Drones to Vie With Economy as Obama Meets Pakistan's Sharif

President Barack Obama will emphasize ways the U.S. can bolster Pakistan’s economy in his meeting tomorrow with Prime Minister Nawaz Sharif as the U.S. seeks to restore closer ties with a nuclear-armed nation at the center of the battle against Islamic extremism.

The U.S. will announce more than $300 million in aid to fund power, road and education projects in Pakistan as part of the release of $1.6 billion in mostly military assistance that was held up by Congress when relations soured last year.

With Pakistan’s regional influence central to assuring a smooth U.S. exit from Afghanistan, the two nations are at a potential turning point in a relationship strained by civilian deaths in U.S. drone strikes, the operation that killed Osama bin Laden in Pakistan and the killing of 24 Pakistani troops in a U.S. airstrike near the Afghan border.

“All the top issues are contentious ones, but there are a variety of economic issues where both sides see eye to eye,” said Daniel Markey, a senior fellow at the Council on Foreign Relations and former State Department official during President George W. Bush’s administration.

Sharif is moving to overhaul an economy crippled by a Taliban insurgency and power blackouts in the world’s sixth most-populous nation, with about 193 million people, by selling shares in state-run companies and improving infrastructure. He is seeking to expand the economy by more than 6 percent in the 2016 fiscal year, up from an estimated 3.6 percent in the year ended June 30.

Aid Focus

The U.S. Agency for International Development will unveil projects that align with Pakistan’s development focus on energy, the economy and combating extremism, according to a U.S. official who asked for anonymity to talk about the plan before it’s announced.

The new aid will include an $80 million hydroelectric power project that will bring electricity to 300,000 people, light 42,000 homes, and help irrigate 16,000 acres of land. The project is part of a longer U.S. goal in Pakistan to help expand the capacity of Pakistan’s energy grid by 1,200 megawatts, the official said.

A second project will be the rehabilitation of a 247-kilometer road that connects Kandahar, Afghanistan, to the Pakistani city of Karachi. The road will eventually be a major trade route, the official said, supporting local economies along its length and allowing farmers to get products to market.

The road cuts through some of the most fraught areas of Pakistan, the official said, and the U.S. sees the conduit as a weapon in the fight against militants in the area. The official said improving transportation makes education, health and other trappings of modernization more available, creating a counterweight to militants.

Increasing Trade

“There’s an increasing acceptance of the idea that the only way to help Pakistan’s economy grow is by creating opportunities for regional trade and investment, and some of that can be facilitated by the United States through aid,” Markey said.

Pakistan has asked the U.S. to go beyond providing aid and help them promote the country as a stable investment environment.

Addressing the U.S. Chamber of Commerce yesterday, Sharif said his government is focused on providing a secure environment for investment and noted profits at Nestle Pakistan Ltd., a unit of the world’s biggest food company, Colgate-Palmolive Co., the world’s largest toothpaste maker, and Unilever Pakistan Ltd.

First Meeting

Tomorrow’s White House meeting will be the first between the two leaders since Sharif, 63, won election in May. While Sharif served twice before as prime minister, in the 1990s, his latest ascent marks the first transition in Pakistan between two democratically elected civilian governments.

While Sharif told the Chamber of Commerce that he wants to put the U.S.-Pakistan relationship “back on a stable and upward trajectory,” one major source of friction has been U.S. drone strikes against militants in tribal areas of Pakistan. The prime minister vowed to stop the U.S. attacks during his election campaign.

On the eve of the White House meeting, London-based Amnesty International released a report saying that civilians are believed to be among those killed in several of the 45 known drone strikes in Pakistan’s North Waziristan from January 2012 to August 2013. The group called the deaths “potentially unlawful killings” and said the U.S. should fully disclose the facts and legal basis for each strike.

U.S. Disputes

White House press secretary Jay Carney said today while the administration was studying the report, “we would strongly disagree” that the U.S. has acted outside international law. “We take extraordinary care” to protect innocent civilians, he said.

Robert Hathaway, director of the Asia program at the Wilson Center in Washington, said security issues remain a large part of the agenda for Sharif’s visit even as Obama seeks areas of agreement.

“So long as Pakistan remains as violent and as troubled domestically as it is, that’s going to put a big hamper on trade,” he said. “As we move into the end game in Afghanistan the administration would like to see greater vigor from the Pakistanis in preventing cross-border incursions by these militant groups into Afghanistan.”

The U.S. also is pressing Pakistan to encourage the Afghan Taliban to seek a peaceful reconciliation with the Afghan government by the end of 2014.

Farahnaz Ispahani, a former member of Pakistan’s parliament, said while hopes are high for Obama and Sharif to improve relations, this may be “a temporary feel-good moment” unless the fundamentals of U.S.-Pakistani policy change “significantly.”

“This relationship has to be reexamined in a more realistic way,” Ispahani said.

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.