Donors Bolster Pakistan's Flagging Economy Pakistan is getting more development money from international donors. Led by the U.S. and Japan, the group pledged more than $5 billion on Friday to help Pakistan's troubled economy, and fight the spread of terrorism in the islamic nation and neighboring Afghanistan. Maria Kuusisto, an analyst with Eurasia Group, explains why Pakistan needs aid so urgently.
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Donors Bolster Pakistan's Flagging Economy

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Donors Bolster Pakistan's Flagging Economy

Donors Bolster Pakistan's Flagging Economy

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It's MORNING EDITION from NPR News. Renee Montagne is on assignment. I'm Steve Inskeep. Good morning. More development money will be going to Pakistan, a country that's at the top of the priority list of the new Obama administration. This money comes from a group called the Friends of Pakistan.

The United States is one of the friends, as are Britain, China, Saudi Arabia, a number of other countries. They're meeting today in Tokyo, and they pledged $5 billion over the next two years. A fair amount of money, though not as much as some had hoped. The people watching Pakistan's progress, or lack of it, include Maria Kuusisto, an analyst with the Eurasia Group.

Ms. MARIA KUUSISTO (Eurasia Group): They're in a big economic meltdown, actually, now, which is, you know, related to their textile sector. And they're selling to the U.S. and the U.K. And now, when there's a recession in the U.K. and U.S., the export orders have significantly declined. While this is happening, Pakistan is also very dependent on overseas Pakistani workers. And particularly now when there's a huge recession, you know, developing in Dubai and other places in the Gulf, these migrant workers are now returning to Pakistan, you know, impacting the unemployment situation.

INSKEEP: I don't mean to be cynical here, but why on Earth would we think we would get any particular value from sending billions of dollars to the government of Pakistan? I'm thinking about the argument that goes on with aid to Africa, where it might be a very nice idea but sending money to a corrupt government is not always a very efficient - it may even be a counterproductive thing to do.

Ms. KUUSISTO: Well, I think, you know, the point is that what the Friends of Pakistan want to do, they want to encourage, you know, development and a social stability in Pakistan. If they don't do this, then this creates a risk that, you know, there will be increasing security threat emerging from Pakistan, sort of radiating to the region and potentially, also globally.

INSKEEP: Wait, wait, wait. You're telling me why it's a problem that Pakistan has a bad economy. Why does anybody think that sending money to Pakistan's government will be productive?

Ms. KUUSISTO: Well, I think what they're aiming to do is basically, not give the money to the government but earmark it to certain development programs which they perceive as, you know, going to the people and this way, sideline the government in terms of investing into the Pakistani economy.

INSKEEP: And what are the kinds of projects that are being earmarked or talked about being earmarked?

Ms. KUUSISTO: Well, there are several. But I think the most popular ones, if you like, are going to be strengthening the court systems, putting money into education, health care, you know, help boost Pakistani peoples' social situation.

INSKEEP: You're a risk analyst, right? That's basically what you do at the Eurasia Group.


INSKEEP: People ask you what kinds of risks there are in different countries. Does this sound like a good bet, that this government in Pakistan is a government that can be helped in a productive way from the outside by these nations?

Ms. KUUSISTO: Well, I think the Pakistani government is looking increasingly weak. And it has been distracted from tackling the economic meltdown. But this said, I think there are opportunities to invest in certain sectors and certain projects and basically, as I said, sidetrack the government. So I think there are opportunities there. But certainly, I think, blank-check assistance is not going to be very helpful.

INSKEEP: Maria Kuusisto is an analyst of Pakistan for the Eurasia Group.

Thanks very much.

Ms. KUUSISTO: Thank you.

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