Where did the $10 Billion US Aid to Pakistan go?

[TaimiKhan]

Posted on July 27, 2009 by Moin Ansari

There are many misconceptions about Pakistan’s economy which have been either created deliberately or the outcomes of ignorance. One of the misconceptions is about $10 billion “assistance” from the United States. Critiques within and outside Pakistan have always asked as to what happened to the $10 billion US assistance. Only recently my good friend Dr Meekal Aziz Ahmed stated: “No one knows where the $10 billion went.” The purpose of this article is to provide some details of $10 billion assistance which Pakistan received from the United States over the last eight years. This is the first time that the readers would know about the details of the $10 billion assistance.

It goes without saying that the United States is and has been one of the major development partners of Pakistan. The Unites States is the largest (23.5 percent, or $4 billion) market of Pakistani products; the single largest source of workers’ remittances (22 percent–$1.8 billion) and foreign private investment (34 percent–$1.7 billion). The US played a pivotal role in encouraging the IMF and the World Bank to bail out Pakistan from a sheer default in external payment obligations; and played an equally dominant role in arranging the donors’ meeting in Tokyo where they pledged to provide $5.28 billion in economic assistance to Pakistan over the next two years. The economic and financial support by the Unites States to Pakistan is highly commendable.

Let me turn to the subject matter. 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.

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.

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.

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.

I am confident that at least one misconception on Pakistan’s economy will be cleared after this write-up. My good friend Dr Meekal Aziz Ahmed will at least not be asking the same question again. It is my endeavour to clear up some of the misconceptions about Pakistan’s economy through this newspaper going forward. Ten billion dollar question, Tuesday, July 28, 2009, Dr Ashfaque H Khan. The writer is dean and professor at the NUST Business School, Islamabad. Email: ahkhan@nims.edu.pk

 

[relent8]

Thankyou for posting the article tamimkhan. In the past I had read an article clearing these same doubts but written by another group or person. So I already knew these facts, but its good to revise the memory again.

The thing is that like this mis-conception of 10 billion dollars, the majority of issues which people curse Musharraf for, in ignorance or due to personal agendas, can be cleared off by similar means if someone wants to understand them. This was a matter of dollars(figures) so the critics wont have any answer to it since the talk cant be distorted nor can it be twisted. But whenever other issues are being explained in logic, then people typically raise their emotions and sometimes become idealistic and therefore let the hatred inside them takeover.

I hope pro-feudalism learn their lessons in the future.

 

[S-2]

This is the official data-

Direct Overt U.S. Aid and Military Reimbursement to Pakistan FY2002-2010- Congressional Research Service

This is a "living" document that is periodically updated. Some here might actually read this- to their benefit.

"Reimbursement" is a gift. Your government and military has delivered ZERO services to our forces in Afghanistan. Have you transferred vehicles or helicopters that need replacement? Weapons and ammo?

What, exactly, have you "provided" which costs $6B?

If so, I look forward to you itemizing such services delivered to our troops. In the absence of such, all your expenses requiring "reimbursement" have been for operations to assist only YOURSELVES on your own lands.

It is unusual for others to underwrite the defense of any country from any enemy-much less those you've willingly allowed to find sanctuary, reside and then dominate your own people from within.

We buy our supplies from civilian contractors. We contract civilian transportation companies to deliver our supplies. No doubt, mucky-mucks in your government and military are taking a cut off THAT largesse as well.

Nowhere does the Pakistani army provide convoy protection integrated as part of the vehicle columns. If so, these attacks on convoys would be contested and defended against. So what, exactly, are we compensating you to do on our behalf that wouldn't be a requirement of yourselves in any case were you determined to defend your lands and people from these islamo-fascists?

You should bear the full expense and cost for the decisions you reached in 2001-2002 to allow these men upon your lands. It's not America's problem to prop up the world's seventh largest army. If unaffordable, cut it's size.

Nobody but you believe that India will attack Pakistan such that your mechanized corps will become a necessity of defense. Ain't gonna happen. We aren't even sure if you BELIEVE that in your military leadership.

Nonetheless, India has served as a convenient bogey-man when it comes to lining the pockets of your generals at the expense of otherwise educating your potential irhabi militant citizens.

Another excellent example of the consequences of your decisions and the myriad ways in which "blowback" can manifest itself. A strong nat'l defense begins with an educated citizenry.

You have 50% illiteracy and so your populace is as susceptible to hysterical fear-mongering about India generated by your duplicitious leaders as it is by the charismatic tom-foolery routinely issued by these islamo-fascist mullahs and their henchmen.

Just a few, humble thoughts on the additional burden to the American taxpayer for underwriting a likely enemy state engaged in fighting a war targeting our soldiers.

 

[A1Kaid]

 

[TaimiKhan]

This is the official data-

Direct Overt U.S. Aid and Military Reimbursement to Pakistan FY2002-2010- Congressional Research Service

This is a "living" document that is periodically updated. Some here might actually read this- to their benefit.

"Reimbursement" is a gift. Your government and military has delivered ZERO services to our forces in Afghanistan. Have you transferred vehicles or helicopters that need replacement? Weapons and ammo?

What, exactly, have you "provided" which costs $6B?

If so, I look forward to you itemizing such services delivered to our troops. In the absence of such, all your expenses requiring "reimbursement" have been for operations to assist only YOURSELVES on your own lands.

It is unusual for others to underwrite the defense of any country from any enemy-much less those you've willingly allowed to find sanctuary, reside and then dominate your own people from within.

We buy our supplies from civilian contractors. We contract civilian transportation companies to deliver our supplies. No doubt, mucky-mucks in your government and military are taking a cut off THAT largesse as well.

Nowhere does the Pakistani army provide convoy protection integrated as part of the vehicle columns. If so, these attacks on convoys would be contested and defended against. So what, exactly, are we compensating you to do on our behalf that wouldn't be a requirement of yourselves in any case were you determined to defend your lands and people from these islamo-fascists?

You should bear the full expense and cost for the decisions you reached in 2001-2002 to allow these men upon your lands. It's not America's problem to prop up the world's seventh largest army. If unaffordable, cut it's size.

Nobody but you believe that India will attack Pakistan such that your mechanized corps will become a necessity of defense. Ain't gonna happen. We aren't even sure if you BELIEVE that in your military leadership.

Nonetheless, India has served as a convenient bogey-man when it comes to lining the pockets of your generals at the expense of otherwise educating your potential irhabi militant citizens.

Another excellent example of the consequences of your decisions and the myriad ways in which "blowback" can manifest itself. A strong nat'l defense begins with an educated citizenry.

You have 50% illiteracy and so your populace is as susceptible to hysterical fear-mongering about India generated by your duplicitious leaders as it is by the charismatic tom-foolery routinely issued by these islamo-fascist mullahs and their henchmen.

Just a few, humble thoughts on the additional burden to the American taxpayer for underwriting a likely enemy state engaged in fighting a war targeting our soldiers.

S-2, do u think rationally before you throw it out ??

Kindly, think rationally, taking history in perspective, i don't have to argue with u by posting counter comments to u as u r those stubborn kind of people whose thinking won't change.
Just ask ur government, after using these so called terrorists for their own use to defeat the russians, why did they left them half way?? If ur govt hadn't left them half they, these so called terrorists by US would not have been here.

By the way don't point at us, ask ur govt and defence manufacturers and contractors how much money has been made by them due to this so called war on terror. We had just 10B$, while how much have ur own defence manufacturers & contractors earned ??? Have u seen the cost of ur unjust barbaric wars on Afghanistan & WMD capable Iraq. How much oil has been taken out of iraq by your US american companies ??? now the Iraqi Army defence deals going for american companies ??? how much has been earned by Haliburton through just the Ready to Eat meals contracts ???
Your 70% supply to US & NATO troops is through Pak.
Do u know how much US supplied weapons have gone into the hands of these militants killing our soldiers??? Do u know the figure of troops we have lost in comparison to US & NATO forces in Afghanistan??? Our Civilians & ordinary afghans rest aside ???

Have u checked the figures of casualties due to this US war on terror rather Islam ??

Have u checked how Americans, u people support Israel and giving free hand in killing thousands of innocent peoples ??? Ever had the balls to check the Lebanon War 2006 pictures of devastation??
Ever checked the 2 month old babies missing their legs, arms or ripped apart body ??? Innocent fathers and mothers killed, seen the faces of those orphaned children ??? Did u guys had the balls to hang those responsible for the killing of 10+ members of a single family after raping a 14 years old girl in iraq ??? Did u hang those responsible for Hadita Killings ???

man u americans even after getting so much education are such ignorant ba****** , its better we be ignorant, at least we aren't silent on such barbaric atrocities and fighting for our rights, but u guys are at the lowest in human race, to have gotten such superior education & civilization and kill innocent children, women & men and go to sleep as if all is well.

If u have the decency of a human being, then reading the above facts will make u realize who is worst then who and keep ur mouth shut, but u don't have the decency as a human being, then definitely u will be posting one more ridiculous ignorant stupid reply.

U & ur civilization can easily be classified as the worst of its kinds after Hitler, rather equal.

Look at these and then tell who is wrong and who is right, These pics make a human being cry to the cruelty of such people, U. And u blame us for your own misdeeds.

That is just a couple of months old baby, with no head. Do u have the courage to see this pic and then go to sleep as if U people are doing nothing on this planet??? What was the crime of this 2 month old Baby???

I have a little girl and due to U americans i worry that if something happens to me or her what will my family do or what will i do without her ?? This world has been made unsafe by u guys, when I go outside to market, am not sure will i be back home or not, due to ur created militants fear that a bomb blast will take place.

 

[TaimiKhan]

What if someone does this to ur family, what will u do, sit at home and watch TV , enjoy a movie with a bucket full of pop corns??

 

[TaimiKhan]

This is the official data-

Direct Overt U.S. Aid and Military Reimbursement to Pakistan FY2002-2010- Congressional Research Service

This is a "living" document that is periodically updated. Some here might actually read this- to their benefit.

"Reimbursement" is a gift. Your government and military has delivered ZERO services to our forces in Afghanistan. Have you transferred vehicles or helicopters that need replacement? Weapons and ammo?

What, exactly, have you "provided" which costs $6B?

If so, I look forward to you itemizing such services delivered to our troops. In the absence of such, all your expenses requiring "reimbursement" have been for operations to assist only YOURSELVES on your own lands.

It is unusual for others to underwrite the defense of any country from any enemy-much less those you've willingly allowed to find sanctuary, reside and then dominate your own people from within.

We buy our supplies from civilian contractors. We contract civilian transportation companies to deliver our supplies. No doubt, mucky-mucks in your government and military are taking a cut off THAT largesse as well.

Nowhere does the Pakistani army provide convoy protection integrated as part of the vehicle columns. If so, these attacks on convoys would be contested and defended against. So what, exactly, are we compensating you to do on our behalf that wouldn't be a requirement of yourselves in any case were you determined to defend your lands and people from these islamo-fascists?

You should bear the full expense and cost for the decisions you reached in 2001-2002 to allow these men upon your lands. It's not America's problem to prop up the world's seventh largest army. If unaffordable, cut it's size.

Nobody but you believe that India will attack Pakistan such that your mechanized corps will become a necessity of defense. Ain't gonna happen. We aren't even sure if you BELIEVE that in your military leadership.

Nonetheless, India has served as a convenient bogey-man when it comes to lining the pockets of your generals at the expense of otherwise educating your potential irhabi militant citizens.

Another excellent example of the consequences of your decisions and the myriad ways in which "blowback" can manifest itself. A strong nat'l defense begins with an educated citizenry.

You have 50% illiteracy and so your populace is as susceptible to hysterical fear-mongering about India generated by your duplicitious leaders as it is by the charismatic tom-foolery routinely issued by these islamo-fascist mullahs and their henchmen.

Just a few, humble thoughts on the additional burden to the American taxpayer for underwriting a likely enemy state engaged in fighting a war targeting our soldiers.

S-2, if u look at history, there was no hatred no enmity towards americans by the muslims in 17th,18th,19th & till middle of 20th century, WHY ?? Ever had a chance to think about it ??

The day u people started to back up Israel in occupying Muslim lands and killing looting Muslims households, with weapons & money provided by U and ur retarded nation, Muslims started to hate U and ur nation and if u look at the above pics, that is the reason Muslims wanna kill U & ur nation for letting Israel do whatever it wants to do.
This is the root cause of all this anarchy, which will InshAllah one day destroy U and ur nation. Someone kills an american or americans and u destroy thousands of life's of innocent people, destroy two countries, so what will u be accepting in return for what above has been shown ???

Lets suppose if hypothetically Al-Qaeda did had a hand in 9/11, why kill and destroy the Afghan Govt, its people & the taliban ???
Becoz the taliban supported the al qaeda, so u kill taliban too.

So now if Israel kills innocent people mercilessly with US supplied weapons & money, and fully supported by US, what do u expect then ???

Got the point or still having retarded thoughts to counter the truth ???