The U.S.-Pakistan partnership is facing unprecedented strains, and dissatisfaction in both countries over The Kerry Lugar Berman (KLB) act's record reinforces other sources of tension in the relationship. Vital U.S. interests require a successful Pakistan—prosperous, stable, democratic, and capable of playing a constructive role in global affairs—but many analysts in both the United States and Pakistan fear that KLB has little chance of succeeding.

Reflecting widespread concern in both countries that KLB was in grave danger, the Woodrow Wilson Center’s Asia Program organized a 17-member working group earlier this year to examine both the broad principles governing the aid program, and some of the specific mechanisms of implementation. This report is the product of extensive consultations, in Pakistan as well as in Washington. 

• It concludes that a robust program of U.S. civilian assistance to Pakistan serves important interests of both countries.

• It warns that substantial mid-course changes are needed if KLB is to fulfill the hopes of its proponents.

• And it offers nearly 30 recommendations that should guide U.S. and Pakistani officials as KLB moves forward.

SELECTED RECOMMENDATIONS

1. Continue to implement KLB aid without adding security- or economic-reform-related conditions—but advocate reforms. Press Pakistan to return to an arrangement with the International Monetary Fund (IMF).

2. To ensure that U.S. aid augments and does not replace local funding, require Pakistani co-investment in all KLB civilian aid projects except disaster relief.

3. Establish a more realistic timeline, with benchmarks, for stepping up the percentages of U.S. aid to be dispensed through Pakistani government structures.

4. With support from other donors, press Pakistan to create and use transparent Treasury Single Account-type mechanisms to improve tracking and donor oversight of aid.

5. Continue budgetary support for the Benazir Income Support Program only if it is tightened to exclude political manipulation and move beneficiaries toward eventual independence.

6. Devise metrics for KLB programs in cooperation with Pakistani implementers.

7. Use independent third parties for KLB project evaluations.

8. Partner with local civil society organizations to improve input from aid beneficiaries, local citizen watchdog groups, and impacted populations through the life of a program.

9. Enhance in-country aid coordination with like-minded bilateral donors.

10. Help fill the Pakistan government’s most critical expertise gaps at the federal and provincial levels—but with “payback” conditions for beneficiaries.

11. Recognize the importance for Pakistan’s future of its urban areas; fund urban clean water, power, sanitation, youth organizations, and literacy training.   

12. Support expansion of Pakistan’s small/medium enterprises sector; target small grants and seed money to new lines of business.

13. Make vocational skills training the main U.S. contribution to education in Pakistan.

14. Create mechanisms to mobilize resources from and tap technical and management skills of the Pakistani diaspora in the United States and elsewhere for new ventures in Pakistan. 

15. Do not substitute bilateral trade, as valuable as it is, for aid, as some Americans and Pakistanis have proposed. Pakistan needs both development and growth.

16. Increase USAID’s use of contracts, and transition away from cooperative agreements. Recruit more seasoned technical experts; extend Pakistan tours; and devolve authority and accountability.

17. Be aware of issues on which U.S. pressure might be counterproductive to development objectives; keep expectations modest; and be patient in our approach.