AP Interview: Focusing US aid projects in Pakistan

ISLAMABAD – The United States is drastically reducing the number of aid projects in Pakistan as part of reforms aimed at improving the distribution of billions of dollars in funding, the top U.S. aid official said Friday.

The total amount of civilian aid will remain the same, but the U.S. hopes the reorganization will producer better, higher profile outcomes that can win hearts and minds in a country where anti-American sentiment is rampant, said Rajiv Shah, the head of the U.S. Agency for International Development.

The move comes over two years after the U.S. launched a five-year, $7.5 billion civilian aid program in Pakistan that supporters hoped would improve the perception of America, elicit greater support from the government in the fight against the Taliban and al-Qaida and reduce the allure of those groups to average Pakistanis. The vast majority of aid before that went to the military.

Despite spending $2.6 billion in civilian aid, popular support for the U.S. has actually fallen as relations between the two countries have deteriorated, and elements of the Pakistani government are widely believed to have continued backing Islamist militants killing American troops in Afghanistan.

Experts have criticized the aid mission for lacking clear goals and for not providing enough information about how the money is spent. The dominant narrative in Pakistan is that the funds have done little to help average citizens — a message the U.S. has tried to counter.

Shah, the U.S. aid chief, said the U.S. has done much more in recent years than it receives credit, including providing medical training that saved the lives of an estimated 30,000 children and working to ensure that 900,000 kids were able to attend school.

But he said the U.S. had also tried to do too many things at once in the country, which hindered results and made it more difficult for Pakistanis to see the benefits.

He did not name specific programs likely to be cut. But he said the U.S. is working to cut the number of projects from a high of over 140 to around 35 by the end of September in five key areas: energy, economic growth, health, education and stabilization of Afghan border areas.

"If we are trying to do 140 different things, we are unlikely to do things at scale in a way that an entire country of 185 million people can see and value and appreciate," Rajiv told The Associated Press in an interview in Islamabad. "We are just far more effective and we deliver much more value to American taxpayers when we concentrate and focus and deliver results."

The U.S. announced a five-year $127 million program Wednesday to create advanced learning centers at three Pakistani universities dealing with the water, energy and agriculture sectors.

Shah said another potential benefit of concentrating the focus of the aid mission is that it could give the U.S. greater leverage in pressing the Pakistani government to undertake necessary reforms, especially in the energy sector, which Washington has made its top priority.

Pakistan suffers from serious gas and electricity shortages that have hindered economic growth and increased hardship for many Pakistanis. The U.S. has helped increase the electricity supply, but the effort will do little good in the long-term unless the Pakistani government deals with the sector's management and pricing issues.

"You can only be effective at direct engagement with Pakistani leaders if you say, 'Look we are big enough and important enough to your energy sector that we should have a real policy dialogue and make sure you are continuing to make these very tough reforms,'" said Shah.

Another key area where reform is required is in increasing Pakistan's tax revenue. Fewer than 2 percent of Pakistani citizens pay any income tax, resulting in one of the lowest effective tax rates in the world, equal to about 9 percent of the value of the country's economy. In contrast, the U.S. equivalent is more than three times as high at about 28 percent.

The U.S.-based Center for Global Development published a critical report of the aid mission in Pakistan last June that recommended the U.S. hold back much of its assistance until the Pakistani government reformed dysfunctional policies related to energy, taxes and other areas. It also said the mission lacked clear leadership, was understaffed and needed more transparency and a better defined strategy.

Milan Vaishnav, a fellow at the center, said he didn't think much had improved since the report was released.

"I think there has been some successful tinkering around the edges, but generally speaking I think the assessment in 2011 looks pretty similar in 2012," said Vaishnav.

Some American lawmakers have called for aid to be halted unless Pakistan improves its cooperation fighting Islamist militants. These calls were especially loud after Osama bin Laden was discovered hiding in a Pakistani garrison town last May.

The U.S. has suspended hundreds of millions of dollars in military aid but has kept civilian assistance flowing.

Shah said it was in U.S. interests to continue providing civilian aid because it would help foster a more stable and prosperous Pakistan, making it a less fertile breeding ground for Islamist militants who threaten America.

"Our logo and our tagline says 'From the American People,' but in reality this work is very much for the American people," said Shah. "We are safer and more secure ... when countries are prosperous and when countries trade with us instead of represent a militant threat."