Relations between the United States and Pakistan have continued to fray since a U.S. Special Forces team killed Osama bin Laden in a comfortable villa near a major Pakistani military academy. But the tit-for-tat retaliations that have followed the raid reflect deeper sources of mistrust and mutual suspicion.

The latest round has focused on the alleged activities of the Pakistani military’s powerful intelligence agency, Inter-Services Intelligence (ISI), in the United States. ISI is accused of watching over the Pakistani diaspora and of sponsoring unregistered lobbyists working to shape congressional opinion.

Indeed, this is not the first time that Pakistan’s relations with the U.S. have been on a slippery slope. In 1965, after helping the country to build up its economy and its military strength, the U.S. walked out over the war with India that Pakistan had provoked by sending “freedom fighters” into Kashmir.

In 1989, following the Soviet Union’s exit from Afghanistan, the U.S. lost interest in what it now calls Af-Pak — Afghanistan-Pakistan. The Americans began returning to Pakistan until, in 1998, the Pakistani government decided to follow India in testing an atomic bomb. This led to the imposition of U.S. sanctions — and America’s third exit from Pakistan.

That situation remained unchanged when Afghanistan-based al-Qaida struck America on Sept. 11, 2001. After receiving a “you are either with us or against us” warning from President George W. Bush’s administration, General Pervez Musharraf’s Pakistan decided to side with the U.S. It severed relations with Afghanistan’s Taliban regime, which it had helped to install five years earlier, and allowed America to use its air space to launch strikes on Afghanistan.

For more than a decade, Pakistan and the U.S. were close allies. Pakistan let the U.S. use its air bases to launch drone attacks on Taliban fighters in Afghanistan and northwestern Pakistan; allowed its territory to be used as a supply route for NATO forces in landlocked Afghanistan; and, less enthusiastically than the U.S. wished, launched military operations against Taliban sanctuaries on the Pakistani side of the porous border with Afghanistan.

According to the U.S. Congress, Pakistan was provided $20 billion in aid between 2001 and 2011. In addition, Congress passed the Kerry-Lugar bill, which promised $7.5 billion in economic aid from 2009 through 2014. The U.S. also encouraged the International Monetary Fund to give Pakistan emergency financial assistance equivalent to $11 billion, to be disbursed starting in late 2008.

This cozy relationship created a “moral hazard” in Pakistan, as the generous flow of U.S. aid insulated the government and military from any sense of urgency about economic reform: Some foreign friend would always rescue the country from its perennial shortage of cash. So far, that friend has been America, but the U.S. could well pull out of Pakistan for the fourth time — a threat that several influential figures in the U.S. Congress have already made.

The dynamic that has brought Pakistan-U.S. relations to this point arguably began Dec. 1, 2009, when President Barack Obama, announcing a surge in the number of U.S. troops in Afghanistan, also indicated his intention to start pulling back American troops beginning in July 2011 — a pledge that he reiterated two months ago. This alerted Pakistan to the fact that, with the imminent departure of U.S. troops, it would be left alone to fight the insurgency on both sides of its border with Afghanistan. To do that, Pakistan would need help from some of the Afghan Pashtun tribes with which it had developed strong relations during the war against the Soviet Union.

The Jalaluddin Haqqani group, which was allowed to base itself in a sanctuary in Pakistan’s North Waziristan tribal agency, was one such ally that Pakistan’s government thought could be used to further its interests in Afghanistan. But the Haqqanis were also the group that threatened the Americans the most. The U.S. pressed Pakistan to move against them. Pakistan resisted. Amid this tussle, the U.S. sent Navy Seals to find Bin Laden at a compound deep in Pakistani territory, informing Pakistan’s government only after the raid was over.

Pakistan’s embarrassed military pressed the government to begin distancing itself from the U.S. After the identity of the CIA’s station chief in Pakistan was exposed (probably by Pakistani military officials), America made it known that it had good evidence that a prominent Pakistani journalist was ordered murdered by ISI.

This time around, the break between the U.S. and Pakistan might not be easily repaired. Pakistan has turned to China for economic and military help, clearly hoping for a less volatile relationship than the one that it has with America.

Pakistan is seeking large investments from China to improve its physical infrastructure and exploit its considerable mineral wealth. The Chinese have been invited to develop Gwadar port on the Balochistan coast, and to use it as a base for their fast-expanding navy.

While China has not responded to these overtures with the degree of enthusiasm that accompanied them, the Chinese would be happy to fill the strategic vacuum likely to be created by America’s accelerated departure from Af-Pak.

A major realignment of forces in the region is looming, and, with it, a new round of Asia’s old Great Game.

Shahid Javed Burki, former finance minister of Pakistan and vice president of the World Bank, is currently chairman of the Institute of Public Policy, Lahore. © 2011 Project Syndicate

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