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'Myth' that Pakistan gets billions in US aid:
Finance minister
Apr 19, 2011, 04.52am IST Reuters
WASHINGTON: Pakistan's finance minister on
Monday dismissed as "a myth" in the United
States that his country is a major recipient
of tens of billions of dollars in US aid.
Finance minister Hafiz Shaikh told an
audience in Washington that the United
States had not delivered what it promised
under the Kerry-Lugar-Berman Law aid
package, which is meant to provide $7.5
billion in civilian aid over five years. The
law, passed in 2009, authorized $1.5 billion
a year.
"There is a perception that there is a lot of
money going to Pakistan," Shaikh told the
Woodrow Wilson Center policy think-tank.
"It is largely a myth that Pakistan is a
beneficiary of tens of billions of dollars. The
truth is that in the Kerry-Lugar-Berman
arrangement this year we have not even
received $300 million," he added.
Pakistan is dependent on foreign aid and
plagued by political instability and violence.
Massive floods last year, the worst natural
disaster the country has ever seen, affected
three million people, destroyed crops and
swept away roads and bridges, causing
over $10 billion in damage and wiping out
about 2 percentage points of gross
domestic product.
A mid-February report by the US
Government Accountability Office said that
while Congress had appropriated the first
tranche of $1.5 billion in Kerry-Lugar-
Berman aid to Pakistan in fiscal 2010, just
$179.5 million of this aid had been
disbursed by the end of 2010.
A bilateral assistance treaty governing the
aid was signed with Pakistan in late
September 2010, and US officials were still
in the process of fully developing projects
for the aid, the GAO report said.
Aid that had been disbursed in Pakistan by
Dec. 31, 2010, included $75 million for
income support, $45 million for education
initiatives and $23.3 million for flood relief,
the GAO said.
It noted that the State Department had
indicated some $500 million of the aid
would be used for flood relief after
Pakistan's devastating floods last summer.
Washington has long pressed Islamabad to
take on Islamist militants who have taken
refuge in Pakistani border sanctuaries from
where they attack Western forces in
Afghanistan.
Shaikh, who attended weekend meetings of
the World Bank and IMF, said Pakistan
wanted trade, not aid.
"We're saying let's open our markets to
each other," he said, pointing to successful
negotiations with the European Union that
have expanded areas of trade.
He said the Kerry-Lugar-Berman Law was an
important symbol of the US government
and Congress's commitment for a new
democratic government in Pakistan.
"If it is disbursed in a proper way and
implemented in a proper way, then it can
have far-reaching consequences for the
people of Pakistan," he said. "It would alter
some misperceptions that are there."
Pakistan is a heavily indebted country, with
its external debt amounting to about $58
billion and domestic debt at 6 trillion rupees
($70 billion).
The country turned to the International
Monetary Fund for an $11 billion emergency
loan in 2008 to avoid an economic
meltdown.
Shaikh said the economy had shown signs
of improvement although the government
was still trying to broaden its tax base to
include untaxed sectors, such as agriculture.
Finance minister
Apr 19, 2011, 04.52am IST Reuters
WASHINGTON: Pakistan's finance minister on
Monday dismissed as "a myth" in the United
States that his country is a major recipient
of tens of billions of dollars in US aid.
Finance minister Hafiz Shaikh told an
audience in Washington that the United
States had not delivered what it promised
under the Kerry-Lugar-Berman Law aid
package, which is meant to provide $7.5
billion in civilian aid over five years. The
law, passed in 2009, authorized $1.5 billion
a year.
"There is a perception that there is a lot of
money going to Pakistan," Shaikh told the
Woodrow Wilson Center policy think-tank.
"It is largely a myth that Pakistan is a
beneficiary of tens of billions of dollars. The
truth is that in the Kerry-Lugar-Berman
arrangement this year we have not even
received $300 million," he added.
Pakistan is dependent on foreign aid and
plagued by political instability and violence.
Massive floods last year, the worst natural
disaster the country has ever seen, affected
three million people, destroyed crops and
swept away roads and bridges, causing
over $10 billion in damage and wiping out
about 2 percentage points of gross
domestic product.
A mid-February report by the US
Government Accountability Office said that
while Congress had appropriated the first
tranche of $1.5 billion in Kerry-Lugar-
Berman aid to Pakistan in fiscal 2010, just
$179.5 million of this aid had been
disbursed by the end of 2010.
A bilateral assistance treaty governing the
aid was signed with Pakistan in late
September 2010, and US officials were still
in the process of fully developing projects
for the aid, the GAO report said.
Aid that had been disbursed in Pakistan by
Dec. 31, 2010, included $75 million for
income support, $45 million for education
initiatives and $23.3 million for flood relief,
the GAO said.
It noted that the State Department had
indicated some $500 million of the aid
would be used for flood relief after
Pakistan's devastating floods last summer.
Washington has long pressed Islamabad to
take on Islamist militants who have taken
refuge in Pakistani border sanctuaries from
where they attack Western forces in
Afghanistan.
Shaikh, who attended weekend meetings of
the World Bank and IMF, said Pakistan
wanted trade, not aid.
"We're saying let's open our markets to
each other," he said, pointing to successful
negotiations with the European Union that
have expanded areas of trade.
He said the Kerry-Lugar-Berman Law was an
important symbol of the US government
and Congress's commitment for a new
democratic government in Pakistan.
"If it is disbursed in a proper way and
implemented in a proper way, then it can
have far-reaching consequences for the
people of Pakistan," he said. "It would alter
some misperceptions that are there."
Pakistan is a heavily indebted country, with
its external debt amounting to about $58
billion and domestic debt at 6 trillion rupees
($70 billion).
The country turned to the International
Monetary Fund for an $11 billion emergency
loan in 2008 to avoid an economic
meltdown.
Shaikh said the economy had shown signs
of improvement although the government
was still trying to broaden its tax base to
include untaxed sectors, such as agriculture.
