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September 4, 2018

US owes Pakistan more than $9 bn under CSF

Top Story

September 4, 2018

ISLAMABAD: Just ahead of US Secretary of State’s visit to Pakistan, the Trump administration has blocked $300 million amount on account of reimbursement of the Coalition Support Fund (CSF) which Pakistan’s military had already spent on mobilisation of troops and launching offensive against terrorists and sent its reconciled amount for reimbursement of incurred expenses.

Some Pakistani economists had proposed to the governments in the past that Islamabad must incorporate markup through sent expenditure bills because the Ministry of Finance had to manage these expenses through borrowings from internal and external resources with attached markup cost, so the US must reimburse these amounts along with full attached costs.

Over $9 billion claims of Islamabad were still pending before the US administration on account of the CSF. Pakistan’s Ministry of Finance has just projected reimbursement of Rs15.9 billion from Washington in the current fiscal year’s budget 2018-19.

After becoming an ally of the US-led war against terror, Pakistan and the US placed a mechanism for reimbursement of bills amount after launching military offensives against terror networks since 2001.

In the last 17 years, Islamabad received $14 billion from the US on account of CSF, said one top official of Finance Division and added that over $9 billion claims were still pending before the Trump administration.

Under the CSF mechanism, Pakistan claims all such expenditure which had already been incurred for mobilisation of troops and launching of offensive against terror networks in tribal and other areas adjacent to Afghanistan and then the US reimbursed the amounts after hectic reconciliation.

“Even reconciled amounts have not yet been fully paid by the US,” said a senior official and added that Washington provided peanuts to Pakistan so far on this front.

Another official said that Pakistan had to bear expenses lenders keeping in view yawning financing of budget deficit on which the government had borne interest rate which was paid with taxpayers money. There is a need to incorporate cost of debt servicing on the claims sent to US on CSF, said the official.

On the other hand, Pakistan’s official document Economic Survey for 2017-18 states that during the last 17 years, the direct and indirect cost incurred by Pakistan due to incidents of terrorism amounted to $126.79 billion equivalent to Rs10,762.64 billion.

After standing with US in its war against terror, Pakistan’s economy had faced major losses during fiscal year 2008-9 to 2014-15 as incurred losses stood at $9.18 billion in 2008-9, $13.56 billion in 2009-10, $23.77 billion in 2010-11, $11.98 billion in 2011-12, $9.97 billion in 2012-13, $7.7 billion in 2013-14 and $9.24 billion in 2014-15. Total accumulated losses stood at $126.79 billion in last 17 years but Pakistan obtained just peanuts in returns from US.