The United States, of late, has been in a dilemma on how far it can go to support Pakistan, both militarily and financially. The US-Pakistan relationship has come under severe strain. The latest decision of the US Congress to freeze $700 million US aid to Pakistan until it provides some assurances of assistance in the fight against improvised explosive devices (IED) in the region and the subsequent clarification by the State Department Spokesperson Victoria Nuland that “US has not cut $700 million in aid to Pakistan” is reflective of the dilemma.

The US has indicated that the use of improvised explosive devices by terrorists was hurting US and coalition troops in Afghanistan. Many are made using ammonium nitrate, a common fertilizer shipped across the border from Pakistan.

“The vast majority of the material used to make improvised explosive devices used against US forces in Afghanistan originates from two fertilizer factories inside Pakistan,” Senator John McCain, a Republican, has said in the Senate.

President Barack Obama had earlier in the year said that he was concerned by Pakistan’s military and intelligence community’s ties to “unsavoury characters.” To pressure Pakistan, the US is looking at cutting military aid.

Nuland said: “What we have is something on the defence authorisation bill, which is currently moving in the Congress. So, if this legislation becomes law, we’ll work with the Government of Pakistan on how we can fulfil the requirements. But, this requires us to maintain a strategic perspective and to be clear with our Congress about the strategy.”

Till date, the United States has allocated some $20 billion in security and economic aid to Pakistan since 2001, much of it in the form of reimbursements for assistance in fighting militants. But US lawmakers have expressed increasing frustration with Pakistan’s efforts in the war.

Post the May 2 US raid killing Al Qaeda leader Osama bin Laden in Pakistan the US-Pakistan relationship hit a new low. Recently, the NATO airstrike killing 24 Pakistani soldiers near the Pakistan-Afghanistan border worsened the relationship.

The Pakistan Prime Minister, Yousuf Raza Gilani warned that Islamabad will not accept “flagrant transgression” of its territory like the last month’s deadly NATO strike which he referred to as the “26/11 attacks”.

Meanwhile, there have been several demands on the part of the US leadership to make US aid to Pakistan conditional. The US wants Pakistan to cooperate in fighting militants such as the Haqqani network which the US believes operate out of Pakistan and battle US troops in Afghanistan. US lawmakers allege that many Afghan bombs are made with fertilizer smuggled by militants across the border from Pakistan into Afghanistan.

Earlier in July, the US had decided to suspend $800 million military aid to Pakistan and India had welcomed the move stating that a heavy presence of arms would have disturbed the equilibrium in the region.

“With reference to the special circumstances between India and Pakistan and how India has consistently taken the view that it is not desirable that this region had to be heavily armed by the US which will upset the equilibrium in the region itself. To that extent India welcomes this step,” External Affairs Minister S.M. Krishna had stated.

Despite the ‘straining relationship’, Pakistan figures among the top three recipients of US aid in 2012. The US State Department has indicated that Afghanistan tops the list at $3,213.4 million, followed by Israel at $3,075 million and Pakistan at $2,965 million of foreign military financing. In the case of Pakistan, 80 per cent of the funding is for activities supported by the Economic Support Fund (ESF) and the Pakistan Counter-Insurgency Capability Fund (PCCF).

Pakistan received $4,462 million from the defence budget in FY 2010, which came down to $2,444 million in FY 2011, but increases slightly to $2,965 million in FY 2012. Almost 88 per cent of the US aid to South Central Asia in FY 2012 is requested for Afghanistan and Pakistan.