[Senate Report 111-33]
[From the U.S. Government Publishing Office]
Calendar No. 85
111th Congress Report
SENATE
1st Session 111-33
======================================================================
ENHANCED PARTNERSHIP WITH PAKISTAN ACT OF 2009
_______
June 23, 2009.--Ordered to be printed
_______
Mr. Kerry, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 962]
The Committee on Foreign Relations, having had under
consideration a bill S. 962, to authorize appropriations for
fiscal years 2009 through 2013 to promote an enhanced strategic
partnership with Pakistan and its people, and for other
purposes, reports favorably thereon with amendments and
recommends that the bill as amended do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Discussion.......................................................2
IV. Cost Estimate....................................................7
V. Evaluation of Regulatory Impact.................................10
VI. Changes in Existing Law.........................................10
I. Purpose
The purpose of this legislation is to authorize
appropriations for fiscal years 2009 through 2013 to promote an
enhanced strategic partnership with Pakistan and its people.
II. Committee Action
S. 962 was introduced on May 4, 2009 by Senators Kerry and
Lugar. At a meeting on June 16, 2009, a Managers' Package of
amendments was adopted by voice vote. By a roll-call vote of
16-0, the committee ordered the bill favorably reported.
Members voting ``aye'' were Sens. Kerry, Lugar, Dodd (by
proxy), Corker, Boxer (by proxy), Feingold, Menendez, Risch,
DeMint, Casey, Isaakson, Gillibrand, Cardin, Barrasso (by
proxy), Shaheen, and Kaufman.
III. Discussion
A. SUMMARY
S. 962, the Enhanced Partnership with Pakistan Act of 2009,
seeks to transform the relationship between the United States
and Pakistan from a transactional, tactically-driven set of
short-term exercises in crisis-management, into a deeper,
broader, long-term strategic engagement. The legislation aims
to properly balance the relationship between United States and
Pakistan by acknowledging and supporting the national security
interests of the United States as well as our economic and
geopolitical interests. United States economic and military
assistance for Pakistan enhances our mutual security while
helping to build economic and political stability in a country
important in a regional and strategic sense. Economic
assistance is as critical an element as strengthening the
capacity of the Pakistan military to counter terrorism,
especially for projects that provide direct and concrete
benefit to Pakistani citizens as a whole. The overall level of
economic assistance authorized would be raised substantially,
with the bulk of this aid intended for projects such as
schools, roads, medical clinics, and infrastructure
development.
Specifically, the legislation:
Authorizes $7.5 billion over the next 5 fiscal years ($1.5
billion annually) under the Foreign Assistance Act.
Advocates an additional $7.5 billion over the subsequent 5
years, subject to improvements in the political and
economic climate in Pakistan.
Conditions military grant assistance and Foreign Military
Financing assistance beginning in 2010, and Foreign
Military Sales beginning in 2012, on certification by
Secretary of State that Pakistani security forces:
are making concerted efforts to prevent al Qaeda
and associated terrorist groups (including Lashkar-e
Taiba and Jaish-e Muhammad) from operating in the
territory of Pakistan;
are making concerted efforts to prevent the Taliban
from using the territory of Pakistan as a sanctuary
from which to launch attacks within Afghanistan; and
are not materially interfering in the political or
judicial processes of Pakistan.
Prioritizes assistance for the following general purposes:
Just and democratic governance;
Economic development; and
Investment in people.
Requires the following reports:
Secretary of State must within 45 days of passage
of the legislation, or September 15, 2009, provide a
comprehensive Pakistan Assistance Strategy Report to
Congress, that contains specific benchmarks to measure
progress on a qualitative basis. The submission of the
report is to be preceded by 15 day consultation period
for Congress;
Secretary of State must within 90 days of the
submission of the Pakistan Assistance Strategy Report,
submit the first of ongoing semi-annual reports to
Congress that describe the uses or intended uses and
impact of assistance authorized for Pakistan;
Secretary of State (in consultation with other
officials) must develop and provide to Congress a
comprehensive strategy for the Afghan-Pakistan border
area;
The Secretary of State, after consultation with the
Secretary of Defense and the Director of National
Intelligence, must submit an annual report on security
forces' progress.
Urges accountability and transparent reporting of Coalition
Support Funds.
Urges a reorientation of engagement towards the Pakistani
people rather than merely towards the Pakistani
government (civilian or military)
The significant increase in assistance authorized by this
legislation is intended to broaden and deepen non-military
programs across a country of some 176 million people, where
less than 50 percent of the population can read and write and
whose Global Hunger Index ranking is nearly on par with that of
North Korea. The legislation highlights the essential economic
assistance pillar to achieve mutual goals of improved human
security through basic services, education, economic
opportunity, political participation and human rights. The
legislation contains Sense of Congress language urging that
security-related assistance be provided in close coordination
with the Government of Pakistan, designed to improve the
Government's capabilities in areas of mutual concern, and
maintained at a level that will bring significant gains in
counterterrorism, counterinsurgency, and regional harmony. The
legislation does not preclude an increase or a decrease in the
level of security-related aid. Any use of funds contained in
this legislation for the purpose of augmenting Pakistan's
nuclear weapons program would be directly contrary to
Congressional intent.
The legislation mandates that funds appropriated or
otherwise made available to carry out section 5 shall be
utilized to the maximum extent possible as direct expenditures
for economic and development projects and programs.
B. ANALYSIS OF SELECTED SECTIONS
Section 5.--Use of Funds
In light of the large increase in assistance authorized by
this legislation, the committee attaches great importance to
ensuring that the assistance authorized will be spent
effectively and efficiently. The legislation contains a number
of provisions designed to promote this objective.
Before any money authorized by the legislation may be
spent, the legislation requires the Administration to
develop and provide to the Congress an assistance
strategy, setting out the objectives to be achieved
with the assistance, the programs and projects the
Administration intends to implement to achieve these
objectives, and the criteria that the Administration
will use to measure the effectiveness of the
assistance. The Administration must consult with the
Congress on its proposed strategy, including the
criteria and benchmarks that will be used to assess the
effectiveness of the assistance, 15 days before
obligating any assistance authorized under the
legislation.
Once money begins to flow, the legislation requires that
the Administration report every six months on how the
money is spent and what impact it is having, measured
with reference to the criteria the Administration
establishes in its strategy report.
Before the Administration may spend more than half of the
$1.5 billion authorized in any fiscal year, the
legislation requires that it certify that the
assistance provided to date has made or is making
substantial progress toward the principal objectives of
assistance contained in the Administration's strategy
report, subject to a waiver that may be exercised to
permit assistance in the national security interests of
the United States.
The legislation permits up to $30 million annually to be
made available to the Inspectors General of the
Department of State, the United States Agency for
International Development and other relevant Agencies
to provide audits and program reviews of projects
funded pursuant to this section. These funds are in
addition to other funds already available to these
offices in their regular budgets. The committee has
provided these additional resources because it believes
that the significant growth of assistance contemplated
by this Act warrants close oversight by Inspectors
General. In providing these funds, the committee also
attaches importance to developing the capacities of the
existing Inspector General offices in federal agencies
to oversee major assistance programs, rather than
seeking to create ad hoc oversight mechanisms.
The legislation also requires the Comptroller General to
submit a report annually on the implementation of the
Administration's assistance strategy, including any GAO
recommendations for improving efficiency or
effectiveness.
The legislation also provides that up to $10 million
annually may be used for administrative expenses of Federal
departments and agencies in connection with the provision of
assistance authorized by this section. These funds are intended
to supplement, not replace, existing funds authorized and
appropriated for such purposes. It is the intent of this
legislation that this provision provides important flexibility
to the U.S. Agency for International Development, which has a
limited overall budget for operational expenses. Given the
magnitude of the assistance and the critical nature of the
purpose of such funds, the committee expects that the Agency
will, however, endeavor to keep administrative expenses to a
minimum.
The legislation provides that certain reporting
requirements linked to the use of authorized assistance funds
will sunset on September 30, 2013, the end of the last fiscal
year for which funds are authorized in the bill. The committee
intends that in the event additional assistance is authorized
for fiscal years after 2013, as is specifically contemplated by
Section 5(d) of the bill, appropriate extensions of these
reporting requirements will accompany the authorization for
such additional assistance.
Subsection (F)(1)(A).--Just and Democratic Governance
Pakistan has experienced a series of governance swings
between military and civilian rule and punctuated by coups and
emergency decrees. Democratic governance with independent
government institutions have been limited in time and impact.
United States assistance authorized by this Act is intended to
provide support for good governance by helping to build the
capacity of independent, fair, and capable institutions of
government such as the judiciary and parliament. This Act
intends that up to $100 million annually of the authorized
funds be used for police reform, equipping, and training.
Subsection (F)(1)(B).--Economic Freedom
Pakistan ranks 136 out of 171 in the Human Development
Index (HDI) and despite GDP growth exceeding 6 percent in
recent years, is currently in the midst of a financial crisis
associated with the global economic recession. Nearly 25
percent fall below the poverty line, and population growth
rates are exceeding the economic capacity to sustain poverty
reduction and development gains made since the turn of the
century. United States assistance authorized in this Act is
intended to provide additional support, considering the
magnitude of international assistance for the same purposes, to
sustain strong economic growth. Rural and agricultural
development are key elements of Pakistan's overall economic
progress and such programs should include support for micro-
finance, small and medium-sized infrastructure projects as well
as effective energy and water developments. A key priority for
United States assistance should be the strengthening of cross-
border trade and appropriate economic development, especially
along the border regions with Afghanistan.
Subsection (F)(1)(C).--Investments in People
PRIMARY AND SECONDARY EDUCATION
One of the most critical long-term investments in any
society is that made in the education of its children. Pakistan
has significant areas of potential in building a comprehensive
public education system. Nationally, the literacy rate is less
than 50 percent, but women's literacy is less than 37 percent.
In some areas of the country women's literacy is no more than 3
percent. In authorizing assistance for broad-based public
primary and secondary education and vocational training for
both boys and girls, the Act highlights concern for the lack of
modern educational opportunities and the significant gender
disparity in school enrollment in Pakistan. The Act intends
that assistance facilitate access to education for all children
in Pakistan, and especially for young women and girls, in order
to raise literacy rates and decrease drop-out rates. Implicit
in the rationale of the Act is an understanding that the
provision of school meals can promote school enrollment and
increasing academic performance, and programs to provide school
meals would be in keeping with the intent of the Act.
HIGHER EDUCATION
If successful, United States assistance will help drive
demand for higher education in Pakistan. The existing system of
tertiary education is inadequate to the current demand for
civil servants, entrepreneurs, doctors, teachers and
professionals of all kinds, and will only continue to fall
short given rapid rates of growth. With a population exceeding
175 million, of which 38 percent are younger than 15, and an
annual population growth rate exceeding 2 percent, Pakistan's
development will require more vocational schools, colleges and
universities. Since 2003 USAID has supported the revitalization
of the well-respected 145-year-old Forman Christian College in
Lahore, after 30 years of neglect as a nationalized
institution. This chartered university provides a much-valued
American style four year baccalaureate program, as well as
Master's degrees, as a non-sectarian, co-educational
institution for over 4,000 students. It has garnered the
support of the Higher Education Commission of Pakistan and
which has indicated its intent to rapidly expand access to
higher education. Assistance under this Act is intended to
continue to enable and expand programs and institutions of
higher education such as FCC.
AMERICAN UNIVERSITY
Whereas scholarship and fellowship programs are an
important part of United States assistance and positively
impact relations between our people, it is cost-effective to
develop local capacity in American-style higher education in
order to broaden cultural understanding. There is a long and
remarkable history of American schools and universities around
the world. Universities that emulate American curricula such as
in Beirut, Lebanon and Cairo, Egypt, have been successfully
drawing talented students and producing leaders in government,
business, science and education. They have produced leaders
such as Salam Fayyad, the Palestinian Prime Minister; Ali Al-
Naimi, Saudi Arabian Minister of Petroleum; Dr. Ashraf Ghani,
former Afghan Finance Minister and World Bank official; and
former United States Ambassador to the United Nations Zalmay
Khalilzad. It is intended that assistance under this Act be
used to explore the opportunity to establish an American
University in Pakistan.
Section 7.--Coalition Support Funds
Coalition Support Funds provide essential support for
military operations of the Government of Pakistan to protect
U.S. and allied logistic operations in support of Operation
Enduring Freedom. Such resources are of such a magnitude that
the process must be transparent and the monitoring must provide
the highest degree of assurance that the program is properly
being used for the purposes intended. This section includes a
provision that the Secretary of Defense should submit to
Congress a semi-annual report on the use of Coalition Support
Funds.
C. CONCLUSION
A premise for this plan is a simple thought-exercise:
Following the earthquake in Kashmir in 2005, the United States
devoted nearly $1 billion to relief efforts, and reaped a
greater reward in popular support than any amount of public
diplomacy could generate. The sight of American servicemen and
women saving the lives of Pakistani citizens was worth many
times the cost of operating the Chinook helicopters. For a
brief period, America was challenging the terrorists in a true
battle of hearts and minds--and winning. S. 962 seeks to
sustain such a relationship and thereby materially and clearly
demonstrate the true friendship of the American people for the
Pakistani people without waiting for a natural (or man-made)
disaster to compel a response.
V. Cost Estimate
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, June 19, 2009.
Hon. John F. Kerry,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 962, the Enhanced
Partnership With Pakistan Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John Chin.
Sincerely,
Douglas W. Elmendorf
------
Congressional Budget Office Cost Estimate
June 19, 2009.
S. 962
Enhanced Partnership With Pakistan Act of 2009
AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON
JUNE 16, 2009
SUMMARY
S. 962 would authorize the appropriation of up to $1.5
billion a year over the 2009-2013 period--a total of up to $7.5
billion over five years--for nonsecurity assistance to
Pakistan. CBO estimates that implementing S. 962 would cost
about $4.8 billion over the 2010-2014 period, assuming
appropriation of the authorized amounts. Enacting the bill
would not affect direct spending or revenues.
S. 962 contains no intergovernmental mandates as defined in
the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
S. 962 could impose a private-sector mandate, as defined in
UMRA, on exporters of major defense equipment. If the Secretary
of State does not certify that the security forces of Pakistan
have met certain security standards by 2012 or does not waive
the requirement for such certification, the bill would prohibit
the export of major defense equipment to Pakistan. CBO cannot
determine whether the cost of the mandate, if imposed, would
exceed the annual threshold established in UMRA for private-
sector mandates ($139 million in 2009, adjusted annually for
inflation).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 962 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
Changes in Spending Subject to Appropriation Due to S. 962*
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2010-2014
----------------------------------------------------------------------------------------------------------------
Authorization Level................................ 1,500 1,500 1,500 1,500 0 6,000
Estimated Outlays.................................. 301 858 1,150 1,355 1,151 4,815
----------------------------------------------------------------------------------------------------------------
*In addition, S. 962 would authorize the appropriation of up to $1.5 billion for nonsecurity assistance to
Pakistan in 2009. However, the Congress has already appropriated amounts for nonsecurity assistance to
Pakistan for fiscal year 2009, enacted in the Omnibus Appropriations Act, 2009 (Public Law 111-8) on March 11,
2009. Additional appropriations for such assistance for fiscal year 2009 will be provided by the Supplemental
Appropriations Act, 2009 (H.R. 2346), which was cleared by the Congress on June 18, 2009. CBO assumes there
would be no additional funding for assistance to Pakistan for this year.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted near the end of fiscal year 2009, that the authorized
amounts will be appropriated each fiscal year over the 2010-
2014 period, and that outlays will follow historical spending
patterns for existing programs.
Assistance to Pakistan
Section 5 would authorize the appropriation of up to $1.5
billion a year over the 2009-2013 period for assistance
programs in Pakistan and would require the administration to
prepare semi-annual reports on the implementation of those
programs. In general, those funds would be used for projects
intended to benefit the people of Pakistan, including those
that promote democratic governance, economic development, civil
society, and recovery from internal conflict. In addition, of
the amounts authorized for a fiscal year, up to $10 million
could be used to administer those programs, up to $30 million
could be used to audit those programs, and up to $5 million
could be used to establish a Chief of Mission Fund that would
address urgent humanitarian needs.
CBO expects that the $1.5 billion authorized to be
appropriated for 2009 would not be provided. The Congress has
already appropriated amounts for nonsecurity assistance to
Pakistan for 2009, enacted in the Omnibus Appropriations Act,
2009 (Public Law 111-8) on March 11, 2009. Additional
appropriations for such assistance for 2009 will be provided by
the Supplemental Appropriations Act, 2009 (H.R. 2346), which
was cleared by the Congress on June 18, 2009. In total, those
appropriations provide approximately $1.3 billion for
nonsecurity assistance to Pakistan in 2009. CBO assumes there
would be no additional funding for assistance to Pakistan for
this year. Assuming appropriation of the amounts authorized for
2010 through 2014, CBO estimates that implementing this
provision would cost about $4.8 billion over that period.
Limitations on Nonsecurity Assistance
The bill would limit the availability of amounts authorized
to be appropriated in section 5 unless the Secretary of State
submits to the appropriate congressional committees a report
describing U.S. policy and strategy with respect to assistance
to Pakistan. In addition, the bill would limit the availability
to half of the amounts authorized to be appropriated each year
unless the President's Special Representative to Afghanistan
and Pakistan certifies that assistance provided under the Act
is helping Pakistan make substantial progress toward achieving
the objectives contained in the Pakistan Assistance Strategy
Report mentioned above. The bill would allow the Secretary of
State to waive that certification requirement in the interests
of national security. CBO expects that the Secretary would
exercise the waiver authority if the President's Special
Representative were unable to make the necessary certification,
and thus, implementing that provision would have no significant
effect on spending subject to appropriation.
Limitations on Security Assistance
Section 6 would limit certain military assistance after
2009 and arms transfers after 2011 to Pakistan unless the
Secretary of State certifies that Pakistani security forces are
not materially interfering in their country's judicial or
political processes and that they are making concerted efforts
to prevent terrorist and militant groups from operating in
Pakistan or using it as a sanctuary. The bill would allow the
Secretary to waive those certification requirements in the
interests of national security. CBO expects that the Secretary
would exercise the waiver authority if she were unable to make
the necessary certification, and thus, implementing that
section would have no significant effect on spending subject to
appropriation.
ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS
S. 962 contains no intergovernmental mandates as defined in
UMRA and would not affect the budgets of state, local, or
tribal governments.
ESTIMATED IMPACT ON THE PRIVATE SECTOR
S. 962 could impose a private-sector mandate, as defined in
UMRA, on exporters of major defense equipment to Pakistan if
the Secretary of State does not certify that the security
forces of Pakistan have met certain security standards by
fiscal year 2012. If the Secretary does not issue such
certification, the bill would prohibit the necessary licenses
and programs for private entities to export major defense
equipment to Pakistan. However, the bill would allow the
Secretary of State to waive the prohibition of exports of major
defense equipment if the Secretary determines it is important
to the national security interests of the United States to
provide such waiver. CBO expects that the Secretary would
exercise such a waiver. In the event that such exports are
prohibited, the cost to comply with the mandate would be the
foregone net income attributed to the sale of major defense
equipment to Pakistan. According to industry experts and the
Defense Security Cooperation Agency, the value of major defense
equipment exported to Pakistan has varied from hundreds of
millions of dollars per year to billions of dollars per year.
Because of uncertainty about the future income from such sales,
CBO cannot determine whether the cost of the mandate, if
imposed, would exceed the annual threshold established in UMRA
for private-sector mandates ($139 million in 2009, adjusted
annually for inflation).
Estimate prepared by:
Federal Costs: John Chin.
Impact on State, Local, and Tribal Governments: Burke
Doherty.
Impact on the Private Sector: Jacob Kuipers.
Estimate approved by:
Theresa Gullo, Deputy Assistant Director for Budget
Analysis.
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with paragraph 12 of Rule XXVI of the
Standing Rules of the Senate, the committee notes that no
changes to existing law are made by this bill.