Factbox: U.S. has allocated $20 billion for Pakistan

Thu Apr 21, 2011 3:59pm EDT

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(Reuters) - Pakistan's finance minister said this week it was "largely a myth" that his country has received tens of billions of dollars in aid from the United States.

But since 2001, Congress has approved about $20 billion for Pakistan in direct U.S. aid and military reimbursements, the Congressional Research Service (CRS) says.

This makes Pakistan one of the largest recipients of U.S. assistance, although much of it is labeled as reimbursements and not all has been delivered yet.

Here are some facts about U.S. aid to Pakistan:

COALITION SUPPORT FUNDS

About half of the U.S. money has come from "Coalition Support Funds" established after the attacks of September 11, 2001 to reimburse Pakistan and other countries for help in fighting extremists. These funds are not officially designated as U.S. foreign aid.

Lawmakers have long complained there is little accountability for this money and, in 2008, U.S. auditors said there was not always enough documentation to verify the costs being reimbursed were valid. Last month, General James Mattis, commander of the U.S. Central Command, indicated the Pentagon was paying closer attention.

Mattis told lawmakers he had some "very keenly attentive field grade officers in Islamabad" who ensured disbursements of U.S. funds to Pakistan are "tracked very, very carefully."

In the government spending legislation that Congress passed last week for fiscal 2011, $1.6 billion was allocated for these military reimbursements. Pakistan normally gets about 80 percent of such appropriations.

COUNTER-INSURGENCY FUNDS

In 2009, the Obama administration asked Congress to approve a specific new fund to help Pakistan's military develop counter-insurgency capabilities to fight Islamist militants within its borders. The money is to pay for things like helicopters and equipment and for counterinsurgency training for Pakistan's troops.

In 2009 and 2010, U.S. lawmakers approved $1.1 billion for this fund. Last week, they added another $800 million.

KERRY-LUGAR-BERMAN FUNDS

Leading lawmakers said in 2009 they wanted to shift the focus to more civilian aid for Pakistan, improving things like health and education to promote stability. They passed the Kerry-Lugar-Berman bill, named after its sponsors -- Senators John Kerry and Richard Lugar, and Representative Howard Berman. It authorized $7.5 billion in civilian aid over five years.

But the money must still be appropriated by Congress each year or Pakistan won't get it. Last year, Congress approved $1.5 billion. A recent report by U.S. government auditors indicated the aid was slow in being delivered -- just $179.5 million had been disbursed by the end of 2010. Some is being diverted to relief from last year's floods in Pakistan.

The slowness in disbursement has caused frustration in Pakistan, expressed this week by Finance Minister Hafiz Shaikh. He told an audience in Washington that: "It is largely a myth that Pakistan is a beneficiary of tens of billions of dollars. The truth is that in the Kerry-Lugar-Berman arrangement this year, we have not even received $300 million."

The spending bill for fiscal 2011 that Congress approved last week included some $6 billion in Economic Support Funds -- the pot of money that much of the Kerry-Lugar-Berman aid comes from. But the administration and Congress have not yet decided how this will be divided up between countries that need it. Over the last decade, Pakistan has been allocated $4.8 billion in Economic Support Funds, the CRS says.

TENSIONS AND U.S. BUDGET PRESSURE

Recently tensions have grown in the U.S.-Pakistani relationship, including over whether Pakistan is doing enough to combat al Qaeda and Taliban militants.

This week the top U.S. military officer, Admiral Michael Mullen, accused Pakistan's intelligence agency, Inter-Services Intelligence (ISI), of maintaining ties to militants targeting U.S. troops in neighboring Afghanistan. [nL3E7FK31W]

U.S. lawmakers have expressed concern about this too.

Representative Gary Ackerman, the ranking Democrat on the House Foreign Affairs subcommittee on the Middle East and South Asia, said this month that he doubted that "our money is buying anything deep or durable" in either Pakistan or Afghanistan. "I doubt the ISI will ever stop working with us during the day and going to see their not-so-secret friends in ... terrorist groups at night," he said.

Growing pressure in the United States for deep budget cuts means all government expenditures are undergoing more scrutiny, and foreign aid is among the most vulnerable targets.

Analysts say Islamabad is also evaluating its ties with Washington.

"The U.S.-Pakistan relationship is very rocky right now. My sense is that the Pakistani security establishment is rethinking their bargain with the United States over Afghanistan and the attendant operations of U.S. intelligence operations on Pakistani soil," said Michael Krepon, director of the South Asia program at the Stimson Center think tank.

"If the Congress slashes military assistance to Pakistan, I would expect commensurate or greater reductions in Pakistani logistical support for U.S. military operations in Afghanistan."

(Compiled by Susan Cornwell; Editing by Laura MacInnis)

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