US' latest payment to Pakistan for fighting Taliban delayed (Roundup)

Feb 19, 2009, 15:32 GMT

Islamabad - The United States has not paid Pakistan a penny for the last nine months for rendering its military services to fight the Taliban and al-Qaeda in the restive tribal areas bordering Afghanistan, a Pakistani official said on Thursday.

Shaukat Tarin, the financial advisor to Prime Minister Yousuf Raza Gilani, said Pakistan's latest reimbursement bill of 1.35 billion dollars for flushing out militants from the region in the north-west of the country, was delayed.

'We have not received any amount since May 2008,' Tarin told reporters.

'Some accounting and procedural complications have delayed the release and we have asked them to pay the bill as soon as possible,' he said, adding that the bills should be paid from the Coalition Support Fund.

According to Tarin, the sides negotiated the issue for months and the Washington has approved a payment of close on 1 billion dollars, while the talks for the remainder were continuing.

'Our monthly military bill stands at 150 million dollars a month and the US have agreed to release 100 million dollars while the accounting issues for the remaining 50 million dollars will be sorted out soon,' he said.

Pakistan joined the US-led international fight against terrorism in 2001, and started to get 297 million-dollar annual under US Foreign Military Grant since 2003 to eliminate the sanctuaries of Islamist insurgents conducting cross border raids on NATO forces in Afghanistan.

The grant was increased gradually and has shot up since 2006 when US pilotless aircraft started attacks on militant hideouts inside Pakistan.

'The military reimbursement bills have been increased and change in the format for reconciling the actual expenditures with the demands has created difficulties for releasing the amount for Islamabad,' said an official in the finance ministry who spoke on condition of anonymity.

The US has so far provided around 10 billion dollars of aid for social development as well as in form of military aid.

But Pakistan says it has suffered financial losses many times more than it has collectively received aid from its western allies, including US, after becoming front line state in the ongoing war against terrorism.

Tarin said Pakistan is projected to face around 8 billion dollars alone in the ongoing fiscal year, ending on June 30. 'Our investments have been dried up and imports and exports affected,' he said.

Thousands lives have also been lost in the Islamic country as it fights Islamic militancy that is spreading fast in North West Frontier Province and infiltrating into its adjoining provinces of Balochistan and Punjab.

Pakistani has asked its western allies to compensate financially by granting Islamabad market access, debt relief, oil facilities on deferred payments and development aid. 'The war against terror is ours but it is also the war of our western friends,' Tarin said.

Pakistan, which recently avoided default by obtaining a 7.6- billion-dollar loan package from the International Monetary Fund, is relying heavily on western aid to revive its economy.