Pak-US Alliance in Fight Against Terrorism

171 Pages·2011·1.39 MB·English

NAVAL
POSTGRADUATE
SCHOOL

MONTEREY, CALIFORNIA

THESIS

THE PAK-U.S. ALLIANCE IN THE FIGHT AGAINST
TERRORISM: A COST-BENEFIT ANALYSIS

by

Fazal ur Rehman Khan
Khaldon Haya Al-Rawashdeh
Jose R. Reyes Irizarry
Raja Shahzad Akram Minhas

December 2011

Thesis Advisor: Robert E. Looney
Second Reader: Leo J. Blanken
Approved for public release; distribution is unlimited
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December 2011 Master‘s Thesis
4. TITLE AND SUBTITLE The Pak-U.S. Alliance in the Fight Against 5. FUNDING NUMBERS
Terrorism: A Cost-Benefit Analysis
6. AUTHOR(S) Fazal ur Rehman Khan, Khaldon Haya Al-Rawashdeh,
Jose R. Reyes Irizarry, Raja Shahzad Akram Minhas
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Monterey, CA 93943–5000
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11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy
or position of the Department of Defense or the U.S. Government. IRB Protocol number ______N/A______.
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13. ABSTRACT (maximum 200 words)
The cost-benefit equation of the Pak-U.S. alliance, in the fight against terrorism, reflects a direct correlation between
the fluctuating patterns of U.S. assistance and their direct and indirect implications for Pakistan. While the U.S.
strives to achieve a better return on its investment through military-oriented support, Pakistan seeks to adopt an
approach that suits both the U.S. and its own domestic and regional interests. This research traces the trend of Pak-
U.S. relations, highlights the impact of the fluctuating U.S. aid in shaping perceptions, and provides a game
theoretical analysis on the issue. Besides highlighting measures to achieve cost effectiveness through micro alliances,
decentralization, accountability, and transparency in fund management, the study supports development of
entrepreneurial culture and micro-alliances in Pakistan. More importantly, it provides an in-depth analysis of the
military and population-centric approaches and their associated costs and benefits for the two countries. The research
concludes by suggesting a more population-centric U.S. approach towards Pakistan to achieve a better return on
investment besides laying foundation for a long-term strategic alliance. It suggests future research on the prospects
and methodology of achieving a long-term partnership between the two nations.

14. SUBJECT TERMS Pakistan-U.S. Relationship, Cost-Benefit, Fight against Terrorism, Global 15. NUMBER OF
War on Terror, U.S. Assistance, Return on Investment, Fund Management, Micro-Alliance, PAGES
Entrepreneurship, Game Theoretical Approach, Perceptions and Realities, Military-Centric Assistance, 171
Population-Centric Approach, Strategic Partnership, Regional Balance of Power, Implications for 16. PRICE CODE
Pakistan, Interest Alignment, Long-Term Objectives, Stability.
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Approved for public release; distribution is unlimited

THE PAK-U.S. ALLIANCE IN THE FIGHT AGAINST TERRORISM:
A COST-BENEFIT ANALYSIS

Fazal ur Rehman Khan
Group Captain (Colonel), Pakistan Air Force
M.S., National Defense University, 2010

Khaldon Haya Al-Rawashdeh
Lieutenant Colonel, Royal Jordan Army
M.S., Naval Postgraduate School NPS, 2011

Jose R. Reyes Irizarry
Major, United States Army
B.A., Polytechnic University of Puerto Rico, 2000

Raja Shahzad Akram Minhas
Lieutenant Commander, Pakistan Navy
BSc (H), Karachi University, 2000

Submitted in partial fulfillment of the
requirements for the degree of

MASTER OF SCIENCE IN DEFENSE ANALYSIS

from the

NAVAL POSTGRADUATE SCHOOL
December 2011

Authors: Fazal ur Rehman Khan
Khaldon Haya Al-Rawashdeh
Jose R. Reyes Irizarry
Raja Shahzad Akram Minhas

Approved by: Robert E. Looney, PhD
Thesis Advisor

Leo J. Blanken, PhD
Second Reader

John Arquilla, PhD
Chair, Department of Defense Analysis
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ABSTRACT
The cost-benefit equation of the Pak-U.S. alliance, in the fight against terrorism, reflects
a direct correlation between the fluctuating patterns of U.S. assistance and their direct and
indirect implications for Pakistan. While the U.S. strives to achieve a better return on its
investment through military-oriented support, Pakistan seeks to adopt an approach that
suits both the U.S. and its own domestic and regional interests. This research traces the
trend of Pak-U.S. relations, highlights the impact of the fluctuating U.S. aid in shaping
perceptions, and provides a game theoretical analysis on the issue. Besides highlighting
measures to achieve cost effectiveness through micro alliances, decentralization,
accountability, and transparency in fund management, the study supports development of
entrepreneurial culture and micro-alliances in Pakistan. More importantly, it provides an
in-depth analysis of the military and population-centric approaches and their associated
costs and benefits for the two countries. The research concludes by suggesting a more
population-centric U.S. approach towards Pakistan to achieve a better return on
investment besides laying foundation for a long-term strategic alliance. It suggests future
research on the prospects and methodology of achieving a long-term partnership between
the two nations.
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TABLE OF CONTENTS
I. INTRODUCTION........................................................................................................1
A. SCOPE AND PURPOSE .................................................................................2
B. THESIS QUESTION AND ITS IMPORTANCE .........................................2
C. METHODOLOGY ..........................................................................................3
D. THEORETICAL FRAMEWORK .................................................................3
E. RESEARCH OUTLINE ..................................................................................7
II. HISTORICAL PERSPECTIVE .................................................................................9
A. PHASE 1 ...........................................................................................................9
B. PHASE 2 .........................................................................................................13
C. PHASE 3 .........................................................................................................14
D. HISTORICAL PERSPECTIVE OF U.S. AID ............................................18
III. COST-BENEFIT ANALYSIS...................................................................................21
A. U.S. AID REVIEW 2002–2010 .....................................................................21
1. Coalition Support Funds (CSF) ........................................................23
2. Economic Support Funds (ESF) .......................................................23
B. COST-BENEFIT ANALYSIS.......................................................................24
1. Military Aid Benefits .........................................................................28
2. Economic Aid Benefits .......................................................................29
C. SYSTEMS THINKING APPROACH .........................................................30
IV. EFFECTIVE FUNDS’ MANAGEMENT ................................................................33
A. INTRODUCTION..........................................................................................33
B. COALITION SUPPORT FUNDS (MILITARY) ........................................33
C. ECONOMIC SUPPORT FUNDS (NON-MILITARY) ..............................36
D. BETTER RETURN ON THE U.S. INVESTMENT ...................................37
1. Decentralization and Institutionalization ........................................38
2. Channelization and Accountability ..................................................39
3. Prioritization and Reforms ...............................................................40
4. Entrepreneurship and Micro-Alliances ...........................................41
E. SUMMARY ....................................................................................................43
V. COST-BENEFIT ANALYSIS: A GAME THEORETICAL APPROACH .........45
A. INTRODUCTION..........................................................................................45
B. GENERALIZED MODEL ............................................................................49
1. Assumptions and Rules......................................................................50
C. STAGE ONE: INITIAL PHASE – SETTING THE STAGE ....................53
1. Player’s Options .................................................................................54
2. Observation ........................................................................................57
D. STAGE TWO: LONG-TERM VS. SHORT-TERM RELATIONS ..........58
1. One-Side Chicken Game ...................................................................59
2. The Players’ Options .........................................................................61
3. Observation ........................................................................................65
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E. STAGE THREE: FALLEN VEILS .............................................................67
1. Game Setup.........................................................................................68
2. The Players Rationale ........................................................................69
3. The Players’ Options .........................................................................73
4. Observation ........................................................................................77
F. STAGE FOUR ................................................................................................78
1. The Game of Perfect Information ....................................................79
2. The U.S. Game....................................................................................79
3. Pakistan Game. ..................................................................................81
4. Observations .......................................................................................82
G. CONCLUSION ..............................................................................................83
VI. PERCEPTIONS AND REALITIES .........................................................................87
A. ROLE OF REGIONAL PLAYERS AND BALANCE OF POWER ........87
B. CONVERGING INTERESTS AND DIVERGING GOALS .....................88
C. PLANNING FOREIGN AID: A WICKED PROBLEM ............................89
D. PERCEPTIONS AND REALITIES .............................................................92
1. U.S. Perception of Pakistan. ..............................................................92
E. CONCEPTUAL BLOCKS BLURRING PERCEPTIONS ........................95
1. Perceptual Blocks ...............................................................................96
2. Emotional Blocks ...............................................................................97
3. Cultural and Environmental Blocks ................................................97
F. CHANGING PERCEPTIONS THROUGH MICRO-ALLIANCES ........98
G. MANAGING PERCEPTIONS BY KNOWING AND INFLUENCING
REALITIES ....................................................................................................99
VII. CONCLUSION ........................................................................................................103
A. THE WAY AHEAD .....................................................................................106
1. Short-Term Measures ―Breaking the Frustration Cycle‖ ...........107
2. Long-Term Measures ―Reinforcing Hope‖ ...................................107
LIST OF REFERENCES ....................................................................................................111
APPENDIX ...........................................................................................................................117
INITIAL DISTRIBUTION LIST .......................................................................................153

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