Research · Reference

Policy glossary

The laws, agreements, institutions and places that come up again and again in relations between the United States and Pakistan, each explained in a short, neutral, sourced entry.

65 entries, A to Z

8 of 65 terms in Aid & finance. Show all

C

Coalition Support Fund

aid & finance. Also Coalition Support Funds, CSF. A US Defense Department account, first funded by Congress in fiscal year 2002, that reimburses partner countries for logistical and military support of US-led operations. Pakistan was its largest recipient: reimbursements, mostly for its army’s operations near the Afghan border, made up nearly half of US transfers to Pakistan after 2001, about $10.7 billion by mid-2013. Later defence bills tied part of the money to action against the Haqqani network.

E

Extended Fund Facility

aid & finance. Also EFF. An IMF lending arrangement for countries with serious medium-term balance-of-payments problems rooted in structural weaknesses. Programmes usually run three years, up to four, with repayment over 4½ to 10 years, and money is released in tranches after reviews of agreed policy conditions. Pakistan’s current arrangement, a 37-month EFF of about $7 billion, was approved on 25 September 2024.

F

Foreign Military Financing

aid & finance. Also FMF. A US programme of grants and loans, authorised by the Arms Export Control Act of 1976, that helps partner governments buy American defence equipment, services and training. The State Department’s Bureau of Political-Military Affairs sets policy and allocations, and the Pentagon’s Defense Security Cooperation Agency carries out the purchases. Pakistan received FMF grants for much of the period after 2001.

K

Kerry–Lugar–Berman Act

aid & finance. Also Enhanced Partnership with Pakistan Act, KLB. The Enhanced Partnership with Pakistan Act of 2009, named for Senators John Kerry and Richard Lugar and Representative Howard Berman, became law on 15 October 2009. It authorised $1.5 billion a year in non-military US assistance to Pakistan for fiscal years 2010 to 2014, for economic development, democratic institutions and public services, and attached conditions and reporting requirements to security assistance.

M

Millennium Challenge Corporation

aid & finance. Also MCC. An independent US foreign-aid agency, created in 2004, that makes large grants, called compacts, to low- and lower-middle-income countries chosen by its board. Selection uses an annual scorecard of 20-odd indicators on ruling justly, economic freedom and investing in people: a country must pass at least half, including “hard hurdles” on personal freedom and on corruption or accountability. A passing scorecard does not guarantee a compact.

S

Stand-By Arrangement

aid & finance. Also SBA. The IMF’s main lending instrument, in use since 1952, for countries with short-term balance-of-payments needs. Money is disbursed in instalments as the borrower meets agreed policy conditions, normally over 12 to 24 months and never more than 36, and is repaid within 3¼ to 5 years. Pakistan’s most recent, a nine-month SBA of about $3 billion, was approved on 12 July 2023.

U

US International Development Finance Corporation

aid & finance. Also DFC, Development Finance Corporation. The US government’s development finance institution, created by the BUILD Act of 2018 by merging the Overseas Private Investment Corporation with USAID’s Development Credit Authority, and operating since December 2019. It supports private investment in lower-income countries through direct loans, loan guarantees, equity investments, political-risk insurance and technical assistance.

USAID

aid & finance. Also United States Agency for International Development, US Agency for International Development. The US Agency for International Development, created in 1961 to run most US civilian foreign aid. In Pakistan it funded programmes in energy, economic growth, education, health and disaster relief, including much of the assistance under the Kerry–Lugar–Berman Act. After a freeze on foreign aid in early 2025, USAID stopped implementing assistance on 1 July 2025 and the State Department took over the programmes it kept.

Definitions are kept short and neutral, and each cites its sources on the term’s page. Spotted something to correct? Tell us.