The U.S government has finally unveiled the details of its much-debated Kerry-Lugar Bill, $7.5 billion aid package. In this long-awaited, Pakistan Assistance Strategy Report (PASR), the American State Department has, contrary to public perception here at home, correctly identified those non-military sectors which are in dire need of funds and largely deprived of development.
Agriculture sector has qualified to receive greater inflows, $2 billion, to resolve impending water crisis and improve farming infrastructure, which is causing huge post harvest losses. Investment in agriculture is justified since it is a source of livelihood of almost 45 percent of the total employed labor force in the country and also because export oriented agri-industries such as textile depend on it.
The report reveals that health and education sector will receive investments of $1.5 billion, because in both these sectors, Pakistan is far behind other developing economies. Moreover, other sectors for grant assistance include, energy sector, national and local governance and security and legal institutions.
The most important part of the report is that Pakistani government has thus far remained successful in meeting the U.S government halfway down the road. U.S officials have agreed to channel greater portion of the funds through Pakistani NGOs, contractors, governmental and non-governmental organizations and reduce the amount of money it spends on foreign contractors.
This is despite the fact that channeling of funds through locals had raised concerns amongst U.S firms and contractors. Even the USAID had previously warned the Director of Policy Planning at U.S State Department that routing of funds through Pakistani ministries and organization would increase the risk of corruption. In addition, a report by the U.S Office of Inspector General also highlighted the risk associated with high reliance on indigenous organization and management.
But these concerns were downplayed after Pakistani government claimed that transferring money through foreign contractors and NGOs results in high costs, such as consultancy fees and significant amount of funds are wasted due to ineffective route.
PASR outlines that significant measures will be taken to prevent the money from being lost to fraud and corruption - but then, that would come at the cost of increased presence of U.S government staff in Pakistan.
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Summary of Projected U.S. Assistance to Pakistan FY 2010-1
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Activities $ (bn)
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Investment in High Impact, High Visibility Programme 3.5
Agriculture 2
Energy 1
Other 0.5
Government Capacity Improvement 2
National & local governance 1
Security & legal institutions 1
Focused Humanitarian and Social Services 2
Immediate post-crisis & humanitarian assistance 0.5
Education and health services 1.5
Total 7.5
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Source: Pakistan Assistance Strategy Report
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