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Clinton unveils aid package to Pakistan, then flies to Afghanistan

By the CNN Wire Staff
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Clinton unveils Pakistan aid package
  • The aid package includes construction of dams and improvements to power plants
  • Clinton also promises investment to help small businesses
  • Her trip is meant to highlight the need for a closer relationship with Pakistan
  • Clinton now is in Kabul

Kabul, Afghanistan (CNN) -- U.S. Secretary of State Hillary Clinton announced a major aid package for Pakistan on Monday -- pledging hundreds of millions of dollars for projects to address the country's water and power shortage and its floundering economy.

Clinton made the announcement at the beginning of a day-long "strategic dialogue" in Islamabad on the second day of her visit to the South Asian country, after which she flew Monday to an international conference in the Afghan capital of Kabul.

Authorities there said they were investigating "a number of blasts," though CNN staffers located near the site of Tuesday's planned conference said they did not hear them. A spokesman for the NATO-led International Security Assistance Force said the blasts likely were from unguided rockets that landed on the outskirts of Kabul.

The projects in Pakistan, which Clinton called "long-term investment in Pakistan's future," include the construction of several dams, improvements to hydroelectric power plants and the country's power grid, and the construction or renovation of three medical facilities.

Video: U.S., Pakistan hold dialogue

The United States will also invest $100 million to expand access to credit for small- and medium-sized businesses, and provide $50 million to support investments in innovation and technology projects, she said.

The projects will be funded by the Kerry-Lugar-Berman Act, which authorizes $7.5 billion in development aid to Pakistan over the next five years.

In the past year, the United States has started engaging more with Pakistan, said Vali Nasr, a senior adviser to Richard Holbrooke -- the U.S. special representative for the region.

The process included Clinton's visit to the nation last October; that trip was followed by various high-level visits that have made Pakistan more aware of U.S. intentions, said Nasr.

Anti-American sentiment is widespread in Pakistan, and the United States hopes to build more trust between the two countries.

But there is "a huge trust gap" that won't be overcome quickly, Nasr said.

"We are not going to be able to change their foreign policy on a dime," he said.

On Monday, Clinton said the two countries are making progress in overcoming their "trust deficit."

"We are looking to establish broader, long-lasting collaboration," she said. "We have commitment that is much broader and deeper than ever."

Clinton also has stops planned in South Korea and Vietnam before heading home.

CNN State Department Producer Elise Labott and Islamabad correspondent Reza Sayah contributed to this report.