Financial Times (London, England) - Thursday, August 27, 2009
Author: Bokhari, Farhan
Half of the planned assistance pledged by the US to Pakistan is likely to be wastefully spent on administrative costs, Islamabad's top finance official has said.
Shaukat Tarin, Pakistan's finance minister, has urged the US to channel its assistance through Pakistani agencies instead to save on high intermediation costs incurred by US counterparts.
His comments come as Pakistan struggles to secure funds from international donors who want to know more about where it will be spent. At an international donors meeting in Turkey this week, Pakistan failed to cement earlier pledges of $5.7bn in aid in spite of an appeal by the United Nations not to ignore the country's plight.
Pakistan has become one of the largest recipients of US aid as Washington seeks to help stabilise the country threatened by a Taliban insurgency. US president Barack Obama plans to raise economic assistance to about $1.5bn a year, or $7.5bn over the next five years.
"Whatever aid [the US is] giving must have full impact on the ground which is why they should route as much of this aid through our agencies than their own agencies," Mr Tarin said in an interview with the Financial Times. "Frankly, we only receive almost 50-55 per cent of the aid, 40-45 per cent becomes expenses [because of intermediation costs by the US]."
Some Pakistani officials express concern that USAID, the US's foreign development arm, will establish a large infrastructure in the country and employ generously paid foreign experts. They are concerned that higher personnel and administrative bills will inflate the cost of development projects.
Mr Tarin added Pakistan would resist any linkage of financial assistance to the country's nuclear programme or confidence-building measures with arch-rival India. He said aid would be "unacceptable" if it was tied to greater monitoring of the country's nuclear arsenal.
"If [the US] put conditions on the money to be spent where it is intended (to be spent), that's the kind of condition I would like to place on myself. But if they bring in other things, nuclear or [opening up] trade with India or anything which we believe is not related, that will not be acceptable to us."
US aid is intended to win public goodwill across Pakistan where antiAmericanism is widespread. US administrations have in the past been viewed as generous with military support, but stinting on civilian partnership.
The US seems unlikely to change how it delivers any increased aid to Pakistan. The US says it expends a lot of time and resources trying to make sure its taxpayers' money does not end up in the wrong hands. Transparency International, the Berlin-based corruption watchdog, last year ranked Pakistan 134th out of 180 countries on its corruption perceptions index.
China, meanwhile, has promised to build at least 12 dams across Pakistan, senior Pakistani government officials said yesterday.