Shouldn’t all the US aid to Pakistan also be counted towards supply line costs?

The story is a couple of days old but will certainly be quoted by many analysts, particularly in DC and in Islamabad. This AP story says that Pakistan’s closure of supply routes costs US six times more for the new route via Central Asia.

Pentagon figures provided to the AP show it is now costing about $104 million per month to send the supplies through a longer northern route. That is $87 million more per month than when the cargo moved through Pakistan.[AP]

More details on the story are at ABC News:

The cost estimate includes the added costs of the combined ground and air movements being used to offset the closed border crossings. …When Pakistan closed the border crossings, only 30 percent of NATO supplies flowed through them, most of it fuel.

…A Defense official says most of the added costs come from the diversion of supplies originally intended to go through Pakistan that now arrive by ship in other countries in the region for eventual air transport into Afghanistan. For example, there is the added cost in diverting some cargo from Pakistani ports to Indian ports where the supplies are either flown into Afghanistan or transported northward by train for delivery through one of the NDN routes.

Additional costs come from the transportation of more materials through the NDN, and the even pricier cost of flowing in supplies on direct flights from the U.S. or Europe into Afghanistan. The direct flights cost ten times what it would cost to transport materials through Pakistan. That is one of the reasons it is the least used option. Transporting materials through the NDN is estimated to be three times the cost of transporting supplies through Pakistan.[ABC]

First the minor quibbles. One, it isn’t clear from the 512 percent increase in monthly costs whether the cost being compared for two different months pertains to the same quantum of supplies. A possibility exists that more supplies may have been moved in to recoup the reserves which would have been consumed in the days immediately after the supply routes were closed by Pakistan.

Two, the facts are hidden deep down in the story. Transporting materials through the NDN is estimated to be three times the cost of transporting supplies through Pakistan. And, direct flights to Afghanistan cost ten times of what it would cost to transport materials through Pakistan.

Now to the major question. Money is fungible. US military and civilian aid to Pakistan (not to count CSF payments), before it came to a halt in 2011, was essentially a facilitation fees paid to Pakistan Army to allow supplies to be sent to Afghanistan via Pakistan. If you add the $20 billion paid to Pakistan by the US (excluding CSF payments) since 9/11, the cost of transporting goods via Pakistan would be costlier than supplying troops in Afghanistan via alternate routes. Essentially, cutting off aid to Pakistan and using northern supply routes is still cheaper than supplying goods via Pakistan.

The media reports might be overlooking this calculation but the Pentagon certainly isn’t. Amidst reports that Pakistan army is looking at levying an additional $1000 NOC fee per container that is routed via Pakistan after the routes open, the US response seems logical if you see the bigger picture.

U.S. officials say they could manage indefinitely without that access if Pakistan either makes the closure permanent or offers to reopen it under unacceptable conditions.[AP]

Considering the benefits accruing to Pakistan’s military-business complex by allowing US supplies to move through Pakistan, it is but a matter of time before Pakistan army finds a fig-leaf of an excuse to resume these supply lines. After all, for all the talk about not allowing US drones to operate in Pakistani airspace, US drones have already struck a couple of times in tribal areas in the last two weeks. For once, by not caving in to Pakistani blackmail, the US seems to be playing the carrot-and-stick game rather well with Pakistan. It is, however, a matter of conjecture if the US can play this game long enough, and smartly enough, in a Presidential election year.


DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.