World | Pakistan
US cash delay could bankrupt us: Tarin
Pakistan has accused the US of pushing it closer to bankruptcy by withholding up to $1 billion (Dh3.678 billion) in military contributions despite the country's efforts to fight terrorism.
- By Isambard Wilkinson, The Telegraph Group Limited
- Published: 23:41 November 15, 2008
Islamabad: Pakistan has accused the US of pushing it closer to bankruptcy by withholding up to $1 billion (Dh3.678 billion) in military contributions despite the country's efforts to fight terrorism.
Shaukat Tarin, the de facto minister for the economy, said Pakistan's crucial role in the US-led war on terror had not been reflected in US revenue transfers at a time when Islamabad was desperately seeking an International Monetary Fund bailout.
Tarin said that a "significant" portion of the annual US payment for Pakistan's counter-terrorism operations was overdue, causing an additional strain on the exchequer.
"There is a process of auditing and it is taking longer than it should," he said. "There is a cost. We have 100,000 troops fighting this war. That takes hard cash. On top of that we are paying for a loss in investment because of the security situation." Approvals to release funds appeared to have been delayed by political sensitivities in the lead-up to the US presidential elections.
Pakistan's economic losses from domestic instability are believed to exceed $8 billion a year. America has paid Pakistan almost $10 billion in direct military "reimbursements" since 2002, mostly as part of what are termed 'Coalition Support Funds'. The subsidy pays for Pakistani military food, fuel, ammunition and maintenance but has come under scrutiny since last year when US officials claimed that up to 70 per cent of the money was "misspent".
Pakistan has barely enough foreign reserves to cover nine weeks of imports and is struggling to raise funds to avert a balance of payments crisis.
The country faces increasing lawlessness as the military struggles to suppress a Taliban insurgency in North West Frontier Province and adjoining tribal areas. Potential donors will gather in Abu Dhabi tomorrow under the banner of "Friends of Pakistan".
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