Author: Joseph Kahn
Publication: The New York Times
Date: October 27, 2001
Washington, Oct. 26 - The Bush administration
has put together an aid package for Pakistan that is likely to total several
billion dollars and includes sweeping debt rescheduling, grants stretching
over many years and trade benefits as a reward for its support against
terrorism.
The package, which is encountering
some resistance in Washington and abroad, would represent a departure from
the often glacial process of aiding poor countries in recent years. Through
the 1990's, American aid to many developing nations fell, and the World
Bank and the International Monetary Fund set up elaborate mechanisms to
determine which poor nations should receive debt relief. Pakistan, with
an average per capita annual income of $500 but with access to world capital
markets, was not among them.
While Pakistan is unlikely to receive
all the concessions it now seeks, the administration's package amounts
to the largest mobilization of low-interest loans and debt relief since
allies showered benefits on Egypt during the Persian Gulf War.
The aid envisaged by Washington
would make Pakistan the largest recipient of American aid after Israel
and Egypt.
Pockets of opposition are already
becoming visible in Washington, among nongovernmental organizations and,
more quietly, in Japan.
Japan recently rejected Pakistan's
request to forgive the entire $5 billion owed Tokyo and is moving more
slowly than the Bush administration to ease sanctions on that country imposed
after Pakistan tested a nuclear weapon in response to India's similar test
in 1998. Tokyo has agreed, however, to delay payments on about $500 million
in Pakistani debt.
While the support may reward President
Pervez Musharraf for his backing of the American-led coalition, critics
worry that politically inspired aid could be misdirected.
Some American lawmakers say the
Bush administration may have too readily agreed to give Pakistan about
$600 million in cash this year and next without a reliable way of ensuring
that the money would be used to improve health and education rather than
to underwrite the military or the Islamic militants that Pakistan backs
in the disputed territory of Kashmir.
"If you just write a blank check
it will end up in the pockets of the wrong people," said Representative
Jim McDermott, a Washington Democrat on the House Ways and Means Committee.
While Mr. McDermott supports helping
Pakistan with its floundering economy, he said the Bush administration
had "been a little cavalier" about wiping away sanctions on Pakistan imposed
after General Musharraf took power in a military coup in 1999.
Representative Jim Kolbe, an Arizona
Republican who chairs the foreign operations subcommittee of the House
Committee on Appropriations, criticized the administration for granting
valuable but vaguely defined "budgetary support," rather than financing
well- supervised individual projects.
"I have not gotten sufficient reassurances
at this point," Mr. Kolbe said.
The aid the United States provided
to Pakistan and Afghan rebels during the Soviet occupation of Afghanistan
in the 1980's is widely seen as having helped finance the rise of the Taliban,
which now controls most of Afghanistan.
Talks between officials of the State
and Treasury departments and Shaukat Aziz, Pakistan's finance minister,
have resulted in an agreement that the administration will work to secure
four types of aid for Pakistan, administration officials said.
These include grants from the United
States and other allies. In addition, the Bush administration is using
its influence to support new loan programs by the I.M.F. and the World
Bank, including an anti-poverty loan worth about $500 million from the
I.M.F. and possibly a line of credit, at higher rates, of some $1 billion.
The United States has already begun
calculating how to reschedule payments on the $3 billion Pakistan owes
Washington. It has urged allies to do the same, and Britain has already
followed suit. Bilateral loans total about $12 billion out of the country's
$38 billion foreign debt.
Pakistan may also secure a higher
quota or lower tariffs for its textile exports to the United States.
Pakistan estimates that the war
in Afghanistan will cost it some $2.5 billion this year alone, including
lost trade and tourism and the expense of caring for Afghan refugees.
One senior administration official
said the United States will monitor closely how the money is used. The
official said Mr. Aziz had improved financial management enough to warrant
more aid even if the Sept. 11 terrorist attacks had not happened.
But the official also acknowledged
that Washington would support Pakistan's bid to get some extraordinary
benefits.
"The reality is that this is a country
that has behaved in a stalwart fashion during this crisis, and that is
going to be recognized," he said. "We are going to find a unique approach
for Pakistan."
The World Bank and I.M.F. have denied
any debt relief to almost half of the eligible poor countries because they
are embroiled in wars, fearing that money would diverted to the military.
Pakistan now has conflicts on two of its borders.
"I absolutely support debt relief
for Pakistan," said Ann Pettifor, who heads Jubilee Plus, a British group
that advocates canceling the debts of all poor countries. "But it's hypocritical
to just dole out the money to Pakistan while denying help to others that
are really even more in need."