Disbursement through NGOs: Pakistan seeks details of US aid

One-third of all Kerry-Lugar aid spent ‘off the budget’; Islamabad says it can not be accounted for.

ISLAMABAD:

Pakistan has demanded the US to share details of funds that it plans to spend through nongovernmental channels, and without the government’s knowledge, under the $7.5 billion Kerry-Lugar aid package.

Islamabad is sceptical that the money being spent through non-governmental channels may not only be wasted but also fall in the hands of unwanted elements, said sources in the finance ministry. “Islamabad’s biggest worry is that the money the US wants to spend off the government books amounts to almost one-third of the Kerry-Lugar aid package,” said an official involved in the process on condition of anonymity.

Finance Minister Dr Abdul Hafeez Shaikh raised the issue with the Obama administration during his recent visit to Washington, sources told The Express Tribune.

‘On’ and ‘off’ the budget

Under the Kerry-Lugar-Berman aid package, the US committed to give $7.5 billion in civilian assistance to Pakistan from 2010 through 2014, amounting to $1.5 billion every year.  The US Spend Plan 2010  indicates that for the financial year 2010-11, the Obama administration would give $1.02 billion to Pakistan through the government channel, known as ‘on the budget’ aid.

The remaining $488 million, that is 32.5 per cent of the yearly allocation, would be spent ‘off the budget’ and through the United States Agency for International Development. The US only indicates the total amount, without giving details of the expenditures.

Sources said that out of the total ‘off the budget’ assistance, the US is claiming to spend $170 million on a programme of narcotics control and law enforcement, $106.4 million for unilateral office of transition and $60 million towards humanitarian assistance. It is commonly anticipated that the money would be disbursed through Pakistani and international non-governmental organisations (NGOs).

Tracking and accountability

Sources said this is a matter of concern for the government since these NGOs are ultimately not accountable to Pakistani authorities. A few months ago, chairman of the standing committee on economic affairs Malik Azmat claimed during committee proceedings that goods distributed among people displaced by the Malakand operation were eventually recovered from extremists in Swat.

Recalling the committee proceedings, Azmat told The Express Tribune that “two foreign NGOs had been found distributing aid to extremist elements in the Malakand division.” He said the committee then recommended to the government to ensure that local elders are involved in the aid distribution process. Meanwhile, according to a US report published before the Kerry-Lugar aid package was passed, little or no substantial impact was recorded of aid spent ‘off the budget.’ This helped policy makers to push Washington to disburse a large chunk of aid through the government.

Sources said there are indications that the US may provide quarterly or bi-annual review reports of the same.

Future disbursements

Out of $1.02 billion allocated for the year, the US has so far released $359 million while Islamabad is expecting to receive another $381 million before June.  However, in the aftermath of Osama bin Laden’s killing, officials doubt the funds will come according to the initial plan.

The US Congress has linked the disbursement of Kerry-Lugar aid with a certificate from the secretary of state, confirming that Islamabad is committed to rooting out terrorism. The government is also expecting to receive another $600 million out of the withheld amount of the Coalition Support Fund. So far, the US has disbursed $8.6 billion but has withheld $3.5 billion, according to a presentation by the defence ministry to the National Assembly standing committee on finance.



Published in The Express Tribune, May 15^th, 2011.