Pakistan not to get normal U.S. economic aid

Islamabad, Feb.25 : Pakistan is not to get the normal US economic assistance for direct budgetary support anymore.

Islamabad, however, has received 289 million dollars from Washington on account of war on terror reimbursements for the period October to December 2007, the Dawn quoted Finance Ministry sources, as saying.

The bills were submitted by Islamabad after item-to-item verification by authorities in Washington.

Pakistan has so far been paid about five billion dollars in reimbursements for services, mostly military services and logistic support, at the rate of 80-100 million dollars per month depending on actual expenditures incurred by Islamabad.

Sources confirmed that the procedure for economic aid to Pakistan had been changed since November last year owing to increasing accountability issues raised by some US lawmakers in recent months.

They said Pakistan used to get about 300 million dollars as direct disbursement for annual budgetary support under the three billion dollar assistance package the two countries had finalised for Islamabad joining the war on terror about five years ago.

These funds would now go directly to the specific development projects mostly in health and education sectors through the US Agency for International Development (USAID) that would also oversee award of contracts and payments thereof, except for those less than 100 million dollars that may still be available for direct budget support, the sources added.

The sources did not agree to a notion with the US administration was withdrawing direct budgetary financing to Pakistan's new government - a facility that has been available to military-led government all these years.

They said it had more to do with the pressure the Bush Administration faced due to accountability concerns expressed by the Democrats.

The sources hinted that the US administration was in close contact with Islamabad to help arrange alternate avenues that might include some financing through development institutions.

Pakistan's foreign exchange reserves declined from 16.4 billion dollars in October 2007 to about 14.08 billion dollars on February 15, owing to increased pressure arising out of higher oil imports, increasing balance of payment deficit and lower than expected inflows, particularly on account of privatisation proceeds and international bonds etc.

Overall, Pakistan has so far received about 10 billion dollars since 2001 from the United States.

ANI