US Aid

[fatman17]

Date Posted: 11-Jul-201i



Pakistan dismisses 'symbolic' $800m cut in US aid


Guy Anderson Defence Industry Editor - London

James Hardy Asia-Pacific Editor - London

Farhan Bokhari Correspondent - Islamabad



Pakistani government officials dismissed reports on 11 July that the US is to cut military and security aid by USD800 million as a "symbolic" gesture, albeit one that carries the message that "relations are worsening, not getting better".

Officials in Islamabad told they had not yet been formally notified of the Obama administration's decision, which emerged through US media outlets over the previous days.

The New York Times reported the funding suspension on 9 July, while White House Chief of Staff William Daley appeared to confirm the report on ABC News' This Week with Christiane Amanpour programme on 10 July, in which he said that Pakistani authorities had "taken some steps that have given us [Washington] reason to pause on some of the aid which we're giving to the military".

The decision reflects a relationship between Washington and Islamabad that has become increasingly tense, notably as Pakistan seeks to reassert its independence following the raid by US personnel that culminated in the assassination of Osama bin Laden in May. Its response included the expulsion of about 100 US military trainers and efforts to close down a US unmanned aerial vehicle (UAV) facility at Shamsi airfield in Baluchistan Province.

It has been indicated that the USD800 million sum mentioned by Daley include USD300 million allocated under Coalition Support Funds (CSF): the facility used to reimburse Pakistan for costs relating to logistics and operational efforts in support of US operations. Other funds affected are believed to relate to the US military trainers that had been ordered out of the country.

Pakistan has emerged as one of the world's principal recipients of US military and security funding following the renewal of relations in 2001 after a decade of sanctions and suspended funding. The thaw was a reflection of Pakistan's significance to US activities following the terror attacks of 11 September 2001.

However, US aid for military and security efforts in Pakistan - which make up the bulk of US financial support provided to the country (see below) - has proved contentious, with a growing swell of political dissent noticeable in Washington.

reported in June that a funding bill passed by the US House of Representatives Committee on Appropriations proposed that 75 per cent of US military aid to Pakistan be withheld until the Obama administration told Congress how the money would be spent. The 2012 appropriations bill proposed that only 25 per cent of the USD1.1 billion Pakistan Counter-Insurgency Fund (PCCF) be made available to Islamabad.

When contacted by on 11 July, the US Department of State was unable to elaborate on the specific funding streams to which the USD800m sum related. However, a spokesman confirmed that all US aid to Pakistan remains "under review".

FOREIGN MILITARY FINANCING (FMF)

While the CSF and PCCF funding streams available to Pakistan are threatened, the FMF tranches - which provide equipment and services relating to longer-term modernisation but not awarded in cash - appear on safer ground. There has been no suggestion to date that FMF is threatened.

FMF - which typically feeds through the Foreign Military Sales (FMS) scheme, also administered by the Defence Security and Co-operation agency (DSCA) branch of the DoD - has been of substantial benefit to the US industrial base given that funding filters back to US contractors.

Pakistan has been allocated goods and services valued at USD2.1 billion since 2002 and has purchased materiel and related services valued at USD5.4 billion over the same period.

FMF aid has typically been directed towards the purchase of surplus or obsolete US materiel, such as eight former USN P-3C Orion maritime patrol aircraft (valued at USD474 million including refurbishment); 5,600 military radios from the US Excess Defense Articles (EDA) inventory (USD186 million); and six surplus C-130E transport aircraft (USD76 million).

It is notable that larger procurements of new materiel have typically been funded from core Pakistani procurement budgets, an example being the acquisition of 18 new F-16C/D Block 50/52 combat aircraft (under a USD1.43 billion agreement).

Agreements funded by a combination of FMF and core Pakistani funds include, according to the US Congressional Research Service, the purchase of 115 M-109 self-propelled howitzers (a USD87 million procurement, of which USD53 million was provided as FMF).


PAKISTANI - REACTION TO THE US WITHHOLDING AID

Pakistani officials had not been formally notified of Washington's decision to withhold aid as of 11 July, although officials reacted by saying that the decision was unlikely to prove helpful.

A senior Pakistani government official told that the US decision will give further impetus to anti-US public opinion and make it additionally difficult for both sides to salvage a relationship that has been under stress since US Navy SEALs tracked down and killed Osama bin Laden on Pakistani soil in May.

"The US-Pakistan relationship is under a great deal of stress. The US decision to scale down military assistance to Pakistan will further raise the level of public anger in Pakistan," the official said. However, a Western defence official in Islamabad said that in the short term. He added that Washington's decision was more of "a symbolic nature than of greater substance".

The Pakistani Army was already expecting a "scaling down of US assistance" after the Bin Laden raid and the subsequent friction in relations. He said the reported cut in the CSF of USD300 million suggests the US wants to "carry on with the majority of its CSF support to Pakistan" but added that "the message to Pakistan is still that relations are worsening, not getting better".


US MILITARY AID TO PAKISTAN - BACKGROUND

Pakistan has ranked as one of the world's principal recipients of US aid. Of the USD30 billion committed to Pakistan since 1948, 50 per cent has been related to military and security programmes.

Military and security aid was suspended in 1990 by the first Bush administration as a result of Pakistan's nuclear activities, but rekindled in 2001 following the events of the 9/11 terrorist attacks. Between 2002 and 2011 military and security aid valued at USD14.17 billion was pledged to Pakistan by Washington. The sums committed increased significantly throughout the 2000s, from USD77 million in 2001 to USD2.7 billion in 2010. Total US aid to Pakistan mushroomed by 2,273 per cent from pre-9/11 level in FY2001 up to 2010, according to the US CRS.

Aid to bolster military and security activities have taken numerous forms, with budgets allocated by the US Department of Defense and the Department of State.

CSFs have accounted for nearly half of US financial aid to Pakistan post 2001: a total of USD7.38 billion between 2001 and 2010, according to US figures. In common with other CSF recipients, Pakistan has been reimbursed via the Pentagon's funds for logistical and operational assistance provided in relation to US-led counter-terrorism operations.

The CSF payments are used to fund Pakistani Army operations and "help to keep more than 100,000 Pakistani troops in the field in northwest Pakistan by paying for their food, clothing and housing. They also compensate Islamabad for coalition usage of Pakistani airfields and seaports", according to a CRS report published in June 2011.

Other DoD-run funds likely to be affected have provided Pakistan with Mi-17 multirole helicopters, King Air 350 surveillance aircraft, "450 vehicles for the Frontier Corps, 20 Buffalo explosives detection and disposal vehicles, hundreds of M141 Bunker Defeat Munitions, helicopter spare parts, sophisticated explosives detectors, night vision devices, radios, body armour, helmets, first aid kits, litters and large amounts of other individual soldier equipment", according to the report.

Counter-narcotics support also from Pentagon budgets totalled USD288 million from 2002 to 2011. International Military Education and Training (IMET - from the Department of State) totalled USD18 million; Foreign Military Financing (the provision of funds to enable the purchase of US-provided materiel and services, funded by the DoD) totalled USD2.2 billion; International Narcotics Control and Law Enforcement (which covers border security) totalled USD528 million.

Non-proliferation, Anti-Terrorism, Demining, and Related (principally relating to anti-terrorism projects in the case of Pakistan) came to USD90 million; and appropriations under Article 1206 of the National Defense Authorization Act (covering the training of Pakistan's personnel) totalled USD212 million.

The Pakistan Counterinsurgency Fund/Pakistan Counterinsurgency Capability Fund (inaugurated in 2009 and initially covered by the Pentagon, yet funded by the Department of State from 2010) totalled USD1.9 billion up to 2011.

There has frequently been a substantial difference between an agreed budget and actual disbursement, however. The PCCF allocation totalled USD400 million for 2009, according to the CRS, yet just USD125 million was received by Pakistan as a result of actual project requirements.

 

[muse]

So, dismissive? Great, lets see how long it will take for this army to say "uncle"
See, so much capability reliant on the US the armed forces will once again, have to restructure their infrastructure - it may be cheaper to say "uncle" - and ultimately bring the day closer when the Pakistan armed forces can be reconstructed - dismantled, retrained with a national orientation, reorganized as a lethal instrument of the state and as a example of all the peoples of Pakistan value as what is best.

I just can't wait for this whole US thing to be over with, so Pakistan can get on with getting on.

Keep the F16, the P3 - want the technology? get it the way you got the nuclear technology. And none of this US entanglements.

 

[All-Green]

I think the situation is coming to a point whereby Pakistan will be forced to end the love affair with USA.
I agree that it will be painful but in the long run, there are more strategic partnerships we can enter into once we are done with USA.

The tricky part will be to sustain the additional economic pressure for few years.
Thanks to the mismanagement and inefficiency of our government and a non existent foreign policy this is the part which worries me the most.

Whereas we shall definitely count on our partnership with China to grow, it is our relationship with KSA which also needs to be realigned.
The million dollar question is what Pakistan can do to improve relationship with Iran and Russia without huge risks and liabilities.

 

[niaz]

Main problem is failure of Pakistan’s Foreign Office. Against a very strong pro Indian lobby, our US mission has failed to convince US media as well as US Law Makers that Pakistan is the main victim of terrorism and suffered more than any other country as a direct result of siding with the US in WOT.

I also read US newspapers where most of the articles imply that ISI is still secretly helping the Taliban who are active in Afghanistan. After hearing the views of ex ISI chief Gen Hamid Gul, one would think that anti US feeling is widespread among the military. Even I find it hard to believe that no one in the ISI was aware of Osama’s whereabouts.

Pakistan Urdu media in particular is strongly anti US. Most of the speakers invited to the TV programs do nothing but spew anti US feeling; completely ignoring that US has provided Pakistan more aid than any other country of the world. A very large part of the population is a firm believer in the conspiracy theories and thinks that US is out to destroy Pakistan. It is certain that US Embassy in Islamabad is keeping Washington apprised of the developments. This action by the US has therefore not come as a complete surprise.

IMO this is a blessing in disguise. There is no such thing as a free lunch. It is about time Pakistan adopts policies that are in Pakistan’s national interest and not dictated by a third party.

 

[fatman17]

someone said something interesting the other day - i think it was maleeah lodhi - very impressive person by the way. - during the sanctions period 89-2001, the pakistan govt. collected the highest revenues as there was no foreign aid available. the point being that when push comes to shove the pakistani can do it! - maybe its that time again - but again why wait till the fag end when things reach a crisis state -why cant it be a normal process

 

[fatman17]

Analysis: Worsening US-Pakistan relations may drive trade with China


Jon Grevatt Asia-Pacific Industry Reporter - Bangkok



The US Department of Defense (DoD) has confirmed it is delaying, but not halting, up to USD800 million in military aid for Pakistan, although officials have warned funds will remain undelivered if "certain issues" are not resolved.

The decision reflects deteriorating relations between the US and Pakistan and could prompt Islamabad to turn to China, its "all weather friend", in a bid to continue the process of military modernisation. Dr Christopher Snedden, Director of Melbourne-based consultancy, Asia Calling, said the decision could also prompt Pakistan to seek the procurement of additional military equipment from China.

In comments published by the DoD on 11 July, Pentagon spokesman Marine Corps Colonel Dave Lapan said the USD800 million is a combination of military aid in the form of equipment and reimbursement for Pakistani military operations under the US Coalition Support Funds (CSF). The CSF is an aid programme designed to support Pakistani Armed Forces in the 'War on Terror'.

The US State Department also confirmed that the delayed funding comes entirely from Pentagon budgets, and other aid streams to Pakistan backed by the State Department, including civilian support projects are unaffected.

Col Lapan emphasised the delayed funds are a "hold, not a halt, and the funds may be delivered if the two nations can resolve certain issues". These issues include the number of visas Pakistan will allow for US service members serving as trainers, and proof of military operations under the CSF programme to enable the processing of US reimbursement. The latter reflects long-standing concerns in Washington about a lack of oversight in military aid being granted to Pakistan through the CSF.

Col Lapan said the list of delayed aid includes funds for ordnance, small arms, ammunition, helicopter spare parts, radios and equipment to counter explosive devices.

Washington's decision to hold back the military aid reflects the tension which has grown between the two countries since the raid by US special forces in May that resulted in the death of Al-Qaeda leader Osama bin Laden in the town of Abbottadad.

In recent years China has co-operated with Pakistan on various high-profile military platforms including JF-17 fighters, Sword-class (F-22P) frigates and the Al-Khalid I main battle tank. Dr Snedden said additional major acquisitions can be expected as long as China continues to see the strategic significance of providing Islamabad with military equipment.

Dr Snedden said: "The Chinese haven't said they will unequivocally support Pakistan: they will do what is in their interests. So if it is in their interest to arm Pakistan with various pieces of kit they will do so, partly because of commercial reasons, partly because of the strength of the relationship, and partly because of India and the US and other forces."

Dr Snedden also said Pakistan would not regard military aid from Washington as anything but a short-term benefit of partnering the US. "The relationship has always been problematic. The Pakistanis believe, with some degree of reasonableness, that the Americans are fair-weather friends. They'll take whatever they can get out of them but the Americans are not going to be there for the long term."

In the long term China is almost certain to remain Pakistan's most important supplier of equipment, particularly if Beijing continues to make available to Islamabad its own military funds and to provide access to soft loans to purchase material.

In recent years a financially constrained Pakistan has approached China in requesting soft loans to pay for orders of joint Chinese-Pakistan developed JF-17 fighter aircraft. The former chief of the Pakistan Air Force Air Chief Marshal Tanvir Mahmood Ahmed said in 2008 between USD700 to USD800 million would be required for a batch of between 40 and 42 JF-17s.

Other major potential acquisitions on the horizon which could be funded through Chinese loans include Pakistan's purchase of up to six Chinese submarines, missile boats and two squadrons of Chengdu J-10 fighter aircraft.

 

[muse]

The US Aid should always have been thought of as a short term measure, after all, no institution in Pakistan can claim an entitlement to US taxpayer monies -- however, our focus should be on those reforms and structural changes that can effect real economic growth in Pakistan - If you take the case of trade with China and I would use the example of India, it's rather incredible that the Pakistan government and business community have not devised, with the Chinese, a strategy to compete with Indian business for Chinese market -- yes, there are areas in which Pakistan may not be able to compete, but that still leaves a vast scope for trade if one considers that the Chinese and Indians are doing some $30 to 40 billion in annual trade.

I do have concerns that Pakistanis will test the patience and generosity of the Chinese in much the same way they have done with the West and US, a India that can decide to free itself of it's South Asian cage by accommodation with the Chinese, will make Pakistan for all practical purposes not just irrelevant but a danger to the Chinese - the geography argument will have to contend with the Iranian offering not just the same practical geography but also infrastructure and a operational will.

I'm all for great relations with the US, but I really do not think this is possible and will not be possible for some time to come and perhaps it's best for us to focus singularly, on the commercial aspects of the relationship with the US.

The Pakistani internal market is potentially significant - but of course, extremism is not conducive to stability and a corruption free environment as well as the measure of certainty required for serious people to TRUST Pakistan with their precious investment.

 

[Aamir Hussain]

So what after China??? I think a better way to do this would be to look at where we can leverage both China and US to ensure a gain for us.

The collection of revenues shoul continue whether we have a relationship with US or not.

 

[fatman17]

according to SIPRI defence procurement by pakistan is 38% US, 30% China and the rest from about 20 countries with which it has signed agreements/MoU's for defence co-operation. the US stands out only because of the big-ticket items like F-16s and P3C's. rest of the procurement from the US can be replaced with China or the other 20 countries.


Pakistan: bilateral defence industrial and military materiel relations

Country.....Details of Defence Materiel Relations.......Date (most recent known agreement development)

China........Extensive supply of materiel to Pakistan. Extensive defence industrial co-operation (relating to naval systems, fighter aircraft, and airborne early warning aircraft). Soft loans to underpin materiel acquisitions. Pakistan's principal materiel supply.

Vietnam.....Areas of co-operation have included training and military exchanges, plus the transfer and development of military materiel.

Indonesia....Government-to-government agreement on co-production of indigenously developed weapon systems. Details undisclosed. Built on military technology pact of 2008 Mar-10

Malaysia.....Defence industrial co-operation and co-production. Details undisclosed May-10

South Korea..Memorandum of understanding covering defence co-production, plus agreement to exchange military personnel. Built on 2000 deal covering co-production of 155 mm ammunition Jan-10

Qatar.........Defence research and development agreement involving academic institutions Jan-10

Yemen.......Military production partnership discussed. Details not disclosed Feb-08

Nigeria.......Government-to-government agreement. Nigeria to benefit from technology transfer. Land systems and ammunition sales expected to underpin activity Jun-10

Swaziland....Pakistan to transfer technologies relating to small-scale industrial production (land systems and ammunition). Intended to bolster Pakistan's exports Dec-10

Italy............Government-to-government agreement. Defence co-operation agreed alongside energy and trade accords. Transfer of technology to Pakistan under subsequent defence agreements foreseen Nov-10

Turkey.........Joint development of Turkish-designed UAVs (2009), plus acquisition of Turkish fast attack craft, artillery simulators and parts for Cobra attack helicopters. Jul-05

Uzbekistan....Memorandum of understanding (MoU) that will see the two countries co-operate over the development of military technologies Sep-07

Ukraine..........Production and development collaboration relating to land systems, radar systems and ammunition Aug-06

Czech Republic....Defence production, military training and exchange of personnel agreed by governments. Mar-10
France.....France agreed closer defence ties, relating to Pakistani naval modernisation requirements. Relations have since cooled Aug-10

Norway.....Agreement to enhance collaboration. Based on likely purchase of surplus Norwegian F-16s Dec-10
Bulgaria.....Government-to-government agreements. Collaboration in land systems development, as well as missiles and rockets Jan-11


US........... Pakistan is a major recipient of US military and security aid (USD14 billion between 2001 and 2011). Pakistan's number two supplier of military materiel. Limited defence industrial co-operation.

Brunei........Investment in Pakistan's industrial base sought. The two nations signed a memorandum of understanding (MoU) to co-operate through the joint development of unspecified defence programmes in November 2008 Aug-09
Romania.....Defence co-operation likely to build on past efforts relating to 125 mm and 100 mm tank ammunition Apr-11

Jordan.....Investment in Pakistan's industrial base sought

Bahrain.....Enhanced defence co-operation and military trade agreed. Bahrain is a principal recipient of Pakistani materiel (typically ammunition) Jun-11

 

[muse]

So what after China??? I think a better way to do this would be to look at where we can leverage both China and US to ensure a gain for us.

The collection of revenues shoul continue whether we have a relationship with US or not.

This is simply impossible in a environment where extremist ideas pervade society - Look, US sentiment and concern directed towards Pakistan is not because they woke up and were angry - it has a concrete dimension and that is the use of extremist ideas and proxies by Pakistan, as a policy tools.

And the US and China both know this both sides against the middle game -- our problems are not lack of weaponry, it is policy - and that policy is the spread or enabling of extremism - when US policy makers argue that Pakistan negotiate with friends while holding a gun to their own heads, they are merely articulating their perception (and much confusion) that Pakistan seem not to understand that extremism's victim is more than likely to be Pakistan itself.

How can we create a Pakistan which for powers such as US and China is a net plus? A way forward for us would be to add inherent value to the kind of state Pakistan is and or is working to wards becoming -- Extremist Pakistan is not the way to go, it's nonviable, a danger to itself and the region and with the nuclear mix, to the world.

So what's this inherent value thing? Governance that is clear headed about the centrality of delivering the services of the judiciary - it's central to a plagued polity such as Pakistan - A hard working, law abiding population - a significant market and commercial corridor -- these things have to be created. And it begins with killing, KILLING extremism in society. This WILL is sadly no where in sight.

It's clear to me that Westminster on the Indus will not cut it - the military dispensations have not demonstrated the discipline to decline the temptations of the public treasury -- a Pakistan system, that affords representation, and above all, stability, within the framework provided by a leaner more energetic constitution tied to a large disciplined political party, seems to me, something that will give us 20 to 30 years of respite from political instability, while opening the economy to all - well, it's just what the situation calls for, in my opinion. Now if that large political party turn out be a coalition with strong backing from the armed forces, if if that means PTI and the playboy Khan, so be it.

 

[fatman17]

Now if that large political party turn out be a coalition with strong backing from the armed forces, if if that means PTI and the playboy Khan, so be it.

so we want the army to 'stir' the pot - it has been going on for 60 years. what about the new and improved fauj we have been talking about.?

read the new op-ed in the CoAS thread called "dilemma of the general" !!! we seem to be returning back to square one.

 

[muse]

I don't think anybody here is calling for the army to stir the pot -- what I am suggesting is that it's a political fact of life that armed forces support makes a huge difference to political outcomes in Pakistan. A "Smarter" army does not have to go about business of being a part of glue that cements coalitions in a clumsy manner.

 

[fatman17]

I don't think anybody here is calling for the army to stir the pot -- what I am suggesting is that it's a political fact of life that armed forces support makes a huge difference to political outcomes in Pakistan. A "Smarter" army does not have to go about business of being a part of glue that cements coalitions in a clumsy manner.

i guess it depends on how one 'brands' things - come on mate!

 

[All-Green]

The ground reality is that whosoever is in power, has to play a balancing act without giving into the extremes in our society.
We cannot jump into the arms of the west nor can we become thaikaidaar of the Muslim world.
Once Pakistan is an Uber Power, then we can be more secure in making such absolute choices...right now we need to survive and ensure that Pakistanis gradually start trusting the State to make the best choice for them.

We have to somehow negate the interference of the west and certain brother Muslim countries in shaping our society and create the feeling that poor or rich, Pakistan shapes its own future.
Even a relatively poor man can have pride, self respect and freedom; however that can only be if the man makes his own choices.

The one benefit i see of a break from US is that it makes it easy for Pakistan to keep strategic partnership with China alive and maybe even enhance it further.
The reason i am saying this is that because if USA was absent in this region and had no interest in Pakistan, our zealots have the potential to start maligning our relationship with China.
I can imagine the conspiracy theories, especially the "Hog and Magog" (Yajooj Majooj) sort of theories... ;-)

Just as long as we have a perceived threat of external interference by the west or the brother Muslim countries, our relationship with China can be stable even with the current mindset of our nation. China is currently perceived as a neutral entity whether you are Anti west or Anti Islamist.

However, given long term political stability and maturity; i am sure that the nation will realize the benefits of alliances and partnerships once they are based on even footing and we shall not have so much conspiracy theories being accepted as fact in all elements of our society.

One thing that remains unanswered is how a strong Pakistani Industry (consequence of stability) would dictate the relationship with China.

 

[fatman17]

educate the masses as a top priority so that they can 'think' what is right or wrong - the revolutionary che guvera said 'a nation that cannot read or write, can be eaisly deceived' - this is exactly what is going on in our country - the politicians are doing it, the mullah are doing it, the extremists are doing it. and yes second, build your civil-milirary industrial base or complex not just the military industrial base (which the armed forces are investing almost US$250m/year). there is a Mckinsey report which states that pakistan has the potential to be the 20th rated exporter of food to the world by 2020 if it puts its energies in the right direction (it currently stands at 46) - everyone talks about the 'potential' but no one wants to convert this potential into 'reality'.