Agree - the Americans dont treat Pakistan as an actual ally - more of a hired lacky for occassional projects it seems. Pakistan does seem happy to fulfill that role aswell though.
Pakistan has a serious corruption problem that is prevalent in all segments of society, from top to bottom, from the elite ruler class to the common man on the street. Consequently, many (at the top) are easily persuaded into fulfilling such roles where a short-term personal benefit (i.e. money looted from aid) comes at the expense of long-term welfare of the country. From personal experience, I've seen it increase multiple folds in the past 2-3 decades. There was a time when corruption had to be done discretely or else the society would castigate you in public: nowadays, if you are given an opportunity for corruption and don't follow, you will be laughed at and ridiculed in public. There is no end in sight. The country needs iron fist rulers for several decades to discipline the population... and get rid of that nonsense democracy they've been trying to establish for the past 77 years.
And still the Mk1A is not ready ...
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I am certain the LCA is just a cash-cow type of project to funnel public money into the defense sector, specifically into DRDO. Begin an overly ambitious and untenable project which was beyond the capability of the Indian defense sector, market it with nationalism and pride, get public funding, and when things (logically) turn out not so good, lure in more funding via sunk cost fallacy and playing the nationalism card.
The project, logically, should have been shelved by late 90s or early 2000s, or at the very least, severely downgraded in it's role in the 1980s.