USAID`s programs, which will be supported by this agreement, have been developed in consultation with the Pakistani government and support the Pakistani government`s 2025 vision, which sets out a roadmap for a prosperous Pakistan. However, following the signing of the PEPA agreement between Pakistan and the United States, relations began to deteriorate and this deterioration in relations also affected the commitments and aid plans promised to Pakistan under the Kerry Lugar Act. Officials from the Ministry of Economy have found that PEPA is one of four agreements under which Washington provides non-military economic assistance to Pakistan. The total amount of aid commitments in the four U.S. aid programs since 2001 is $8.2 billion, and the amount that has been paid to date is $6.6 billion. The agreement, reached on September 16, represents an additional $407 million to support U.S. and Pakistani government initiatives to improve critical infrastructure, create economic opportunities and pursue economic and political reforms that promote prosperity, according to a press release released here on Tuesday. Shortly after the PEPA agreement came into force, Pakistan-U.S. relations deteriorated to near the lowest level in decades.
This has also had an impact on actual KLB commitments and payments. The sources showed that due to the slowness of payment and the use of aid, USAID would likely be able to use the total amount within a year. That is why the federal government has renewed its agreement with Washington. Islamabad, October 4, 2016 – The United States Agency for International Development (USAID) and the Ministry of Finance signed the latest amendment to the Pakistan Enhanced Partnership Agreement (PEPA) on September 16, the document by which the U.S. government provides development assistance to Pakistan. The agreement allocates an additional US$407 million to support U.S. and Pakistani government initiatives to improve critical infrastructure, create economic opportunities and pursue economic and political reforms that promote prosperity. The United States has further cut aid to Pakistan and reduced it by $440 million, in line with The Kerry Lugar Berman Act. Current aid amounts to $4.1 billion, just over half of the total pledged to Islamabad in 2010. The Office of the Inspector General of the United States also ordered a review of aid to Pakistan under the Kerry Lugar Berman Act.
OIG Report 2015 concluded that the United States has failed to meet its long-term development goals in Pakistan because of the short-term political ambitions of the U.S. State Department, which has opposed USAID`s long-term agendas. The United States has reduced USAID, which was delivered to Pakistan under the Kerry Lugar Berman Act, by an additional $440 million. The grant now stands at $4.1 billion, up from the original amount promised under the AE PEPA of $7.5 billion.