ISLAMABAD: The debate on stringent conditions attached by the Obama Administration to the Kerry-Lugar Bill of aid is giving an option to Pakistan’s economic managers from barring the US to provide its aid in such a way where major chunk on the development projects — in the range of 50 to 60 percent of the $1.5bn per annum — is being spent and sent back to US in the name of consultancy and intermediatory costs.
All kinds of tough conditions have been incorporated in the Kerry-Lugar Bill to ensure strict audit in the name of transparency but it never touches the spending of money by the United States on consultancy, salaries and other intermediately costs to run the USAID funded projects inside Pakistan.
A relevant authority having knowledge on Pakistan’s economy is of the view that the US wanted to spend major chunk of the aid in its own bureaucratic way which in some cases rose to 65 to 70 per cent and certain projects currently being executed by USAID could be cited on this count.
The US is raising questions about transparency in spending aid but it never bothered to tell this nation as to how much it got back in the shape of inter-mediatory costs in the last 60 years relationship between the two countries.
The Pakistan People’s Party-led government is in a Catch-22 situation on the Kerry-Lugar Bill as it will have to swallow the bitter pill either in case of its rejection by the Parliament or acceptance, having negative fallout on the economy as well as growing trust deficit between the Presidency and the military establishment in both scenarios.
Officials say if a country of 170 million population can ensure a jump-start of the economy by increasing remittances to over $10bn from the ongoing fiscal year 2009-10 and increases its tax revenues by another Rs500bn, touching Rsl,800bn instead of Rsl,380bn, it could provide room to say goodbye to upcoming aid from the US and diminish Islamabad’s growing dependence on money obtained from international financial institutions.
During the last 50 years, the US provided to Pakistan $33.6bn as economic assistance and $8.9bn as military aid. Out of this, it made available $25.8bn as economic assistance and $7.1bn as military aid during the 32 years military rule.
