THE newly installed Obama government is yet to achieve the economic policy coordination with Pakistan that will be needed not just to restore its economic stability, but at the same time to give a new dimension to the US long-term commitment and engagement in Pakistan. A policy that mainly aims at providing economic support directly to the people of Pakistan and one that yields key objectives like poverty alleviation, strengthened democracy and the revival of a positive perception about the US in the country. Given the US plan of continued presence in the region, there is a strong case for enhanced bilateral cooperation and increased investment-oriented interaction, as only economic prosperity is the surest way to curb terrorism both locally and globally. In doing so, the new US administration will be well advised to take into account and acknowledge the following guidelines when devising its economic package for Pakistan. 1) That there is a serious need to broaden US engagement in Pakistan, both in 'monetary' and 'spread' terms. 2) Monetary figures/packages of yesteryears are neither relevant nor adequate. The inadequacy of funds means that though money is spent it does not generate any significant impact and does not yield the desired results both politically and socially. 3) Monetary denominations have changed dramatically in the last decade and if the economic package is kept smaller than the minimum required, it not only fails to accomplish its objectives, but also can yield negative results due to the time lost in the process, e.g. the present on-going debate on the right size of the stimulus package within the US itself 4) Spread borders on areas where: a) Perception of US needs to be improved by choosing the right areas (geographically + sector wise) and the correct type of projects. The US cooperation should adopt a more surgical type approach rather than doling out broad based grants. For example, extending fund to support cum subsidize low wage employment in Pakistan, etc. b) Physical presence of US companies and institutions (with the help of local private sector support, where required) in areas where a cross-section of people directly draw tangible benefits through interaction with these companies, e.g. model mechanized farms, which can then go on to serve as area incubators; joint venture industrial or infrastructure development partnerships with visible US projection to yield positive public feelings; etc. Back in the 60s and 70s the US aids, grants, investments had these friendship signs posted at the entrance of every such project that went a long way in capturing the magnitude of US's meaningful endeavors in Pakistan. 5) The economic package for Pakistan should border on two broad principles: i) First, mutual business investment opportunities should be explored and facilitated. The best way to do this is to improve the business environment between the two countries and minimize any direct government involvement. For example, enhancing bilateral market access will by itself put the private sector forces into motion and evolve an auto mechanism of broad US economic support base in Pakistan (like in China). Further, trade encourages specialization, which brings prosperity; Capital markets and the private sector, for all their problems, allocate money more efficiently than governments; Economic cooperation encourages confidence and enhances security. ii) Second, the new financing in shape of loans should be long-term in nature (40 years or more) and focus on building roads, power grids, renewable energy generation, ports, fibre-optic networks, and water and sanitation systems. Higher investment in these areas and social spending will stimulate the entire economy, spur economic development, and promote environmental sustainability through the above proposed investments in renewable energy, efficient water use, and sustainable agriculture. 6) When selecting investment and joint venture sectors the resultant synergies should be closely analyzed, i.e. whether or not the projects represent areas of natural alliance based on prudence. For example, Textiles, Agriculture and the Financial Sector are sectors where there exist tremendous synergies between Pakistan and the US, and other fields of cooperation should also be selected on this basis. 7) Entrepreneurship development in small and medium level businesses should be targeted as not only will this help shore up employment opportunities at a quick pace but also ensure that the employment generation takes place with an equitable distribution (provincial, urban/rural, and communal). For example, directly toying with the creation of social security nets, etc., can be both messy and ineffective, because of the inadequacy of the present management structure to operate such initiatives. A more innovative approach to support the common man would be to provide him access to funds (micro finance but at affordable rates) and induce him to take risk, work hard and contribute productively in order to better his lot and in the process of the people associated with him, i.e. on the theme of the 'once' American dream. 8) Last but not least, care needs to be taken that any economic package that is prepared is in essence people friendly rather than merely institution friendly. Given the prevalent corruption and incompetence in the state's machinery, only cleverly created private-public micro-management mechanisms can ensure funds' effectiveness and accountability.