Washington, D.C.— Senate Foreign Relations Chairman John Kerry (D-MA) and Ranking Member Dick Lugar (R-IN) introduced legislation yesterday, S. 3665, that will lead to the establishment of the “Pakistani-American Enterprise Fund,” to focus on strengthening the private sector in Pakistan using existing funds from the Kerry-Lugar-Berman aid package passed by Congress last year. The legislation will help empower Pakistan’s private sector to create jobs, which will contribute toward increasing economic growth and stability. The Fund is modeled after successful post-Cold War funds established by the United States 20 years ago for the development of Eastern Europe.
“Pakistan’s private sector suffers from a lack of capital, which has a negative impact on the daily lives of Pakistani people. The United States can help the Pakistani private sector provide jobs, opportunity, and hope to Pakistanis using creative tools such as this Enterprise Fund,” Senator Kerry said. “It’s a clear example of how the Kerry-Lugar-Berman aid package can help make a real difference in stimulating growth in Pakistan based on the remarkable results we have had with similar funds in Eastern Europe and elsewhere. We introduce this legislation as a first step in a long process, but hope that our Senate colleagues will move rapidly to make this Enterprise Fund a reality.”
“The failed attack that occurred on May 1, 2010, in Times Square re-enforces the need for our governments to work together to neutralize the imminent threats posed by terrorists waiting to strike, while simultaneously preventing the cancer of extremism from spreading and corrupting local communities in both our countries,” Lugar said. “The Pakistani-American Enterprise Fund will work with the private sector to catalyze indigenous job creation, which will empower the people of Pakistan to reject radical voices and, instead, build a stronger future for their families. Pakistan currently enjoys a vibrant private sector, especially among small and medium size enterprises, and the mission of this Fund will be to encourage greater business formation and expansion.”
Before the fund is established, the Senate Foreign Relations Committee and the full Senate will have to approve the legislation. The House of Representative will also have to introduce and pass the legislation.
After the fall of the Berlin Wall, the U.S. Congress, through enactment of the Support for East European Development (SEED) Act and the Freedom Support Act (FSA), authorized nearly $1.2 billion for USAID to establish ten new enterprise funds throughout Central and Eastern Europe and the Former Soviet Union. These funds channeled investment into more than 500 enterprises in 19 countries, leveraged an additional $5 billion in private investment capital from outside the U.S. government, provided substantial development capital where supply was limited, created or sustained more than 260,000 jobs through investment and development activities, funded $74 million in technical assistance to strengthen the private sector, and is expected to recoup 137% of the original USAID funding.