Why the US paid big money to Pakistan

American dollars were not “wasted”, even if they won’t please prissy auditors

So the New York Times reports that all that money that the United States is giving to the Pakistani military establishment is being “wasted”. Musharraf’s regime is not only overcharging the United States, siphoning off much of it and not spending the money on fighting terrorism, as it should. One European diplomat is quoted as saying that the Americans are being taken for a ride.

Yet none of this is the least bit surprising. The US government knew before and during the entire period that the Pakistani establishment would behave exactly as it is behaving. The lessons of the anti-Soviet jihad of the 1980s in Afghanistan point to that. Musharraf’s contemporary shopping list—F-16 fighter aircraft, P3-C Orion maritime surveillance aircraft and anti-ship missiles—was not exactly secret either. The smart people in Washington won’t be unaware of the principle of fungibility of money, as also the fungibility (to a large extent) of military hardware and training. The European diplomat is either being charitable or being naive. The US government is not a victim of the Pakistani military establishment: it is a willing accomplice.

But its complicity is not without reason. Although the reasons wouldn’t be the ones it can put in front of Congressional auditors. That’s because the money that the US was paying the Musharraf regime was the only way—short of messy, and far more expensive, military methods—it could retain a hold over its actions. The US essentially bought the co-operation of the Pakistani military establishment. The itemised billing was for show. Indeed, this strategy required the US to allow its money to be used, abused, siphoned and spirited away by the Musharraf regime. The idea was not to insist on transparency and accountability on how the funds were spent. Rather, it was to hold Musharraf accountable for the results. The pertinent question that needs to be asked—and criticism leveled against the Bush administration—is how far it pursued the latter. It is also reasonable to ask, in the interests of good governance design, how far the former affected the latter.

Let’s not forget externalities. Supplementing Pakistan’s military budget allowed the Musharraf regime to purchase more weapons than it could otherwise have changing the military balance with respect to India. And the US stands to benefit (via Atanu Dey, who has a lucid explanation of dollar auctions and deadly games) from the inevitable Indian response. If there is a victim in this story, it is the poor Indian taxpayer.