The relationship may be at a nadir but the cheques, albeit thinner, will keep coming, for now.
The Obama administration assured Pakistan that it would not suspend civilian economic assistance, said top officials who recently returned from Washington.
The volume of funding, however, would be affected by the debt crisis in the US and the initial $7.5 billion Kerry-Lugar assistance, slated to be disbursed over five years, will now be stretched over six or seven years, officials added.
The Spent Plan 2011, the approval of which Islamabad sees as a litmus test for resumption of economic ties between the estranged allies, is now worth $1.3 billion, $200 million less than what was initially announced.
No commitments on CSF
The US did not, however, give any commitments regarding the resumption of military assistance, including reimbursements under the Coalition Support Fund (CSF).
The CSF issue came under discussion and Pakistan emphasised that technically, the CSF was its money and the US just has to reimburse it, a top economic manager said. The US suspended the release of $800 million CSF tranche after relations between Pentagon and GHQ soured.
The message delivered at the levels of US deputy secretaries of state and treasury was that economic assistance will be treated separately from military assistance.
Enterprise Fund
Despite the setback in relations, the Senate Foreign Relations Committee has cleared the Pak-American Enterprise Fund worth $300 million, for five years, officials said.
The matter would now go to the Conference Committee of the Congress – a joint body comprising representatives from the Senate and the House – for final approval.
The fund’s approval would pave the way for $60 million per annum American investment in small and medium enterprises in Pakistan.
Litmus test
Pakistan has been waiting for the approval of Spent Plan 2011, for last two months, and sees it apprehensively as a test of assurances by American officials that economic assistance would continue.
For the second year under the five-year Kerry Lugar package, Pakistani and US authorities have firmed up $1.3 billion worth of projects for funding.
“An early approval of the Spent Plan will establish US administration’s sincerity to continue civilian assistance,” said an official privy to the Pak-US meetings.
The administration did not give any cut-off date but said the plan would be approved as early as possible, the official added.
The plan, which carries education, health and energy sector projects, has been sent to congressional committees that have 15 days to approve or reject it. If no objection is raised, it would be approved within the stipulated time.
Published in The Express Tribune, October 2nd, 2011.
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@Mushtaq Ali Jafri: You'd do well to take a look at the state of finance of Pakistan. Talking "eye to eye" while your economy is collapsing around you might not make such a good impression anyway.
Why not save Somalians with this aid and leave us alone.
It is upto Pakistan, whether they like to sell their sovereignty for few million dollars in six years. My advice is to reject all types of AID and only then you can talk eye to eye.
All these aids are a new age tool to enslave nations. This is modern day imperialism. The unholy Judeo-Christian nexus hasn't learnt the lessons of defeat in Lebanon. They have also been snubbed in the Middle East through the Arab Spring. Iran is leading a powerful resistance on behalf of Muslim nations. Palestine's statehood has wide-scale support from all respectable nations except America and Israel. India, being a nation of 170 million Muslims, should stand beside Pakistan and the rest of the Islamic world. India should open up its borders for trade with our neighbour Pakistan. Pakistan won't need a penny of Western aid.