http://www.ft.com/intl/cms/s/0/bb2f9a84-8d31-11e0-bf23-00144feab49a.html

US to cut Pakistan aid projects

By James Lamont and Farhan Bokhari in Islamabad
Published: June 2 2011 17:08 | Last updated: June 2 2011 17:08

The US will cut the number of projects it funds in Pakistan by two-thirds as
it seeks to focus its civilian assistance more tightly in the wake of the
killing of Osama bin Laden, according to US officials.

A top US official told the Financial Times that the US would slim its
civilian aid programme in Pakistan to target 50 projects, down from 160
projects.

Emphasis would be put on achieving maximum visibility to help counter strong
anti-American sentiment across Pakistan, inflamed by what many see as an
attack on Pakistan's sovereignty by the covert raid on the al-Qaeda leader.

"A slash of assistance is not on the cards, unless there is another big
surprise [like Bin Laden's whereabouts]," said the US official.

"There is a lot of money in a lot of places . . . Aid is in a diffused
state. We can say great things about what we are doing in Baluchistan and
Sindh [provinces], but you don't see it."

US civilian assistance, boosted in 2009 by the authorisation of $7.5bn over
five years, is to be funnelled towards projects in high impact sectors such
as energy, education, open democracy, the Federally Administered Tribal
Areas and job creation. It would be subject to more rigorous monitoring, and
streamlined to assure quicker transfer of money to Pakistan.

The reshaping of the aid programme coincides with a greater role for Marc
Grossman, Washington's envoy for Afghanistan and Pakistan. He replaced the
late Richard Holbrooke, whose expansive style led to a proliferation of aid
programmes. "Holbrooke was a floodlight," said the US official explaining
the different approaches of the two diplomats. "Grossman is a laser".

The recalibration also comes as senior politicians in the US question the
scale of assistance to Pakistan amid persistent doubts about its willingness
and ability to combat Islamist militants striking targets within Afghanistan
and Pakistan.

Pakistan's leaders, however, insist that it has suffered far greater
casualties than Nato in a conflict that now threatens civil war in their own
country. They claim to have lost 35,000 people to the fight in the past
decade.

The US is seeking ways to recover from a severe loss of confidence in
Pakistan this year. The relationship has suffered what US officials describe
as double "crises" of the arrest of Raymond Davis, a Central Intelligence
Agency operative, in Lahore and the discovery, and subsequent killing, of
Bin Laden in a garrison city, 50km from Islamabad, Pakistan's capital.

The US's top priority is to rebuild its intelligence sharing with Pakistan.
Thereafter, it is concentrating on improved military to military contacts
and a more effective aid programme.

Some US analysts predict a radical reassessment of US aid flows to Pakistan,
including tougher conditionality.

The US has given Pakistan about $20bn worth of aid over the past nine years,
making it one of the largest recipients of US foreign assistance. It also
spends about $2bn a week in its war effort in Afghanistan against Taliban
and al-Qaeda militants, many of whom depend on support and refuge in
Pakistan.

Richard Haass, the president of the Washington-based US Council on Foreign
Relations, said more "scruple" would be attached to signing off money to
Pakistan, as the US was "disappointed" by the level of co-operation it had
received.

"This relationship is going to have to become more of a transactional
relationship, more of a performance-based relationship," he said. Some
Pakistani leaders have responded to the bin Laden killing by calling for a
rejection of US aid. "The outsiders want to do away with the sovereignty of
the country by using the pretext of charity," said Shahbaz Sharif, the chief
minister of Punjab province, Pakistan's most populous.

Copyright The Financial Times Limited 2011.





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