October 28, 2001	Sunday	Shaba'an 10, 1422

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NEW YORK, Oct 27: The Bush administration has put together an aid package for Pakistan that is likely to total several billion dollars and includes sweeping debt rescheduling, grants stretching over many years and trade benefits for its support to the US-led coalition against terrorism, the New York Times said in a report.

The aid envisaged by Washington would make Pakistan the largest recipient of American aid after Israel and Egypt, the paper said.

The NYT said that talks between officials of the State and Treasury departments and Finance Minister Shaukat Aziz had resulted in an agreement that the administration would work to secure four types of aid for Pakistan, the administration officials said.

These include grants from the United States and other allies. In addition, the Bush administration is using its influence to support new loan programmes by the IMF and the World Bank, including an anti-poverty loan worth about $500 million from the IMF and possibly a line of credit, at higher rates, of about $1 billion.

The United States has already begun calculating how to reschedule payments on the $3 billion Pakistan owes Washington. It has urged allies to do the same, and Britain has already followed suit. Bilateral loans total about $12 billion out of the country’s $38 billion foreign debt, the paper said.

Pakistan may also secure a higher quota or lower tariffs for its textile exports to the United States.

Pakistan estimates that the war in Afghanistan will cost it approximately $2.5 billion this year alone, including lost trade and tourism and the expense of caring for Afghan refugees.

One senior administration official said the United States would, however, monitor closely how the money is used. But the official also acknowledged that Washington would support Pakistan’s bid to get some extraordinary benefits, the paper said.

While Pakistan is unlikely to receive all the concessions it now seeks, the administration’s package amounts to the largest mobilization of low-interest loans and debt relief since allies showered benefits on Egypt during the Persian Gulf War, the paper said. Pockets of opposition are already becoming visible in Washington, among non-governmental organizations and, more quietly, in Japan.

Japan recently rejected Pakistan’s request to forgive the entire $5 billion. Tokyo has agreed, however, to delay payments on about $500 million in Pakistani debt.

Some American lawmakers say the Bush administration may have too readily agreed to give Pakistan about $600 million in cash this year and next without a reliable way of ensuring that the money would be used to improve health and education rather than to underwrite the military expenses.