It is improbable we will ever learn exactly what was on President Donald Trump’s mind when, at 4 am on New Year’s Day, he lamented that the United States had “foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies and deceit”. For all the furore that has followed, though, the precise details of what he intends to do to address the problem remains unclear. United States officials have said they do not intend to hand over the $255 million in military aid that was scheduled to be given in 2016. That funding, however, was placed in escrow six months ago — so its suspension is not breaking news. Perhaps more importantly, the $255 million amounts to only about 20 per cent of the $1.87 billion Pakistan is expected to spend on new military acquisitions and modernisation — not insubstantial but not enough to make Islamabad scream in pain. Put simply, President Trump’s tweet tells us that he is upset and angry with Pakistan — something that he has announced repeatedly since taking office — but there is still little clarity on how to turn those sentiments into policy.
This much, though, is clear: Pressure is mounting on Islamabad to deliver on its obligations to act against terrorists operating from its soil. In February, the State Bank of Pakistan, the equivalent of that country’s Reserve Bank, is scheduled to report to the multi-national Financial Action Task Force (FATF) on what actions it is taking against the financing of groups like the Jama’at-ud-Dawa and Taliban. Less than two months remain, but the SBP has managed to take little concrete action. With an irate United States in play at the FATF, Pakistan could find itself in trouble with the global banking system. Add to that the risk that the United States may stonewall Pakistan’s future appeals for International Monetary Fund aid, and Islamabad has real reason for concern.
For years now, some experts have feared that such pressures could push Pakistan further into China’s orbit — turning it, in effect, into another North Korea. That fear has allowed Islamabad to continue sponsoring jihadist groups in India and Afghanistan with impunity. Yet, President Trump’s advisors have weighed the options and seem to have taken the decision to ratchet up the pain. That may prove a sound call. China has shown little willingness to underwrite Pakistan’s economy in the way the United States did for decades. Instead of aid, Beijing provides loans — on terms many experts consider unfair, even usurious. In spite of its relationship with Beijing, Pakistan’s military still looks west for cutting edge military technology. But this is uncharted terrain, with unforeseeable consequences: Reason to watch how this play unfolds with the greatest care.