ISLAMABAD, Oct 28: Pakistan’s balance of payment crisis, worsened by the conflict in tribal areas, can be eased if the US reimburses the remaining $800 million it should pay under the Coalition Support Fund relating to expenditure incurred on combating militancy.

Sources told Dawn on Tuesday that Pakistan had received only two instalments since March 2008 under the fund – programme which required the US military to reimburse Pakistan for expenses incurred in operations against terrorists.

Pakistan received $281 million in March 2008 followed by another instalment of $364.7 million in Sept 2008, they said.

On an average, the operational cost of the war on terror, including sustainability of logistics and garrison in Fata is about $1 billion a year. The figure is based on cost estimate only for Waziristan and adjacent areas.

Analysts said that although the impact of the international financial crisis on domestic economy was minimal as had been anticipated by economists, the rising expenditure on the war on terror was a heavy burden on the country’s ailing economy.

The cost of war had increased because of the military offensive launched against militants in Swat in November 2007, followed by operations in Bajaur and Kurrum agencies. Pakistan has deployed more than 100,000 troops in the troubled areas.

A finance ministry official said that in order to reduce fiscal deficit, the government was left with no option but to phase out subsidies on oil, gas and drastically cut development expenditures.

Independent economists said that if the US government did not offer any financial bailout, it should at least reimburse funds Islamabad had already spent from its own resources.

A senior military source told this correspondent that the amount for reimbursement was calculated on the basis of six-monthly reports. He said all bills related to the expenditure had been audited jointly by a team of Pakistani military officers and the US embassy.

He said these bills were then sent to the US Government Accountability Office (GAO) and Pentagon for further scrutiny. After clearance, they were sent to the US State Department for release of funds.

“There was no delay in the payment of money till March 2008. The process has since been made more cumbersome, seeking minute details about the expenditures. This takes more time,” the official said.

The sources said Pakistan had already submitted details of funds spent on the war on terror to the US authorities through its embassy in Islamabad.

A senior official told Dawn that the country had received $9.343 billion till December 2007 from the US under different accounts from 2001-02. Of this, $5.42 billion had been reimbursed on account of the war of terror costs, which was not assistance. About $1.495 billion debt has also been written off, he added.