Row with State Dept derailed USAID mission

Published: September 18, 2016

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 18th, 2016.

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Reader Comments (10)

  • Khwaja
    Sep 18, 2016 - 10:26AM

    Hilary is hilarious. Make the project fail and use local staff as scape goats. Poor women …or men…working in local team ! Folks update CVs and change professions. This was over before it ever started. US obviously wants to disengage. Recommend

  • NKAli
    Sep 18, 2016 - 10:58AM

    When has the USA ever been able to do anything positive/constructive in Pakistan? Look at what they did in the Syrian ceasefire yesterday. They deliberately violated the ceasefire and killed 80 plus Syrian soldiers and said it was inadvertent. How many times they killed our soldiers at Salazar and other places. Did they apologise and give compensation?
    My sincerest advice to them is close down all their offices and keep open only the offices conducting conspiracy and clandestine activities.
    It will be better if they move all their offices to Afghanistan where they will be better able to monitor the situation in the region. Yes, they can do one very big favor for and that is to take away permanently some of the politicians who have residences and are always begging the bilateral and multilateral donors for loans and stop-gap funding.
    We can look after ourselves. Thank you. SalamsRecommend

  • Fahim
    Sep 18, 2016 - 11:54AM

    That sounds awkward but unless we separate bureaucracy from development and trade we can’t achieve development status. Biggest problem in Pakistan is permitRecommend

  • Riz
    Sep 18, 2016 - 12:14PM

    She suggested that Pakistan does not need aid and should instead be given greater market access.

    There are no barriers to online trade at all. All these ministers and industrialists that keep begging for market access don’t see that the internet gives you exactly that. And not just for the US but for the whole world. That’s how india manages to export $100bn in IT products and services every single year. Compared to that our total exports from all sectors of the economy are just $25bn a year.Recommend

  • Simon
    Sep 18, 2016 - 1:00PM

    Before blaming USA, lets look our society which is only meant for kick backs and short cuts. Our political leaders have made Pakistan a heaven for commission agents. To get money from USAID, transparency matters. We are good in criticizing and want to do business in desi style, which can not work at all.Recommend

  • Rao Amjad Ali
    Sep 18, 2016 - 2:59PM

    Since 1961 when USAID was first established by President John F Kennedy, the Agency has made a low-yield and suspicion provoking low-visibility contribution to international development efforts of which Pakistan has been a significant beneficiary over the last 15 years.

    Be that as it may, the pervasion of lingering perception among a wide variety of Pakistani politicians and thought leaders that somehow foreign aid impedes expansion of trade is rooted in ignorance.

    The impact of donor funded programs varies greatly among recipient countries. While India, Israel, Ghana, Jordan and Guatemala have utilized American aid to expand market access through improved competitiveness and efficient governance, Pakistan has not.

    Given the high incidence of moral hazard, Ms. Khar’s proposition that the entire KLB sponsored aid package ought to have been allocated to Diamer Basha Dam is irrational and fraught with high risk because there are serious oversight challenges, more so with long-term projects in Pakistan.Recommend

  • Sabi
    Sep 18, 2016 - 4:39PM

    Who is to believe the director USAID who wrote an op-Ed on this space a few days ago highlighting the achievements or this reporter negating any progress.Recommend

  • abood
    Sep 18, 2016 - 5:40PM

    @riz.india managed 100 billion in exports because indians work.they dontvl waste time on useless things like we pakistanis do.our younger generation wants everything in the plate.while indians go and get it.we never tried making something useful else than selling vegetables all around the world.lets make something uselful and the world will open its door.Recommend

  • Shuaib
    Sep 18, 2016 - 11:57PM

    So Pakistan is not super dependent on USAID? That’s a good thing?Recommend

  • Riz
    Sep 19, 2016 - 1:23PM

    Actually the problem is with the older generation not the younger generation. Also the entire point of having access to first world markets is that you don’t have to work hard. You get access to a market that pays at a rate that is 30x the local rate. This disparity only exists because they protect their labour market by physically blocking immigrants from entering it. The internet changes all that. It allows you to access their market without moving there.Recommend

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