A US official said that the Donald Trump government has cut its foreign military financing (FMF) to Pakistan from USD 255 million to USD 100 million for the 2018 fiscal, but has kept options open whether it would be a grant or should be converted into a loan.
"While we may use FMF to leverage loans for some countries, we will still maintain the flexibility to use it as grant assistance where needed," a state department spokesman told PTI when asked about the budget proposal of USD 100million in foreign military funding to Pakistan.
"This budget focuses on bilateral FMF assistance requested for Israel (USD 3.1 billion), Egypt (USD 1.3billion), Jordan (USD 350 million), and Pakistan (USD 100million)," the spokesman said on Teusday.
In 2016, the US assistance to Pakistan under the state department budget was USD 534 million, which included USD 225 million towards foreign military funding. In all, the state department has proposed a massive USD 190 million reduction in its financial aid to Pakistan as compared to the 2016 fiscal.
The current 2017 fiscal ends onSeptember 30 in 2017. On Monday, the White House said that FMF to Israel andEgypt would continue to be in the form of grant while forPakistan it would be a loan but a final decision would betaken by the state department.
"The Foreign Military Funding or FMF for Pakistan wouldbe provided in the form of a loan guarantee," said MickMulvaney, Director of the Office of Management of Budget inthe White House. Responding to questions, Mulvaney said the Trumpadministration has proposed to convert its FMF programme tomany countries from aid to financial loan.
Pakistan is one of those countries. "This is one of the options that the administration had explored in its internal deliberations, but the request itself does not make that determination," the White House later clarified indicating it might revert to the original financial grant to Pakistan to sell military hardware if need be.
"Whether the funding is provided through grants, or as a subsidy for a guaranteed loan, is an option the statedepartment can exercise to ensure our foreign assistance bestsupports our national interests," the White House said.
"Our argument was instead of giving somebody USD 100 million, we can give them a smaller number worth of loan guarantees and they can actually buy more stuff. We did not change it for Israel. We did not change it for Egypt," said Mulvaney.
In another major development, the Trump administration in its annual budget for 2018 fiscal beginning October 1 thisyear has proposed to end the Pakistan Counter insurgency Capabilities Fund (PCCF), which was budgeted as USD 9 millionin both 2016 and 2017.
PCCF was designed to build the counterinsurgencycapabilities of Pakistan's security forces engaged in operations against militant extremists in the Federally Administered Tribal Areas (FATA) and Khyber-Pakhtunkhwa.
"While the counter-insurgency purpose underlying the PCCF account and the maintenance of close US Pakistani military ties remain important administration priorities, these needs have been met through other accounts, including Foreign Military Financing (FMF) and International Military Education and Training (IMET), since the FY 2014 Request," the White House said in its budgetary explanation.
The state department said the USD 100 million in FMF to Pakistan will be used to advance US national security interests in that country by supporting Pakistan's capacity to improve stability and security and fight terrorism, including through the elimination of safe havens for terrorist and militant organisations.
The money would be used to continue efforts to build the counter-terrorism and counter-insurgency capabilities of Pakistan's security forces to improve security in the tribal areas along the border with Afghanistan, achieve progress on joint US-Pakistan objectives, including bilateral efforts to decimate core al-Qaeda elements and confront the emerging threat posed by ISIS-Khorasan Province.
Funds will also improve Pakistan's ability to participate in US-led Coalition Maritime Forces and patrol its maritime borders to stem the flow of illicit materials and personnel,it said.
With PTI inputs