Where did the funds go?

As the Obama Administration focuses more on the social sectors of the Pakistani economy and separates its aid to Pakistan under the Kerry-Lugar Bill from assistance to the Pakistan Army, new information about how the old US funds were utilised by the Musharraf regime has come to light. The revelation is that the army was not given all the aid meant for increasing its capacity to fight terrorism, but that most of it was diverted by the Musharraf regime to prop up the civilian government.

A couple of retired generals have decided to speak out. General Mahmud Durrani (Retd), who was Pakistan’s ambassador to the US under General Musharraf, says: “It went to things like subsidies, which is why everything looked hunky-dory. The military was financing the war on terror out of its own budget.” And how was this made possible? By the fact that General Musharraf was both army chief and de facto “ruling” president of Pakistan.

According to a report, the additional shocking fact is that some sections of the army, faced with the terrorism of the Taliban, received nothing till 2007, the year when Musharraf’s era began to crumble under pressure from the mistakes the general-president made. In these lean years for the army, “helicopters critical to the battle were not available; the limited night-vision equipment was taken away every three months and returned three weeks later; and old equipment fell out of repair and training was lacking.”

There have been rumours about money getting “siphoned off” on Musharraf’s watch. Some US circles thought Pakistan’s military was more obsessed with India and spent what it got not on the war against domestic terrorism, but on its state of preparedness against India. But if, between 2002 and 2008, only $500 million of the $6.6 billion aid actually made it to the Pakistani military, what kind of defence against India was Pakistan able to secretly mount? On the other hand, the PPP leader President Asif Ali Zardari has been talking of the “misuse” of nearly $10 billion in American aid.

Pakistan doesn’t make public its defence budget. So one cannot track what happens to the money that goes into it. Such sectors as intelligence are kept away from public scrutiny although most of what the spooks do affects the civil sector and the economy. We know that General Musharraf “saved” the army some money by inducting a large number of serving officers into civilian jobs. Pakistan already pays its army’s pensions from the civilian budget, but the charge that wasteful subsidies were paid out of the money meant for the army needs investigation. The “circular” debt that General Musharraf’s regime left behind indicates how reckless his government was with the economy he never tired of discussing.

The Americans were willing to fund the Pakistan Army because in comparison with their own troops it was cheap. By 2008, the US paid Pakistan $8.6 billion for the military, and more than $12 billion in all. The army would send in the bills and the US would pay, barring some cases when delays took place till lack of trust began to prevail and the bills remained pending.

General Mahmud Durrani, whose thesis is that Pakistan has disadvantaged itself politically and economically by pursuing India-centric strategies, says money went into buying equipment better suited to fighting India in Afghanistan than to fighting terrorists. It bought armour-piercing TOW missiles, sophisticated surveillance equipment, air-to-air missiles, maritime patrol aircraft, anti-ship missiles and F-16 fighter aircraft. As a result, in 2007, Pakistan had only one working helicopter for use in FATA!

Pakistan was the largest recipient of US assistance under General Musharraf. It is about to receive even more of it under the Kerry-Lugar Bill. Because of what has happened in the past, there is a lack of trust between the donor and the recipient. Also, those who want to fight terrorism in Pakistan without American help — they actually believe Pakistan doesn’t need to fight terrorism — want the American assistance rejected. Until an inquiry is held — and the time for that will come later — we will not know what actually happened. Now is the time to back the army and do whatever it takes to increase its capacity to fight the terrorists. *