Due to its failure to fight and reign in Islamists militants, the US cancelled $300 million in aid to Pakistan.
"Due to a lack of Pakistani decisive actions in support of the South Asia Strategy, the remaining United States dollars 300 million (actually USD 323.6 million to include non-Pakistan funds) was reprogrammed by DoD in the June/July 2018 time frame for other urgent priorities before the funds expire on September 30, 2018", Pentagon Spokesman Kon Faulkner told PTI.
Faulkner said the plan will be submitted to Congress and, if approved, will bring the total of Coalition Support Funds that have been cut to $800 million since early this year. "This is the money they (US) are supposed to reimburse, but now either they are not willing or unable to pay back", Qureshi said during a hurriedly called press conference on Sunday after the USA announced the decision.
It adds to a broader cut to security aid this year when President Donald Trump accused Pakistan of paying back past aid with "nothing but lies and deceit".
This cancellation of $300 million comes on the eve of an expected trip to Islamabad by U.S. Secretary of State Mike Pompeo, who said fighting the extremists would be a "primary part of the discussion".
But the U.S. does not want a complete break in ties with Pakistan.
Mattis chose not to, the Pentagon spokesperson has now told Reuters.
For over a decade, Pakistan has received CSF assistance to reimburse its military for expenditures incurred in its war against armed groups, including the Pakistani Taliban. The focus in Afghanistan should be a peace process with the Afghan Taliban, and while Pakistan has consistently expressed an interest in supporting a peace process, it can only do so much in the face of political disarray in Afghanistan and reluctance in the USA to engage the Taliban in dialogue.
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Defence secretary Jim Mattis, in particular, had an opportunity to authorise $300 million in the so-called Coalition Support Funds (CSF) this summer if he saw concrete Pakistani action in going after insurgents.
"With the visit of the US Secretary of State we have an opening and a beginning can be made, and we will try to build a consensus in areas of mutual interest", he said.
Officially allies in fighting terrorism, Pakistan and the United States have a complicated relationship, bound by Washington's dependence on Pakistan to guarantee a supply route for USA troops in Afghanistan.
Pakistan's foreign exchange reserves have plummeted over the past year and the country will soon have to decide whether to seek a bailout from the International Monetary Fund (IMF) or from friendly nations such as China.
The U.S. has historically been in the largest donor to UNRWA, contributing more than $350 million in 2017 alone. Khan is, however, a critic of the USA presence in Afghanistan and critics have nicknamed him "Taliban Khan" due to his willingness to talk to Islamist groups. In his victory speech, he said he wanted "mutually beneficial" relations with Washington.
In March, a senior U.S. official said that Pakistan has "done the bare minimum to appear responsive to our requests", and concerns over a lack of action by Islamabad against militant groups still persist.
Pakistan could again be eligible next year for CSF.