Pakistan: U.S. Foreign Assistance
Susan B. Epstein
Specialist in Foreign Policy
K. Alan Kronstadt
Specialist in South Asian Affairs
July 28, 2011
Congressional Research Service
7-5700
www.crs.gov
R41856
CRS Report for Congress
P
repared for Members and Committees of Congress

Pakistan: U.S. Foreign Assistance

Summary
The 112th Congress is focused on cost-cutting measures to reduce the budget deficit. How it deals
with the second-ranking U.S. aid recipient, Pakistan—which is important to U.S. national security
interests but that some say lacks accountability—will be key.
Pakistan has been among the leading recipients of U.S. foreign assistance both historically and in
FY2010, and most experts list the country among the most strategically important for U.S. policy
makers. Recent major developments—including the killing of Al Qaeda founder Osama bin
Laden in Pakistan—have put strains on bilateral relations, making uncertain the future direction
of U.S. aid to Pakistan. For many lawmakers, the issue will be how to balance considerations
about Pakistan’s strategic importance to the United States with the pervasive and mounting
distrust in the U.S.-Pakistan relationship and with budget deficit-reduction pressures.
U.S. assistance to Pakistan has fluctuated considerably over the past 60 years. In the wake of
9/11, however, aid to Pakistan has continually risen as the Bush and Obama Administrations have
characterized Pakistan as a U.S. partner in the Afghanistan war, in the fight against terrorism, and
in efforts to stabilize the region. Since 1948, the United States has pledged more than $30 billion
in direct aid, about half for military assistance. Two-thirds of this total was appropriated in the
post-9/11 era from FY2002 to FY2010. Some question the gains from the aid, saying there is a
lack of accountability and reform by the Pakistani government, and any goodwill generated by it
is offset by widespread anti-American sentiment among the Pakistani people.
In September 2009, Congress passed the Enhanced Partnership with Pakistan Act of 2009 (EPPA,
also known as the “Kerry-Lugar-Berman” or “KLB” bill for its main sponsors). This became P.L.
111-73 and authorizes the President to provide $1.5 billion in annual bilateral economic aid to
Pakistan from FY2010 through FY2014. The law requires certification for release of security-
related aid; such conditionality is an ongoing and contentious issue. Also in 2009, Congress
established two new funds—the Pakistan Counterinsurgency Fund (PCF) within the Defense
Department appropriations and the Pakistan Counterinsurgency Capability Fund (PCCF) within
the State-Foreign Operations Appropriations—to build Pakistan’s counterinsurgency capabilities.
Within the FY2010 supplemental appropriations (P.L. 111-212), Congress provided $349 million
in military and economic assistance to Pakistan, $5 million more than the Administration’s
request. When “coalition support fund” military reimbursements are included, the U.S. provided a
total of $4.5 billion for Pakistan for FY2010 alone, making it the second-highest recipient after
Afghanistan. In addition to these ongoing programs, in mid-2010 the United States pledged an
additional $592 million in emergency and recovery aid, plus more than $95 million of in-kind aid
after extensive flooding resulted in a severe humanitarian crisis that affected an estimated 20
million Pakistanis. In October 2010, Secretary of State Hillary Clinton announced the
Administration’s intention to increase U.S. Foreign Military Financing for Pakistan to $2 billion
over a five year period, a $100 million annual increase from the current level. This would have to
go through the congressional appropriation and authorization process.
This report will be updated as congressional actions on aid to Pakistan unfold in the 112th
Congress. For broader discussion of U.S.-Pakistan relations, see CRS Report R41307, Pakistan:
Key Current Issues and Developments
, and CRS Report R41832, Pakistan-U.S. Relations: A
Summary
.
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Pakistan: U.S. Foreign Assistance

Contents
Introduction ................................................................................................................................ 1
Recent Developments.................................................................................................................. 2
Fluctuating U.S. Aid to Pakistan Before 9/11............................................................................... 4
U.S. Aid to Pakistan After 9/11.................................................................................................... 5
Bilateral Economic Assistance .............................................................................................. 6
FATA Development Plan ................................................................................................. 7
The Enhanced Partnership With Pakistan Act (EPPA) of 2009 ......................................... 8
Debate in Pakistan Over the “KLB” Bill.......................................................................... 9
Security Assistance ............................................................................................................. 11
Coalition Support Funds (CSF) ..................................................................................... 12
Defense Supplies........................................................................................................... 13
Military Training and Law Enforcement ........................................................................ 16
Other International Economic Donors ................................................................................. 17
FY2012 Request for Aid to Pakistan and Objectives .................................................................. 22
Issues for Congress ................................................................................................................... 24
Conditions on Aid to Pakistan ............................................................................................. 25
Debate Overview .......................................................................................................... 25
Current Conditionality and Administration Certification................................................ 26
Government Reform ........................................................................................................... 27
Corruption and Transparency Issues .................................................................................... 28
Aid Delivery and Security Concerns.................................................................................... 31
U.S. Image and Public Diplomacy....................................................................................... 31
Possible Adjustments to U.S. Assistance Programs .............................................................. 33
Other Aid Issues.................................................................................................................. 34
Conclusions .............................................................................................................................. 34

Figures
Figure A-1. U.S. Aid in Current and Constant Dollars................................................................ 36
Figure B-1.FY2012 Budget Request for Aid to Pakistan ............................................................ 37
Figure C-1.Official Development Assistance to Pakistan, by Donor ........................................... 38

Tables
Table 1. Direct Overt U.S. Aid and Military Reimbursements to Pakistan, FY2001-
FY2012.................................................................................................................................. 19

Appendixes
Appendix A. History of U.S. Aid to Pakistan ............................................................................. 36
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Appendix B. Current Year Request ............................................................................................ 37
Appendix C. Major Donor Bilateral Development Assistance to Pakistan, CY2009 ................... 38
Appendix D. Principles and Purposes of the Enhanced Partnership with Pakistan Act of
2009 ...................................................................................................................................... 39

Contacts
Author Contact Information ...................................................................................................... 40

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Introduction1
Experts commonly list Pakistan among the most strategically important countries for U.S. policy
makers. The 112th Congress will likely grapple with balancing Pakistan’s importance to U.S.
national security interests and domestic budgetary pressures.
In the post-9/11 period, assisting in the creation of a more stable, democratic, and prosperous
Pakistan actively combating religious militancy has been a central U.S. foreign policy effort.
Global and South Asian regional terrorism, and a nearly decade-long effort to stabilize
neighboring Afghanistan, are viewed as top-tier concerns. Pakistan’s apparently accelerated
nuclear weapons program and the long-standing dispute with India over Kashmir continue to
threaten regional stability. Pakistan is identified as a base for numerous U.S.-designated terrorist
groups and, by some accounts, most of the world’s jihadist terrorist plots have some connection to
Pakistan-based elements. With anti-American sentiments and xenophobic conspiracy theories
remaining rife among ordinary Pakistanis, persistent economic travails and a precarious political
setting combine to present serious challenges to U.S. decision makers. Aware of these and other
concerns, the U.S. government has provided large-scale foreign assistance to Pakistan with an eye
toward short-term U.S. security interests and longer-term U.S. interests in realizing a more stable,
democratic, and prosperous Pakistani state.
The United States has provided significant foreign aid to Pakistan over the nearly 64 years since
that country’s independence, but at levels that fluctuated widely. Major aid flows during some
periods and drastic cuts in others contributed to creating a perception among many in Pakistan
that the United States is not a fully reliable ally. At the same time, some U.S. lawmakers continue
to question providing large amounts of aid to a Pakistani government that is seen as an unreliable
partner in U.S. counterterrorism efforts—as evidenced most recently by revelations that Al Qaeda
founder Osama bin Laden found refuge in a Pakistani city for several years. To many, Pakistan
also appears incapable of providing sustainable economic development and security for its own
people, and often is unaccountable to the United States for aid results. Beyond these issues, some
question whether the aid results in public diplomacy benefits for the United States.
Pakistan is a poor, fragile, and insecure state, representing a daunting challenge to U.S. and other
foreign donors. Pakistan’s estimated per capita GDP of $2,791 (at purchasing power parity) ranks
it 136th of 183 world countries (by comparison, the U.S. figure is $45,284 and India’s, with seven
times as many citizens, is $3,309). From 2008 to 2010 the country experienced aggregate
inflation of nearly 50% against GDP growth of less than 13%. Pakistan’s education sector is
among the world’s least effective: the government devotes less than 3% of GDP to education and
nearly one-quarter of primary school age children have no formal education of any kind. Less
than half of Pakistanis have access to modern energy services, and the energy infrastructure is so
overburdened that chronic electricity shortages result in rolling blackouts lasting 10 or more
hours per day, even in vital business centers such as Karachi. Potable water shortages are
widespread, and a dilapidated health sector provides insufficient access to basic health services,
meaning that many citizens—women and children, especially—die each year from preventable
diseases. Meanwhile, security threats remain rife: Pakistan is home to multiple Islamist,
separatist, sectarian, and other politically motivated militants and terrorist groups. The U.S.

1 For broader discussion of U.S.-Pakistan relations, see CRS Report R41307, Pakistan: Key Current Issues and
Developments
, and CRS CRS Report R41832, Pakistan-U.S. Relations: A Summary, both by K. Alan Kronstadt.
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National Counterterrorism Center reports there were an average of more than 25 terrorist attacks
each week in Pakistan in 2010; only Afghanistan and Iraq suffer a higher number of incidents.2
Recent Developments
Pakistan has been a central issue in several congressional and executive branch actions:
• On July 27, the House Appropriations Subcommittee on State-Foreign
Operations Appropriations marked up its FY2012 bill that includes Section 7047,
stating that none of the funds made available by this act may be obligated for aid
to Pakistan until the Secretary of State, in consultation with the Secretary of
Defense and the Director of National Intelligence, certifies and reports to
Congress that the Government of Pakistan is cooperating on nuclear
nonproliferation efforts, investigating how Osama bin Laden found refuge in
Pakistan for years, and making demonstrable progress in combating terrorist
groups. This bill would provide no Pakistan Counterinsurgency Capability Funds
(PCCF).
• H.R. 1540, the Defense Authorization bill, was introduced April 14, 2011, and
passed by the House with amendments on May 26, 2011. This bill extends
authorization of the Pakistan Counterinsurgency Fund (PCF) to September 30,
2012, and restricts use of the PCF after FY2011 to not more than 25% of the
Fund unless the Secretary of Defense submits a report to appropriate
congressional committees (with the concurrence of the Secretary of State)
identifying the strategy for use of the PCF and the metrics to be used to
determine progress is being met. The report is to be updated annually at the time
that the President’s budget is submitted to Congress. The bill currently is
awaiting action in the Senate.
• H.R. 2219, The Defense Appropriations Act of 2012, was introduced on July 11,
2011. This bill would appropriate $1.1 billion to PCF and contains similar
language as H.R. 1540 that limits authorization of PCF spending to not more than
25% of the fund unless a report is submitted to certain congressional committees
setting the strategy for use of PCF expenditures and metrics to determine if the
strategy is successful. If interested in spending more than 25%, the Secretary of
Defense is required to send a report 30 days prior to planned expenditures. The
bill passed in the House and awaits Senate action.
• Section 981 of the Foreign Relations Authorization Act 2012, as introduced by
Chairwoman Ileana Ros-Lehtinen on July 19, 2011, would amend the Enhanced
Partnership with Pakistan Act of 2009 (EPPA, P.L. 111-73) by stating that no aid
would be available to Pakistan unless the Secretary of State certifies that Pakistan
is making measurable progress toward achieving the principal objectives of U.S.
assistance to Pakistan as stated in the Pakistan Assistance Strategy Report.
Furthermore, in order to receive security assistance within EPPA, Pakistan would
have to make demonstrable progress toward combating terrorist groups,

2 Data in this paragraph from IMF World Economic Outlook Database, April 2011; USAID, “U.S. Assistance to
Pakistan – Sectoral Working Papers;” NCTC Worldwide Incidents Tracking System.
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including the Haqqani Network, fully assist the United States in investigating bin
Laden’s residency in Pakistan, and facilitate entry/exit visas for U.S. military
trainers and personnel for other cooperative programs and projects in Pakistan.
The bill is being marked up in the House Foreign Affairs Committee.
• The Obama Administration has recently indicated certain changes in military aid
to Pakistan. Congressional sources say that Pakistan will not be receiving some
$440 million worth of scheduled counterinsurgency training and equipment due
to the recently reduced U.S. military trainer presence there, along with obstacles
to fulfilling agreements between the two countries. In addition, according to
these sources, delays in processing U.S. visa requests has led to the suspension of
$300 million in anticipated CSF reimbursements.
A number of events have significantly affected U.S-Pakistan relations and could influence
congressional views regarding future U.S. aid for that country:
• The Obama Administration submitted its FY2012 budget request to Congress on
February 14, 2011. It includes $2.965 billion for aid to Pakistan within the 150
(international affairs) function. The Administration also requested $1.75 billion in
Pentagon funding to reimburse coalition partners for logistical and operational
support of U.S.-led military operations worldwide. Pakistan has in the past
received more than three-fourths of such funds for its support related to U.S.
efforts in Afghanistan.
• Early in 2011, an incident involving an undercover U.S. employee tested the
fragile U.S.-Pakistan relations and caused some in Congress to scrutinize the
second-largest U.S. aid recipient. On March 16, 2011, CIA operative Raymond
Davis was freed from a Pakistani prison and immediately flown out of the
country. Davis, who worked out of the U.S. Consulate in Lahore, had shot and
killed two men who approached his vehicle in urban traffic on January 27. Davis
contended that he acted in self-defense when the men tried to rob him at
gunpoint. However, Pakistani authorities accused him of murder and a court
barred the government from releasing him despite an adamant insistence from
top U.S. officials that diplomatic immunity shielded him from prosecution. After
weeks of secret negotiations, political pressure by Pakistani officials on the
courts, and, finally, a pledge of $2.3 million in diyat—commonly referred to as
“blood money”—for the victims’ families, Davis was released. The controversy
led some in Congress to question further U.S. aid to Pakistan (H.Res. 145 called
for a “freeze” on all monetary assistance to Pakistan until such time Davis was
released; the resolution did not emerge from committee).
• On May 1, 2011, U.S. Special Forces killed Osama bin Laden in a raid on a
compound in Abbottabad, Pakistan, some 35 miles north of Islamabad. The
circumstances of bin Laden’s refuge raised serious suspicions for many Members
of Congress concerned that elements of Pakistan’s security forces may have been
complicit in protecting the Al Qaeda founder for years while the United States
provided billions of dollars in aid to Pakistan. Some senior Members—House
Speaker John Boehner and Senate Foreign Relations Committee Chairman John
Kerry among them—counseled a moderate response to the development,
emphasizing the ongoing importance of the U.S.-Pakistan relationship for key
U.S. interests. Others—including Senate Armed Services Committee Chairman
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Levin and Senate Homeland Security Committee Chairman Lieberman—issued
strongly worded suggestions that levels of U.S. aid could be sharply reduced.3
• On May 3, 2011, H.R. 1699, the Pakistan Foreign Aid Accountability Act, was
introduced in the House and referred to the House Foreign Affairs Committee.
The act would prohibit future foreign assistance to Pakistan unless the Secretary
of State certifies that the Pakistani government was not complicit in hiding bin
Laden (to date, the bill has not emerged from committee). In the wake of bin
Laden’s death and increasing acrimony between the U.S. and Pakistani
governments, congressional scrutiny of the relationship and bilateral aid program
intensified. Some in Congress appear to favor scaling back development aid to
focus U.S. resources on combating Islamist terrorism and militancy. Others
maintain that strengthening Pakistan’s civilian government is a key means to
ensuring a positive, long-term relationship with that country.4
• On May 16, 2011, Senator Kerry arrived in Islamabad, the highest-ranking U.S.
official to do so after the death of bin Laden. Senator Kerry said that it was
important to press the “reset button” in U.S.-Pakistan relations and use this
opportunity to put the relationship back on track and work jointly to bring about
effective cooperation to combat terrorism, which is in both countries’ interest. He
also stated that he was “determined to make sure that the kinds of projects that
are financed by the Kerry-Lugar-Berman funds will get on track and demonstrate
our long-term commitment to Pakistan.”5
Fluctuating U.S. Aid to Pakistan Before 9/11
Over the past six decades, the United States has turned aid to Pakistan on and off to correspond
with U.S. foreign policy objectives and to reflect the state of the bilateral relationship. Aid was
provided or restricted for numerous reasons over those 60 years. In some years, U.S. aid would
support balance in the region and contain Soviet expansionism; in other years, the U.S.
government would withhold aid because of nuclear weapons proliferation and lack of
democratization gains. U.S. aid levels to Pakistan (after adjusting for inflation) peaked in 1962
when Pakistan aligned itself with the West by joining two regional defense pacts, the South East
Asia Treaty Organization (SEATO) and the Central Treaty Organization (CENTO, also known as
the “Baghdad Pact”; see Figure A-1). President Dwight D. Eisenhower famously called Pakistan
America’s “most allied ally in Asia.” In contrast, U.S. aid to Pakistan was at its lowest level in the

3 Speaker Boehner said the present circumstances call for “more engagement [with Pakistan], not less.” Senator Kerry
said, “Going forward, we have to act thoughtfully and, no matter what, we have to remember the big picture, the larger
strategic interest, and the full nature of this relationship with Pakistan.” Senator Levin said, “In terms of the military aid
... support for that will depend on how Pakistan answers some of these questions, which need to be asked, about the
presence of bin Laden in such a central location.” Senator Lieberman said, “This is going to be a time of real pressure
[on Pakistan] to basically prove to us that they didn’t know that bin Laden was there.” (Boehner quoted in “Boehner:
US Should Not Back Away From Pakistan,” Associated Press, May 3, 2011; Kerry’s May 5, 2011, statement at
http://foreign.senate.gov/press/chair/release/?id=def2d12c-8ec5-479d-ac70-99b371633dfd; Levin and Lieberman
quoted in “After Bin Laden, Pakistan May Be Greatest Casualty,” Reuters, May 2, 2011.
4 See “Pakistan Military Aid Safer Than the Economic Aid,” The Cable (ForeignPolicy.com), May 11, 2011.
5 See the U.S. Embassy’s May 16, 2011, statements at http://islamabad.usembassy.gov/pr-110516001.html and
http://islamabad.usembassy.gov/pr-media051611.html.
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1990s after the Soviet Army withdrew from Afghanistan in 1989, and President George H. W.
Bush suspended aid to Pakistan in 1990 because of its nuclear activities.
During and immediately after the Indo-Pakistani wars of 1965 and 1971, the United States
suspended military assistance to both sides. This resulted in a cooling of the Pakistan-U.S.
relationship and a perception among many in Pakistan that the United States was not a reliable
ally. In the mid-1970s, new strains arose over Pakistan’s efforts to respond to India’s 1974
underground nuclear test by seeking its own nuclear weapons capability. President Jimmy Carter
suspended most U.S. aid in response to Pakistan’s covert construction of a uranium enrichment
facility. However, in 1979, the Soviet Union invaded Afghanistan, and the United States viewed
Pakistan as a frontline ally in the effort to block Soviet expansionism. In 1981, therefore, the
Reagan Administration negotiated a five-year, $3.2 billion economic and military aid package
with Pakistan. As a result, Pakistan became a key transit country for arms supplies to the Afghan
resistance, as well as home for millions of Afghan refugees, many of whom have yet to return.
In 1985 Congress passed the Pressler Amendment (Section 620E(e) of the Foreign Assistance Act
of 1961) that required the President to certify to Congress that Pakistan did not possess a nuclear
explosive device during the fiscal year for which the aid was provided. President Reagan and
President George H. W. Bush certified Pakistan each year until 1990.
After the 1990 suspension of aid to Pakistan, U.S. aid to that country remained at low levels not
seen since the early 1950s, largely due to a disengagement from Pakistan and Afghanistan after
the defeat of the Soviet Union there, as well as an overall reduction in foreign aid in an effort to
balance the U.S. budget. This left a lasting effect on Pakistani perceptions of the United States.
Former Pakistani Army Chief and President Musharraf repeatedly voiced a narrative in which
Pakistan joined the United States to “wage jihad” in Afghanistan in the 1980s, only to see
“disaster” follow when the “military victory was bungled up” and the United States then left the
region “abandoned totally.” When combined with ensuing sanctions on U.S. aid, this left many
Pakistanis with the sense they had been “used and ditched.”6 According to the succeeding
Pakistani President Asif Zardari, writing in January 2009, “Frankly, the abandonment of
Afghanistan and Pakistan after the defeat of the Soviets in Afghanistan in the 1980s set the stage
for the era of terrorism that we are enduring.”7
Unpredictability of U.S. aid has contributed to Pakistan’s view that the United States is an
unreliable partner. That view may play a role in Pakistan’s level of cooperation with the United
States on various national security issues while keeping its options open with U.S. competitors,
such as China. Pakistani Prime Minister Yousef Raza Gillani’s May 2011 state visit to Beijing
was viewed by many as an implicit response to a recent deterioration in U.S.-Pakistan ties.8
U.S. Aid to Pakistan After 9/11
Following a decade of alienation in the 1990s, U.S. relations with Pakistan were once again
transformed in dramatic fashion, this time with the September 11, 2001, terrorist attacks on the
United States and the ensuing enlistment of Pakistan as a pivotal ally in U.S.-led counterterrorism

6 “President’s Address at Royal United Services Institute, London,” January 25, 2008.
7 Asif Ali Zardari, Partnering With Pakistan” (op-ed), Washington Post, January 28, 2009.
8 “Pakistan’s Gilani visits ally Beijing Amid US Rift,” Associated Press, May 16, 2011.
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efforts. Post-9/11 U.S. aid to Pakistan rose dramatically and included a $600 million emergency
cash transfer in September 2001. In 2003, President George W. Bush hosted then-Pakistani
President General Pervez Musharraf at Camp David, MD, where he vowed to work with
Congress on establishing a five-year, $3 billion aid package for Pakistan. Annual installments of
$600 million each, split evenly between military and economic aid, began in FY2005.9
From FY2000 at $36.76 million to FY2001 at $187.7 million, U.S. aid increased five-fold, and in
FY2002 (the first post-9/11 fiscal year) aid increased by another 11-fold to $2,057 million. Aid
continually increased from 2006 to 2010; FY2007 was the first year of the Bush Administration’s
plan to devote $750 million in U.S. development aid to Pakistan’s tribal areas over a five-year
period. The 2010 U.S. aid to Pakistan of some $4,462 million represents an increase of 2,273%
when compared to the pre-9/11 level in FY2001. In FY2010, Pakistan ranked second among top
U.S. aid recipients, after Afghanistan and before Israel.
About two-thirds of U.S. aid from FY2002 to FY2010, some $13.3 billion (including Coalition
Support Fund reimbursements), has supported security assistance in Pakistan. Of that, about $9.4
billion has been funded through Defense Department appropriations, with $3.9 billion in security
assistance for Pakistan funded through the Department of State appropriations. Economic
assistance for Pakistan from FY2002 to FY2010 has totaled more than $6.5 billion. About three-
fourths (or $4.8 billion) of that was within the Economic Support Fund (ESF),10 which grew
dramatically in FY2009 and FY2010.
Over the years, disbursements of aid to Pakistan generally track appropriation levels of aid.
However, in some years not all aid appropriated is actually disbursed. For example, of the $400
million in Pakistan Counterinsurgency Fund (PCF)/Pakistan Counterinsurgency Capability
(PCCF) funds in 2009, a total of $125 million has been received by Pakistan. With other
accounts, some funds are transferred to meet certain needs on the ground. During years of natural
disasters, some funds from ESF have been transferred to the International Disaster Assistance
(IDA) or the Migration and Refugee Assistance (MRA) account. (See Table 1 for both
appropriation and disbursement levels.)
Bilateral Economic Assistance
The United States provides bilateral economic, development, and humanitarian assistance to
Pakistan through a number of funding accounts: the Economic Support Fund (ESF), Food for
Peace Title II (P.L. 480), Global Health and Child Survival, as well as International Disaster
Assistance (IDA), and Migration and Refugee Assistance (MRA). Often funds within ESF are
transferred to IDA or MRA for emergency assistance, such as in response to the Pakistan flooding
crisis in 2010.
In FY2009 and FY2010, ESF funds reflected about 80% of U.S. economic assistance to Pakistan,
with the above-noted accounts making up the remaining 20% (see Table 1). Some of the
increases in ESF funding were from FY2009 and FY2010 supplemental appropriations passed by
Congress. ESF is used to fund a wide array of activities. In Pakistan the program is used to help

9 The Foreign Operations FY2005 Appropriations bill (P.L. 108-447) established a new “base program” of $300
million for military assistance for Pakistan.
10 ESF is a bilateral economic assistance program employed to advance U.S. strategic and political interests through the
use of foreign aid.
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establish political parties and bolster Pakistan’s ability to conduct elections; help the government
provide services to its citizens; promote delivery of health-related technologies, such as vaccines;
provide basic education support, such as building schools and providing funds for text books and
teachers; and improve the quality of universities in Pakistan. ESF funds also provide help for the
government of Pakistan to pursue economic reforms, such as improving tax collection,
strengthening border management, and building infrastructure—roads and power supply—to
improve citizens’ faith in their government and promote job growth and stability. ESF promotes
agriculture, which is a key component of job growth in rural districts, and supports linkages
between farmers, markets, and business service providers to increase access to modern farm
equipment. ESF also promotes private-sector competitiveness to strengthen the business
community, create jobs, and expand the economy.
Food for Peace aid to Pakistan fluctuates from year to year, largely related to needs on the
ground. During years of humanitarian crisis (either natural or war-related), food aid levels can
rise dramatically. The 2010 floods in Pakistan created a severe humanitarian crisis, affecting more
than 20 million people and resulting in the United States more than doubling food aid over the
previous year’s level, from $55 million in 2009 to $124 million in 2010.
Global Health and Child Survival (GHCS) funding levels within the past decade range from $14
million in FY2002 to $34 million in FY2009 and totaled $221 million from FY2002 to FY2010.
This program provides funds to Pakistani nongovernmental organizations, national, and
provincial organizations to partner and fight more effectively the spread of HIV/AIDS and
support the national HIV/AIDS strategy, among other things.
FATA Development Plan
Pakistan’s western tribal areas are remote, isolated, poor, and traditional in cultural practices. The
social and economic privation of the inhabitants is seen to make the region an attractive breeding
ground for violent extremists. The U.S.-assisted development initiative for the Federally
Administered Tribal Areas (FATA), launched in 2003, seeks to improve the quality of education,
develop healthcare services, and increase opportunities for economic growth and micro-enterprise
specifically in Pakistan’s western tribal regions.11 A senior USAID official estimated that, for
FY2001-FY2007, about 6% of U.S. economic aid to Pakistan was allocated for projects in the
FATA.12
In 2008, the Bush Administration urged Congress to continue funding the five-year, $750 million
aid plan for the FATA initiated in FY2007. The plan supports Islamabad’s own 10-year, $2 billion
sustainable development effort there. In H.Rept. 111-151, the 111th Congress expressed its
intention that the majority of the $399 million in unallocated FY2009 supplemental assistance for
Pakistan be used to support programs in the FATA and Khyber Pakhtunkhwa (KPk, formerly
North West Frontier) province “to counter the influence of violent extremists through local
initiatives, including infrastructure, health, education, governance, rule of law, and employment
opportunities.”

11 See http://www.usaid.gov/pk/sectors/fata.
12 Statement of Acting Deputy USAID Administrator James Kunder before the Senate Foreign Relations Committee,
December 6, 2007.
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Skepticism has arisen about the potential for the policy of significantly boosted FATA-specific
funding to be effective. Corruption is endemic in the tribal region and security circumstances are
so poor that Western nongovernmental contractors find it extremely difficult to operate there.
Moreover, as much as half of the allocated funds reportedly are devoted to administrative costs.13
Islamabad insists that implementation of aid programs in the FATA be carried out wholly by
Pakistani civil and military authorities and that U.S. aid, while welcomed, must come with no
strings attached.14 Attacks on aid workers exacerbate a circumstance in which corruption and
tangled bureaucracy thwart U.S. aid efforts in the FATA. In 2009, the KPk governor himself
complained that very little new assistance funds were reaching the tribal belt.15
According to former USAID Afghanistan Pakistan Task Force Director James Bever, aid efforts
in the FATA have been hampered by the limited presence of Pakistani federal ministries and
constrained provision of services. Some Pakistan-based analysts raise like concerns and have
recommended that the United States and other international donors refrain from handing control
of development programs in the crucial FATA region to the Pakistani government until political
reforms and effective financial oversight mechanisms are in place.16 Given such limitations,
USAID’s primary aim is to build confidence in the Pakistani government by working with the
FATA Secretariat on small-scale projects in relatively secure areas. All of the activities are
developed, monitored, and evaluated in partnership with the FATA’s civilian authorities.17
The Enhanced Partnership With Pakistan Act (EPPA) of 2009
A key aspect of the Obama Administration’s approach to Pakistan has been a tripling of annual
nonmilitary aid to improve the lives of the Pakistani people, with a particular focus on conflict-
affected regions, and increased U.S. military aid to Islamabad on counterinsurgency goals while
conditioning such aid on that government’s progress in both combating militancy and further
democratizing. As Senators in the 110th Congress, President Obama, Vice President Joe Biden,
and Secretary of State Hillary Clinton all supported the Enhanced Partnership With Pakistan Act
of 2008 (which was never voted upon), and they strongly encouraged the 111th Congress to pass a
newer version of that legislation.
During the first session of the 111th Congress, the full House passed a parallel Pakistan Enduring
Assistance and Cooperation Enhancement Act of 2009 (H.R. 1886) and, three months later, the
Senate unanimously passed The Enhanced Partnership With Pakistan Act of 2009 (S. 1707), both
authorizing a tripling of nonmilitary aid to Pakistan for at least five years (through FY2014).
President Obama signed the resulting Enhanced Partnership with Pakistan Act (EPPA) of 2009
into P.L. 111-73 on October 15, 2009. The legislation is sometimes referred to as the “Kerry-
Lugar-Berman” or “KLB” bill (see the law’s principles and purposes in Appendix D).

13 “Doubts Engulf an American Aid Plan for Pakistan,” New York Times, December 25, 2007; “US Aid ‘Failing to
Reach Target,’” BBC News, May 16, 2008.
14 “U.S. Aims to Turn Hostile Pakistani Tribes Friendly,” Reuters, January 30, 2008.
15 “Violence Mars US Aim to Win Hearts, Minds,” Associated Press, February 27, 2009.
16 “Pakistan: Countering Militancy in FATA,” International Crisis Group Asia Report No, 178, October 21, 2009, at
http://www.crisisgroup.org/home/index.cfm?id=6356.
17 Testimony before the House Oversight and Government Reform Subcommittee on National Security and Foreign
Affairs, “U.S. Aid to Pakistan (Part II): Planning and Accountability,” March 16, 2010.
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Senate Foreign Relations Committee Chairman Senator John Kerry lauded the legislation as the
product of extensive “bicameral, bipartisan, and inter-branch consultation” that was meant to
“forge a new long-term relationship between the people of America and Pakistan.” Then-House
Foreign Affairs Committee Chairman Representative Howard Berman emphasized the
importance of forging a “true strategic partnership with Pakistan and its people.” Secretary of
State Clinton called the legislation’s passage “a historic chapter” in bilateral relations that would
“strengthen the bonds of friendship and cooperation between the American people and the
Pakistani people.”18 Independent analysts viewed the legislation as a landmark expression of the
U.S. Administration’s and Congress’s intent to provide significant, long-term support for its
Pakistani allies.
The EPPA authorizes $1.5 billion annually for economic aid to Pakistan from FY2010 to FY2014
to support democratic institutions and the expansion of rule of law, promote economic freedoms
and sustainable economic development, support investment in people, and strengthen public
diplomacy in Pakistan. The act states that no funds may be made available unless the
Administration submits a Pakistan Assistance Strategy Report to the appropriate congressional
committees (the Administration submitted the report on December 14, 2009). It also limited aid to
$750 million unless the President’s Special Representative to Afghanistan and Pakistan (or, if
vacant, the Secretary of State) certifies to Congress that aid provided thus far is making
reasonable progress toward achieving U.S. objectives. The act also allows for the Secretary of
State to waive this certification requirement if it is in the U.S. national security interests to do so.
It also provides a sense of Congress that the same level of economic aid should continue in
FY2015-FY2019 “subject to an improving political and economic environment in Pakistan.”
The EPPA authorizes each year from FY2010 to FY2014 “such sums as be may be necessary” for
security assistance. Security assistance and arms transfers are prohibited by the act unless the
Secretary of State certifies that the government of Pakistan is continuing to cooperate with U.S.
efforts to dismantle nuclear weapons-related material supplier networks and make significant
efforts to combat terrorist groups, and if Pakistan’s security forces are not impeding political or
judicial processes there. The Secretary of State may waive these limitations if doing so is deemed
to be in the U.S. national security interest. Secretary Clinton issued the first such certification in
March 2011.
The EPPA also clarifies activities related to the Pakistan Counterinsurgency Capability Fund
(PCCF), established by Congress in the Supplemental Appropriations Act, 2009 (P.L. 111-32),
including that aid within the PCCF is in addition to any other authority to provide assistance.
Debate in Pakistan Over the “KLB” Bill
In what many consider to be a surprisingly visceral reaction, significant segments of Pakistani
officialdom and society were highly critical of the EPPA, seeing in its language an intent to
interfere with and dictate to Pakistan on sensitive foreign policy and national security issues,
perhaps even with malicious goals. The “conditioning” of assistance was the focus of criticism.
The main opposition party in Islamabad (the Pakistan Muslim League-Nawaz or PML-N)
expressed “strong reservations” over the law’s conditions and requested that the government

18 Sen. Kerry’s September 24, 2009, release at http://kerry.senate.gov/cfm/record.cfm?id=318241; Rep. Berman’s
September 30, 2009, release at http://www.internationalrelations.house.gov/press_display.asp?id=659; Secretary
Clinton’s October 6, 2009, remarks at http://www.state.gov/secretary/rm/2009a/10/130314.htm.
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present the details for parliamentary approval. Even secular parties within the ruling coalition
described the bill as “interference” in Pakistani affairs.19 The Lahore High Court Bar Association
unanimously passed a resolution rejecting the law, saying its imposition of “cruel conditions”
represented a violation of Pakistani integrity and sovereignty.20 In one representatively rancorous
statement, a Pakistani commentator said the law was “less an assistance program than a treaty of
surrender,” and he criticized its terms and conditions as amounting to a “ten-fold increase in
national humiliation.” Another saw the conditions as aimed at “clipping the wings of Pakistan’s
mighty security establishment.”21 President Zardari himself rejected all such complaints as
misguided and misinformed.
The most serious criticism, however, came from the Pakistani military establishment itself. A
statement following the 122nd Corps Commander Conference in October 2009 included an
expression of “serious concern regarding clauses [of the law] impacting on national security.” In
the diplomatic context, this was taken as an unusually explicit and strong condemnation; Army
chief General Ashfaq Pervez Kayani was reported to have energetically complained in person to
visiting U.S. commander General Stanley McChrystal, focusing especially on clauses related to
civilian control over the military, and references to the Afghan “Quetta shura” and the Lashkar-e-
Taiba’s Muridke compound, which locate U.S.-designated terrorists on Pakistani territory.22
The widely negative and oftentimes vitriolic nature of Pakistani reactions caught many U.S.
officials by surprise and spurred the Senate Foreign Relations Committee leadership to issue an
unusual formal rebuttal of “myths” surrounding the bill. Primary among these was the widely
held—and patently false—assumption that conditions had been placed on the $7.5 billion in
nonmilitary aid authorized for Pakistan. Other important corrections of the record included
clarifications that nothing in the bill threatened Pakistani sovereignty in any way; that the
conditions placed on military aid only reinforced standing policies of the Pakistani government
and military; and that the United States neither required nor desired an oversight role in internal
Pakistani military operations such as promotion decisions, among several others.23 Senator Kerry
then traveled to Islamabad days later in a largely successful effort to allay Pakistani concerns.
Secretary of State Clinton was in Islamabad the same month, only two weeks after Senator Kerry
and, when asked about the strongly negative reactions in Pakistan to the U.S. legislation, she
expressed American “shock”:
For the United States Congress to pass a bill unanimously saying that we want to give $7.5
billion to Pakistan in a time of global recession when we have a 10 percent unemployment
rate, and then for Pakistani press and others to say we don’t want that, that’s insulting—I
mean, it was shocking to us. So clearly, there is a failure to communicate effectively.24

19 “PML-N Asks Govt to Present Kerry-Lugar Bill in Parliament,” News (Karachi), September 29, 2009; “Kerry-Lugar
Bill Interference in Pakistan’s Affairs: ANP,” Daily Times (Lahore), October 11, 2009.
20 “LHCBA Passes Resolution Condemning Kerry-Lugar Bill,” Daily Times (Lahore), October 1, 2009.
21 Ayaz Amir, “Kerry-Lugar: Bill or Document of Surrender?” (op-ed), Daily Times (Lahore); “Imtiaz Gul, “Kerry-
Lugar Aimed at Dispiriting the Army?” (op-ed), Friday Times (Lahore), both October 2, 2009.
22 See the October 7, 2009, ISPR release at http://www.ispr.gov.pk/front/main.asp?o=t-press_release&date=2009/10/7;
“U.S. Aid Package Riles Pakistan’s Army,” New York Times, October 8, 2009.
23 See the SFRC’s October 9, 2009, release at http://kerry.senate.gov/cfm/record.cfm?id=318845.
24 See the State Department’s October 30, 2009, release at http://www.state.gov/secretary/rm/2009a/10/131103.htm.
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Many independent observers saw the unexpectedly strong Pakistani reaction as being fueled and
perhaps even generated by a combination of military elements and opposition political forces who
shared a common cause of weakening the Pakistan People’s Party-led civilian government. Anti-
government media outlets eagerly participated. More specifically, this perspective had Army
Chief Kayani engaged in an ongoing struggle with President Zardari and Prime Minister Gillani
over ultimate control of the country’s military. One effect of the U.S. legislation was to place the
United States in the middle of this battle.25 However, the spate of criticisms ended almost as
quickly as it had begun, and by the end of 2009, Pakistani officials and most media critics had
fallen silent.
Security Assistance
As noted above, U.S.-Pakistan security cooperation accelerated rapidly in the post-9/11 period,
and President George W. Bush formally designated Pakistan as a major non-NATO U.S. ally in
2004. The close U.S.-Pakistan security ties of the Cold War era, which came to a near halt after
the 1990 aid cutoff, were restored as a result of Pakistan’s role in the U.S.-led anti-terrorism
campaign. In 2002, the United States began allowing commercial sales that enabled Pakistan to
refurbish at least part of its fleet of American-made F-16 fighter aircraft and, three years later,
Washington announced that it would resume sales of new F-16 fighters to Pakistan after a 16-year
hiatus. During the Bush Administration, a revived U.S.-Pakistan Defense Consultative Group
(DCG)—moribund from 1997 to 2001—sat for high-level discussions on military cooperation,
security assistance, and anti-terrorism. The forum has continued under the Obama Administration.
Pentagon officials have for some time been frustrated by the allegedly feckless counterinsurgency
efforts of the internally squabbling Islamabad government. Reports indicate that U.S. officials
have been disheartened by signs that the Pakistani military is slow to shift away from a
conventional war strategy focused on India, and they have made clear the United States stands
ready to assist Pakistan in reorienting its army for counterinsurgency efforts. This is not a task the
Pakistani military leadership has appeared eager to complete. In an effort to more effectively
channel U.S. security assistance so as to specifically strengthen Pakistan’s counterinsurgency
capabilities, the Pentagon proposed, and Congress later endorsed, creation of a dedicated fund,
the Pakistan Counterinsurgency Fund (PCF), later designated as the Pakistan Counterinsurgency
Capability Fund (PCCF).26
In addition to conditions on security assistance found in the EPPA, Pakistan is subject to more
general conditionality on such aid. For example, in the spring of 2010, concerns arose that
allegedly serious human rights abuses by the army—especially in the Swat Valley northwest of
Islamabad—including extrajudicial killings and the holding of thousands of suspected militants in
indefinite detention, would trigger so-called “Leahy Amendment” restrictions on future U.S.
security assistance (Sec. 620J of the Foreign Assistance Act of 1961 (P.L. 87-195, as amended),

25 “Pakistan Aid Places U.S. in the Midst of a Divide,” New York Times, October 13, 2009.
26 Appearing before both Senate and House panels in May 2009, Secretary of Defense Gates urged Congress to quickly
provide significant new counterinsurgency funding for Pakistan, arguing that the newly authorized PCF/PCCF should
be overseen by U.S. military commanders rather than by State Department civilians. Yet many in Congress voiced
doubts about the wisdom of creating a major new stream of military funding under Pentagon oversight, as such aid
traditionally has been subject to Foreign Assistance Act restrictions. When the House Appropriations Committee took
up the issue, its members determined to place PCCF oversight in the hands of the State Department after FY2010, a
plan then endorsed by the full House (“Gates Pushes Congress to Boost Pakistan Aid,” Washington Post, May 1, 2009;
“Democrats Steer Pakistan Security Account to State,” Associated Press, May 7, 2009).
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also known as the Leahy Amendment, states that “No assistance shall be furnished under this Act
or the Arms Export Control Act to any unit of the security forces of a foreign country if the
Secretary of State has credible evidence that such unit has committed gross violations of human
rights”).27 In October of that year, the Obama Administration announced that it would abide by
these provisions by withholding train and equip funding for several Pakistani army units believed
to be complicit in human rights abuses, and it remains concerned about potential mass
disappearances of detainees into the hands of Pakistani security forces.28
Coalition Support Funds (CSF)
At the Bush Administration’s behest, Congress in FY2002 began appropriating billions of dollars
to reimburse Pakistan and other nations for their operational and logistical support of U.S.-led
counterterrorism operations. These “coalition support funds” (CSF) have accounted for nearly
half of U.S. financial transfers to Pakistan since 2001; as of May 2011, some $8.9 billion had
been disbursed. The amount equals roughly one-fifth to one-quarter of Pakistan’s total military
expenditures during this period. According to Secretary of Defense Gates, CSF payments have
been used to support many scores of Pakistani army operations and help to keep more than
100,000 Pakistani troops in the field in northwest Pakistan by paying for their food, clothing, and
housing. They also compensate Islamabad for coalition usage of Pakistani airfields and seaports.29
During the latter years of the previous decade, however, concerns grew in Congress and among
independent analysts that standard accounting procedures were not being employed in overseeing
these large disbursements from the U.S. Treasury. The Government Accountability Office (GAO)
was tasked to address oversight of coalition support funds that go to Pakistan. Its 2008 report
found that, until about one year before, only a small fraction of Pakistani requests were
disallowed or deferred. In early 2007, the value of rejected requests spiked considerably, although
it still represented one-quarter or less of the total. The apparent increased scrutiny corresponded
with the arrival in Islamabad of a new U.S. Defense Representative, Vice Admiral Michael
Lefever, who reportedly has played a greater role in the oversight process. GAO concluded that
increased oversight and accountability was needed over Pakistan’s reimbursement claims for
coalition support funds.30
The State Department claims that Pakistan’s requests for CSF reimbursements are carefully vetted
by several executive branch agencies, must be approved by the Secretary of Defense, and
ultimately can be withheld through specific congressional action. However, a large proportion of
CSF funds may have been lost to waste and mismanagement over the years, given a dearth of

27 “Pakistan Army Accused of Extrajudicial Killings, Human Rights Abuses,” Washington Post, April 5, 2010;
“Pakistan Holding Thousands in Indefinite Detention, Officials Say,” Washington Post, April 21, 2010. When asked
directly during a June 2010 Senate Appropriations Committee hearing, Secretary Gates assured Congress that his
department was working to ensure that the “Leahy Law” is being implemented in both Pakistan and Afghanistan
(statement of Secretary of Defense Robert Gates before the Senate Appropriations Committee, June 16, 2010).
28 “Pakistani Army Chief Orders Video Inquiry,” New York Times, October 7, 2010; “Pakistani Troops Linked to
Abuses Will Lose U.S. Aid,” New York Times, October 22, 2010; “Disappearances With Reported Ties to Pakistan
Worry U.S.,” New York Times, December 30, 2010.
29 Statement before the Senate Armed Services Committee, February 6, 2008.
30 See http://www.gao.gov/new.items/d08806.pdf. See also “Pentagon Puts Brakes on Funds to Pakistan,” Los Angeles
Times
, May 7, 2008.
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adequate controls and oversight. The Bush Administration may have concluded in late 2008 that
Pakistan diverted much of the funds toward a military buildup focused on India.31
Senior Pentagon officials reportedly have taken steps to overhaul the process through which
reimbursements and other military aid are provided to Pakistan. The National Defense
Authorization Act (NDAA) for FY2008 (P.L. 110-181) for the first time required the Secretary of
Defense to submit to Congress itemized descriptions of coalition support reimbursements to
Pakistan. More recent NDAAs require the Secretary of Defense to submit to Congress detailed
quarterly reports on the uses of CSF. In 2010, the now deceased Special Representative for
Afghanistan and Pakistan Ambassador Richard Holbrooke claimed that about 60%-65% of
Pakistan reimbursement requests under CSF are fulfilled. When questioned about CSF oversight
at a March 2011 House hearing, the Commander of U.S. Central Command stated that he had
“some very keenly attentive field grade officers in Islamabad” who track the money “very, very
carefully.”32 A May 2011 press report suggests that this is being accomplished, and that U.S.
auditors are now much more careful in their examination of Pakistani claims.33
Defense Supplies
Major U.S. arms sales and grants to Pakistan since 2001 have included items useful for
counterterrorism operations, along with a number of “big ticket” platforms more suited to
conventional warfare. In dollar value terms, the bulk of purchases are made with Pakistani
national funds, but U.S. grants have eclipsed this in recent years. The Pentagon reports total
Foreign Military Sales agreements with Pakistan worth $5.4 billion for FY2002-FY2010 (in-
process sales of F-16 combat aircraft and related equipment account for more than half of this).
The United States also has provided Pakistan with more than $2.1 billion in Foreign Military
Financing (FMF) grants since 2001 (including FY2010 funds). These funds are used to purchase
U.S. military equipment for longer-term modernization efforts. Pakistan also has been granted
U.S. defense supplies as Excess Defense Articles (EDA). Major post-2001 defense supplies
provided or soon to be provided under FMF include:
• eight P-3C Orion maritime patrol aircraft and their refurbishment (valued at $474
million; two delivered);
• about 6,312 TOW anti-armor missiles ($186 million; at least 2,007 delivered);
• more than 5,600 military radio sets ($163 million);
• six AN/TPS-77 surveillance radars ($100 million);

31 “Pakistani Military ‘Misspent Up to 70% of American Aid,’” Guardian (London), February 28, 2008; “Revamping
Aid to Pakistan is Expected in Bush Report,” New York Times, December 7, 2008. In mid-2008, the leader of
Pakistan’s ruling party, now-President Zardari claimed, without providing evidence, that, as president, Pervez
Musharraf had been passing only a fraction of the funds over to the Pakistani military, leaving some $700 million of
reimbursements per year “missing” (quoted in “Where’s the Money?,” Sunday Times (London), August 10, 2008).
32 See the State Department’s March 2, 2010, release at http://www.state.gov/p/sca/rls/rmks/2010/137693.htm;
statement of General James Mattis in “House Armed Services Committee Holds Hearing on the Proposed Fiscal 2012
Budget for the Defense Department’s U.S. Central Command and U.S. Special Operations Command,” CQ Transcripts,
March 3, 2011.
33 By this account, Pakistan has “routinely” submitted “unsubstantiated” or “exaggerated” claims, and denial rates have
climbed from less than 2% in 2005 to 44% in 2009 (“U.S. Balks at Pakistani Bills,” Wall Street Journal, May 17,
2011).
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• six C-130E transport aircraft and their refurbishment ($76 million);
• five refurbished SH-2I Super Seasprite maritime helicopters granted under EDA
($67 million);
• the USS McInerney, an ex-Perry class missile frigate (via EDA, $65 million for
refurbishment);
• 20 AH-1F Cobra attack helicopters via EDA ($48 million, 12 refurbished and
delivered); and
• 121 refurbished TOW missile launchers ($25 million).
Supplies paid for with a mix of Pakistani national funds and FMF include:
• up to 60 Mid-Life Update kits for F-16A/B combat aircraft (valued at $891
million, with $477 million of this in FMF; Pakistan’s current plans are to
purchase 35 such kits); and
• 115 M-109 self-propelled howitzers ($87 million, with $53 million in FMF).
Notable items paid for entirely with Pakistani national funds include:
• 18 new F-16C/D Block 50/52 combat aircraft, with an option for 18 more (valued
at $1.43 billion, 17 delivered to date34);
• F-16 armaments including 500 AMRAAM air-to-air missiles; 1,450 2,000-pound
bombs; 500 JDAM bomb tail kits for gravity bombs; and 1,600 Enhanced
Paveway laser-guided bomb kits, also for gravity bombs ($629 million);
• 100 Harpoon anti-ship missiles ($298 million);
• 500 Sidewinder air-to-air missiles ($95 million); and
• six Phalanx Close-In Weapons System naval guns ($80 million).
Other major articles transferred via EDA include:
• 14 F-16A/B combat aircraft;
• 59 T-37 military trainer jets’ and
• 550 M-113 armored personnel carriers.35
Under Coalition Support Funds (part of the Pentagon budget), Pakistan has received 26 Bell 412
utility helicopters, along with related parts and maintenance, valued at $235 million. Under
Section 1206 (global train and equip), Frontier Corps, and PCF/PCCF authorities (all overseen by
the Defense Department to date), Pakistan has received four Mi-17 multirole helicopters (another
six were provided temporarily at no cost), two King Air 350 surveillance aircraft, 450 vehicles for
the Frontier Corps, 20 Buffalo explosives detection and disposal vehicles, hundreds of M-141

34 The first of the new F-16s were delivered in June 2010, when three aircraft were inducted into the Pakistani Air
Force at the Shabaz Air Base near Jacobabad. A fourth delivery saw five more planes delivered in December,
representing “near completion” of the new Block 52 squadron (all 18 aircraft are set to be delivered by January 2012)
(see the U.S. Embassy’s December 13, 2010, release at http://islamabad.usembassy.gov/pr-10121309.html).
35 Figures reported by the U.S. Department of Defense. See also CRS Report RS22757, U.S. Arms Sales to Pakistan.
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Bunker Defeat Munitions, helicopter spare parts, sophisticated explosives detectors, night vision
devices, radios, body armor, helmets, first aid kits, litters, and large amounts of other individual
soldier equipment. Pakistan is eager to receive more counterinsurgency hardware for use in
western Pakistan, including armored personnel carriers, laser target designators, laser-guided
munitions, and more night-vision goggles and surveillance gear. They also request better and
more sophisticated surveillance and communications equipment, along with more attack and
utility helicopters.
Despite the provision of equipment suited to unconventional warfare, some analysts have
continued to criticize the programming of security-related aid to Pakistan. Foremost among these
are assertions that the Pakistani military maintains an institutional focus on conventional war-
fighting capabilities oriented toward India and that it has used U.S. security assistance to bolster
these capabilities while paying insufficient attention to the kinds of counterinsurgency capacity
that U.S. policy makers might prefer to see strengthened.36 For example, of the some $2.1 billion
in Foreign Military Financing provided to Pakistan from FY2002-FY2010, more than half has
been used by Islamabad to purchase weapons of limited use in the context of counterterrorism.37
These include maritime patrol aircraft, anti-armor missiles, surveillance radars, update kits for F-
16 combat aircraft, and self-propelled howitzers. Counterarguments contend that such purchases
facilitate regional stability and allow Pakistan to feel more secure vis-à-vis India, its more
powerful neighbor.38
The Defense Department has characterized F-16 fighters, P-3C patrol aircraft, and anti-armor
missiles as having significant anti-terrorism applications. The State Department has claimed that,
since 2005, FMF funds have been “solely for counterterrorism efforts, broadly defined.”39 Such
claims elicit skepticism from some observers, and analysts who emphasize the importance of
strengthening the U.S.-India strategic partnership have called U.S. military aid to Pakistan
incompatible with U.S. strategic goals in the region. Moreover, U.S. officials are concerned that
Pakistan has altered some conventional U.S.-supplied weapons in ways that could violate the
Arms Export Control Act. Such alleged modifications include expanding the capability of both
Harpoon anti-ship missiles and P-3C naval aircraft for land-attack missions. The Islamabad
government categorically rejects the allegations.40 Indian observers were unsurprised by the
claims; New Delhi’s leaders continuously complain that Pakistan diverts most forms of U.S.
assistance toward India. Some more suspicious analysts even see purpose in such a dynamic: a
U.S. wish to maintain Pakistan’s viability as a regional balancer to Indian hegemony.41

36 The Omnibus Appropriations Act, 2009 (P.L. 111-8), limits FY2009 Foreign Military Financing for Pakistan to
counterterrorism programs only, and it bars the Administration from using such funds for any programs initially funded
under Section 1206 of the 2006 defense authorization (P.L. 109-163), which pertains to Pentagon programs for training
and equipping foreign military forces.
37 Of the $2.1 billion, about $1.2 billion was used to upgrade P-3C maritime patrol aircraft and F-16 combat aircraft,
and for the purchase of TOW anti-tank missiles and launchers.
38 See, for example, the Pentagon’s June 28, 2006, notification at http://www.dsca.osd.mil/PressReleases/36-b/2006/
Pakistan_06-09.pdf.
39 F-16 aircraft are reported by some to be effective in Pakistan’s counterinsurgency efforts, with improved training and
enhanced capabilities allowing for more precise targeting resulting in fewer civilian casualties (see the December 17,
2009, statements of a Pentagon official at http://www.defense.gov/transcripts/transcript.aspx?transcriptid=4528);
State’s release at http://2001-2009.state.gov/p/sca/rls/rm/2007/97946.htm.
40 “U.S. Says Pakistan Made Changes to Missiles Sold for Defense,” New York Times, August 30, 2009; Foreign
Ministry’s August 30, 2009, release at http://www.mofa.gov.pk/Press_Releases/2009/Aug/PR_335_09.htm.
41 “Aid to Pakistan ‘Invariably Directed’ Against India - Minister,” BBC Monitoring South Asia, August 17, 2009;
(continued...)
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During the course of autumn 2009 fighting in South Waziristan, Pakistan received low-profile but
significant U.S. assistance in the form of transport helicopters, parts for helicopter gunships, and
infantry equipment, along with unprecedented intelligence and surveillance video sharing from
American UAVs. In anticipation of new counterinsurgency operations in 2010, the United States
provided the Pakistani air force with about 1,000 quarter-ton bombs, along with up to 1,000 kits
for making gravity bombs laser-guided-capable. As noted above, transfers to Pakistan of such
offensive weaponry are viewed with a wary eye by the Indian government.
Pakistani officials have continued to complain that U.S.-supplied defense equipment, especially
that most needed for counterinsurgency operations such as attack and utility helicopters, has been
too slow in coming. The Pakistani Ambassador to the United States has been quoted as claiming
that, in his first two years in Washington, Pakistan received only eight used Mi-17 transport
helicopters and that Pakistan’s military operations have been hindered by a lack of equipment.
Such claims rile U.S. officials, who document that the United States has provided Pakistan with at
least 50 helicopters since 2006—12 of them armed Cobra models—and who note that the
delivery of more top-line attack helicopters has been delayed because of Pakistani inaction.42
Former U.S. Joint Chiefs Chairman and Secretary of State Colin Powell has urged the Obama
Administration to do a better job of providing the Pakistani military with the mobility and
intelligence capabilities needed for counterinsurgency operations.43 In September 2010, the
Pentagon notified Congress of a potential sale to Pakistan of 30 Bell 412 utility helicopters and
related support and training worth up to $397 million.44
Military Training and Law Enforcement
The George W. Bush Administration launched an initiative to strengthen the capacity of the
Frontier Corps (FC), a 65,000-man paramilitary force overseen by the Pakistani Interior Ministry.
The FC has primary responsibility for border security in Pakistan’s western Khyber Pakhtunkhwa
(KPk) and Baluchistan provinces, which border Afghanistan. In 2007, the Pentagon began using
its funds to train and equip the FC, as well as to increase the involvement of the U.S. Special
Operations Command in assisting with Pakistani counterterrorism efforts. Americans are also
engaged in training Pakistan’s elite Special Service Group commandos with a goal of doubling
that force’s size to 5,000. These efforts have continued under the Obama Administration. The
U.S. program to train Pakistan’s paramilitary forces reportedly has been hampered by Pakistan’s
reluctance to send troops who are needed for urgent operations elsewhere. Some analysts also
contend that only U.S. military personnel (as opposed to contractors) can effectively train
Pakistani soldiers.
Other security-related programs for Pakistan are aimed especially at bolstering Islamabad’s
counterterrorism and border security efforts, and have included U.S.-funded road-building
projects in the KPk and FATA. The United States also has undertaken to train and equip new
Pakistan Army Air Assault units that can move quickly to find and target terrorist elements. U.S.-
funded military education and training programs seek to enhance the professionalism of

(...continued)
Gurmeet Kanwal, “US Arms Sales Are Propping Up Pakistan as a Regional Challenger,” Institute for Defense Studies
and Analysis (New Delhi), February 11, 2010.
42 “Pakistan Wants Combat Copters,” Washington Times, June 16, 2010; author interviews with Pentagon officials.
43 See the November 15, 2010, CNN transcript at http://transcripts.cnn.com/TRANSCRIPTS/1011/15/lkl.01.html.
44 See the notification at http://www.dsca.osd.mil/PressReleases/36-b/2010/pakistan_10-28.pdf.
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Pakistan’s military leaders, and develop respect for rule of law, human rights, and democratic
values. At least 600 Pakistani officers have received such training since 2001.
U.S. security assistance to Pakistan’s civilian sector is aimed at strengthening the country’s law
enforcement capabilities through basic police training, provision of advanced identification
systems, and establishment of a new Counterterrorism Special Investigation Group. U.S. efforts
may be hindered by Pakistani shortcomings that include poorly trained and poorly equipped
personnel who generally are underpaid by ineffectively coordinated and overburdened
government agencies. Pakistan’s weak criminal justice sector is marked by conviction rates below
10%, poorly trained investigators, and rampant corruption. Some analysts link the problem to
democratization more broadly, and urge much greater U.S. and international attention to
bolstering Pakistan’s civilian security sector.45 The findings of a 2008 think-tank report reflected a
widely held view that Pakistan’s police and civilian intelligence agencies are better suited to
combating insurgency and terrorism than are the country’s regular army. The report found that
Pakistan’s police forces are “incapable of combating crime, upholding the law, or protecting
citizens and the state against militant violence,” and placed the bulk of responsibility on the
politicization of the police forces. The report recommended sweeping reforms to address
corruption and human rights abuses.46
Other International Economic Donors
Of the $5.4 billion in total aid committed for Pakistan in 2009, about 48% was from multilateral
agencies and 52% from bilateral sources. The United States is the largest single bilateral donor of
development assistance to Pakistan, providing nearly half of all commitments (47.6%) in 2009.
The United Arab Emirates committed 15% and the United Kingdom 13% that same year.
The largest multilateral agency commitments in 2009 were $1.9 billion from the World Bank’s
International Development Association, $278.8 million from European Union Institutions, and
$249.4 million from the Asian Development Fund. See Appendix C for bilateral economic
development aid commitments to Pakistan by other donor countries in FY2009.
Global cooperation involving a “Friends of Democratic Pakistan” (FODP) group was launched in
September 2008, when President Zardari and the top diplomats of the United Arab Emirates,
Britain, and the United States were joined by foreign ministers from Australia, Canada, France,
Germany, Italy, Japan, and Turkey, and representatives of China, the European Union, and the
United Nations. A resulting statement expressed agreement to work in strategic partnership with
Pakistan to combat violent extremism; develop a comprehensive approach to economic and social
development; coordinate an approach to stabilizing and developing border regions; address
Pakistan’s energy shortfall; and support democratic institutions.47
In April 2009, 31 countries and 18 international institutions sent representatives to an
FODP/Donors’ Conference in Tokyo. There Ambassador Holbrooke announced the
Administration’s intent to provide a total of $1 billion in assistance to Pakistan over the 2009-

45 See “Reforming Pakistan’s Criminal Justice System,” International Crisis Group Asia Report No. 196, December 6,
2010.
46 “Reforming Pakistan’s Police,” International Crisis Group Asia Report No. 157, July 14, 2008.
47 See State’s September 26, 2008, release at http://2001-2009.state.gov/r/pa/prs/ps/2008/sept/110353.htm.
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2010 period, bringing to more than $5 billion the total offered by the international community in
addition to the $11.3 billion International Monetary Fund package first arranged in late 2008. In
the lead-up to the 2009 conference, Pakistani officials called for a “Marshall Plan” for Pakistan
that would provide $30 billion in international donations over a five-year period. The Pakistani
Ambassador to the United States is among those who called the proposed $5.7 billion in aid
“miniscule” when compared to the bailouts being provided to American automobile and other
companies, a characterization that rankled some in Congress.48
At an FODP summit meeting in New York in September 2010 co-chaired by President Obama,
President Zardari, and British Prime Minister Gordon Brown, the forum reiterated its central
goals, but no further specifics were discussed pending more detailed Pakistani development
proposals. The FODP’s Third Ministerial Meeting took place in October 2010, when donors
continued to press Pakistan to reform its economy, especially through an expansion of the tax
base.49
China, an ally of Pakistan partly because of its similar distrust of India, has provided some aid
and loans to Pakistan, but nothing close to the level of the United States and other major donors.
Between 2004 and 2009, China provided $9.0 million in grant assistance and $217 million in
loans to Pakistan.50 China stands to gain access to resources in Pakistan and a bigger influence in
Asia, in general. China also provides a model of a successful nondemocratic country to Pakistan.


48 “Pakistan Asks U.S. for 30 Billion Dollar ‘Marshall Plan’ to Stabilize Region” (interview), Washington Times, April
8, 2009.
49 “Friends Tell Pakistan to Shape Up in Exchange for Aid,” Daily Times (Lahore), October 16, 2010.
50 The Center for Global Development, Pakistan Aid Facts, by Wren Elhai, August 26, 2010. http://blogs.cgdev.org/
mca-monitor/2010/08/pakistan-aid-facts.php?utm_source=nl_weekly
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Table 1. Direct Overt U.S. Aid and Military Reimbursements to Pakistan, FY2001-FY2012
(appropriations, with disbursements in parentheses, rounded to the nearest millions of dollars)
FY2002-
Program or
FY2011
FY2012
Account
FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Total
(req.)
1206
— — — — — 28 14 56 114

e
212



8
24
49
54
47d
CN

(1) — (1)
(9)
(14)
(37)
(72)
(25) 43e 63e
288

964
CSFa
— 1,169 1,247 705b
862 731
1,019 685e 1,499
f
8,881f

FC
— — — — — — — 75 25d — —
100

75
225
75
299
297
297
298
300
FMF

(75)
(225)
(75)
(298)
(298)
(297)
(298)
(300) 294 n/a
2,160
350
1
1
1
2
2
2
2
2
IMET

(1)
(1)
(1)
(2)
(2)
(2)
(2)
(2) 5
n/a
18
5
77
91
31
32
32
38
24
22
88f
INCLE
(77)
(91)
(31)
(1)
(17)
(—)
(10)
(33)
(35) 170h n/a 528
125
10
1
5
8
9
10
10
13f
NADR

(10)
(1)
(5)
(7)
(5)
(6)
(1)
(5)
24 n/a 90
23
400
PCF/PCCF
— — — — — — — —
(125)
700 800
1,900
1,100
Total
Security
77 1,346 1,505 818 1,313 1,260 1,127 1,536 1,674g 2,735 n/a 14,177 1,603


14
16
26
21
28
22
30
33
CSH/GHCS

(1)
(1)
(6)
(16)
(19)
(25)
(18)
(31)
30 n/a 221
2
10
35
49
29
38
95
30
DA

(0)
(2)
(9)
(39)
(43)
(29)
(32)
— — n/a
286

CRS-19


FY2002-
Program or
FY2011
FY2012
Account FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Total
(req.)

625
188
200c
298
337
394d
347
1,114f
ESF
(3)
(602)
(190)
(206)
(203)
(218)
(269)
(86)
(209) 1,292
11 4,797
1,360
91
41
30
22
32
55
10
50
55
Food Aidi
(2)
(5)
(40)
(22)
(6)
(48)
(10)
(3)
(79) 124 51 413

11

HRDF
— 1 — 2 2 1
(1) — (1) — — 17

70
50
50
103
IDA
— — — — —
(53)
(9)
(6)
(27)
232 145 650

9
9
7
6
6
10
4

60
MRA
(4)
(5)
(7)
(4)
(3)
(3)
(5)
(10)
(9)
49 —
152

Total
Economic
111 711 286 317 402 553 683 591
1,365g 1,727 n/a 6,536 1,362


Grand
Total
188 2,057 1,791 1,135 1,715 1,813 1,810 2,127 3,039g 4,462 n/a 20,713 2,965
Sources: U.S. Departments of State, Defense, and Agriculture; U.S. Agency for International Development.
Abbreviations:
1206: Section 1206 of the National Defense Authorization Act (NDAA) for FY2006 (P.L. 109-163, global train and equip; Pentagon budget); CN: Counternarcotics Funds
(Pentagon budget); CSF: Coalition Support Funds (Pentagon budget); CSH: Child Survival and Health (Global Health and Child Survival, or GHCS, from FY2010); DA:
Development Assistance; ESF: Economic Support Funds; FC: Section 1206 of the NDAA for FY2008 (P.L. 110-181, Pakistan Frontier Corp train and equip; Pentagon
budget); FMF: Foreign Military Financing; HRDF: Human Rights and Democracy Funds; IDA: International Disaster Assistance (Pakistani earthquake and internal y displaced
persons relief); IMET: International Military Education and Training; INCLE: International Narcotics Control and Law Enforcement (includes border security)
MRA: Migration and Refugee Assistance; NADR: Nonproliferation, Anti-Terrorism, Demining, and Related (the majority allocated for Pakistan is for anti-terrorism
assistance); PCF/PCCF: Pakistan Counterinsurgency Fund/Pakistan Counterinsurgency Capability Fund (Pentagon budget through FY2010, State Department thereafter)
Notes:
n/a=not available. Country al ocations were not available at the time of publication.
a. CSF is Pentagon funding to reimburse Pakistan for its support of U.S. military operations. It is not officially designated as foreign assistance.
b. Includes $220 million for Peacekeeping Operations reported by the State Department.
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c. Congress authorized Pakistan to use the FY2003 and FY2004 ESF allocations to cancel a total of about $1.5 billion in concessional debt to the U.S. government. From
FY2005-FY2007, $200 million per year in ESF was delivered in the form of “budget support”—cash transfers to Pakistan. Such funds have been mostly “projectized”
from FY2008 on.
d. Includes $110 million in Pentagon funds transferred to the State Department for projects in Pakistan’s tribal areas (P.L. 110-28).
e. This funding is “requirements-based;” there are no pre-al ocation data.
f.
Congress appropriated $1.2 billion for FY2009 and $1.57 billion for FY2010, and the Administration requested $2 billion for FY2011, in additional CSF for al U.S.
coalition partners. Pakistan has in the past received about 80% of such funds. FY2009-FY2011 may thus see an estimated $3.4 bil ion in additional CSF payments to
Pakistan.
g. Includes a “bridge” ESF appropriation of $150 million (P.L. 110-252), $15 million of which the Administration later transferred to INCLE. Also includes FY2009
supplemental appropriations of $539 million for ESF, $66 million for INCLE, and $2 million for NADR.
h. The Administration’s request for supplemental FY2010 appropriations includes $244 million for ESF, $40 million for INCLE, and $60 million for FMF funds for Pakistan.
These amounts are included in the estimated FY2010 total.
i.
P.L.480 Title I (loans), P.L.480 Title II (grants), and Section 416(b) of the Agricultural Act of 1949, as amended (surplus agricultural commodity donations). Food aid
totals do not include freight costs.

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Pakistan: U.S. Foreign Assistance

FY2012 Request for Aid to Pakistan and Objectives
The FY2012 budget request continues objectives set earlier by the EPPA and the George W. Bush
Administration. According to the Obama Administration’s FY2012 budget request,
The United States seeks to advance U.S. national security by deepening its long-term
bilateral strategic partnership with Pakistan.... The United States will partner with Pakistan to
strengthen the capacity of the democratic government to meet the needs of its citizens better
by rehabilitating critical infrastructure, stabilizing key areas contested by violent extremists,
and fostering private-sector-led economic growth.51
For FY2012, the Administration is requesting a total of $2,965.0 million within the International
Affairs 150 function (State-Foreign Operations Appropriations). Of this, about 46% is for
economic assistance and 54% is for security assistance, including $1.1 billion for PCCF,
considered to be Overseas Contingency Operations (OCO) that is not part of the core request, but
is identified by the Administration as extraordinary, temporary funding needs for frontline states.
Consistent with the EPPA, the FY2012 civilian assistance will focus on four key areas: energy,
stabilization, social services (especially health and education), and economic growth (including
agriculture). Security assistance will focus on addressing long-term military modernization needs
in Pakistan, as well as counterinsurgency and counterterrorism capabilities.
The Administration’s request of funds for Pakistan continues the six objectives put forth by the
Bush Administration:
1. Peace and Security;
2. Governing Justly and Democratically;
3. Investing in People;
4. Economic Growth;
5. Humanitarian Assistance; and
6. Monitoring, Evaluation, and Oversight.
Performance assessments are to be used to determine resource allocations for Pakistan in the
budget and planning process in future years.52
The Economic Support Fund (ESF), $1,360 million for Pakistan in the FY2012 request,
supports
Governing Justly and Democratically—ESF strengthens the rule of law and
human rights, supports good governance activities, building political competition
and civil society. (FY2010—$171.0 million; FY2012 request—$145.0 million)

51 The Congressional Budget Justification, FY2012, Department of State, p. 660.
52 The following information is based on details provided by the FY2012 Department of State’s Congressional Budget
Justification, Foreign Operations, Vol. II, pp. 660-675.
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Investing in People—ESF promotes health and education services and provides
protection for vulnerable populations. (FY2010—$608.2 million; FY2012
request—$265.2 million)
Economic Growth—ESF funds are used to build a macro foundation for growth
in the economy by expanding trade and investment, improving the financial
sector, building infrastructure, supporting the agricultural sector, encouraging
private sector competitiveness, and expanding economic opportunity. (FY2010—
$502.5 million; FY2012 request—$929.4 million)
Humanitarian Assistance—ESF is used directly or is transferred to other
accounts to assist Pakistan during humanitarian crises. (FY2010—$10.0 million;
FY2012 request—$20.0 million)
The Global Health and Child Survival (GHCS), totaling $2 million for Pakistan in the FY2012
request, provides assistance to support
Investing in People—GHCS funds support the health sector generally, as well as
the National HIV/AIDS Strategy and local health nongovernmental organizations
(NGOs). (FY2010—$29.7 million; FY2012 request—$2.0 million)
Food For Peace Title II53, none requested for Pakistan in FY2012, provides aid for
Humanitarian Assistance, particularly during emergencies.(FY2010—$96.9
million; FY2012 request—$0)
Foreign Military Financing (FMF), $350 million for Pakistan in the FY 2012 request,
provides support for
Peace and Security—FMF funds are used to develop increased professionalism
in Pakistan’s military, promote closer ties with the United States, and
complement other security-related activities such as counterterrorism and its own
defense capabilities. (FY2010—$294.2 million; Fy2012 request—$350.0
million)
International Military Education and Training (IMET), $5 million for Pakistan in the FY2012
request, supports
Peace and Security—IMET funds support military education and training, mostly
in the United States, for Pakistani military personnel and leaders to develop
personal ties with their U.S. counterparts, promoting long-term respect between
them. (FY2010—$5.0 million; FY2012 request—$5.0 million)
Nonproliferation, Antiterrorism, Demining, and Related Programs (NADR), $23.4
million for Pakistan in the FY2012 request, supports
Peace and Security—NADR funds assist Pakistan with antiterrorism efforts and
combating weapons of mass destruction. (FY2010—$23.9 million; FY2012
request—$23.4 million)

53 Food For Peace (P.L. 480 Title II) is within the 150 function but is not in the State-Foreign Operations
appropriations; it is funded within the Agriculture appropriations. During humanitarian crises, funds from certain
Foreign Operations accounts, such as the International Disaster Assistance and Economic Support Fund, may be
transferred to the Food For Peace account for critical food needs.
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International Narcotics Control and Law Enforcement (INCLE), $125 million for
Pakistan in the FY2012 request, contributes
Peace and Security—INCLE funds support the government of Pakistan’s access
to the frontier areas to combat militant and criminal elements, anti-narcotic
operations, and law enforcement training, particularly in the provinces.
(FY2010—$163.9 million; FY2012 request—$116.7 million)
Governing Justly and Democratically—INCLE helps Pakistan to expand the rule
of law program that is jointly administered by the Department of State’s Bureau
of International Narcotics and Law Enforcement Affairs (INL) and the
Department of Justice with prosecutor and judicial training. It also supports
corrections programs and training in Pakistan and jail renovations. (FY2010—
$6.1 million; FY2012 request—$8.3 million)
Monitoring and Program Evaluation. The Administration is fostering community and
third-party oversight of aid programs in Pakistan. The oversight will combine with
USAID monitoring and regular audits done by State and USAID Inspector Generals, the
U.S. Government Accountability Office, the Pakistan Auditor General, and Pakistani
accounting firms to expand the capability of accomplishing the sixth objective
Performance Monitoring and Evaluation. USAID is basing FY2012 project
choices and budgetary decisions in Pakistan on the resulting performance
information.
Critics contend that many of the stated institutional and development goals of U.S. assistance to
Pakistan remain largely unmet. For much of the post-2001 period, this was at least in part due to a
perceived U.S. over-reliance on security-related aid, which has accounted for the great bulk of
U.S. assistance to Pakistan.54 Many observers argue that it would be more useful to target U.S.
assistance programs in such a way that they more effectively and more directly benefit the
country’s citizens.
Issues for Congress
A number of issues concern many in Congress about making Pakistan one of the top U.S. aid
recipients, not the least of which is preventing nuclear proliferation. Senator Kerry, chairman of
the Senate Foreign Relations Committee, acknowledged at a May 2011 committee hearing that he
has received recent news about “a dramatic increase in Pakistan’s nuclear arsenal that has raised
U.S. and our allies’ concerns about nuclear proliferation and regional security.”55 Other key issues
follow.

54 A major 2007 study found that only about one-tenth of U.S. post-2001 aid was directed toward development,
governance, and humanitarian programs (Craig Cohen, “A Perilous Course: U.S. Strategy and Assistance to Pakistan,”
Center for Strategic and International Studies, August 2007).
55 Senate Foreign Relations Committee, hearing on U.S. Policy and Its Limits in Pakistan, May 5, 2011.
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Conditions on Aid to Pakistan
Debate Overview
One idea long floated in foreign assistance critiques is the “conditioning” of aid to Pakistan,
mainly through the creation of benchmarks and certification that they have been met. For
example, in 2003, a task force of senior American South Asia watchers issued a report on U.S.
policy in the region that included a recommendation to directly link U.S. support for Islamabad to
that government’s own performance in making Pakistan a more “modern, progressive, and
democratic state.”56 Some commentators have emphasized that, to be truly effective,
conditionality should be applied by many donor countries rather than just the United States and
should be directed toward the Pakistani leadership—especially the military—to the exclusion of
the general public.57 In the wake of political crises and deteriorating security circumstances in
Pakistan in the late 2000s, some senior Members of Congress became more vocal in calling for
conditions on further U.S. assistance in the absence of improvements in these areas.58
Many analysts, however, including many policymakers in the George W. Bush Administration
and some in the Obama Adminsitration, have contended that conditioning U.S. aid to Pakistan
had a past record of failure and likely would be counterproductive by reinforcing Pakistani
perceptions of the United States as an unreliable partner. From this perspective, putting additional
pressure on an already weak Islamabad government might lead to significant political instability
in Pakistan.59 For numerous Pakistan watchers, a policy of enhanced cooperation and structured
inducements is viewed as likely to be more effective than a policy based on pressure and threats.
In a May 2011 Senate Foreign Relations hearing, ranking Member Senator Lugar stated,
“American conditionalities, ‘you need to do A, B and C,’ is not necessarily helpful. What is
helpful is identifying the most appropriate projects and then following through, not changing
midcourse.”60 One senior Washington-based analyst, a longtime advocate against placing
conditions on U.S. aid to Pakistan, instead offered an admittedly modest approach: he argued for
modifying current U.S. policy through more forceful private admonitions to Islamabad to better
focus its own counterterrorism efforts while also targeting Taliban leadership, increasing
provision of U.S. counterinsurgency technologies and training to Pakistani security forces, and
establishing benchmarks for continued provision of coalition support funding.61 Private
admonitions are considered by some analysts to be meaningless in the absence of public
consequences, however.

56 Specifically, the experts urged directing two-thirds of U.S. aid to economic programs and one-third to security
assistance, and conditioning increases in aid amounts to progress in Pakistan’s reform agenda (“New Priorities in South
Asia: U.S. Policy Toward India, Pakistan, and Afghanistan,” Chairmen’s Report of an Independent Task Force
Cosponsored by the Council on Foreign Relations and the Asia Society, October 2003).
57 See, for example, Frederic Grare, “Rethinking Western Strategies Toward Pakistan,” Carnegie Endowment for
International Peace, 2007.
58 See, for example, “Senate Leader Wants Bush to Pressure Pakistan,” Reuters, January 10, 2008; “Democrat
Questions US Aid to Pakistan,” Associated Press, May 27, 2008.
59 See, for example, Daniel Markey, “A False Choice in Pakistan,” Foreign Affairs, July 2007.
60 Senate Foreign Relations Committee, Hearing on U.S. Policy and its Limits in Pakistan, May 5, 2011.
61 Ashley Tellis, “Pakistan: Conflicted Ally in the War on Terror,” Carnegie Endowment Policy Brief 56, December
2007.
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For Pakistanis themselves, aid conditionality in U.S. congressional legislation can raise
unpleasant memories of 1985’s Pressler Amendment, which led to a near-total aid cutoff in 1990.
Islamabad’s sensitivities are thus acute: in 2007, the Pakistan Foreign Ministry said aid conditions
legislated in the Implementing the 9/11 Commission Recommendations Act of 2007 (P.L. 110-53)
“cast a shadow” on existing U.S.-Pakistan cooperation and create linkages that “did not serve the
interest of bilateral cooperation in the past and can prove to be detrimental in the future.”62 Calls
for further conditionality from some in Congress led Islamabad to again warn that such moves
could harm the bilateral relationship and do damage to U.S. interests. Nevertheless, the State
Department in 2009 reported being “comfortable” with congressional conditions and “confident”
that required reports could be issued.63
After bin Laden was found in a military cantonment city not far from Islamabad, expert witnesses
at a Senate Foreign Relations Committee hearing in May 2011 asserted that certification and
conditionality should be taken far more seriously than they have been in the past, but that
economic assistance should continue. However, Senator Carl Levin, chairman of the Senate
Armed Services Committee, reportedly has suggested that he would favor a curtailment of
development rather than security aid, the argument being that short-term U.S. interests in
combating terrorism and Afghan insurgents trump longer-term interests in seeing Pakistan
transformed into a more prosperous and democratic state.64
Current Conditionality and Administration Certification
Section 203 of The Enhanced Partnership with Pakistan Act of 2009 (P.L. 111-73) contains the
most explicit and stringent conditions on U.S. assistance to Pakistan in the post-2001 period. As
noted above, these substantive conditions apply only to security-related assistance for FY2011-
FY2014 and arms transfers for FY2012-FY2014.65 The law precludes such assistance and
transfers until the Secretary of State certifies annually for Congress that
(1) the Government of Pakistan is continuing to cooperate with the United States in efforts to
dismantle supplier networks relating to the acquisition of nuclear weapons-related materials,
such as providing relevant information from or direct access to Pakistani nationals associated
with such networks;
(2) the Government of Pakistan during the preceding fiscal year has demonstrated a sustained
commitment to and is making significant efforts towards combating terrorist groups ...
including taking into account the extent to which the Government of Pakistan has made
progress on matters such as A) ceasing support, including by any elements within the
Pakistan military or its intelligence agency, to extremist and terrorist groups, particularly to
any group that has conducted attacks against United States or coalition forces in Afghanistan,

62 See http://www.mofa.gov.pk/Press_Releases/2007/july/PR_199_07.htm.
63 “Pakistan Rejects Call for Conditions on U.S. Aid,” Reuters, January 11, 2008; State Department claim at
http://2001-2009.state.gov/p/sca/rls/rm/2007/97946.htm.
64 Senate Foreign Relations Committee, Hearing Transcripts, pp. 8, 9, 13, May 5, 2011; Sen. Levin quoted in “Pakistan
Military Aid Safer Than the Economic Aid,” The Cable (ForeignPolicy.com), May 11, 2011.
65 For these purposes, “security-related assistance” is defined as grant assistance to carry out section 23 of the Arms
Export Control Act (22 U.S.C. 2763) and assistance under chapter 2 of part II of the Foreign Assistance Act of 1961
(22 U.S.C. 2311 et. seq). It does not include assistance authorized to be appropriated or otherwise made available under
any provision of law that is funded from accounts within budget function 050 (National Defense) or amounts
appropriated or otherwise available to the Pakistan Counterinsurgency Capability Fund established under the
Supplemental Appropriations Act, 2009 (P.L. 111-32).
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or against the territory or people of neighboring countries; B) preventing al Qaeda, the
Taliban and associated terrorist groups, such as Lashkar-e-Taiba and Jaish-e-Mohammed,
from operating in the territory of Pakistan, including carrying out cross-border attacks into
neighboring countries, closing terrorist camps in the FATA, dismantling terrorist bases of
operations in other parts of the country, including Quetta and Muridke, and taking action
when provided with intelligence about high-level terrorist targets; and C) strengthening
counterterrorism and anti-money laundering laws; and
(3)the security forces of Pakistan are not materially and substantially subverting the political
or judicial processes of Pakistan.
In apparent conflict with problematic U.S. government reporting on Pakistan’s progress in these
areas was a March 18, 2011, certification by Secretary Clinton required under Section 203. In the
wake of revelations that Al Qaeda’s founder was living in plain sight in a Pakistani city, and top
U.S. military officials persistently complaining that Pakistan has failed to take action against the
Haqqani network of Afghan insurgents in the FATA, this kind of certification has been met with
deep skepticism and appears to many observers to be driven primarily by political considerations
rather than realities on the ground.
Government Reform
The politics of reforming Pakistan’s governance process and tax structure may be among the most
important obstacles to improving aid effectiveness. The United States has provided assistance in
recent years to help build governance capacity in Pakistan, improve political party competition,
promote participation of women and religious minorities in government, and expand rule of law
training. On several occasions Secretary Clinton has pushed Pakistan on tax reform. For example,
when speaking about Pakistan’s flood crisis in October 2010 she said
The international community can only do so much. Pakistan itself must take immediate and
substantial action to mobilize its own resources, and in particular, to reform its economy.
The most important step that Pakistan can take is to pass meaningful reforms that will
expand its tax base. The government must require that the economically affluent and elite in
Pakistan support the government and people of Pakistan.... It is absolutely unacceptable for
those with means in Pakistan not to be doing their fair share to help their own people while
taxpayers of Europe, the United States, and other contributing countries are all chipping in to
do our part.66
Secretary Clinton is one of several top U.S. officials critical of Pakistan’s 9% tax-to-GDP ratio,
one of the lowest in the world. For most observers, this represents what essentially is mass tax
evasion by the country’s economic elite, and is exacerbated by a federal budget overemphasizing
military spending. The government has in recent months been pursuing a Reformed General Sales
Tax initiative, but to date has found it difficult to win sufficient parliamentary support for what
are considered modest changes.
The energy sector provides another representative example of needed government reform.
International donors have for many years pressed Pakistani leaders to reduce price subsidies on
electricity, without success. In the words of one group of aid experts,

66 P.J. Aroon, “Clinton: It’s ‘unacceptable’ that Pakistani elites aren’t paying more taxes,” Foreign Policy, October 14,
2010.
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Time and again, project documents cite the same problems, the donors recommend the same
solutions, the government of Pakistan promises to implement the same reform, the
government breaks (and donors lament) the same promises. Meanwhile, the basic politics
maintaining the status quo have not changed-there are too many reaping the benefits of
subsidized power, and ordinary consumers feel they aren't getting service that warrants
paying more.67
Pakistan’s prime minister contends that his government is firmly committed to economic reforms,
but asks donors to “kindly be patient” with this “work in progress.”68 Nevertheless, there is a
resistance to long-term policy reform in Pakistan which may counter any progress U.S. aid
achieves.
Corruption and Transparency Issues
Corruption is endemic to South Asia and to Pakistan in particular. It presents a persistent and
serious problem for the national economy, harming both domestic and foreign investment rates,
as well as creating skeptical international aid donors. For 2010, Berlin-based Transparency
International (an organization that tracks global corruption trends) placed Pakistan 143rd out of
178 countries in its annual ranking of world corruption levels, giving it a lower ranking than such
countries as Nigeria and Bangladesh, among others.69 A September 2010 agreement between the
U.S. government and Transparency International (TI) established a hotline through which people
can report any misuse of U.S. assistance funds. TI subsequently contended that its workers in
Pakistan have faced threats and harassment, and there were even reports that the Islamabad
government planned legal action against TI for allegedly paying bribes to officials to extract
information.70
Corruption and lack of sufficient transparency is identified as a key obstacle to effective
implementation of U.S. aid programs in Pakistan, and has drawn significant attention in
Congress. A June 2009 House hearing addressed what one senior Member called the “serious
accountability and transparency concerns that have plagued U.S. programs and operations in both
Afghanistan and Pakistan for the past seven years.” At the hearing, Administration witness
Ambassador Holbrooke expressed his support for expanding the responsibilities of the Special
Inspector General for Afghanistan Reconstruction (SIGAR) to monitor U.S. aid programs in
Pakistan.71 At a subsequent House hearing on potential fraud and waste in U.S. aid to Pakistan
and Afghanistan, a senior House Member expressed “serious concerns about the [U.S. aid]
community’s ability to provide comprehensive coverage that keeps pace with the rapid boom in
U.S. activities in the region.”72 During an April 2010 hearing on security and stability in Pakistan,

67 Nancy Birdsall, Wren Elhai, and Molly Kinder, “Pakistan’s Political Crisis: The Limits of U.S. Leverage,” Foreign
Policy
(online), January 20, 2011.
68 Quoted in “Pakistan PM Urges Donors for Patience on Reforms,” Reuters, November 15, 2010.
69 See http://www.transparency.org.
70 “Graft Fighter Alleges Pakistan Threat,” Wall Street Journal, November 29, 2010.
71 Transcript: “Joint Hearing of the House Oversight and Government Reform Committee and National Security and
Foreign Affairs Subcommittee of the House Oversight and Government Reform Committee, ‘Afghanistan and
Pakistan: Oversight of a New Interagency Strategy,” June 24, 2009.
72 Statement of Rep. John Tierney, “Transcript: House Oversight and Government Reform Subcommittee on National
Security and Foreign Affairs Holds Hearing on Detecting Fraud and Waste in Afghanistan and Pakistan,” September 9,
2009.
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the chairman of the House Armed Services Committee acknowledged that the Administration had
developed “good metrics” for tracking progress in Pakistan, but expressed being disappointed that
insufficient information was being provided to Congress.73
Ambassador Robin Raphael, the U.S. Coordinator for Economic and Development Assistance in
Pakistan, vowed in mid-2009 that the United States will employ the “highest standards of
accountability” in efforts to minimize future administrative outlays.74 While such efforts are no
doubt sincere, evidence of improvements is scarce nearly two years later. Moreover, U.S. funds to
the government of Pakistan for budget support are comingled with other resources, according to a
2010 U.S. Inspectors General report, contributing to further ongoing accountability and reporting
challenges.75
A reliance on foreign contractors may have fueled significant resentment among Pakistanis who
saw them as enriching themselves with aid dollars.76 According to skeptics, large-scale U.S. aid
only engenders Pakistani corruption and has allowed Islamabad to boost its India-oriented
military capabilities in ways that would not have otherwise been possible. Corruption concerns
reportedly have led to resentment in Pakistan, where some officials feel slighted after launching a
vigorous and risky campaign against militants.77 There are concerns that consulting fees and
administrative overhead account for a large proportion of appropriated aid, meaning large sums
may never reach the people they are meant to benefit.78 It is claimed that roughly half of all U.S.
assistance pledged for Pakistan is spent on administrative costs, including highly paid foreign
experts, thus forwarding the argument that aid flows would be more effective if channeled
through Pakistani agencies.79 Pakistani officials have tended to agree with those in the United
States who believe that administrative costs can be reduced by channeling U.S. aid primarily
through Pakistani government agencies rather than through NGOs.80 Under Ambassador
Holbrooke’s guidance, the State Department in late 2009 made plans to significantly scale back
its use of U.S. aid contractors in Pakistan and begin channeling more money directly to Pakistani
officials and local groups.81 This shift has not come without resistance from some quarters, with
analysts warning that Pakistan’s civilian bureaucracies do not have sufficient capacity to be
effective implementing partners.82

73 See the opening remarks of Rep. Ike Skelton, “House Armed Services Committee Holds Hearing on Security and
Stability in Pakistan,” CQ Transcripts, April 29, 2010.
74 “‘US Aid Administrative Costs to be Minimalized,’” Daily Times (Lahore), August 29, 2009.
75 Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan by the Inspector General for
USAID, Inspector General for the Department of State, and the Inspector General for the department of Defense,
December 31, 2010, p. 34.
76 “Setbacks Plague U.S. Aid to Pakistan,” Wall Street Journal, January 21, 2011.
77 Azeem Ibrahim, “How America is Funding Corruption in Pakistan,” Foreign Policy (online), August 11, 2009;
“Economic Aid for Pakistan a Victim of Corruption Worries,” Los Angeles Times, March 28, 2010.
78“US Aid ‘Failing to Reach Target,’” BBC News, May 16, 2008.
79 “US Aid to Pakistan ‘Depleted by Admin Costs,’” Financial Times (London), August 27, 2009.
80 “Gilani Opposes Aid Disbursement Though NGOs,” Daily Times (Lahore), September 7, 2009.
81 “State Dept Rethinks How to Deliver Aid to Pakistan,” USA Today, October 2, 2009.
82 One major early 2010 study on reforming Pakistan’s civil service warned U.S. and other donor countries to refrain
from supporting bureaucracies such as the FATA Secretariat until reforms there increase transparency and reduce the
risk of large-scale corruption in these “inefficient and unaccountable institutions.” An April 2010 Government
Accountability Office report provided supporting evidence for such warnings, identifying ongoing problems with
efforts to track U.S. development assistance in the FATA (82 “Reforming Pakistan’s Civil Service,” International Crisis
Group Asia Report No. 85, February 16, 2010, at http://www.crisisgroup.org/home/index.cfm?id=6528; GAO,
(continued...)
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A 2011 GAO report determined that, as of the end of 2010, only about $180 million of the some
$1.5 billion appropriated for civilian assistance to Pakistan in FY2010 had been disbursed,
meaning that the full impact of such aid could not be determined. The report listed substantive
risk mitigation strategies undertaken by USAID in its shift to increased reliance upon local and
Pakistani government implementing partners—now reportedly accounting for roughly half of
FY2010 economic assistance disbursements—while also recommending executive action going
forward:
To help prevent waste, fraud, and abuse of U.S. funds, it is important that USAID effectively
implement and monitor efforts to address the weaknesses and enhance the capacity of these
[local] organizations, particularly those that are identified as having a high-risk or medium-
risk of not meeting standards for managing U.S. funds.... To enhance the accountability of
U.S. civilian assistance to Pakistan, we recommend that the USAID Administrator should
ensure that U.S. assistance to Pakistani organizations identified as high- or medium-risk be
provided through contracts, grants, or agreements that require these organizations to address
weaknesses identified in their preaward assessment that would improve the accountability of
funds. These measures can include such steps as implementing a conflict of interest policy,
recruiting more qualified internal audit and procurement staff, embedding approved CPA
staff, and participating in a capacity-building program.83
Some analysts warn that corruption and lack of capacity in Pakistan’s government led to a
“shambolic” response to the mid-2010 floods, and they contend that an absence of working
democratic institutions results in the unnecessary waste of billions in foreign aid, aid that is used
much more effectively on a per-dollar basis in similarly poor, but more democratic countries.
These analysts recommend curtailing unconditioned aid flows and instead channeling assistance
through international escrow accounts accessible only to an Islamabad government that meets
objective criteria.84 In a sign that oversight of its assistance to Pakistan was becoming more
stringent, USAID in late 2010 suspended a U.S.-based nonprofit organization from receiving new
awards pending an investigation into “evidence of serious corporate misconduct,
mismanagement, and internal controls.”85
Problems with USAID-run programs appear to persist. A February 2011 report issued by the
Inspectors General of USAID, State, and the Pentagon addressed in some detail USAID’s
improved oversight and monitoring of its programs, especially though the conducting of pre-
award assessments of local implementing partners, and with the establishment of oversight
entities to ensure that aid funds are protected against waste and theft. However, it also found that,
during the period October-December 2010, two audited U.S. aid development programs in the
FATA “had made little progress” in achieving their goals. While sections of the report on “risk
and mitigation strategies” and “oversight status” listed numerous initiatives meant to ensure better
aid management, the auditors identified a considerable lack of progress overall: “We believe that
USAID has an imperative to accumulate, analyze, and report information on the results achieved

(...continued)
“Combating Terrorism: Planning and Documentation of U.S. Development Assistance in Pakistan’s Federally
Administered Tribal Areas Need to Be Improved, April 2010, at http://www.gao.gov/products/GAO-10-289).
83 See http://www.gao.gov/new.items/d11310r.pdf.
84 Alejandro Quiroz Flores and Alastair Smith, “”Pakistan’s Flood of Cash: How Aid Made Flood Management
Worse,” Foreign Affairs (online), November 28, 2010.
85 See the December 8, 2010, release at http://www.usaid.gov/press/releases/2010/pr101208.html.
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under its programs. One year after the launch of the civilian assistance strategy in Pakistan,
USAID has not been able to demonstrate measureable progress” [emphasis added].86
Aid Delivery and Security Concerns
Security concerns in Pakistan raise several issues, including the inability of American aid workers
to deliver aid and therefore the need to have Pakistani institutions handle much of the delivery;
the difficulty in monitoring and evaluating the effectiveness of the aid; and the security risks
associated with showing the American flag or labeling the aid as coming from the American
people. Security concerns continue to hamper implementation of many foreign assistance
programs, especially in the KPk and FATA regions. In mid-2010, the U.S.-based Mercy Corps
agency halted operations and shut nearly 50 offices due to security issues in both Sindh and
Baluchistan. Similarly, World Food Program operations in northwest Pakistan were temporarily
halted in December 2010 after a suicide bomb attack at a Bajaur food station killed 46 people.87
Along with such direct attacks on NGO operations, more general Pakistani public perceptions of
NGOs may not be favorable.88
Because of militant attacks, the Pakistani army’s public works division is carrying out numerous
U.S. aid projects in the form of roads, water, and electricity in South Waziristan. A senior
Pakistani government official in the region said that the projects have gained support, but it is too
dangerous to put any USAID logos on them because of possible reprisals against the workers. A
tribal elder in the region said that while locals support the road between the towns of Tank and
Makin, they don’t like America any more as a result.89
U.S. Image and Public Diplomacy
There exists a widely held view that substantial, long-term development assistance is the only
way to win hearts and minds in Pakistan, and that this must be delivered predictably and through
transparent processes that are in large part prioritized and monitored by locals.90 Some studies
support the argument that donor countries can reap public diplomacy benefits, perhaps especially
through humanitarian aid. A study of the relationship between foreign disaster assistance
following Pakistan’s 2005 earthquake and local attitudes found evidence that trust of foreigners
was measurably increased in areas closest to the fault-line: “The results provide a compelling case
that trust in foreigners is malleable, responds to humanitarian actions by foreigners and is not a

86 “Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan As of December 31,
2010,” February 2011, at http://www.usaid.gov/oig/public/special_reports/
pakistan_quarterly_report_as_of_dec_31_2010.pdf.
87 “Mercy Corps Leaves South Pakistan,” BBC News, June 14, 2010; “Pakistan Attack Halts Aid,” Wall Street Journal,
December 27, 2010.
88 When asked in an early 2010 survey if NGOs are “working for the welfare of the country and society” or are
“making money and nothing else,” about two-thirds of respondents gave the latter answer (see
http://www.gallup.com.pk/pollsshow.php?id=2010-03-05).
89 Setbacks Plague U.S. Aid to Pakistan, by Tom Wright, Wall Street Journal, January 21, 2011. http://online.wsj.com/
article/SB10001424052748703583404576080113980804354.html
90 See Homi Kharas, “U.S. Aid to Pakistan: Time for a New Approach,” Brookings Institution, August 25, 2010.
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deeply-rooted function of local preferences.”91 In 2010, there were reports of U.S. public
diplomacy benefits resulting from the provision of flood relief in Swat and other areas.92
A rebuttal to these conclusions contends there is very little evidence that humanitarian or
development assistance is effective in promoting greater stability or improved public perceptions
of the United States in Pakistan, and it offers a warning that “greater instrumentalization and
securitization of aid” give the military too large a role in the humanitarian and reconstruction
sectors.93 In one anecdotal example of the apparent failure of aid to bring meaningful public
diplomacy benefits, following U.S. demonstrations of goodwill after mid-2010 floods killed
thousands of Pakistanis and affected some 20 million others, victims who received aid from a
local organization funded by USAID did not change their views of the United States, with one
saying, “I like America’s money, but I don’t like their bullets. It is fair enough that they are
fighting the Taliban, but they kill too many innocent civilians.”94 This attitude may be partially
explained by the many Pakistanis who are ill-informed about levels of U.S. assistance to their
country and express being unaware of any benefits, as well. The perception gap to an extent may
have resulted from the portions of aid lost to corruption and the lack of labeling of aid as coming
from America in some provinces due to security concerns.95
Some reports have U.S. officials seeking greater public diplomacy benefits by pressing
international aid groups to more prominently advertise the source of the goods and services they
provide. Ambassador Holbrooke was himself among those expressing concern that the United
States was not receiving sufficient credit for its assistance efforts. Yet many of those groups are
reluctant, fearing that such visibility would make them targets for militants; 11 of them penned a
letter to USAID asking that requirements on use of U.S. government labels be reconsidered.96 At
the same time, to maximize aid effectiveness and sustainability, and incur faith by the people in
their government, USAID/Pakistan is “committed to providing assistance through Pakistani
institutions.”97

91 The study found more than three in five Pakistanis living on or very close to the earthquake fault line saying they
trusted foreigners, while slightly more than one in five who lived at least 40 miles from the fault line saying they did so
(Tahir Andrabi and Jishnu Das, “In Aid We Trust: Hearts and Minds and the Pakistan Earthquake of 2005,” September
2010). See also “Study: Aid After 2005 Quake Won Trust in Pakistan,” Washington Post, September 7, 2010.
92 See, for example, Zubair Torwali, “Changing Perceptions of the US” (op-ed), Friday Times (Lahore), September 3,
2010.
93 Andrew Wilder, “Aid and Stability in Pakistan: Lessons From the 2005 Earthquake Response,” Disasters, October
2010. At a late 2009 House hearing on U.S. aid to Pakistan, this same nongovernmental expert contended that
development assistance is unlikely to “win hearts and minds” or promote U.S. security objectives. He further warned
that aid can have significant destabilizing effects through its fueling of large-scale corruption, which in turn is corrosive
of government and institutional legitimacy. In order to avoid such an outcome, he argued, a robust effort to rebuild and
repair Pakistan’s civil service bureaucracy should be a priority (Testimony of Andrew Wilder before the House
Oversight and Government Reform Subcommittee on National Security and Foreign Affairs, “U.S. Aid to Pakistan:
Planning and Accountability,” December 9, 2009).
94 Quoted in “Setbacks Plague U.S. Aid to Pakistan,” Wall Street Journal, January 21, 2011.
95 “U.S. Aid Buys Little Goodwill,” Washington Post, August 24, 2010.
96 “US Wants More Aid Recognition in Pakistan,” Washington Post, September 25, 2010; Samuel Worthington, “Why
American Aid Workers in Pakistan Need to Keep a Low Profile” (op-ed), Washington Post, October 10, 2010; “Aid
Groups Concerned Over U.S. Branding in Pakistan,” Reuters, October 12, 2010.
97 Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan by the Inspectors General of
the Departments of State and Defense and USAID. December 31, 2010, p.34.
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Pervasive anti-American sentiment related largely to the drone attacks that Pakistanis say also kill
numerous civilians has led the U.S. government to minimize its “footprint” when providing aid in
certain regions, especially those bordering Afghanistan. This has meant that some projects are
conducted in ways similar to covert operations under the cover of Pakistani government agencies.
Although such an approach facilitates delivery of aid, public diplomacy gains can be sacrificed
when aid beneficiaries are unaware of the origin of the assistance they are receiving. Because
development of Pakistan’s tribal areas is identified as a key U.S. national security goal in and of
itself, such costs may be considered acceptable.
Possible Adjustments to U.S. Assistance Programs
In a response to the Administration’s December 2009 Pakistan Assistance Strategy, a report by a
large coalition of U.S.-based international nongovernmental organizations (INGOs) lauded the
new U.S. approach while also presenting numerous recommendations meant to ensure greater
accountability and effectiveness in U.S. civilian aid to Pakistan:
• Rather than focusing on conflict-affected areas only, U.S. investments in social
services would realize greater long-term effectiveness by being geographically
targeted to all underserved areas, and not favor only areas of “short-term strategic
military and political importance.”
• An emphasis on “high-impact, high-visibility” infrastructure programs should be
balanced with “the development of human capital at the local level through
sustainable, albeit low-visibility programs.”
• Using Pakistan as an “experimental pilot” for transitioning away from INGOs
and relying instead on local and national government and civil society
organizations as aid implementers may be ill-advised in the absence of careful
planning informed by a review of lessons learned from past efforts.
• In order to be sustainable in the long term, aid programs should have Pakistani
ownership and sufficient accountability and oversight.
• Because audit reports produced by accounting firms are not always the best
means of uncovering corruption, the Administration should establish an
independent public watchdog “to keep Pakistani funding transparent and in the
public eye.”
• While local ownership is to be encouraged, Pakistani implementing partners may
lack the capacity to handle an aid package of this magnitude, and may also lose
credibility if viewed as being instruments of U.S. policy. Thus, the U.S.
government should “think creatively about options for oversight and
accountability” of Pakistani partners so as to avoid compromising their
legitimacy.
• Implementation of civilian aid programs is best facilitated by conceptually
divorcing such programs from the language and objectives of counterinsurgency.
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Further recommendations include strengthening existing coordination mechanisms, assuring
flexible funding to meet humanitarian emergencies, developing a clear public relations strategy,
and providing the NGO community with consistent and clear communication.98
Other Aid Issues
Several other concerns regarding the effectiveness and long-term results of U.S. aid in Pakistan
are noted and being addressed by USAID, including99
• Pakistan’s vulnerability to natural disasters such as earthquakes and floods
creates emergencies that cause development aid to be reprogrammed to meet
recurring critical needs. USAID supports surface water management and dam
projects to mitigate flooding.
• Environmental concerns. Some development projects such as certain sections of
roads, dams, etc. are prone to producing adverse environmental impacts that may
solve one problem but create others. Assessments may be required before certain
projects are begun.
• A high turnover rate with the leadership in the Pakistani government’s
agricultural sector, which disrupts projects, has led to requirements to ensure
continuity of key personnel.
• Terrorist threats in the United States—an attack on U.S. soil, but planned in
Pakistan—could have damaging effects on the U.S.–Pakistan bilateral
relationship and aid program, as has the suspicion of the role Pakistan’s military
may have played in protecting bin Laden.
• Limited institutional capacity in Pakistan, especially in the FATA, Khyber
Pakhtunkhwa, and Baluchistan, to implement aid projects or deliver aid could
result in lost resources, theft, and a general inability to manage large amounts of
funding. USAID is supporting technical advisors and units within government
ministries, providing training in accounting and auditing for greater transparency
and accountability. USAID is also collaborating with Pakistan to create a fraud
hotline and education program.
Conclusions
Despite the major May 2011 embarrassment for Pakistan—and especially its security services—
in the appearance of complicity or gross incompetence with regard to the circumstances of Osama
bin Laden’s death, many U.S. government and independent analysts continue to assert that U.S.
strategic interests are inextricably linked with a stable Pakistan that can effectively rule all its
territory, assist the United States with the war in Afghanistan as well as with the fight against
terrorism, and contribute to the stability in the region. While there exist numerous concerns about
whether Pakistan can be accountable in how it uses U.S. aid and whether it will pursue needed

98 “Recommendations for Implementation of Pakistan Assistance Strategy,” InterAction Policy Paper, March 2010, at
http://www.interaction.org/document/recommendation-implementation-pakistan-assistance-strategy.
99 Quarterly Progress and Oversight Report on the Civilian Assistance Program in Pakistan by the Inspectors General of
the Departments of State and Defense and USAID. December 31, 2010, pp 33,.34.
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reforms, these observers emphasize the importance of maintaining a close bilateral engagement,
with an eye toward encouraging and facilitating Pakistani democratization. Given the current
budgetary constraints facing the United States and the recent strained relationship, the 112th
Congress may question the return on such large investments in Pakistan, the second-largest U.S.
aid recipient. Lawmakers will seek the right balance between U.S aid expenditures to promote
U.S. national security interests in Pakistan and the region versus belt-tightening foreign aid cuts
and accountability measures to address the lack of trust between the two governments.
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Appendix A. History of U.S. Aid to Pakistan
Figure A-1. U.S. Aid in Current and Constant Dollars


Source: U.S. Overseas Loans and Grants (Greenbook), U.S. Agency for International Development, The
Department of State’s Congressional Budget Justifications, FY2002-FY2012, and CRS calculations.
Notes: Figures 1948-2000 = obligations; 2001-2010=appropriations. (a) 1962 Peak aid. Pakistan aligned with
West; signed two defense pacts. (b) 1981 Reagan administration negotiated five year $3.2 million security
economic aid package with Pakistan. (c) 1985 Pressler Amendment, Reagan and George H. W. Bush certified
Pakistan to get aid until 1990. (d) 1989 - Soviet Army withdrew from Afghanistan. George H. W. Bush suspended
aid in 1990 because of Pakistan’s nuclear activities. Aid lowest in 1990s. (e) Post 9/11 aid to Pakistan.
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Appendix B. Current Year Request
Figure B-1.FY2012 Budget Request for Aid to Pakistan

Source: The Department of State Congressional Budget Justification, FY2012 and CRS calculations.
Notes: Includes only aid from the State-Foreign Operations Appropriation Request. Defense Department funds
for FY2012 are not yet available. ESF=Economic Support Fund; FMF=Foreign Military Financing;
IMET=International Military Education and Training; INCLE=International Narcotics Control and Law
Enforcement; NADR=Nonproliferation, Anti-terrorism, Demining, and Related Programs; PCF/PCCF=Pakistan
Counterinsurgency Fund/Pakistan Counterinsurgency Capability Fund; and GHCS=Global Health and Child
Survival.
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Appendix C. Major Donor Bilateral Development
Assistance to Pakistan, CY2009

Figure C-1.Official Development Assistance to Pakistan, by Donor
(In Millions of U.S. $ and percentages)

Source: Organization for Economic and Development Cooperation, OECD/DAC International Development
Statistics Online, prepared by USAID Economic Analysis and Data Services, May 4, 2011.
Notes: In addition to bilateral development assistance, in 2009 Pakistan received $2.6 billion from multilateral
agencies, including the World Bank’s International Development Association—$1.9 billion, European Union
Institutions—$279 million, and the Asian Development Fund—$249 million.
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Appendix D. Principles and Purposes of the
Enhanced Partnership with Pakistan Act of 2009

Principles:
1. Pakistan is a critical friend and ally to the United States and share goals of
combating terrorism, firmly establishing democracy and rule of law , and
promoting social and economic development in Pakistan;
2. U.S. aid to Pakistan is to supplement, not replace, Pakistan’s own efforts;
3. The United States requires a balanced, countrywide strategy that provides aid
throughout the country;
4. The United States supports Pakistan’s struggle against extremism and recognizes
its sacrifices in this regard;
5. The United States intends to work with the Government of Pakistan
• to build mutual trust by strengthening mutual security, stability, and
prosperity of both countries;
• to support the people of Pakistan and democracy there, including
strengthening its parliament, judicial system, and rule of law in all provinces;
• to promote sustainable long-term development and infrastructure projects,
including healthcare, education, water management, and energy programs;
• to ensure all people of Pakistan have access to public education;
• to support curricula and quality of schools throughout Pakistan;
• to encourage public-private partnerships in Pakistan top support
development;
• to expand people-to-people engagement between the United States and
Pakistan;
• to encourage capacity to measure program success and increase
accountability;
• to help Pakistan improve its counterterrorism financing and anti-money
laundering;
• to strengthen Pakistan’s counterinsurgency/counterterrorism strategy to
prevent any territory of Pakistan from becoming a base for terrorist attacks;
• to aid in Pakistan’s efforts to strengthen law enforcement and national
defense forces under civilian leadership;
• to have full cooperation on counterproliferation of nuclear weapons;
• to assist Pakistan in gaining control and addressing threats in all its areas and
along its border; and
• to explore ways to consult with the Pakistani-American community.
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Purposes of Democratic, Economic, and Development Assistance:
1. To support democratic institutions in Pakistan to strengthen civilian rule and
long-term stability;
2. to support Pakistan’s efforts to expand rule of law, build capacity, transparency,
and trust in government, and promote internationally recognized human rights;
3. to support economic freedom and economic development in Pakistan such as
investments in water resource management systems, expansion of agricultural
and rural development (i.e., farm-to-market roads), and investments in energy;
4. to invest in people, particularly in women and children, regarding education,
public health, civil society organizations, and to support refugees; and
5. to strengthen public diplomacy to counter extremism.
Purposes of Security Assistance:
1. To support Pakistan’s paramount national security need to fight and win the
ongoing counterinsurgency within its borders;
2. to work with the Pakistani government to improve Pakistan’s border security and
control and help prevent any Pakistani territory from being used as a base or
conduit for terrorist attacks in Pakistan, or elsewhere;
3. to work in close cooperation with the Pakistani government to coordinate action
against extremist and terrorist targets; and
4. to help strengthen the institutions of democratic governance and promote control
of military institutions by a democratically elected civilian government.

Author Contact Information

Susan B. Epstein
K. Alan Kronstadt
Specialist in Foreign Policy
Specialist in South Asian Affairs
sepstein@crs.loc.gov, 7-6678
akronstadt@crs.loc.gov, 7-5415


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