`Myth` that we get billions in US aid: Pak FM

Pakistan, plagued by political instability, is dependent on foreign aid.

Last Updated: Apr 19, 2011, 18:17 PM IST

Washington: Pakistan`s finance minister has 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).