The US administration requested that Congress free up $101 million for Pakistan on Tuesday, purportedly to help economic stability, as per foreign media report. During a panel meeting, Assistant Secretary of State Donald Lu emphasized that this aid would assist the country in addressing ongoing challenges such as terrorism, debt management, and economic reforms.
Lu made this statement while presenting a written budget request for South and Central Asian Affairs to the House of Representatives Foreign Affairs Committee.
The total amount of foreign assistance for the South and Central Asia region is $1.01 billion, according to the president's budget request document, as per Dawn News. This funding aims to “compete with the People’s Republic of China, counter Russian and Chinese disinformation, and prevent terrorist groups from posing a threat to Washington security.”
Commenting on Pakistan’s ties with China, Lu expressed that the US aims to prevent Islamabad from becoming “further overreliant” on Beijing. In response to a lawmaker during the hearing about Washington's strategy to counter China’s “strong and growing influence” in Pakistan, he asserted that the US intends to surpass Chinese investments.
Pakistan, however, ranks as the third-largest recipient of Chinese development finance internationally, with a portfolio totaling $70.3 billion, according to a study released last year. Notably, only 2% of China's financial assistance to Islamabad from 2000 to 2021 was in the form of grants, and the majority was provided as loans. In 2023, during a financial crisis, Beijing rolled over $2.4 billion in loans to Islamabad for an additional two years.
This economic support has been crucial in helping Islamabad avoid default amid dwindling foreign exchange reserves, particularly as Islamabad seeks to secure a staff-level agreement with the International Monetary Fund.
Recently, however, the US House of Representatives passed a resolution with strong bipartisan support expressing concerns about democracy and human rights in Pakistan, which were strongly rejected by the country.