How the U.S. can help revitalize economies in Pakistan and Afghanistan

Plowshares for Peace. WaPo Editorial
How the U.S. can help revitalize economies in Pakistan and Afghanistan
WaPo, Sunday, March 22, 2009; page A18

AS THE Obama administration formulates its strategy for Pakistan and Afghanistan, pretty much everyone agrees that spurring the economy in both countries -- creating jobs -- is key to defusing militancy. The usual prescription is more foreign aid, which is sure to figure in any new plan. But what doesn't always get acknowledged in these discussions is that such aid often doesn't do much good. The United States wasted billions of dollars in Iraqi reconstruction aid, and given the dangerous environment -- which discourages inspection and monitoring -- you can expect a rerun in Afghanistan and Pakistan. A more effective way to boost both economies would be to allow them to export their products tariff-free into the United States. But that idea arouses the enmity of U.S. labor unions, which means that it's not going to get far in a Democratic Congress.

Enter Rep. Chris Van Hollen, Montgomery County Democrat and member of the House leadership, with a practical alternative. Mr. Van Hollen, with co-sponsors, has introduced legislation to create "reconstruction opportunity zones" within both countries. Certain products, including some (not all) textiles, produced within the zones would enjoy duty-free access to the U.S. market for 15 years. This would encourage investment by local businessmen, who best know the terrain, and create jobs. There's no better formula for discouraging Taliban recruitment.

It's not a magic formula, of course. The investment areas have to be drawn widely enough to make the prospect of investment realistic; if you limit them to the most intense battle zones, you're not going to see many jobs created. The bigger they are, though, the likelier the bill will arouse union opposition, so the politics are tricky. Mr. Van Hollen and his co-sponsors -- including Reps. Sander M. Levin (D-Mich), Peter Hoekstra (R-Mich.) and Mark Steven Kirk (R-Ill.) -- have tried to find the sweet spot, and their bill also insists that any factories in the zones meet core international standards in their treatment of workers.

Maybe the strongest argument for the opportunity zones is that there is no down side; the worst that could possibly happen is they don't trigger much investment. But they would immediately provide a signal of U.S. commitment -- the governments of both countries strongly support the idea -- and they could have a substantial positive effect reasonably quickly, at almost no cost to the U.S. Treasury. Congress and the administration should get behind this idea.