United States Cuts Financial Assistance to Pakistan

US-Pakistan: a Transactional Relationship Cold War Era:

The heydays of US-Pakistan relationship dates back to the cold war era, when Pakistan was
overtly aligned towards the US bloc of nations and India, though claimed to be non-aligned, had a leaning
ssbspottowards the Soviet bloc.
The relationship between US and Pakistan saw a dip during the Presidency of Jimmy Carter owing to
Pakistan’s nuclear program and the execution of PM Zulfikar Ali Bhutto in April 1979 by President, General Muhammad Zia-ul-Haq. Meanwhile, Soviet Union had conveniently stepped-in to help stage a coup in Afghanistan, in which President
Hafizullah Amin was killed and Soviet loyalist Babrak Karmal from a rival faction was installed as the President in December 1979.
President Carter envisaged that in the wake of an Islamic Revolution in Iran in 1979 and Soviet troop’s
deployment in Afghanistan, it was vital to “repair relationships with Pakistan.”
President Carter became convinced by mid-1979 that the Soviets were going to invade Afghanistan and hence,
despite the risk of unintended consequences, joined hands with Pakistan to support the mujahedeen that he felt
could be an effective way to contain Soviet aspirations to gain control over Central Asia.
The Soviet-Afghan War lasted over nine years, from December 1979 to February 1989. United States and
Pakistan provided tacit support to the insurgent groups that fought a guerrilla war against the Soviet Army and
the Democratic Republic of Afghanistan.
It is estimated that between 562,000 and 2,000,000 civilians were killed and millions of Afghans fled the
country as refugees, mostly to Pakistan and Iran.
Creation of Taliban:
Taliban was a creation of the Pakistani intelligence agency (the ISI) but was funded by
the US. The United States provided $3 billion to build this Islamic group and provided them with arms and ammunition, which they forgot to keep track of after the Soviet war.
The exit of Soviet Union from Afghanistan created a political void in the country. The Taliban continued to grow stronger as it received military support from Pakistan and financial support from Saudi Arabia.
In 1996, the Taliban captured the Afghan capital Kabul and established the Islamic Emirate of Afghanistan under the leadership of Mullah Mohammed Omar. Al Qaeda provided close support to the Taliban with thousands of imported fighters from Pakistan, Arab countries, and Central Asia.
Though the Islamic State of Afghanistan government remained the internationally recognized government of
Afghanistan under President Burhanuddin Rabbani, its physical jurisdiction was restricted to just 10% in the northern part of Afghanistan. General Pervez Musharraf, later the President of Pakistan, when he was the Chairman of Joint Chiefs of Staff Committee from 1998 to 2001 and the Chief of Army Staff of Pakistan Army from 1998 to 2007, played an
instrumental role in drafting Pakistan’s role in the Afghan civil war.
He was responsible for sending thousands of Pakistani nationals to fight alongside the Taliban and Bin Laden against Ahmad Shah Massoud, who was the military commander of the United Islamic Front (Northern Alliance) that fought for democratic system in Afghanistan.
It is during this period that Pakistan had established an intricate nexus with the founding leader of Al Qaeda,
Osama Bin Laden and his ‘lieutenant’ Ayman al-Zawahiri from 1996 to 2001, who had become a virtual state
within the Taliban state. Bin Laden sent Arab fighters to join the fight against the United Front (Northern
Alliance) in Afghanistan and called them 055 Brigade.
‘War Against Terror’: The monster that the US had created started to snarl back and gave them a formidable
blow in the form of 9/11 (11 September 2001) that brazenly jolted them from their false sense of being
The series of four coordinated terrorist attacks by the Islamic terrorist group al-Qaeda on the United States on
the morning of Tuesday, September 11, 2001, killed 2,996 people, injured over 6,000 others, and caused at
least $10 billion in infrastructure and property damage.
This catastrophe taught them an unforgettable lesson that you can never “run with the hare and hunt with the
Hence, it brought the US back to Afghanistan, this time with a different agenda and they called it ‘war against
Once again United States required Pakistan to provide them with the administrative backup and facilities from
where the coalition forces could operate.
Foreign Aid to Pakistan
The United States began providing economic assistance and military aid to Pakistan shortly after the country’s
creation in 1947. In total, the United States obligated nearly $67 billion to Pakistan between 1951 and 2011.
The period between 2002 and 2009, only 30 percent of US foreign assistance to Pakistan was appropriated for
economic-related needs; the remaining 70 percent was allocated to security-related assistance.
Hence, to insulate the development agenda from unpredictable geopolitical and military events and facilitate
longer-term planning for development, a bill called the Kerry-Lugar-Berman Bill was introduced into the US
Kerry-Lugar-Berman Bill:
In 2009, the US Congress approved the Enhanced Partnership for Pakistan Act
(commonly known as the Kerry-Lugar-Berman bill, or KLB) signalling a renewed commitment to their trusted
ally, Pakistan.
The act authorized a tripling of US economic and development-related assistance to Pakistan, or $7.5 billion
over five years (FY2010 to FY2014), to improve Pakistan’s governance, support its economic growth, and
invest in its people.
Coalition Support Fund:
The foreign aid to Pakistan, after the US headed coalition launched its ‘war against
terror’ in Afghanistan, is mostly from the ‘Coalition Support Fund’ which is reimbursement to Pakistan for
expenses already incurred and compensation for facilities made available to the coalition forces such as the
Shamsi Airfield and Dalbandin air bases by Pakistan.
Pakistan is one of the largest recipients of the Coalition Support Fund (CSF), having received US$ 14 Billion
since 2002. Pakistan was authorized to receive up to the US $900 million under CSF during the fiscal year
Cut on US Aid to Pakistan
The US-Pak relationship has always been transactional and can be best defined as marriage of convenience.
The recent times have seen mutual mistrust brewing up and the two countries are beginning to drift apart.
Pakistan’s continued support for resurgent militant groups that are hostile to the United States, coupled with
continued improvement in US military and business relations with India, has resulted in Islamabad’s
diminished strategic importance as an ally to Washington.
American civilian and military aid to Pakistan, once the third-largest recipient of US foreign assistance, was
less than $1 billion in 2016, down from a recent peak of more than $3.5 billion in 2011.
In March 2016, Republican Senator Bob Corker, Chairman of the Senate Foreign Relations Committee, sought
to bar $430 million in US funding for Islamabad’s purchase of $700 million of Lockheed Martin Corp. F-16
fighter jets.
In August 2016, the then Secretary of Defence Ash Carter refused to authorize $300 million in military
reimbursements to Pakistan. Pakistan has been reimbursed $550 million of the $900 million the country was
authorized to receive in fiscal year 2016.
The Trump administration has proposed to covert the $100 million in foreign military funding to Pakistan for
the current financial year into a loan rather than an aid.
Once again, on 21 July 2017, the United States of America has decided to block the disbursement of USD 350
million aid in ‘Coalition Support Fund’ to Pakistan.
The Defence Secretary, Jim Mattis, informed the Congress that Islamabad had not taken “sufficient actions”
against the militant Haqqani network, which is based in the country’s tribal areas bordering Afghanistan and
was responsible for carrying out a number of high-profile attacks on US and Western interests.
Implications of Cutting Financial Assistance to Pakistan by United States
In a report from the US Embassy in Islamabad, up to 70 percent of the funds given to the Pakistani military to
support activities along the Afghanistan/Pakistan border have been
misspent, and much has apparently been diverted to bolster Pakista n’s arsenal against India.
Considering the above, cutting of aid to Pakistan is a welcome news for India, as Pakistan will be
economically restrained in its efforts to foment trouble in Kashmir. The US has other options for supplying its
troops in Afghanistan, such as enhancing its military presence in Turkmenistan.
China has not been conventionally giving aid to other countries, so Pakistan is aware that China would never
be able to fill-up the substantial void left behind by a US cessation of financial
However, by squeezing military aid to Pakistan, US could lose its leverage to control what many call an
“unruly” Pakistan. The growing radicalism and ‘Wahhabism’ in Pakistan can result in nuclear proliferation to
the fundamentalist, which may be seen as a serious threat to the entire world.
Secondly, China is all poised to move in to replace the US where ever it can to define the new world order, e.g.
Africa, Central Asia, etc. Though, its foreign aid budget is about 1/4 of that of the US, but for a country like
Pakistan from whom multiple gains are expected, it can always make an exception to the rule.
The China-Pakistan Economic Cooperation (CPEC), where China is investing more than $ 46 billion to create
ports, rail transportation, and energy generation in Pakistan is an effort by China to re-do Pakistan as Hong
Kong west. Further, Pakistani development will actually help China’s troubled Xinjiang Province.
A closer China-Pakistan can have serious military ramifications for India. Beijing is currently waging a full
scale psychological warfare against India by displaying aggression in Doklam. It is primarily testing the
military gumption and political will of India.
It is closing in on India from multiple flanks, extending from the Northeast to J&K and further to the Indian
India must be prepared for an increased Kashmir interference by China due to its investments in the ‘One Belt
One Road’ project that cuts across Pakistan-held J&K.
Chinese military presence in this area has been slowly growing, including near the Line of Control. India now
faces Chinese troops on both flanks of its portion of J&K and a deepening China-Pakistan nexus presents India
with a two-front theatre in the event of a war with either country.

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