Journal: US Aid To Pakistan ‘Depleted By Admin Costs’

Peace Intelligence
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By Farhan Bokhari in Islamabad and James Lamont in New Delhi

Half of the planned assistance pledged by the US to Pakistan is likely to be wastefully spent on administrative costs, Islamabad’s most senior finance official has said.

Phi Beta Iota: This is really about AID not letting Pakistan steal most of the money, as CIA likes to allow.

Shaukat Tarin, Pakistan’s finance minister, has urged the US to channel its assistance through Pakistani agencies instead to save on high intermediation costs incurred by US counterparts.
His comments come as Pakistan struggles to secure funds from international donors who want to know more about where it will be spent. At an international donors meeting in Turkey this week, Pakistan failed to cement earlier pledges of $5.7bn in aid in spite of an appeal by the United Nations not to ignore Pakistan’s plight.

Pakistan has become one of the largest recipients of US aid as Washington seeks to help stabilise the country threatened by a Taliban insurgency. US President Barack Obama plans to raise economic assistance to about $1.5bn a year, or $7.5bn over the next five years.

“Whatever aid [the US is] giving must have full impact on the ground which is why they should route as much of this aid through our agencies than their own agencies,” Mr Tarin said in an interview with the Financial Times. “Frankly, we only receive almost 50-55 per cent of the aid, 40-45 per cent becomes expenses [because of intermediation costs by the US].”

Some Pakistani officials express concern that USAID, the US’s foreign development arm, will establish a large infrastructure in the country and employ generously paid foreign experts.

They are concerned that higher personnel and administrative bills will inflate the cost of development projects.

Mr Tarin added that Pakistan would resist any linkage of financial assistance to the country’s nuclear programme or confidence-building measures with arch-rival India. he said aid would be “unacceptable” if it was tied to greater monitoring of the country’s nuclear arsenal.

US aid is intended to win public goodwill across Pakistan where anti-Americanism is widespread. US administrations have in the past been viewed as generous with military support, but stinting on civilian partnership.

The US seems unlikely to change how it delivers any increased aid to Pakistan. Like other developed countries the US says it expends a lot of time and resources trying to make sure its taxpayers’ money does not end up in the wrong hands. Transparency International, the Berlin-based corruption watchdog, last year ranked Pakistan 134th out of 180 countries on its global corruption perceptions index.

Phi Beta Iota: Unlike the Central Intelligence Agency (CIA), US Agency for International Development (AID) actually tries to reduce corruption and this is the real Pakistani complaint.  AID has matured since Viet-Nam when it approved schoolhouses built with 50% sand that melted within the year.