The decision to slash the promised economic assistance, being disbursed under the 2009 Kerry Lugar Berman (KLB) Act, was officially communicated to Islamabad before Prime Minister Imran Khan visited the U.S. on July 20, sources in the Ministry of Economic Affairs told The Express Tribune.
"We were paying US$1.3 billion to Pakistan as aid, for many years. The problem was...Pakistan was not doing anything for us. They were really subversive. They were going against us. I ended that about a year and a half ago, the US$1.3 billion (aid)," U.S President Donald Trump said during his meeting with Khan.
Imran Khan when came back from US:
'I feel like i have won the world cup. Trump made me feel at home. World listens to me'. #BrandImran
2 weeks later:
- Trump supports India on Kashmir at UNSC.
- Trump cuts 440 million dollars aid for Pakistan.
On July 1, the United States Agency for International Development (USAID) informed the federal government that as part of Trump’s expenditure cuts, the amount of assistance under the Pakistan Enhanced Partnership Agreement (PEPA) of 2010 was reduced by US$440.2 million.
The PEPA was signed in September 2010 to make operational the KLB Act to allocate US$7.5 billion to Pakistan over a period of 5 years. However, after the signing Pakistan-U.S. relations dipped to a historic low and the promised funds were delayed.
According to the Ministry of Economic Affairs, before the latest cut the commitments under the KLB stood at nearly US$4.5 billion, but the actual disbursements, including off-budget, stood at just US$3.2 billion, they added.
Meanwhile, rising tensions over Kashmir continue between the two nations, as Pakistan downgraded diplomatic relations and suspended bilateral trade with neighbor India after its government scrapped Indian Occupied Kashmir’s Special status on Aug. 5.
The aid cut then sends mixed signals as Trump, during Khan’s official visit to the U.S., offered to be a “mediator” over the matter. Pakistan was open to the idea, yet India rejected it saying the issue was an "internal matter."