Uncle Sam: Checking out?

America under Trump doesnt seem interested in maintaining its soft power abroad. Reports coming out of Washington D.C. suggest that the Trump administration will downgrade the FY18 budget of US State Department and its foreign-aid-implementation body, the US Agency for International Development (USAID) by at least 37 percent from the FY17 budget of $50 billion. A US Senator called this an amputation, not a budget cut. The State Department is said to be working understaffed at this stage.

Economic and development assistance would be cut by 61 percent Humanitarian assistance accounts would be cut by 36 percent. The White Houses proposal would shift almost all foreign military financing grants to loans, except for the security assistance committed to Israel as per a Washington Post report last Friday.

Two motivations seem to be at work. One, the Trump administration is looking to stop what they refer to as building the world at the expense of hard-working Americans. And two, massive budget cuts across US government, including at the Environmental Protection Agency, are expected to drive a $54 billion budget increase in defense spending, to modernize what Trump regularly calls a depleted military.

It is unclear if the budget cuts will pass the test of US Congress, which is largely sold on the idea of maintaining American influence abroad. But any cuts to foreign aid regardless of scale will suggest a change of heart in the US.

The impact will inevitably be felt in Pakistan. Under the Obama administration, there was renewed US-Pak civilian engagement, first through the Enhanced Partnership with Pakistan Act (2010) (or more famously, the Kerry-Lugar Bill) and later via the US-Pakistan Strategic Dialogue.

As per the State Department documents, the US government had provided $10.5 billion worth of assistance to Pakistan between 2001 and 2009. The breakup of that assistance is not available. Since 2009, the US government had committed $6 billion of civilian assistance to Pakistan, including $1 billion emergency assistance in the aftermath of the great floods of 2010.

The State Department website notes that to date, America has added over 2,400 megawatts to Pakistans electricity grid, built or reconstructed nearly 1,000 schools, and funded nearly 1,100 kilometers of roads in Fata and Khyber Pakhtunkhwa.

Pakistans Economic Affairs Divisions (EAD) Yearbook for 2014-15 states that the US spent $4.3 billion under the Kerry-Lugar aid programme from its start until June 2015. Calculations based on EAD documents suggest that about 10 percent of those funds were channeled via Pakistani government.

It remains to be seen how much funding the State Department will request Congress for projects in Pakistan for FY18. In recent years, those requests which include both civilian and military assistance have dropped. Requests for assistance to Pakistan totaled $2.4 billion in FY13, $1.3 billion in FY14, $872 million in FY15, $917 million in FY16, and $860 million in FY17.

Two things seem plausible if those cuts hit closer to home. One, Islamabad, which had emerged as the development district in the country since 2009, would lose some of its charm for local and foreign NGOs and consultants. With the mainstream British politics, and now it seems European discourse as well, heading down the populist route, it will be hard to fill any shortfalls in American aid. Meanwhile, cutting civilian aid will hurt vulnerable people, who public finances do not adequately take care of, the most.

And two, if the US civilian aid to Pakistan also goes down the way of the military funding, it may provide cynical Pakistanis with one more reason to yet again feel abandoned by Uncle Sam. China, meanwhile, will earn more cheers as a long-term partner, even though it is too early to tell what the net effect for Pakistanis will be of those massive but mostly-debt-financed CPEC investments.

Due to the Afghanistan factor, it is likely that the Trump administration will not drastically reduce civilian aid to Pakistan. Engulfed in a crisis of credibility at home, President Trump has not made any pronouncement on Afghanistan or Pakistan so far. Instead, he seems to let his generals do the talking on regional affairs.

It may reassure some in Pakistan that the general now in-charge at the Pentagon is supportive of foreign aid and appreciates the challenges faced by Pakistan. Lets see which way the cookie crumbles.