US suspends military aid to Pakistan. Military says it doesn't need it.

[Al Bhatti]

No I don't support blocking penultimate US aid to Pak as ordinary Pak citizens will starve to death and Govt will go bankrupt and insolvent.
Its forex reserves will decline and economy will go into depression. And Pak is crucial ally for war on terror.

The world community which wants the war on terror operation must continue supporting the Pak army as starving and weak ally can't fight terrorist.

In Islam it is said: the livelihoods are in the hands of Allah, not damn America

 

[Al Bhatti]

problem is in our corrupt political system .they need USA for stay in power not for aid .

If the politicians continue to be pro US aid whether in public or private, then some one should do something like what was done to the Yemeni president, and let those politicians be a living example for all the coming presidents and prime ministers of Pakistan.

 

[SpArK]

U.S. withholds $800 million in aid to Pakistan: White House​

(Reuters) - The United States is withholding some $800 million in military assistance to Pakistan in a show of displeasure over its cutback on U.S. trainers, limits on visas for U.S. personnel and other bilateral irritants, the Obama administration said on Sunday.

Pakistani authorities have "taken some steps that have given us reason to pause on some of the aid which we're giving to the military," White House Chief of Staff William Daley said on ABC television's "This Week with Christiane Amanpour."

As a result, "We'll hold back some of the money that the American taxpayers have committed to give," he said, adding this amounted to about $800 million, or more than a third of the $2 billion given to Pakistan for security assistance.

The U.S. Defense Department said Pakistan's army had requested a "significant cutback" of U.S. military trainers and limited the ability of U.S. personnel to obtain visas.

"While the Pakistani military leadership tells us this is a temporary step, the reduced presence of our trainers and other personnel means we can't deliver the assistance that requires training and support to be effective," the department said in a written response to questions.

Bilateral ties have been under mounting strain as the United States has pushed one of its key counterterrorism partners to boost efforts against Taliban and other militants fighting western forces in neighboring Afghanistan.

Pakistan also is smarting from the surprise U.S. raid that killed al Qaeda leader Osama bin Laden on May 2 in a Pakistani garrison town, as well as U.S. drone attacks and night raids that have killed civilians as well as militants.

The New York Times, which reported the aid curtailment in its Sunday editions, said Pakistan has shut down a U.S. program that had been training paramilitary forces, sending home more than 100 U.S. trainers in recent weeks, and has threatened to close the base the CIA has been using for pilotless plane attacks on militant targets.

The U.S.-Pakistan relationship also was damaged last year after a CIA contractor in Lahore killed two Pakistanis he said were trying to rob him.

The Defense Department in its reply said a series of events over the last eight months "have affected our bilateral relations."

"We remain committed to helping Pakistan build it's capabilities, but we have communicated to Pakistani officials on numerous occasions that we require certain support in order to provide certain assistance," the Pentagon said.

"Working together, allowing an appropriate presence for U.S. military personnel, providing necessary visas, and affording appropriate access are among the things that would allow us to effectively provide assistance," it added.

The State Department added: "We are taking a very clear-eyed approach to our relationship with Pakistan - weighing both the importance of a continued long-term relationship and the importance of near-term action on key issues.

The United States will continue to work with Pakistani leaders "to affirm the importance of cooperating toward our shared national security objectives," the department added in a written reply to a query.


U.S. withholds $800 million in aid to Pakistan: White House | Reuters

 

[53fd]

An interesting comment on the news report on yahoo:

"We need to borrow the $800 million from China to give it to Pakistan; now they will simply get the money directly from China. Is this a good thing? Perhaps."

 

[Vibs]

@Developereo,
Someone with a better background in economy can better answer than me. Nonetheless, here is my understanding.
My understanding is that the US 'aid' goes into compensation for the military operation carried out by 100,000+ Pakistani troops in the Pakistani northwest. Pakistan is a very poor country and 100,000+ troops are lot to deploy in combat missions over extended periods. Sadly, Pakistan will have to cut back on some of the operations/deployments against them--and there have been many in FATA alone over past several years. The damned terrorists will be so happy that finally the heat is off them--and believe me, drones are nothing compared to the Pakistani military operations against them.
Pakistan will start saving money by cutting down the operations.

However, it is not the American 'aid' which is the pivotal consideration here. It is the trade with the West. The IMF loans. Even foreign remittance can be choked off by some legal ways. Even without the UN approval, the West, under American directive, can hurt Pakistani economy big way.

Default is almost certain.

What happens in a loan default? I don't know.

My educated guess is that, unlike closed, tyrannical countries like N. Korea, Pakistan has a lot of collective wisdom, pluralism, democracy, natural resources AND powerful foreign friends who can ensure a defaulted-Pakistan continues to feed its population. This will call for a revolution of sort: Different parts of the population coming together on some interim setup. I think it is entirely likely. Pakistan have done so in 1971, 1988, and 2008 (E. Pakistan war and its consequences; Zia's death; Benazir's death and elections; respectively) where the ruling classes buried their differences for some minimal common agenda.

Remember that: Pakistan has significant civil society, free judiciary, very philanthropic population, free media, and media class, great agriculture lands, working services and industries, along with a powerful military. Things are not as bad as the noise make it out to be.

To know what happens when a loan gets defaulted look at Zimbabwe and Somalia. Pakistan may not be in as bad a position as these countries but still there is a trend to how these things work.
Also follow my explanation on the thread http://www.defence.pk/forums/econom...reserves-hit-all-time-high-18-25-billion.html

 

[Vibs]

An interesting comment on the news report on yahoo:

"We need to borrow the $800 million from China to give it to Pakistan; now they will simply get the money directly from China. Is this a good thing? Perhaps."

Interesting quote. China does hold a large amount of US treasury bonds.

 

[53fd]

This will unfortunately backfire very badly for the US. This is what Pakistan's former ambassador Maleeha Lodhi had to say about the US action:

BBC News - Pakistan: US suspends $800m of military aid

 

[Developereo]

Are you speaking of foreign debts or domestic debts?

I am not an economist but I suspect foreign debts are harder to write off. Domestic debt can be refinanced by issuing new bonds and/or selling off public assets. But foreign debtors will demand hard cash. Also, the credit rating probably takes a bigger hit if you default on foreign debts.

Greece is pulling out all the stops to avoid defaulting on its foreign debt. The Europeans are helping -- although there is a case filed in the German supreme court to halt German taxpayer bailout of Greece. However, most economists seem resigned to the fact that Greece will eventually default on at least part of its debt.

 

[Vibs]

This will unfortunately backfire very badly for the US. This is what Pakistan's former ambassador Maleeha Lodhi had to say about the US action:

BBC News - Pakistan: US suspends $800m of military aid

Thats international diplomacy. I believe Pakistan will put diplomatic pressure from multiple sides on the US. But I suspect there will be another diplomatic mission on it's way to China right now.

 

[Nothing4U]

This will unfortunately backfire very badly for the US. This is what Pakistan's former ambassador Maleeha Lodhi had to say about the US action:

BBC News - Pakistan: US suspends $800m of military aid

its very obvious, but unfortunatey, non pakistanis have the habit to see through US eyes

but, US always wanted to end afghan war, first it had to create drama through osama killings, then it is showing that it doesnt need pakistan anymore on WOT because its planning to withdraw its forces

remember when WOT started US suddenly started giving aids and removed weapon import embarge

its like US is now disposing off pakistan because it doesnt need pakistan anymore

 

[Abu Basit]

American terrorists have got frustrated ................

 

[Vibs]

its very obvious, but unfortunatey, non pakistanis have the habit to see through US eyes

but, US always wanted to end afghan war, first it had to create drama through osama killings, then it is showing that it doesnt need pakistan anymore on WOT because its planning to withdraw its forces

remember when WOT started US suddenly started giving aids and removed weapon import embarge

its like US is now disposing off pakistan because it doesnt need pakistan anymore

Well , George Bush in all his infamous wisdom did give you the carrot and stick approach. Either aid and military tech or get bombed to oblivion.
Like I said in the end it's how your diplomats are able to play the game. Look at Iran. Given the US track record, Iran would've been another war front for the US.But their diplomats have strong relations with India, Russia, China and to some extent even Pakistan allowing them that much leverage.

 

[53fd]

Thats international diplomacy. I believe Pakistan will put diplomatic pressure from multiple sides on the US. But I suspect there will be another diplomatic mission on it's way to China right now.

The US will regret its decision very soon when it sees the adverse effects of this action on their WOT in Afghanistan, & then will come rushing back to give more aid. Maleeha Lodhi is precisely correct.

 

[Vibs]

The US will regret its decision very soon when it sees the adverse effects of this action on their WOT in Afghanistan, & then will come rushing back to give more aid. Maleeha Lodhi is precisely correct.

I don't think they care about the WOT anymore. Obama himself said that as far as he is concerned they have achieved all their goals in Afghanistan. What they are leaving is a mess for all the South Asian countries to clean up.

 

[Fireurimagination]

If it's one-off 'You expelled our trainers so we cut your aid' thing then probably Pakistan will manage but if this continues and Pakistan keeps on needling US then Pakistan will be in a real tight spot in the near future. Expect increase drone strike, expect no IMF support hence defaulting on loans, expect increase needling in Pakistan by US through Afghanistan or otherwise