Pakistan’s decision, after months of political posturing and delicate negotiations, is likely to ease strains between Washington and Islamabad. For its renewed cooperation, Pakistan would reap higher tariffs and a payout of at least $1.3 billion in withheld “coalition support funds” for its contribution to the fight against Islamist militants.
Officials on both sides say the agreement will not provide Pakistan the full apology it wants for an incident in which U.S. fighter jets and helicopters mistakenly bombed two outposts on the border with Afghanistan in November, killing 24 Pakistani soldiers. The deaths prompted Pakistan to seal the borders.
But for traders such as Baz Muhammad Afridi, happy days will return when the blockade ends. Afridi, 46, who vends looted goods in a bazaar on the outskirts of Peshawar known informally as “the U.S. market,” nearly abandoned his business because of dwindling stock.
Afridi said he sold food, daggers, computers and engineering equipment pillaged from supply convoys. “We were getting quality goods, technological gadgets and American flags at very reasonable prices,” he said Tuesday.
“But the supply suspension nearly stopped our business, and it becomes hard to meet even daily expenses,” he said. “Lower-middle-class people like me will be happy with the reopening of NATO supply lines.”
On the macroeconomic level, Islamabad needs help, too. The $1.3 billion has been penciled into the proposed budget, according to Finance Ministry officials.
And there are other beneficiaries. The Pakistani military — sometimes called Army Inc. because of its sizable stake in commerce, corporations and land holdings — indirectly controls 30 percent of the NATO oil tanker contracts, according to local transporter associations. The military, which played the key role in the NATO-provisioning negotiations with U.S. and Afghan army commanders last weekend, declined to comment on its share of the supply business.
Tribal-area militants will profit, too: They demand protection money from the companies that haul the freight. And they launch attacks to get their slice of what’s inside the steel sea-shipping containers that begin their journey at the port of Karachi and travel hundreds of miles through perilous territory.
“Even the Taliban is the beneficiary. . . . They get weapons and ammunition when they attack the containers,” said a black-market trader in NATO goods, who spoke on the condition of anonymity for fear of Taliban reprisals. “This is one of the financial sources of the militants.”
Not to be left out, police and other local authorities extract bribes to allow convoys to pass, transporters say. It’s part of doing business for companies that are hoping to put 8,000 to 10,000 tankers and trucks back on the roads to reach land-locked Afghanistan.
Cost concerns for NATO
Pakistan shut its border crossings soon after the November attacks, forcing NATO to use other, more costly routes across Central Asia. In the past, NATO has shipped two-thirds or more of its supplies for the Afghanistan war through Pakistan.
Even before the border closure, U.S. military officials had stockpiled several months of material to weather possible problems with the Pakistan route. Those stockpiles have been supplemented by increased shipments through what’s known as the Northern Distribution Network, through Central Asia and Russia.
While new NDN agreements have been signed to expand the types and quantities of goods those countries allow to pass through their territories, the passage is far more expensive and lengthy. The cost and difficulty would increase exponentially as the United States and its coalition partners begin to remove equipment as the coalition withdraws combat forces from Afghanistan by the end of 2014.
In April, Pakistan’s Parliament unanimously passed guidelines for future dealings with the United States, calling for an end to CIA drone strikes on targets in Pakistan and an apology for “the condemnable and unprovoked” border attacks in November. The Pentagon has called the deaths accidental and regrettable but has concluded that both sides shared blame.
Observers in Islamabad and Washington never expected the drone strikes would end, but an apology was a possibility until April 15 attacks on Western targets in Kabul that U.S. officials attributed to the Pakistan-based Haqqani network.
Pakistan’s willingness to reopen the border, widely signaled Monday, seemed to have an immediate result: On Tuesday afternoon, NATO Secretary General Anders Fogh Rasmussen invited President Asif Ali Zardari to this weekend’s Chicago summit, where the alliance will discuss the endgame in Afghanistan.
Despite Washington’s extreme mistrust of Pakistan’s military-intelligence apparatus — which it blames for harboring militants who attack troops in Afghanistan — Pakistani participation is seen as vital to a settlement with the Taliban and allied insurgents.
Pakistani officials said that Zardari would attend the summit and that the invitation was not linked to the opening of the NATO supply lines.
Some analysts speculated that Zardari might wait to announce in Chicago any new deal with NATO. On Wednesday, Prime Minister Yousuf Raza Gilani’s unwieldy cabinet — 53 ministers in all — took up the matter but ended the day with no decision, except to reinforce the Parliament’s previous recommendation that shipments contain no weaponry or lethal supplies.
Afterward, Information Minister Qamar Zaman Kaira told journalists: “No decision on NATO supplies will be made under any pressure.”
For people in Pakistan’s insurgency-wracked northwestern Khyber Pakhtunkhwa province, the practical implications of the NATO issue matter far more than the political ones.
Javed Ali Khan, a farmer in his early 30s who lives near Peshawar, said he has to protect himself from militants. He would like the looters to get back in business.
“The prices of weapons, arms and ammunition will come down once the NATO supply is restored,” he said. “American- and European-made pistol prices went up almost double since November 26, 2011.”
That was the day U.S. aircraft bombed Pakistan’s border posts.
Staff writer Karen DeYoung in Washington and special correspondents Haq Nawaz Khan in Peshawar and Shaiq Hussain in Islamabad contributed to this report.