Pakistan and “Strategic Rents”

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"Pakistan and “Strategic Rents”"

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This great Peter Juul post on Pakistan at the Wonk Room points me to this fascinating Newsweek article from January 2008 which introduces me to the concept of “strategic rents.” I think it’s a great way of thinking about some of the pathologies afflicting the US-Pakistan relationship. They argue that much as you tend to see a “resource curse” in areas where politics becomes about trying to control the rents from oil wells or diamond mines, that in Pakistan you see an analogous problem of strategic rents:

Rents paid for natural resources are bad enough. But “strategic rents”—earned by a country for its role in the foreign policies of other states—are even more damaging. Military aid by definition entrenches the militaries that get it, making them less responsive to civilian control. Pakistan’s military has grown enormously powerful over the years, resistant to democratic checks and highly entrenched in every aspect of the country’s commercial, civil and political life. From banking to insurance, cereals to cinnamon, the military’s presence and influence can be felt everywhere. Strategic rents have also helped radicalize Pakistan, since some of the Saudi aid money for jihad in Afghanistan has gone instead to fund extremist madrassas in Pakistan itself.

Strategic rents are also susceptible to manipulation. Gen. Pervez Musharraf, for example, has consistently avoided foreign criticism and kept the money coming by arguing, essentially, that while he may be imperfect, the alternative—the Islamists—is far worse. To support this case, Pakistan’s leaders have resorted to trickery at times. For example, according to the Pakistani journalist Ahmed Rashid, prior to last year’s confrontation at the Islamabad Red Mosque, the government stood by idly as militants poured into the compound—though it could have easily flushed them out in the early days—in order to highlight the Islamic “threat” Pakistan supposedly faced, and the need for more aid.

I was at off-the-record event with various knowledgeable players last week when some related issues came up. The point one speaker was making is that it just doesn’t seem to be the case that the Pakistani elite sees the region the way we do. And the hard question for policymakers is whether they really think they have any way of getting Pakistani elites to change their mind about this. As Peter writes:

We (the principal) are counting on the Pakistani government (the agent) to accomplish something in our interests, while the Pakistani government has its own conception of its interests and strategic objectives. This problem leads to the Pakistani government using our military aid to further its own strategic objectives. Hopefully, the refocus on civilian development and governance assistance will more directly address the problems that allow militancy to flourish in Pakistan. But unless the Pakistani government decides that militancy is a threat to the state itself and acts accordingly, our civilian aid won’t have the impact it could.

I think that part of this is that not only do we need clever ideas, but we need to show some willingness to walk away. As long as the Pakistani security establishment thinks we’ll never walk away, then any kind of conditions we try to impose on our aid just become a challenge to try to get around. There needs to be some kind of sense that we might get really fed up and take our toys home. At the same time, there needs to be some sense among the general public that we’re genuinely interested in improving their lives and not just in trying to buy permission to launch air strikes.

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