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Summary:
A stable, democratic, economically thriving Pakistan is vital to U.S. interests in Asia. Key U.S. concerns regarding Pakistan include regional terrorism; weapons proliferation; the ongoing Kashmir problem and Pakistan-India tensions; human rights protection; and economic development. A U.S.-Pakistan relationship marked by periods of both cooperation and discord was transformed by the September 2001 terrorist attacks on the United States and the ensuing enlistment of Pakistan as a pivotal ally in U.S.-led counterterrorism efforts. Top U.S. officials regularly praise Islamabad for its ongoing cooperation, although doubts exist about Islamabad's commitment to some core U.S. interests in the region. Pakistan is identified as a base for terrorist groups and their supporters operating in Kashmir, India, and Afghanistan. Pakistan continues to face serious problems, including domestic terrorism and human rights violations. For more than one year, Pakistan's army has conducted unprecedented counterterrorism operations in the traditionally autonomous Federally Administered Tribal Areas. A potential Pakistan-India nuclear arms race has been the focus of U.S. nonproliferation efforts in South Asia. Attention to this issue intensified following nuclear tests by both countries in May 1998; the tests triggered restrictions on U.S. aid to both countries (remaining nuclear-related sanctions on Pakistan were waived in October 2001). Pakistan and India have fought three wars since 1947. Recently, the United States has been troubled by evidence of "onward" proliferation of Pakistani nuclear technology to third parties, including North Korea, Iran, and Libya. Such evidence became stark in February 2004. Separatist violence in Kashmir has continued unabated since 1989. India blames Pakistan for the infiltration of Islamic militants into Indian Kashmir, a charge Islamabad denies. The United States reportedly has received pledges from Islamabad that all "cross-border terrorism" would cease and that any terrorist facilities in Pakistani-controlled areas would be closed. Similar pledges have been made to India. The United States strongly encourages maintenance of a cease-fire along the Kashmiri Line of Control and cont i n u e d substantive dialogue between Islamabad and New Delhi. Pakistan's macroeconomic indicators have turned positive since 2001, but widespread poverty persists, and rates of foreign investment remain low. Democracy has fared poorly in Pakistan; the country has endured military rule for half of its existence. In 1999, the elected government was ousted in an extra-constitutional coup led by Army Chief Gen. Pervez Musharraf, who later assumed the title of President. Parliamentary elections in 2002 resulted in no majority party emerging, though significant gains for Islamist parties were notable. A new civilian government is seated (Musharraf ally and Finance Minister Shaukat Aziz became prime minister in August 2004), but it remains weak, and Musharraf has retained his position as army chief. The United States strongly urges the Musharraf government to restore fully functioning democracy in Islamabad. Congress has granted President Bush authority to waive couprelated sanctions through FY2006. Including current appropriations, Pakistan will receive about $2.64 billion in direct U.S. assistance for FY2002-FY2005. Almost half of this ($1.13 billion) is security-related aid. See also CRS Report RL32259, Terrorism in South Asia; and CRS Report RL32615, Pakistan's Domestic Political Developments.
