Bloomberg News

Pentagon Freeing $1.1 Billion Withheld From Pakistan

July 05, 2012

The Pentagon is preparing to release about $1.1 billion withheld from Pakistan’s military after that nation agreed this week to reopen supply routes into Afghanistan.

The withheld dollars are part of the U.S. Coalition Support Fund to reimburse Pakistan for its support of U.S. counter- insurgency operations, Pentagon spokesman Navy Captain John Kirby told reporters today.

Payments were suspended last year amid increased U.S.- Pakistan tensions even before Pakistan closed the land routes into Afghanistan in November as a result of an accidental U.S. attack that killed 24 Pakistani soldiers. Pakistan, which had demanded a U.S. apology for the deaths, agreed to reopen the lines after Secretary of State Hillary Clinton said “we are sorry” in a statement on June 3.

“Several trucks have gone through and this will continue,” Kirby told reporters today. “The traffic is starting to flow,” he said.

Asked if Defense Secretary Leon Panetta agreed with Clinton’s statement of “deepest regrets,” Kirby said Panetta “fully supports the approach that was taken.”

While the apology, supply line reopenings and funds transfer were important developments, “it would be a mistake to believe that US-Pak relations are now ‘back on track,’” Alan Kronstadt, a South Asia analyst for the nonpartisan Congressional Research Service, said today.

Drone Disputes

“Disputes over drone strikes, intelligence sharing/cooperation, and the role of the Haqqani Network remain serious and unresolved,” Kronstadt said.

Haqqani Network extremists launch attacks on coalition forces and civilians in Afghanistan from Pakistani safe havens.

Using northern routes as an alternative means to ship supplies into Afghanistan was costing the U.S. about $100 million a month, Panetta said last month. The Pakistan routes were shut for seven months.

Kirby said he didn’t expect the Pentagon to substantially modify a request to shift about $2.1 billion in Pentagon funding into Army and Air Force accounts to pay for the actual and anticipated costs of using the costlier northern land and air routes to move supplies in and out of Afghanistan. Kirby said he didn’t have a breakdown of the costs.

The request is contained in an $8.6 billion Pentagon “reprogramming” that was sent Congress.

“We do not believe there will be major changes as a result of the opening,” Kirby said of the $2.1 billion potential shift.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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