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No word on $350m unutilised funds lying with USAID

Tuesday, April 28, 2009
By Mehtab Haider

ISLAMABAD: More than $350 million allocated by the US for development in Pakistan are lying unutilised owing to capacity constraints of the USAID and line ministries and departments, official sources confirmed to The News.

The Obama administration is in the process of extending another $1.5bn per annum assistance to Pakistan and its major chunk is expected to be spent through USAID for community-based development but Pakistani authorities are worried that how this huge money could be translated into bringing prosperity in the lives of common people when USAID itself lacks capacity for spending earlier assistance worth millions of dollars.

On the basis of this strong argument, the Pakistani authorities are striving hard to convince the US administration to bifurcate the upcoming $1.5 billion into budgetary support as well as project aid. “We are also proposing the US administration to spend project aid in our Public Sector Development Programme (PSDP) related projects,” said a high-level official on Monday.

He said that if the US wanted to assist Pakistan in the war on terror it should come in a way so as to bring prosperity in the lives of Pakistanis rather than publicising aid packages without solid outcomes.

This correspondent sent written questions to USAID office based in Islamabad on April 3 and waited for 24 days to get a reply but nothing came despite giving several reminders on telephone.

Through the sent questions, the USAID was asked that there were some reports suggesting around $400 million were stuck with USAID and lying unutilised. They were also inquired to pinpoint where the fault lies for non-utilisation of these huge funds but no answer was sent till filing of this report.

However, sources in USAID told this scribe on the condition of anonymity that millions of dollar spending was in the pipeline, which would be ultimately utilized in the due course of action.

There were also reports that US authorities were not happy with affairs of FATA secretariat owing to recent changes made by the government on which FATA’s political agents are happy but US high-ups are annoyed.

Official sources in the Economic Affairs Division (EAD) said that the US had provided $300 million through USAID from last couple of years as well as $150 million per annum for Federally Administered Tribal Areas (FATA).

“There is too much limited spending in FATA owing to apparent reasons,” said the official and added that the spending in other projects even in settled areas remained unable to get the desired pace in recent years.

A major chunk of the assistance, the official said, was spent into soft projects such as advocacy, consultancy and elimination of gender discrimination etc and no hard projects could be seen existing on the ground despite getting over $2.5 billion in shape of budgetary support and project aid in the last five years from USA. The mode and way of financing can be questioned which was not raised even by the incumbent regime after assuming reigns of power, added the sources.

The official recalled that when Pakistan and US authorities were finalising FATA plan worth $750 million for five years the then Secretary EAD, Akram Malik, had sternly opposed Washington’s idea to spend money through USAID and NGOs without involving the government. But finally he had to accept viewpoint of US authorities because our political leadership had taken decision to allow spending through USAID as well as NGOs.

When official spokesman in Finance Ministry was asked about the modalities of the upcoming US assistance, he said that Pakistan’s economic managers led by Advisor to PM on Finance Shaukat Tarin and Minister of State for Economic Affairs Hina Rabbani Khar would discuss this issue with Obama administration high-ups during their ongoing visit for attending the annual spring meeting of the IMF and World Bank.

When he was specifically asked about unutilised funds stuck up with USAID worth millions of dollars, he replied that this can be answered by the high-ups of the Economic Affairs Division (EAD).

This scribe also visited the office higher ups of EAD on Monday but they refused to share any information on the record, saying that the minister and the secretary had barred them to talk to media on any subject.
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