Money talks 

Money talks 


Pakistan is worried less by U.S. withdrawal of aid than the overall downslide in ties

US holds Pakistan accountable for terrorism

That the U.S. will continue to withhold $255 million in Foreign Military Financing to Pakistan this year suggests it is prepared to downgrade its ties with Pakistan further in an effort to hold it to account on terrorism

Remarks against Pakistan’s double policy

  • U.S. Ambassador to the UN Nikki Haley cited Pakistan’s “double game” of cooperating with the U.S. and harbouring terrorists who attack its troops in Afghanistan
  • Mr. Trump’s own tweet, a day earlier, on January 1, was less temperate in its wording. He accused Pakistan of “lies and deceit” and of treating the U.S. leadership as “fools”

Pakistan’s reaction

After a National Security Council meeting of top generals and ministers convened by Prime Minister ShahidKhaqanAbbasi, it issued a statement expressing “disappointment” over the U.S. statements, and referring to Pakistan’s record in fighting terrorism and providing support to the U.S. effort in Afghanistan


Decision to hold back aid not unexpected

One reason is that the U.S. decision to hold back the $255 million was not unexpected

  • In May last year, the Trump administration had decided to cut the annual outlay for 2018 from $255 million to $100 million
  • In August, it notified Congress it would withhold the current tranche due for 2016 as well, while a decision on 2017 was still pending

No major impact

Second, while the overall downslide in ties with the U.S. will be a major worry for Pakistan, the cancellation of funds may not be that alarming. American assistance to Pakistan is at its lowest levels since 2001.

Chinese alternative available to Pakistan

Third, Pakistan’s confidence that it has an alternative in China has grown, with Beijing’s pledge of more than $100 billion in loans for the China-Pakistan Economic Corridor infrastructure, power projects, and so on

The Question

Whether the U.S. will consider stronger measures, such as stopping all funding, sanctions, or cancelling Pakistan’s ‘major non-NATO ally’ status?

India’s view: a positive development

From India’s point of view, any attempt to hold Pakistan’s feet to the fire on its support to terror groups is a positive development

US needs to follow through

It is particularly important that the U.S. follow through on its ultimatums in this respect.

Focus on terrorism affecting American troops only

However, all American statements so far focus on Pakistan’s support to terror groups that threaten Afghanistan, and more particularly, the U.S. troops in Afghanistan

Action against groups targeting India is unlikely

Therefore, action against the groups that threaten India is unlikely to be an immediate priority. New Delhi must also be mindful of the impact of a more fractured U.S.-Pakistan relationship on regional security


Above all, the U.S.-Pakistan relationship, like that between India and the U.S. and India and Pakistan, is a long-standing bilateral one. While welcoming all moves to address India’s core concerns on terror, New Delhi must ensure it doesn’t get ensnared or triangulated in the equation between Washington and Islamabad

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