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.