The relationship may be at a nadir but the cheques, albeit thinner, will keep coming, for now.
The Obama administration assured Pakistan that it would not suspend civilian economic assistance, said top officials who recently returned from Washington.
The volume of funding, however, would be affected by the debt crisis in the US and the initial $7.5 billion Kerry-Lugar assistance, slated to be disbursed over five years, will now be stretched over six or seven years, officials added.
The Spent Plan 2011, the approval of which Islamabad sees as a litmus test for resumption of economic ties between the estranged allies, is now worth $1.3 billion, $200 million less than what was initially announced.
No commitments on CSF
The US did not, however, give any commitments regarding the resumption of military assistance, including reimbursements under the Coalition Support Fund (CSF).
The CSF issue came under discussion and Pakistan emphasised that technically, the CSF was its money and the US just has to reimburse it, a top economic manager said. The US suspended the release of $800 million CSF tranche after relations between Pentagon and GHQ soured.
The message delivered at the levels of US deputy secretaries of state and treasury was that economic assistance will be treated separately from military assistance.
Despite the setback in relations, the Senate Foreign Relations Committee has cleared the Pak-American Enterprise Fund worth $300 million, for five years, officials said.
The matter would now go to the Conference Committee of the Congress – a joint body comprising representatives from the Senate and the House – for final approval.
The fund’s approval would pave the way for $60 million per annum American investment in small and medium enterprises in Pakistan.
Pakistan has been waiting for the approval of Spent Plan 2011, for last two months, and sees it apprehensively as a test of assurances by American officials that economic assistance would continue.
For the second year under the five-year Kerry Lugar package, Pakistani and US authorities have firmed up $1.3 billion worth of projects for funding.
“An early approval of the Spent Plan will establish US administration’s sincerity to continue civilian assistance,” said an official privy to the Pak-US meetings.
The administration did not give any cut-off date but said the plan would be approved as early as possible, the official added.
The plan, which carries education, health and energy sector projects, has been sent to congressional committees that have 15 days to approve or reject it. If no objection is raised, it would be approved within the stipulated time.
Published in The Express Tribune, October 2nd, 2011.