Marshall Plan for Pakistan

There has been much discussion but little action on the new US strategy to emphasize economic aid for Pakistan, in addition to the concerted NATO-Pakistan military action against the insurgents. The 80/20 rule, as outlined by General Petraeus, calls for 80% emphasis on the political/economic effort backed by 20% military component to fight the Taliban insurgency in both Pakistan and Afghanistan. This rule has led many to speculate about a US-backed "Marshall Plan" style effort to help Pakistan expand the economic opportunity for its young and growing population, vulnerable to exploitation by extremists.

The Marshall Plan, named after General George Marshall, the US secretary of state after the Second World War, is credited with the rapid economic rise of Europe and Japan from the ruins of the war. The Marshall Plan aid by the US amounted to about 100 billion in today's dollars. Pakistani leadership called for their own "Marshall Plan" earlier this year, saying the country needed $30 billion over the next five years to fight Taliban and al-Qaeda militants.

The United States, United Kingdom and Western allies met in Istanbul yesterday to draft a $5 billion "Marshall Plan for Pakistan" to help rebuild the swaths of the country destroyed in its war against terrorism. While $5 billion will help in Pakistan's economic recovery, it is really a stretch to compare it to the $100 billion (today's dollars) US Marshall Plan for Europe after WW II. To put it in perspective in Pakistan's context, let's consider the following: At the end of calender year 2008 in Pakistan, remittances topped 7 billion dollars, an increase of 17 per cent year over year, led by higher remittances from oil-rich GCC countries, which grew by 30 per cent year on year. Similarly, FDI inflows jumped 100 per cent year over year to 708 million dollars for December, 2008, as the telecom, oil and gas, and financial-services sectors continued to attract foreign inventors, according a report in the Nation newspaper. Annual cash remittances from overseas Pakistanis and foreign direct investments (FDI) in Pakistan in this decade have been far larger and much more significant in its economic growth than all of the well-publicized foreign aid put together.

Though the amount of aid appears to be far less than what Pakistanis need and asked for, it does seem that the Friends of Pakistan Aid Consortium, led by US and UK, is beginning to get serious about the economic component of the fight to save nuclear Pakistan from the potential danger of falling prey to the powerful insurgency still plaguing the two neighbors in West Asia.

The Telegraph of London has reported today that "Friends of Democratic Pakistan, including ministers from Japan, Turkey, Saudi Arabia, Germany, France, China, Australia and the European Union, met to agree funding and draft in experts to agree a series of projects to support reconstruction efforts and shore up the country's new democratic government. Gordon Brown and Barack Obama will co-chair the group's next meeting in New York next month where the scale of funding and support will be finalised."

The British newspaper adds that "Britain is expected to take a lead role in creating an education task force to explore non-madrassah (religious) schools. It will also play a role in developing new public-rivate partnerships to accelerate new investment in services. “There’s a bit more openness [in Pakistan] now to discuss these things with friends, the new democratic government is opening up,” said a diplomat."

This reported plan of serious economic aid and expertise, if true, is a step in the direction. But it must not be allowed to become victim of bureaucratic redtape, incompetence and corruption. Such an effort must also address the issues of poor governance and feudal excesses in Pakistan to ensure the effectiveness of the money offered in making a real difference in the lives of the average people of Pakistan in terms of their human development and expanded economic opportunity.

Related Links:

Feudal Punjab Fertile for Terrorism

Taliban target Swat's landed elite

HDF Fundraiser in Silicon Valley

Valuing Life in Afghanistan and Pakistan

Missiles versus Schools

Pakistan's Choice: Globalization versus Talibanization

Feudal Raj in Pakistan

Aid, Trade and FDI in Pakistan


guY-sir said…
Hello Brother,
I'm a fan of your articles and I 1st found you on SPB Insight PPC. I recently created my blog where I also publish my own and your one Article on democracy which you wrote on Indian democracy.
Karachi Khatmal was 1st who informed you about it. Well it doesn't mean I can't write. I've also wrote article on democracy in my own words which heading is Democracy is a rUSe. I wrote twice. I encore it later. I invite you to read it.
I have also wrote like Marranos who worship mammon. Protocols of Zion: Mankind Death Wish. God and Mammon. Obama-geddon vs. Osama-geddon. Freedom of Speech of mine to Indians. India and Israel are halluci-Nations. etc.
I invite you to read above listed articles of mine.
Well good article It is not Marshall Plan rather it is Marshall law plan by US for Pakistan under da guise of democracy.
Uncle Sam making nothing but halluci-Nations
islam nasheed said…
Pakistan will not be in peace until there are problems in Afganistan.
Riaz Haq said…
Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:

The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.

It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.

At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.

The committee met with Chairman Sheikh Waqas in the chair and was attended by MNAs Barjees Tahir, Nawab Yousuf Talpur, Wasan, Khurum Wattoo and others. Petroleum Minister Naveed Qamar, Secretary Kamran Lashari, Special Secretary G A Sabri and MD FF General Rab Nawaz attended the meeting.

Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.

Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.

Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.

Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.

Minister Naveed Qamar is a close friend and ally of Zardari.
Riaz Haq said…
A recent Princeton study by Blair and Fair based on a survey of 6000 Pakistanis concluded that there is no link between poverty and terrorism:

The policy literature on the causes of militant violence frequently focuses on poverty as a root cause
of support for violent political groups (see e.g. Aziz 2009). Moreover, much of U.S. and Western policies toward Pakistan over the last ten years have been geared toward encouraging economic and
social development as an explicit means of diminishing the terrorist threat. Legislation before the
U.S. House of Representatives in April 2009, for example, called for the United States to
“strengthen Pakistan’s public education system, increase literacy, expand opportunities for
vocational training, and help create an appropriate national curriculum for all schools in Pakistan”
(House 2009).8 In testimony on this bill, U.S. Special Envoy Richard Holbrooke argued that
Washington should “target the economic and social roots of extremism in western Pakistan with
more economic aid” (Holbrooke 2009). This view also played a pivotal role in the April 2009
donors’ conference in Tokyo, where nearly thirty countries and international organizations pledged
some $5 billion in development aid explicitly intended to “enable Pakistan to fight off Islamic
extremism” (“Donors pledge” 2009).9 These policies reflect a belief that poverty is a root cause of
support for militancy, or at least that poorer and less-educated individuals are more prone to
militants’ appeals.10 Despite the strong beliefs about links between poverty and militancy that these
aggressive policy bets reveal, there is little solid evidence to support this contention in the case of
Islamist militant organizations. So what do we know?
First, although the hypothesis that poverty predicts participation in violent political
organizations is widespread in the policy literature it finds little support in rigorous empirical tests
(Abadie 2006; Kreuger and Malečková 2003). That hypothesis is likely so prominent because crossnational
evidence typically shows a positive correlation between overall poverty and levels of militant violence.11 However, the perpetrators of militant violence are predominantly from middle class or
wealthy families (Krueger and Malečková, 2003),12 and there is no reliable link between poverty and
support for specific terrorist tactics. Further damaging the empirical foundations of the povertymilitancy
hypothesis, Tessler and Robbins’ (2007) moderately-sized (n≈1,000) surveys from Algeria
and Jordan find that “neither personal nor societal economic circumstances, by themselves, are
important determinants of attitudes toward terrorism directed at the United States” (323). Using
Pew World Values surveys, Shafiq and Sinno (2010) show that the relationship between “educational
attainment and income on support for suicide bombings varies across countries and targets” (146).
Second, there is a mixed or negative relationship between indicators of poverty such as
unemployment and rates of militant violence within countries (Berman et. al. (2011) find a negative
relationship; Dube and Vargas (2008) find mixed evidence). Across countries scholars have argued
that levels of political violence are increasing in: short-term poverty (Miguel, Satayanth and Serengeti
2004); dashed expectations for material gain (Gurr 1970); and income inequality (Sigelman and
Simpson 1977; Muller 1985), but the overall evidence at the individual and sub-national levels is
deeply ambiguous (Blattman and Miguel 2010).
Given this indeterminacy, making progress in understanding the relationship between
poverty and militant violence requires testing specific mechanisms by which poverty could influence
levels of violence.

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