US Enhanced Aid to Pakistan

A powerful Congressional panel has given its nod to a controversial act tripling US non-military aid to Pakistan to $1.5 billion annually for five years, but imposed tough conditions that include prevention of "cross border attacks into neighbouring countries" by Islamabad.

PEACE Act
Approving for passage, the Pakistan Enduring Assistance and Cooperation Enhancement (PEACE) Act 2009, the House Foreign Affairs Committee also sought to bar Pakistan military or its intelligence agency from supporting any extremists and terrorist group. It also wants Islamabad to provide "direct access to Pakistani nationals" connected with proliferation networks. The bill will now go to the floor of the House of Representatives for passage.

The original bill, introduced on April 2 by Committee Chairman Howard L Berman, imposed conditions that Pakistan would not let its territory be used for launching terror attacks against India and would not support any group that indulges in terror activities against India. The version of the Berman Bill, which was approved by voice vote, replaced “India” with “neighbouring countries,” apparently at the suggestion of the Obama Administration because Pakistan, in particular its Army and the ISI, had raised strong objections to it.

Interestingly, while the original bill had insisted that Pakistan must undertake not to let its territory be used for launching terrorist attacks against India, the direct reference to India was replaced by ‘neighbouring countries’ keeping in mind Pakistani sensitivities. Indeed, it was the Obama administration which told the lawmakers that mentioning India by name could be counter-productive to their overall objective given that the Pakistan establishment was allergic to it.

In other tough clauses, the law seeks to bar the Pakistan military or its intelligence agency from supporting any extremist and terrorist group.

Disappointment for India
India is disappointed over the decision of a US Congressional committee approving a law tripling non-military aid to Pakistan and is expected to take up the matter with Secretary of State Hillary Clinton, who is expected to visit New Delhi soon.

The US was extending aid to Pakistan, obviously to keep it in a good humour though it was fully aware of the ground situation in this region.

The issues will figure prominently during discussions between the Indian side and Hillary Clinton, who is likely to visit New Delhi in July. This would be the first top-level visit to India from Washington since the Obama administration assumed office in January.
There are also indications that Prime Minister Manmohan Singh could meet President Obama on the margins of the G-8 summit in Italy in July. The two leaders had met for the first time in London on the sidelines of the G-20 meet in early April.

Tax Proposals
Obama has also come up with tax proposals that are intended to plug loopholes in taxing American multinational companies (MNCs) operating in India. The proposed measures are likely to hit not only the Indian subsidiaries of US firms because they may not be able to claim benefits under the Indo-US Double Taxation Avoidance Agreement, but also Indian companies engaged in business outsourcing from the US.
However, American policy should appreciate that Pakistan’s claim on Jammu and Kashmir suffered a serious blow after 1971 when Bangladesh emerged as a larger Muslim nation in the subcontinent. Pakistan has no claim to be the "godfather" of Muslims in this subcontinent when the number of Indian Muslims is double the number of Muslims in Pakistan. On Comprehensive Test-Ban Treaty (CTBT), former US President George W. Bush tried to bypass the entire controversy by formulating the Indo-US nuclear deal. There is no way by which President Obama can bring back the Jammu and Kashmir issue or the CTBT issue.

It is the height of naivety for the US to overlook Pakistan’s track record that such assistance to it has always been used against India.