The total economic assistance provided by the United States since 2001-02 and until November 2008 (the last period I have), that is, during the last seven-and-a0half years, amounted to $10,768 million.
Of which $6,062 million (56.3 percent) is the reimbursement of expenditures that Pakistan has incurred against the war on terror.
Since the war on terror is being fought on daily basis the expenditures are also incurred on daily basis. At the end of the month the bill is prepared by the Joint Staff Headquarters and shared with the representatives of the US government in Islamabad. After detailed scrutiny of all the expenditures, the bill is then forwarded to the headquarters of the US Central Command and after its approval goes to the Department of Defence for payments. The payment is usually received by Pakistan after a lapse of, on average, six months. Since Pakistan borrows money from domestic sources to finance war on terror expenditure and the reimbursement is made after six months, the interest cost of the borrowing is borne by the government. The interest cost has never been part of reimbursement. Can we treat reimbursement as economic assistance? The answer is certainly no. The over 56 percent of the $10.768 billion is not economic assistance. It is the government of Pakistan’s own money which has been reimbursed.
Comments: So this is money owed to Pakistan, and therefore not aid, and money Pakistan can do whatever it wants with.
Once we take care of the reimbursement part,
the remaining $4,706 billion US assistance needs to be explained. The United States has written off $1,495 million of its debt to Pakistan in 2002-03 ($1,000 million) and 2004-05 ($495 million), thus leaving $3,211 million to be explained. Pakistan has received grants from the US over the last seven-and-a-half years totalling $487 million for the purchase of wheat and soybean oil, governance, economic growth, education and health, and for earthquake relief, law enforcement and population planning. These grants ranged from $0.7 million (2002-03) to $198 million (2006-07). After grants are taken care of, the amount left to be explained is $2,724 million.
So again, this is not money in Pakistan's pocket, so cannot be misspent, all talk of money being 'fungible' aside.
When former president Pervez Musharraf visited Camp David in June 2003, then-president George Bush agreed to provide $3 billion economic assistance spreading over five years. This assistance was equally divided into economic and military assistance. In other words, Pakistan was to receive $600 million annually with $300 million as budgetary support and the remaining $300 million as military assistance.
Pakistan received military assistance in cash after adjusting the purchase of any equipment from the United States. The total military assistance received by Pakistan in cash over the seven-and-a-half years (that include military assistance under Camp David) amounted to $1,514 million. If we adjust the total military assistance the remaining amount to be explained reduced to $1,210 million.
This is really the only place where one could argue 'violation of aid rules' - to illustrate that one would however have to show that all of this money was indeed given with the specific condition that equipment purchased with it could not be deployed anywhere other than FATA or some such thing.
Under the Camp David agreement Pakistan was to receive $300 million’s budgetary support per annum.
Pakistan started receiving this money from 2004-05 to 2006-07 at the rate of $200 million per annum and the remaining $100 million was spent on various social-sector projects by USAID in Pakistan directly. Therefore, Pakistan received $600 million in budgetary support during three years period.
During the remaining two years (2007-08 and 2008-09) the entire $300 million was spent directly by USAID on social-sector projects identified by the government. In other words, Pakistan did not receive any budgetary support directly under the Camp David agreement in the remaining two years. Altogether, Pakistan has received $1,200 million under budgetary support over the seven-and-a-half years (It received a one-time $600 million budgetary support in 2001-02–immediately after 9/11), thus leaving only $10 million to be explained. Pakistan received the small loan of $10 million in 2002-03.
This completes the total breakdown of $10.786 billion US assistance from 2001-02 to November 2008. In actual terms, Pakistan received $4706 million financial assistance from the United States during the period. If we adjust the amount of debt write off ($1495 million) the total cash that Pakistan received amounted to $3211 million over seven and a half years.
http://www.defence.pk/forums/economy-development/30821-where-did-10-billion-us-aid-pakistan-go.html
