This is long overdue. It’s a disgrace how little the rich in Pakistan are taxes, and the more motivation the government has to tax them, the better.
WASHINGTON — The United States will set tougher conditions on its aid to foreign governments, including an expectation that rich foreigners won’t skip out on their taxes while Americans bankroll things their nations need, Secretary of State Hillary Rodham Clinton said Tuesday.
The remarks were aimed largely at Pakistan, a major aid recipient.
“Countries that will not tax their elite who expect us to come in and help them serve their people are just not going to get the kind of help from us that historically they may have,” Clinton said. She singled out Pakistan, where wealthy landowners typically pay little or no taxes.
Clinton’s warning came as she and other Cabinet officials described aid and development policies President Barack Obama announced last week. Treasury Secretary Timothy Geithner said the higher bar for U.S. aid will help the U.S. get more for its money.
“Unless we are tougher on how we provide assistance, unless we look at those basic simple things, like are they running their country in ways that give us confidence that our resources will be used well, we should not be financing them at this level,” Geithner said.
Pakistan receives $1.5 billion annually in nonmilitary assistance and has become one of the principal recipients of U.S. aid.
The money funds traditional development projects such as schools and clinics but is also meant to strengthen a weak government in a country vital to the U.S.-led war in Afghanistan and its broader struggle against extremists.
Washington also hopes to build support among Pakistan’s population. A Pew Research Center survey released in July found that nearly six in 10 Pakistanis polled described the U.S. as an enemy and only one in 10 called it a partner.
Clinton delivered a milder warning about taxes during a visit to Pakistan last summer, drawing an angry response from Pakistan.
Speaking Tuesday at the nonprofit U.S. Global Leadership Coalition, Clinton said that Pakistan is now drafting new tax policies.
Obama signed new development blueprints last week that he said favor nations that commit to democracy and economic revival. He said development should no longer be measured by how much money or medicine is delivered, but by the extent to which the U.S. helps countries build up themselves.