Looks like a full-court press to me. So far as I can tell, this is really revolutionary stuff. We're less surprised in the modern global security environment by one state taking an interest in what previously might have been considered to be the sovereign internal affairs of another, what with economic interconnectedness, so-called "superempowered individuals" and sub-state actors, and so on, but isn't this even a step beyond what we're used to seeing? It's one thing to say "we'd like to see the Pakistanis using the F-16s we're selling them to prosecute counterinsurgency operations on their northwest frontier rather than to defend against an imagined Indian threat," and it's quite another to say "we wish the Pakistanis would teach more math to third-graders." Yesterday's commentary seems much closer to the latter."This is one of my pet peeves: Countries that will not tax their elites but expect us to come in and help them serve their people are just not going to get the kind of help from us that they have been getting," Secretary of State Hillary Clinton told an audience Tuesday at the U.S. Global Leadership Coalition conference.
"Pakistan cannot have a tax rate of 9 percent of GDP when land owners and all of the other elites do not pay anything or pay so little it's laughable, and then when there's a problem everybody expects the United States and others to come in and help," Clinton said to a round of applause. She noted that Pakistan's finance minister is now presenting a package of economic and tax reforms.
Treasury Secretary Timothy Geithner, who was also on the same panel, drove home the message that countries who want U.S. development aid must adopt the reforms that Clinton is advocating.
"I've been doing this for a long time and I have never heard a discussion like this, where you have the secretary of state saying what she just said, which is recognizing that unless we are tougher on how we provide assistance...we should not be financing them at this level," Geithner said.
Panel moderator Frank Sesno noted that scaling back assistance to Pakistan, and countries like it, could conflict with other U.S. objectives in the region, such as bolstering the government's internal stability.
"All of these objectives are going to be in conflict at one time or another," Geithner responded. If the countries do not make the required reforms, "We're not going to be able to justify financing [them] on this scale," he said.
On Monday, Af-Pak envoy Richard Holbrooke made a similar plea while appearing on the Rachel Maddow show.
"Their maximum tax rates are much lower than ours, and there's a lot of tax evasion there, as has been well reported. And we can't ask American taxpayers to pay the burden if the Pakistanis don't raise their own revenue," Holbrooke said. "So I don't want to leave people with the impression we're going to pay for the reconstruction
phase."In an interview, USAID Administrator Rajiv Shah told The Cable that the multi-billion reconstruction effort that Pakistan faces in the wake of the flood crisis is "going to be much more successful" if Pakistan adopts the Obama administration's suggestions to ""implement a stronger tax regime that's ... more effective."
But even more than all that, here's what really worries me: are we so sure that we understand Pakistan's internal politics well enough to give guidance (or make demands) about potentially inflammatory domestic issues like taxation? Most of us are prepared to acknowledge that Pakistan at least has the potential to become -- if it's not already -- the most dangerous country in the world for the U.S., right? I don't really have enough area knowledge to say this for a fact, but it seems to me that one way to accelerate that development is to contribute to the sort of socio-economic/class stratification that could imperil the government from yet another direction, piling yet another threat on to that posed by the challenge of religious extremist groups/parties and those agitating for land reform and other measures of economic equality (who are already susceptible to manipulation by Taliban-type groups mentioned latterly).
Basically what I'm asking is this: are we sure we should be asking the Pakistani government to piss off rich people at the same time they're pissing off poor people, conservative people, very religious people, Indians, Baluchis, and Pashtuns? It might be good politics in the U.S. -- fair enough that people get annoyed about pumping U.S. aid dollars into a country that can't effectively collect its own legally and morally justified receipts -- but shouldn't the priority here be maintaining the stability of the Pakistani government?
Would be very interested to have actual Pakistan experts weigh in here (as well as all you development folks).
UPDATE: Whoops, in my rundown of people the government has pissed off, I forgot to include the military.
