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Tuesday, November 29, 2011

Pakistan: U.S. Foreign Assistance

Susan B. Epstein
Specialist in Foreign Policy

K. Alan Kronstadt
Specialist in South Asian Affairs

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 securityrelated 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 United States 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.

Date of Report: November 4, 2011
Number of Pages: 45
Order Number: R41856
Price: $29.95

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