The US Ambassador Nancy Powel and Pakistan's
Secretary for Economic Affair's signed an agreement that has written off
495 million dollar debt owned by Pakistan. With this cancellation the
total loan written off comes to $ 1.6 billion as the US had waived of
over $ 1 billion last year.
The US Congress has already approved a $ 3 billion
aid package spread over 5 years for Pakistan starting from US financial
year October 2004. The U.S administration has already outlined $ 701
million for the fiscal year 2005-2005. This amount is slightly more than
promised due to additional funding in some key sector.
The loan write off agreement was singed at a time
when US Deputy Secretary of State Richard Armitage was in Pakistan and
when reports were appearing in the international media about growing
pressures from Washington on Pakistan to capture a high value target
before presidential elections in the United States of America. Richard
Armitage has "publically stated that Pakistan should be a bit more
muscular in her drive against terrorism".
The 3 billion dollar aid package was promised by
President Bush during his meeting with President Musharraf at Camp David
last year. No onward proliferation of nukes and effective monitoring and
export controls, vigorous support against terrorism and a functional
democracy in Pakistan were the three pre-conditions for the said package
to become operational.
According to the Ministry of Finance the proposed
package of $ 300 million for Ministry of Finance (FMF) would include: $
22.15 million for Child Survival and Health Programme Fund; $ 29 million
for Development Assistance; $ 300 million for Economic Support Fund (ESF);
$300 million for Military Financing (EMF); $ 2 million for International
Military Education/Training; $40 million for International Narcotics
Control/Law Enforcement; $6 million for NADR (Anti Terror); and $ 1
million for NADR (Export Control/Border Security). The proposed package
includes commitment for strengthening security and export control regime
of the country, in addition to anti-terror financing.
Next year, the US budget has also earmarked $ 300
million assistance to provide Pakistan US arms. During his last visit to
the United States, Shaukat Aziz held talks with Chairman of the Senate
Appropriations committee Jim Kolbe, besides meeting officials of the
National Security Council and Deputy Secretary of Defense, Paul
Pakistan, under the Acquisition and Cross Servicing
Agreement (ACSA) with the United States, also receives million of
dollars every month, as costs providing logistical support and services,
including air based. According to a half yearly review report, the
logistical support to payments increased by 83.3 percent during
July-December 2003 to total $ 581 million or about $ 97 million a month.
Two sides signed the Acquisition and Cross Servicing Agreement (ACSA) in
early 2002 to facilitate reciprocal provisions of logistics support and
services between the two armed forces, to be used primarily during
combined exercising, training, deployments, operations or other
cooperative efforts. Items permitted under ACSA include food, water,
transportation, POL, communications and medical services and also covers
use of facilities, training services, repairs and maintenance etc. in
addition to normal billing of fuel, water and communication charges, the
government also charges for the facilities, like air bases, storages
etc. it offered to US forces in the region. The agreement was mainly
concluded to formalize the arrangement of logistical support offered to
the US forces in Afghanistan.
US financial assistance and debt relief for Pakistan
are totally inadequate in the face of what it has done for Washington.
It's established beyond any shadow of doubt and is even acknowledged by
the US leadership that Pakistan's role in US war against terror in
Afghanistan was crucial and fundamental. The $ 3 billion assistance
spread over five years and $ 1.495 billion debt relief is, therefore,
just a peanut in comparison to the sacrifices that Pakistan has rendered
to help US realize its objectives in Afghanistan. The Pakistan
leadership had taken difficult and unpopular decisions and had affected
a major shift in its Taliban policy against the public wishes to support
the US anti-terror war. It was a major shift in Pakistan's policy, which
is being interpreted in some circles as betrayal of Taliban, while
ramifications of the war in Afghanistan have destabilized the country.
The relief package has, in fact, disappointed the Pakistan masses rather
than creating any goodwill for the United States. Interestingly, the US
has written off only the concessionnal loans borrowed under the official
Development Assistance (ODA) and has opted to keep the burden of costly
non-ODA loans carrying about 6.58 percent on weighted average. The
written off loans, with weighted average cost of 2.54 percent were
repayable in 38 years, while the non-ODA loans are payable in full. The
US decision to keep the high cost loans and waive off only softer ones
constitutes a glaring contradiction in its declared policy of
participation in Pakistan's economic take-off and sustained development.
Isn't it ironic that a non-NATO ally and partner in anti-terror war
should be cheated so glaringly. It once again substantiates the public
perception in Pakistan that US is not a sincere friend. The fact is that
Pakistan has not been rewarded appropriately for the sacrifices that it
has rendered for the US war on terror. It has long endured acts of
terrorism and is still fighting against the militants to make America
safer. Yet, Pakistan is being treated shabbily. Why shouldn't Pakistan
be also given debt relief on the pattern of Egypt and Jordan during the
first Gulf War.