Economic aid for Pakistan a victim of corruption worries

On the same day Pakistani generals declared victory over the Taliban here in the badlands along the Afghan border, a girl crouched by a brackish pond and filled large metal pots with her family’s drinking water.

Farther down a dirt road pocked with gaping potholes, severed power lines snaked across farm fields overrun by weeds. In Damadola, a cluster of mud huts that once served as a stronghold for the Taliban and Al Qaeda, villager Abdul Sattar listed his community’s needs: New roads and bridges. A pharmacy. Girls schools. And, above all, jobs.

“The main source for the militancy has been the area’s unemployment,” Sattar said.

As the country’s military makes inroads against the insurgency in the lawless border region known as the Federally Administered Tribal Areas, officials here say the government must move quickly to launch infrastructure and social service projects that will keep extremism from taking root again.

But corruption concerns could slow billions of dollars in U.S. aid earmarked for rebuilding, a prospect that infuriates Pakistani officials who say they’ve proved themselves in the fight against the Taliban. Pakistani officials also say they are deeply disappointed that only $250 million has been delivered out of the $5.7 billion pledged by the U.S. and other nations at an international donor conference in Tokyo last April.

Economic development for the tribal areas is expected to be a cornerstone of the five-year, $7.5-billion package of aid signed into law by President Obama in October.

The package represents a new strategy initiated by Obama that shifts the focus of billions of dollars in aid from the Pakistani military to addressing the country’s critical economic and infrastructure issues, including energy and water.

However, in revamping Washington’s development aid to Pakistan, the Obama administration wants to ensure that U.S. taxpayer money doesn’t get lost in the layers of corruption that still dominate Pakistani governance.

Teams of U.S. auditors will be sent to Pakistan to scrutinize whether the money is being spent on its intended targets or siphoned off by corrupt bureaucrats. Pakistani accounting firms trained to apply U.S. accounting standards will be hired to audit aid recipients such as Pakistani nongovernmental organizations.

“I want to make clear to the government of Pakistan that U.S. civilian assistance comes as a package -- funding, programming and oversight,” U.S. Rep. John F. Tierney said during a recent hearing of the House Oversight and Government Reform Committee’s subcommittee on national security and foreign affairs, which the Massachusetts Democrat chairs. “Pakistan cannot accept the funding but deny U.S. agencies the personnel or the access critical to conduct oversight.”

Pakistan has grown increasingly wary of new oversight mechanisms that officials in Islamabad, the capital, say could slow aid from Washington. In the case of Coalition Support Funds payments -- U.S. reimbursements to Pakistan for the cost of battling terrorism -- Islamabad has fought back.

The Pakistani government has balked at issuing dozens of visas the U.S. has sought for the teams of auditors. For 2009, the U.S. owes Pakistan about $2 billion. U.S. officials say the debate over visas has held up disbursement of the funds, whereas Pakistani leaders say the additional oversight isn’t needed.

The U.S. “has to decide what’s important,” said Fauzia Wahab, a Pakistani lawmaker and spokeswoman for President Asif Ali Zardari’s ruling party. “If the goal is to defeat the militants and weed out Al Qaeda, then you have to trust your partner. And Pakistan is delivering.”

The delays are being felt here in Bajaur, a tribal region decimated by 18 months of fighting between Pakistani troops and Taliban militants.

Nearly a third of Bajaur’s 600 schools were blown up by the Taliban, said Tariq Hayat Khan, law and order secretary for the FATA Secretariat, the administrative body for the tribal areas.

Half of the region’s 14 health clinics have been destroyed. It’s not uncommon to see villagers carrying an ailing Bajaur resident to a hospital several miles away, Khan said.

“None of the promised billions of dollars have materialized,” Khan said. “The fact is, we are being badly let down.”

During a recent trip to Bajaur arranged by the Pakistani military for foreign journalists, army commanders said the region had been a key conduit for Taliban militants, who could freely move across the area’s porous, mountain-lined border with Afghanistan. Al Qaeda militants had turned Damadola into a stronghold, and it is believed the terrorist network’s second in command, Ayman Zawahiri, once had a house here.

Now, with the Taliban and Al Qaeda largely flushed out of the region, Pakistani military commanders say Bajaur needs a massive infusion of aid.

“We haven’t seen any funding,” said Maj. Gen. Tariq Khan, who led the fight against Taliban militants in Bajaur. “There’s been a lot of prose and poetry and promise. Let’s hope it converts into practical manifestations.”

At the House hearing, James Bever, director of the Afghanistan-Pakistan Task Force of the U.S. Agency for International Development, said the U.S. has already spent $5.6 million on a host of projects in Bajaur, including street paving, flood wall construction, electricity grid repairs, school renovations and construction of government buildings.

Khan, the law and order secretary, says that’s not nearly enough. Projects that could tap the region’s natural resources and infuse it with scores of jobs have gone ignored, he says. As an example, he cites what he says are hundreds of thousands of tons of bauxite, used in the production of aluminum, lying untapped in Bajaur’s rock strata.

“We haven’t had a single offer to develop it,” Khan said. “It’s right on the surface; you don’t even have to mine for it. We keep pushing it to everyone, but the response always is, ‘We’ll take a look at it.’ I’m afraid those looks aren’t enough.”