: Allah, the army, and America. Though frequently uttered in jest, the

adage also captures an underlying fatalism and willingness to avoid blame that is

endemic to Pakistan. Only Pakistanis can write the history of their country. Only

Pakistanis can determine whether Musharraf’s avowed goal of a moderate, progressive Pakistan will be achieved.

But as they take up this task in the months and years ahead, the United States

owes it to its Pakistani friends to remember that support for a particular Pakistani

leader is not the same as supporting Pakistan. We have seen too much of the former

in recent years. It is high time that we renew our commitment to the country and

its people, who, after all, will remain long after Musharraf passes from the scene.

Senator MENENDEZ. Thank you all for your testimony. We’ll go

through a round of questions and the Chair recognizes himself.

Dr. Hathaway, I just wanted to pick up from some of your observations a little earlier in your testimony. You heard me ask the

Secretary to give him another shot about making the record pretty

clear. Do you believe that the course that we’re on, 28 days before

the election, which is the date in which the emergency decree is

going to be lifted, that we can really consider the elections good,

transparent, and fair at the end of the day? And if so, what has

to happen from here to then to make that all happen?

Dr. HATHAWAY. I think all of us are hesitant to prejudge it but

what I will tell you, Mr. Chairman, is this: I’ve been in close contact, including trips to Pakistan, but I’ve been in close contact with

Pakistanis who have been warning me for well over a year now,

under current conditions, there’s no chance in the world that we

can have free and fair elections.

I don’t think any of the concerns that have been raised and Secretary Boucher mentioned a number of them, I don’t think any of

those concerns have been adequately addressed. It has not yet been

mentioned but it frequently is mentioned, including in Senator

Daschle’s report: Intimidation and harassment by the Pakistani intelligence services. The fact that polling places—there’s a likelihood

that the polling places will not be clearly designated. The fact—and

this took place in an election not long ago, maybe a local election.

Women were simply excluded, were not allowed to vote, even

though legally, they had every right to vote.

What has to be done? I think there is a whole host of things. A

necessary though not a sufficient step is to immediately lift the

emergency rule. We have to give all parties and all politicians’

equal access to the media and it’s not at all clear that that’s going

to happen. You have to have a real electoral commission. Again,

what others who are far better informed than I have told me is

that no one believes in the current electoral commission.

Senator MENENDEZ. That’s a lot in a little over a month.

Dr. HATHAWAY. And that’s only the beginning of my list but, yes,

sir; it is.

Senator MENENDEZ. Dr. Korb, $10 billion. Do you think we

should be talking to A.Q. Khan?

Dr. KORB. Very definitely. I mean, again, if you go back to the

2004 campaign, the one thing Senator Kerry and President Bush

agreed on was that a nuclear weapon or nuclear technology falling

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into the hands of a terrorist group of a global reach was the greatest threat to the United States and here is the person who can tell

us more about where that is than anybody else. So if the fact that

we haven’t used that leverage up to now, I think it’s high time that

we did this, particularly the military. Now, the military wants to

buy a lot of this equipment and things and they’re the ones, I

think, that can lean on the government and if you do have a different government there, a government that is not under the control of President Musharraf, they may be more willing to do that.

But I think some part of the aid has got to be conditioned on.

Senator MENENDEZ. Why do you think we haven’t used our leverage in that respect and why do you think there is resistance to give

us access to him?

Dr. KORB. Well, I think that people are concerned that we will

not get the help we want from Pakistan. They overemphasize the

help they’ve actually given us in terms of fighting the war on terror

and I think there is also a legitimate concern that a lot of our effort

in Afghanistan, supplies have to move through Pakistan. So I think

that’s a reason why people have been somewhat unwilling to do

that. But I think it’s clear we do have some leverage. I don’t say

use all the aid but I think that some portion of it, particularly the

military aid, has to be conditioned on that.

Senator MENENDEZ. Finally, let me ask you about some statements both in your written testimony as well as in the report you

coauthored. You call it the Forgotten Front and while it was focused primarily on Afghanistan, it did talk about Pakistan as well.

You particularly mention there that there is very little United

States support for Pakistan’s civil society or moderate political

forces. You also mention that there are many who believe that military aid is finding its way back to the Taliban because of linkages

between certain groups in Pakistan’s security forces. Do you want

to comment on that for us?

Dr. KORB. Well again, because we don’t have any transparency

or accountability, we’re not quite sure what they’re doing with that

money. Some of it, probably because of lack of control, some sympathies, particularly among the so-called ISI there, toward the

Taliban would go there. Remember that many people in Pakistan

perceive the Taliban as a check on what they see as India’s influence in Afghanistan. So they’re not completely unhappy with the

Taliban’s partial reemergence there.

Senator MENENDEZ. Finally, Ambassador Schaffer, I heard your

testimony and I know you testified before this committee a little

over 2 years ago about our strategy. Then, you recommended that

focusing on counterterrorism alone is a false choice and the United

States should use assistance in three different ways and you reiterated one of those today again, the economic assistance. You talked

about rebuilding institutions in that testimony. I think you mentioned that today again. How would you prioritize the institutions

that we pursue trying to help rebuild directly?

Ms. SCHAFFER. I would certainly put the judiciary very high on

the list. Now, when you’re talking about assistance, what you are

talking about is what I believe Mr. Kunder referred to before, assistance to help in the functioning of the judiciary, and I think that

is an appropriate thing for us to be doing with our assistance. It

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doesn’t solve all the problems with it but it’s one of the things you

can do with aid.

I would also say that it’s very important to continue with technical assistance for a smoother functioning Parliament although I

suspect that countries with a parliamentary system may be better

placed to do that than we are, because a lot of the traditions that

are so important in the United States Congress hinge on separation of powers and that doesn’t exist in Pakistan. So it really is a

different political environment.

The other one is the civil service, which may sound odd because

the Pakistani Government has always had a very strong civil service, but it has been much hollowed out through the years. There

was a brave but ultimately not very successful attempt at reforming the income tax service to increase professionalism and reduce

the temptation to be corrupt. I would love to see that picked up

again but if you’re talking about institutions, these are the ones

that are where I think the United States can make some kind of

a difference.

Senator MENENDEZ. Thank you.

Senator Lugar.

Ms. SCHAFFER. Could I say one word about A.Q. Khan, though?

Senator MENENDEZ. Surely.

Ms. SCHAFFER. At the risk of being out of step with my colleagues with whom I basically agree, yeah, we certainly should get

access to A.Q. Kahn. But before we start thinking about what kind

of heavy artillery we’re going to deploy in the attempt, I think we

also ought to think about how much we are likely to learn 5 years

later.

Benazir Bhutto, when she spoke in Washington just before she

went back, was asked the same question and she said, no; she

wouldn’t make him available to the United States but she would

make him available to the IAEA and she was absolutely pilloried

for it. This is something that any government of Pakistan will find

very difficult and the fact that it’s been 5 years actually makes it

harder.

Senator MENENDEZ. I respect that. I’d still like to know.

Ms. SCHAFFER. Right. So would I.

Senator MENENDEZ. Who he sold to and what he sold because

that would give us a network to pursue. And I find it very difficult

to understand $10 billion later why—whatever information that

would be of value at this point could not be deduced by having the

opportunity to have access to him.

Senator Lugar.

Senator LUGAR. Thank you, Mr. Chairman. I understand the

panel has stated in one form or another that President Musharraf

is not indispensable. Despite all of the thought that had been given

by some of the administration that he was indispensable, but I just

want to try to trace through the testimony we’ve had, who we anticipate will perform various functions. Specifically, if our Government is looking to Pakistan to be an ally against terrorism in the

form of al-Qaeda and/or the Taliban, who, in fact, do we look to,

to be responsible for those results?

Ms. SCHAFFER. I think that what you’re likely to get after the

election is a situation where you will have at least two and possibly

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three people who are involved in power. The two will be Musharraf

and the Chief of Army Staff. The maybe third will be the Prime

Minister. If it’s a Prime Minister from Musharraf’s party, this isn’t

going to be somebody who counts for very much.

Ultimately, what you need to have in order to have an effective

cooperation with the Pakistan Government, is not just the military

but the political legitimacy that goes with an elected government

moving the political needle and mobilizing more of the Pakistan

people behind the kinds of things that we both agree need to be

done, which very much includes defending the state of Pakistan

against violent attack.

Senator LUGAR. Well, we’ve received testimony to that effect for

several years but what is being described today is the reality;

namely these 23 days before an election January 8, for which our

Government has offered some technical assistance and yet we’re

not certain who the competitors may be and what sort of knowledge the voters will have of this election process and, therefore,

what emerges is something short, obviously, of that hoped for ideal.

Now, we can indicate that we require more but we’re not in a position, nor is it our nature, to direct Pakistanis to in fact affect the

kind of democracy that we believe they ought to have in order to

have the basis for effective government. So I get back to the realities of the current predicament, and you’ve answered that in a

sense that there may be three persons who we look to for performance here, because this is critical for our troops, especially for the

areas next to Afghanistan in the immediate future as opposed to

the evolution of Pakistan down the trail.

Ms. SCHAFFER. Senator, we faced a very similar situation in the

1990s. It was referred to at the time as the Troika, first with

Benazir Bhutto and then with Nawaz Sharif as Prime Minister and

in each case, they shared power with the President, who was a

strong figure although he did not come out of the military, and

with the Chief of Army Staff. It wasn’t the most comfortable organization to work with. I was in government at the time and was

on this beat. It was something we were able to cope with.

You expressed concern about whether the people of Pakistan

would be able to figure out what their choices were. That’s actually

something I’m not particularly worried about. The strength and

weakness of the political system is that they’ve got these parties,

which have, I think, quite good brand identity. The bad news is

that they’re also wholly owned possessions of one person or one

family.

So I think people will perceive that in voting for a PPP candidate

for Parliament or a Muslin League candidate for Parliament, they

are supporting whoever the leader is and they will perceive that in

spite of the fact that Nawaz Sharif is unlikely to be eligible to run

himself.

Making the whole system work may be a bit of a challenge but

it is worth that extra challenge if you get an increase in political

legitimacy. My worry is that we may not see that.

Senator LUGAR. We’re all worried about that.

Dr. HATHAWAY. May I add something to that, Senator? The Pakistani Army is a professional, highly disciplined army. They have,

for the last 8 years, for reasons that we’re aware, been distracted

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by all sorts of other responsibilities that are not necessarily their

principal responsibility. I think if the army can step back from the

job of running the country and devote full time to the job of maintaining the security of Pakistan, it may well be that they will be

able to have greater success than they’ve had to date, in defeating

what I think most of the senior people in the army understand, is

a tremendous threat to Pakistan’s integrity and Pakistan’s

security.

Now, what you need and what you haven’t had, particularly over

the last year, is a political leadership who has legitimacy and who

is supported in a country, who can then go to the people and convincingly make the case that this battle against domestic extremists is a battle for Pakistan, for the future of your children. This

is not a battle that has been foisted upon us by Washington. This

is something that we have a direct and immediate stake in. If you

have a government who has legitimacy because it’s popularly

elected, then perhaps that government will be better able to make

that case while simultaneously, you will have a professional army

not distracted by all these other responsibilities unrelated to

security.

Senator LUGAR. In the short time I have, let me just follow on

that. What if the army or the military take the position that in

fact, this democracy is not particularly legitimate; that about 30

percent happen to participate in this election or maybe less than

that and you say they value the fact they’ve got to fight for the

Pakistani people. They feel that very strongly. So perhaps in the

tradition of some countries we’ve seen in our hemisphere, the military decides that all things considered, in order to further Pakistan

quite apart from the war against terrorism, the military ought to

be in charge. In other words, we’re sort of back to ground zero

again. Mr. Musharraf is no longer in uniform but somebody else is

and, as a matter of fact, the people of Pakistan may feel the stability and the confidence that comes from all of this although temporary, all things considered, is the way they ought to go. What are

the possibilities of that being the evolution of this current scene?

Dr. HATHAWAY. You can’t rule it out but at the same time, Pakistan is not a Banana Republic and I believe—I’ll let my other colleagues speak for themselves, but I believe very strongly that the

Pakistani Army wants to get out of the business of running the

country; that they do see this as a distraction and as something

which has an adverse impact on their professionalism. So I certainly am not going to tell you that it’s not possible, but I think

if the army has its choice, it will gladly hand at least the appearance of power over to a civilian Prime Minister. Obviously the

army is going to retain a very important role, particularly on security issues. But I think they’re eager to get out of the business of

running all aspects of the country.

Ms. SCHAFFER. But the army’s interest in making some kind of

a move is going to depend critically on whether they think their

former Chief Musharraf can still hack it.

Senator LUGAR. Thank you, Mr. Chairman.

Senator MENENDEZ. Thank you, Senator Lugar. Well, let me

thank our witnesses for their testimony today and for their insights. The record will remain open for 2 days so that committee

64

members may submit additional questions to the witnesses and we

would ask that——

Dr. KORB. Mr. Chairman, may I—since you referred to our report

on Afghanistan——

Senator MENENDEZ. If you’d just give me one moment so that we

may ask the witnesses to respond expeditiously to these questions.

Dr. Korb.

Dr. KORB. Yes, since you referred to our report on Afghanistan,

may I enter that into the record?

Senator MENENDEZ. Without objection.

[EDITOR’S NOTE.—The report ‘‘The Forgotten Front’’ submitted for

the record by Dr. Korb was too voluminous to be printed in this

hearing. It will be maintained in the permanent record of the committee.]

Senator MENENDEZ. And with that, the hearing is adjourned.

[Whereupon, at 4:47 p.m., the hearing was adjourned.]

ADDITIONAL QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD

RESPONSES OF ASSISTANT SECRETARY RICHARD BOUCHER TO QUESTIONS SUBMITTED

FOR THE RECORD BY SENATOR JOSEPH BIDEN

Question. You testified that the Department of State ‘‘must concur on the reimbursement’’ of all claims for Coalition Support Funds submitted by the Government

of Pakistan, and that ‘‘Embassy Islamabad is working with the Department of

Defense and the Government of Pakistan to make the Coalition Support Funds reimbursement process more supportive of U.S. policy goals and to ensure that we get

maximum value for the money expended.’’

Please provide the committee with a complete list, preferably in electronic format,

of all claims in excess of $1 million submitted since September 11, 2001, by the Government of Pakistan for reimbursement from Coalition Support Funds.

Please provide the committee with the total number of requests for reimbursement from Coalition Support Funds made by the Government of Pakistan, and the

total number of such requests that have been denied or sent back for clarification.

Of those denied or sent back for clarification, please provide details on the request,

and on any subsequent action (i.e., which of these requests were resubmitted and

eventually granted).

Answer. Claims are submitted through the U.S. Embassy where they are reviewed for completeness and accuracy and then endorsed. They are then reviewed

by U.S. Central Command which validates the link to U.S. military operations. The

Office of the Secretary of Defense (Comptroller) evaluates the claims to ensure costs

are reasonable and credible based on the documentation provided, obtains concurrence from the Department of State, and then prepares a determination for the Deputy Secretary of Defense to sign a notification to Congress. Once the 15-day congressional notification period expires, the Comptroller releases funds to the Defense

Security Cooperation Agency for payment to Pakistan.

The State and Defense Departments work closely together on the consideration

of reimbursement claims and each claim is examined closely by both Departments.

Any decision to reject a claim or send it back for clarification is made jointly by both

Departments. As the Defense Department is responsible for oversight of Coalition

Support Funds, reimbursements, it maintains the records necessary to provide the

details requested here. Consequently, for further details on Coalition Support Funds

and a list of claims, we would refer you to the Department of Defense.

Question. Please provide a list of all weapons systems primarily designed for

purposes of external security currently scheduled for sale or transfer to Pakistan,

with dates of scheduled transfer and dollar value of the transaction. A weapons system primarily designed for external security (for the purpose of this question) may

be informally defined as one primarily designed for conventional combat against a

rival state, rather than one principally intended for counterterrorism or counterinsurgency.

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Answer. Pakistan remains one of the most active countries in supporting U.S.

efforts in the war on terror. While most of the ‘‘conventional’’ weapons listed below

may have been designed primarily for external security, Pakistan has dedicated

many of these weapons to support its counterterrorism efforts. The Government of

Pakistan’s use of TOW 2A missiles in the Federally Administered Tribal Areas and

its F–16 sorties along the border region, to cite two examples, exemplify how ‘‘conventional’’ weapons can be effectively used in counterterrorism operations. In fact,

much of the equipment procured by the Government of Pakistan has been used in

its counterterrorism efforts along the border and in the tribal areas at some point

during the past 6 years.

The items below, with dates of scheduled transfer and dollar value, are currently

on case as ‘‘conventional’’ weapons systems for transfer to Pakistan. Some are being

purchased with Pakistan’s own funds, while others may involve funds from Foreign

Military Financing account.

• AN/TPS–77 Radars:

Æ Cost: $100 million

Æ Schedule: All six already in country; first turnover will be February 2008

• Phalanx CIWS x 6:

Æ Cost: $79.7 million

Æ Schedule:

Phalanx 1: Scheduled for September 2008

Phalanx 2: Scheduled for October 2008

Phalanx 3: Scheduled for November 2008

Phalanx 4: Scheduled for December 2008

Phalanx 5: Scheduled for January 2009

Phalanx 6: Scheduled for February 2009

• Tow 2A Missiles x 2014:

Æ Cost: $65.4 million

Æ Schedule: Earliest delivery January 2008

• P–3C Aircraft x 8:

Æ Cost: $295.33 million

Æ Schedule:

P–3C 1: Delivered January 2007

P–3C 2: Delivered February 2007

P–3C 3–7: In refurbishment and update; delivery date unknown

P–3C 8: Logistics spare aircraft

• Harpoon Missile x 100:

Æ Cost: $297.823 million

Æ Schedule:

40 Air-launched: Delivered September 2006

10 Ship-launched: Delivered September 2006

10 Ship-launched: Delivered June 2007

10 Ship-launched: Delivered September 2007

30 Encapsulated: Still in production

• AIM–9M Missiles x 300:

Æ Cost: $47.548 million

Æ Schedule:

44 Delivered June 2007

36 Delivered January 2008

Remaining 220 waiting for shipment

• F–16 C/D Aircraft x 18:

Æ Cost: $1.433 billion

Æ Schedule: Earliest delivery 2010

• Mid-Life Update (MLU) for F–16 A/B x 60:

Cost: $890.954 million

Schedule: Earliest delivery 2010

• F–16 A/B Modification of Excess Defense Article (EDA) Aircraft x 12:

Æ Cost: $11.084 million

Æ Schedule:

EDA 1,2: Delivered July 2007

EDA 3–6: To be delivered in June 2008

EDA 7–10: To be delivered in July 2008

EDA 11–12: To be delivered in 2011

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• M–109 Howitzers x 115:

Æ Cost: $86.442 million Æ Schedule: 115 to be delivered from March 2008–March 2009

• AMRAAM x 500, AIM–9M x 200, JDAM x 500, BLU–109 x 700, MK–82/84 x

800:

Æ Cost: $666.507 million Æ Schedule: Earliest delivery 2010

Question. You have testified that ‘‘Democracy requires accountable government institutions, including an independent judiciary, protection of individual human

rights, a free and dynamic press, an atmosphere promoting open debate, and a vibrant civil society.’’

3a. Given that this sentence contains the sole mention of the judiciary in your testimony as prepared, please outline what specific benchmarks the administration will

use to assess the extent to which President Musharraf has restored independence

to the Pakistani judicial system.

3b. Given that all judges and Supreme Court Justices unwilling to swear an oath

to uphold edicts issued during the suspension of the Pakistani Constitution were

forcibly retired and replaced with candidates willing to take such an oath, can the

judiciary as currently structured truly be deemed ‘‘independent’’?

3c. What specific benchmarks will the administration use to assess the degree to

which President Musharraf has restored accountable government institutions, protected individual liberties, permitted the operation of a free and dynamic press, and

restored an atmosphere promoting open debate and a vibrant civil society?

Answer. There has historically been great tension between the executive and judicial branches of government in Pakistan, under civilian and military governments

alike, causing similar periods of political uncertainty. A long-term solution is required and will take the energies and attention of the political parties and the government. Given the proximity of parliamentary elections in Pakistan and the political sensitivity of the specific issue of reinstating the deposed justices, we doubt that

Pakistan can productively address this issue at this time. But addressing independence of the judiciary—a key pillar of democracy—will be incumbent upon the new

Pakistani Government that emerges post-election.

We leave the question on the status of the court for Pakistani legal authorities

to determine and for the Pakistani people to decide. The U.S. supports a vibrant

and independent judiciary and will continue to urge Pakistan to respect the rule of

law as it transitions to a new civilian democratic government.

Our benchmarks for democracy, government accountability, protection of individual civil liberties, and freedom of the press in Pakistan are the same benchmarks

that we use with any other country. Specifically, we have asked the Government

of Pakistan to ease restrictions on the media, lift the media code of conduct, and

release remaining prisoners, including Aitzaz Ahsan and former Chief Justice

Chaudhary. The ‘‘Annual Country Reports on Human Rights Practices’’ published

annually by the Department of State documents a range of issues including the rule

of law, civil liberties, and press freedoms.

Question. You testified that, even after the unconstitutional and destabilizing actions taken by President Musharraf since November 3, ‘‘We believe that maintaining

funding levels for Economic Support Funds and Foreign Military Financing is crucial.’’ You also testified the modest steps back from full martial law announced by

Musharraf over the past 2 weeks are due in part to ‘‘the constant pressure from the

international community, especially the United States.’’

4a. If maintaining current funding levels of aid to Pakistan is publicly declared

to be ‘‘crucial,’’ what sort of pressure—other than mere rhetoric—has the administration applied to President Musharraf?

4b. If financial levers are taken off the table, what possible ‘‘pressure’’ would the

administration consider applying if Musharraf stages a flawed election (as you testify you believe to be likely), or if he fails to take the other steps you describe as

necessary to return Pakistan to the democratic path?

Answer. Throughout the state of emergency, we had an ongoing dialog with President Musharraf in which we urged him to end emergency rule. We have seen

progress, and President Musharraf has taken promising steps to advance Pakistani

democracy. He resigned as Chief of Army Staff on November 28, 2007, and restored

the constitution by lifting the emergency on December 15. Led by Ambassador Patterson, the U.S. Embassy in Pakistan has been very active meeting with parties

across the political spectrum, encouraging their participation in the February 18

vote and stressing to the Pakistani Government publicly and privately that we

expect the election to be free, fair, credible, and transparent.

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The U.S. Government will continue to engage in an active dialog with the Pakistan Government emphasizing the need to create the conditions for free, fair, credible, and transparent elections—including the need to lift remaining media restrictions and release all political prisoners. We have already urged the government to

prevent interference by state agencies, clarify election observer guidelines, restore

media freedoms, and release prisoners who remain under house arrest.

Maintaining our close relationship with the Pakistanis, especially with regard to

assistance, actually furthers our own national interest. It also allows us to remain

influential. Disengagement is not a realistic or productive option, as demonstrated

by the years during which assistance to Pakistan was cut off. Pakistan is too critical

to our national security. We ‘‘lost’’ a generation of Pakistanis when we halted much

of our assistance during the 1990s. Neither Pakistan nor the United States can

afford to go down that path again.

Question. You have announced plans to projectize $200 million in ESF funds for

FY 2008. Are there any plans to projectize ESF funds in future years?

Answer. In years past, direct budget support has been successful in helping the

Government of Pakistan to not only increase spending on education and health expenditures but also improve delivery of those services. As I said during my testimony, we will use a new approach for FY 2008. ‘‘Projectizing’’ will seek to more efficiently use Economic Support Funds for programs that directly benefit the Pakistani

people in areas of health, education, and job training. Although a final decision has

not been made, we are working to ‘‘projectize’’ Economic Support Funds in 2009.

RESPONSES OF ASSISTANT SECRETARY RICHARD BOUCHER TO QUESTIONS SUBMITTED

FOR THE RECORD BY SENATOR ROBERT MENENDEZ

Question. Military-Civilian Coordination: Please outline the management mechanisms and the reporting chain with respect to any military-civilian coordination in

the design, planning, or implementation of assistance programs in Pakistan. Which

programs are operated solely by one agency and which ones are implemented

jointly?

Answer. The Department of State’s Director of Foreign Assistance is ultimately

responsible for all assistance programs to Pakistan. Given that the vast majority of

our security assistance funding is traditionally implemented by the Department of

Defense, Defense will continue to play an important advisory role in security assistance policy. However, security assistance policy, as an integral element of U.S. foreign policy, remains the responsibility of the Secretary of State. As the primary

interface between the Defense and State Departments, the Bureau of PoliticalMilitary Affairs manages the overall Foreign Military Financing and International

Military Education and Training programs, while working with the regional bureaus

within the new foreign assistance process run by the Director of Foreign Assistance.

U.S. Ambassadors have an important role to play in making recommendations as

to which countries should receive military assistance as well as providing oversight

over the execution of programs, end-use monitoring and human rights vetting.

Although 1206-funded programs draw on Defense Department resources, funding

the programs requires the Secretary of State’s full concurrence. This requirement

ensures the programs’ complete fidelity to U.S. foreign policy objectives. In practice,

this has meant close coordination between U.S. Ambassadors and Combatant Commanders in the field, as well as between the Departments of State and Defense in

Washington. This collaboration has produced programs that closely match the military needs of our partners to the overarching goals of U.S. foreign policy.

Working closely with State’s Bureau of Political-Military Affairs, the Department

of Defense’s Defense Security Cooperation Agency implements the Foreign Military

Financing, International Military Education and Training, and 1206 programs. Each

provision of military equipment provided to Pakistan is carefully reviewed by the

Department of State to ensure that it will not fuel an arms race in the region and

is monitored by the Defense Security Cooperation Agency to ensure proper end-use

and compliance with the Arms Export and Control Act and the Foreign Assistance

Act.

The U.S. Agency for International Development does not implement any programs

with the military. The only exception was the case of humanitarian relief following

the 2005 Kashmir earthquake, where the support of the U.S. Armed Forces was

vital in providing life-saving logistical support.

Question. Oversight: Please describe the steps the Department of State and

USAID will take to provide effective oversight of all the assistance programs in

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Pakistan to ensure that all the resources are used for their intended purpose. What

legal and administrative oversight mechanisms exist?

Answer. Assistance funds disbursed by the U.S. Agency for International Development are subject to that agency’s audit requirements. With the exception of $200

million in annual budget support which is audited by the U.S. Agency for International Development and an independent audit agency and guided by mutually

agreed ‘‘Shared Objectives’’ most funds pass through U.S. partner grantees and contractors. We have clear, established controls and financial records for this portion

of our assistance program. All U.S. Agency for International Development contracts

and grants are supervised by trained personnel to ensure the activities expend resources to obtain the agreed-upon objectives. Regular financial audits are performed.

Evaluations of projects occur after they end, and, in some cases, there are mid-term

evaluations. In addition, the U.S. Agency for International Development has hired

additional staff to increase project monitoring.

In particular, the annual $200 million budget support funds are managed by the

Government of Pakistan through the Ministry of Finance and the Accountant General of Pakistan/Revenue. The U.S. Agency for International Development Mission

in Pakistan monitors these funds at the national budget level to assure that the

U.S. Government contributions are used in accordance with the agreements. The

Department of State, the Agency for International Development, and Treasury meet

annually with Pakistan’s Ministry of Finance counterparts (most recently in April

2007) to review Pakistan’s progress in achieving our ‘‘Shared Objectives’’ before the

grant is disbursed. To ensure greater efficiency of use, the U.S. Government in 2008

plans to end the direct cash transfer and instead will fund projects through the U.S.

Agency for International Development.

Question. FATA Strategy: Provide a comprehensive strategy and program description of at least the first 2 years of the $750 million program for the FATA region.

How was this mix of programs determined? Which agencies were involved in the

strategy development? Provide an illustrative list of potential U.S. Government

partners who may have the capacity to implement such programs.

Answer. The Tribal Area Strategy was created to advance our objectives in the

Global War on Terror. The United States will help the Government of Pakistan recast its relationship with the country’s Federally Administered Tribal Areas and

work to alter the economic and development landscape. The U.S. and Pakistan

agree there can be no purely military solution to the problem of violent extremism

in the tribal areas. Weak economic fundamentals, rampant unemployment, a lack

of social services (including education and health care), and an inadequate government presence breed social and political instability in the border region. Countering

extremist influences in tribal areas will require a robust multiyear program that

will address not only security concerns, but economic, developmental, and governance problems.

The U.S. Agency for International Development and the U.S. Department of State

prepared a 5-year, $750 million Tribal Areas Strategy that supports the Government of Pakistan’s 10-year, $2 billion Federally Administered Tribal Area Sustainable Development Plan. The three-pronged Tribal Areas Strategy has economic, development, and governance components. The programs provided through the U.S.

Agency for International Development support short- and medium-term service delivery, while addressing the capacity constraints of government agencies to deliver

essential services with speed and effectiveness. The Tribal Areas Strategy strengthens and expands ongoing U.S. efforts in infrastructure improvement, education,

health, and economic growth. In addition the strategy will support Pakistani efforts

to improve livelihoods, which has been identified as the tribal areas’ principal immediate need. Community participation and buy-in as well as building the capacity of

government agencies to deal effectively with communities is critical to long-term

success.

In November 2007, the U.S. Agency for International Development’s Office of

Transition Initiatives launched its portion of the Tribal Areas Strategy, focused on

building confidence and trust between the Pakistan Government and tribal area

communities through a consultative approach that identifies and implements small

community-improvement projects.

Question. Coalition Support Funds (CSF): How do the Department of State and

the Department of Defense coordinate on the use of Coalition Support Funds (CSF)?

What formal and informal coordination mechanisms exist? What is the step-by-step

process for approval of the receipts for reimbursement for the Coalition Support

Funds?

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Answer. The Department of Defense is responsible for oversight of Coalition Support Funds reimbursements. Claims are submitted through the U.S. Embassy where

they are reviewed for completeness and accuracy and then endorsed. They are then

reviewed by U.S. Central Command which validates the link to U.S. military operations. The Office of the Secretary of Defense (Comptroller) evaluates the claims to

ensure costs are reasonable and credible based on the documentation provided, obtains concurrence from the Department of State, and then prepares a determination

for the Deputy Secretary of Defense to sign a notification to Congress. Once the 15-

day congressional notification period expires, the Comptroller releases funds to the

Defense Security Cooperation Agency for payment to Pakistan. For further details

on Coalition Support Funds, we would refer you to the Department of Defense.

RESPONSES OF ACTING DEPUTY ADMINISTRATOR JAMES KUNDER TO QUESTIONS

SUBMITTED TO THE RECORD BY SENATOR ROBERT MENENDEZ

Question. Military-Civilian Coordination: Please outline the management mechanisms and the reporting chain with respect to any military-civilian coordination in

the design, planning, or implementation of assistance programs in Pakistan. Which

programs are operated solely by one agency and which ones are implemented

jointly?

Answer. USAID does not implement any programs with the military. The only exception was in the case of humanitarian relief following the earthquake, where the

support of the U.S. Armed Forces was vital in providing life-saving logistical

support.

Question. Oversight: Please describe the steps the Department of State and

USAID take to provide effective oversight of all the assistance programs in Pakistan

to ensure that all the resources are used for their intended purpose. What legal and

administrative oversight mechanisms exist?

Answer. All USAID contracts and grants are supervised by trained personnel to

ensure the activities spend resources in order to obtain the agreed upon objectives.

Regular financial audits are performed. Evaluations of projects after they end—and

in some cases earlier for a mid-term evaluation—are part of our business approach.

USAID has been hiring additional staff to increase project monitoring.

The $200 million budget support funds are managed by the Government of Pakistan (GOP), through the Ministry of Finance and the Accountant General of

Pakistan/Revenue. The USAID Mission in Pakistan monitors these funds at the national budget level to assure that the USG contributions are used in accordance

with the agreements. The Department of State, USAID, and Treasury meet annually with Pakistan’s Ministry of Finance counterparts (most recently in April 2007)

to review Pakistan’s progress in achieving the ‘‘Shared Objectives’’ before the grant

is disbursed.

In addition, USAID’s Regional Inspector General/Manila has done an assessment

of the capacity of the Auditor General of Pakistan (the Supreme Audit Institution

of Pakistan) and found them capable of performing audits at acceptable levels of

quality. USAID’s Regional Inspector General has asked the Supreme Audit Institution to perform the audit of the Cash Transfer. USAID’s Regional Inspector General/

Manila will approve the scope of work for the audit and the audit reporting package.

The Regional Inspector General also conducts quality control reviews of the working

papers onsite to ensure quality.

Question. FATA Strategy: Provide a comprehensive strategy and program description of at least the first 2 years of the $750 million program for the FATA region.

How was this mix of programs determined? Which agencies were involved in the

strategy development? Provide an illustrative list of potential U.S. Government

partners who may have the capacity implement such programs.

Answer. The FATA Development Program was created to help win the Global War

on Terror. In order to do this the United States must help the Government of Pakistan recast its relationship with the country’s Federally Administered Tribal Areas

(FATA).

Since late 2001, Taliban and al-Qaeda elements have exploited FATA’s loosely

governed and impoverished environment to plan and launch attacks on Afghan,

Pakistani, United States, and NATO forces in Afghanistan and Pakistan. Despite

successes in the Pakistan military’s campaign against terrorists and militants in

FATA, the U.S. and Pakistan agree there can be no purely military solution to the

problem. Factors such as a weak economy, rampant unemployment, a lack of social

services, and an inadequate government presence breed social and political instaVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
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bility in the region. Countering extremist influences in FATA will require, among

other approaches, a robust economic development program implemented with the

support and assistance of the U.S. and the international community.

In response to these issues, the U.S. Agency for International Development and

the U.S. Department of State prepared a 5-year, $750 million development strategy

for FATA that supports the Government of Pakistan’s 10-year, $2 billion FATA Sustainable Development Plan. The strategy supports short- and medium-term service

delivery, while addressing the capacity constraints of government agencies to deliver

essential services with speed and effectiveness.

The FATA development strategy strengthens and expands ongoing U.S. efforts in

infrastructure improvement, education, health, and economic growth. In addition

the strategy will support Pakistani efforts to improve livelihoods/jobs, which has

been identified as the principal immediate need in FATA. Community participation

and building the capacity of government agencies to deal effectively with communities will be critical to long-term success.

Long-Term Goals

1. Improve economic and social conditions in FATA communities: The people of

FATA currently lack the most basic of economic opportunities and social services.

There are few employment opportunities and a woefully inadequate number of functional hospitals and schools. U.S. support of Pakistani objectives will focus on employment generation and skills development, basic education, primary health care,

infrastructure and agriculture, and media and public outreach. A key programmatic

area of U.S. assistance in the short term will be the establishment of employment

generation programs that will provide thousands of unskilled laborers in FATA with

opportunities to build their communities while gaining market-applicable skills.

2. Enhance the legitimacy and writ of the Government of Pakistan in FATA:

Taliban and al-Qaeda elements are able to become established and successfully operate in FATA largely because the Government of Pakistan’s writ does not extend

into most of the region. Generally, people in FATA live in remote, impoverished conditions, abide by tribal codes rather than Pakistani law, and do not benefit from

Pakistani Government services. A major goal of the U.S. development strategy in

FATA will be enhancing the Government of Pakistan’s capacity to deliver essential

services in FATA, including water and sanitation, health care, education, and road

repair. Improved government access and delivery of services will help extend the influence and writ of the government in FATA.

3. Support permanent, sustainable change: It is ultimately the responsibility of

local inhabitants, civil society, government and the private sector to permanently

transform FATA from an impoverished, ungoverned space into an economically productive and politically stable region of Pakistan. Therefore, throughout program implementation, the USG will be mindful that its aim is to leave in place the essential

mechanisms—local institutions, governance structures, and economic models—that

FATA residents can use to sustain economic growth, social service improvements

and political stability.

The FATA Development Program was designed in consultation with the U.S.

Country Team (Office of the Defense Representative–Pakistan and Department of

State–Narcotic Affairs Section (NAS)), USAID/Washington and other major bilateral

and multilateral donors in Pakistan, including from Britain, Japan, Norway, and

the Asian Development Bank.

Implementation Arrangements

Both USAID and the Department of State have done extensive planning for implementing the FATA Development Program.

NAS will utilize its existing implementation arrangements in expanding its road

program. NAS is planning to assist with the establishment of an infrastructure unit

within the FATA Secretariat to expedite implementation of its infrastructure activity. Preparations for a levy training center (local law enforcement) are well advanced and NAS will be in a position to begin contracting as soon as funds become

available.

USAID will utilize a number of implementation arrangements to operate its capacity-building, livelihoods development, and service delivery programming. Implementing partners will include a mix of U.S. development firms, nongovernmental organizations, community-based organizations and public international organizations.

Agreements will be through competitive procurements, grants, and indefinite-quantity contract mechanisms.

Capacity Building: USAID is in the concluding phase of the award of a Capacity

Building Development Program under an existing indefinite quantity contract mechVerDate 11-MAY-2000 11:43 Oct 30, 2008 Jkt 000000 PO 00000 Frm 00074 Fmt 6633 Sfmt 6621 PAKASSIST sforel1 PsN: sforel1
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anism to accelerate the implementation of activities in the second quarter of FY

2007 in the following areas:

• Develop operational plans for each agency and frontier region;

• Establish monitoring and reporting systems;

• Improve capacity of government agencies to develop implement and manage development programs at the agency and community level;

• Improve the capacity of FATA NGOs to develop, implement, and manage development programs;

• Develop media strategies for government institutions;

• Improve coordination of civil/military activities;

• Identify long-term capacity, organizational, and policy issues for Government

agencies.

Livelihoods Development: USAID has initiated the procurement of a Livelihoods

Development Program through full and open competitive applications directed at establishing a community-based program implementing activities in the second quarter of FY 2007 in the following areas:

• Creating jobs, increasing incomes and teaching employable skills with a focus

on unemployed youth;

• Revitalizing community infrastructure and essential services;

• Supporting established businesses and developing new sustainable businesses.

Service Delivery: USAID’s Office of Transition Initiatives (OTI) has conducted a

FATA assessment and is now operational, having awarded grants to Creative Associates and IOM to engage in community mobilization (small infrastructure projects)

and a media campaign to support/publicize community activities. OTI will work in

four agencies—Orakzai, Kurram, Mohmand, and Khyber. USAID is also amending

its current contracts and grants in health, water and sanitation, HIV/AIDS, education and economic growth to include work in the FATA.

Æ