Beggar at Ghazi Chowk


Wednesday, 9 May 2012

In defense of common sense

Published in the Daily Princetonian May 9th, 2012. Co-authored with Hamza Masood

In an article about Princeton University’s overseas financial investments published in this newspaper on April 27, Pakistan was singled out as one of the countries in which the University had held an investment. In fact, Pakistan was mentioned in the title of the article and was the only country out of 29 in which the University holds investments to be discussed in the article. The article suggested, both with references to previously controversial overseas investments as well as the crises that have rocked the U.S.-Pakistan relationship over the last year, that investing in Pakistan was a suspicious and possibly condemnable activity. This is an irresponsible and inaccurate depiction of reality.

The reality is that the U.S. government, U.S. investors in general and the University in particular are all invested in Pakistan. Let us explain each of those in turn and discuss where this money goes. The U.S. government in 2010 alone provided $1.9 billion of economic aid, $2.5 billion in military aid and reimbursements of $1.2 billion through the Coalition Support Fund, according to the Center for Global Development. This money was spent on furthering efforts to improve governance, health, education, police, agriculture and infrastructure, counterterrorism and counterinsurgency efforts, along with supporting the continued deployments of Pakistani troops along the Pak-Afghan border to fight the insurgency. Through the Kerry-Lugar-Bergman Act, the U.S. government is committed to providing $1.5 billion of aid each year from 2010 to 2014 to the civilian government alone. In the private sphere, according to the Office of the United States Trade Representative, foreign direct investment in Pakistan from U.S. investors in 2009 totaled $517 million. These are investments held in stocks in private Pakistani companies.

As for the University’s investments in Pakistan, they are not limited to the paltry $86,000 the article mentioned. Every year, the Financial Aid Office gives grants totaling several hundreds of thousands of  dollars to Pakistani students who study at the University. Considering how many students from Pakistan in the last decade alone have studied or are presently studying at Princeton, the numbers add up very, very quickly. Several of these students, including us, have either returned or are committed to returning to Pakistan to live and work there. The University chooses to invest resources in Pakistani students every year, and we see no reason why this should stop.

The point here is that while there are certainly reasons for why some investments in Pakistan should be considered suspicious, just like some investments anywhere outside the country or even in the United States should be considered suspicious, painting any and all investments in Pakistan to be in the same category is irresponsible and presents an inaccurate picture. There is no doubt that there are terrorist groups operating in Pakistan that are a threat to both the world and to Pakistan. In fact, this is one of the reasons why the U.S. government remains committed to providing Pakistan with military aid. Issues of government corruption have been raised, and for good reason. However, that has no bearing on privately held investments, which is what the University held in this case.

This bears particular relevance when seen in the context of the recent referendum to create an “oversight committee to encourage the University’s endowment to be investment in ‘socially responsible ways.’” The article seems to insinuate that the mere mention of an investment in Pakistan was a “controversy” on the scale of investing in a Zimbabwean defense contractor that aided a government known to engage in human rights violations. We hope that further insight into the University’s endowment, not least of all in Pakistan, is treated with more nuance. In fact, it was disappointing that the University seemed almost defensive by quickly explaining that the investment was made by an external manager and has been zero value for some time. The account’s value should have no bearing on the ethics of investing in Pakistan.

Pakistan is a country of 180 million people. The large majority of those are desperately in need of intelligent capital spending and have no relation to extremist activity. It is worrying to see the simple mention of Pakistan be so quickly linked to suspicious spending and controversial activity. There is much more to Pakistan that can and should be discussed, and we hope that future discussion addresses more specific controversial or suspicious issues, rather than implying with broad strokes. We are not oblivious to Pakistan’s problems, but we hope others are not oblivious to everything else in the bigger picture either.