Following Pakistan's non-cooperation in fighting militancy, US cuts off the Coalition Support Funds worth $500 million.
Following the recent US threat to cut off Pakistan’s civil and military aid if the suspended intelligence cooperation between the two countries is not restored to hunt down fugitive al Qaeda and Taliban leaders hiding in Pakistan, the Obama administration has halted the release of the Coalition Support Funds (CSF) to Islamabad which were meant to fight militancy.
According to well placed government sources in Islamabad, the reason behind the US action is Pakistan’s tough stance on the role of CIA operatives and its decision to reduce the US footprint in the country as well as its refusal to launch a full-scale military offensive against the Haqqani network believed to be based in North Waziristan.
The US move has come at a time when the American administration is sending out all kinds of threats to stop financial assistance. The government sources say the Obama administration is quite upset over the recent crackdown launched against the CIA network in the country, following the May 2, 2011 Abbottabad raid that killed bin Laden. As part of pressure tactics, the sources say, the Obama administration is also trying to sideline Pakistan pertaining to the Afghan endgame and its recent peace overtures with the Afghan Taliban.
Pakistan was expecting $500 million in the last tranche of the Coalition Support Fund, which was set up by the US Congress after the 9/11 attacks to reimburse allies for costs in supporting the US led war on militancy.
On April 25, Finance Minister Abdul Hafeez Shaikh had announced after a visit to the US that the Obama administration was firmly committed to releasing at least $500 to $600 million by June 30. But a finance ministry official now says the transaction to Pakistan has been stopped as the US Congress has refused to clear the transaction.
This is a major setback to Pakistan’s besieged economic managers who seem to be struggling to keep the budget deficit below six per cent of the total Gross Domestic Product (GDP).
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