Reality check for “insignificant” US aid

Jul 30th, 2011 | By | Category: Pakistan Today

While the American Congress debates whether to cut aid to Pakistan, the media seems to be taking it upon itself to make the case that the US doe snot need to be sending any more money to Pakistan. No, I am not referring to FOX News, I’m talking about Pakistani media.

Humayun GauharA prime example can be found in Humayun Gauhar’s article of Pakistan Today last week that inaccurately reflects the amount of aid Pakistan has received from US since 9/11.

Hamayun Gauhar in his piece says that “Since 9/11, Pakistan has received only about $448 million net in economic assistance”. But a February 2010 article in The News (Jang Group) reports that “Islamabad has received $6 billion in civilian aid after the September 11 attack in New York”. Which is correct?

We decided to do some research of our own to fact check Humayun Ghauar and The News to find out who is telling the truth, and who is stretching it thin.

Gauhar terms US Secretary of State Hillary Clinton’s 27 May statement that “We provide more support than Saudi Arabia, China, and everybody else combined…” as ‘bull’. He later invites readers to compare American aid “to China’s spending of $30 billion in infrastructure projects in Pakistan”.

What Gauhar doesn’t tell is where this $30 billion from China is being spent. That’s because, there is no $30 billion in Chinese aid. What Gauhar is likely referring to is the $30 billion in trade agreements between Pakistan and China signed last year. Not only is this not aid, it doesn’t even exist yet.

The two sides inked 35 agreements; including 13 at the government level and 22 between their private sectors that are expected to bring around $25 to $30 billion of investment over the next five years.

This is not to look down on trade agreements which are actually quite important. But Gauhar is comparing apples to oranges by comparing the amount of aid US has given Pakistan since the past ten years and a promise of increased trade with China to happen over the next five years.

Let us, then, compare some apples to apples, shall we?

According to statistics from the State Bank of Pakistan and Pakistan Development Assistance Database compiled by Center for Global Development, for years 2004-2009 the US on average gave Pakistan $268 million in grant assistance. China gave only $9 million on average during the same years.

Loans and Grants charts from Center for Global Development

Additional research from Institute of Policy Studies Islamabad shows that between the years 2001 and 2006, US gave Pakistan $2,939.3 million in Economic Aid.


Economic Aid, US$(2006) M

Military Aid, US$(2006) M

Per Capita Aid, US$(2006)





























* Average per capita aid per year.Sources: U.S. Overseas Loans and Grants [Greenbook] and US Assistance per Capita by Year.

According to Center for Global Development and Institute of Policy Studies Islamabad, the US has given Pakistan billions in civilian aid since 2001. In his article, Mr Gauhar says that “Mr Anjum Rizvi of Vibe TV helped me put these facts and figures together to expose the myth of US ‘aid’ to Pakistan”. It is unknown where Mr Gauhar and Mr Rizvi found their facts and figures, but perhaps they could share them with the Pakistan Development Bank, Pakistan Development Assistance Database, and Institute of Policy Studies Islamabad since they obviously have their figures wrong.

Mr Gauhar also states in his piece that “50 percent of the aid has to be spent on US ‘contractors’ under US law, so this goes back to America” and that “25 percent is wasted on administrative expenses. The rest is given to the US Ambassador’s favorite NGO to be deposited in US accounts. Almost none makes it to Pakistanis”.

Actually, what Mr Gauhar refers to is a change in US aid policy under the Obama administration that requires that at least 50 percent of aid money be spent through the government of Pakistan as the US moves development projects away from US contractors over to domestic groups in Pakistan.

The administration said it would funnel at least 50 percent of the funds through the Pakistani government, rather than using American contractors. The aim was to show America’s commitment to the civilian government and help strengthen its ability to deliver to its citizens, American officials said. Moreover, the large overheads of American contracting companies would be eliminated, they said.

As far as we have been able to determine from extensive research, Mr Gauhar’s claim that “The rest is given to the US Ambassador’s favorite NGO to be deposited in US accounts” appears to have been been invented from thin air by Mr. Gauhar for sensationalizing the issue at hand.

Also as the New York Times piece notes, much of the promised funds have not been released due to American concerns about corruption.

To keep a close watch on corruption, U.S.A.I.D. expanded its inspector general’s office in Pakistan to nine auditors in 2010, from two in 2009. Already, the office has opened 12 cases so far this year — involving bribery, kickbacks and collusion on bidding — compared with 13 cases in 2010, the office said.

To this, Mr Gauhar demands “Prove it. Or shut up”. According to him, “The problem is more likely with American bureaucracy, not Pakistani “mistakes”. And so just as we have learned from Mr Gauhar that the US has given almost no aid to Pakistan, so we have learned that there is no corruption in Pakistan also. Otherwise, we might be thankful that the Americans are carefully watching where the aid money goes so that it does not fill the pockets of corrupt politicians and bureaucrats, which of course do not exist.

However it should be stated that at least one “mistake” has been found in Mr Gauhar’s maths. In the opening paragraph of his column, Mr Gauhar states that “Since 9/11, Pakistan has received only about $448 million net in economic assistance”. But later in his piece he states that “Pakistan’s ministry of finance was prompted to seek US clarifications on how $488.537 million being provided under the Kerry-Lugar-Burmen Law (KLL) were being spent”.

If US has only given $448 million in economic assistance since 10 years, how is it that $488.537 million has been spent since Kerry-Lugar-Burman which was passed only 2 years ago?

But what is a few hundreds of millions or even billions of dollars? According to Humayun Gauhar, whatever the actual number, it is “insignificant”. Let me tell you I was surprised when I first read this, that so much money could be termed “insignificant”. I immediately began researching and found that US economic aid helped Hyder Shah Fruit Farm in Sindh deliver “150,000 kilograms of processed mangos to the Middle East and earned more than four million rupees in profit”. I also found on the USAID website that US is funding additional power infrastructure and flood control systems in Pakistan.

An example of USAID’s impact can be seen at Pakistan’s power plants, and in the hundreds of thousands of homes and businesses that that will be powered thanks to infrastructure upgrades. USAID’s current energy program is designed to add 540 MW to Pakistan’s power grid by 2012.

USAID is also funding the completion of dams at Gomal Zam, Satpara, and Tarbela. USAID helped build the Tarbela Dam in the 1970s and has just completed the first phase of a turbine rejuvenation effort. When completed, Gomal Zam, located in South Waziristan, will generate electricity for 25,000 households and irrigate 191,000 acres, providing a livelihood for 30,000 households. It will also improve flood control systems, stemming serious damage that could be inflicted by future floods.

But Humayun Gauhar says this is “insignificant” and it is “the US that continues to cause problems for Pakistan”. And who are we to argue with such an esteemed journalist?

Ironically, it is US Secretary of State Hillary Clinton that is most ardently defending the US aid to Pakistan, while commentators like Humayun Gauhar tell the Americans to “shut up” about their “insignificant” aid. We hope that Mr Humayun Ghauar will be willing to take a personal tour of Hyder Shah Fruit Farm and also South Waziristan to explain how the improvements to their businesses and homes is is “insignificant”. I am certain it will be an enlightening discussion.

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