New US law may cost Pakistan billions of dollars

By IANS

Islamabad : Pakistan could lose up to $1.5 billion a year under a new ban on cash transfers imposed by the Omnibus Appropriations Bill passed earlier this week by the US Congress mandating that Islamabad get a certificate from the State Department on democracy related issues.


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“While many Pakistanis think that the new conditions will have a minor impact of about $50 million in military aid, the real implication is in the fine print which says no cash payments would be made,” The News reported Thursday.

“This will have a devastating effect as the impact will be felt by the Pakistan Army which has been receiving almost $1.5 billion a year since 2002 under the Coalition Support Fund (CSF) which reimburses all expenses incurred by Pakistan to fight the war on terror and meet the threat of Al Qaeda and Taliban,” the newspaper added.

In addition to the $3.5 billion in economic and military aid provided under the multi-year aid package, Pakistan has received $7.5 billion to $9.5 billion dollars in CSF since 2002.

The US House of Representatives has now added several conditions for military aid to Pakistan including a tough set of democracy-related benchmarks that require an independent judiciary, a free press, release of political prisoners, restoration of constitutional rights and much more.

Representative John Tierney of Massachusetts, who chairs the sub-committee on government oversight that includes the CSF recently co-authored an op-ed article in a major Washington newspaper with barrister Aitzaz Ahsan, the leader of the lawyers’ movement in Pakistan.

“This illustrated how deeply the US lawmakers have penetrated in guaranteeing democratic rights for the people of Pakistan,” The News pointed out.

The Omnibus Appropriations Bill will extend conditions to all aid to Pakistan that qualifies as a cash transfer. The certification process will either slow down CSF payments, which average up to $150 million dollars per month, or see them suspended.

The CSF is used to reimburse coalition countries, primarily Pakistan and Jordan, for logistical, military, and other expenses incurred in supporting US military operations in the war against terror.

These payments are made in amounts as determined by the US defence secretary. Reimbursing coalition partners helps to ensure their contributions yield the maximum benefit to the overall operations of US military forces.

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