Daily Times

(Recap: Since Prime Minister Liaquat Ali Khan’s first 24-day state visit to the US in May 1950, Pakistan has kept all its eggs in the American basket. Successive governments have been boasting of being a non-NATO ally of the US – with mismatched strategic objectives, though. Pakistan needed the US support against India but was offered protection from communism, which it accepted – ambivalently. In other words, it needed a haircut but, incredibly, settled for shampoo. Therefore, this antithetical alliance was a non-starter from day one. It metamorphosed into a transactional relationship between the proverbial wolf and the lamb. As a consequence, Pakistan was required to dance non-stop on Washington’s tunes; to be rewarded when it did and sanctioned when it didn’t. Hence the sad saga of intermittent sanctions, with the latest bill tabled in the US Senate on September 27.)

The 1990 Sanctions: The Geneva Accords signed between Pakistan and Afghanistan on April 14, 1988, heralded the end of the second Pak-US honeymoon. The accords, guaranteed by the US and the Soviet Union, inter alia, stipulated a timetable of the Soviet withdrawal from Afghanistan, which started on May 15, 1988, and was completed on February 15, 1989.

With the Soviet withdrawal from Afghanistan, Pakistan lost its strategic significance for the US. President George W Bush wasted no time in refusing to certify that Pakistan “did not possess a nuclear explosive device.” On October 1, 1990, Washington suspended all military assistance and new economic aid to Islamabad, under the Pressler Amendment.

The Geneva Accords signed between Pakistan and Afghanistan on April 14, 1988, heralded the end of the second Pak-US honeymoon.

The sanctions hurt Pakistan severely. According to an economic survey, the period of the 1990s was Pakistan’s worst decade yet, in economic terms. Pakistan was receiving about $2.5 billion per year in loan/grant assistance from international financial institutions and bilateral donors. The sanctions put a squeeze on loans/grants, causing hardships for Pakistan. The country’s external debt accumulated from $22 billion in 1990 to $38 billion by the end of 2000. (Pakistan spent an estimated 80 per cent of its annual budget on debt servicing. In 2000 alone, it made interest and principal repayments of about $5 billion to foreign creditors.)

Gross Domestic Product (GDP) growth rate fell from an average of 6.5 per cent during the 1980s to 4.6 per cent in the 1990s, with the rate being even lower (4.2 per cent) in the latter half of that decade. The average growth between 1996-97 and 2000-2001 was not more than three per cent. Inflation, which had never been a real problem in Pakistan, was in double digits for most of the 1990s. Unemployment almost doubled from around three per cent in the 1980s to close to six per cent in the 1990s. Investment and growth in industrial development, particularly in the manufacturing sector, showed negative trends.

Poverty emerged as a serious economic and social issue in the 1990s. The proportion of the poor below the poverty line almost doubled between 1987 and 2000. In 1987-8, 17.3 percent of the population was below the poverty line and in 1998-9 this figure had risen to 32.6 percent. The development expenditure fell from 7.2 percent of GDP during the early 1980s to around 4.2 percent during the ’90s. In real terms, development expenditure fell by almost a third from close to nine per cent of GDP in the early 1980s to less than three per cent of GDP in the late 1990s.

During the Afghan Jihad, the US provided military aid to Pakistan to modernize its conventional defence capability. 40 per cent of its assistance package was allocated to non-reimbursable credits for military purchases, the third-largest program after Israel and Egypt. The remainder of the aid program was devoted to economic assistance.

As a result of the financial constraints, which were a natural concomitant of the sanctions, the normal robust training programme of Pakistan’s 620,000 member armed forces (and 513,000 reservists), the world’s eighth-largest, was adversely affected. Likewise, Pakistan had an increasingly difficult time maintaining its ageing fleet of American, Chinese, British and French equipment.

The Case of F-16s: To make hay while the sun was shining during the Afghan Jehad, Pakistan had shown interest in purchasing F-16 fighter aircraft. The request was met with immediate approval. An agreement for the purchase of 40 aircraft was signed in December 1981. The first aircraft landed in Pakistan in January 1983 and the delivery of the entire lot of 40 was completed in 1987. Pakistan was the second nation, after Israel, to use this premier front-line combat aircraft.

The purchase deal of 71 more F-16s was successfully negotiated in 1989. Pakistan paid $ 658 million for 28 aircraft. By October 1990, when Washington invoked the Pressler amendment, 17 aircraft had been built and delivered to the Aircraft Maintenance and Regeneration Centre (AMARC) in Arizona. Besides, 11 attrition replacement aircraft were also built, paid for and ready for delivery to Pakistan. But, because Pakistan was no more needed in Afghanistan, these aircraft were never delivered. And, as if that was not enough, the money paid by Pakistan in advance, was not refunded for about a decade.

(To Be Continued)

The writer is a former diplomat, based in Canberra, and can be reached at khizar_niazi@hotmail.com