Consortium Against Terrorist Finance Aug. 31, 2016, 10:04am

Pakistan no longer qualifies as the largest recipient of U.S. military reimbursements after a calculated move by the U.S. administration involving both Congress and the Executive blocked the disbursement of $300 million the country expected for the current fiscal year. As rumored for over a month and publicly acknowledged by both U.S. and Pakistani authorities last week, U.S. Defense Secretary Ash Carter has recently refused to certify to Congress that Pakistan has “taken sufficient action against the Haqqani network,” thereby causing the Pentagon to block the release of a new tranche of funds from the Coalition Support Fund (CSF) for 2016. The CSF program was established under the aegis of the U.S. Defense Department to reimburse U.S. allies for military and logistical support for counter-terrorism and counter-insurgency operations. Although not strictly limited to the Haqqani Network, a U.S. terrorist designated organization, the program’s disbursement for Pakistan in 2016 was overtly conditioned on reinforced measures against the group last year. The withheld certification certainly signals U.S. frustration and is intended to add more pressure on Pakistani authorities, but also reflects new political and strategic developments in the fragile relationship between the two countries.

As a coalition of tribal militants from Afghanistan and Pakistan aligned with the Taliban, the Haqqani Network grew and thrived during the Afghan war with the support of the intelligence services of Pakistan (Inter-Services Intelligence, ISI) and the United States (CIA). Since then, the group has pursued its mission of expelling coalition troops from Afghanistan through armed resistance and of establishing sharia law. The Haqqani Network has historically maintained a safe haven in the town of Miran Shah in Pakistan’s North Waziristan (NWA), from where they have been able to grow to almost the status of a makeshift “ministate” with its own system of courts, tax offices and madrasas. Safe within Pakistan’s semi-autonomous tribal region, the Network’s military leadership has planned and masterminded several terrorist attacks and established money-making entities – not least front companies that sell cars and real-estate throughout Pakistan. Reports have confirmed that over the past three decades the group was actively involved in trade based money laundering, smuggling, narco-trafficking, and kidnapping for ransom, but also benefited from private donations and funds diverted from Afghanistan reconstruction efforts.

The Haqqani Network remains one of – if not the most – serious threat in the Afghan arena, also in light of its affiliation with several extremist and terrorists groups and movements, including the Taliban, al-Qaeda, Islamic Jihad, and Tehrik-i-Taliban. NATO forces on the ground believe that Sirajudding Haqqani, the Haqqani Network’s leader also serving as the deputy chief of the Afghan Taliban, “increasingly runs the day-to-day military operations for the Taliban.” The Network kept a lower profile in North Waziristan after an ISI search and seizure in 2005, and a dramatic increase in drone presence on Pakistani territory. However, during a congressional testimony in 2011, Navy Admiral and chairman of the Joint Chiefs of Staff Mike Mullen described the Haqqani Network as the “veritable arm” of the ISI, a remark later echoed by then-Secretary of Defense Leon Panetta. Several Pakistani intelligence and security officials speaking in confidentiality referred to Haqqani as a valuable asset. In fact, according to a comprehensive report written by Jeffrey Dessler for The Institute for the Study of War in 2010, Pakistani forces’ notorious refusal to make meaningful strikes against the Haqqani Network stems also from the Network proving a useful ally in Afghanistan.

“Operation Zarb-e-Azb,” a military offensive by the Pakistani Armed Forces launched just one week after the bloody terror attack against Jinnah International Airport on July 8, 2014, has been a notable exception to this consolidated trend in that it constituted the first serious initiative taken against the Haqqani Network. The main phase of the operation lasted from 15 June 2014 to 3 April 2016, and is currently in the clearance phase. As of December 2015 Pakistani forces claim to have cleared approximately 98% of North Waziristan of local and foreign militants. However, despite the apparent success of the operation, key members of the Haqqani Network were tipped off before the operation and moved their assets across the Duran Line and out of Zarb jurisdiction.

Washington’s frustration is justified, especially in light of the $700 million in CSF devolved to Pakistan for fiscal year 2015. Pakistan, on the other hand, desperately needs U.S. security aid but remains in denial . In a meeting with Special Assistant to the U.S. President and Senior Director for South Asia at the U.S. National Security Council Peter Lavoy held on August 25, Pakistan’s Foreign Secretary Aizaz Chaudhry conveyed his disappointment at the U.S. decision to withhold certification of Pakistan’s commitment to implement “concerted and forceful measures” against terrorist groups in the country. Chaudhry reiterated that Pakistan has taken action against all terrorist groups, including the Haqqani Network. The country rejected all accusations of harboring militant extremists and terrorists, and claimed that its ongoing fight against multiple Islamist groups and the growing threat of new terrorist attacks on its territory inevitably limit the effectiveness of its counterterrorism operations.

This most recent episode is likely to further deteriorate the strained relations between the two countries, which have reached a new low after a U.S. drone strike on Pakistani soil in May 2016 killed Afghan Taliban leader Mullah Akhtar Mansour. A recent report by the Congressional Research Service confirmed that the U.S.’ military and economic support to Pakistan has declined by 73% after the killing of al-Qaeda leader Osama bin Laden in 2011. Pakistan has received $14 billion under the CSF since 2002, but U.S. lawmakers’ resistance to continuing security assistance is growing. The Pakistani Foreign Secretary has argued that CSF reimbursements “enable the United States to support Pakistan’s ongoing counterterrorism efforts in a manner that serves shared interests of both the countries.” Yet mounting concerns over Pakistan’s nuclear program and over its enduring support for militant groups hostile to the U.S., as well as U.S.’s improved relations with India may ultimately compromise the U.S.-Pakistan long-standing partnership. In the long run, a mix of political and strategic considerations may diminish Pakistan’s strategic importance for the U.S., with dramatic implications for both parts’ interests especially in Pakistan and Afghanistan.

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