Kerry-Lugar Act: US unlikely to extend civilian aid package

The $7.5 billion package will expire by September next year

ISLAMABAD:

The United States may further squeeze its already drying funding to Pakistan as a five-year civilian assistance package is set to expire next year without any chances of further extension amid signs that Washington is shifting its focus away from South Asia to the Middle East.

There are very slim chances that the US Congress would extend the $7.5 billion civilian assistance package under the Kerry-Lugar Act of 2009 that would expire by September next year, according to sources in the finance ministry and diplomatic circles.



Officials said that the government received discouraging signals about the continuation of the civilian aid package beyond 2015 during meetings with US authorities, particularly with Ambassador Robin Raphel, the senior adviser to the US special representative on Afghanistan and Pakistan, who visited Islamabad between September 27 and October 6.

They added that Ambassador Raphel also lowered Pakistan’s expectations from the investors’ conference held in Washington on October 8. Pakistan expected commitments worth $5 billion from US investors for the Diamer-Bhasha dam but couldn’t secure anything but promises.

The US Congress passed the Kerry-Lugar Bill into law in October 2010. Although, the assistance is not coming as promised, its emphasis is on energy, economic growth, agriculture, education, health and infrastructure.



According to Section 102d of the Act, the aid package can be extended beyond 2015. “It is the sense of the Congress that, subject to an improving political and economic climate in Pakistan, there should be authorisation to be appropriated up to $1.5 billion for each of the fiscal years 2015 through 2019,” it reads.

The civilian aid package is expiring at a time when the US is reprioritising its strategic interests in the region, limiting chances of any extension.

“The US is trying to outsource its role in this region to countries with which it feels a convergence of strategic interests on South Asia. The US views India as a more trustworthy and reliable strategic partner,” said Senator Mushahid Hussain, an expert in defence and strategic affairs.

He said that the United States – which will be completely out of South Asia militarily by 2016 – wants a more proactive Indian role to contain Pakistan in Afghanistan and China in the rest of Asia.

The shift would minimise the flow of dollars from Washington and the squeeze will be both on civilian assistance and disbursements under the Coalition Support Fund (CSF), according to sources in the Economic Affairs Division.

However, the CSF was significantly contributing to lowering the budget deficit and meeting some of the demands of the military, according to officials who dealt with the US.

Early this year, Parliamentary Secretary for Finance Rana Muhammad Afzal informed the National Assembly that Pakistan so far received over $3.8 billion against the total obligation of $7.5 billion. Almost three-fourths of this money was spent without the government’s oversight.

Officials privy to the developments also held the EAD responsible for lack of oversight of the civilian assistance. They added that the EAD was not holding quarterly review meetings on a regular basis.

US version

To a written question, the spokesperson for the US Embassy in Islamabad stated that the entire $7.5 billion assistance will take longer to allocate and disburse than the five-year period originally envisioned. The spokesperson vowed that this would not diminish America’s long-term commitment to the development of Pakistan’s civilian institutions.

The spokesperson didn’t provide a yearly breakup of the assistance but said that the Obama administration was disbursing approximately $1 billion a year, both in civilian and military assistance. The Kerry-Lugar law requires $1.5 billion per annum civilian aid disbursement, exclusive of military aid.

While commenting on Ambassador Raphel’s visit, the spokesperson said he discussed a wide range of political and economic issues related to our comprehensive bilateral relationship.


Published in The Express Tribune, October 14^th, 2014.