Pak-US-Relations - Part 4

Pak – US Relations Part – 4

Reinstatement of Pak’s IMF Enhanced Structural Adjustment Facility/Electronic Frontier Foundation (ESAF/EFF)

As we’ve already talked about, the nuclear tests were a big setback for US-Pakistani ties, which had improved during the second Clinton administration when the US showed more interest in the country. Within a few days, President Clinton signed the Glenn Amendment, which put more economic and military bans on Pakistan. But since most of the help had already stopped, the Glenn penalties didn’t have many more effects on bilateral aid to Pakistan. An official US report says, “The Indian and Pakistani nuclear tests of May 1998 triggered the draconian-looking Glenn Amendment sanctions, but in practise, they were implemented with a lot of flexibility, which made them much less harsh than they could have been.” Also, as we talked about in Part III, the Brownback Amendments I and II, which were passed almost right after the Glenn Amendment sanctions were put in place against India and Pakistan, let the president get out of most of the Glenn sanctions. In November 1998 and October 1999, President Clinton used this power to get rid of some of the toughest sanctions against India and Pakistan.

Also, as we talked about in Part III, the Brownback Amendments I and II, which were passed almost right after the Glenn Amendment sanctions were put in place against India and Pakistan, let the president get out of most of the Glenn sanctions. In November 1998 and October 1999, President Clinton used this power to get rid of some of the toughest sanctions against India and Pakistan. But there is more to the business than just wheat and clothes. At that time, Pakistan had just over a billion dollars in foreign exchange savings, which wasn’t even enough to pay for imports for two weeks. Also, Pakistan would soon have to pay back a lot of money to other countries. Analysts said that Pakistan would have to do very bad things to get through the sanctions. To deal with the problem, the government, among other things, passed a new law that froze all Foreign Currency accounts in Pakistani banks and stopped all legal rights that dealt with foreign exchange. This, in turn, caused the Pakistani Rupee to lose a lot of value, which made Pakistan’s debt load bigger. Pakistan, but not India, borrowed money from the IMF. In May 1998, there was still almost a billion dollars in a line of credit that had been set up a few months before. The penalties put a big question mark over how this amount would be paid out. Under US law, the Administration had to fight against foreign organisations giving more money to Pakistan. Even though the US does not have a veto on IMF lending programmes, it is the largest shareholder in the body and has 18% of the votes. As with the World Bank, it was unlikely that the IMF would give money to Pakistan without help from the US.

Pakistan, like India, was a big borrower from the World Bank. However, $800 million in new loans to India have been put off forever. Pakistan’s request for a loan of about $750 million could not be handled in a different way, of course. Japan, which gave Pakistan the most bilateral aid, with loans worth nearly $500 million each year, stopped its aid plan.

After that, G-7 put in place economic penalties that made the situation even worse. The partial lifting of sanctions and the following reinstatement of Pakistan’s IMF Enhanced Structural Adjustment Facility/Electronic Frontier Foundation (ESAF/EFF) in early 1999, followed by a re-scheduling by the Paris Club and the London Club, kept the country from going into international default by just a little bit. The conditions of the IMF programme were hard for the government to meet, so the programme was stopped in July 1999. Pakistan revealed a reform plan and started talking with the IMF about a Poverty Reduction and Growth Facility that would start in July 2000.

China gives Pakistan M-11 missiles

Again, Pakistan was hit harder by the sanctions than India. This was mostly because Pakistan was more dependent on the US than India was, and it also bought many parts of its nuclear weapon and missile infrastructure, which led to sanctions meant to stop such transfers. India did not break these parts of US law because its missile and nuclear programmes were seen as mostly homegrown, even though they had received help from other countries. Brownback-II (June 1999) did give Pakistan some relief from the Symington and Pressler amendment penalties, which since 1990 had made it illegal for the U.S. to give Pakistan any military or economic help. But as bad luck would have it, this comfort didn’t last long. Section 508 of the Foreign Appropriations Act added a new layer of sanctions after the civilian government in Islamabad was overthrown in October 1999. These sanctions included limits on foreign military funds and economic aid. This meant that the US could mostly only help Pakistan with helping refugees and fighting drugs. In November 2000, after the US found that China had given Pakistan M-11 missiles in the latter half of the 1990s, the Clinton Administration put sanctions on the Pakistani Ministry of Defence, the Pakistani Space and Upper Atmosphere Research Commission, and their sub-units under the Arms Export Control Act and the Export Administration Act. This meant that exports to (and imports from) entities receiving Missile Technology Control Regime Category-I missiles were banned. Before the US gave in, Pakistan had to wait until the turn of the century. Reps. Ed Royce (R-CA) and Jim McDermott (D-WA) proposed a bill in April 2001 to get rid of all sanctions against India and Pakistan. But after 9/11 and its effects, the congressional process was put on hold.

Pak-US-Relations

Pak – US Relations (Part – 3)

Clinton Administration’s plan to get Pakistan to sign CTBT

As we’ve talked about, the end of the second romance between Pakistan and the US was when the Soviets left Afghanistan in 1989. The US put the Pressler sanctions on Pakistan right away, which stopped all military help and new economic aid. And to make things worse, it wouldn’t let 28 F-16s that were built, paid for, and ready to be sent out. It also wouldn’t give back $658 that had already been paid for the planes. It took almost five years for Pakistan’s diplomatic efforts to persuade the US that it was in both countries’ best interests to work together at least on anti-terrorism and anti-drug efforts, that Pakistan could help keep peace in trouble spots all over the world, and that it was wrong to hold back items (other than F-16s) that had been paid for long ago. The Clinton Administration did give in, but it did so because it was part of its plan to get Pakistan to sign the CTBT. So, in 1995, Congress passed the Brown Amendment, which gave the Administration permission to work with Pakistan more on fighting terrorism and drug trafficking and to release $368 million worth of military equipment that Pakistan had bought and paid for before the Pressler sanctions. Even though there were claims that China gave Pakistan nuclear and missile parts and technology, the change was still passed. The $368 million worth of equipment that was released included F-16 extra parts and ammunition, but not the 28 F-16 planes that had already been paid for in 1989. It also made exceptions to the embargo for some kinds of help, like fighting drugs, military-to-military contact, training, humanitarian and community projects, peacekeeping and other international obligations, and helping fight terrorism. (Most of the time, their funding came with wording in the law saying that they had to be done “regardless of any other law”). But even though the release helped the industrial base grow, Pakistan’s efforts to modernize the Armed Forces were greatly hampered by limited financial resources and a number of penalties.

It took almost five years for Pakistan to convince the US that at least working together against terrorism and drugs was good for both countries.

Nuclear Tests: a big setback for US-Pakistan ties

Pakistan kept begging for a decade, but no one would give them back 28 planes or give them back $658 million. When India did nuclear tests in May 1998, the US gave in with some conditions. India boldly told Pakistan not to do tit-for-tat tests because it wanted to show that it was stronger than Pakistan. It couldn’t have been any more rude! Pakistan turned down this fake offer. It thought that having nuclear weapons was a good way to stop nuclear India. This made the US very angry and gave them another reason to play wolf and lamb with Pakistan again. So, the nuclear tests were a big setback for US-Pakistan ties, which had been getting better during the second Clinton administration when the US became more interested in Pakistan. At that time, Pakistan was facing a number of limits on aid because of the Pressler Amendment and the Symington Amendment. These restrictions were put in place because Pakistan had a nuclear explosive device and had received uranium enrichment equipment.

Stoppages of loans from IMF/ World Bank

Both India and Pakistan were hit with Glenn Amendment penalties within a few days. So, under the Foreign Assistance Act, the US stopped giving help to both of the nuclear neighbors, including help with economic growth. Under the Arms Export Control Act, military sales to other countries were stopped. The US government stopped giving credit and guaranteeing credit. India and Pakistan could no longer get loans from US banks. Loans from the International Monetary Fund (IMF) and the World Bank were also stopped. And exports of nuclear or missile things with more than one use were not allowed. In July 1998, just three months after the Glenn Amendment sanctions went into effect, Congress rushed to pass a law that gave India and Pakistan a one-year exemption from the Glenn Amendment restrictions on buying agricultural goods from US farmers. This was done in response to pressure from the farmers’ lobby at home. The India-Pakistan Relief Act of 1998, also known as Brownback-I, was also passed by Congress the next day. This law gave the President the power to lift the Glenn, Symington, and Pressler amendment sanctions against India and Pakistan for a time of one year, except for the restrictions on military aid, exports with more than one use, and military sales.

Brownback I & II

In October 1998, Brownback-I was signed into law. Pakistan said in September 1998 that it would sign the CTBT by September 1999, but only if certain things were met. In November 1998, President Clinton used his waiver power under Brownback I to bring back some non-military aid projects in India and remove restrictions on what US banks could do in India and Pakistan. In June 1999, Congress passed Brownback-II, which gave the President the power to waive penalties permanently. Since 1990, the Symington and Pressler amendments had made it illegal for the U.S. government to give Pakistan any kind of military or economic help. The amendment also gave the President the power to ignore those restrictions. Brownback II made it possible to get back the money that was paid up front for 28 F-16s ten years ago. Six months later, the Administration decided to give back only $ 467 million in cash and the rest in kind, in the form of grains. And the US’s self-declared non-NATO friend breathed a sigh of relief, even though the way the money was returned was completely crazy.

Pak-US-Relations

Pak – US Relations (Part – 2)

End of second Pak – US romance

The 1990 Sanctions: When Pakistan and Afghanistan signed the Geneva Accords on April 14, 1988, the second Pak-US romance was over. The agreements, which were backed by both the US and the Soviet Union, included a plan for when the Soviets would leave Afghanistan. This process began on May 15, 1988, and ended on February 15, 1989. With the Soviets leaving Afghanistan, Pakistan became less important to the US from a military point of view. President George W. Bush didn’t waste any time in refusing to declare that Pakistan “did not possess a nuclear explosive device.” Under the Pressler Amendment, Washington stopped all military help and new economic aid to Islamabad on October 1, 1990.

Pakistan and Afghanistan signed the Geneva Accords on April 14, 1988. This marked the end of the second Pak-US honeymoon

Worst Decade of Pakistan’s Economy

Pakistan was hurt very badly by the sanctions. A study of Pakistan’s economy says that the 1990s were the worst decade for the country’s economy. International financial institutions and individual donors gave Pakistan loans and grants worth about $2.5 billion each year. Pakistan has a hard time getting loans and funds because of the sanctions. From $22 billion in 1990 to $38 billion at the end of 2000, the country’s debt to other countries grew. (Pakistan spent about 80% of its budget each year on paying its debts. It paid back about $5 billion in interest and capital to its foreign creditors in 2000 alone. The Gross Domestic Product (GDP) growth rate dropped from an average of 6.5% in the 1980s to 4.6% in the 1990s. In the second half of the 1990s, the rate was even lower at 4.2%. Between 1996-1997 and 2000-2001, the average growth was not more than 3%. Pakistan has never really had a problem with inflation, but it was in the double digits for most of the 1990s. From about 3% in the 1980s to close to 6% in the 1990s, the unemployment rate almost doubled. Especially in the manufacturing sector, investment and growth in industry development were going in the wrong direction.

In the 1990s, poverty became a big problem in both the economy and society. Between 1987 and 2000, almost twice as many poor people were living below the poverty line. In 1987-1988, 17.3% of the people lived below the poverty line. By 1998-1999, this number had jumped to 32.6%. The amount spent on growth dropped from 7.2% of GDP at the beginning of the 1980s to around 4.2% in the 1990s. From close to 9% of GDP in the early 1980s to less than 3% of GDP in the late 1990s, development spending dropped by almost a third in real terms. During the Afghan Jihad, the US gave Pakistan military help so that it could update its traditional defenses. 40% of the aid package went to non-repayable credits for buying military equipment. This was the third biggest program, after Israel and Egypt. The rest of the aid scheme went to helping people with money. Because of the financial restrictions that came with the sanctions, Pakistan’s armed forces, which have 620,000 active members and 513,000 reservists and are the eighth biggest in the world, couldn’t train as well as they normally would. In the same way, Pakistan had a hard time keeping its old fleet of American, Chinese, British, and French weapons running.

The Case of F16s

During the Afghan Jihad, Pakistan wanted to buy F-16 fighter planes to take advantage of the situation. Almost right away, the request was granted. In December 1981, a deal was made for the purchase of 40 planes. The first plane arrived in Pakistan in January 1983, and the last of 40 planes was sent there in 1987. After Israel, Pakistan was the second country to use this top-notch front-line attack plane.

In 1989, the deal to buy 71 more F-16s was finally worked out. Pakistan bought 28 planes for $658 million. By the time the Pressler amendment was used in October 1990, 17 planes had already been built and sent to the Aircraft Maintenance and Regeneration Centre (AMARC) in Arizona. Also, 11 new planes for planes that were lost were built, paid for, and ready to be sent to Pakistan. But these planes were never sent because Pakistan was no longer needed in Afghanistan. And if that wasn’t bad enough, the money Pakistan paid ahead of time wasn’t returned for about ten years.

Pak - US Relations

Pak – US Relations (Part – 1)

The US keeps playing with Pakistan. This time, it’s to get back at Pakistan for the “most humiliating defeat in history,” which was actually caused by the Taliban but “credited” to Pakistan.

Afghanistan Counterterrorism, Oversight, and Accountability Act of 2021

On September 27, 22 Republican senators, including Mitt Romney, who ran for president in 2012, pushed a bill through the Senate. The bill, which is called the “Afghanistan Counterterrorism, Oversight, and Accountability Act of 2021,” would put sanctions on both the Taliban and Pakistan. It requires the Secretary of State to give a report on Pakistan’s help for the Taliban within 180 days of the Act being signed into law.

The report must include information about how state and non-state actors in Pakistan helped Taliban between 2001-2010, including “sanctuary space, financial support, intelligence support, logistics, medical support, training, equipment, and tactical, operational, or strategic direction.” It must also figure out what part Pakistan played in helping Taliban overthrow the government of Ashraf Ghani and take over Panjshir.

The bill gives US President the power to put sanctions on “any foreign person who has provided support to any terrorist group in Afghanistan, engaged in serious human rights abuses,” or “played a role in drug trafficking” in country. The measures would stop people from buying or selling property, from coming to US, and from using visas they already have. Also, sanctions that are already in place against the Taliban would stay in place, and US’s allies would be urged to do the same.

History is repeating itself

The history of ties between Pakistan and US is a sad story of US putting sanctions on Pakistan, easing them, taking them off, putting them back on, and so on.

The 1965 suspension of military assistance affected Pakistan more severely because of Islamabad’s heavier dependence on Washington.

In 1947, US and Pakistan set up formal ties. Pakistan’s location on a route that connects important parts of South Asia, Central Asia, West Asia, and China gave it a unique place as a gateway to these areas. The US agreed to help Pakistan with its economy and defence, and Pakistan joined Baghdad Pact, CENTO, and SEATO when it was just getting started as a country. This was their first date, and it set the stage for a long and difficult relationship between two countries.

US trained Pakistani nuclear scientists

As a result of the Cold War, the US saw India as a possible alternative to communist China and the Soviet Union. It tried to make friends with India, ignored its young nuclear programme, and even gave it nuclear technology through the Atoms for Peace programme. Pakistani nuclear scientists were also taught by the US, and Pakistan got a nuclear research reactor from the US. But during the Indo-Pakistan war in 1965, the US stopped giving Pakistan armed help. Even though the suspension impacted both India and Pakistan equally, it hurt Pakistan more because Islamabad is more dependent on Washington. The ban stayed in place until 1975, when sales of guns were finally allowed to start up again. In May 1974, India put the Smiling Buddha through a test firing. This gave Pakistan’s nuclear programme a boost and led the US to pass laws against spreading nuclear weapons.

Imposition of sanctions on Pakistan

The Foreign Assistance Act of 1961 was changed by the Symington Amendment in 1976. This change stopped the US from giving most kinds of economic and military aid to any country that gave or got nuclear enrichment equipment, materials, or technology that wasn’t protected by the International Atomic Energy Agency (IAEA). The next year, Congress added the Glenn Amendment to the Foreign Assistance Act. This meant that the US couldn’t help any country that didn’t have nuclear weapons but had a nuclear blast. India and Pakistan did not lose their rights because of the Symington and Glenn changes. Congress passed the Nuclear Nonproliferation Act in 1978. This law made it illegal to send nuclear technology to countries that don’t have nuclear weapons unless those countries agreed to full IAEA controls. The Act also said that any state that tried to get unprotected technology could be punished. Pakistan was hit with these penalties right away. In April 1979, President Carter put economic and military sanctions on Pakistan because Islamabad was quietly building a place to enrich uranium, which was against the Symington Amendment. (These sanctions did not stop foreign financial institutions from giving aid in the form of grants and loans to help feed people)

Change in US attitude towards Pakistan

In December 1979, when the Soviet Union invaded Afghanistan, the US suddenly and drastically changed how it felt about Pakistan. Due to concerns about national security, the US lifted the sanctions above, even though there was proof that Pakistan was working on a nuclear weapons programme. This was clearly meant to get Pakistan ready for a role against the Soviets in Afghanistan, and it marked the second honeymoon in their relationship with each other. In 1981, the US passed a $3.2 billion military and economic aid programme for Pakistan. The goal was to help Pakistan deal with the growing threat to security in the area and meet its own needs for economic growth. In March 1986, a $4 billion plan like this one was given the green light for the years 1988-1993. Ironically, while the US Administration was trying to get a Pakistan that could make nuclear weapons to help fight the war in Afghanistan, Congress was busy making scaffolding for the people who spread nuclear weapons. During the Afghan Jihad, Congress passed the Pressler Amendment (1985) to the Foreign Assistance Act, which helped Pakistan. This amendment stopped most economic and military aid to Pakistan unless the US President could swear every year that “Pakistan did not have a nuclear weapon and that US aid would make it less likely for Pakistan to have a nuclear weapon.” Even though Pakistan told the world in 1984 that it could enrich uranium for nuclear bombs and in 1987 that it could put together a nuclear device, the US kept saying that Pakistan was not a nuclear power until 1990. Ironically, while the US Administration was trying to get a Pakistan that could make nuclear weapons to help fight the war in Afghanistan, Congress was busy making scaffolding for the people who spread nuclear weapons. During the Afghan Jihad, Congress passed the Pressler Amendment (1985) to the Foreign Assistance Act, which helped Pakistan. This amendment stopped most economic and military aid to Pakistan unless the US President could swear every year that “Pakistan did not have a nuclear weapon and that US aid would make it less likely for Pakistan to have a nuclear weapon.” Even though Pakistan told the world in 1984 that it could enrich uranium for nuclear bombs and in 1987 that it could put together a nuclear device, the US kept saying that Pakistan was not a nuclear power until 1990.

To be continued