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Support wavers for U.S. economic aid to Pakistan

By Susan Cornwell

WASHINGTON (Reuters) - Senator Richard Lugar says the U.S. effort to aid Pakistan named after him and two other lawmakers has not had enough time to achieve one of its main goals: dispel Pakistani mistrust of the United States.

Few others in Congress seem keen to give it more time or money.

Following U.S. accusations that some in the Pakistani government have aided anti-U.S. militants, Congress is reevaluating its 2009 promise to triple nonmilitary aid to Pakistan to a total of $7.5 billion over five years.

The non-military aid came on top of billions in security assistance Washington has provided since 2001, and is now rethinking as well.

The economic aid was intended to convince Pakistan the United States could look beyond counterterrorism cooperation and show concern for Pakistan's long-term development, in areas including infrastructure and agricultural.

That approach was heartily endorsed by the Obama administration, and the 2009 law authorizing the aid was named after its sponsors: Lugar, a Republican, and two Democrats, Senator John Kerry and Representative Howard Berman.

But Pakistan's suspicions of the United States do not appear to have eased, and U.S. mistrust of Islamabad definitely has grown. Washington last week said Pakistan's powerful ISI spy agency backed the Afghan Taliban-allied Haqqani network, and provided support for the group's September 13 attack on the U.S. Embassy and NATO headquarters in Kabul.

Now, U.S. congressional appropriators in both the Republican-run House and Democratic-run Senate want to toughen and broaden restrictions on military aid to Pakistan and extend them to economic aid as well.

"Our message to Pakistan is: We can't help you unless you help us," said Senator Lindsey Graham, the top Republican on the Senate foreign aid appropriations subcommittee.

In an interview with Reuters, Graham said he had been a supporter of Kerry-Lugar-Berman, but "there's been a turn there. ... We're not writing checks without being able to identify progress."

Starting next year, lawmakers are proposing to make economic as well as military aid conditional on Pakistan's cooperation in fighting militants such as the Haqqani network.

Such conditions are almost certain to inflame sensitivities further in Pakistan.

The appropriators haven't even bothered to specify an amount of new economic aid for Pakistan for fiscal 2012, leaving it to the Obama administration to come back to Congress and request funding if the conditions are met.

The proposals must be approved by the full House and Senate and are subject to running budget battles in Congress.

A LOST APPETITE

Other key senators also sound unenthusiastic about voting more aid to Pakistan, even if it means backing down on the Kerry-Lugar-Berman promise.

"I am very reluctant to vote for the additional economic aid while they are giving support to the Haqqani group. ... So I'd be very reluctant to vote for anything like Kerry-Lugar," Democratic Senator Carl Levin, the chairman of the Armed Services Committee, told Reuters outside the Senate this week.

"I think that Congress has lost its appetite for dealing with a country that is clearly in some ways a friend of the United States, and in other ways hedging its bets and siding with those who are placing our forces at risk," said Karl Inderfurth, assistant U.S. secretary of state for South Asian affairs in the Clinton administration.

The nation's top military officer said last week that U.S. aid to Pakistan needs to be conditioned. But Admiral Mike Mullen also warned lawmakers to be careful: "I think it's a very dangerous long-term outcome should we cut it (aid) off."

Lugar told Reuters that one reason the Kerry-Lugar-Berman program has not yet had a chance to work is that very little money had actually been spent. That is due in part to disagreements between the U.S. and the Pakistani government about how programs will be administered, he said.

The U.S. Agency for International Development says that in the last two years, nearly $2 billion in U.S. economic aid had been disbursed to Pakistan, but that just $534 million could be considered Kerry-Lugar-Berman funding. Some of the rest was disaster aid, or linked to other U.S. programs.

Lugar still thinks American development aid could help change perceptions about the United States in Pakistan, where poverty is widespread. "It could and would have, but it won't unless the money is spent," he said in a brief interview outside the Senate.

"I think it's a good approach, but the question is what our overall relationship will be" with Pakistan, he added.

Berman, in a statement e-mailed to Reuters, said Americans were "right to be frustrated with Pakistan" but warned against any blanket cutting off of aid.

This "may make us feel good in the short term, but will only harm our long-term interests in Afghanistan, Pakistan and the rest of South Asia," Berman said.

Development experts worry that the proposed restrictions on economic aid will thwart the main purpose of the law. It "was supposed to be an investment in the well-being of the Pakistani people," said Daniel Cutherell, a policy analyst at the Center for Global Development.

"Tying civilian economic aid to security indicators ... demonstrates that all U.S. aid is simply payment for cooperation on security issues," Cutherell said.

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