ISLAMABAD:
Even as the United States announced a suspension of military aid to Pakistan, Islamabad is pushing Washington not only to continue its civilian aid programmes, but also to begin financing ‘mega projects’ as opposed to the dozens of small projects that are currently being funded by the US government.
“For early completion of the projects and making better use of the assistance, Washington needs to reconsider its approach and should allocate resources for mega projects,” said a finance ministry official on the condition of anonymity, as he was not authorised to speak to the media.
Government officials believe that many of the US-funded programmes – including some as small as $4 million – are not big enough to have a substantial impact on the Pakistani economy. Currently, the largest programme being financed by the US is $190 million for the Citizen Damages Compensation Programme, known locally as the Watan Cards programme for the 2010 flood victims.
Of the $1.5 billion in annual civilian financial assistance promised each year to Pakistan under the Kerry-Lugar Act passed by the United States Congress, the US government has so far only disbursed about $374 million. It had earlier committed to disbursing at least $718 million by June 30.
The United States Agency for International Development (USAID) has a portfolio of about $2 billion, of which $1 billion is for 32 Kerry-Lugar-funded projects.
The number of projects had initially been 55, but was consolidated downwards during a meeting between Pakistani and US officials in September 2010. Islamabad wants to continue moving that process forward.
The US government has already agreed to provide $500 million for the Diamer Bhasha dam, and the government is negotiating with the US to establish a five-year Pakistan Enterprises Fund to promote private American investment in small and medium-sized Pakistani businesses.
Finance Minister Abdul Hafeez Sheikh has admitted recently that allowing the US to determine which projects it wanted to fund was a mistake.
Yet despite the delays in disbursement and the suspension of $800 million in military aid, Pakistani government officials do not believe that there will be a suspension of civilian aid, at least in the short term. The US legislature has approved funding for Pakistan under the Kerry-Lugar Act for the US fiscal year ending September 30, 2012. A suspension of this funding would require another act of Congress which many officials in Islamabad view as unlikely.
US diplomats in Pakistan appear to echo that sentiment. “There is no change to US development assistance to Pakistan,” said US Embassy spokesperson Courtney Bale, drawing a contrast between civilian and military aid. “Coalition Support Funds are a reimbursement for expenditures in support of overseas contingency operations.”
Military aid is relatively easy to suspend for the US government since it is not appropriated separately from Congress, allowing the Obama administration more flexibility to disburse or suspend payments. However, even civilian assistance is contingent upon the US Secretary of State certifying that Pakistan remains democratic and makes progress in the war on terrorism.
The US government has frequently used the suspension of Coalition Support Fund (CSF) disbursement as a pressure tactic, withholding $600 million for the fiscal year ending June 30, 2011, which pushed up Pakistan’s budget deficit by 0.2 per cent of the total size of the economy.
Pakistan’s total outstanding CSF claims have reached about $3.4 billion, of which the US government has been able to reconcile $1.8 billion, but has not yet disbursed.
Published in The Express Tribune, July 12th, 2011.
COMMENTS (9)
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@Hyder Ali, London, England, UK: And Pakistan has become.....what? in genrosity.
@Mirza: Where as USA is selfish on behalf of USA and most of the civilised humanity and demanding Pakistan to root out terrorists, Saudi Arabia is selfish on behalf of Wahabis and China is selfish on behalf of China only and asking Pakistan to do their bidding.
Common sense would say that this is a wasted effort - but I would disagree. The USA and Pakistan share at least one thing in common - the left hand often doesn't know what the right hand is doing - especially when there is money to be made. What's the downside - all they can do is say no.
The spigot is being turned off. Better hope the Chinese put their money where their mouths are!
Saudi should give free oil. China should build a refinery for free. USA should build roads and all the infrastructure to deliver that oil to the establishment.
The establishment shall build marriage halls, defense housing colonies and golf courses. Everyone should do their job.
I am seriously confused over this matter. We can only hope for better leaders and decision makers on our part. Otherwise the overall situation is not so encouraging.
Bhutto had emphatically said.. that we shall eat grass for generations to come.. but Inshaallah we shall have the 'bomb'.
Now that Pakistani's have to eat grass (thats if the aid is suspended).. why even ask the US of A for aid.... Now that u have the bomb.. u should be content eating grass and be an example to the whole world for Vegans..
Psst.. is PETA listening....
This is all being done as the people who bring America to Pakistan for projects get a certain percentage of it. if you bring Saudi Arabia and China they will be for the betterment of the country not these people. They will not fill the pockets of the politicians. Our politicians know that once they are out of power they will not be able to come again. So they need a way out as America offers this facility to all our politicians. People you will see they will all go to America to make a deal to come back in power. Pakistan will accept all options America dictates... this, what is happening is just to gain the vote of the people of Pakistan for the up coming elections..... everything will be done as per the will of MASTER / PAPA America..... Pakistan will become like beggers or America will humiliate us in the world market but OUR BEST FRIEND AND ENEMY WILL BE AMERICA...... as long as our politician parties are the same. ...... May Allah help Pakistan.....
Why don't we ask Saudi Arabia or China to finance those projects? I thought we were upset with the big bad America? The Ghairat brigade does not want any money from the US and according to the terrorist apologists; USA has never given anything ever to Pakistan. Beggars with a false pride, pretty funny!