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Home News Reports No more free lunch? US to convert aid to Pakistan into loan

No more free lunch? US to convert aid to Pakistan into loan

This should be seen as a significant shift forward in the US foreign policy towards Pakistan. In his maiden annual budget submitted to the US Congress, American President Donald Trump has proposed to convert the US grant to Pakistan – for purchase of military hardware – into loan. The State Department will take a final call on the proposal. However, for countries like Israel and Egypt, the US military aid will continue in the form of grant.

Though the move is seen as part of the Trump administration’s efforts to help pay for increased US military spending, it is loaded with the new US stance on Israel and Egypt vis-a-vis Pakistan. Like India, Israel and Egypt are victims of terrorism. The Trump administration has vowed to protect Israel and Egypt from Hamas and Islamic State respectively. But at the same time, Pakistan aids and abets terrorism of which the entire South Asia region, particularly India, is the victim.

The move came close on the heels of the President Trump told the Arab-Islamic-US Summit that countries must ensure that no terror outfit is existing in their soil. While asserting that India is among the victims of terrorism, Trump had said, “Every nation has an absolute duty to ensure that terrorists find no quarter on their soil.” Obviously, this was in oblique reference to Pakistan.

Ever since Donald Trump took over as President, American is going tough against Pakistan. Recently, in its first assessment of the security situation in South Asian region, Trump administration had issued severe indictment of Pakistan.

Dan Coats, Director of National Intelligence in Trump administration, had blamed Pakistan for sponsoring terrorism and held that it is responsible for destabilising the South Asian region.

For decades Pakistan has been peddling terrorism on American dollars by pulling wool over US eyes. President Donald Trump’s proposal to convert the US grant to Pakistan into loan is a much awaited revision in US’s Pakistan policy. This is a clean break from the approach by successive past US administrations – Obama, Bush and Clinton – on Pakistan.

It could be noted that as of now Pakistan is the leading recipient of the US aid. According to a study conducted by the Congressional Research Service, the US has given a whopping $18 billion aid to Pakistan from 2002 to 2015. The country also received $13 billion from the Coalition Support Fund as reimbursements for so called logistical and operational support it provided to the US troops operating in Afghanistan.

But what does Pakistan do with these billions of US aid? It diverts it to train, finance and support terrorist organisations against India and other South Asian countries precisely explaining how Pakistan uses terrorism as an instrument of state policy.

Donald Trump’s proposal to convert the US grant to Pakistan into loan is certainly significant. This is not to dispute that finance plays a very significant role in running terror operations. Once the US finance is choked, Pakistan’s terrorist factory will be automatically shut down. Economically Pakistan is in a terrible state. It can’t afford to use its own money to finance terror operations. Nor it can afford to divert the loan from the US for the purpose of terrorism.

This is clear validation of New Delhi’s position that Pakistan is the mothership of International terrorism and it is important to keep the heat on the rogue state.

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Saswat Panigrahi
Political writer, policy observer.

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