Implications of Uncle Sam’s largesse

Arindam Banerji points out how Uncle Sam’s largesse is already leading Pakistan to harden its position vis-a-vis Kashmir. This is yet another factor behind Musharraf’s recent pronouncements.

On Sunday Vir Sanghvi argued that Pakistan is pursuing peace with India not out of ‘love thy neighbour’ bonhomie but because it has no choice. American mollycoddling and dollars are creating choices that are already beginning to be counterproductive to regional security.

Related Link: Harold Gould writes in designating Pakistan as a “major non-NATO ally,” once again the U.S. has opted for short-term gains over long-term consequences.

Arindam Banerji: So, Powell slapped us – Now what? Second, inadvertently or on purpose, with this MNNA declaration and the subsequent aid announcements, Uncle Sam has just strengthened the hand of Pakistan in the upcoming Kashmir negotiations. The balance used to be – Pakistan holds the gun of terrorism to our head, while India dangles the goodies of better trade/economy and the impact of a lost arms race to Pakistan. What the US has done, is to strengthen the Pakistani economy significantly by strengthening their economy and also changed the odds visibly in the arms race equation. Overall, India clearly had the upper hand, and I’m not a big fan of India negotiating from anything, other than a position of overwhelming strength. Actually, Pakistan is already back to its old tricks, as IntelligenceOnline reports based upon Army intelligence intercepts:

Following the US decision to make Pakistan a major non-NATO ally, the Indian Army and security forces have seen a perceptible heightening of terrorist preparations to infiltrate into Jammu and Kashmir once the snows melt, and officials say that General Pervez Musharraf is going back on his peace commitments to India

Of, course for (Pakistan), a country with a GDP of $64B and a growth at about 5%, this means about 4.63% (3.7% of GDP if you assume 50% price gouging) of GDP growth. If you take this away and realize that Saudi Arabia is hesitant to renew the $1B (1.5% of Pakistan’s GDP) of free oil-aid that it gives to Pakistan in the future, Pakistan’s economy would essentially be in a recession without this baksheesh program. While, that total in itself is interesting, it says nothing about the direct impact of the money on India. So, thanks to a friend from Bharat Rakshak, let us do a little more mathematics.

Assuming, that Pakistan spends about half of what it is charging the US forces, then the total amount of amount of extortion profit from the US is about $2.4B. Let’s say 10% of this $2.4B goes into funding paramilitary-style terrorism, and 70-90% of that is spent on buying RDX, communication equipment, salaries for terrorists and insurance payouts for the dead scum. This leaves about $24M for buying guns, bullets and spending money for the act itself. This probably leaves about $6M for buying guns and bullets and buys us about 100,000 AK-47s (at about $40 a pop). [Sify]

One thought on “Implications of Uncle Sam’s largesse”

  1. Just a brief comment: What’s more disheartening is the lack of reaction–at least so far–from the MEA.

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