The Trump administration has slashed its foreign military financing (FMF) to Pakistan from $255 million to $100 million for the 2018 fiscal, but has kept its options open whether it would be a grant or should be converted into a loan, according to a US official.
“While we may use FMF to leverage loans for some countries, we will still maintain the flexibility to use it as grant assistance where needed,” a state department spokesman said when asked about the budget proposal of $100 million in foreign military funding to Pakistan. “This budget focuses on bilateral FMF assistance requested for Israel ($3.1 billion), Egypt ($1.3 billion), Jordan ($350 million), and Pakistan ($100 million),” the spokesman said.
Last year, the US assistance to Pakistan under the state department budget was $534 million, which included $225 million towards foreign military funding.
In all, the state department has proposed a massive $190 million reduction in its financial aid to Pakistan as compared to the 2016 fiscal. The current 2017 fiscal ends on September 30 this year.
On Monday, the White House said that FMF to Israel and Egypt would continue to be in the form of grant while for Pakistan it would be a loan but a final decision would be taken by the state department.
“The Foreign Military Funding or FMF for Pakistan would be provided in the form of a loan guarantee,” said Mick Mulvaney, Director of the Office of Management of Budget in the White House.
Mulvaney said the Trump administration has proposed to convert its FMF programme to many countries from aid to financial loan.
