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US Assistant Secretary for South and Central Asia, Donald Lu said Tuesday that US President Joe Biden has requested $101 million in aid for Pakistan to support democracy and human rights in the country.
Lu, whom Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan blamed for toppling his government in 2022, made the statement before a committee of the American House of Representatives, which was summoned to discuss the United States budget for South Asia.
The assistant secretary stated that the funds would be allocated to combat terrorism, support economic reforms, and provide debt relief.
Lu highlighted that this financial assistance aims to stabilise Pakistan’s economy, which is in dire straits even after the government secured a 37-month-long International Monetary Fund (IMF) programme.
The staff-level agreement caps negotiations that started in May after Islamabad completed a short-term, $3 billion program that helped stabilize the economy, avert a sovereign debt default, and set challenging revenue targets in its budget to get IMF approval.
The new agreement introduced increased tax on agricultural incomes, underscoring the need to increase government revenue and reduce recurrent deficit to win the lender’s approval.
Under the IMF deal, the highest effective tax rate can rise to as much as 45% from the current 15%. It will be implemented from 2025, a move that was termed “unprecedented” by brokerage and investment banking firm JS Global.
Moving forward, he also expressed concern over the situation of women and minority groups in Afghanistan, noting that relations with the Taliban government cannot normalise until the rights of Afghan citizens are respected.
The senior State Department official also demanded the Afghan Taliban to release all American prisoners in their custody.
The US remains the largest aid donor to impoverished Afghanistan nearly three years after the Taliban seized Kabul as the last US troops completed a chaotic pullout following 20 years of war with the Islamist militants.
Since the US withdrawal was completed on August 30, 2021, Washington has provided more than $17.9 billion in assistance to Afghanistan.
