Drones Vie With Economy as Obama Meets Pakistan Leader

Photographer: Shah Khalid/AP Photo

A Pakistani villager holds the wreckage of a suspected surveillance drone that crashed in the border town of Chaman in 2011, along the Afghanistan border with Pakistan. Close

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Photographer: Shah Khalid/AP Photo

A Pakistani villager holds the wreckage of a suspected surveillance drone that crashed in the border town of Chaman in 2011, along the Afghanistan border with Pakistan.

President Barack Obama emphasized U.S. help for Pakistan’s economy after his meeting today with Prime Minister Nawaz Sharif, who repeated his insistence that strikes by American drones on Pakistani soil must end.

The U.S. is seeking to restore closer ties with a nuclear-armed nation at the center of the battle against Islamic extremism by working with Sharif’s government on economic development.

The U.S. plans to provide 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.

Obama told reporters after meeting with Sharif for about two hours that they spent much of the time discussing economic issues, including expanding trade.

“I applauded the prime minister for some of the reforms steps he has already taken,” Obama said. “Not all of them are easy, but they promise to put Pakistan’s finances and economy on a more stable footing.”

While the U.S. president made no mention of one source of tension between the nations, Sharif said he brought up concerns about attacks on militant targets by remote-controlled drone aircraft, “emphasizing the need for an end to such strikes.”

Photographer: Alex Wong/Getty Images

Pakistani Prime Minister Nawaz 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. Close

Pakistani Prime Minister Nawaz Sharif is moving to overhaul an economy crippled by a... Read More

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Photographer: Alex Wong/Getty Images

Pakistani Prime Minister Nawaz 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.

Strained Ties

With Pakistan’s regional influence central to assuring a smooth U.S. military exit from neighboring Afghanistan, America and Pakistan are at a potential turning point in a relationship strained by civilian deaths from drone attacks, the raid 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 a State Department official during President George W. Bush’s administration.

Sharif is moving to overhaul an economy crippled by the 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 fiscal 2016, up from about 3.6 percent in the year ended June 30.

Power Project

The U.S. Agency for International Development unveiled projects that align with Pakistan’s development focus on energy and the economy.

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 the national energy grid by 1,200 megawatts.

A second project will be the rehabilitation of a 247-kilometer (153-mile) road that connects Kandahar, Afghanistan, to the Pakistani city of Karachi. The road is expected to become a major trade route, supporting local economies along its length and allowing farmers to get products to market.

The road runs through some of the most fraught areas of Pakistan, and the U.S. sees the conduit as a weapon in the fight against militants in the area, according to a U.S. official who asked not to be identified in talking about the project before it was announced. The official said improving transportation makes education, health and other trappings of modernization more available, creating a counterweight to militants.

First Meeting

The White House meeting was 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.

U.S. drone strikes against militants in tribal areas of Pakistan have been a point of friction between the nations. 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.

Jay Carney, the White House press secretary, said yesterday that 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.

Lew Meeting

Ahead of his visit with Obama, Sharif met last night with U.S. officials including Treasury Secretary Jacob J. Lew and Commerce Secretary Penny Pritzker to discuss Pakistan’s energy industry and opportunities for trade and investment, according to a Treasury Department statement.

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.

Border Incursions

“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 next year.

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

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