YAISHWARYAJ: The myth of US aid to Pakistan

LINK:http://pakpotpourri2.wordpress.com/2011/07/23/the-myth-of-us-aid-to-pakistan/

The myth of US aid to Pakistan

A Pakpotpourri Exclusive

By: Humayun Gauhar

Get it straight. Since 9/11, Pakistan has received only about $448 million net in economic assistance. The Economic Survey of Pakistan says that the costs Pakistan has incurred on America's lost 'War on Terror' are $68 billion. Deduct our external debt from $68 billion and we would have a billion of two left over, which the US should pay. Sad was the day we decided to help this multi-bankrupt country.

Yet propagandists and conspiracy theorists in the US corporate media (with their Pakistani poodles yapping in tandem) keep peddling the myth of the "enormous" American aid to Pakistan since 9/11. Figures vary wildly from $10 to 20 billion. This is perception management at its best.

After a study he conducted for the Woodrow Wilson Centre, Shahid Javed Burki said: "If US civilian assistance is completely withdrawn, it will only have an impact of 0.14 percent on Pakistan's GDP growth." Calculations were based on gross aid, 40 percent of which goes to American 'consultants'. These are conservative estimates compared with how US aid is being spent in Iraq and Afghanistan, where more than 60 percent of the money remains with American 'contractors' and 'consultants'.

Mr. Anjum Rizvi of Vibe TV helped me to put these facts and figures together to expose the myth of US 'aid' to Pakistan.

Former State Bank Governor Ishrat Husain says that American aid does not help the government's precarious fiscal situation in any meaningful way. Only "12-15 percent of the total amount is channeled for budgetary support… Assuming that the whole $3 billion [per annum] in economic and military aid is disbursed fully, this accounts for less than seven percent of the total foreign exchange earnings of the country… The increase in export revenues and remittances in the current year was almost twice that amount."

What price then Hillary Clinton's boast in Islamabad on May 27 that, "We provide more support than Saudi Arabia, China, and everybody else combined…but I will stand here and admit that I'm not sure many Pakistanis know that." Of course they don't, Madam Secretary, because its all bull and you know it and we know it.

Since 2006 militancy has spread like a contagion throughout Pakistan. So far, it has cost the country more than 35,000 citizens, 3,500 security personnel, destruction of infrastructure, internal migration, nose-diving production and growing unemployment.
The US has so far provided $13 billion in aid to Pakistan, of which almost $9 billion were military disbursements. The government expects to receive $1.45 billion this year from CSF as reimbursements for money Pakistan has already spent on US behalf.
America has made the process of auditing Pakistan's invoices for reimbursement more stringent and rejected several claims in recent years.

50 percent of the aid has to be spent on US 'contractors' under US law, so this goes back to America.
25 percent is wasted on administrative expenses.
The rest is given to the US Ambassador's favorite NGO to be deposited in US accounts.
Almost none makes it to Pakistanis.

Compare this to China's spending of $30 billion in infrastructure projects in Pakistan.

If American military 'aid' looks big to you, please pause. Much of it is our money – reimbursements for money we have spent on America's behalf. It comes under 'Coalition Support Funds' for reimbursement to allied militaries for operations beneficial to the United States.

The Pakistanis submit their costs; the US decides whether to pay or not.
More than 40 percent of Pakistan's requests have been rejected.
If any of our requests are "bogus" as the US informally claims, prove it. Or shut up.
The problem is more likely with American bureaucracy, not Pakistani "mistakes". America is now even declining to pay for death benefits that it used to.
Compare this to Afghanistan's $100 billion and Iraq's $600 billion aid, countries that are eight times smaller than Pakistan. Because America hasn't formally occupied Pakistan yet?
Efforts to increase civilian assistance to $1.5 billion annually have failed.

Mrs. Clinton also said: "America cannot and should not solve Pakistan's problems. That's up to Pakistan. But in solving its problems, Pakistan should understand that anti-Americanism and conspiracy theories will not make problems disappear. It is up to the Pakistani people to choose what kind of country they wish to live in and it is up to the leaders of Pakistan to deliver results for the people." Quite. But most Pakistanis think that it is the US that spawns conspiracies that spawn "conspiracy theories" and it is the US that continues to cause problems for Pakistan.

Security-related funding, including CSF (2002-2010), amounted to about $14.14 billion.

This includes the operational cost of the 140,000 Pakistani troops deployed along the 2,560-kilometer border with Afghanistan and training programmes for the paramilitary Frontier Corps.
Almost two-thirds of the amount goes into security-related heads, while the social sector and economic infrastructure receive the remaining one-third.
US AID and 'private contractors' spent more than 70 percent of the funds allocated for socio-economic development on their own support infrastructure.
Half of the money never leaves US accounts. It's the same for Iraq and Afghanistan.

Pakistan's ministry of finance was prompted to seek US clarifications on how $488.537 million being provided under the Kerry-Lugar-Burmen Law (KLL) were being spent.

KLL provided for two modes of assistance: one, budget money worth $1,025.335 million for the year 2010-11 and, two, "off the budget" $488.537 million.
Of "off the budget" assistance of $488 million, America plans to spend $170 million for International Narcotics Control and Law Enforcement, $106.387 million for Office of Transition and $60 million for humanitarian assistance.
The remaining over $240 million will be spent through international and local NGOs. Pakistani authorities do not know details of this spending.
The American "Spent Plan" shows that Washington has so far obligated $1.025 billion for Pakistan after completing Congressional procedural requirements.

US media might scream about the "billions of dollars" of aid to Pakistan, but the fact remains that its impact on Pakistan is insignificant. US aid doesn't come close to funding the difference with Pakistan's losses. The war's cumulative impact on Pakistan is worse: loss of investment, decline in industry and capital flight. US and NATO forces abuse Pakistan's roads and bridges but don't pay for their maintenance. Add infrastructure loss due to militant activity and it gets worse. The truth is that aid from this bankrupt country creates more problems than it is worth.

NOTE Gauhar is a political analyst & a columnist.