U.S. economic assistance to Pakistan : review of the period 1982-1987

The A.I.D. program was designed in part to offset the balance of payment impacts of GOP purchases of U.S. military goods. Thus, the program included a $448 million agricultural Commodity Import Program (CIP), a $100 million energy CIP, and a $309 million Title I program. The Title I program led to policy changes intended to liberalize markets and increase local production of edible oils (despite contrary U.S. commercial interests), while local currency generated by all 3 programs helped reduce chronic GOP budget deficits. Nonetheless, the GOP's public finance position has seriously deteriorated. Activities in agriculture (with obligations totaling $186 million) have achieved clear successes in improving irrigation water use/system maintenance and partial success in policy dialogue (market liberalization and increasing the private sector's role). A food security project shows promise. Other initiatives, however, such as those in agricultural research and forestry, require stronger GOP commitment to institutional reforms. Also, the need for fast-disbursing balance of payments support may preclude using the new Agriculture Sector Support Program to leverage policy reform. USAID/P's energy efforts (obligations of $356 million) may turn into a major success story. The Mission has identified activities that complement those of other donors and is prepared to take the high risks and perform the humble tasks of exploring the feasibility of various potential private sector investments. The Mission is also gradually achieving institutional reform in this arena. Following GOP priorities, there has been less activity in the social sector than seems warranted, with only $196 million obligated for health, family planning (FP), training, and women in development. Perhaps the most innovative effort has been a social marketing project, which despite policy constraints is successfully distributing low-priced contraceptives through the private sector. Training, especially the Development Support Training Project, has also been an important success story. Other social sector initiatives have suffered from insufficient GOP policy and financial support. Area development/narcotics control projects have faced severe implementation problems, with only $20 million disbursed of $98 million obligated. The Northwest Frontier Areas Development Project has apparently succeeded in reducing poppy cultivation; however, projects in the inhospitable environments of Baluchistan and the Tribal Areas seem to have exposed USAID/P to a high risk of failure. GOP support has been less than might be expected. See also the abstract of PD-AAY-457.