Funding Pakistan is a waste of money

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The Administrator Samantha Power announced that the United States, through the U.S. Agency for International Development (USAID) has been offering an additional $20 million in humanitarian aid to help the people affected by the severe flooding in Pakistan due to intense monsoon rains as well as landslides as well as glacial lake eruptions, which are ongoing since June.

The effects of the flooding have been felt across Pakistan. A total of 33 million people are affected, almost 1,400 people have lost their lives plus more than 12700 were injured. Infrastructure along the flood’s path has been destroyed, with over 1.7 million houses as well as approximately 13.8 million acres of crops as well as hundreds of miles of roads and bridges that have been broken or damaged.

This aid follows on from the announcement made last week that $30 million would be provided in aid to the humanitarian sector to aid those in Pakistan suffering from the terrible floodings. Since August 12th this year, the United States has provided over $50.1 million in aid to disasters to assist those in Pakistan. With this additional funding, USAID partners will continue to offer emergency aid equipment, multi-purpose cash and shelter assistance, as well as support to improve livelihoods and logistics and systems for coordination of humanitarian responses. USAID will also focus on water sanitation, hygiene, and sanitation (WASH) help as a measure of prevention to limit the potential spread of diseases that are water-borne.

USAID has also set up a Disaster Assistance Response Team (DART) to oversee the U.S. government’s humanitarian response efforts in Pakistan. The DART team, which is comprised of experts in disasters from USAID and USAID, is looking at the damages, determining priorities, and coordinating together with the Government of Pakistan and humanitarian partners. It is believed that the United States is the single largest humanitarian aid donor to Pakistan.

The United States is deeply saddened by the flood victims as well as the destruction of families as well as homes, livelihoods, and livelihoods across Pakistan. We stand with the communities of Pakistan through this difficult time and we will be there to assist the people in necessity.

The people of Pakistan as well as those of the United States share a fundamental need for stability, belief in peace, and support for global and regional economic growth.

In order to help realize that vision, U.S. civilian assistance to Pakistan has produced tangible outcomes on the most crucial for everyone Pakistanis which include energy and stability, education, economic growth, and health. Since 2009 it has been reported that the U.S. government has committed more than $5 billion in civil aid to Pakistan and more than $1 billion for emergency humanitarian intervention.

The United States has also donated more than 61 million doses of vaccine to Pakistan and over $78 million of cash and in-kind assistance to assist Pakistan to combat the deadly COVID-19 virus. U.S. assistance to Pakistan is usually through grants that do not increase the burden of debt or the balance of payments issues.

This is a reflection of our belief that should Pakistan is safe, peaceful, and prospering, it’s not just beneficial for Pakistan but also for the entire region and beneficial for the entire world. A prosperous, stable, and democratic Pakistan which plays a constructive role within the region will stay in the long-term U.S. national interest.

U.S. Commercial Service Pakistan

The U.S. Commercial Service in Pakistan is accountable for U.S. export development activities in Pakistan. We offer a variety of services for U.S. businesses in order to provide complete information needed to create efficient strategies for export marketing. It is our goal to offer expert advice and to advertise U.S. merchandise and products in Pakistan as well as counsel, defend, and defend U.S. commercial interests within Pakistan.

Spent by the United States in Pakistan

The United States began providing economic aid as well as military aid to Pakistan shortly after Pakistan’s formation in 1947. In all, it was the United States obligated nearly $67 billion (in constant dollars of 2011) towards Pakistan between the years 1951 between 1951 and 2011. The amount of aid from vary from year to year. They have fluctuated and then dipped for decades since US geopolitical concerns within the Pakistani region changed. Aid levels have risen after periods of denial. There were several times, and in the 1990s, the US cut to aid in full and closed America. USAID offices. This practice has rendered the America United States a far cry from being a stable and reliable partner for Pakistan in the past.

In 2009, as an effort to show an indication of the United States’ renewed commitment to Pakistan 2009, it was proposed that the US Congress adopted the Enhanced Partnership for Pakistan Act (commonly referred to as the Kerry-Lugar-Berman bill, also known as KLB). The goal of KLB was to place security and development on distinct tracks, thus shielding developing agendas from uncertain conflicts and geopolitical events, as well as facilitating long-term planning for development. The act allowed a triple of US aid to development and economic issues Pakistan which is $7.5 billion over the course of five years (FY2010 until FY2014) for Pakistan to improve its governance, help its economic development, and invest in its population.

With explicit authorizing language it’s up to the administration to make requests for funds, and it is up to the Congressional committees on appropriations to accept the requests. According to an earlier Congressional Research Service report by Susan Epstein and Alan Kronstadt in just one of the four years of KLB’s five-year authorization did the total appropriation for US aid to the economy of Pakistan be more than or equal to the annual average for $1.5 billion.

How Has US Assistance Been Allocated in Recent Years?

From FY2002 to FY2009 only 30% of US foreign aid to Pakistan was allocated to economic requirements; the other 70 percent was devoted to assistance related to security. Since the KLB authorization (FY2010 until FY2014’s budget request) 41 percent of the assistance was allocated to economic aid — still not the majority of all assistance, however, the increase in the prior period shows the renewed interest in Pakistan’s economic development as reflected in the law.

How Has US Assistance Funding Been Spent?

While the figures above illustrate the way in which officials plan to spend foreign aid funds in Pakistan but actually disbursing the funds has proved to be a huge issue. The limitations that local counterparts have, the legitimate concern regarding security and corruption as well as a lack of willingness to provide aid in the absence of essential reforms in the system–for instance in the energy sector, and the interruption of programmed assistance caused by natural disasters like the floods of 2010 have all contributed to the difficulty in distributing money.

As well as the difficulties in using the funds in a way that isn’t easy, in addition to the challenges of spending it, CGD staff have stated earlier, it’s difficult to determine exactly the amount of money used. According to the latest CRS report between FY2010 and FY2012 roughly $2.2 billion of the $4 billion allocated for assistance to the economy was paid out (including security-related assistance. Just more than $3 billion was distributed in this period).

The other source for information comes from another source is the US Foreign Assistance Dashboard. The Dashboard says that in the same timeframe (FY2010-2012) almost $1.9 billion of dollars was spent by Pakistan. The Dashboard is likely to under-report expenditure and obligation data due to the fact that only five of the 22 agencies and departments were required to report to the Dashboard at the time of publication (see the CGD’s US International Assistance Dashboard Tracker for updates on the status of reporting).

Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan, produced by the Office of the USAID Inspector General. The report states that at the time of its release on March 31st, 2013, more than $4 billion in civilian aid funds from FY2010 to FY2013 was obligated and approximately $3.5 billion was spent. Utilizing our categorizing scheme, in which we categorize ESF, GHCS, and the HR and Democracy Fund as aid for development, $2.6 billion in development-related assistance was obligated, and $2.3 billion has been spent.

How Do Assistance Levels to Pakistan Compare to Assistance to Other Initiatives and Countries?

The budget proposal for FY2014 of the president shows a substantial reduction in the amount of assistance provided to Pakistan as well as the other states that are frontline in Afghanistan as well as Iraq. The majority of aid is out of the Overseas Contingency Operations (OCO) component, which was created to provide emergency and exceptional resources needed for states in frontline positions and also to Enduring/Core Programs.

Despite this, however, it is clear that the quantity of US aid that is promised to Pakistan is significant in comparison to the amount of money allocated to other development projects. This administration’s $1.16 billion proposal for foreign aid to Pakistan surpasses the request for Global Hunger and Food Security initiative ($1.06 billion) as well as the Millennium Challenge Corporation ($0.90 billion) and the Global Climate Change initiative ($0.48 billion). It’s also not too as much as the proposed $1.36 billion from the Bank’s International Development Association (IDA) which provides loan and grant payments to 81 most disadvantaged countries and is the biggest source of development financing in these regions. For bilateral aid, according to the most recent figures from USAID’s US Overseas Loans and Grants database (FY2011), Pakistan is the fourth-largest beneficiary of US aid, following Israel, Afghanistan, and Egypt. To give a comparison it is worth noting that the United States has pledged seven times more aid to Pakistan than it has given to Bangladesh a neighboring nation that has a similar size population and similar needs for development.

It’s Not All About the US: Other Donors’ Contributions to Pakistan

Of course, it is true that the United States is just one of the many nations and institutions which provide financial aid to Pakistan. The chart below puts United States’ contributions in the context of the percentage of each donor’s contribution to the total amount of Official Development Assistance (ODA) that was poured into Pakistan in the year 2011. Total gross payments totaled $4.15 billion (constant dollars in 2011). It is worth noting that the United States was the largest donor, accounting for more than a third of all ODA to Pakistan, and was closely followed by the World Bank’s International Development Association (21 percent of total ODA), Japan (14 percent) and the United Kingdom (8 percent) as well as The EU Institutions (4 percent).

For the multilateral institutions, The Asian Development Bank (ADB) is Pakistan’s largest multilateral partner, offering aid of $4.4 billion between 2009 and 2012. In the 2009-2013 Pakistan Country Strategy the ADB increased its support for the transport, energy, and irrigation infrastructure as well as the urban services, with an annual average of nearly $1.5 billion.

The portfolio of the World Bank in Pakistan currently comprises 30 projects, with an overall pledge of $5.5 billion. The Bank is heavily investing in the field of education (in Punjab, Sindh, and Balochistan) as well as infrastructure (transport sanitation, transport, and water management as well as energy).

The IMF granted a credit of $5.2 billion for Pakistan from FY2008 until FY2010 in the aftermath of 2008’s economic crisis. In 2011, the Government of Pakistan decided to put an end to the IMF program, however, after the country’s civil election in May 2013, the new government, headed by the Pakistani Muslim League (Nawaz) signed an agreement to a new provisional arrangement with the Fund that is worth $6.6 billion to fund the bailout program for FY2013-2016. Even though there is no doubt that both the IMF along with Pakistan have had a turbulent history and a rocky relationship, the current government is believed to be stuck due to the current balance of payments problem and the sharp decline in foreign exchange reserves.

US aid to Pakistan, 1948-2010

A few highlights:

* US aid to Pakistan was at its highest in 1962 at more than $2.3bn

* in 2010, the amount of military aid to Pakistan was $2.5bn which included $1.2bn in funds for support to coalition members

* US aid to Pakistan dropped to its lowest point in the 1990s, following the administration of President George H.W. Bush stopping aid flow to Pakistan over Pakistan’s upcoming nuclear program.

* US military aid dropped drastically following and immediately following the Indo-Pakistani wars in 1965 and 1971.

In the 1970s president, Carter stopped the aid provided to Pakistan (except aid for food) due to Pakistan’s decision to build an enrichment facility for uranium.

* despite the fact that US assistance (both military and economic) towards Pakistan has fluctuated significantly in the past sixty years, the amount has increased consistently since 2001.

Pakistan is historically among the top beneficiaries of US aid. Since 1948, the US has given over PS30bn in aid directly to the nation. About half of it is for military aid. But following the revelation that Osama bin Laden’s body was uncovered as well as killed at Abbottabad at the beginning of this calendar year US President Barack Obama is being pressured more and more to justify US aid expenditures in Pakistan.

Although the military assistance program is the only source of US assistance to Pakistan to be withheld Congress has also considered other – yet unfavorable bills that would also hinder US aid to the economy and civil aid for Pakistan is likely to be on the table again next year, once the budget battles for 2012 begin.

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