U.S. Funding Cut May Do More for Pakistan's Generals than for Washington's Goals

This week's news that the Obama Administration has withheld just over a third of the military aid earmarked for Pakistan's military aroused little surprise in the Pakistani capital. Since the May 2 humiliation of the U.S. raid that killed Osama bin Laden, the Pakistani military has pushed back against the U.S., embracing defiant nationalist rhetoric that mirrors the distrustful mood in Washington. The U.S. funding move may, ironically, actually create an impression that helps Pakistan's military satisfy its citizenry's clamor for it to stand up to Washington. Still, even if a backlash from the U.S. were expected, cutting funding will make it more difficult to repair relations, exert influence over Pakistan and press it to move against those militants against whom it has been reluctant to act.

The aid has not been cut, U.S. and Pakistani officials insist. What has taken place is a "delay" in the delivery of $800 million from two separate funds. The largest chunk, $500 million, comes from the Coalition Support Fund — used to reimburse Pakistani troops for combat operations against Taliban militants. The U.S. is invoiced for these costs and, after determining whether the claims are justified, the sums are paid to the Pakistani government before being transferred to the military. In the past, U.S. officials have complained about these expenses being either poorly documented or inflated.

The delay of payment is hardly sudden, either. In contrast to the impression created by recent media reports, Pakistan's military has been waiting for payments for at least six months. Coalition Support Fund payments are disbursed quarterly, and the half-billion dollars being withheld are the payments from the last two quarters of 2010. And it is this sum that will most anger Pakistan's generals, who see Washington responding to events after May 2 by further delaying money already spent by the Pakistani military the previous year. Still, in public, the military has affected an insouciant shrug in response to the announcement.

The reimbursement process via the Coalition Support Fund has long been a source of frustration for Pakistan's generals. Back in January 2009, army chief General Ashfaq Parvez Kayani complained to General David Petraeus about slow payment. According to a 2009 State Department cable released by WikiLeaks, Kayani also told Petraeus that the bulk of the funds never reached the military's coffers — he claimed that as much as 60% had remained with the civilian government. That claim was reinforced in a press release after the last meeting of Pakistan's top army generals, the powerful corps commanders.

The corps commanders' statement claimed that the army had only received $1.4 billion out of the $8.4 billion in Coalition Support Funds paid to Pakistan since 2001. Some $6 billion, the statement asserted, had remained with the government for "budgetary support." Until 2008, of course, the government had been run by the military under General turned President Pervez Musharraf, a fact artfully elided by the statement. The commanders added that since March 2010, the military hard argued that U.S. military assistance should "be diverted toward economic aid to Pakistan."

The remaining $300 million of the amount being delayed stems from a separate counterinsurgency fund, and covers the total costs of maintaining the presence of U.S. special-operations troops in Pakistan and the value of the equipment they brought along. Those forces had been based in places like Warsak in the northwest to train Pakistani military trainers, who would in turn impart enhanced counterinsurgency skills to their own troops. From the start, Kayani had been wary of letting U.S. trainers engage directly with his soldiers. In June, when the Pakistani military demanded the departure of many of those U.S. special-operations troops in retaliation for the bin Laden raid in Abbottabad, it knew it would also lose the equipment they had brought with them.

For Kayani, Pakistan cutting back on U.S. military aid has not only been a longstanding reality, but may even be desirable. Nearly two-thirds of U.S. military aid will continue, of course, and the military will continue to gobble up at least a quarter of Pakistan's national budget. But it helps Kayani to appear less dependent on the U.S. In the 2009 meeting with Petraeus, Kayani said he wanted to dispel the impression that the Pakistan military was "for hire." Highly publicized cuts in U.S. aid will help him achieve that goal.

In recent weeks, Kayani has been under pressure from his top generals and his middle ranks to stand up to the U.S. Unwittingly, by responding to the domestic political mood in America, Washington may in fact be helping Kayani respond to the domestic mood in Pakistan.

But Washington also loses some clout in the process. Suspending military aid is highly unlikely to pressure Pakistan into taking more decisive action against militants fighting Western forces in Afghanistan; Kayani has already long refused to do so as a result of Pakistan's view of its own interests in the region. Now, the powerful army chief will not even have to proffer excuses. The loss of military equipment is a setback, but as the military's spokesman has argued, the country can look to China and other sources as an alternative.

Still, the suspension of military aid will not alter the Pakistani military's fundamental strategic calculations; it is unlikely to make it any more cooperative with the U.S. but also unlikely to bring on a complete break with Washington. Kayani is well aware that Beijing is in no position to take over the role of "top sugar daddy," and any military equipment it might supply will be of poorer quality than the American variety to which the Pakistanis have become accustomed. Nor has China shown much enthusiasm for making common cause with Pakistan against their common strategic rival, India.

Pakistan simply maintaining the status quo doesn't suit Washington, of course: the purpose of suspending military aid is to change the U.S.-Pakistan dynamic in Washington's favor. But if anything, the move has made that less likely. After weeks of very public mutual recriminations following the Abbottabad raid, it has become more difficult for either side to be seen as backing down.