Pakistan using US aid for war against India: Obama
Pakistan’s government has misused billions of US aid dollars meant for anti- terror efforts, channelling the money to finance weapons against India.
Pakistan’s government has misused billions of US aid dollars meant for anti-terror efforts, channelling the money to finance weapons against India, US officials say.
The claim, carried by the New York Times newspaper on Monday, has been denied by the Pakistani military.
Bush administration and military officials in Islamabad and Washington acknowledged that there were too few controls over the more than $5bn the US spent to bolster Pakistan’s military against al-Qaeda and the Taliban, telling the paper that the strategy had to be completely revamped.
The officials said they believed much of the American money was not making its way to frontline Pakistani units but being diverted to help finance weapons systems designed to counter India.
The military had also inflated claims for fuel, ammunition and other costs to the tune of tens of millions of dollars, officials said.
“I personally believe there is exaggeration and inflation,” said a senior American military official who reviewed the programme.
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IMF tells Pakistan to cut army
Bruce Loudon, South Asia correspondent | October 25, 2008
THE International Monetary Fund yesterday ordered Pakistan to cut military spending by almost a third as fears grew that the nuclear-armed nation’s economic crisis was now so bad that its role in the war against al-Qa’ida and the Taliban was imperilled.
The secret IMF demand – one of several measures that the bankrupt country is being asked to agree to for a bailout of its tanking economy – was disclosed as President Asif Ali Zardari prepared to go cap in hand to Saudi Arabia for help.
Also yesterday, it was announced that US General David Petraeus would travel to Islamabad next week for talks.
Amid reports that General Petraeus was planning the same strategy for Pakistan and Afghanistan that he used in Iraq, it emerged that the boss of Islamabad’s spy agency, the ISI, General Ahmed Shuja Pasha, was in Washington to mend fences over his organisation’s double-dealing with the militants.
A senior military source in Islamabad told The Weekend Australian last night: “A cut to military spending of anything like that magnitude – even 10per cent, let alone the more than 30per cent that is being demanded – would rip the heart out of the army and its ability to operate effectively in a situation where it is in the front line of the battle against al-Qa’ida and the Taliban … If we go, al-Qa’ida wins. Is that what the IMF wants to see?”
The country is now rated as among the worst credit risks in the world, ahead of only the Indian Ocean Seychelles islands in the Standard & Poor’s index.
The military pay cut is just a part of IMF demands.
What was being sought in exchange for a bailout was effectively what had been termed “economic martial law”. Six IMF directors and two World Bank directors would oversee all preparations for the country’s budget, and would have direct intervention in the running of the State Bank of Pakistan.
IMF officials would also be imposed even at the provincial level to monitor tax collection.
The number of pensionable government jobs could be cut by almost half. After agreeing to the conditions, Pakistan would get $US9.6billion ($14.5billion) from the IMF over three years.
Last night, Mr Zardari asked where money given to Pakistan since September 11, including a handout of $US10billion from the US to be used in the war against terrorism, had gone.
“We could have averted the present difficult economic situation if tens of billions of dollars received in assistance and foreign remittances during the past several years after 9/11 had been wisely spent on infrastructure development instead of importing consumer goods,” he said.
He might have found his answer in newspaper reports yesterday that a cabinet reshuffle remained stalled as would-be ministers from rival coalition parties wrangled over who would get the most lucrative posts.
A leading Karachi banker warned “without external assistance, Pakistan doesn’t have the resources to meet its obligations,” and added: “Pakistan should seek the IMF’s assistance now instead of waiting for the eleventh hour. It is already 10:55.”
Cricketer-turned-politician Imran Khan said the country was facing an economic crisis of a magnitude never seen before. “Unless we change, we are heading towards a disaster. The only way we can change is if we have an independent judiciary checking the abuse of power,” he said.
http://www.telegraph.co.uk/news/worldnews/asia/pakistan/3273945/Pakistan-halts-building-of-army-HQ-as-bankruptcy-edges-closer.html
Pakistan halts building of army HQ as bankruptcy edges closer
Pakistan has been forced to halt the construction of lavish new military headquarters in Islamabad as the nuclear-armed nation desperately fights to stave off bankruptcy.
By Nell Raven in Islamabad, 29 Oct 2008
The move by General Ashfaq Kayani, the country’s army chief, was widely seen as a message to President Asif Ali Zardari, who faces calls to bring back millions of dollars that his family allegedly has in foreign bank accounts.
The military was due to complete its unpopular move from the garrison city of Rawalpindi to the capital Islamabad by 2012, at a cost of more than £475m.
“The army chief has taken this decision in view of the economic situation in the country,” chief Pakistani military spokesman Maj Gen Athar Abbas said.
A military statement said that Gen Kayani, who took over from former President Pervez Musharraf as army chief last November, was “cognisant of the financial crunch being faced by Pakistan”.
The new headquarters complex had prompted complaints from ordinary Pakistanis because of its huge cost, its site on a chunk of prime real estate and the likelihood that it would be targeted by militant attacks.
Pakistan, a key ally in the US-led “war on terror”, is in talks with the International Monetary Fund to secure up to £3.2bn and has discussed with the United States a loan of £10bn to avoid defaulting on its foreign debts.
It has also been hit by skyrocketing inflation, while the stock market and the Pakistani rupee have both collapsed since the start of the year.
German Foreign Minister Frank-Walter Steinmeier said on a visit to Islamabad that Pakistan must secure IMF funding within six days to avoid a financial crisis.
The economic troubles have piled pressure on the government of Mr. Zardari, the widower of slain former premier Benazir Bhutto, who also faces a surge in violence by Taliban and Al-Qaeda militants near the Afghan border.
Gen Kayani’s attempt to show that the powerful military feels the pain of Pakistan’s 170 million people follows calls by opposition leaders for Mr Zardari and other politicians to bring foreign currency deposits back home.
Unlike previous army chiefs, who have ruled Pakistan for more than half its existence, Gen. Kayani has publicly kept out of politics but still wields a powerful behind-the-scenes influence.
http://www.ft.com/cms/s/0/1d44428c-a4e2-11dd-b4f5-000077b07658.html?nclick_check=1
IMF ‘has six days to save Pakistan’
By Farhan Bokhari in Islamabad and Chris Bryant in Berlin
Published: October 28 2008
The International Monetary Fund has less than a week to prevent a full-blown financial crisis in Pakistan, Germany’s foreign minister warned on Tuesday, as Islamabad said it was nearing agreement with the fund over a bail-out package.
Speaking in the Pakistani capital, Frank-Walter Steinmeier called on the IMF to save the nuclear-armed country from an escalating financial crisis by extending an “appropriate loan”.
I hope the decision will be taken soon. It won’t help to have it in six months, or six weeks. Rather, we need it in the coming six days,” he said after meeting Pakistan’s President Asif Ali Zardari and Shah Mehmood Qureshi, foreign minister.
Germany, which has troops on the ground in neighbouring Afghanistan, shares the concerns of many western governments that a growing balance of payments crisis will destabilise security in Pakistan whose people are angry about the rising cost of food and energy.
Shortly after Mr Steinmeier’s remarks, a Pakistani official said negotiations with the IMF were “in the final stages” and that the government expected agreement on a letter of intent with the fund “within one or two days”.
An IMF programme is expected to last until June 2010 and could be worth up to $15bn, officials said.
An official said that a letter of intent would be followed by a formal request to the IMF’s board for funding, with an agreement likely by mid-November.
Moody’s, the ratings agency, downgraded Pakistani government bonds from “B-2” to “B-3” and signalled that it could cut its rating further, citing the failure of Pakistan to secure other lines of funding.
Mr Steinmeier pledged to support the country in its negotiations with the IMF and promised to increase German development assistance. He departed immediately for the Middle East where he is expected to urge Saudi Arabia and the United Arab Emirates to increase their support for Pakistan ahead of a donor conference in mid-November.
Pakistan needs $4bn-$5bn for the financial year to June 2009 to meet debt payments and other liabilities, according to finance ministry officials in Islamabad.
An official at the central bank said the country’s foreign currency reserves stood at $4bn and were likely to run out by the end of November. “We have a very narrow space to put the country back on the rails,” he said. End
To be read together with:
“Pakistan using U.S. aid against India”
May 21, 2007
“Pakistan using U.S. aid against India”
http://jihadwatch.org/archives/016537.php
Being taken for a ride by an “ally,” and financing yet another jihad. “‘Pak using US aid against India,'” from the Times of India, with thanks to Ranajit:
NEW YORK: Pakistan has received $1.8 billion as security assistance from the US for the war against terrorism, but the weapons financed under it are “more useful in countering India” than fighting Al Qaida and Taliban, according to a study.In addition, Pakistan has got $5.6 billion from Washington over the last five years as reimbursements for fighting Taliban and Al Qaida, the New York Times reported on Sunday quoting a research by the US-based Centre for Strategic and International Studies (CSIS).
Here is the New York Times story in question: “U.S. Pays Pakistan to Fight Terror, but Patrols Ebb,” by David E. Sanger and David Rohde:
WASHINGTON, May 19 — The United States is continuing to make large payments of roughly $1 billion a year to Pakistan for what it calls reimbursements to the country’s military for conducting counterterrorism efforts along the border with Afghanistan, even though Pakistan’s president decided eight months ago to slash patrols through the area where Al Qaeda and Taliban fighters are most active.The monthly payments, called coalition support funds, are not widely advertised. Buried in public budget numbers, the payments are intended to reimburse Pakistan’s military for the cost of the operations. So far, Pakistan has received more than $5.6 billion under the program over five years, more than half of the total aid the United States has sent to the country since the Sept. 11, 2001, attacks, not counting covert funds.
Some American military officials in the region have recommended that the money be tied to Pakistan’s performance in pursuing Al Qaeda and keeping the Taliban from gaining a haven from which to attack the government of Afghanistan. American officials have been surprised by the speed at which both organizations have gained strength in the past year.
Good idea. Or cut it off altogether. But Gordon Johndroe, a spokesman for the national security adviser, says that’s not going to happen:
“I’m not aware of any serious discussion to cut off the funding,” Mr. Johndroe said. The payments are critical to bolstering the military, General Musharraf’s greatest source of support, particularly as he faces growing street protests over his removal of an independent-minded Supreme Court chief justice as the court was about to consider the legality of the president’s decision to hold the nation’s top military and political posts at the same time….A study of the roughly $10 billion sent to Pakistan by the United States since 2002, conducted by Craig Cohen and Derek Chollet of the Center for Strategic and International Studies, found that $5.6 billion in reimbursements was in addition to $1.8 billion for security assistance, which mostly finances large weapons systems.
But those weapons are more useful, the authors concluded, in countering India than in fighting Al Qaeda and the Taliban. The United States has also provided about $1.6 billion for “budget support,” which Pakistan can use broadly, including for reducing debt….
Gen. James L. Jones, the former NATO supreme commander, said that when American or NATO forces saw Taliban fighters crossing the border and radioed nearby Pakistani posts, there sometimes was no answer. “Calls to apprehend or detain or restrict these ongoing movements, as agreed, were sometimes not answered,” General Jones said. “Sometimes radios were turned off.”…
Mr. Durrani, the ambassador, denied that Pakistani troops were failing to stop Taliban fighters at the border. He said the troops were carrying out joint operations with American forces based inside Afghanistan.
Two American analysts and one American soldier said Pakistani security forces had fired mortars shells and rocket-propelled grenades in direct support of Taliban ground attacks on Afghan Army posts. A copy of an American military report obtained by The New York Times described one of the attacks.
Durrani denies this also, of course.
Islamic Terrorism in India 
