The United States has further cut Pakistan’s aid by $440 million, bringing down its commitments under Kerry Lugar Berman Act to just $4.1 billion, which is slightly over half of the total amount that Washington had promised to give nine years ago.
The decision to cut Pakistan’s economic assistance, being disbursed under the Kerry Lugar legislation of 2009, was officially conveyed to Islamabad about three weeks before the planned visit of Prime Minister Imran Khan to the United States, sources in the Ministry of Economic Affairs told The Express Tribune.
The aid was being disbursed under Pakistan Enhanced Partnership Agreement (PEPA) 2010. PEPA that was going to lapse was extended by Pakistan last week aimed at facilitating the disbursements of the remaining $900 million grant, said the sources in the ministry.
PEPA was signed in September 2010 to make operational the Kerry Lugar Berman (KLB) Act that was passed by the US Congress in October 2009 to disburse $7.5 billion to Pakistan over a period of 5 years.
However, soon after PEPA agreement was made effective the relations between Pakistan and the US started deteriorating and reached nearly its lowest ebbs in decades. This also affected the actual commitments and disbursements under the KLB Act.
The sources said before the fresh cut the commitments under the KLB stood at nearly $4.5 billion that have now come down to $4.1 billion. But the actual disbursements, including off-budget, stood at just $3.2 billion, they added.
On first of July, the United States Agency for International Development (USAID) informed the federal government that as part of the Trump administration’s overall review, the amount of assistance under PEPA was reduced by $440.2 million, said the sources.
The Economic Affairs Ministry officials said Pakistan is not the only country that has been affected by the recent cuts in aid. They said the reduction in aid is part of President Donald Trump’s strategy to reduce the aid to the developing countries.
The USAID’s official version could not be immediately obtained due to an official holiday.
The KLB was aimed at making investments in Pakistan’s economic infrastructure, particularly in energy and agriculture, to help Pakistan recover from its energy and water crises, improve the daily lives of the Pakistani people, and increase opportunities for economic growth.