Terror war losses outstrip ‘generous’ US payments

Islamabad bears a loss of $123 billion against American assistance of $33.4 billion

Shahbaz Rana January 03, 2018
Soldiers stand guard outside Lal Shahbaz Qalandar's shrine. PHOTO: APP

ISLAMABAD: The US-led war against terror has inflicted three times more damages on Pakistan’s economy than $33.4 billion total economic assistance that Islamabad has received in the past 16 years. Interestingly, these $33.4 billion include payments made for supporting the US mission in Afghanistan.

The total economic losses that Pakistan sustained directly or indirectly since the US invasion of Kabul in October 2001 stand at $123.13 billion, according to Economic Survey of Pakistan 2016-17. The losses are $89.73 billion higher than the amount the US ‘generously’ gave to Pakistan.

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The $33.4 billion reimbursements to Pakistan include $14.573 billion payments under the Coalition Support Fund (CSF), which is technically not aid but service payments for providing logistical and operational support to the US-led military operations in Afghanistan.

The US disbursed the $14.573 billion after vetting bills against every cent and rejected billions of dollars in claims that it found not genuine, said some former officials of the Ministry of Finance.

The $14.573 billion is 44% of $33.4 billion aid to Pakistan. By excluding the $14.573 billion cost of logistics and aerial support, the approved civilian and security-related aid to Pakistan from 2002 to 2016 will stand at only $18.8 billion, said the statistics compiled by US authorities. Hypothetically speaking, the US should pay $104.3 billion more to Pakistan just to make good these losses.

On Monday, the US President Donald Trump accused Pakistan of giving Washington ‘nothing but lies and deceit’. Trump said the US had ‘foolishly’ given Pakistan more than $33 billion in aid over the last 15 years. This has triggered a debate in Pakistan about the Pak-US relations.

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Compared to the actual foreign aid of $18.8 billion to Pakistan, the finance ministry’s statistics showed that Islamabad sustained $123.13 billion losses since 9/11. The per annum losses due to this war range from $2.67 billion to $23.8 billion. Pakistan reported maximum annual losses from 2010 to 2013.

Washington’s economic leverage over Islamabad has significantly reduced since 2014, as it came down to $1.6 billion per annum against the average of $2.3 billion per annum between 2002 and 2013.

The flow of funds from the US to Pakistan saw another drastic reduction in 2017. The US economic assistance historically remained around 1% of Pakistan’s budget, which can easily be met from other sources.

Pakistan can replace the US assistance by focusing on enhancing remittances that currently stand at over $19 billion annually. The Pakistani immigrants still send a significant portion of remittances through informal channels and the federal government can tap this by giving more incentives.

Security-related assistance

Since 2002, the US has given $7.96 billion in security assistance to Pakistan with an annual average of $530.4 million, which is 23.83% of total US budgetary appropriations for Pakistan. A major chunk of it – $3.8 billion – has been given under the Foreign Military Financing Programme.

Another sum of $2.35 billion has been given under the Pakistan Counterinsurgency Fund and Counterinsurgency Capability Fund. The third major portion was $911 million, which the US gave under the International Narcotics Control and Law Enforcement programme.

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Against the 12-year average of $576.7 million, the US gave $1.03 billion from 2014 to 2016 with an average of only $345 million under the security-related assistance to Pakistan. Most of this sum came under the foreign military financing programme.

Economic assistance

The US has given $10.85 billion in economic assistance to Pakistan during the past 15 years at an average of $723.5 million per annum. The 12-year average was $788 million per annum. The economic assistance was about one-third of the total US budgetary appropriations for Pakistan.

Out of $10.85 billion, the US gave $8.5 billion under the Economic Support Fund, followed by $918 million under the International Disaster Assistance Programme and another $623 million in food aid to Pakistan. However, during the past three years, the economic assistance has come down to only $1.4 billion, at an average of $345 million per annum.

The majority of US economic assistance was off the budget, suggesting it did not benefit the finance ministry and either went into private hands or back to the US through third-party contracts.


Tariq | 3 years ago | Reply Economic Survey of Pakistan seems biased. Which body was responsible for running this survey? The government of Pakistan would be better served by an independent body running this investigation.
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