Biden's swan song: $101m pledge for Pak democracy

Washington aims to prevent Islamabad's 'further overreliance' on Beijing

In a bid to shore up democracy, combat terrorism, and stabilize the economy in Pakistan, the US administration has tabled a request for a $101 million budget.

The announcement was made by US Assistant Secretary of State Donald Lu during a Congressional panel hearing on Tuesday.

In his address to the House of Representatives Foreign Affairs Committee, Lu presented a written budget request for South and Central Asian Affairs, highlighting the "ongoing challenges and opportunities" faced by Pakistan.

He emphasised that the requested funds would be crucial in supporting economic reforms and debt management, thereby aiding in the stabilisation of Pakistan's economy.

"The President's budget requests a straight-lining of our $101 million Pakistan budget," Lu stated. "These funds would be directed towards strengthening democracy and civil society, combating terrorism and violent extremism, and supporting economic reforms and debt management to help stabilize Pakistan's economy."

The budget request underscores the US's consistent push for Pakistan to uphold democratic values.

Last month, the US House of Representatives had overwhelmingly adopted a resolution expressing concerns about the state of democracy and human rights in Pakistan. In response, Islamabad had strongly rejected these concerns as unfounded.

Washington has also reiterated its "shared interest" with Pakistan in addressing the critical threat of terrorism in the region.

The president's budget blueprint includes a hefty $1.01 billion in foreign assistance for the South and Central Asia region, aiming to "compete with the People's Republic of China (PRC), counter Russian and Chinese disinformation, and prevent terrorist groups from threatening US security."

Of this, $585.7 million has been earmarked for South Asia, marking a 4.8% bump from the 2023-24 budget.

Addressing Pakistan's economic ties with China, Lu noted that the US aims to prevent Islamabad's "further overreliance" on Beijing. Responding to a lawmaker's inquiry about balancing China's "strong and growing influence" in Pakistan, Lu asserted that the US plans to supersede Chinese investments.

"China is the past in terms of investment; we are the future," Lu declared.

A study revealed last year that Pakistan is the third biggest recipient of Chinese development finance worldwide, with a portfolio of $70.3 billion. However, only 2% of China's portfolio in Pakistan between 2000 and 2021 consisted of grants, with the remainder being loans. Last year, Beijing rolled over $2.4 billion in loans to Pakistan for two years during a financial crisis.

China has repeatedly assisted Pakistan in averting defaults amid low foreign exchange reserves through debt rollovers, while Islamabad has struggled to secure a staff-level agreement with the International Monetary Fund (IMF).