Foreign Aid

Since independence Pakistan has had to depend on foreign assistance in

its development efforts and to balance its international debt payments. In
1960 the World Bank organized the Aid-to-Pakistan Consortium to
facilitate coordination among the major providers of international
assistance. The consortium held 92 percent of Pakistan's outstanding
disbursed debt at the end of June 1991. The consortium's members
include the United States, Canada, Japan, Britain, Germany, France, and
international organizations such as the World Bank and the Asian
Development Bank (ADB). The World Bank accounted for 26 percent of
the outstanding debt, and the ADB, which was the largest lender in the
early 1990s, accounted for 15 percent. Most nonconsortium funding
comes from Saudi Arabia and other oil-producing Middle Eastern
countries. Most aid is in the form of loans, although the proportion of
grants increased from around 12 percent in the late 1970s to around 25
percent in the 1980s, mainly because of food aid and other funds directed
toward Afghan refugees. With the decline in this aid after 1988, the
proportion of grants decreased to 16 percent in FY 1992.

The United States has been a major provider of aid since independence
and was the largest donor in the 1980s (see Foreign Policy , ch. 4). All
United States military aid and all new civilian commitments, however,
ended in October 1990 after the United States Congress failed to receive
certification that Pakistan was not developing a nuclear bomb. As of early
1994, United States aid had not resumed, but Agency for International
Development projects already under way in October 1990 continued to
receive funds (see The Armed Forces in a New World Order , ch. 5). 1

Data as of April 1994

1
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