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Pakistan Table of Contents

Pakistan

FOREIGN ECONOMIC RELATIONS

Cinema in Karachi
Sheila Ross

A craftsman creating beautiful patterns on Namdas
Courtesy Embassy of Pakistan, Washington

Foreign Aid

Since independence Pakistan has had to depend on foreign assistance in its development efforts and to balance its international debt payments. In 1960 the World Bank organized the Aid-to-Pakistan Consortium to facilitate coordination among the major providers of international assistance. The consortium held 92 percent of Pakistan's outstanding disbursed debt at the end of June 1991. The consortium's members include the United States, Canada, Japan, Britain, Germany, France, and international organizations such as the World Bank and the Asian Development Bank (ADB). The World Bank accounted for 26 percent of the outstanding debt, and the ADB, which was the largest lender in the early 1990s, accounted for 15 percent. Most nonconsortium funding comes from Saudi Arabia and other oil-producing Middle Eastern countries. Most aid is in the form of loans, although the proportion of grants increased from around 12 percent in the late 1970s to around 25 percent in the 1980s, mainly because of food aid and other funds directed toward Afghan refugees. With the decline in this aid after 1988, the proportion of grants decreased to 16 percent in FY 1992.

The United States has been a major provider of aid since independence and was the largest donor in the 1980s (see Foreign Policy , ch. 4). All United States military aid and all new civilian commitments, however, ended in October 1990 after the United States Congress failed to receive certification that Pakistan was not developing a nuclear bomb. As of early 1994, United States aid had not resumed, but Agency for International Development projects already under way in October 1990 continued to receive funds (see The Armed Forces in a New World Order , ch. 5).

Data as of April 1994