Most U.S. aid to Pakistan still in America’s hands

U.S. economic aid to Pakistan, which totals over $1.5 billion per year, is a key part of the Obama administration’s strategy to strengthen the U.S.-Pakistan strategic partnership. However, most of the aid that was allocated for last year is still in U.S. government coffers.

Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, the Government Accountability Office stated in a report released last week. Almost all of that money was distributed as part of the Kerry-Lugar aid package passed last year.

$75 million of those funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan’s Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remains unspent.

None of the funds were spent to construct the kind of water, energy, and food infrastructure that former Special Representative for Afghanistan and Pakistan (SRAP) Richard Holbrooke advocated for diligently when he was the lead administration official in charge of managing the money. Moreover,  according to the report, the Obama administration hasn’t yet set up the mechanisms to make sure the money isn’t misspent.

"The full impact of the fiscal year 2010 civilian assistance could not be determined because most of the funding had not yet been disbursed," the report stated. The GAO tracked Kerry-Lugar money sent to Pakistan up until Dec. 31. "It will take some time before significant outcomes of the civilian assistance can be measured."

Holbrooke’s office, which is now run by the new SRAP Marc Grossman, told The Cable that the leftover funds were due to the fact that the money was appropriated belatedly and the first year of the program carried with it unique challenges.

 "While the facts of the GAO report are accurate, it doesn’t reflect the big picture nor adequately represent what we’ve achieved with civilian assistance over the last year," said Jessica Simon, a spokesperson for the SRAP office. "As the FY 2010 funding was appropriated in April 2010, it is hardly surprising that only a portion of the funding was disbursed by the end of the year."

Simon said that in total, the U.S. government has disbursed $878 million of Pakistan-specific assistance since October 2009, which includes over $514 million in emergency humanitarian assistance in response to the devastating July 2010 floods. 

The floods also slowed the progress of the Kerry-Lugar program, Sen. John Kerry‘s spokesman Frederick Jones told The Cable.

"The floods last summer changed the Pakistani landscape, literally and figuratively, and required us to take a step back and reexamine all of our plans," Jones said. "Bureaucracies move slowly and redirecting aid at this level requires time and some patience. It is difficult to allocate billions of dollars in a responsible way without proper vetting, which takes time."

Experts note that the disparity between U.S. promises to Pakistan and funds delivered is a constant irritant in the U.S.-Pakistan relationship.

"There are always complaints and in terms of the delays there are pretty valid reasons on both sides," said Shuja Nawaz, director of the South Asia Center at the Atlantic Council. He said that Congress’s requirement that the money be tracked and accounted for is a source of contention.

"For a long time the U.S. didn’t ask any questions about the money. And so it became a bit of a shock," he said.

The GAO has long called for better oversight of the funds, especially in Pakistan’s  Federally Administered Tribal Areas (FATA). This lack of accountability is what spurred Congress to mandate better oversight of the Kerry-Lugar money, including provisions that require reporting on the Pakistani military’s level of assistance to the United States.

Those provisions were portrayed in some parts of the Pakistani press as unwarranted interference in Pakistani affairs. Popular reception of the Kerry-Lugar bill in Pakistan was filled with skepticism of U.S. intentions.

Regardless, Holbrooke was determined to make sure the money achieved the desired result of improving America’s image in Pakistan. He battled successfully with some in Congress and even those inside the Obama administration to steer the money directly toward Pakistani organizations rather than filtering it through USAID contractors.

"The big shift was that the Pakistani government had complained that most of the money was being given to U.S. contractors and not making it Pakistan. The big shift was to reduce the role of the beltway bandits… and that shift is here to stay," said Nawaz.

According to the GAO, the United States has given Pakistan over $18 billion, mostly in security-related aid, since 2002.