America in a tangle over aid to Pakistan

Several ambiguities exist in the discourse on how much — or how little — money has flowed from Washington to Islamabad and under what conditions

January 12, 2015 12:02 am | Updated 12:06 am IST

The U.S.’ complex relationship with Pakistan was back in the spotlight last week when it became evident to beltway policy- wallahs that a private diplomatic conversation between the American Ambassador in Islamabad and the Pakistani Finance Minister had been twisted into a formal press release hinting at the promise of $532 million in aid under a now-expired Act.

In two successive daily press briefings the State Department was quick to stoutly deny that the U.S. Congress had been notified about any such funds for Islamabad, and to spell out the minutiae of the Kerry-Lugar-Berman Act (KLB), also known as the Enhanced Partnership with Pakistan Act of 2009, under which the U.S. is authorised to finance its South Asian friend to the tune of $7.5 billion between 2010 and 2014.

Ambiguities Yet, apart from the apparent misreading of Ambassador Richard Olson’s comments, which some in U.S. officialdom generously characterised as a “publication mistake,” the episode has revealed several ambiguities in the broader discourse, in terms of how much — or how little — money has flowed from Washington to Islamabad under the rubric of the KLB, and under what conditions.

On the question of aid conditionality, officials in the U.S. went to great lengths to emphasise last week that not once since Hillary Clinton’s assurances in March 2011 had the State Department provided “certification” that the government of Pakistan was “continuing to cooperate with U.S. efforts to dismantle nuclear weapons-related material supplier networks and make significant efforts to combat terrorist groups.”

Certification of this sort, which Section 203 of the KLB calls for annually, is a prerequisite for security assistance and arms transfers.

The reason why it is closely watched by New Delhi and Indian media is that it implies that Islamabad is also “preventing al Qaeda, the Taliban and associated terrorist groups, such as Lashkar-e-Taiba and Jaish-e-Mohammed, from operating in the territory of Pakistan, including carrying out cross-border attacks into neighbouring countries…”

According to one expert on Pakistan-U.S. politics, Professor Christine Fair of Georgetown University, Secretary Clinton “perjured herself” three years ago when she certified that Islamabad was complying with this counterterrorism norm, a suggestion that is consistent with the Obama White House insisting on a “waiver” after Pakistan’s knowledge of Osama bin Laden’s presence in Abbottabad was questioned.

A waiver of certain conditionality requirements in U.S. “national security interests” is a facet not only of KLB — others include the Department of State, Foreign Operations, and Related Programmes, Division I, Consolidated Appropriations Act, 2012; and the National Defense Authorisation Act for FY2010 — a point of confusion in last week’s debates on which funds were, promised, notified or disbursed.

However certification is quintessentially the opposite of the waiver. KLB certification suggests that Pakistan was in compliance with counter-terrorism requirements.

The application of the waiver, which has happened numerous times for KLB and appropriations funding, implies that Washington deemed it necessary from a “national security interests” standpoint to transfer the aid despite Pakistan’s failure to fully comply with the requirements.

Under the rubric of these parameters how much money did Pakistan actually receive?

Amount received Reporting by Congressional Research Services, a non-partisan think-tank in Washington, suggests that total security related U.S. aid appropriations for and military reimbursements to Pakistan rose from $989m in FY2009 to $1.27bn in FY2011 and then dropped off to an estimated $353m by 2014.

In this context it should be noted that there are multiple components to this layered process: reviews, certifications, waivers, notifications and, finally, disbursement of funds.

From government data on KLB funding it is clear that the amounts disbursed for each year from 2010-2013 inclusive were, in order, $1.515bn, $1.086bn, $1bn, $1.071bn.

For the final tranche of KLB funding, for FY2014, the review and waiver were provided in July 2014 but notification has not been provided, and is likely to happen in 2015. The amount mentioned by Ambassador, $532m, is “unlikely to be the final number.”

The deeper question that these transactions provoke however is, what is the quality of the bilateral relationship here, especially given that U.S. lawmakers have routinely attempted to ramp up aid conditionality or suspend aid entirely, for example after Pakistan’s action against Dr. Shakil Afridi for allegedly aiding the U.S. effort to assassinate bin Laden?

On the other hand the Indian government probably harbours justified concerns about aid fungibility, the possibility that Pakistan may be diverting resources towards combat operations on its eastern border given that the cascade of incoming greenbacks makes their deployment elsewhere in the country redundant.

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