U.S. Payments To Pakistan Face New Scrutiny

[maqsad]

The US will bomb Pakistan? And so, Pakistan has to kowtow? Hardly honorable a reason.

Further, the US may target and bomb NWFP, FATA, but would they have any good reason to bomb Pakistan elsewhere?

I am of the firm opinion that one should not take Pakistan and its Armed Forces to be a pack of cards that it will fold up and so the country should give up its ghost!

I, in turn, hope that you understand the simple reasons as to why your reply does not quite meet the bill.

You just don't seem to grasp it, do you? It has been repeated a few times in other threads that the US is in the region partly to gain some amount of control over Caspian oil and gas. If you drew a circle around the Caspian Sea in 2001 you would have noticed the weakest point of entry was Afghanistan. Voila! Osama and the Taliban were not so much the reason but more so the domestic propaganda(excuse) for US troops to occupy Afghanistan and turn it into the second regional base from where to operate from.

What does honor and kowtowing have to do with this? It is pure business. If Pakistan does not play along then Balochistan, Gawador and parts of FATA and NWFP will be seized and there goes the trade and energy corridor to China that Pakistan was also working on. Whether this is done by bombing or US backed terrorism and separatism eventually supported by a bombing campaign is irrelevent. The point is that the US calls the shots now and pakistan has been blackmailed to either play second fiddle for a few scraps from the master's table or else to be cracked vertically and lose it's western half.

 

[Tiki Tam Tam]

You just don't seem to grasp it, do you? It has been repeated a few times in other threads that the US is in the region partly to gain some amount of control over Caspian oil and gas. If you drew a circle around the Caspian Sea in 2001 you would have noticed the weakest point of entry was Afghanistan. Voila! Osama and the Taliban were not so much the reason but more so the domestic propaganda(excuse) for US troops to occupy Afghanistan and turn it into the second regional base from where to operate from.

What does honor and kowtowing have to do with this? It is pure business. If Pakistan does not play along then Balochistan, Gawador and parts of FATA and NWFP will be seized and there goes the trade and energy corridor to China that Pakistan was also working on. Whether this is done by bombing or US backed terrorism and separatism eventually supported by a bombing campaign is irrelevent. The point is that the US calls the shots now and pakistan has been blackmailed to either play second fiddle for a few scraps from the master's table or else to be cracked vertically and lose it's western half.

I do get a lot of things that you don't.

You are single focussed and make your world revolve around that, as if other things do not matter.

The TAP is one of the inputs and many a time I have mentioned it, but that it not the only reason.

You are only reinforcing what I have stated.

Where is the originality?

You really believe that Pakistan can be militarily sorted out by the US?

And because of that Pakistan is being 'blackmailed'?

The trade that you are banking as the lifeline of Pakistan and through Balochistan can be snuffed out by the US as and when it desires, whether Pakistan is with or without the USA, should the US' interest be affected.

The reason why Pakistan has to buckle is because it is not economically sound as should be, no matter what one wants to proclaim, to steer an independent course!


So, what is it on which you are belaying the line?

.

 

[Neo]

Are you suggesting that Pakistan generates $ 600 million in 2 to 3 months? If so, think again!

Pakistan's economy is growing and of that there is no doubt, but that feel good feeling should not lead to daydreams just to force a point of view that is unrealistic and airy fairy! But then, I sure would love to be proved wrong.

Sir,

Hate to prove you wrong but the economy is indeed growing at average 7% (for last five years). We may not achive targetted 7.2% growth for FY 2007-08 but 6.5% is more likely according to several ADB, WB and IMF reports.

Nominal GDP stands at $150 billion (FY 2006-07), 6.5% equals $9.75 billion or $0.813 billion per month!

$600 million isn't going to push us back to stone age, impact on economic growth would be less than 1% since USaid (economic) is used for budgetary relief, health & education and debt repayments and very small part for industrial development. US is not involved in LSM sector.

 

[maqsad]

I do get a lot of things that you don't.

You are single focussed and make your world revolve around that, as if other things do not matter.

The TAP is one of the inputs and many a time I have mentioned it, but that it not the only reason.

You are only reinforcing what I have stated.

Where is the originality?

You really believe that Pakistan can be militarily sorted out by the US?

And because of that Pakistan is being 'blackmailed'?

The trade that you are banking as the lifeline of Pakistan and through Balochistan can be snuffed out by the US as and when it desires, whether Pakistan is with or without the USA, should the US' interest be affected.

The reason why Pakistan has to buckle is because it is not economically sound as should be, no matter what one wants to proclaim, to steer an independent course!


So, what is it on which you are belaying the line?

.

Originality? This is not some sort of an essay contest.

My critique is against your repeated assertion that $600 million a year is all it takes to make the pak army jump up and down like a puppy, indeed you seem to imply that it is a major factor if not THE major factor which brought pakistan to heel in this war on a noun. My opinion is that $600 million means nothing, zip nada in the whole equation. The blackmail is not coming from the $600 million at all. The $600 million is nothing but an insignificant decoy that fools people into thinking that plugging a heamorrage in the tiny pakistani economy is how the US controls its puppet.

Just focus on the money for a second, do you seriously think that $600 million a year or even $2 billion a year is all it takes to get a country of 160 million people to be your colony?

The US/UK imperial axis has nurtured pakistan since its birth but made damn sure to keep a knife at its jugular during that time

How has "the west" stifled pakistani sovereignty since 47? By keeping the pak ruling elite under the whip through the use of dirty underhanded ploys which ensure the shaky survival of the pakistani state. I suspect the following factors are typical of the props used to keep the pakistani state solid while at the same time becoming like opium to an addict:

1) The US prevents however possible, the anexation of Pakistani held Kashmir, along with other territory including chunks of punjab from India by for example allowing Pakistan(so far) to maintain a nuclear deterrent.

2) Prevents anexxation of FATA, Quetta, Parts of NWFP, Northern areas by Afghan tribesmen by heavily financing and training pk army, particularly now in counter-insurgency and guerrilla warfare tactics. The pak army is standing against Afghans who constantly dream of anexxing "pakhtunkhwa". In typical twofaced fashion they are now also beefing up militants in that area as we can all see!

3) Provides occasional debt forgiveness when needed after the pk elite sacrifice foreign policy objectives in favor of US/NATO as we have seen after 2001. This keeps the occasionally choked pakistani economy from default. To stop the pak economy from getting too healthy tools like the IMF and corrupt tycoons are manipulated especially in the black market, resulting in significant capital flight.

4) Provides occasional equipment such as F16s which keep the balance of power with India to a reasonable level. Military aid is used effectively here, both to keep the balance of power and also build up a nice amount of debt which can be later "forgiven" during an obedient phase such as post 2001. The armed forces also prevent Iran or Afghanistan from gobbling Balochistan.

These and many other nasty blades of puppetmastery are held over the heads of the pak rulers like a sword of Democales to ensure future cooperation. The $600 million yearly aid MEANS NOTHING in comparison to that which is not visible. It is just a tiny drop in the bucket compared to the size of the pakistani economy.

 

[ejaz007]

In 1999 600 million dollars would have mattered a lot to Pakistan because its reserves were around 400 million dollar and GDP around 45 billion dollar. But as has been stated by Neo presently reserves are around 15 billion dollar and GDP 150 billion dollar. Presently economy is strong enough to bear the loss of 600 million.
Now why Pakistan is part of US war on terror is a subject that needs very careful analysis. In 2001 when Pakistan joined war on terror conditions were different and we had no option but to join the coalition. Pakistan gained some military and economic benefits and this helped us. USA would have entered Afghanistan one way or the other with or without Pakistan therefore it was better that it entered with Pakistan. Otherwise consequences could have been bad for Pakistan also. Simply because USA was wounded badly and needed an prey. The easiest was Afghanistan. The situation has changed now and there is growing realization in Pakistan that this war is not leading us anywhere and now calls are coming to change the strategy. The new government will have a difficult task convincing USA but they do not have an option. Lets wait and see what happens.
As for the winners of the recent elections the people of Pakistan have given their decision and every one should respect it. If Mr. Zardari has indeed committed corruption then past government should have been able to prove it. He spent 8 years in jail and nothing was proved. Every one is innocent till proven guilty.

 

[Tiki Tam Tam]

Sir,

Hate to prove you wrong but the economy is indeed growing at average 7% (for last five years). We may not achive targetted 7.2% growth for FY 2007-08 but 6.5% is more likely according to several ADB, WB and IMF reports.

Nominal GDP stands at $150 billion (FY 2006-07), 6.5% equals $9.75 billion or $0.813 billion per month!

$600 million isn't going to push us back to stone age, impact on economic growth would be less than 1% since USaid (economic) is used for budgetary relief, health & education and debt repayments and very small part for industrial development. US is not involved in LSM sector.

I am never unhappy to be proved that I am wrong. It only help updating my knowledge.

I am well aware that Pakistani economy is on the rise and good for Pakistan too!

If you take the FE deficit, the loan repayment, replacing of spare parts of the military machine and the fact that the Pakistani economy is basically dependent on the West, then the miracle of the economy would not be there to gloat about!

Should the West, for whatever be the reason, just stops trading, where will the economy be? If financial institutions controlled by them stop bankrolling, what would be the situation?

Therefore, bravado is not the call of the hour. Pragmatism is.

That is what the Musharraf govt was doing even if the Pakistani voters thought him to have sold Pakistan to the West.

I await what democracy does for Pakistan!

If indeed the US aid was chicken ****, then why did Musharraf not spurn it? I am sure he too does not relish the idea of being ordering around by the US or being threatened every now and then or allowing Moslems to be killed by Moslems.

Can someone educate me on this?

 

[AgNoStiC MuSliM]

I honestly think that the new restrictions on aid in a new era of political parties and the "same old players" running the show are an excellent idea.

Look at the type of restrictions mentioned:

They said Pakistan used to get about $300 million as direct disbursement for annual budgetary support under the $3 billion assistance package the two countries had finalised for Islamabad joining the war on terror about five years ago. These funds would now go directly to the specific development projects mostly in health and education sectors through the US Agency for International Development (USAID) that would also oversee award of contracts and payments thereof, except for less than $100 million that may still be available for direct budget support, the sources added.....
.....
The sources hinted that the US administration was in close contact with Islamabad to help arrange alternate avenues that might include some financing through development institutions.

By initiating stricter accountability standards, and restricting aid to specific projects, the potential for misuse of this money by Pakistani politicians is reduced to quite an extent. Is Musharraf even protesting this, or chuckling to himself in private that the politicians do not get a "blank check"?

Any future aid, of the sort Biden and other analysts are mentioning, also needs to be restricted in this manner. The GoP needs to come up with specific proposals and projects that would utilize such aid (schools, roads, hospitals etc.). Pakistanis (and US tax payers) in the US should actively lobby for such restrictions in fact.

 

[Malang]

If indeed the US aid was chicken ****, then why did Musharraf not spurn it? I am sure he too does not relish the idea of being ordering around by the US or being threatened every now and then or allowing Moslems to be killed by Moslems.

Can someone educate me on this?

I am sorry to butt in...pardon my limited knowledge but this is what I have understood...


GDP doesn't equate to funds available... Pakistan's govt had funds worth 1,314,777,000,000 Rs available to it in 2006-07... which roughly equates to 22bn$... which roughly means around a seventh of the gdp..
out of which Pakistan spent all 22bn$(including a fifth on defence or 4bn$+)...

Most of the money is spent on critical and necessary stuff and some fixed component in debt servicing etc...in 2006-07 Bank borrowings made up around 10% of the budget...

therefore to really initiate new investments Pakistan will have to rely either on
1. Domestic Private investment
2. Foreign Investment
3. borrowings.. Loans..etc..

1. I am not sure Pakistan has a big Private Investment base..
2. Is not very high but is increasing..
3. is expensive

till the 1st 2 do not increase substanially till then Pakistan's govts ability to invest in the country(infra, defence etc.) is limited...

NOw US's aid even if its worth a billion$ would mean an addition to the funds available to the govt.. which can be employed in defence...

Hence since Pakistan's budget is inherently small with a high fixed component therefore the US aid frees up quite a significant source to invest in fields whcih the govt feels is critical....

 

[AgNoStiC MuSliM]

Interesting Views on continued aid to Pakistan, albeit in a different manner than currently. As I mentioned earlier, I am in complete support for measures that restrict aid to specific projects in the socio-economic sector that the GoP can formulate. Similarly, greater long term access to US markets for a variety of products would be a great way to allow economic development, without direct American taxpayer funds. It would allow the private sector to take the lead and generate employment, rather than the government and therefore reduce chances of aid misappropriation. It also creates a much more stable and long term relationship between the US and Pakistan, instead of the existing one heavily biased in favor of military assistance, which is only in US interests as long as it needs Pakistan for pursuing its goals in Afghanistan.

FTA's, such as the ones negotiated with Vietnam and other nations, would send a very positive signal to the Pakistani people.

US experts urge trade access, aid hike for Pakistan​

Wednesday, February 27, 2008
WASHINGTON: Seeing Pakistan’s parliamentary poll as an historic step towards democratic progress, top South Asian experts have urged the United States to bolster economic aid as well as trade access for the country so that the Pakistani people may genuinely feel that America wants their long-term development.

“We should try to help Pakistan in its economic development, we should try to do things which masses see as genuine gestures which should be seen as trying to help their interest, which we believe, are also in our long-term interest,” said Eric Bjornlund, cofounder of Democracy International that observed last week’s polls in Pakistan.

Speaking on “The Pakistani Election: What Next” at a Washington think-tank, Bjornlund described the Feb 18 polls as representing a landmark stride in the country’s democratic process. He said: “There was general acceptance that the results reflected what people were trying to say” and added that it was a “remarkable” finding for Democracy International.

Robert M Hathaway, Director Asia Program at the Woodrow Wilson International Centre for Scholars, stressed that one of the best ways to send the message of enduring relationship with the Pakistani people is through materializing a robust assistance package for socio-economic development of the country. Such assistance, he said, may target building hospitals, healthcare delivery, schools, roads and projects that create livelihoods and jobs and touch lives of the people.

The Pakistani nation, he said, deserves democracy dividend as “the Pakistani people, for their own reasons and not because the US wanted it, carried out an exercise in political freedom, which has clearly exonerated all of us.

“They clearly demonstrated that they believe in political pluralism, and I think it is entirely appropriate for the US to say that after this demonstration that our two people share the values it is all the more reason to build our relationship through economic aid.”

Hathaway also favoured the idea of establishing reconstruction opportunity zones and said these should serve both the local populace and the American taxpayers. On boosting access for Pakistani products including textiles in the huge American market he said: “I think it is entirely appropriate for the United States to give Pakistanis greater access to the American market, it is difficult political issue, but clearly, and particularly after the election last week I think the US should revisit the entire issue as to what we can do to support Pakistani people. And one way to do that is to give them greater access to the market, including the textile market.”

Hassan Abbas, a research fellow at Harvard University, underlined the importance of political stability for sustained economic progress and said in view of challenges facing the country, PPP Co-chairman Asif Ali Zardari should be credited with reaching out to political forces across the spectrum. He stated the leaders of largest winning party plan to move forward with a comprehensive economic strategy.

Marvin Weinbaum, a scholar associated with the Middle East Institute, said the election was also about bread and butter issues and people want to see improvement in their lives. He emphasized that the Pakistani economic system must ensure that the people benefit from its success.

 

[imiakhtar]

Up to 70% of US aid to Pakistan 'misspent' | World news | guardian.co.uk

Pakistan really is screwing the US over, only 30% of the aid accountable, doesn't surprise me.

 

[blain2]

The problem is with both sides then...why were the contracts and book-keeping not done more rigorously? If you give Pakistan money for its military, then its up to the Pakistani military to use this money. If the US would like the money to be used specifically then it has to spell that out and then Pakistan can react.

All of these reports are essentially unsubstantiated suggestions about misuse. What if the Pakistani government always assumed the money was to be used where ever they felt it was appropriate?

When this arrangement was made in 2002, none of these issues like where the money was to be spent were talked about. As always, Pakistan is left standing to fend off the idiotic claims.

 

[Tiki Tam Tam]

The problem is with both sides then...why were the contracts and book-keeping not done more rigorously? If you give Pakistan money for its military, then its up to the Pakistani military to use this money. If the US would like the money to be used specifically then it has to spell that out and then Pakistan can react.

All of these reports are essentially unsubstantiated suggestions about misuse. What if the Pakistani government always assumed the money was to be used where ever they felt it was appropriate?

When this arrangement was made in 2002, none of these issues like where the money was to be spent were talked about. As always, Pakistan is left standing to fend off the idiotic claims.

One wonders if a country gives aid to another to spend it the way one feels like.

It is obvious that aid is given for a purpose and with a quid pro quo. If it were not so, then it would be more like giving alms! Obviously, no nation gives alms and no self respecting nation accepts such monies as alms. That would begger the cause of the aid.

Therefore, in my humble opinion, Pakistan was given monies and equipment for specific reasons. To feel otherwise, would do the Pakistani government, which took the aid, an injustice.

Misusing funds and corruption is a worldwide phenomenon and it is not that Pakistan alone can be singled out.

 

[AgNoStiC MuSliM]

Salim and Imiakhtar:

Lets dispense with the propoganda first. There is no justification of the 70 percent aid "misused" claim. That issue has been clarified several times with numbers from US sources. Out of approximately ten billion in disbursements to Pakistan, only 1.8 billion was in the form of "military aid" that one could argue was "misspent". So there is no "screwing over of the US".

Middle East Desk : Pakistan

Of the 1.8 billion in military aid, one would have to show that there were conditions attached to such monies being spent a particular way to justify allegations of aid being "misspent". If no conditions were attached, Pakistan is justified in spending the aid as it sees fit on its military. In fact the latest tranche has a separate category labeled "Counter Terrorism funds" that amounts to a few million. That leads to the question of why the US did not label its entire disbursement of military aid as "Counter Terrorism Funds"? That would have left no doubt as to what the monies were to be used for. A seperate category for "Counter terrorism aid" only indicates that the remainder was to be spent as Pakistan saw fit.

The Cobra's and NVG's were indeed provide to Pakistan for CT purposes, but I haven't read anything regarding the diversion of such resources away from the FATA theater, so that does not seem to justify complaints from the US side.

At this point the allegations of "over charging" also remain just that, with a couple of unknown sources going by "back of the envelope" accounting. Ridiculous.

 

[Neo]

Should the West, for whatever be the reason, just stops trading, where will the economy be? If financial institutions controlled by them stop bankrolling, what would be the situation?

It would be disasterous for any country, not just for Pakistan. But a declared nuclear Pakistan makes all the difference. Most sanctions applied by west were a direct result for our quest for nuclear capability, we've reached and demonstrated it to the world, there's nothing to hide and there's not much the west can do to undo it.

So the era of sanctions is over, even if the west stops aiding us we'll survive because there are alternatives we didn't have before.
Its a misconception that major financial institution are fully controlled by the west, money has a language of it own and as long as we've a healthy economy the money will be provided based on lucrative returns. According to Moony Pakistan still is world 3rd most luctrative market to invest despite all the political instability.

 

[ejaz007]

If the USA and West just stop doing business with Pakistan who would gain from it. Surely extremists would gain from it. If this is what they want then why the hell they started the war on terror?
Also USA has already made the mistake of abandoning Pakistan twice. Third time might be the last. No Pakistani future leader whether civilian or military shall take the risk of nurturing the relations with USA when he knows that one day they are simply going to run away. Pakistani people’s mode has changed very dramatically towards USA in the last eight years and one of the major reason for Musharaf and his allies loosing the general elections is that they were considered too much pro USA. Most of the problems existing in Pakistan are also blamed on the pro USA policies.
As far as sanctions are concerned they have in the past and shall be in the future eventually beneficial for Pakistan. USA would loose what ever influence it has in Pakistan.