Pakistan expected to receive $2.5 bn from US

Last Updated: Thursday, July 5, 2012 - 12:46

Islamabad: Cash-strapped Pakistan is expected to receive USD 2.5 billion as financial assistance from the US during the current fiscal following the end of a standoff between the two sides on NATO supply routes to Afghanistan.

The disbursements, especially reimbursements from the US Coalition Support Fund (CSF) for Pakistan`s expenses on the war on terror, might relieve the government of pressure it is facing because of depleting foreign exchange reserves which necessitated an immediate bailout from the International Monetary Fund.

The US is expected to pay USD 1.5 billion to USD 2 billion during the current fiscal year from the CSF, the Dawn newspaper quoted its sources as saying. About USD 700 million to USD 1 billion is expected under the Kerry-Lugar Berman Act and Foreign Military Financing (FMF).

An unnamed official said Pakistan`s claims for about USD 1.3 billion from the CSF had already completed a 10-stage approval and reconciliation process of the US government and only banking instructions are needed for the amount to be transferred into Pakistan`s accounts.

Bills worth another USD 800 million to USD 1 billion had passed the reconciliation process and were awaiting approval because of political issues surrounding the closure of NATO supply routes.

"We are expecting disbursements to start within the current month," an official said.

Pakistan had closed the supply lines after a cross-border NATO attack killed 24 of its soldiers last year. It ended the blockade after the US apologised for the attack.

Pakistan had originally estimated a payment of USD 1.3 billion from the CSF for the last fiscal year but the amount was scaled down to USD 800 million.

The Pakistani blockade of the NATO supply routes resulted in the US halting all disbursements. The stopping of aid by the US was a major reason for Pakistan missing its fiscal deficit target for the last fiscal by a wide margin.

Against a budgeted target of four percent of GDP, the annual deficit widened to over 7.6 percent.

The officials said the US is also expected to speed up the approval of more bills in the coming months.

They explained that these amounts no more required parliamentary approvals and would just need to go through reconciliation procedures at the bureaucratic level.

Pakistan also estimates to get about Rs 8.2 billion (USD 85 million) from the US under the Kerry-Lugar Aid programme.

Until Osama bin Laden was killed in the garrison town of Abbottabad in May last year, Pakistan’s defence authorities had billed about USD 12 billion to the US under the CSF.

The US had disbursed most of the bills except for USD 3.5 billion that are still outstanding.

An official said that according to rough estimates, the total outstanding amount on account of CSF would be in the vicinity of USD 4.7 billion to five billion, including the previously billed amount of USD 3.5 billion.

The monthly CSF bills averaged USD 100 million.

PTI



First Published: Thursday, July 5, 2012 - 12:46

comments powered by Disqus