Afghan Withdrawal: Rejuvenating the Carrots and Sticks of Economy


Soon after Eisenhower’s visit to Pakistan and the continuation of the aid program as well as the initiation of the USAID program for Pakistan, the economic relations saw a dramatic change; as in the Indo-Pak wars of both 1965 and 1971, the United States denied financial assistance to Pakistan by imposing economic sanctions contrary to Pakistani aspirations. Soon after the wars, aid sanctions were lifted by the United States in 1975, only to be re-sanctioned in 1979 following apprehensions of a Pakistani Nuclear Weapons Program; but this was again contradicted as aid was released for Pakistan in 1980, totaling a sum of $3.2 billion in military assistance against the Soviet intervention in Afghanistan.

Again this was brought to a halt through the Pressler Amendment of 1985, where aid to Pakistan was restricted on grounds of the Nuclear Weapons Program initiated by Pakistan; but NGOs and other humanitarian based reliefs were not denied monetary assistance. The 1998 atomic weapons tests resulted in another set of sanctions; the USAID program released $140 million for agricultural development in Pakistan. The September 11, 2001 attacks on the World Trade Center and Pakistan’s support assurances to counter terrorism saw another round of economic leverages.

The $3 billion outstanding debt of Pakistan was debated at Paris Club, the United States released $350 million for civil and $512 million for military assistance to Pakistan. The Bush administration, in 2003, announced a 5 year package for Pakistan totaling $3 billion, and after the October 2005 earthquake in Pakistan, it received $510 million for relief efforts. The Obama administration, in 2008, released a $7.5 billion package for Pakistan, and the more recent National Defense Authorization Act, 2011, following a lot of diplomatic deadlocking, had turned the tides once more.

The conclusion from the above mentioned dissection of a historical overview of the Pak-US economic relations reveals that it is mostly driven by ‘need and want’, and that release and sanctioning of the economic assistance to Pakistan is based on ascertainment of the best fulfillment of the American interests. Strangely enough, Pakistan in this relationship has the least say in matters pertaining to financial assistance. The United States of America follows perfectly the Rational Actor Model as the entire aid and assistance program, right from its initiation, has been driven in accordance to requirements.

The pattern is clear: the funds were released against Pakistan joining SEATO and CENTO to contain the Soviet Union, denied against the Indo-Pak wars, then released against the Soviet-Afghan war to be denied by Pakistani nuclear Weapons Project, and then again released for the Pakistani support regarding the September 11 attacks and more recently denied for want of more cooperation by Pakistan. This implies that whenever the United States had her national interests to fulfill, the funds were allowed and when Pakistan’s interests collided with the American aspirations, the same were denied.

In terms of application of the Pluralistic and the Elitist Model, a very vivid demonstration was observed during the Pressler Amendment when economic assistance to Pakistan was sanctioned – Pakistan still received a small amount of assistance in terms of military packages, as the Soviet-Afghan war was still underway and providing military assistance was deemed necessary. Similar events also reveal the utilization of the Bureaucratic Politics Model, as the American Bureaucratic structure regulated all economic funding in strict accordance to the requirement presented by Pakistan and ratification of the same in positive pursuance of the American national interest in the region projected through Pakistan.

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is a Masters in Strategic and Nuclear Studies from the National Defense University. He can be reached on

Discussion4 Comments

  1. I can answer the author’s question at the end. Compliance. As always that is the incentive for the US. The US never has and never will give aid out of the goodness of it’s heart. Their “aid” is actually a bribe to the corrupt leaders. Not to mention that the aid has to be spent on American goods. quite clever i must say. The “aid” not being used to bribe politicians is going back to American companies anyways. This keeps the Pakistani reliance on american goods instead of pakistani products, therefore pakistan’s economy from getting better. Same thing with the loans that in reality can never be paid back (and they aren’t ever meant to be).

  2. Somewhere the author of the article has also mis-spelt the word aid; It is actually AID, not aid; US-Agency for International Development (US-AID). This agency called AID, and we think it is aid and free money, actually is the funds for projects and the money is dispensed by US against very long term, very low interest rates for development projects; Pakistan gets this US-AID package which is supposed to be returned back in time; there is no FREE LUNCH as it is said, so thinking it is aid and not to be repaid back is living in fools paradise; which Pakistanis love to stay in and dream about. Absolutely it is the fault of our media, government and the leaders of country who project this aid concept; LIES it is; … We Pakistanis are not used to face the truth as it is in short supply and take refuge behind the curtains of deceit and lies;

  3. The author is truly delusional and has no understanding of the international issues and the ground realities out there. Crying hoarse about things will not help solve problems anywhere.

    And the word US aid is not aid but AID i.e., Agency for International Development. Better research would have helped the authenticity of the article.

  4. 1. You do not need to write two pages long, to describe what are actually just two words …. “transactional relationship”.
    2. With the change in US-India equation, and with the quiet transfer of a huge military aid, that includes over 5000 top of the line air-to-air missiles, the US have cleverly changed its pro-Pakistan position to a neutral one. Therefore, Pakistan would now see reduction of flow of American dollars in the coming years.

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