Should Pakistan Tell America to Take its Aid and Shove it?
"Aid only postpones the basic solutions to crucial development problems by tentatively ameliorating their manifestations without tackling their root causes. The structural, political, economic, etc. damage that it inflicts upon recipient countries is also enormous.” These words were written in a letter to UN to refuse aid by Finance Minister Berhane Abrehe of Eritrea which is the 7th poorest nation in the world.
Can Pakistan (per capita annual income of $3000) do what Eritrea (per capita annual income of less than $700) has already done with UN aid? Say "No" to foreign aid?
Pakistan Movement for Justice party leader and cricket hero Imran Khan thinks so. Echoing the sentiments of the Eritrean minister, Imran Khan told the BBC recently that "if we don't have aid we will be forced to make reforms and stand on our own feet."
Let's examine in a little more detail the proposition that Pakistan should tell the United States to take its aid and shove it:
1. Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, according to a report by the United States Government Accountability Office.
2. Even if the entire $1.51 billion had been disbursed, it would account for only $8.39 per person, about 0.28%, a very tiny fraction of Pakistanis' per capita income of $3000 a year.
3. Pakistan ended last fiscal year in June 2011 with a small current account surplus of about half a billion US dollars. It received inflows over $40 billion in the form of export earnings ($25 billion), remittances from Pakistani diaspora ($10 billion), and FDI, FII and other accounts. The actual US aid of just $179.5 million out of over $40 billion in 2010-2011 is a negligible figure.
4. Of the $179.5 million received by Pakistan in 2010, $75 million of the US aid funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remained unspent.
Although refusing US aid will hurt the anti-poverty efforts, higher education and infrastructure development programs to some extent unless made up by raising greater tax revenues to replace it, it is theoretically possible to say No to the US aid without a big negative short-term impact on Pakistan's economy.
However, Pakistan would be well advised to not seek confrontation with Washington even after refusing US aid. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must save more, a lot more than the current 10% of GDP, to have more money for investment in the future.
3. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
4. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
5. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Impact of Foreign Aid on Economic Development in Pakistan
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
Can Pakistan (per capita annual income of $3000) do what Eritrea (per capita annual income of less than $700) has already done with UN aid? Say "No" to foreign aid?
Pakistan Movement for Justice party leader and cricket hero Imran Khan thinks so. Echoing the sentiments of the Eritrean minister, Imran Khan told the BBC recently that "if we don't have aid we will be forced to make reforms and stand on our own feet."
Let's examine in a little more detail the proposition that Pakistan should tell the United States to take its aid and shove it:
1. Only $179.5 million out of $1.51 billion in U.S. civilian aid to Pakistan was actually disbursed in fiscal 2010, according to a report by the United States Government Accountability Office.
2. Even if the entire $1.51 billion had been disbursed, it would account for only $8.39 per person, about 0.28%, a very tiny fraction of Pakistanis' per capita income of $3000 a year.
3. Pakistan ended last fiscal year in June 2011 with a small current account surplus of about half a billion US dollars. It received inflows over $40 billion in the form of export earnings ($25 billion), remittances from Pakistani diaspora ($10 billion), and FDI, FII and other accounts. The actual US aid of just $179.5 million out of over $40 billion in 2010-2011 is a negligible figure.
4. Of the $179.5 million received by Pakistan in 2010, $75 million of the US aid funds were transferred to bolster the Benazir Income Support Program, a social development program run by the Pakistani government. Another $45 million was given to the Higher Education Commission to support "centers of excellence" at Pakistani universities; $19.5 million went to support Pakistan's Fulbright Scholarship program; $23.3 million went to flood relief; $1.2 billion remained unspent.
Although refusing US aid will hurt the anti-poverty efforts, higher education and infrastructure development programs to some extent unless made up by raising greater tax revenues to replace it, it is theoretically possible to say No to the US aid without a big negative short-term impact on Pakistan's economy.
However, Pakistan would be well advised to not seek confrontation with Washington even after refusing US aid. Why? The reason is simply that the United States is the architect and the unquestioned leader of the international order that emerged after the WW II and this system still remains largely intact. Not only is the US currency the main reserve and trade currency of the world, the US also dominates world institutions like the UN and its agencies, the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO).
All foreign aid, regardless of its source, comes with strings attached. And those in Pakistan who think that China, undoubtedly a rapidly rising power, can replace US as a powerful friend in helping Pakistan now are deluding themselves. Today, China's power and influence in the world are not at all comparable to the dominant role of the United States. Chinese currency is neither a trade nor a reserve currency. Chinese themselves depended on the US agreement to be allowed to join the WTO after accepting terms essentially dictated by the United States in a bilateral agreement. Most of China's trade is still with the United States and its European allies. And the Chinese military power does not extend much beyond its region because it, unlike the United States, lacks the means to project it in other parts of the world.
Rather than alienate the United States and risk being subjected to international isolation and crippling sanctions like North Korea (a Chinese ally), Pakistanis must swallow their pride now and choose better ways of becoming more self-reliant in the long run.
Here are some of my recommendations for Pakistanis to move toward greater self-reliance:
1. They must all pay their fair share of taxes to reduce dependence on foreign aid and loans.
2. They must save more, a lot more than the current 10% of GDP, to have more money for investment in the future.
3. They must spend more on education and heath care and human development to develop the workforce for the 21st century.
4. They must invest in the necessary infrastructure in terms of energy, water, sanitation, communications, roads, ports, rail networks, etc, to enable serious industrial and trade development.
5. They must develop industries and offer higher value products and services for exports to earn the US dollars and Euros to buy what they need from the world without getting into debt as the Chinese have done.
No amount of empty rhetoric of the "ghairat brigade" can get Pakistanis to reclaim their pride unless they do the hard work as suggested above.
Related Links:
Haq's Musings
Tax Evasion Fosters Foreign Aid Dependence
Aid, Trade, Investments and Remittances
Impact of Foreign Aid on Economic Development in Pakistan
Can Chinese Yuan Replace US Dollar?
Vito Corleone: Godfather Metaphor for Uncle Sam
Can US Aid Remake Pakistan?
South Asia Slipping in Human Development
Pakistan to Terminate IMF Bailout Early
Pakistani Military and Industrialization
Comments
ISLAMABAD, Sept 29: The fiscal deficit during 2010-11 stood at a whopping Rs1.336 trillion — highest in the country’s history and almost 39 per cent of total expenditure and 59 per cent of revenue.
According to consolidated fiscal data released by the finance ministry, the fiscal deficit, excluding payments of electricity subsidies, was Rs1.194 trillion or 5.9 per cent of GDP. However, after inclusion of one-time off-budget electricity subsidy payments of Rs142 billion to Wapda’s power companies, the overall deficit worked out at Rs1.336 trillion or 6.6 per cent of GDP.
During 2009-10, the deficit was Rs929 billion, 6.3 per cent of GDP, and increased by Rs407 billion in a year.
Ironically, revenue collection showed a dismal performance. The total collection declined significantly to 12.5 per cent of GDP against 14.2 per cent in 2009-10, despite a series of additional tax measures introduced in March.
Tax revenue dropped to 9.4 per cent of GDP from 10 per cent achieved in the previous year.
In absolute terms, total revenues amounted to Rs2.253 trillion, an 8.3 per cent increase over Rs2.078 trillion last year.
The tax revenue increased to Rs1.699 trillion from Rs1.473 trillion, by 15.3 per cent.
The growth in total provincial revenue was slightly better at 17.8 per cent.
The total non-tax revenue also declined to 3.1 per cent of GDP from the previous year’s 4.1 per cent, showing widespread erosion of tax collection efforts against the potential.
Even in absolute terms, the non-tax revenue stood at 553.5 billion, about 8.5 per cent lower than the previous years’ Rs605 billion. The federal non-tax revenue declined to Rs491 billion from Rs537 billion — a drop of 8.5 per cent. The provincial non-tax revenues also dropped by 8.5 per cent to Rs62 billion, from Rs68 billion a year ago.
The finance ministry said the total expenditure during 2010-11 increased by 14.6 per cent to Rs3.447 trillion, from Rs3.007 trillion in 2009-10. But the revenue growth of 8.3 per cent did not keep pace with 14.6 per cent increase in expenditure, leading to the huge fiscal deficit.
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Defence expenditure increased by a massive 20 per cent to Rs451 billion from Rs375 billion in 2009-10. Total defence- and security-related grants amounted Rs682 billion (Rs232 billion for security), showing a nine per cent increase over Rs625 billion (Rs250 billion security grants) in 2009-10.
On the contrary, the development expenditure and net lending dropped from Rs653 billion in 2009-10 to Rs514 billion, showing a reduction of 21.3 per cent or Rs139 billion.
The expenditure on the public sector development programme (PSDP) dropped by 11 per cent to Rs461.5 billion from Rs517 billion.
This meant the expenditure on improving the lives of the people posted a sizable reduction when seen in the context of increased prices and deteriorating poverty situation.
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To meet the deficit, the government had to borrow a record Rs615 billion from the banking sector, up Rs311 billion from Rs304 billion in 2009-10.
The non-bank borrowing increased by 8.3 per cent to Rs472 billion from Rs436 billion.
Interestingly, external financing to bridge the deficit posted a reduction of 43 per cent to Rs108 billion from the previous year’s Rs189 billion, showing a falling international confidence to extend financing to an economy battered by a war-like situation and devastating floods.
As a result, domestic deficit financing increased by as much as 47 per cent (Rs311 billion) to Rs1.086 trillion from Rs740 billion.
http://www.dawn.com/2011/09/30/highest-ever-fiscal-deficit-at-rs1336tr.html
Mullen, the outgoing chairman of the Joint Chiefs of Staff, softened his rhetoric on Friday, telling a ceremony marking the end of his tenure that the U.S. relationship with Pakistan was "vexing and yet vital."
"I continue to believe that there is no solution in the region without Pakistan, and no stable future in the region without a partnership," said Mullen, who sometimes referred to himself as Pakistan's best friend in the U.S. military.
Obama acknowledged on Friday that Pakistan's relationship to the militant Haqqani network, believed responsible for the Embassy attack, is murky. But he urged Islamabad to tackle the problem anyway.
"The intelligence is not as clear as we might like in terms of what exactly that relationship is," Obama said in a radio interview, when asked about the Haqqani network.
"But my attitude is, whether there is active engagement with Haqqani on the part of the Pakistanis or rather just passively allowing them to operate with impunity in some of these border regions, they've got to take care of this problem," he said.
http://www.reuters.com/article/2011/09/30/us-pakistan-usa-idUSTRE78T57X20110930
Pakistan’s nuclear weapons have been conceived and developed as a deterrent against mighty neighbour India, more so now when its traditional rival has added economic heft to its military muscle. But Islamabad may also be holding onto its nuclear arsenal to deter an even more powerful challenge, which to its mind, comes from the United States, according to Bruce Riedel, a former CIA officer who led President Barack Obama’s 2009 policy review on Afghanistan and Pakistan.
Pakistan and the United States are allies in the war against militancy, but ties have been so troubled in recent years that some in Pakistan believe that the risk of a conflict cannot be dismissed altogether and that the bomb may well be the country’s only hedge against an America that looks less a friend and more a hostile power.
Last year the Obama administration said there could be consequences if the next attack in the West were to be traced backed to Pakistan, probably the North Waziristan hub of al Qaeda, the Taliban and other militant groups.No nation can ignore a warning as chilling as that, and it is reasonable to expect the Pakistan military to do what it can to defend itself.
Riedel in a piece in The Wall Street Journal says Pakistan’s army chief Ashfaq Kayani may well have concluded that the only way to hold off a possible American military action is the presence of nuclear weapons on its soil and hence the frenetic race to increase the size of the arsenal to the point that Pakistan is on track to become the fourth largest nuclear power after the United States, Russia and China.
Last month’s military action in Libya, the third Muslim nation attacked by the United States in the ten years since 9/11, can only heighten anxieties in Pakistan. Indeed Libya holds an opposite lesson for Pakistan’s security planners. This is a country that gave up a nuclear weapons programme - ironically assisted by Pakistan’s disgraced nuclear scientist A.Q.Khan – under a deal with the West following the 2003 invasion of Iraq. Suppose for a moment that Colonel Muammar Gaddafi had held on its nuclear weapons, would there have been air strikes then ?
Indeed none of the three countries attacked by the United States had nuclear weapons including, as it turned out, Iraq although the whole idea of invading it was to eliminate the weapons of mass destruction. You could further argue that this perhaps is the one reason why the United States hasn’t taken on North Korea because of its advanced nuclear programme with a bomb or two in the basement.
Kayani and the generals have therefore concluded the only reason the United States may hesitate to use force against Pakistan, should ties break down completely, will be because of the 100-odd weapons it has. It only makes sense to expand it further to make the Americans think twice before launching an action.
But such nuclear brinkmanship cannot come without consequences of its own, and one of them will be India reviewing its nuclear posture. A Pakistan battling a deadly Islamist militancy and beset with economic difficulties but on a fast track to expand its nuclear weapons programme is a nightmare scenario. Riedel says India has exercised restraint on its weapons program me, but seeing an acceleration in the Pakistani efforts, it may well step up production of its own.....
http://blogs.reuters.com/afghanistan/2011/04/09/pakistans-nuclear-weapons-a-deterrent-against-india-but-also-united-states/
Last month Adml Mike Mullen, in his last few days before retiring as America's most senior military officer, said the Haqqani network, one of the most feared insurgent groups in Afghanistan, was a "veritable arm" of Pakistan's ISI intelligence agency.
He accused Pakistan of exporting violence and also blamed the ISI for directing a 19hr attack on the US embassy and Nato headquarters in Kabul on September 13, as he stepped up demands that Pakistan act against Haqqani bases in North Waziristan.
His statement was the climax of a string of apparently carefully choreographed allegations by senior Administration officials – including the US ambassador to Islamabad – that Pakistan's intelligence service was closely connected to the Haqqanis.
However, with relations between the two countries close to breaking point, the US appeared to row back with a series of statements emphasising the importance of the alliance.
On Friday, President Barack Obama made a point of not endorsing Adml Mullen's accusations.
He admitted that the intelligence was not clear on the exact nature of the relationship between the ISI and the Haqqanis.
The reversal has been greeted with glee in Islamabad.
Mr Gilani, who was speaking at Bili Wala in Punjab, said an all-party conference (APC) held last week had been instrumental in forcing the US to back down.
"It is due to APC as well as the unity of Pakistan's political leaders that the US has a sent a message that they need Pakistan and that they cannot win the war without Pakistan," he said. "They have also distanced themselves from the statement of Mullen."
The climb-down also suggests the US knew it had few options to increase pressure, without risking a total breakdown in relations and the deployment of American forces to Pakistan.
"US options are limited as we don't want a larger war in south Asia," said Bruce Riedel, a former CIA officer who advised the White House on Afghanistan and Pakistan in 2009 and a fellow at the Brookings Institution think tank."
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/8804227/Pakistan-claims-victory-over-US-Haqqani-spat.html
Eleven days ago, the United States' top military official seemed to sum up Washington's current relationship with Pakistan when he accused the country's premiere intelligence service of supporting insurgents who attacked the U.S. embassy in Kabul.
But what Admiral Mike Mullen did not say is that the U.S. had secretly met with a member of that same insurgent group -- known as the Haqqani network -- as part of efforts to find a political end to the war in Afghanistan, and that the institution that helped set up the meeting was the same intelligence agency he had condemned: the Directorate of Inter Services Intelligence, or I.S.I.
The meeting, according to two current U.S. officials and a former U.S. official, was held in the months before the Sept. 13 attack on the U.S. embassy and NATO's military headquarters, which U.S. officials have blamed on the Haqqani network. In his congressional testimony Sept. 22, Mullen called the Haqqanis a "veritable arm" of the I.S.I., but failed to mention that the I.S.I. facilitated the meeting between the U.S. and Ibrahim Haqqani, a son of founder Jalaluddin Haqqani and a major player in the group, according to a senior U.S. official.
The meeting suggests there is much more to the recent spat between Islamabad and Washington while the violence in Afghanistan has increased as U.S. troops have begun to withdraw. At stake, U.S. officials said, is how they will try to reduce the violence in Afghanistan and to what extent Pakistan will be allowed a say.
From Pakistan's point of view, military and intelligence officials have long argued that their connections with the Haqqani network -- going back decades in the Pakistani tribal areas and in Afghanistan -- can facilitate the only way to end the war: through political negotiation. But for U.S. officials, even as the debate in Washington continues over the best way to wind down the war, there was a high-level decision after the embassy attack to name and shame the I.S.I. for supporting the Haqqanis, hoping it would work where no previous pressure or incentives placed on Pakistan had worked, according to a senior Western official.
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The fact that the U.S. and Pakistani intelligence service set up the meeting with Haqqani and discussed how to stop a Haqqani attack suggests a much more nuanced -- and very often, confounding -- relationship with Pakistan's intelligence service than Adm. Mullen and other military officials have publicly admitted in the last two weeks.
The Pakistanis, in turn, have tried to portray themselves as the victims of a smear campaign headed by Mullen. As Pakistani President Asif Ali Zardari wrote in the Washington Post Friday, "While we are accused of harboring extremism, the United States is engaged in outreach and negotiations with the very same groups."
http://abcnews.go.com/Blotter/us-pakistan-struggle-haqqani-insurgents/story?id=14656079&page=2
..According to an analyst this obviously meant that President Zardari was considering firing General Kayani. The offer was sent through a prominent American citizen of Pakistani origin, investment banker and businessman Mansoor Ijaz. In an article in FT which was almost a confession, Mansoor Ijaz admitted that he received the message from a senior Pakistani diplomat and sent it to Admiral Mullen and claimed that his channel was used to “bypass the Pakistan Army and intelligence channels.”
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“Gen Ashfaq Kayani, the army chief, and his troops were demoralised by the embarrassing ease with which US special forces had violated Pakistani sovereignty. Inter-Services Intelligence, Pakistan’s feared spy service, was charged by virtually the entire international community with complicity in hiding bin Laden for almost six years. Both camps were looking for a scapegoat; Mr Zardari was their most convenient target.
“The diplomat made clear that the civilian government’s preferred channel to receive Mr Zardari’s message was Admiral Mike Mullen, chairman of the US joint chiefs of staff. He was a time-tested friend of Pakistan and could convey the necessary message with force not only to President Barack Obama, but also to Gen Kayani.
“In a flurry of phone calls and emails over two days, a memorandum was crafted that included a critical offer from the Pakistani president to the Obama administration: “The new national security team will eliminate ‘Section’ S of the ISI charged with maintaining relations to the Taliban, Haqqani network, etc. This will dramatically improve relations with Afghanistan.”
“The memo was delivered to Admiral Mullen at 14.00 hours on May 10. A meeting between him and Pakistani national security officials took place the next day at the White House. Pakistan’s military and intelligence chiefs, it seems, neither heeded the warning, nor acted on the admiral’s advice.
“On September 22, in his farewell testimony to the Senate armed services committee, Admiral Mullen said he had “credible intelligence” that a bombing on September 11 that wounded 77 US and Nato troops and an attack on the US embassy in Kabul on September 13 were done “with ISI support.” Essentially, he was indicting Pakistan’s intelligence services for carrying out a covert war against the US - perhaps in retaliation for the raid on bin Laden’s compound, or perhaps out of strategic national interest to put Taliban forces back in power in Afghanistan so that Pakistan would once again have the “strategic depth” its paranoid security policies against India always envisioned.
“Questions about the ISI’s role in Pakistan have intensified in recent months. The finger of responsibility in many otherwise inexplicable attacks has often pointed to a shadowy outfit of ISI dubbed “S-Wing”, which is said to be dedicated to promoting the dubious agenda of a narrow group of nationalists who believe only they can protect Pakistan’s territorial integrity.
“The time has come for the US State Department to declare S-Wing a sponsor of terrorism under the designation of “foreign governmental organisations”. Plans by the Obama administration to blacklist the Haqqani network are toothless and will have no material impact on the group’s military support and intelligence logistics; it is S-Wing that allegedly provides all of this in the first place. It no longer matters whether ISI is wilfully blind, complicit or incompetent in the attacks its S-Wing is carrying out. S-Wing must be stopped...........
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=9493&Cat=13
......Like many government-run hospitals in Pakistan, Lady Willingdon struggles to provide even basic care. The hospital, built by the British in the 1930s before Pakistan's independence, was meant to house 80 patients. The country's population has since boomed, forcing officials to cram 235 patients into a facility that is now run-down. Paint peels off the concrete walls and black mold covers the ceilings.
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There are only three working infant incubators, which were donated by NGOs, said Mohammed Athar, the doctor who runs the nursery for premature babies. The hospital is forced to use overhead warmers for other infants, leaving them more exposed to disease, he said.
"Without incubators, it's useless," said Athar.
The $16 million offered by the U.S. would have been used to purchase 10 incubators, build a new 100-bed ward and expand the nursery and emergency facilities, said Sharif, the hospital administrator.
The U.S. has financed similar efforts to transform two hospitals in southern Sindh province that treat tens of thousands of patients every year.
The head of the Punjab government, Shahbaz Sharif, tried to justify his decision to spurn American aid following the May 2 raid that killed the al-Qaida chief not far from Pakistan's equivalent of West Point. He said at the time that Pakistan needed "to break the begging bowl" and "get rid of the foreign shackles."
The U.S. operation outraged Pakistani officials because they were not told about it beforehand.
Sharif is a leading member of the main opposition party in the country, and many viewed his decision as a way to siphon votes away from the Pakistan People's Party, which controls the federal government. The Punjab government spokesman declined to comment on this interpretation.
Sharif and other members of his government are unlikely to feel much personal impact from the move to turn down U.S. aid.
Free government-run hospitals like Lady Willingdon are mainly used by the poor, who are already suffering from Pakistan's weak economy and surging inflation. Wealthier citizens opt for more expensive private institutions in Pakistan or abroad.
A large chunk of the American assistance, $100 million, was to be used to rebuild schools in southern Punjab destroyed by last year's devastating floods. An additional $10 million was meant to improve municipal services like clean water and sanitation.
The money will now be redirected to other areas of the country, said the U.S. Embassy.
Washington has continued several programs in Punjab that don't run directly through the provincial government, such as rehabilitation of power plants and small grants to female entrepreneurs in flood-affected areas, said the embassy.
The loss of aid for schools, water and sanitation also won't be felt acutely by the elite. Most send their children to private schools and live in leafy parts of Lahore dotted with Western restaurant chains, polo grounds and cosmetic surgery centers. The Sharifs own property in London worth millions of dollars.
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Life is very different for Pakistanis who live in Shamaspura, a dirt-poor part of Lahore filled with ramshackle brick houses separated by a narrow mud lane coursing with sewage. Most of the roughly 15,000 residents are fruit and vegetable vendors who make about $2 per day. They are forced to tie pieces of cloth across their faucets to filter out dirt and insects in the water.
"We have asked the government to pave our road and build us a sewer system, but they said they don't have any money," said Jumma Khan, a 55-year-old vegetable vendor......
Meanwhile in Washington, debate in the U.S Congress about aid to Pakistan -- not just military aid but aid to shore up the civilian government along the lines that the late Richard Holbrooke advocated -- has grown increasingly hostile. Many in Congress assume that Washington's announced annual economic aid package of $1.5 billion provides leverage that can somehow bring both the civilian and military sides of Pakistan's government into line -- and are threatening to withdraw civilian aid in frustration with the inability or unwillingness of Pakistan's military and intelligence agencies to deal with the Haqqani Network and other threats to the security of Americans in Afghanistan.
The IMF saga makes clear that that leverage just doesn't exist. Using economic aid to push weak civilian governments into political steps they cannot take (unless they are willing to give up power altogether) doesn't work. It is even more far-fetched to imagine that the much smaller amount of U.S. civilian aid constitutes leverage with Pakistan's military and intelligence establishment, or that it's removal is a serious threat to them. If the government of Pakistan is willing to walk away from more than $3 billion of IMF money because it cannot implement a VAT, it seems unlikely that the powers that be will change their strategic calculus in Afghanistan for whatever Congress appropriates this year.
As we have emphasized before, the purpose of U.S. civilian aid to Pakistan is not to bribe or reward, nor would withholding aid be a useful punishment. Aid seldom constitutes leverage over tough domestic policy decisions, as the development community knows well. Apparently, so does the U.S. military. On the eve of his retirement, Chairman of the Joint Chiefs of Staff Adm. Mike Mullen told Congress that the U.S. needs to move beyond counterterrorism in Pakistan and focus on the development issues that constitute the foundation of that country's long run success. In his words, "isolating the people of Pakistan from the world right now would be counter-productive."
The issue is whether modest amounts of U.S. aid -- to help educate kids, create jobs, and strengthen democratic institutions -- might help give Pakistan a shot at becoming a more stable, prosperous and democratic country in the long term. Congress should be demanding evidence of that possible effect and targeting aid appropriately, rather than making superficial cuts that hurt America's image and impact in Pakistan for no apparent gain.
Nancy Birdsall is the founding president of the Center for Global Development, a Washington, DC based think tank. Milan Vaishnav is a visiting fellow and Daniel Cutherell is a policy analyst at the Center for Global Development.
http://afpak.foreignpolicy.com/posts/2011/11/04/pakistan_and_the_imf
WASHINGTON: The US State Department on Tuesday defended aid to Pakistan amid calls from senators for a full review of whether economic and military assistance there serves the US national interest.
“We believe our assistance to Pakistan still continues to provide dividends for the American people in trying to grow and strengthen Pakistan’s democratic institutions, boost its economy,” said spokesman Mark Toner.
“In the long term, you know, those are the kinds of things we’re seeking to achieve,” he told reporters one day after Republican Senators John McCain and Lindsey Graham made a full-throated call for reevaluating the aid.
His comments came shortly after US Senate Intelligence Committee Chair Dianne Feinstein said that cutting assistance to Pakistan would be unhelpful but warned that calls to do so had strong congressional support.
“I don’t think that’s useful,” she told reporters. “My understanding is that there’s some overtures under way to restore the relationship. Well, that’s fine, but I suspect that if a bill were to come to the floor which fenced money, the bill would have a good chance of passing,”she said.
US lawmakers have expressed mounting anger at Pakistan, accusing military and intelligence officials there of supporting the Haqqani network blamed here for attacks on US forces and targets in Afghanistan.
“I can only express my profound disappointment with the relationship” and the “deterioration” in an already troubled alliance that “goes up and down, and up and down, and up and down,” she said.
“My very strong feeling is you can’t walk both sides of the street with respect to terror,” said Feinstein.
Relations slid to a new low last month when Nato air strikes killed 24 Pakistani soldiers on the Afghan border, prompting Pakistan to boycott an international conference in Bonn on Afghanistan’s future.
“This is a very complex relationship,” Toner said, adding that the deadly border incident “was difficult for the Pakistani people, for the Pakistani government.”
“They have reacted in a way that shows how important and how significant this tragedy was for them,” Toner said.
“It’s absolutely essential that Pakistan, Afghanistan and the US, other international partners, work through this and beyond. It’s in all our interests.”
But Republican Senator Mark Kirk told AFP that McCain and Graham, who serve on the Senate Armed Services Committee, “are right.”
“Military aid to Pakistan is unsustainable, and in this time of deficits and debt, we ought to save the money,” he said, warning that if Pakistan has chose “to embrace terror and back the Haqqani network,” it should do so “without subsidies from the US taxpayer.
Kirk has also called for bolstering ties to India and “making India a military ally of the United States and to encourage India to fill the vacuum in Kabul once we leave.”
http://www.dawn.com/2011/12/07/us-state-dept-defends-pakistan-aid.html
The Pakistani government has criticized the move by the U.S. Congress, saying it is not based on facts and takes a "narrow vision of the overall situation."
Foreign Minister Hina Rabbani Khar says that the aid suspension is not a matter of concern for her country because the Pakistani parliament is currently redefining future terms of engagement with Washington and international forces following what she called the "unprovoked" cross-border air attack by NATO last month.
"Pakistan is currently going through a process of re-assessment and re-evaluation," said Khar. "And what matters today to Pakistan and to all its institutions is the mandate that will be given by the parliament of Pakistan. So I think we are less concerned about what [the U.S.] Congress is doing today and more concerned about what the parliament of Pakistan is doing today because that is what redefines this relationship."
Pakistan's uneasy relationship with the United States has plunged to new lows since NATO's deadly cross-border air attack in late November. The country has retaliated by cutting supply lines for U.S. and allied forces fighting the Taliban insurgency in neighboring Afghanistan. It has evicted American personnel from an airbase in the country's southwest, and the Pakistani government has asked the parliament to define future terms of anti-terrorism cooperation with both the United States and the coalition forces. The U.S. military and NATO deny Pakistani troops were deliberately targeted in the attack and have launched investigations of the incident.
The Pakistani foreign minister says she is confident that once approved by the country's parliament, the renewed terms of engagement with allied nations, including the United States, will lead to productive relationships.
"It will also strengthen the partnership that we pursue with any country because it will be a partnership which is on a clearly defined mandate, it will be a partnership which has less grey areas and has a clear mandate of the public and parliament of Pakistan and therefore we will be able to pursue this partnership much more vigorously," added Khar.
The U.S. Embassy in Islamabad issued a clarification Thursday evening, saying reports that Congress has cut $700 million dollars in military aid to Pakistan are not correct. It says that the draft legislation currently under consideration in the U.S. Congress includes a reporting requirement and that once the U.S. secretary of defense certifies that Pakistan is cooperating in the joint efforts to combat IEDs, the funds will be released. It says setting conditions on assistance with reporting requirements is not new, nor is it Pakistan specific.
Taliban insurgents are increasingly using the IEDs to attack U.S.-led forces in Afghanistan. American military officials say that most of the material used to make the bombs is coming from Pakistan, charges officials here deny.
http://www.voanews.com/english/news/asia/south/Pakistan-Downplays-Proposed-Freeze-in-US-Military-Aid-135663968.html
According to Bank’s Country Partnership Strategy Progress Report, a mid term review and implementation assessment, the Bank has responded flexibly in the face of the tremendous challenges Pakistan has gone through over the past year or so.
World Bank Country Director for Pakistan Rachid Benmessaoud said they will continue strong support to Pakistan while keeping a keen eye on implementation to ensure that these efforts translate into real results on the ground.
The progress report says the overall focus of the Bank’s strategy- to help Pakistan’s economy get back onto the path of high, sustained growth –remains valid and consistent with the overall priorities of the government of Pakistan as articulated in its New Framework for Growth Strategy. Also, the Bank support will remain centred on the original pillars of the CPS- the economic governance, human development and social protection; infrastructure and security and conflict risk reduction.
The Bank engagement over FY 12-14 is projected at up to $ 4 billion in new International Development Association (IDA) credits and International Bank for Reconstruction and Development loans. This will be supplemented by a robust programme under the Multi donors trust fund (MDTF) with initial commitment of $ 140 million and IFC support projected at $ 1.5 billion.
http://www.pakistantoday.com.pk/2012/02/wb-to-provide-5-5b-to-pakistan-in-3-years/
U.S. Ambassador to Pakistan Cameron Munter doesn’t beat around the bush: America’s relationship with Pakistan — a vital ally in securing Afghanistan’s fragile stability — has deteriorated. And when it comes to mending those frayed ties, Munter is even less sentimental.
“If we’re going to get out of what has been a very tough period, it is going to be because both countries decide they’re going to look at something bigger than themselves,” Munter said at Harvard Kennedy School (HKS) on Monday. Both sides need to ratchet down their emotions, he said.
“We call this the Turner doctrine,” Munter added, invoking “the American philosopher” Tina Turner. “What’s love got to do with it?”
Munter’s assessment, which he shared with a packed hall of HKS students and Mideast observers, came at the close of what he called “a very tough year” for the United States in Pakistan. In the beginning of 2011, the arrest and negotiated release of Raymond Davis, an American CIA contractor, caused bad blood on both sides. Two months later, an American drone strike killed nearly 50 people in North Waziristan. And not least of all, the killing of Osama bin Laden by American troops in Islamabad last May was taken as an insult to the Pakistani military, Munter said.
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In part, America’s recent failures in Pakistan stem from overpromising, Munter said. Americans, sensitive to Pakistanis’ lingering feelings of betrayal, developed a set of goals for development in Pakistan in 2008 that encompassed everything from women’s rights to water resources to telecommunications. Those lofty plans too often fell by the wayside as America pursued its military goals in the region.
“American policy began to struggle with the distinctions, or even the contradictions, of its long-term goals and its short-term goals,” he said. “We were trying so hard to reach our counterterrorism goals that we in part did damage to our own long-term goals.”
The relationship between the two countries’ militaries has suffered, and “our military presence in the country has shrunk dramatically,” Munter said. American diplomats must also account for the rising generation of Pakistani generals, part of the “lost generation” who were cut off from American training, who are “less familiar with American traditions” and perhaps less likely to see eye to eye with their Western counterparts.
Still, Pakistan has shown its commitment to fighting terrorism. The country has experienced huge losses fighting insurgents at its own borders — nearly 4,000 troops and between 30,000 and 40,000 civilians, according to Munter.
“In any other country this would be called a civil war,” he said. “It causes a fair amount of resentment in Pakistan, and we would be wise to remember what it is that they’ve lost.”
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“The only way to get past a relationship that’s fraught with anger and misunderstanding is to create a partnership,” he said. “You have to get as far away as you can from an assistance relationship.”
The bad news, Munter said, is that America is unpopular in Pakistan, with a public favorability rating of roughly 6 to 10 percent. The good news, however, is that “Pakistanis care desperately what America thinks. They want desperately for Americans to do good things in Pakistan, [and they] want to see us live up to their image of what they think Americans can do.”
“In this relationship, neither side is blameless,” Munter said. But when it comes to economic growth and stability in the Middle East, “there is a fundamental affinity between what Americans want and what Pakistanis want.”
http://news.harvard.edu/gazette/story/2012/02/less-bluster-more-action/
The United States remains the major grant assistance provider to Pakistan during the first nine months of the current fiscal year while the Asian Development Bank (ADB) and the World Bank have been major lenders to Pakistan by releasing $470 and $269 million respectively during the period.
The total foreign assistance received by Pakistan from July 2011 to March 2012 was $1.6 billion with US as the major grant provider despite the recent tension between the two countries.
The foreign assistance provided by the ADB and the World Bank is 'loan-based' assistance while the assistance provided by the US is 'non-loan' assistance that in other terms is called 'grant'.
According to the data available with Business Recorder, the US has provided the grant assistance of $112 million to Pakistan during the first nine months of 2011-12.
Agriculture and Livestock ($3.4m) Food Assistance ($102.7m) Health and Nutrition ($1.1m) Crisis Prevention and Disaster Reduction (1.5mdollar) and Housing and Construction ($1.8m) are the sectors for which this amount has been released by the US.
The data reveals that $470 million has been released by the ADB for various projects including the projects on Crisis Prevention and Disaster Reduction (2.9m$), Rural Development( 6.9m$), Banking, Finance and Insurance ($200m), Education ($6.5m), Energy Generation( $73m), Health and Nutrition ($4.3m), Transport ($111.4m), Governance ($0.6m), Budgetary Support( $19.7m), Agriculture and Livestock( $11.4), Urban Development ( $5m),and Environment and Natural Resources ($28.4m).
The World Bank remains the second major lender to Pakistan by disbursing $269 million.
The projects under which this amount has been released includes Banking, Finance and Insurance ($2.5m), Urban Development (34.9m), Education ($34m), Agriculture and Livestock( $15.5m), Health and Nutrition ($41.7), Trade ($1.2m), Transport ($3.3m), Energy Generation ( $23m) , Social Welfare ( $21.1m)Water and Sanitation ($0.06m), Governance ( $1.4m)and Food Assistance ($5.6million).
The data says that the Islamic Development Bank (IDB) has provided $35.1 million.
Germany 23.2 million dollars, UK 22.2 million dollar, and UN has released $26.1 million.
The data reveals that Canada has disbursed $18 million to Pakistan from July 2011 to March 2012, Switzerland 1.2 million dollars, Japan 5.2 million dollars and EU has released $13.1 million.
Spain has released $3.15 million, Norway $3.3 million, Saudi Arabia 1 million dollar, Italy $1.6 million, Netherlands $17.3 million, Sweden $7.7 million, Australia $22 million, China $0.5 million, International Private Donors $0.6 million and Ireland has disbursed $3 million.
France has disbursed, according to the document, $0.5 million, Belgium $6.8 million, Denmark $1.4 million, Luxembourg $0.8 million, and New Zealand has released $0.4 million to Pakistan from July 2011 to March 2012.
http://www.brecorder.com/money-a-banking/198/1169611/
Ambassador of Japan to Pakistan Hiroshi Oe on Sunday said "National Transmission Lines and Grid Stations Strengthening Project" of Japan worth Rs30 billion, will help Pakistan save electricity used in about 2 million average households.
In an interview with APP, he said Pak-Japan project, soon after its completion, will help Pakistan in overcoming its growing energy demand.
About the major projects initiated by the Japan government, he said that Japan has been a major contributor to the development of social sectors in Pakistan.
Japan's assistance to Pakistan has added up to 1.3 trillion yen (approx. 1.5 trillion rupees) since 1954, the ambassador said.
Japan has provided technical assistance to Pakistan by receiving trainees under the Colombo Plan and provided technical training or study opportunities to over five thousand Pakistanis in Japan, he added.
He said Japan has built up about 530 schools and 130 hospitals, clinics and provided medical equipment under various Japanese assistance programmes.
To a question, he said about 30 Japanese companies are operating in Pakistan including joint ventures with Pakistani companies related to automobiles, motorcycles and service industries such as constructors, IPPs, financial institutions and trading houses.
Considering the vast potentials in Pak-Japan bilateral relationship, he said there is much more work to be done, and therefore, he cannot be complacent about the current status of ties.
Highlighting the need to enhance the potential of manpower in Japan for Pakistani youth, he said trade opportunities with Japan must expand and interactions with Japan will surely provide vast opportunities to the youth of Pakistan.
To a question, he said Pakistan is an important partner in the area of parliamentarians' exchanges.
Both the countries have Japan-Pakistan friendship groups respectively, consisting of parliamentarians from each country, working to enhance their regular interactions.
In September 2011, when the Japanese Parliamentary League for Polio Eradication visited Pakistan, they discussed the need for promoting interactions between parliamentarians of the two countries during their meeting with Pakistani parliamentarians, he said.
The ambassador expressed his determination to make utmost efforts to further strengthen bilateral relations between the two countries, focusing on the promotion of parliamentarians' exchanges of our two countries.
About the Pak-Japan cultural ties, Hiroshi Oe said Japan Embassy holds cultural events such as Ikebana workshop and demonstration, children's art and speech competition and Japan film festival throughout the year across the Pakistan.
The ambassador said JICA has been helping National Institute of Science and Technological Education (NISTE) to train science teachers who will surely play a vital role in utilizing Japanese technology in Pakistan in the future.
He said that he visited Sialkot last year and found the world's top-class manufacturing industries there. He hoped that with proper quality control and marketing, Pakistan will develop even more industries of such standard.
The year 2012 is the 60th anniversary of the establishment of the diplomatic relations between Japan and Pakistan,the Ambassador added.
Hiroshi Oe emphasized on promoting human and cultural exchanges to deepen mutual understanding between the two countries and expressed wish to work with the Pakistani government to further deepen the bilateral cooperative relations.
http://www.brecorder.com/top-news/108-pakistan-top-news/51454-japans-grid-stations-project-to-help-save-electricity-of-2mn-house-holds-ambassador-.html
Administrator of the US Agency for International Development (USAID) Dr Rajiv Shah and Sindh Education Minister Pir Mazhar-ul-Haq launched the USAID-funded ‘National Reading Programme’ at Government Girls Primary/Secondary School, Sultanabad.
The programme consists of three projects - two national and one focused on Sindh - that will help train teachers, improve reading skills and numeracy, and mobilise communities to support school management. It will also increase enrollment of students and ensure student retention, especially of girls.
The programme aims at improving literacy and numeracy for nearly seven million children, provide training to over 90,000 teachers in teaching and assessment, and support the development of 3.2 million new readers–including 700,000 children in Sindh. USAID will be supporting the school with a reading programme under the Sindh Basic Education Programme (SBEP). USAID SBEP was started in 2011 and will span until 2016, with a budget of $ 155 million. “This is good because it supplements your education budget, a budget that is woefully under-funded. But more importantly, it establishes the need for accountability in school administration and management. We are both now accountable to citizens who look to us to be stewards of these resources.
http://www.dailytimes.com.pk/default.asp?page=2012\04\13\story_13-4-2012_pg7_17
USAID does not have any offices in the Federally Administered Tribal Areas (FATA) but operates out of Peshawar, a settled area adjacent to the tribal areas. Officials here recognize the threats and say security is one of the biggest challenges to their aid work, so they've found a small way to work around it.
“It is the requirement of US government to brand its aid, but we are giving waivers to projects undertaken in the Federally Administered Tribal Areas, because if they put up our logos etc, it can be life threatening,” says Mehdi Ali Khan, the communication specialist for USAID here.
Another official says USAID in Pakistan would prefer to be more transparent. Not only would it help to show that money is being put to good use, but it could build good will toward the US.
“We [would] like to get credit but it’s a complex situation. There is a war in Afghanistan. There are areas under conflict in Pakistan.... This is the reality,” he says wishing not to be named since he is not authorized to speak to the media. The official said USAID was putting up signboards that say the project is USAID funded in areas of Khyber Pakhtunkhwa (KP) in northwest Pakistan, but in areas like FATA, it just wasn’t possible.
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Violent anti-US sentiment among the public in the area has led many development organizations to decline to work with USAID altogether.
Muhammad Tahseen, who heads South Asia Partnership, a network of more than 1,000 nongovernment organizations all over Pakistan says that working with USAID can even be counterproductive to development.
Aid workers complain USAID money has a lot of strings attached that complicate their efforts. “We feel the aid has to do more with politics and not with development so we have refused to work with them,” Mr. Tahseen says.
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USAID has spent more than $2.6 billion dollars in the past two years. In 2011, USAID refined the strategy to focus assistance on economic growth, energy, education, health, and stabilization.
But Pakistani analysts feel that the US government has failed to change the perceptions of the public in Pakistan despite its huge commitments.
“The US had an opportunity in Pakistan. It could have engaged in a meaningful aid delivery program but it made aid subservient to foreign policy squabbles, and to military strategy in Af-Pak which fueled the public perception that US development assistance is a means to further its regional agenda,” says Raza Rumi, a leading columnist and a development consultant. “It is simply tragic that enormous amount of such aid gets squandered either through bad planning or making it hostage to political imperative.”
http://www.csmonitor.com/World/Asia-South-Central/2012/0425/Aid-to-Pakistan-2.6-billion-spent-little-ability-to-show-it
Brussels on Monday announced a further 20 million euros in aid to victims of Pakistan's 2011 monsoon floods, as well as people displaced by conflict, bringing funding this year to 55 million euros.
While the world had responded with generosity to the country's devastating 2010 and 2011 floods, "we must not forget that millions of people are still struggling to recover, especially in the province of Sindh," said the EU's Commissioner for Humanitarian Aid, Kristalina Georgieva.
Floods in Pakistan in the summer of 2011 affected 5.8 million people, with floodwaters killing livestock, destroying crops, homes and infrastructure as the nation struggled to recover from record floods the previous year. In Sindh province, three out of four households have insufficient food.
Meanwhile, conflicts linked to army raids against insurgents have left more than 300,000 people displaced in Khyber, Pakhtunkhwa province.
In 2011, the EU executive gave 94.9 million euros to Pakistan of emergency aid due to flooding, conflict and the needs of Afghan refugees in the country.
The European Union's total assistance to Pakistan -- including aid from the Commission and member states -- amounts to 2,458 billion euros for 2009-2013, or around a third of total annual development assistance to the country.
In a ground-breaking move in February, the World Trade Organization approved a waiver allowing 75 Pakistani products duty free access to European markets for two years to help textile exports after devastating floods in 2010.
The EU is Pakistan's largest trading partner, receiving almost 30 percent of its exports -- worth almost 3 billion euros ($3.9 billion).
Pakistan's trade with the EU consists mainly of textiles, which account for more than 70 percent of its exports to European countries.
http://www.google.com/hostednews/afp/article/ALeqM5h7Y5nTEKB19m9VBwtpZN46pLG5RQ?docId=CNG.3c37098156ebc05a18aee237c9cea7e0.01
The United States Agency for International Development will construct 200-kilometre roads in South and North Waziristan agencies in addition to undertaking longer term interventions in Khyber Pakhtunkhwa’s education and health sectors.
Andrew Sisson, the agency’s mission director in Pakistan, told Dawn that the USAID had already constructed over 200km roads in South Waziristan and it was planning construction of additional 200km roads primarily in North Waziristan Agency and some in South Waziristan Agency.
“It (road construction) is an excellent investment in opening the Federally Administered Tribal Areas in terms of economy and business to the rest of the country,” he said.
The US agency, he said, had provided $201 million for roads linking North Waziristan and South Waziristan to the rest of Pakistan. He said that USAID was also planning to provide more resources for roads directly to the Fata Civil Secretariat later this year.
Similarly, the USAID signed an agreement in October last year for disbursing funds for the construction of irrigation network downstream Gomal Zam dam that, he said, would irrigate 120,000 cultivable acres, benefiting thousands of farm families. Some $9 million for construction irrigation network, he said, had been released to the Water and Power Development Authority in December last.
Mr Sisson said that investment in this part of Pakistan (KP and Fata), especially for education, health, infrastructure, community level activities, irrigation and business development, remained ‘a very high priority’ of the US government.
“We are budgeting for the future..we are hopeful that the funds would come after approval by our Congress,” said Mr Sisson, adding that the Obama administration was committed to maintaining high level of aid to Pakistan even during this rocky period (of relationship).
“Despite our relations, our aid levels are high,” he said, adding that his organisation would continue building schools in Fata and KP, which was a very important part of the bilateral relationship.
He said that their assistance to Pakistan was in the interest of the people of both the countries and that it had been achieving great results. The USAID-funded projects, according to him, put 400MW to the grid last year, some 500MW would be added to the system next year, and one million children went to schools constructed by the agency over the past few years.
“We want Pakistan to succeed, to be more stable and have a more prosperous economy,” he said, adding that their interest in Pakistan would continue no matter who was in power in the US.
He said that apart from funding five major interventions in the energy sector the US was looking into making other investments to help Pakistan overcome its energy sector. “We are in discussion with the government for carrying out feasibility studies for Diamer-Bhasha dam,” said the USAID director.
He said that the USAID was also assisting the Fata secretariat and the KP to help build their capabilities. Justifying delays in the execution of infrastructure projects in the KP and Fata, Mr Sisson said “Even in the United States complicated infrastructure projects don’t go on schedule and that’s very true in Pakistan (as well).”
He said that some of the infrastructure projects were being carried out in tough regions where security formed a major impediment to the on time completion of projects.
About corruption-free use of USAID funds, he said that except for two cases in which the USAID Office of Inspector General had collaborated with National Accountability Bureau, a majority of the projects had seen apt and honest use of funds.
http://dawn.com/2012/01/26/focus-on-rebuilding-roads-in-waziristan-2/
As a result of the agreement on reopening Nato’s ground routes, it has been reported that Pakistan will receive around $1.2bn of unpaid arrears pertaining to the Coalition Support Funds (CSF). This money is reimbursement for costs already incurred by Pakistan in military operations in the northwest in support of Nato/Isaf’s Afghanistan campaign, and not assistance.
Nonetheless, it represents a not insignificant potential reduction of the fiscal deficit (by 0.5 per cent of GDP) and the need to borrow by government. More importantly, it has the potential to calm the financial markets that are nervous about depleting forex reserves in the context of large debt repayments due this fiscal year.
However, beyond this the CSF inflow will have a limited effect. To put this money into context, $1.2bn is roughly the equivalent of 0.5 per cent of GDP, 2.5 per cent of Pakistan’s annual foreign exchange earnings and 2.7 per cent of projected imports this year. More importantly, for the benefit of friends who celebrate the arrival of each $1bn of foreign taxpayer money as if it was ‘manna from heaven’, this inflow (or the elusive Kerry-Lugar money for that matter) is the equivalent of a miniscule 2.9 per cent of potential tax revenue that Pakistan can collect — but chooses not to.
In terms of overall US assistance, Pakistan has been a recipient of substantial inflows from the US in fits and starts over the years, with the bulk being in the realm of military aid. In terms of US economic assistance to Pakistan, the defining features since inception appear to have been:
— It has not been enduring, but spasmodic;
— The US has invariably followed a short-sighted, ‘transactional’ approach in its relationship with Pakistan, and continues to do so despite a strong case having been made at the start of the Pakistan-US strategic dialogue for a ‘transformational’ relationship;
— Assistance has peaked in non-democratic set-ups;
— US aid has generally been pro-cyclical, reinforcing upturns in the economy, rather than supporting Pakistan’s economy in a downturn (as currently). As a result, the impact has not been ‘visible’.
— US programmes are mired in bureaucracy, with large ‘lags’ and high transactional costs (to be fair, the latter is pretty much the case with all aid programmes across the board);
— Spending has, until now, either ignored areas deemed high-impact by the Pakistan side (agriculture, water, market access, for example) or, has been spread too thin over a large number of projects. As a result, the impact has been diffused, denying the US visibility for the taxpayer dollars it has spent in Pakistan.
The most potent form of economic assistance the US can provide to Pakistan, one with the greatest externality, is allowing preferential market access to the country’s textile and clothing (T&C) exports. If focused on the right products, such as garments (labour-intensive and value-added), the US intervention has the potential to create hundreds of thousands of additional direct and indirect jobs, carving a powerful urban, educated (and possibly currently unemployed) constituency comprising the country’s youth.
This will also be the ‘lowest cost’ in terms of US taxpayer dollars, since the additional exports from Pakistan will most likely displace existing imports into the US from some other producer.
Strangely, this is proving to be the second hardest legislation to bring to Congress after domestic gun control. Pursued actively by Pakistan since 2004, this request has routinely met the same response: Congress will not sacrifice the interest of its states with a large textiles constituency. Since then, however, Congress has allowed duty-free access for textiles and clothing to large regional blocs in Central America, the Andean states, and a number of African countries....
http://dawn.com/2012/07/13/pakistan-the-us/
MANSEHRA - Over the next two years, USAID will provide $15 million for the construction and rehabilitation of seven Faculties of Education buildings across Pakistan.
More than 2,000 students and 100 faculty members will use these buildings every year, including the recipients of the new ADE and B.Ed. degrees.
The United States reinforced its long-term commitment to advancing education in Pakistan through the groundbreaking for a new, $1.5 million Faculty of Education building at Hazara University in Mansehra.
“This new faculty of education building will go a long way toward helping Pakistan improve the quality of education in Khyber Pakhtunkhwa”, this was stated by the Vice Chancellor of Hazara University, Prof. Dr. Syed Skhawat Shah while he led the groundbreaking ceremony on Monday in Hazara University.
While addressing the gathering State Minister for Technical and Professional Education Shahjhan Yousaf said that there is need to concentrate more on education. We have educated and results oriented teachers but don’t have strong education policy. “there is a need to work over it and to introduce good policy to facilitate new generation in their further studies,” he added.
Vice Chancellor Prof. Dr. Syed Skhawat Shah awarded degrees to 49 students from the Regional Institute of Teacher Education in Abbottabad who have been awarded Associate Degrees in Education after successfully completing two years of studies. “These two-year degrees were introduced to Pakistan by the Higher Education Commission (HEC) with USAID support, along with a four-year Bachelor’s Degree in Education. USAID helped design and introduce these degrees in order to increase the quality of teacher preparation at universities throughout Pakistan,” he added.
The US Agency for International Development (USAID) Mission Director Jock Conly congratulated the graduates through a special message saying, “The United States government is deeply committed to helping Pakistan develop strong educational institutions. Together with the Government of Pakistan, the United States is working to improve the quality of education throughout the country.”
Chief of Party for the USAID Pakistan Reconstruction Program (PRP) Tarek Selim said that the faculty of education building being constructed at the Hazara University will have 16000 square feet covered area, having six class rooms, multi-purpose hall for hundred people, learning resource center, two laboratories, a seminar room and ten rooms for faculty.
He said that building will also have twenty postgraduate rooms besides a dean office, administration room and faculty lounge. “This building, to be completed by end of the coming year, will accommodate three hundred students and has been designed to resist earthquakes besides being environmentally sustainable and energy efficient.” Tarek told the journalists.
He said that teachers will also receive continuing education in the new, U.S.-funded facilities that will help train teachers working in some of the nearly 500 schools that the U.S. has helped build in Pakistan since October 2009.
http://www.pakistantoday.com.pk/2012/11/12/news/national/usaid-to-provide-15m-for-education-sector-across-pakistan/
ISLAMABAD: Around 71 percent of the total amount worth $3.172 billion disbursed by the United States under the Kerry-Lugar-Berman (KLB) Act was off-budget assistance for Pakistan in the last three years, official sources in the Finance Division confirmed to The News. Both Pakistan and the US confirmed that a major chunk of money continued to pour outside the government of Pakistan’s channel.
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“The total amount disbursed to Pakistan from October 2009 to September 30, 2012, since the adoption of the KLB legislation, is around $3.2 billion. If you’d like the exact figure, it’s $3.172 billion,” said spokesperson of the US Embassy in an email message.
When contacted, Federal Secretary Economic Affairs Division Javed Iqbal confirmed that so far the United States has disbursed $3.197 billion for development in the last three years. “There are ongoing projects with an estimated cost of $754 million at the moment,” he added. Official data suggests that the on-budget assistance from the US stood around $350 to $375 million per annum – almost the same pattern followed by Washington in the aftermath of 9/11 when Pakistan decided to side by the country in the war against terrorism.
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..renowned economist Dr Ashfaque H Khan said that Pakistan received $14.950 billion from US since 2001 till August 1, 2012, of which $9.8 billion was received as Coalition Support Fund (CSF) and the remaining $4.8 billion for economic assistance. On average, cash inflows stood at $437 million per annum in the last 12 years. Against the total losses of $68 billion incurred by Pakistan’s economy, the United States reimbursed just 14 percent or $9.8 billion. However, US spokesperson stated that US assistance to Pakistan has delivered real results for various sectors of the economy.
“US has added over 400 megawatts to the power grid – enough to supply electricity to nearly 900,000 households, or roughly six million people,” she said. In view of the energy sector, key projects funded by the US include power plant renovation at Tarbela dam, modernising generators at Mangla dam, upgrading Guddu, Jamshoro and Muzaffargarh power plants, and building Satpara and Gomal Zam dams.
US funds certain projects that will provide electricity to an estimated two million households in 2013. For the education sector, she added, they were building and renovating 800 schools and providing scholarships to 12,000 students to attend universities in Pakistan. Washington is also helping Pakistan in creating jobs and increasing incomes with programmes that boost agricultural output, build roads, and help entrepreneurs grow their businesses. Furthermore, US has funded the construction and rebuilding of over 650 km of roads in Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA), while the Peshawar Torkham highway’s reconstruction is underway.
In a statement, US Ambassador Richard Olson said that he was struck by the economic potential Pakistan possessed and the industriousness and vitality of its people. “Washington helped train 14,000 Pakistani farmers to better protect their livestock from diseases,” he said.
“It is also helping Pakistan in building new irrigation canals that will expand the arable land by more than 200,000 acres.”
He further added that US will build more than 1,000 km roads in FATA, KP and Balochistan. “We are also assisting Pakistan in business entrepreneurship,” he maintained. “To promote trade and investment, US is Pakistan’s largest export market. Two way trade between both the countries stood at $6 billion in 2011.”
http://www.thenews.com.pk/Todays-News-3-146902-Pakistan-received-71pc-of-KLB-assistance-off-budget-officials
Water system rehabilitation in Peshawar: USAID-funded Municipal Services Programme began cleaning drainage ditches and rehabilitating tubewell pump houses in Town-1 Peshawar. This work will greatly reduce contamination of drinking water, a major cause of water-borne diseases.
Child Protection Programme: USAID’s Child Protection Programme, which ended in December 2012 after two years supported 128,000 women and children affected by the 2009 conflict between armed forces and extremist groups in Malakand and adjacent areas of FATA. The project provided Pakistanis with health care, rehabilitation services, counseling, nutrition, vaccination and support for enrollment in schools. The project also helped National Database Registration Authority (NADRA) register more than 123,000 births.
Enhances skills of FATA officials: USAID trained FATA officials from various government departments on office management, communication, media relations and public financial management. Twenty officials became master trainers on Zakat and Ushr procedures to effectively govern alms giving. These specialists will train over 500 chairmen of local Zakat committees to improve the efficiency and transparency of Zakat and Ushr distribution to FATA’s poorest citizens.
Education: USAID’s Deputy Director for Punjab Jeffrey Bakken joined FCC officials to inaugurate a USAID-funded Resource Centre at the FCC’s Public Policy and Governance Centre. The Resource Centre will support and promote empirical research in Pakistan. It houses literature, data and training facilities for students, researchers and policymakers to be used for informed decision making.
USAID Programmes to Punjab civil society: A USAID-organised workshop on education in Lahore informed Punjab’s civil society about USAID education grants, common challenges and collaboration opportunities. Approximately 60 representatives from academia, civil society, government and think tanks participated.....
http://www.dailytimes.com.pk/default.asp?page=2013\02\06\story_6-2-2013_pg5_6
KARACHI, Pakistan — The ads are a staple of Pakistani television: footage of water gushing through dams, farmers standing in green fields, a girl using a computer. At the end, the red, white and blue logo of an aid organization flashes on the screen with its slogan, “from the American people.”
The organization behind the Urdu-language ads, the United States Agency for International Development, or U.S.A.I.D., has been operating in Pakistan for more than a decade, disbursing billions of dollars. But critics say the aid has had minimal impact on the ground.
Critics accuse the agency of taking on projects with little consideration for local priorities and being over-reliant on American contractors with little development experience. At the same time, they say, much of the aid money goes toward administrative costs, and large amounts have been siphoned off by Pakistani subcontractors who fail to complete work or return raw material.
A recent lawsuit against the agency highlighted the challenges and image problem it faces in a country where American aid is often viewed with suspicion, and countries like China have been making inroads with their own programs. The case, filed in Peshawar, in northern Pakistan, by three lawyers seeking the payment of legal fees from the aid agency, accused it of abandoning the recovery of United States taxpayer money from a former contractor.
Documents and correspondence filed by the lawyers lay bare the money and equipment that went to waste in a project in Pakistan’s insurgency-hit tribal areas. One subcontractor finished only two of 12 irrigation channels he was supposed to build. Another did not return more than $27,000 worth of construction material to U.S.A.I.D., and demanded nearly $30,000 in rental charges for equipment, though there was no proof of any machinery on site.
Nadeem UL Haque, the former deputy chairman of the Planning Commission, a government agency that oversees development projects, said U.S.A.I.D. had become an “aid-outsourcing agency” and that funds largely flowed back to American contractors instead of to communities.
Despite the widespread criticism about its effectiveness, some experts also acknowledge that the agency has been the victim of anti-Americanism in Pakistan and has failed to promote some of its successes.
“I would not say it’s been a failure — they’ve invested money in energy and education — but because of anti-Americanism and their own inability to effectively communicate, this hasn’t been seen,” said Raza Rumi, a fellow at the National Endowment for Democracy in Washington, who has worked in Pakistan’s development sector. “They’ve spent so much money in F.A.T.A.,” he added, referring to the Federally Administered Tribal Areas of northwest Pakistan. “The reality is no one actually knows the result.”
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The development agency’s project at the center of the lawsuit in Peshawar was a $300 million initiative to create jobs and build roads in insurgency-torn districts in the tribal areas. One of the contractors on the project, Academy for Educational Development, a now-defunct American nonprofit organization, was accused in 2009 of submitting false claims and failing to inform U.S.A.I.D. that it was aware that its subcontractors were overcharging U.S.A.I.D., potentially by millions of dollars.
U.S.A.I.D. suspended Academy for Educational Development from United States government contracts and reached a settlement that involved the repayment of more than $5 million.
Academy for Educational Development was also awarded at least $300,000 after a drawn-out arbitration process with its Pakistani subcontractors — money that should have been returned to U.S.A.I.D. The Pakistani lawyers who filed the suit said that the aid agency had made no attempt to recover the money.
Deaton, an economist at Princeton University who studied poverty in India and South Africa and spent decades working at the World Bank, won his prize for studying how the poor decide to save or spend money. But his ideas about foreign aid are particularly provocative. Deaton argues that, by trying to help poor people in developing countries, the rich world may actually be corrupting those nations' governments and slowing their growth. According to Deaton, and the economists who agree with him, much of the $135 billion that the world’s most developed countries spent on official aid in 2014 may not have ended up helping the poor."
The idea of wealthier countries giving away aid blossomed in the late 1960s, as the first humanitarian crises reached mass audiences on television. Americans watched through their TV sets as children starved to death in Biafra, an oil-rich area that had seceded from Nigeria and was now being blockaded by the Nigerian government, as Philip Gourevitch recalled in a 2010 story in the New Yorker. Protesters called on the Nixon administration for action so loudly that they ended up galvanizing the largest nonmilitary airlift the world had ever seen. Only a quarter-century after Auschwitz, humanitarian aid seemed to offer the world a new hope for fighting evil without fighting a war.
There was a strong economic and political argument for helping poor countries, too. In the mid-20th century, economists widely believed that the key to triggering growth -- whether in an already well-off country or one hoping to get richer -- was pumping money into a country’s factories, roads and other infrastructure. So in the hopes of spreading the Western model of democracy and market-based economies, the United States and Western European powers encouraged foreign aid to smaller and poorer countries that could fall under the influence of the Soviet Union and China.
The level of foreign aid distributed around the world soared from the 1960s, peaking at the end of the Cold War, then dipping before rising again. Live Aid music concerts raised public awareness about challenges like starvation in Africa, while the United States launched major, multibillion-dollar aid initiatives. And the World Bank and advocates of aid aggressively seized on research that claimed that foreign aid led to economic development.
Deaton wasn’t the first economist to challenge these assumptions, but over the past two decades his arguments began to receive a great deal of attention. And he made them with perhaps a better understanding of the data than anyone had before. Deaton’s skepticism about the benefits of foreign aid grew out of his research, which involved looking in detail at households in the developing world, where he could see the effects of foreign aid intervention.
“I think his understanding of how the world worked at the micro level made him extremely suspicious of these get-rich-quick schemes that some people peddled at the development level,” says Daron Acemoglu, an economist at MIT.
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Instead, many of the positive things that are happening in Africa – the huge adoption in cell phones over the past decade, for example – are totally homegrown. He points out that, while the world has made huge strides in reducing poverty in recent decades, almost none of this has been due to aid. Most has been due to development in countries like China, which have received very little aid as a proportion of gross domestic product and have "had to work it out for themselves."
http://www.washingtonpost.com/news/wonkblog/wp/2015/10/13/why-trying-to-help-poor-countries-might-actually-hurt-them/
The United States International Development Agency (USAID) has planned to spend about 450 million US dollars in next American financial year on various projects from education to health and energy to agriculture beside others in Pakistan.
This was stated by Mission Director USAID to Pakistan John Groarke while talking to APP on Sunday about projects being executed and planned to be executed by the USAID in various parts of the country
He said that the USAID had executed hundreds of projects focusing five major areas – health, education, agriculture, economic growth and energy besides other areas especially women empowerment programme.
Responding to a question about agriculture dairy potential, the Mission Director said that Pakistan has a huge dairy farming potential to earn billions of dollars by exporting agricultural and dairy products.
Giving examples of agriculture and dairy products, John Groarke said that Pakistan has potential to export a large quantity of mangoes and oranges as these two Pakistani fruits were known worldwide.
“Pakistan has capacity to earn billions of dollars by capturing the world market through exporting dairy products and vegetables,” the Mission Director said.
Speaking about the importance of Pakistan for USA, the Mission Director said, “Pakistan is an important country for USA and a stable, secure and democratic Pakistan with a vibrant economy is in the national interest of the United States and Pakistan.”
According to documents made available to APP about projects of USAID, the United States has demonstrated a continued commitment to Pakistan through Kerry Lugar Berman Act. Since 2009 and the US government has disbursed over 4 billion dollars in civilian assistance in partnership with the Government of Pakistan (GOP), civil society and private sector institutions.
The USAID is executing hundreds of projects in various parts of the country and AJK having its offices in Islamabad, Lahore, Peshawar and AJK.
https://www.thenews.com.pk/latest/246635-usaid-helping-boost-pakistans-chili-production
The U.S.-Pakistan Partnership for Agricultural Market Development (AMD), along with the Trade Development Authority of Pakistan (TDAP) and Government of Sindh held a conference in Karachi that brought together public-private stakeholders to discuss issues and challenges pertaining to Pakistan’s chili sector.
USAID Deputy Mission Director Oghale Oddo, Federal Secretary Ministry of National Food Security & Research, Fazal Abbas Mekan, and Secretary Agriculture, Government of Sindh, Sajid Jamal Abro, participated.
“We are proud of the role USAID has played for many years to support the development of Pakistan’s agriculture sector. The U.S. government is hopeful that these efforts will help Pakistan emerge as a major player in the international market,” said Deputy Mission Director Oghale Oddo. “We are confident that we can help Pakistani chili exports become more competitive in the international arena by introducing innovative technology and providing technical assistance.”
Through discussions and interaction during the conference, stakeholders reviewed and endorsed AMD’s efforts and shared solutions to problems faced by the industry.
USAID launched the U.S.-Pakistan Partnership for Agricultural Market Development in February 2015 to improve the ability of Pakistan's commercial agriculture and livestock sectors to compete in international and national markets in the four target product lines; meat, high value and off season vegetables, mangoes, and citrus.
This partnership acts as a catalyst for development and investment in the target product lines, helps improve the quality and increase the quantity of exportable agricultural produce, and promotes cooperation among farmers, processers, exporters, and buyers of Pakistani agricultural products in international (non-U.S.) markets thus resulting in increased incomes and generating employment opportunities for Pakistani people working in the targeted product line.
https://pk.usembassy.gov/u-s-pakistan-effort-to-elevate-the-higher-education-sector/
The summit was organized by the U.S.-funded Higher Education System Strengthening Activity (HESSA) and focuses on the role of higher education in the 21st century, highlighting the fluid nature of learning and employment, and explores how universities can reposition themselves in this ever-changing landscape.
Ambassador Donald Blome celebrated the 75 years of partnership between the U.S. and Pakistan and said, “In a country where more than 60 percent of the population is below the age of 30, we must continue to help youth achieve their full potential.”
Minister Iqbal remarked that the Government of Pakistan is open to improving the higher education system and is looking into various options to capitalize on the abundant youth potential in the country. He appreciated Pakistan’s 75-year partnership with the U.S. government and celebrated the support provided by the U.S. government to academia through specialized investment in higher education. He further added that academic institutions and the public and private sectors should join hands to accelerate this development. Mr. Iqbal tasked Pakistani higher education officials to improve higher education.
Dr. Mukhtar Ahmed, Chairman of the Higher Education Commission of Pakistan (HEC), said that HEC will continue working with the U.S. government to build a cadre of experts to improve graduate employability.
Senator Keith Grover, Utah State Senator from the United States noted, “it is the ultimate goal of an institute to provide necessary skills for youth so they can positively contribute to the workforce both locally and globally.”
HESSA is supported by the United States through USAID, and is implemented in collaboration with 16 Pakistani public universities and other stakeholders, with a focus on strengthening universities’ capacity to deliver market-driven education, research, and graduate employability.
https://www.dawn.com/news/1726537
Washington has been investing generously on Pakistani students to provide them with the best education opportunities and every year more than 800 students travel to the United States (US).
This was highlighted by deputy assistant secretary Bureau of Educational and Culture Affairs of US Department of States Ethan Rosenzweig, who is currently in Pakistan on a brief visit.
Exclusively speaking to Dawn here on Thursday, the visiting US education official said there were a lot of opportunities for Pakistani students to study in his country, through scholarships and a number of exchange programmes.
“I arrived yesterday (Wednesday) and what struck me immediately was that everyone is so kind, funny and welcoming. The hospitality of the Pakistani community is something which I will remember for a long time,” said Mr Rosenzweig while sharing his experience of visiting Pakistan.
Talking about the Fulbright scholarship progamme, he said this programme was the premier international exchange programme for students, researchers and scholars. He said Pakistan had the largest US government-funded Fulbright programme in the world.
Mr Rosenzweig said the US-Pakistan relationship and Fulbright programme were beneficial to fight global challenges together such as climate change, global health and strengthening of freedom of expression and democratic values.
“Under this programme, the US government has been ensuring that students have opportunities in the US. I am so excited because our Fulbright programme is larger than any country. It is larger than Germany, larger than the United Kingdom and larger than Australia,” he said and added that he was here to celebrate the success of this programme and the important diplomatic relationship between both countries.
“I believe relationships between the two countries will be more stronger regardless of impediments occurring in Pakistan,” he added, without elaborating.
“We have over 800 Pakistanis coming to the US every year through exchange programmes. Whether its young leaders, researchers or community officials coming for a short stay, they travel to the US every year, because both the countries have been enjoying cordial bilateral and diplomatic relations.
“The US has a large alumni network of 37,000 members in Pakistan and alumni groups have been playing an important role in Pakistan by applying the experience they gained from US,” he said.
Mr Rosenzweig said that the Humphrey programme is also one of the most important programmes, under which the US invites Pakistani leaders, government officials and others to visit the country and work on pressing issues, such as climate change and global health.
He said that he was here to attend an important dialogue [Humphrey Conference], which is being attended by alumni under the theme of ‘Combatting Climate Change’, adding that he was glad to see current leaders engaged in solving challenges.
When asked about the inactive status of the six-week-long partnership programme for Pakistani journalists for the last few years, he said that he will check it out, saying, “There are so many programmes that bring professionals to the US, whether it is a short visit to travel around to meet government leaders, semester visits for students or longer visits for researchers. I want to celebrate what we have.”
To another question, he said that they also have a sports diplomacy programme and programmes for differently-abled students. “When it comes to ensuring that differently-abled students have opportunities, we are leaders in this field and are also working directly with Pakistan with specific grants to help teach differently-abled students. All students deserve great education,” he said.
Responding to a question about the recent floods in Pakistan which also damaged educational infrastructure, he said: “The US is deeply committed towards ensuring that Pakistan has the resources to recover from the flood.”