Pakistan has decided to close down a joint venture with the United States on the pretext of funding constraints. However, sources allege that Washington was using the project as a cover-up for spying.
The Competitiveness Support Fund (CSF) was jointly launched by the US and Pakistan in 2006 to provide technical assistance to place Pakistan on a more competitive footing globally. CSF will, however, terminate its operations from March 31, sources said.
The main objective of the CSF was to enhance competitiveness by providing technical and financial assistance to small and medium enterprises.
Reliable sources, however, say that for the past few years foreign nationals were brought in as consultants but were involved in ‘suspicious’ activities. They also said that some were on exorbitant payrolls with one alleged to be an employee of the Pentagon.
A senior government official involved with its operations and requesting anonymity called the CSF a slush-fund. He, however, did not share the nature of these alleged activities.
US Embassy’s spokesperson Mark Stoh said: “It is a ridiculous allegation: that someone under the Pentagon’s payroll was brought in under the cover of a consultant.” He admitted that the Government of Pakistan approached the US and said it did not require the funding for the joint venture anymore.
On the contrary, an official document available with this scribe states, “The United States Agency for International Development declined to fund matching grants, and without donors’ funding it will be difficult for the Government of Pakistan to continue the CSF.”
So far, the US has provided $11.6 million assistance under the programme, while the government itself has provided $837,000. CSF’s Chief Executive Officer Shahab Khawaja was not available for comments as he is said to be on a tour abroad.
One of the members of CSF’s Board of Directors Kamran Yousaf Mirza said the government thinks the venture is no longer serving the purpose it intended to. He said the Board evaluated the decision and came to the conclusion that the government, being the majority shareholder, could terminate operations.
According to the same assessment of the Government of Pakistan, “The CSF has not developed any sustainability plan.” Citing reasons for the fund’s failure, the paper states that the “CSF was told to change its direction from SMEs support to policy support and the impacts of policy support were non-visible.”
The paper also raised objections over the appointment of the last CSF CEO Arthur Bayhan. “The CEO was not hired in a transparent manner and was appointed by the USAID without concurrence from the government,” it said.
The paper lists some of the domestic and international consultants hired from 2009 to 2011 and their lucrative packages. Mohsin Khan (former IMF official) was hired for 80 days at $35,000 while Sakib Sherani, former principal economic adviser of finance ministry, was hired for 144 days at $57600. A comprehensive list of foreign and local consultants is available online.
Published in The Express Tribune, March 28th, 2012.