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U.S. Payments To Pakistan Face New Scrutiny

As I mentioned earlier, I am in complete support for measures that restrict aid to specific projects in the socio-economic sector that the GoP can formulate.

restrict aid? I think aid ought to be banned for Pakistan.. instead of aid make US investment in Pakistani economy compulsory...

Similarly, greater long term access to US markets for a variety of products would be a great way to allow economic development, without direct American taxpayer funds. It would allow the private sector to take the lead and generate employment, rather than the government and therefore reduce chances of aid misappropriation.

opening up US market for Pakistan will not really help..
1. First Pakistan has small industrial base and has a small export base (besides footballs and some other items nothing from Pakistan is bought Chinese style)
2. Pakistani exports will not be cheapest, highest quality, branded or in sufficient quantities (in most categories) when compared to Vietnam, China, India etc.. (after all US are allowed and are self-motivated to setup their subsidaries and logistics and procurement and manufacturing in other nations)
3. to really make an impact in trade.. substantial investment is required ..though at the moment US economy is in doldrums... further the current atmosphere in Pakistan is not conducive to investing in industries exporting items to western nations (threat of sanctions)...
4. contrary to what people believe foreign investment is good for a nation and drives up gdp... and when US citizens have invested in your country they will work as hard as a Pakistani in making these companies work...

so instead of getting 600mn$ of aid from US .. equivalent amount of investments by US companies in setting up Industries in Pakistan.. will have a multiplier effect on GDP .. whereas aid is only used as a source of spending by the govt with no real effect on GDP (unless used in infra etc..)

It also creates a much more stable and long term relationship between the US and Pakistan, instead of the existing one heavily biased in favor of military assistance, which is only in US interests as long as it needs Pakistan for pursuing its goals in Afghanistan.

quite true.. but when you have the other country investing in ur nation then relations turn out to be stabler and more robust...

FTA's, such as the ones negotiated with Vietnam and other nations, would send a very positive signal to the Pakistani people.

before Pakistan can do that it ought to have a pro-trade govt.. with laws and policies encouraging entreprenurs to invest money with possible options of bailout by govt...

I have said this before and I will say this again... Musharraf could have made Pakistan go the Chinese way...
 
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restrict aid? I think aid ought to be banned for Pakistan.. instead of aid make US investment in Pakistani economy compulsory...

opening up US market for Pakistan will not really help..
1. First Pakistan has small industrial base and has a small export base (besides footballs and some other items nothing from Pakistan is bought Chinese style)
2. Pakistani exports will not be cheapest, highest quality, branded or in sufficient quantities (in most categories) when compared to Vietnam, China, India etc.. (after all US are allowed and are self-motivated to setup their subsidaries and logistics and procurement and manufacturing in other nations)
3. to really make an impact in trade.. substantial investment is required ..though at the moment US economy is in doldrums... further the current atmosphere in Pakistan is not conducive to investing in industries exporting items to western nations (threat of sanctions)...
4. contrary to what people believe foreign investment is good for a nation and drives up gdp... and when US citizens have invested in your country they will work as hard as a Pakistani in making these companies work...

so instead of getting 600mn$ of aid from US .. equivalent amount of investments by US companies in setting up Industries in Pakistan.. will have a multiplier effect on GDP .. whereas aid is only used as a source of spending by the govt with no real effect on GDP (unless used in infra etc..)

before Pakistan can do that it ought to have a pro-trade govt.. with laws and policies encouraging entreprenurs to invest money with possible options of bailout by govt...

I have said this before and I will say this again... Musharraf could have made Pakistan go the Chinese way...


If the US government is "investing in the economy", and they would only be able to do that by investing in roads, schools and hospitals, since the US government is not involved in running private enterprise, that would amount to "aid" - investment in Pakistan is just a nicer way to put it.

Also, I am not convinced that aid in the form of "direct budgetary support" (which is how it has been disbursed so far) is the correct way to go about it. Funding for Schools, roads and hospitals etc. will have a direct impact on the economy and society - you employ a huge amount of workers through direct construction requirements, material production facilities etc. In the long run those schools, hospitals and roads improve the quality of life of people, provide an educated pool of workers that industry can choose from and roads and infrastructure enables industry to conduct business more efficiently and gives access to areas that were for the most part isolated.

Investment into businesses and industry can only be done by businesses from the US, and they will invest when they see an economic advantage, not when the US asks them to. A FTA provides companies, US, Pakistani and foreign, to invest and expand in Pakistan by taking advantage of the access to the US market, so that in itself provides the incentive for businesses to invest in Pakistan. The ROZ's that are goign to be set up in Azad Kashmir and the Tribal areas are aimed at attracting such investment, by offering "Free Trade access" to the US market, so the idea is already being implemented.

Providing Aid is the US's decision, and at this point I agree with what Biden and other analysts have suggested - that aid to social sector projects be increased (no point looking a gift horse in the mouth), and that restrictions be placed on it in that it goes to specific projects.

Your statement about Pakistan's industrial base is completely off (it may be smaller than India and China's, but it is ridiculous to suggest that it is limited to the categories you mentioned), as are your statements regarding price and quality, compared to India at least. On what basis are those claims being made?

I disagree with having only a "pro trade government" - our economy has grown by an average of seven percent without any major growth in exports, indicating that local demand has been the driving factor behind that growth, and I believe that has insulated Pakistan to some extent from the negativity in the last year. Had we been following a "Chinese model", you would have seen industry and exports plummet after the wave of suicide bombings, emergency and civil unrest.
 
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Pakistan Army denies American aid being misspent

* Guardian report alleges Pakistan’s war on terror expense claims ‘vastly inflated’​

LAHORE: Pakistan Army Spokesman Major General Athar Abbas has denied the allegation that American aid to Pakistan to cover the operational cost of the war on terror was being misspent, according to a report in the Guardian published on Thursday.

The British newspaper said the $5.4 billion assistance package to Pakistan had come under scrutiny after allegations that as much as 70 percent of it was been misspent.

“As far as the military is concerned, I can assure you we have full account of these things,” spokesman Major General Athar Abbas told the Guardian.

“Yes there are minor issues they keep raising, but at no stage have we received any formal complaint from any official channel,” he said.

The Washington Post had reported last week that a claim for “roads and tracks” from the Pakistani navy had been rejected.

Gen Abbas said the navy was “also involved in the war on terror because they have to guard against infiltration of arms and explosive from abroad”.

According to the Guardian, the US had paid the operating costs of Pakistan’s military operations in the Tribal Areas - averaging $80 million a month - since 2002. It said the Pakistani military submitted expense claims to the US embassy in Islamabad every month. “No receipts are provided, and the money is paid directly into the Ministry of Finance.”

“American officials processing the payments at the US embassy in Islamabad have concluded that the Pakistani expense claims have been vastly inflated,” the British newspaper quoted two western military officials as saying. It did not identify the officials.

“My back of envelope guesstimate is that 30 percent of the money they requested to be reimbursed was legitimate costs they expended,” said one official. He said the US did not know what happened to the remaining 70 percent - approximately $3.8 million. The newspaper also quoted him as saying that “at least half the money was thought to have disappeared”.

“Poorly accounted claims caused the US to suspend payments for several months last spring,” the second official told the Guardian.

Daily Times - Leading News Resource of Pakistan
 
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AgNoStIc MuSliM,

on certain topics I agree with you but I am also adding another dimension of making US corporations participate in the Pak economy...

a crude example scenario..
US govt would give Pakistan 200mn$ to spend on building healthcare facilities...
200mn$ given to US corporation to build a road in Pakistan on a BOT or some other formula with a Pak corp JV..
100mn$ soft loan(may be a loan waiver after a lock-in period) given to a US corporations into setting up a JV with a Pakistani corporation to manufacture...


in border areas I doubt if foreigners would be willing to invest, though one must look at the drawbacks of ROZ as well... which will be clear(er) whence the fine print is out... (but if something what I have mentioned in my crude example is done, it might work)..


ROZ will be used in manufacturing items only for export and are non-taxable this is having/going the trade way .. since Pakistan has managed to achieve growth without trade as you mentioned this might reflect something important..


Your statement about Pakistan's industrial base is completely off (it may be smaller than India and China's, but it is ridiculous to suggest that it is limited to the categories you mentioned), as are your statements regarding price and quality, compared to India at least. On what basis are those claims being made?

India's industrial base is ridiculous too IMO.. but as for PAK I didn't mention any categories??

What I meant to say was Pakistan doesn't produce anything in that great quantities, variety, quality, costs to make them attractive over others (or to make it imperative for them to export) or which grants them a monopoly or able to withstand a price war.... (football was an example of exports.. I think that I didn't make my self clearer in the earlier post)..


AM could you clarify this,

You are saying that Pakistan should have FTA and ROZ (Chinese style) are planned to promote trade but Pakistan having a Chinese type trade based economy could have resulted in total chaos and Pakistan is growing because of internal demand

further foreigners will invest where they see an economic advantage, but ROZ are planned along the borders,
 
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Malang:

The ROZ's are going to be present in FATA, Baluchistan and Azad Kashmir. The idea is that the "incentive" of having duty free access to the US will encourage companies to look at the risk-benefit issue favorably. Now encouraging investment in FATA, despite the ROZ's, may still be challenging, and what we may see is that the majority of the investment occurs in the AK and Baluchistan zones. However, I believe that if the peace deals with certain Taliban leaders work out, the GoP will be able to leverage the employment opportunities and potential prosperity offered by the Zones into Taliban support for maintaining security. This is not as far fetched as it seems - in the recent elections the Taliban took over security for polling stations in some agencies under an agreement with the government.

Without the ROZ's and a potential FTA, Pakistan continues to suffer from terrorism and related insecurity, and has no major incentive (ROZ"s etc.) to offer to offset the security risk. So while insecurity and instability may continue, there is a much larger chance of higher investment and economic growth, and the subsequent decline of terrorism due to an improving economic situation, then there would be in the absence of such incentives.

Now regarding your point about this being "trade based investment" - that is a valid point, however ai am not arguing for a shift in Pakistan's current economic direction - the ROZ's are going to attract investment in addition to the domestic growth based investment, so they act as a "growth multiplier" or "catalyst", by boosting a section of the economy that hasn't grown as fast as the economy in general. My concerns with Pakistan having followed a "trade based growth model" were based on the effect the instability in Pakistan would have had in the past year - at this point that instability is out in the open. Companies that invest in Pakistan now do so knowing the risk that exists, and therefore there is a lesser chance (unless there is a dramatic worsening of the situation) that they will exit because of terrorism related instability (since the risk already exists).
 
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Malang:

The ROZ's are going to be present in FATA, Baluchistan and Azad Kashmir. The idea is that the "incentive" of having duty free access to the US will encourage companies to look at the risk-benefit issue favorably. Now encouraging investment in FATA, despite the ROZ's, may still be challenging, and what we may see is that the majority of the investment occurs in the AK and Baluchistan zones. However, I believe that if the peace deals with certain Taliban leaders work out, the GoP will be able to leverage the employment opportunities and potential prosperity offered by the Zones into Taliban support for maintaining security. This is not as far fetched as it seems - in the recent elections the Taliban took over security for polling stations in some agencies under an agreement with the government.

Without the ROZ's and a potential FTA, Pakistan continues to suffer from terrorism and related insecurity, and has no major incentive (ROZ"s etc.) to offer to offset the security risk. So while insecurity and instability may continue, there is a much larger chance of higher investment and economic growth, and the subsequent decline of terrorism due to an improving economic situation, then there would be in the absence of such incentives.

From a cursory reading, ROZ is a quick fix solution offered by US...
Some of the drawbacks I feel are

1. If ROZ is implemented on a large scale, Pakistanis will be investing quite a lot of their resources in these areas and hence they have inherently higher risk (US corp on the other hand will be investing a fraction and might have bailouts etc.)

2. Since most of the Border areas etc. (except may be Mirpur?) don't have skilled workers therefore people from other areas will shift leading again to a demographic change which might be resented by the local populace

3. They will be prime targets for disruption. and the tribals might see as a way of changing their way of life, terrorists might see them as easy targets.. etc...

4. I don't think the border areas are as well connected to Karachi and the cost and mode of transportation will result in significant bottlenecks(I am not sure of other infrastructure)


ROZ are not a soln for taking care of tribal areas but in the future sure have a
potential to exacerbate the situation...

instead terrorism should be countered with a heavy hand and then border area populace rehabilitated and then given economic opportunities... (an example of an alt to ROZ by no means exhaustive)..
 
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From a cursory reading, ROZ is a quick fix solution offered by US...
Some of the drawbacks I feel are

1. If ROZ is implemented on a large scale, Pakistanis will be investing quite a lot of their resources in these areas and hence they have inherently higher risk (US corp on the other hand will be investing a fraction and might have bailouts etc.)

2. Since most of the Border areas etc. (except may be Mirpur?) don't have skilled workers therefore people from other areas will shift leading again to a demographic change which might be resented by the local populace

3. They will be prime targets for disruption. and the tribals might see as a way of changing their way of life, terrorists might see them as easy targets.. etc...

4. I don't think the border areas are as well connected to Karachi and the cost and mode of transportation will result in significant bottlenecks(I am not sure of other infrastructure)


ROZ are not a soln for taking care of tribal areas but in the future sure have a
potential to exacerbate the situation...

instead terrorism should be countered with a heavy hand and then border area populace rehabilitated and then given economic opportunities... (an example of an alt to ROZ by no means exhaustive)..

I am going to address your last point first. If terrorism could be addressed solely by using a "heavy hand", the US would not be struggling in Afghanistan or Iraq. Terrorism is a multidimensional problem and requires a multidimensional approach to effectively tackle it. The application of force has already been used - the Pakistan military has beated back the Taliban in Swat, Darra Adamkhel and in B Mehsud's territory. What is needed now is the presence of an alternate source of livelihood and a "life outside militancy". Without providing that alternative, the militancy will never end, and this fact has been accepted by almost every single Western Analysis coming out of both Afghanistan and Iraq.

However, it is almost impossible to get companies to invest in high risk areas such as FATA without incentives - that is where the incentive of the ROZ's come in. This is meant to be a quick solution to reduce support for the Taliban among the local populace, and provide time for the GoP to undertake long term reform. The ROZ"s have been proposed to exist for about 15 years, in the meantime it is the GoP's responsivility to affect long term change in the Tribal belt by investing in social infrastructure (education, health, basic services), as well as exploring the local economy (mineral deposits, agriculture etc.) to provide long term solutions for the region. Therefore, while the ROZ's are not a longterm solution for the Tribal areas, they are a necessary short-medium term solution to get the ball rolling, and in turn provide a boost for the overall Pakistani economy as well, which allows for increased revenues that can be pumped back into the local economy and social sector reforms.

You talk about "rehabilitation of the locals" and "giving economic opportunities" - I would argue that is exactly what the ROZ's are designed to do, in the short-medium term.

On the question of locals not being employed, that will depend upon how the GoP approaches the ROZ's in FATA - whether it will also set up vocational training institutes for unskilled labor so that they can be used in the industry being set up. The Pakistan Ordinance Factories (POF) did something similar when they tried to move the illegal gun manufacturing in Darra Adamkhel into the legal sphere - they set up workshops to train the Tribesmen in manufacturing quality sporting and hunting arms and ammuintion in legal POF factories. So the same process can be replicated here. TUSDEC is a federal agency that has been doing some remarkable work in setting up vocational training centers across Pakistan, and their help might be utilized here as well.

Connectivity is not an issue. The Islamabad-Peshawar Motorway was completed last year, which then connects to the Islamabad-Lahore Motorway, and then various highways from Lahore to Karachi. Within FATA, the GoP has already been constructing roads from the agencies (Such as the friendly Wazir part of South Waziristan) to link up with other roads going to Peshawar. There are also various roads used for transport into Afghanistan from Peshawar that can be linked to from the various zones. So the main arteries already exist, and only connecting roads need to be built. IN the long term, as the GoP continues to develop another trade corridor in the West of the country, rail lines and roads from the north to Gwadar are also being planned, and those can also be linked to.

Tribal leaders have already approved of the ROZ's. What the rest of the world does not seem to understand is that the vast majority of the Triabls just want to get on with their lives, and have a means of living - they won't oppose the ROZ's, the Taliban (those who haven't entered "deals") will. And the government is taking great care, from what I have read, to set up ROZ's only in thse areas where they can get the Local elders and/or Taliban to guarantee peace. So your point of the Locals "resenting the change" is incorrect.

Major investors in the zones (FATA ROZ's atleast - the AK and Baluchistan ones do not have anywhere close to the same amount of risk associated with them) may indeed by primarily Pakistani/Arab/Chinese, but that is fine, since it allows the domestic industry to expand into a huge American market, and strengthen.
 
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I am going to address your last point first. If terrorism could be addressed solely by using a "heavy hand", the US would not be struggling in Afghanistan or Iraq. Terrorism is a multidimensional problem and requires a multidimensional approach to effectively tackle it. The application of force has already been used - the Pakistan military has beated back the Taliban in Swat, Darra Adamkhel and in B Mehsud's territory. What is needed now is the presence of an alternate source of livelihood and a "life outside militancy". Without providing that alternative, the militancy will never end, and this fact has been accepted by almost every single Western Analysis coming out of both Afghanistan and Iraq.

agreed... I said something on the same lines..

However, it is almost impossible to get companies to invest in high risk areas such as FATA without incentives - that is where the incentive of the ROZ's come in. This is meant to be a quick solution to reduce support for the Taliban among the local populace, and provide time for the GoP to undertake long term reform.

If ROZ is successful then all countries would do something similar.. because as per my observations initial indicators all point to it backfiring (to an extent)

The ROZ"s have been proposed to exist for about 15 years, in the meantime it is the GoP's responsivility to affect long term change in the Tribal belt by investing in social infrastructure (education, health, basic services), as well as exploring the local economy (mineral deposits, agriculture etc.) to provide long term solutions for the region. Therefore, while the ROZ's are not a longterm solution for the Tribal areas, they are a necessary short-medium term solution to get the ball rolling, and in turn provide a boost for the overall Pakistani economy as well, which allows for increased revenues that can be pumped back into the local economy and social sector reforms. You talk about "rehabilitation of the locals" and "giving economic opportunities" - I would argue that is exactly what the ROZ's are designed to do, in the short-medium term.

SEZ's and ROZ's are not without their drawbacks... ROZ I would envisage to be implemented at a later stage and as a long term solution... but I guess Americans must have done some feasibility studies..


Connectivity is not an issue. The Islamabad-Peshawar Motorway was completed last year, which then connects to the Islamabad-Lahore Motorway, and then various highways from Lahore to Karachi. Within FATA, the GoP has already been constructing roads from the agencies (Such as the friendly Wazir part of South Waziristan) to link up with other roads going to Peshawar. There are also various roads used for transport into Afghanistan from Peshawar that can be linked to from the various zones. So the main arteries already exist, and only connecting roads need to be built. IN the long term, as the GoP continues to develop another trade corridor in the West of the country, rail lines and roads from the north to Gwadar are also being planned, and those can also be linked to.

I am not sure what are the transportation rates.. but Motorway freight is more expensive than Rail freight.. what is the turnaround time of ports etc.

(for an indicator GoI estimates that it is cheaper to transport stuff from Rotterdam to Mumbai than within India.. )

Tribal leaders have already approved of the ROZ's. What the rest of the world does not seem to understand is that the vast majority of the Triabls just want to get on with their lives, and have a means of living - they won't oppose the ROZ's, the Taliban (those who haven't entered "deals") will. And the government is taking great care, from what I have read, to set up ROZ's only in thse areas where they can get the Local elders and/or Taliban to guarantee peace. So your point of the Locals "resenting the change" is incorrect.

I wouldn't be surprised if any community doesn't want prosperity. . except the ones causing troubles in the first place

Major investors in the zones (FATA ROZ's atleast - the AK and Baluchistan ones do not have anywhere close to the same amount of risk associated with them) may indeed by primarily Pakistani/Arab/Chinese, but that is fine, since it allows the domestic industry to expand into a huge American market, and strengthen.

Arab and Chinese will have bailouts and can recover..
an upcoming Pakistani entrepreneur can be squashed..
or what'll happen is the Chinoti Sheikhs (Etc) will get richer..
but lets keep our fingers crossed...
 
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The objections I see from your POV are:

1. ROZ's/SEZ's have drawbacks - I understand that, it is the argument you are making, and I am attempting to respond to those points

2. Motorway freight vs Rail Freight. As long as roads to Peshawar exist, either can be taken advantage off.

3. Port Charges/turnaround time - Those are issues all of Pakistani industry has to deal with, it seems to be surviving just fine, so will the ROZ based industry.
 
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The objections I see from your POV are:

1. ROZ's/SEZ's have drawbacks - I understand that, it is the argument you are making, and I am attempting to respond to those points

2. Motorway freight vs Rail Freight. As long as roads to Peshawar exist, either can be taken advantage off.

3. Port Charges/turnaround time - Those are issues all of Pakistani industry has to deal with, it seems to be surviving just fine, so will the ROZ based industry.

Yes you summed it up pretty well..

1. Drawbacks will be known .. once feasability studies etc. are made public and most importantly when they start operating out of ROZ's...
2. I am saying freight either way will be pretty expensive (esp as compared to ROZ's operating near the border)
3. Again this will come into play once ROZ are in full swing...

but ultimately I feel ROZ is not the right soln to be implemented at the moment for Tribal and disturbed areas...
 
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Yes you summed it up pretty well..

1. Drawbacks will be known .. once feasability studies etc. are made public and most importantly when they start operating out of ROZ's...
2. I am saying freight either way will be pretty expensive (esp as compared to ROZ's operating near the border)
3. Again this will come into play once ROZ are in full swing...

but ultimately I feel ROZ is not the right soln to be implemented at the moment for Tribal and disturbed areas...

1. Some studies have pointed out the major issues already - developing infrastructure for the zones - providing electricity, gas, telephones and road connectivity. Those issues are recognized and being worked on.

2. I'm afraid your "distance argument" (expensive freight) just doesn't make sense. The issue of freight and distance will always exist. The only solution would be to either relocate everybody to the coast, or not set up any industry or business in the border areas. Obviously neither of the two is realistic.

3. There is plenty of industry that exists in and around Peshawar that utilizes the ports, and the Karachi ports are being expanded, so I don't see a major issue with those.
 
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1. Some studies have pointed out the major issues already - developing infrastructure for the zones - providing electricity, gas, telephones and road connectivity. Those issues are recognized and being worked on.

2. I'm afraid your "distance argument" (expensive freight) just doesn't make sense. The issue of freight and distance will always exist. The only solution would be to either relocate everybody to the coast, or not set up any industry or business in the border areas. Obviously neither of the two is realistic.

3. There is plenty of industry that exists in and around Peshawar that utilizes the ports, and the Karachi ports are being expanded, so I don't see a major issue with those.

sounds good .. lets wait and see if its successful or not ...
 
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Much of US aid to Pakistan since 2001 for services provided

By Khalid Hasan

WASHINGTON: Pakistan has received a total of $10.69 billion from the United States since 2001 in direct overt assistance and military reimbursements, much of it compensation for services provided in the “war against terrorism”.

According to the Congressional Research Service, Pakistan received $92 million in 2001, made up of food aid ($88 million) and narcotics control and border security ($4 million).

In 2002, the figure went up to $2.1 billion made up of Coalition Support Funds (CSF): $1.17 billion; Economic Support Funds (ESF): 625 million; Foreign Military Financing (FMF): $75 million; narcotics control and border security (91 million), with the rest of the money going to miscellaneous heads.

In 2003, the total received was $1.76 billion with the following breakdown: CSF ($1.25 billion); ESF ($188 million); FMF ($225 million), the rest being for miscellaneous uses.

In 2004, the total received was $1.12 billion with the following breakdown: CSF ($705 million); ESF ($200 million); FMF ($75 million); narcotics control and border security ($32 million), the rest being miscellaneous.

In 2005, Pakistan received $1.68 billion,, the breakdown being: CSF ($964 million); ESF ($298 million); FMF ($299 million), the rest being for miscellaneous uses.

In 2006, Pakistan was given $1.69 billion with the following breakdown: CSF ($862 million); ESF ($297 million); FMF ($297 million), the rest representing miscellaneous heads.

In 2007, Pakistan received $1.41 billion with the following breakdown: CSF ($612 million); ESF ($284 million); FMF ($297 million), with the rest being for other uses.

The estimated figure for 2008 is $929 million with the following breakdown: Pakistan Frontier Corporation training and equipment ($75 million); ESF (407 million); FMF ($298 million), the rest being for other uses.

The estimated total figure for 2009 is $826 million with the following breakdown: ESF ($453 million), FMF ($300 million) with the rest being for other uses.

The miscellaneous heads for which US assistance has been given include: counter-narcotics, child survival and health, development assistance, international military education and training, international narcotics control and law enforcement and non-proliferation, anti-terrorism and demining (NADR). CSF is Pentagon funding to reimburse Pakistan for its support of US military operations. It is not officially designated as foreign assistance, but is counted as such by some analysts. Congress authorised Pakistan to use the FY2003 and FY2004 ESF allocations to cancel a total of $1.48 billion in concessional debt to the US government. From FY2005-FY2007, $200 million per year in ESF was delivered in the form of “budget support” - cash transfers to Pakistan. Such funds will be “projectised” from FY2008 on. The great majority of NADR funds allocated for Pakistan are for anti-terrorism assistance.
 
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