homes. She and her husband are partners and proudly explain that the business
is expanding. Their success is not unusual; small-time retailers are doing well in
Pakistan’s cities. Despite the economy’s larger structural problems, Pakistan’s
urban areas are growing rapidly enough that poor and lower-middle-class
strivers can pull themselves up from poverty if they have a decent plan, work
hard, and have access to capital. That potential for upward mobility opens
peaceful and productive doors to a rising generation.
Just sixty miles to the northeast, an even more revolutionary project is
under way at Jassar farm, where owner Shahzad Iqbal believes he has figured
out how to improve dramatically the milk yield of Pakistan’s 60 million dairy
cows (the third largest herd on earth). Unfortunately, due to breeding, care, and
environmental conditions, Pakistani cows now yield less than one-fifth the milk
of their counterparts in the developed world. By importing bull embryos from
outside Pakistan and raising them to stud, Iqbal hopes to engineer a massive
genetic “upgrade” in the Pakistani bovine population. If successful, that would
translate into a surge in milk production – and business opportunities – for the
millions of Pakistani families that own cows.
These innovative projects are risky. But what is encouraging, even inspiring,
is that there are so many similar efforts in the works focused on improving
healthcare, low-income housing, primary education, and agriculture across
Pakistan.52 Many Pakistanis are working hard to improve their country, their
lives, and the fortunes of their children. Some are making real progress and
could, with access to greater resources and support, achieve transformative
breakthroughs.
Along the Grand Trunk Road, the ancient thoroughfare traversing South
Asia that links Kabul to Calcutta, about an hour to the southeast of Islamabad
is Gujjar Khan, a provincial town surrounded by villages. There on a hot,
52 For an example of other efforts in the healthcare sector, see the Aman Foundation, http://
amanfoundation.org/v2/wp-content/uploads/Aman%20Foundation%20-%20Corporate%
20Profile.pdf; in low-income housing, see Saiban, http://www.acumenfund.org/investment/
saiban.html; in education, see The Citizens Foundation, http://www.tcf.org.pk/TCFStory.aspx; in agriculture, see Microdrip, http://www.microdrip.pk/aboutus.html; in drinking water, see Pharmagen, http://www.acumenfund.org/investment/pharmagen-healthcare-ltd.html.
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dusty day in May 2012, Khaleel Ahmed Tetlay surveyed the scene near a small
irrigation reservoir. Low cliffs of a soft clay soil in various hues of brown
flanked the water. Here and there, scrub brush dotted the hills, but for the
most part the soil was untethered to the land, subject to wind erosion and
heavy downpours during the rainy season. Tetlay asked several of the local
farmers why the banks of the reservoir were barren. They explained that goats
had nibbled away their plantings. “Ah, but this should be a challenge for you,
to outsmart the goats,” Tetlay teased.
In his sunglasses, FDNY baseball cap, and khakis, the mustachioed Tetlay,
who studied agricultural economics in the United Kingdom in the late 1970s,
stood apart from the bearded villagers in their traditional cotton tunics. But it
was clear that he was very much in his element. He soon shifted the conversation
to the farmer who was pumping water from the reservoir to water his fields.
The man proudly explained how his crops were far better off than those of his
neighbors who still depended upon infrequent rains. The mini-dam that made
his irrigation possible was a project of the Rural Support Programmes Network
(RSPN). The wisecracking, and in fact rather wise, Tetlay was RSPN’s chief
operating officer.
Tetlay left his job as an economist in Islamabad and joined the first of the
Rural Support Programmes (RSPs) in the 1980s.53 The RSP was designed
to help village communities identify and prioritize their needs, pool their
resources, and identify and tap outside funds from the government and other
donors to meet shortfalls. By nearly any measure, the model worked. Between
1986 and 1997, infant mortality in the communities of the Northern Areas and
Chitral where the RSP was active dropped from 162 per 1,000 to 33 per 1,000.
From 1991 to 2001, real per capita income grew by an average of 84 percent.
Over that same period, poverty rates dropped from about two-thirds to one-
third of the population.54 Over time, the RSP model was replicated, with both
private and state support, to encompass 108 of Pakistan’s 131 districts.
Over time, Pakistan’s RSPs have produced meaningful change. Standing
alongside Tetlay at the irrigation reservoir was his junior colleague, Tariq
Nazir. Quieter than Tetlay but quick to laugh, Nazir explained that he started
53 Based in Pakistan’s remote, mountainous regions of Chitral and the Northern Areas (now Gilgit-Baltistan), the program was intended to serve the needs of a large community of Ismailis, an Islamic sect led by His Highness Prince Karim Aga Khan IV, believed by his followers to be a descendant and spiritual successor to the Prophet Muhammad. As part of his extensive philanthropic work the Aga Khan entrusted a pioneering development worker and former
civil servant, Shoaib Sultan Khan, to try out a new model of community organization in the desperately poor region. Shoaib drew inspiration from his mentor, Dr. Akhter Hameed Khan, one of South Asia’s most famous grassroots organizers, advocates, and development scholars.
At the core of their shared philosophy was the idea that poor people can do a great deal for themselves if mobilized and organized.
54 Stephen F. Rasmussen et al., “Pakistan: Scaling Up Rural Support Programs,” pp. 3, 10–11, http://www.microfinancegateway.org/gm/document-1.9.25816/24216 file rural support.pdf.
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America’s Options
229
his community organizing in the area nearly two decades earlier. Back then, the
same villagers who confidently walked us through a budget briefing and a tour
of their newly paved street were hardly able to sit together, much less to pool
their resources toward a common aim. Now, he said, the local organizations
and their elected representatives are able to manage just about any sort of
project.
The women of the community were also making strides. A bright-eyed group,
young and old, gathered in a sparsely furnished room to explain their plans for
digging a new well. In this part of the world, fetching water is women’s work.
The women estimated that they each spent about four hours every day walking
to and from the existing well. A new well would reduce that to mere minutes,
with revolutionary implications for the daily life of half the village. When asked
why the well had not been selected as the vill
age’s first project, Nazir replied
it was probably because the men had organized before the women. “Now the
women are catching up,” he added with a smile.
The benefits of organizing are social and political as well as economic. On the
drive back to Islamabad, Tetlay explained that the successful community orga-
nizations represented a challenge to traditional rural politicians who, for gen-
erations, have enjoyed virtually unquestioned authority to dispense or pocket
development funds from the provincial and national government. Now, grass-
roots leaders, including women, had a say in selecting development projects.
At times, they could even circumvent politicians in soliciting money from the
federal government and outside donors.
So far, however, rural politicians have chosen mainly to avoid confrontation.
Tetlay likened the situation to the rise of the social welfare state in the West.
“Rather than allowing the workers to unite in proletarian revolution as Marx
predicted,” he explained, “capitalism evolved. The capitalists met enough of
labor’s demands to save their system. If Pakistani politicians are smart, they will
do something similar.” Tetlay went on to observe that some communities were
already planning town hall meetings before the next national elections, offering
them an unprecedented chance to hold their local politicians accountable and
to quiz their challengers.
With their demonstrated capacity to improve economic conditions and to
change political dynamics in rural Pakistan, the RSPs are but one example
of an organization that would benefit from a U.S. strategy of comprehensive
cooperation. This is where the United States may be able to tip Pakistan’s bal-
ance. Since it is the direction of Pakistani society writ large that will ultimately
determine the state’s stewardship of the nuclear arsenal, the numbers of mili-
tants and extremists who choose to take up arms, and the nature of Islamabad’s
relationships in the region as well as its global outlook, these issues are more
than a matter of humanitarian concern.
Of course, Pakistan’s innovative businesses and NGOs are only one piece
of the development story. Decades ago, as mentioned in the Chapter 1, Wash-
ington made massive investments in Pakistan’s infrastructure when it helped
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No Exit from Pakistan
to build the Tarbela Dam. U.S. officials are well aware that Pakistan desperately
needs more hydropower and better management of its water supply. New dams,
power plants, and irrigation canals are massive and costly undertakings, but
they are also precisely the sorts of projects that can transform a countryside
and jump-start economies on a huge scale.
To its credit, Washington has explored the idea of helping to finance the
construction of Pakistan’s long-delayed Diamer Bhasha dam.55 That project, if
successful, could represent a signature “made in America” contribution with
tangible as well as political benefits. When complete, the dam would gener-
ate 4,500 megawatts of electricity, roughly 1,000 more than the mammoth
Tarbela.56 To date, financing challenges have slowed land acquisition, not to
mention construction.57 Other political and diplomatic challenges await, but
there is little question that Washington could tip the scales by its contributions
and leverage with other international funders like the World Bank.58
Aside from direct assistance, Washington has failed to capitalize on the
potential economic benefits of freer trade or incentivized private sector invest-
ment. Since 9/11, nearly every American report on policy toward Pakistan has
advocated a reduction in U.S. tariffs on Pakistani-made textiles and garments.59
The move would not hurt American consumers or producers. Nevertheless,
Capitol Hill has never taken the issue seriously. By some estimates, congres-
sional inaction has cost Pakistan well over a million jobs in volatile cities like
Karachi.60 A decade of job losses of that magnitude, even in such an enor-
mous city, is no small matter. If a Pakistan-only trade deal remains impossible,
perhaps a South Asia-wide plan would win more congressional support. India
might profit more from such an arrangement than Pakistan, but the only real
losers would be low-cost Chinese manufacturers.
Similarly, Congress has resisted calls to establish an “enterprise fund” for
Pakistan that would extend loans and make equity investments in Pakistani
55 Zafar Bhutta, “Raising Finance: U.S. Proposes Securitisation of Dam’s Assets,” Express Tribune, October 24, 2012, http://tribune.com.pk/story/455906/raising-finance-us-proposes-securitisation-of-dams-assets/.
56 Saeed Shah, “U.S. Support for Pakistan Dam Could Help Stem Flow of Bad Blood,”
The Guardian, August 29, 2011, http://www.guardian.co.uk/world/2011/aug/29/us-pakistan-dam-funding.
57 “Potentially Electrifying,” Economist, October 19, 2011, http://www.economist.com/blogs/
banyan/2011/10/new-dam-pakistan.
58 Shahbaz Rana, “Diamer-Bhasha: WB Links Dam’s Funding to Indian Agreement,”
59 See U.S. Strategy for Pakistan and Afghanistan, Independent Task Force Report No. 65 (New York: Council on Foreign Relations Press, 2010), pp. 38–9, 48–50, and The Next Chapter: The United States and Pakistan, Pakistan Policy Working Group (Washington, DC: United States Institute of Peace, 2008), p. 32.
60 “2010: US Embassy Pushed for Pakistan Textiles in Free-Trade Agreement,” Dawn, June 7, 2011, http://dawn.com/2011/06/07/2010-us-embassy-pushed-for-pakistan-textiles-in-free-trade-agreement/.
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America’s Options
231
businesses. Shortly after the collapse of the Soviet Union, similar U.S. funds for
the newly independent countries of Eastern and Central Europe encouraged
business growth and, in most cases, the loans were repaid in full.61 In 2012,
the U.S. embassy in Islamabad announced a new “Pakistan Private Investment
Initiative,” intended to deliver many of the same benefits.62 Expanded versions
of these sorts of programs would help to spur growth in Pakistan’s small and
medium-sized businesses, which would in turn stimulate exports and create
new jobs.63
In short, U.S. assistance might be better used to assist Pakistani development,
grow its economy, and contribute to the nation’s stability in ways that also
serve the American interest. Many of these efforts would be smarter than
channeling millions of dollars directly into the Pakistani government, where
the money provides a budgetary cushion to politicians unwilling to raise taxes
or charge market rates for power and, at the same time, becomes invisible
to Pakistani citizens who are already so deeply skeptical about the value of
American partnership.
Finally, a comprehensive U.S. approach to cooperation with Pakistan offers
the greatest diplomatic opportunity to support and encourage improved Indo-
Pakistani ties, clearly the best way to stabilize Pakistan’s economy and society
over the long run. By hitching its wagon to the giant Indian engine of growth,
Pakistan’s massive population can claw its way out of poverty.64
The history of American diplomatic efforts to mediate between India and
Pakistan suggests that subtle encouragement and nurturing of Indian and
Pakistani initiatives is more likely to pay dividends than public pressure. Wash-
ington will never have enough influence to force either side to take conciliatory
steps or to accept a settlement by diktat. Americans must recall that these are
issues over which both Indians and Pakistanis have been willing to fight and
die for decades.
The name of the game, therefore, is quiet lobbying. In Pakistan, business-
men are typically the most supportive voices for a normalized relationship
with their Indian neighbors. Although in some sectors like pharmaceuticals
61 For more on enterprise funds, see http://www.innovations.harvard.edu/showdoc.html?id=
2364342.
62 “New Investment Initiative Launches in Pakistan with Up to $80 Million of U.S. Funding,”
Press Release, U.S. Embassy, Islamabad, September 14, 2012, http://islamabad.usembassy.gov/
pr 091312d.html; and for background, see Dustin Cathcart, Meredith Gloger, and Aaron
Roesch, “Recommendations for the Pakistan Private Investment Initiative,” John F. Kennedy School of Government, Harvard University, May 2012, http://www.innovations.harvard.edu/
cache/documents/23643/2364342.pdf.
63 See Polly Nayak, “Aiding without Abetting: Making U.S. Civilian Assistance to Pakistan Work for Both Sides,” Woodrow Wilson International Center for Scholars, 2011, p. 37,
http://www.wilsoncenter.org/sites/default/files/WWC%20Pakistan%20Aiding%20Without%
20Abetting.pdf.
64 On the mutual Indo-Pakistani benefits of enhanced bilateral trade see, for instance, Sayem Ali and Anubhuti Sahay, “Pakistan-India Trade – Peace Dividend,” Global Research, Standard Chartered, June 7, 2012.
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