U.S. policymakers have learned a lot of hard lessons since the invasion of Afghanistan months after 9/11. One of them is that no realistic inducements or threats of coercion are likely to change the Pakistan military’s strategic calculus regarding support for militant groups like the Haqqani network. The most lethal arm of the Taliban insurgency and a critical ally for the Pakistan military, the Haqqanis became the bête noire for the United States in Afghanistan. Most U.S. forces have withdrawn from Afghanistan, but the group nevertheless was a major subject of discussion over the weekend in Islamabad, where U.S. national security advisor Susan Rice met with Pakistani civilian and military leaders.

The visit came on the heels of an announcement that U.S. Secretary of Defense Ash Carter declined to certify that Pakistan had taken adequate steps against the Haqqani network, which is believed to be responsible for a recent spate of attacks in Afghanistan. Unless Carter reverses this decision, Pakistan’s military is out $300 million in what is called “Coalition Support Funds.” That still leaves $700 million in authorized money on the table for the fiscal year, and that money is unlikely to be withheld.* The financial loss of $300 million is not inconsequential, but the political symbolism of the decision is the real story.

Why We Pay

After 9/11, a new authority was created to enable the United States to reimburse coalition partners for their logistical and combat support of U.S. military operations connected with the global war on terror. The Department of Defense administered these reimbursements, Coalition Support Funds (CSF), for costs incurred above and beyond normal operating expenditures. Almost 30 countries have received CSF, but Pakistan is far and away the largest recipient. Pakistan has pocketed approximately 82 percent of the money disbursed since 9/11.

Theoretically, CSF was intended to enable Pakistan military operations against militants in the Federally Administered Tribal Areas (FATA) in support of Operation Enduring Freedom. These operations were considered critical to supporting the NATO / ISAF mission in Afghanistan by reducing cross-border violence emanating from Pakistan. In reality, CSF also became an inducement used to keep open the Ground Lines of Communication (GLOCs) into Afghanistan. Today, this latter objective is less important as a result of the U.S. drawdown. Only 9,800 troops remain in Afghanistan, with most of them focused on advising or counterterrorism. The numbers fluctuate, but Pakistan still maintains more than 100,000 troops in the FATA. These forces are deployed to fight the Tehrik-e-Taliban Pakistan, which is waging an insurgency against the Pakistani state. Many observers do not think that Pakistan would pull its troops out if CSF stopped. More importantly, even if they did, the NATO/ISAF combat mission in Afghanistan is over and thus the original rationale for CSF no longer exists. So why did Congress reauthorize another $1 billion in CSF for Pakistan for the latest fiscal year?

First, some U.S. policymakers lack confidence that Pakistan would keep its troops in the FATA if the money stopped. Although the Pakistan military does not target all the groups the United States wants it to, the presence of Pakistani troops does constrain the operating environment for al-Qaeda. Those who fear Pakistan might pull its troops from FATA if CSF stopped believe that although the original rationale for CSF no longer applies, reimbursements enable operations that help meet U.S. counterterrorism objectives. Second, and relatedly, some policymakers believe that CSF remains a necessary sweetener to induce tactical counterterrorism cooperation, especially against al-Qaeda and given the potential rise of the Islamic State in the region. There is a sense, not entirely unfounded, that CSF can provide leverage to affect tactical shifts in Pakistani behavior, such as keeping the GLOCs open. The decision not to certify Pakistani action against the Haqqanis will further test this proposition. Third, as long as there are U.S. forces in Afghanistan, some U.S. policymakers and military officials remain leery of turning off the tap since they believe the threat coming from across the border would be even worse if the Pakistan military reduced its force presence. Fourth, some policymakers likely worry that cutting off CSF will fuel Pakistan’s narrative of U.S. abandonment and with it more bad behavior.

How We Pay

The United States provided reimbursements to Pakistan with little oversight through 2008, when the Government Accountability Office issued a report criticizing this practice. This led the Department of Defense to institute more stringent procedures. Receipts piled up and the time between expenditure and reimbursement grew, causing CSF delays to become an irritant in the bilateral relationship with Pakistan. Frustration was already mounting in the United States, largely because of Pakistan’s ongoing support for militant groups like the Haqqani network. Then came the annus horribilis, which began in 2011 with the Raymond Davis episode. In May, U.S. Navy Seals killed Osama bin Laden in Abbottabad. Five months later, NATO troops killed Pakistani forces during an accidental clash at two Pakistan military checkpoints in the Pakistani border area of Salala. The United States refused to apologize for the Salala incident, which many Pakistanis believed was deliberate. Pakistan closed the GLOCs; the United States froze CSF.

The relationship cratered, but both countries walked back from the precipice. The United States issued an apology for Salala in summer 2012 and Pakistan reopened the GLOCs. Money began flowing once again. As part of the effort to rebuild the relationship, the Department of Defense worked hard to streamline the reimbursement process. These efforts included the creation of standard categories of expenditures (such as food, water, fuel, and ammunition) expended in support of U.S. military efforts. At the same time, however, Congress prohibited reimbursements for the roughly seven-month period when the GLOCs were closed and mandated that future CSF was contingent on Pakistan keeping the GLOCs open. Congress also legislated that Pakistan could not receive CSF unless the secretary of defense certified that security was being maintained along the GLOCs, and that Pakistan was making demonstrable efforts both against al Qaeda and other militant groups and to counter the threat of improvised explosive devices (IEDs) in Afghanistan. These provisions were updated in fiscal year 2014 to include cooperating with U.S. counterterrorism efforts against the Haqqani network and other militant groups like Lashkar-e-Taiba, and not supporting terrorist activities against the United States or coalition forces in Afghanistan. The secretary of defense, in coordination with the secretary of state, may waive these restrictions if it is in the U.S. national security interest to do so. No secretary of defense has ever certified. Instead, multiple secretaries waived certification on national security grounds.

The Pakistan military launched a long-awaited military operation in the North Waziristan tribal agency in spring 2014. Pakistan claimed — not for the first time — that its policy of fighting some militants and supporting others was over. Operation Zarb-e-Azb would target all militants equally. In reality, the Haqqani network was spared once again, though its operations were disrupted as a result of the need to relocate. Debates were ongoing in the U.S. government about whether to continue providing CSF and, if so, at what level. Congress ultimately authorized a ceiling of $1 billion for Pakistan in fiscal year 2015 — down from $1.2 billion the previous year — extended for another year the existing certification requirements, and added a new provision that made $300 million of the $1 billion contingent on certification by the secretary of defense that Pakistan had undertaken military operations in North Waziristan that significantly disrupted the safe haven and freedom of movement of the Haqqani network in Pakistan. Critically, Congress stipulated certification could not be waived. Last week, the secretary of defense declined to certify.

Looking for Leverage

So is the United States “suspending military aid” to Pakistan as some news outlets reported? No. To begin with, CSF is not security assistance or, more colloquially, military aid. It is a reimbursement, albeit one that has arguably been lucrative for the Pakistan military. The United States and Pakistan have a five-year security assistance roadmap that runs through 2017. Assistance will continue to flow. Whether or not the two countries agree on another roadmap, it is safe to assume some military aid will continue after 2017 barring a major rupture in the relationship. Moreover, the United States is not suspending CSF. The United States has decided it cannot certify Pakistan has taken the necessary action against the Haqqani network. Thus, $300 million of the $1 billion authorized and appropriated for Pakistan is being withheld. This decision is not final. Pakistan is not currently meeting the congressional requirement, but could take action that would bring a favorable outcome. In other words, the United States government could certify (and thus enable reimbursement of the $300 million in question) if Pakistan took appropriate action against the Haqqanis.

So what is the political significance of this decision?

First, the most recent condition (for FY15), which the secretary of defense cannot waive, focused specifically on the Haqqanis, rather than the wider militant infrastructure in Pakistan. This likely owes partly to the fact that U.S. policymakers remain fixated on the Haqqani network because it has been the most lethal arm of the insurgency in Afghanistan. It also may be a function of the fact that Pakistan had recently launched Zarb-e-Azb, and so the new language was intended to coerce the military to make good on its promise to target all militant groups equally.

Second, despite the narrow focus on the Haqqanis, the language in the legislation was relatively broad in terms of the action demanded. Pakistan did not have to directly strike the Haqqani network. Rather, the military only needed to undertake operations in North Waziristan that “significantly disrupted the safe haven and freedom of movement of the Haqqani network in Pakistan.” The fact that U.S. policymakers took a hard line suggests a willingness to begin holding Pakistan more accountable for its behavior.

Third, the direct Haqqani threat to U.S. forces in Afghanistan is greatly reduced, mainly because there are far fewer U.S. troops present in country today. The greater threat is to Afghan forces and, by extension, to the prospects for a negotiated settlement to the conflict in Afghanistan. Afghan President Ashraf Ghani went out on a limb to improve relations with Pakistan, which he hoped would help facilitate peace talks with the Taliban. No one expected insurgent violence to stop. The United States has been pressing Pakistan to do more to end the spasm of Haqqani strikes against Kabul, however, since these are particularly destabilizing and have an especially pernicious effect on the prospects for peace negotiations. According to one senior U.S. official, Susan Rice made clear to her Pakistani hosts that these attacks have developed into a main point of regional friction. Noting the recent upsurge in violence, the official said, “Addressing this challenge will be imperative for Pakistan’s relations with its neighbors and with Washington.” Declining to certify is likely intended to signal to Pakistan that its failure to make even tactical shifts on this front comes at a cost. It is too soon to tell, but it is possible that this decision augurs a transition from a narrow focus on al-Qaeda and access to Afghanistan to a broader emphasis on regional stability. This would be an important and welcome shift, though one that would not be complete without public or private efforts to engender tactical shifts by the Pakistan military vis-à-vis India-centric groups like Lashkar-e-Taiba and Jaish-e-Mohammad that are becoming increasingly active.

Looking Ahead

In addition to taking a more regional outlook when dealing with Pakistan, U.S. policymakers must also settle once and for all how CSF will end. The U.S. government considered various glideslopes that would wind down CSF to Pakistan over the next 2–3 years, with the total money allotted declining each year. Because there is an approximately one-year gap between expenditures and reimbursement, Pakistani actions undertaken during one fiscal year are reimbursed with money appropriated the following fiscal year. The rationale behind a 2–3 year glideslope is that it would both definitively end CSF and provide Pakistan enough lead-time to blunt accusations of abandonment or perfidy. Policymakers ultimately kicked the can down the road. Congress reauthorized CSF for another fiscal year, albeit with the $300 million fenced off pending action against the Haqqanis, and left open the question of what would happen thereafter.

So what next? Time will tell whether the threat of withholding $300 million in CSF provides tactical leverage. Even if this proves true, maintaining reimbursements at current levels is unsustainable. At the same time the structure of the program, long timelines from expenditure to reimbursement, and ongoing neuralgia among some U.S. policymakers about losing even an ounce of influence means flipping the switch on CSF is not as simple as it sounds. Policymakers should reconsider a glideslope that ends CSF reimbursements to Pakistan over the next several years, with the total authorized amount reducing each year. A glideslope provides Pakistan warning that CSF will end, and insulates the United States from accusations of abandonment. It also provides U.S. policymakers time to explore other less politically and financially costly ways of attempting to induce or coerce tactical shifts by Pakistan on militancy. This would make for an imperfect, but necessary denouement to CSF. It would also help right-size the defense relationship and put it on a more sustainable footing.

Stephen Tankel is an Assistant Professor in the School of International Service at American University, an adjunct fellow in the Asia-Pacific Security program at CNAS, and a senior editor at War on the Rocks. He previously served as a Senior Adviser for Asian & Pacific Security Affairs at the Department of Defense.

Photo credit: Al Jazeera English

* The original version of this article incorrectly stated that Pakistan was appropriated $900 million in FY2015 for CSF. The actual amount is $1 billion. $900 million is the amount that may be appropriated for Pakistan in FY2016. Corrections have been made throughout the article.