Row with State Dept derailed USAID mission

Only $1.8b of total $7.5b disbursed so far, reveals damning audit report

ISLAMABAD: The United States could not achieve its long-term development objectives in Pakistan that it had set under the $7.5 billion Kerry-Lugar Act due to competing short-term political priorities of the State Department, says a damning report by the USAID Inspector General’s Office released earlier this month.

The report titled ‘Competing priorities have complicated USAID-Pakistan’s efforts to achieve long-term development under EPPA (Enhanced Partnership with Pakistan Act) of 2009’ reveals that against the five-year package of $7.5 billion, actual disbursements stood at only $1.8 billion by September last year. The EPPA is commonly known as Kerry-Lugar-Berman Act.

The report released on September 8, 2016 provides an independent oversight of US foreign assistance programmes and operations carried out by USAID. It conducted the audit to determine if USAID programmes in Pakistan contributed to the achievement of the development of EPPA objectives.

“The State Department’s budget and programming for shorter-term politically strategic goals conflicted with USAID’s longer-term development planning,” states the report. EPPA gave the lead role for assistance activities to the State Department, making it responsible for budget and project decisions.

“However, the State Department and USAID-Pakistan had competing priorities, and ultimately USAID-Pakistan had to integrate its long-term objectives with State Department’s shorter-term priorities,” the report notes.

The report further reveals that “USAID staff were sent out of Pakistan for disagreeing with State Department decisions.”

“USAID programmes have not achieved EPPA development objectives for Pakistan, notwithstanding the mission’s self-reported accomplishments,” according to findings of the audit report. About 30% of EPPA-funded awards that previously audited did not meet intended goals, and another 55% did so only partially, it adds.

The report blames the US State Department for most of the problems, which at that time was led by Hillary Clinton, who is now the Democratic party’s nominee for the November presidential election.

US authorities did not have time to achieve long-term objectives in Pakistan, as they wanted to achieve short-term objectives, so that they could report back to the Congress on a quarterly and biannual basis, said Hina Rabbani Khar, Pakistan’s former foreign minister. She also served as minister of state for economic affairs and interacted with US authorities on Kerry-Lugar funding issues.



She said that in her capacity as foreign minister, she raised the issue of US civilian assistance during bilateral meetings and urged the US authorities to put all Kerry-Lugar money into the multibillion dollar Diamer Basha dam or any single transformational project. She suggested that Pakistan does not need aid and should instead be given greater market access.

“Despite USAID-Pakistan’s efforts to work within State’s mandate, the purpose of EPPA — to support Pakistan’s long-term development as an investment in security for both Pakistan and the US — may not be achievable,” the report adds.

EPPA had authorised $7.5 billion funding to Pakistan over five years period in civilian assistance. As of September 2014, the US Congress had appropriated $4.5 billion, of which USAID-Pakistan received $3.9 billion. Out of $3.9 billion receipts by the USAID’s Pakistan office, the actual disbursements remained at just $1.8 billion as of September 2015, according to the report.

The report’ findings are likely to further deepen the mistrust, as skepticism remains over the US real motives despite committing billions of dollars in aid to Pakistan.

Political tensions between Washington and Islamabad, negative US perception in Pakistan and change in regulations by Pakistan’s interior ministry for registration of foreign organisations were among the factors affecting implementation of the programme.

The report says that under the State Department’s direction, USAID-Pakistan did not develop a strategic development plan. USAID-Pakistan’s efforts to include health and education initiatives “were overshadowed by the State Department’s focus on energy and stabilisation,” it adds.

“State Department’s budget and programming for shorter-term politically strategic goals conflicted with USAID’s longer-term development planning.” Even before the State Department issued its initial development plan, secretary of state Clinton announced a series of high-visibility infrastructure projects intended to improve Pakistani perceptions of the US, including dams and irrigation systems, says the report.

Conflict over development programming arose between USAID and the State Department. The USAID-Pakistan staff who opposed the State Department’s decisions were sometimes dealt with strongly. According to three staffers, USAID staff was sent out of Pakistan for disagreeing with State Department decisions. While citing a USAID staffer, the report noted that, “most of the problems could have been avoided if people better understood that these funds are not for development”.

A Country Development Cooperation Strategy for achieving targeted outcomes — a USAID requirement for all bilateral missions — was not established. The surge in US funding also outpaced USAID’s ability to effectively design and award projects. Insufficient staff resources and tensions in Pakistan further slowed programming, creating a $1.9 billion pipeline of unexpended funds.

EPPA called for a “balanced, integrated, countrywide strategy for Pakistan but more than half of EPPA’s State Department-controlled Economic Support Funds were directed toward the State Department’s energy and stabilisation priorities, mostly focused in tribal areas and Khyber-Pakhtunkhwa.

Published in The Express Tribune, September 18^th, 2016.