Pakistan stops billing US for ‘war on terror’ costs

Published: December 20, 2011
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Deterioration in ties since bin Laden killing has had monetary consequences.

Deterioration in ties since bin Laden killing has had monetary consequences.

ISLAMABAD: 

The US Navy Seals raid on May 2, when Osama bin Laden was found and killed on Pakistani soil, cost Pakistan in terms of pride and reputation. It has also proved costly in terms of finance.

Since the operation in Abbottabad, the Pakistani military has stopped sending reimbursement claims to Washington for expenses incurred in the ‘war on terror’.

The decision is likely to put additional burden on the resource-strained budget. Pakistan used to claim between $100 million and $140 million per month from the US. This brings the unclaimed amount to at least $600 million over the past six months, provided activities are going on at the same pace.

After becoming a front-line state, Pakistan had claimed expenses under the Coalition Support Fund (CSF) from Washington.

As ties deteriorated, the US started using the CSF as a negotiating tool, either delaying or rejecting some of the claims to put more pressure on the economically-beleaguered Pakistani government.

The US had started rejecting 35-40% of the claimed amount prior to the raid, officials told The Express Tribune. In the initial years of the war, the US would disburse the entire amount, though this had gradually crept up to 5-10% over the past few years.

Till December 2010 the US had disbursed $8.6 billion to Pakistan, against $12 billion in claims, said a government functionary. The last tranche of the CSF was released in December 2010, that cleared up to June 2010 claims, he added.

The government will have to take a decision on whether to reflect the rejected amount as outstanding – or write it off. It seems that the authorities have compromised on $900 million worth of claims, as they put the outstanding figure at $2.5 billion. (Bearing in mind the $12 billion billed amount, the outstanding amount comes to $3.4 billion.)

The federal government had initially estimated it would receive $1.4 billion this year, but now the figure has been revised to $800 million, officials added. “It is not aid. Rather, these are the expenditures that we have already incurred and it is our own money,” a source said.

Pakistan has also raised the issue of mark-up costs on the withheld amount with US authorities, they added.  The officials said that Pakistan has added $800 million in balance of payments calculations and any shortfall will increase the deficit on external payments and receipts.

They added that the US has processed half of this amount, but is waiting for the final nod from the deputy secretary of defence. After he gives clearance, the Department of Defence will notify the cleared amount to Congress, which has 15 days to either clear or block the amount. It earlier blocked $800 million from the CSF after the killing of Osama bin Laden.

The officials said that during the first five months of the current fiscal year the military has spent Rs187 billion, which is 38% of the allocated annual defence budget of Rs495.2 billion.

Published in The Express Tribune, December 20th, 2011.

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Reader Comments (20)

  • syed baqar ahsan
    Dec 20, 2011 - 9:41AM

    All this outstanding $3.5b is now required more by the USA rather then to us because now Americans are surviving on other’s resource and deposits.Pakistan is surviving since long against all odds,nothing new.

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  • CK
    Dec 20, 2011 - 9:58AM

    Let us stand on our own feet, thankyou.

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  • Hu Jintao
    Dec 20, 2011 - 10:32AM

    we need to get out of this warRecommend

  • Dec 20, 2011 - 10:44AM

    How about this deal. Pakistan takes care of its own business and not stop US flying over its Territory and US will not slap sanctions on Pakistan.

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  • R S JOHAR
    Dec 20, 2011 - 10:51AM

    It appears to be a case of grapes, turned sour.

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  • Dec 20, 2011 - 11:40AM

    I fully agree with you CK. Hope that Imran Khan will take us out of this [email protected]:

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  • Ram
    Dec 20, 2011 - 1:31PM

    Surprising, no one is blaming India for the aid stoppage?

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  • Ejaz
    Dec 20, 2011 - 3:00PM

    The US has paid to Pakistan $20bn so far and the actual burden of cost borne by Pakistan is $70bn. Could the US compensate for 35,000 human lives on top of $50bn deficit?

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  • Cautious
    Dec 20, 2011 - 3:20PM

    Pakistan military stopped billing because the USA told Pakistan that it wasn’t going to give them anymore money. Those who think that Pakistan will save money by withdrawing from the war on terror are in for a big surprise – your military isn’t going to get any smaller or any better at doing their jobsRecommend

  • Sweet Dee
    Dec 20, 2011 - 3:25PM

    @Ram

    The world doesn’t revolve around India. Don’t know why Indians have to bring up India in every discussion.

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  • FactCheck
    Dec 20, 2011 - 4:18PM

    @Ejaz:

    $20 billion vs. $70 billion, difference = 3.5 times.Recommend

  • Ram
    Dec 20, 2011 - 4:25PM

    @Ejaz – US can pay you only to the extent of billed amount (i.e) US$ 20billion. Needless to say, by raising a bill for US $70 billion, you have a good chance to blame India for non payment.

    Of the US$ 20 billion, there were several deductions & looks like Pak government couldn’t satisfy US. To my knowledge India hasn’t been blamed yet

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  • Hu Jintao
    Dec 20, 2011 - 4:32PM

    over hyped figure of $20 billion they keep saying on media. what they dont tell you that big chunk of it goes for the services rendered by Pakistan army and certainly can not be called AID. some part of it goes to US contractors and trainers.

    point of saying is that USA with its most advance military and technology and trillions of dollars of money spent they can’t defeat the talibans in afghanistan neither they could achieve victory in Iraq how in the universe they expect Pakistan to something like that with limited monetary and technological resources also most difficult battle terrain in the world.

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  • Paulo
    Dec 20, 2011 - 5:50PM

    Pakistan would be totally bankrupt without US largesse. Pakistanis who demonstrate against US, burns US flags and curse Americans should bear this in mind.

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  • Dec 20, 2011 - 6:30PM

    World Aid to Pakistan since 2001 = 20 Billion Dollars (Including $ 9 Billion CSF Reimbursements)
    Pakistan’s Losses since 2001 = 68 Billion Dollars + 35000 Civilians + 5000 Soldiers + 6 Million IDPs (FATA & Swat) + 30% Population Psychologically disturbed due to Terrorism incidents + 1 Million Kids deprived of Education due to destruction / closure of Schools (FATA & KPK) + Stigma of Selling Sons & Daughters to Americans (like Aafia) + Violation of Sovereignty by Drones & TTP militants’ attacks almost daily……….. The list goes on and on….
    ……
    Down with this “War of Terrorism”?Recommend

  • Maria
    Dec 20, 2011 - 7:05PM

    What is a few hundred million when Pakistan has lost tens of billions. Rather than worry about handouts from other nations, Pakistan has to look after its own interests just like any other country.

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  • Ejaz
    Dec 20, 2011 - 7:34PM

    @Ram:
    How about looking into attrocities committed by Indian Army in Kashmir, Aasam and other parts of India. In essence, yoiu need to worry about the Indian Army first and then start picking on neighbouring army.Recommend

  • Nadir
    Dec 21, 2011 - 4:23AM

    Why doesnt anyone say that we should all pay or taxes rather than complaining?

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  • Optimist
    Dec 21, 2011 - 5:13AM

    How come Indians are feeling the ‘pain’ in comments section when Pakistan doesn’t get/want the money from the US?
    .
    Most favourite nation, my cow!!

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  • My2cents
    Dec 22, 2011 - 1:40AM

    The US is reimbursing Pakistan for actions against al Qaeda and the Afghanistan Taliban, not your war with the Pakistan Taliban. That is what the $20 billion reimbursement was for . The other $50 billion and the lives lost in Pakistan were in your war with the Pakistan Taliban, getting out of the war in Afghanistan won’t save you from that.

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