By Sultan M. Hali

Pakistan has been a benefactor of US largesse since 1954, after joining the American camp at the detriment of annoying its neighbours Soviet Union, China and India. In the same time frame, the Indians played the non-aligned card and reaped benefits from the Soviet Bloc as well as the west. A brief review of the financial aid received by Pakistan from USA indicates that as the Cold War heated up in the 1950s, a 1954 security agreement prompted the US to provide nearly $2.5 billion in economic aid and $700 million in military aid to Pakistan.

During the period 1965-1979, following the 1965 Pak-India War, the US left Pakistan in the lurch, despite its military pacts, and also slapped sanctions. The same was repeated in the 1971 Pak-India War. Between 1965 and 1971, the U.S. sent only $26 million in military aid, which was cut back even further to $2.9 million through the end of the decade. Meanwhile, economic aid kept flowing, totaling $2.55 billion over the 15 years. Everything came to a halt in 1979, when the Carter administration cut off all but food aid after discovering a uranium-enrichment facility in Pakistan.

During the decade of 1979-1990, the Soviet invasion of Afghanistan changed everything. Pakistan's ISI security agency became the primary means of funneling covert U.S. assistance to anti-Soviet forces in Afghanistan. From 1980 to 1990, the US ramped up its contributions for both development and military purposes, sending more than $5 billion over the course of the decade. Initially President General Mohammad Zia-ul-Haq refused $ 400 million aid, labeling it as “peanuts”, which became a catch phrase. The following year, he was rewarded with a much more attractive offer. As long as the war in Afghanistan persisted, and Pakistan was serving a strategic Cold War purpose, despite US concerns regarding Pakistan’s nuclear program, waiver was provided and aid to Pakistan to combat the Soviet onslaught persisted.

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During the period of 1991-2000, following the Soviet defeat, the US invoked the Pressler Amendment and stopped all military aid to Pakistan and economic aid withered to $429 million leaving Pakistan high and dry during the decade. So much so that because of an embargo, defence purchases, for which advance payment had been made, were stopped and military hardware, which had been in the pipeline or was sent to the US for repair or scheduled maintenance, was seized.

In the period 2001-2009, following the events of 9/11, the US once again bolstered its funding commitments, sending nearly $9 billion in military assistance both to aid and reimburse Pakistan for its operations in the unwieldy border regions with Afghanistan. Another $3.6 billion has funded economic and diplomatic initiatives. In 2009, a new five-year, $7.5 billion assistance package was passed by Congress in September and signed by President Obama in October, with stipulations explicitly prohibiting funds from being used for nuclear proliferation, to support terrorist groups, or to pay for attacks in neighboring hpw countries. It also puts new emphasis on the bottom line, reserving the right to cut off aid if Pakistan fails to crack down on militants. Those restrictions have opened a rift between Pakistan and the US. Pakistan’s losses in the war on terror have exceeded US $ 65 billion, while the US has provided only a fraction of the amount spent. Thus Pakistan’seconomic losses as a result of the war against terror exceed the amount of aid received from the United States by six and a half times, according to an analysis conducted by the economic affairs division in the finance ministry.


American aid to Pakistan is split almost evenly between civilian and military assistance, with civilian aid totaling $4.5 billion and military aid amounting to $4 billion. Washington sanctioned an additional $8.9 billion to Pakistan’s military as compensation for services rendered on behalf of the US military under the Coalition Support Fund. The reimbursements are on account of expenses already incurred by Pakistan in providing assistance to US military operations; however, a sizable portion of it remains unremitted by the US.

The truth of the US financial assistance to Pakistan is that during the fifties and sixties, the US provided military hardware, which was obsolete and of World War II vintage or surplus from the Korean War. At one stage, the US even proposed to Pakistan to shut down its military academies and send its cadets to USA for training. Good sense prevailed and military leaders did not fall in the trap otherwise Pakistani military training would have suffered immeasurably, once the US tired of Pakistan and jilted it, which it has been constantly doing.

After throwing crumbs at Pakistan, the US has been using it not only as a client state but for its clandestine operations, without taking Pakistani leadership into confidence. The 1960 U-2 incident opened Pakistan’s eyes when an irate Soviet Union threatened to target Peshawar with its ballistic missiles, an obvious reference to the Pakistani airbase from which the U-2 had been operating. On numerous occasions, American aid has been used as carrot and stick to get Pakistan to do the bidding of the US. The carrot has been the promise of financial aid while the stick has been the threat of curtailing that aid. Financial experts in Pakistan have pointed out that of the lump sum assistance sanctioned by the US, only a fraction reaches the national exchequer, since the bulk is siphoned off as consultancy charges to US appointed agents and overseers.

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Unfortunately, subsequent Pakistani governments, both military and civilian have become so addicted to US financial assistance that like a drug addict, who would do anything for a shot of morphine or whatever drug he/she is addicted to, Pakistani rulers are ready to bend backwards to receive another dose of US aid. The myth of American aid is that it is amorphous and addictive. It puts the nation into a state of stupor; it is time our rulers had a reality check and rejected any further aid as well as the strings of bondage attached to it.