U.S. Foreign Aid to East and South Asia: Selected Recipients

Congressional research reportOct 8, 2008

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Prepared for Members and Committees of Congress

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This report analyzes annual budget justifications and legislation for foreign operations

appropriations and discusses U.S. foreign aid trends, programs, and restrictions in 16 East Asian

and South Asian countries. It does not cover aid to Pacific Island nations, North Korea, and

Afghanistan. Country tables do not include assistance from U.S. State Department programs

funded outside the foreign operations budget, such as educational and cultural exchange

programs, and assistance from other departments and agencies.

Since the war on terrorism began in 2001 and the Millennium Challenge Account (MCA) and

Global HIV/AIDS Initiative (GHAI) were launched in 2004, the United States has increased

foreign aid spending dramatically in some regions, including East and South Asia. The United

States has raised military, economic, and development assistance primarily for counterterrorism

objectives in the East Asia-Pacific (EAP) and South Asia regions, with Pakistan, India, the

Philippines, and Indonesia receiving the bulk of the increases. In 2007, the Bush Administration

restructured U.S. foreign aid programs to better serve the goal of transformational development,

which places greater emphasis on U.S. security and democracy building as the chief goals of

foreign aid.

In the past decade, the United States government has restricted foreign assistance to many

countries in East and South Asia in order to encourage democracy and respect for human rights.

Some sanctions have been waived or lifted. The Consolidated Appropriations Act for FY2008

(P.L. 110-161) placed human rights conditions upon portions of the U.S. military assistance grants

to Indonesia, the Philippines, Pakistan, and Sri Lanka. Since 2003, President Bush has annually

exercised the waiver authority on coup-related sanctions against Pakistan. In 2005, the United

States government resumed full military assistance to Indonesia, based upon the satisfaction of

legislative conditions and national security grounds.

The FY2008 budget for the East Asian countries that are covered in this report represented a

slight increase compared to FY2007. The FY2008 budget raised assistance to South Asian

countries by 8%, according to estimates. In September 2008, the House and Senate passed the

continuing resolution (CR), H.R. 2638 (Consolidated Security, Disaster Assistance, and

Continuing Appropriations Act, 2009). The bill was signed into law as P.L. 110-329. The House

and Senate approved $36.6 billion and $36.7 billion, respectively, for Department of State and

Foreign Operations in FY2009, compared to $32.8 billion enacted in FY2008. The CR for

FY2009 continues most funding through March 6, 2009, at FY2008 levels.

This report will be updated periodically.

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Overview ......................................................................................................................................... 1

New Approaches to Foreign Aid ............................................................................................... 1

Critiques.............................................................................................................................. 1

Funding Trends.......................................................................................................................... 2

Foreign Aid Restrictions ........................................................................................................... 3

The FY2008 and FY2009 Budgets............................................................................................ 4

Regional Comparisons .............................................................................................................. 5

East Asia.......................................................................................................................................... 7

Taiwan and Singapore......................................................................................................... 8

Foreign Aid Restrictions ........................................................................................................... 8

Lifting Sanctions on Indonesia ........................................................................................... 9

September 2006 Military Coup in Thailand ..................................................................... 10

Chinese Aid to Southeast Asia ................................................................................................ 10

Country Aid Levels and Restrictions—East Asia...........................................................................11

Burma.......................................................................................................................................11

Cambodia ................................................................................................................................ 12

People’s Republic of China (PRC).......................................................................................... 14

East Timor (Democratic Republic of Timor-Leste) ................................................................ 15

Indonesia ................................................................................................................................. 16

Resumption of Military Assistance................................................................................... 17

2004 Tsunami Relief ......................................................................................................... 18

Laos......................................................................................................................................... 18

Malaysia .................................................................................................................................. 19

Mongolia ................................................................................................................................. 20

Philippines............................................................................................................................... 21

Thailand .................................................................................................................................. 22

September 2006 Military Coup and U.S. Aid Sanctions................................................... 23

Other Programs ................................................................................................................. 23

Vietnam ................................................................................................................................... 24

South Asia...................................................................................................................................... 24

Foreign Aid Restrictions ................................................................................................... 25

Disaster Assistance............................................................................................................ 26

Country Aid Levels and Restrictions—South Asia ....................................................................... 26

Bangladesh .............................................................................................................................. 26

India ........................................................................................................................................ 27

Nepal ....................................................................................................................................... 28

Pakistan ................................................................................................................................... 29

Lifting of Foreign Aid Restrictions................................................................................... 30

Sri Lanka ................................................................................................................................. 31

FY2008 Appropriations .................................................................................................... 32

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Figure 1. Major U.S. Aid Recipients in Asia, by Aid Amount, 2001-2007 ($million) .................... 3

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Figure 2. Health and Development Assistance (DA and CSH) by Region, FY2007 est.

($million)...................................................................................................................................... 6

Figure 3. Economic Support Funds by Region, FY2007 est. ($million)......................................... 6

Figure 4. Military Assistance by Region, FY2007 est. ($million) .................................................. 7

Figure 5. U.S. Foreign Aid (Non-food) to East Asian Countries, FY2007 est. ($million) .............. 8

Figure 6. Top U.S. Foreign Aid Recipients in East Asia, FY2000, FY2002-FY2007

($million)...................................................................................................................................... 9

Figure 7. U.S. Assistance to South Asian Countries (excluding Food Aid), 2001-2008

($million).................................................................................................................................... 25

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Table 1. U.S. Foreign Assistance by Region(Excluding Food Aid), 2001, 2003-2007 ................... 4

Table 2. U.S. Assistance to Burma, 2005-2009 ..............................................................................11

Table 3. U.S. Assistance to Cambodia, 2005-2009 ....................................................................... 12

Table 4. U.S. Assistance to China, 2005-2009 .............................................................................. 14

Table 5. U.S. Assistance to East Timor, 2005-2009 ...................................................................... 15

Table 6. U.S. Assistance to Indonesia, 2005-2009 ........................................................................ 16

Table 7. U.S. Assistance to Laos (LPDR), 2005-2009 .................................................................. 18

Table 8. U.S. Assistance to Malaysia, 2005-2009 ......................................................................... 19

Table 9. U.S. Assistance to Mongolia, 2005-2009 ........................................................................ 20

Table 10. U.S. Assistance to Philippines, 2005-2009.................................................................... 21

Table 11. U.S. Assistance to Thailand, 2005-2009........................................................................ 22

Table 12. U.S. Assistance to Vietnam, 2005-2009 ........................................................................ 24

Table 13. U.S. Assistance to Bangladesh, 2005-2009 ................................................................... 26

Table 14. U.S. Assistance to India, 2005-2009.............................................................................. 27

Table 15. U.S. Assistance to Nepal, 2005-2009 ............................................................................ 28

Table 16. U.S. Assistance to Pakistan, 2005-2009 ........................................................................ 29

Table 17. U.S. Assistance to Sri Lanka, 2005-2009 ...................................................................... 31

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Appendix. Selected Acronyms for U.S. Foreign Aid Accounts and Programs.............................. 33

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Author Contact Information .......................................................................................................... 33

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The United States acts to advance U.S. foreign policy and national security goals and respond to

global development and humanitarian needs through its foreign assistance programs. Following

the September 2001 terrorist attacks, foreign aid gained importance as a “vital cornerstone,”

along with diplomacy and defense, in U.S. national security strategy.1 The Bush Administration

reoriented foreign assistance programs, particularly to “front line” states in the war on terrorism.

For many countries, the U.S. government directed not only increased security and military

assistance but also development aid for counterterrorism efforts, including programs aimed at

mitigating conditions that may make radical ideologies and religious extremism attractive, such

as cycles of violence, poverty, limited educational opportunities, and ineffective or unaccountable

governance.

In 2007, the Bush Administration restructured U.S. foreign aid programs to better serve the goal

of transformational development, which places greater emphasis on U.S. security and democracy

building as the principal goals of foreign aid.2 Toward these ends, the new Strategic Framework

for U.S. Foreign Assistance divides aid programming among five objectives: peace and security;

governing justly and democratically; investing in people; economic growth; and humanitarian

assistance. The Millennium Challenge Account (MCA), established in 2004, promotes these

objectives by rewarding countries that demonstrate good governance, investment in health and

education, and sound economic policies.

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According to some analysts, recent U.S. foreign policy trends have weakened programs and

institutions that specialize in basic development. Some policy-makers have expressed concern

that transformational development and MCA funding priorities have taken resources away from

traditional programs, particularly in countries that contain lesser security threats to the United

States or where governments do not meet various U.S. performance criteria. Other analysts argue

that promoting democracy in some countries prematurely may result in a waste of aid.3 According

to one study, insufficient funding for foreign assistance objectives has reinforced a “migration of

foreign aid authorities and functions to the Department of Defense.”4

1

See CRS Report RL33491, Restructuring U.S. Foreign Aid: The Role of the Director of Foreign Assistance in

Transformational Development, by (name redacted).

2

Transformational development, which involves foreign aid, is to work in tandem with the Administration’s

transformational diplomacy, which emphasizes diplomatic resources. See USAID Fact Sheet, “New Direction for U.S.

Foreign Assistance,” January 19, 2006.

3

Marcela Sanchez, “A Risky Shift in Direction,” South Florida Sun-Sentinel, January 27, 2006; Guy Dinmore, “U.S.

Poised for Radical Reform of Foreign Aid Programme,” Financial Times, January 19, 2006; Guy Dinmore, “Critics of

‘Utopian’ Foreign Policy Fail to Weaken Bush Resolve,” Financial Times, January 13, 2006.

4

Embassies Grapple to Guide Foreign Aid: A Report to Members of the Committee on Foreign Relations, United

States Senate Committee Print, November 16, 2007.

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Foreign operations appropriations declined from a peak in 1985 to a low in 1997, after which they

began to grow again. Many of the fluctuations in aid flows over the past 25 years can be

attributed to U.S. foreign policy responses to events such as natural disasters, humanitarian crises,

and wars and to U.S. military assistance and other security initiatives in the Middle East. Since

2001, U.S. assistance to front line states in the global war on terrorism and Iraq war-related

funding have propelled foreign aid funding to new highs.

Other sources of growth include the Millennium Challenge Account (MCA) and the President’s

Emergency Plan for AIDS Relief (PEPFAR).5 Four Asia-Pacific countries are eligible to apply for

MCA assistance—East Timor, Mongolia, Sri Lanka, and Vanuatu—while two countries—

Indonesia and the Philippines—have been designated as “threshold,” qualifying them for

assistance to help them become eligible for MCA funds. In October 2007, the Mongolian

government and the Millennium Challenge Corporation (MCC) signed a five-year, $285 million

agreement. Vietnam is the largest Asian recipient of Global HIV/AIDS Initiative (GHAI) funding

under PEPFAR ($118 million between 2005 and 2007).

The war on terrorism has reoriented foreign assistance priorities in Asia and accelerated a trend

toward increased aid to the region that began in 2000. Throughout the 1990s, U.S. assistance to

Asia fell due to the ebbing of Cold War security concerns, nuclear proliferation sanctions, and

favorable economic and political trends. For example, the withdrawal of U.S. military forces from

the Philippines, nuclear proliferation and other sanctions against Pakistan, and the reduced need

for economic assistance, particularly in Southeast Asia, contributed to declines in U.S. aid levels.

The Asian financial crisis of 1997-98 reversed the downward trend, as USAID funded a regional

economic recovery program for Indonesia, the Philippines, Thailand, and Vietnam.

Since the war on terrorism began in 2001, Pakistan, India, the Philippines, and Indonesia became

the foci of the Bush Administration’s counterterrorism efforts in South and Southeast Asia, due to

their strategic importance, large Muslim populations, and insurgency movements with links to

terrorist groups. These countries have received the bulk of the increases in U.S. foreign aid (nonfood) to Asia (excluding Afghanistan), although funding for aid programs in India and the

Philippines reached a peak in 2006 and fell in 2007 and 2008. Beginning in 2004, both Indonesia

and the Philippines received new funding for education programs in order to promote diversity,

non-violent resolution of social and political conflict (Indonesia), and livelihood skills among

Muslims residing in impoverished and conflict-ridden areas (southern Philippines). See Figure 1.

5

CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-Year Review, by (name redacted).

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Figure 1. Major U.S. Aid Recipients in Asia, by Aid Amount, 2001-2007 ($million)

Both the Bush Administration and Congress have supported increased funding for the Department

of State’s Human Rights and Democracy Fund (HRDF). Spending for HRDF increased from a

yearly average of $13 million in 2001-2002 to $31 million in 2003-2005. The Fund received $71

million in both FY2006 and FY2007. In addition, the U.S. government provided a total of $65

million for National Endowment for Democracy (NED)-administered HRDF programs between

2003 and 2007. Approximately one-third of the Democracy Fund has been allocated to Asia,

mostly for rule of law and civil society programs in China.6

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In the past decade, the United States has imposed restrictions on non-humanitarian development

aid, Economic Support Funds (ESF),7 and military assistance to some Asian countries in order to

pressure them to improve performance related to democracy, human rights, weapons

proliferation, foreign debt payments, and other areas. These countries include Burma, Cambodia,

China, Indonesia, Thailand, and Pakistan. However, the United States continues to fund nongovernmental organizations (NGOs) that run development and democracy programs in some of

these countries. Most sanctions on aid to Cambodia, Indonesia, Thailand, and Pakistan have been

6

The Human Rights and Democracy Fund, administered by the Bureau of Democracy, Human Rights, and Labor

(DRL) of the Department of State, was established by the Foreign Relations Authorization Act, FY2003 (P.L. 107228).

7

Economic Support Funds (ESF) programs involve a wide range of uses (except military) that support U.S. security

interests and promote economic and political stability in the recipient countries and regions.

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lifted. The Consolidated Appropriations Act for FY2008 placed human rights conditions upon

portions of the U.S. military assistance grants to Indonesia, the Philippines, and Pakistan.

‘ŽȱŘŖŖŞȱŠ—ȱŘŖŖşȱžŽœȱ

The Administration’s FY2008 budget request for the East Asian countries that are covered in this

report ($453 million) represented a slight increase compared to FY2007 ($442 million). With the

exception of Indonesia and Vietnam, assistance to most East Asian countries is to decrease or

remain about the same in 2008 compared to 2007. The budget request for Indonesia included

large increases in Development Assistance (DA) and Foreign Military Financing (FMF). Global

HIV/AIDS Initiative funding for Vietnam is to grow by 36% in FY2008, from $63 million in

FY2007 to $86 million.

The FY2008 budget raised assistance to South Asian countries by 8% (from $900 million in

FY2007 to $974 million). This reflected greater funding for Bangladesh (mostly Development

Assistance) and Pakistan (ESF). In addition, for FY2008, the Administration requested new

funding for law enforcement enhancement activities in Nepal and Sri Lanka. Regional

Development Mission Asia programs (an estimated $13.7 million in FY2008) support public

health efforts, improved water and sanitation services, trade, environmental preservation, and

investments in energy efficiency, renewable energy, and clean technologies in East and South

Asia.

The Consolidated Appropriations Act, 2008 (H.R. 2764, signed into law as P.L. 110-161),

Division J, made some changes to the Administration’s request. These revisions included

additional ESF for democracy and humanitarian activities for Burma; funding for democracy, rule

of law, and Tibet programs in China as well as U.S.-China educational exchanges; and increased

FMF for the Philippines. The spending measure also imposed new restrictions on FMF for Sri

Lanka.

FY2009 Continuing Resolution

The House and Senate passed the continuing resolution (CR), H.R. 2638 (Consolidated Security, Disaster Assistance,

and Continuing Appropriations Act, 2009), on September 24, 2008 and September 27, 2008, respectively. The bill was

signed into law as P.L. 110-329. The House and Senate approved $36.6 billion and $36.7 billion, respectively, for

Department of State and Foreign Operations in FY2009, compared to $32.8 billion enacted in FY2008. The CR for

FY2009 continues most funding through March 6, 2009, at FY2008 levels.

For further information, see CRS Report RL34552, State, Foreign Operations, and Related Programs: FY2009

Appropriations, by name redated and name redated.

. U.S. Foreign Assistance by Region(Excluding Food Aid), 2001, 2003-2007

Table 1

($million)

Africa

East Asia-Pacific

Europe and Eurasia

Near East Asia (Middle East)

South/Central Asia (excl. Afghanistan)

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

FY2001

FY2003

FY2004

FY2005

FY2006

FY2007

1,313

368

2,017

5,401

201

1,706

477

2,871

8,409

785

2,091

474

1,577

5,556

685

2,795

525

1,323

5,755

970

2,771

1,022

1,023

5,217

875

3,486

500

845

5,099

1,025

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Western Hemisphere

Totals

FY2001

FY2003

FY2004

FY2005

FY2006

FY2007

749

10,049

1,559

15,807

1,545

11,928

1,723

13,091

1,516

12,424

1,439

12,394

U.S. Department of State, Country/Account Summaries (2001-2007).

Note: In addition to the above, USAID administers emergency and humanitarian food assistance pursuant to

P.L. 480, Title II (the Agricultural Trade Development Act of 1954, as amended). USDA’s Foreign Agricultural

Service (FAS) administers P.L. 480, Title I—sales of agricultural commodities under concessional or favorable

credit terms, Food for Progress programs (Food for Progress Act of 1985), Food for Education (Farm

Security and Rural Investment Act of 2002), and Section 416(b) (Agricultural Act of 1949, as amended)—

donation of surplus commodities.

Source:

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Africa remained the largest regional recipient of Child Survival and Health (CSH) and

Development Assistance (DA) funding in FY2007.8 The largest regional recipients of Economic

Support Funds in FY2007 were Near East Asia (Middle East) and South and Central Asia (mostly

to Afghanistan, with a large portion going to Pakistan as well). The largest recipient of military

assistance, by far, was Near East Asia followed by South and Central Asia.9 These rankings were

the same as those for FY2006. See Table 1 and Figures 2-4.

8

The State Department divides foreign aid allocations into six regions: Africa, East Asia and the Pacific (EAP), Europe

and Eurasia, Near East Asia (Middle East), South and Central Asia (formerly South Asia), and Western Hemisphere

(Latin America and Caribbean).

9

Military assistance includes International Military Education and Training (IMET), Foreign Military Financing

(FMF), and Peacekeeping Operations (PKO).

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. Health and Development Assistance (DA and CSH) by Region, FY2007 est.

($million)

Figure 2

Figure 3. Economic Support Funds by Region, FY2007 est. ($million)

Source:

U.S. Department of State.

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. Military Assistance by Region, FY2007 est. ($million)

Figure 4

Source:

U.S. Department of State.

Šœȱœ’Šȱ

Since 2001, foreign aid spending in East Asia has grown markedly, largely due to

counterterrorism efforts in the Philippines and Indonesia. The Philippines, a Major Non-NATO

Ally, and Indonesia, a democratizing nation with the world’s largest Muslim population, are home

to several insurgency movements and radical Islamist organizations, some with ties to Al Qaeda,

such as the Abu Sayyaf Group (Philippines) and Jemaah Islamiyah (Indonesia). USAID’s

programs in East Asia also aim to address the conditions that may give rise to radical ideologies

and terrorism, such as poverty and unemployment, lack of education, failing governments,

political disenfranchisement, and violent conflict. In October 2003, the Bush Administration

launched education programs in Muslim communities in the Philippines and in Indonesia as part

of its regional counterterrorism efforts.

Among East Asia and the Pacific (EAP) countries (excluding the Pacific Island nations),10 in

FY2007, Indonesia was the largest recipient of U.S. foreign aid, particularly ESF, health, and

development assistance (CSH and DA), followed by the Philippines. The Philippines was the

region’s largest beneficiary of Foreign Military Financing (FMF) and International Military

Education and Training (IMET). Counter-narcotics and law enforcement assistance (INCLE)

were provided to Indonesia, the Philippines, Laos, and Thailand. Indonesia, Cambodia, and the

Philippines were the largest recipients of Non-proliferation, Anti-terrorism, De-mining, and

10

For information on U.S. foreign assistance to the Pacific Island countries, see CRS Report RL34086, The Southwest

Pacific: U.S. Interests and China’s Growing Influence, by (name redacted) and (name redacted).

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Related Programs (NADR).11 Vietnam, as one of 15 focus countries under the President’s

Emergency Plan for AIDS Relief (PEPFAR), received $118 million from the Global HIV/AIDS

Initiative (GHAI) account between 2005 and 2007 and is to receive $86 million in 2008. See

Figures 5 and 6.

. U.S. Foreign Aid (Non-food) to East Asian Countries, FY2007 est. ($million)

Figure 5

Source:

U.S. Department of State.

U.S. assistance also finances several EAP regional programs. Estimated funding for such

programs in FY2007 was $27 million, a slight decrease from that provided in FY2006. Most of

the funding—approximately 75%—supports economic growth efforts. In addition, the United

States contributes to the Developing Asian Institutions Fund as part of the establishment of a Free

Trade Area of the Asia-Pacific. The second largest regional aid objective is the advancement of

peace and security (nearly 20% of regional program funding), including the following aid

activities: counterterrorism, counternarcotics, fighting transnational crime, non-proliferation, and

maritime cooperation. The third largest aid area is democracy-building.

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Taiwan and Singapore, two newly developed countries in East Asia, also receive limited U.S.

assistance. Taiwan receives over $550,000 annually to develop its export control system and

combat trafficking in persons. The United States government provides Singapore roughly

$700,000 per year to help the country deter, detect, and interdict the flow of illegal arms across its

maritime borders.

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In some East Asian countries, the United States has withheld assistance or restricted it to nongovernmental organizations (NGOs) or to exiled democratic political groups in response to

11

The INCLE and NADR accounts are often referred to as “security assistance.”

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government actions that the U.S. government has deemed in violation of international human

rights standards. In the past decade, foreign operations appropriations measures have imposed

human rights-related sanctions on U.S. foreign assistance to the governments of Burma,

Cambodia, and Thailand and to the Indonesian military while supporting Burmese dissident

groups and promoting human rights, civil society, and democracy in Cambodia, China, East

Timor, Indonesia, Mongolia, and elsewhere. Since 2006, most sanctions on aid to the

governments of Cambodia and Thailand and to the Indonesian military have been lifted.

.Top U.S. Foreign Aid Recipients in East Asia, FY2000, FY2002-FY2007

($million)

Figure 6

Source:

U.S. Department of State.

’’—ȱŠ—Œ’˜—œȱ˜—ȱ —˜—Žœ’Šȱ

Between 1993 and 2005, Indonesia faced sanctions on military assistance largely due to U.S.

congressional concerns about human rights violations, particularly those committed by

Indonesian military forces (TNI). In February 2005, Secretary of State Condoleezza Rice

determined that the Indonesian government and armed forces (TNI) had satisfied legislative

conditions and certified the resumption of full IMET for Indonesia. P.L. 109-102, Section

599F(a), continued existing restrictions on FMF, stating that such assistance may be made

available for Indonesia only if the Secretary of State certifies that the Indonesian government is

prosecuting, punishing, and resolving cases involving members of the TNI credibly alleged to

have committed gross violations of human rights in East Timor and elsewhere. Section 599F(b)

provided that the Secretary of State may waive restrictions on FMF for Indonesia if such action

would be in the national security interests of the United States. In November 2005, the Secretary

of State waived restrictions on FMF to Indonesia on national security grounds pursuant to Section

599F(b).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

şȱ

ȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

Ž™Ž–‹Ž›ȱŘŖŖŜȱ’•’Š›¢ȱ˜ž™ȱ’—ȱ‘Š’•Š—ȱ

In response to the September 19, 2006, military coup in Thailand, the Bush Administration

suspended military and peacekeeping assistance pursuant to Section 508 of the Foreign

Operations Appropriations Act, which provides that such funds shall not be made available to any

country whose duly elected head of government was deposed by military coup. The U.S.

government also suspended funding for counter-terrorism assistance provided under Section 1206

of the National Defense Authorization Act for FY2006. Other aid programs not affected by

Section 508 or in the U.S. national interest continued to receive funding. In February 2008, the

United States resumed security and military assistance to Thailand following the holding of

democratic elections.

‘’—ŽœŽȱ’ȱ˜ȱ˜ž‘ŽŠœȱœ’Šȱ

In comparison to major bilateral donors in the region, the People’s Republic of China (PRC)

provides relatively little official development assistance (ODA). Furthermore, the PRC

government appears to lack a foreign aid system with a centralized organizational structure, longterm development goals, open funding processes, and published data. Nonetheless, the PRC

administers a wide range of economic assistance to Southeast Asia that includes many forms of

aid that generally are not counted as ODA by established international aid agencies: infrastructure

and public works projects, trade and investment agreements, pledges of foreign direct investment,

and technical assistance. China is also a large source of loans. According to some analysts, when

these kinds of assistance are included, China is one of the largest bilateral aid donors in Southeast

Asia. The PRC has been described as the “primary economic patron” of the region’s least

developed countries (Burma, Cambodia, and Laos).12 China also has provided considerable

foreign aid to Vietnam as well as other large and more developed countries (Thailand, Indonesia,

and the Philippines).

Some analysts have criticized PRC assistance and investments for being non-transparent,

supporting urban “trophy projects” rather than sustainable development, and lacking performance

criteria and environmental safeguards. Others have argued that the benefits of PRC assistance to

these countries, particularly Cambodia and Laos, have outweighed adverse effects, and that China

has helped to address needs not met by Western and Japanese aid. Many observers argue that the

United States should bolster its aid programs, trade activities, and diplomatic presence in the

region in order to counteract China’s growing influence.13

12

Catherin E. Dalpino, “Consequences of a Growing China,” Statement before the Senate Committee on Foreign

Relations Subcommittee on East Asian and Pacific Affairs, June 7, 2005; Heritage Foundation program, “Southeast

Asia’s Forgotten Tier: Burma, Cambodia and Laos,” July 26, 2007.

13

For further information, CRS Report RL34620, Comparing Global Influence: China’s and U.S. Diplomacy, Foreign

Aid, Trade, and Investment in the Developing World, by (name redacted) et al.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŖȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

˜ž—›¢ȱ’ȱŽŸŽ•œȱŠ—ȱŽœ›’Œ’˜—œȯŠœȱœ’ŠŗŚȱ

ž›–Šȱ

Table 2. U.S. Assistance to Burma, 2005-2009

(thousands of dollars)

Account

CSH

DA

ESF

Othera

Totals

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

0

0

7,936

4,000

11,936

0

0

10,890

3,000

13,890

2,100

0

10,890

3,000

15,990

2,083

717

12,895b

3,000b

18,695

2,100

0

13,750

—

15,850

U.S. Department of State; USAID.

a. Humanitarian assistance for displaced Burmese and host communities in Thailand through an unspecified

account.

b. P.L. 110-161

Sources:

Burma’s political, economic, educational, and public health institutions and systems have

deteriorated under 40 years of military rule. The United States provides no direct aid to the

Burmese government in response to the Burmese military junta’s (State Peace and Development

Council or SPDC) repression of the National League for Democracy (NLD), failure to honor the

NLD’s parliamentary victory in 1990, and harassment of its leader, Aung San Suu Kyi, who

remains under house arrest.15 U.S. sanctions were tightened, especially travel and financial

restrictions against SPDC leaders, following the Burmese government’s violent suppression of

democracy demonstrators in September 2007.

Top Donors of Bilateral

On June 11, 2003, the 108th Congress passed the Burmese

Freedom and Democracy Act of 2003 (P.L. 108-61), which

Official Development

bans imports from Burma unless democracy is restored.

Assistance ($US million) to

Additional U.S. foreign aid sanctions against Burma include

Burma

opposition to international bank loans to Burma and a ban on

1. Japan: 26

debt restructuring assistance. Since the Office to Monitor and 2. EC: 14

3. United Kingdom: 11

Combat Trafficking in Persons was established by the U.S.

4. Australia: 11

State Department in 2001, Burma has received a “Tier 3”

5. Korea: 7

assessment annually by the Office for failing to make

2004-2005 average. Source: OECD

significant efforts to bring itself into compliance with the

minimum standards for the elimination of trafficking in

persons. The Tier 3 ranking could serve as a basis for withholding non-humanitarian aid.

14

Including Southeast Asia and excluding North Korea and Pacific Island nations.

For Burma aid sanctions, see P.L. 104-208, Section 570. For further information on Burma, see CRS Report

RS22737, Burma: Economic Sanctions, by (name redacted) and (name redacted).

15

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŗȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Inside Burma, the United States provides assistance for HIV/AIDS prevention, care, and

treatment, English language training, and civil society. The largest U.S. aid programs assist

Burmese refugees in Thailand.

The Consolidated Appropriations Act for FY2008 (P.L. 110-161) appropriated $13 million (ESF)

primarily for Burmese student groups and other democratic organizations located outside Burma,

and for the provision of humanitarian assistance to displaced Burmese along Burma’s borders.

The act also provides $3 million for community-based organizations operating in Thailand to

provide food, medical and other humanitarian assistance to internally displaced persons in eastern

Burma.

Š–‹˜’Šȱ

Table 3. U.S. Assistance to Cambodia, 2005-2009

(thousands of dollars)

Account

CSH

DA

ESF

FMF

GHAI

IMET

INCLE

NADR

Peace Corps

Totals

Food Aid

P.L. 480 Title II Granta

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

29,300

8,950

16,864

992

0

0

0

4,170

0

60,276

28,556

5,483

14,850

990

0

54

0

5,000

0

54,933

27,826

7,922

14,850

990

1,600

101

0

3,987

0

57,276

27,826

8,087

14,879

198

—

67

0

3,937

1,379

56,373

23,135

17,226

—

750

—

60

0

4,200

—

45,371

0

0

0

0

0

FFPb

3,643

0

0

—

—

FFEb

0

1,257

2,373

—

—

U.S. Department of State; USAID; U.S. Department of Agriculture.

a. USAID data—includes freight costs.

b. USDA data—does not include freight costs.

Sources:

Cambodia ranks 131st out of 177 countries and regions on the United Nations Development

Program’s Human Development Index, which measures GNP per capita, life expectancy, and

educational attainment. The U.S. State Department reports that Cambodia’s fragile institutions,

weak rule of law, and rampant corruption are major challenges to Cambodia’s democratic

development and economic growth. Furthermore, Cambodia’s health and education systems were

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŘȱ

ȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

decimated under the rule of the Khmer Rouge (1975-1979) and subsequent Vietnamese control.16

The largest U.S. assistance sectors in Cambodia are health and education ($25 million), including

a significant HIV/AIDS program component. The U.S. assistance mission in Cambodia also aims

to promote transparency and accountability in government, combat corruption, and strengthen

civil society. Other program areas include economic reform and growth and improving the

military’s capability to protect Cambodia’s borders from transnational threats.

In February 2007, the United States government lifted a decade-long ban on direct bilateral aid to

Cambodia. The U.S. government had imposed restrictions on foreign assistance to Cambodia

following Prime Minister Hun Sen’s unlawful seizure of power in 1997 and in response to other

abuses of power under his rule. Foreign operations appropriations barred U.S. assistance to the

central government of Cambodia and to the Khmer Rouge tribunal and instructed U.S.

representatives to international financial institutions to oppose loans to Cambodia, except those

that met basic human needs. U.S. assistance was permitted only to Cambodian and foreign NGOs

and to local governments. Statutory exceptions allowed for the following categories of U.S.

assistance to the central government of Cambodia: reproductive and maternal and child health

care; basic education; combating human trafficking; cultural and historic preservation; the

prevention, treatment, and control of HIV/AIDS and other infectious diseases; and counternarcotics activities.17

Cambodia, one of the top five countries in the world for the

number of landmine casualties (approximately 800 victims per

year), received $5 million 2006 and an estimated $3.8 million

in 2007 in U.S. de-mining assistance. Under the

Administration’s FY2008 budget, the country is to receive

$2.5 million in de-mining assistance. In addition, in the past

decade, USAID has supported programs worth $13 million

providing for prostheses, physical rehabilitation, employment,

and related services for mine victims using Leahy War Victims

Funds.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Cambodia

1. Japan: 94

2. United States: 60

3. France: 28

4. Australia: 27

5. Germany: 24

2004-2005 average. Source: OECD

On October 12, 2005, U.S. Secretary of Health and Human

Services Michael Leavitt, on a visit to Southeast Asia, signed a cooperation agreement with

Cambodian officials in which $1.8 million was pledged to help the country guard against the

spread of H5N1 (avian influenza).

In January 2007, the Peace Corps launched programs in Cambodia to teach English and develop

sustainable community activities.

16

Congressional Budget Justification for Foreign Operations, FY2008.

For most of these activities, the U.S. government collaborated with the central government of Cambodia but

continued to provide funding through the country’s large and vibrant NGO community.

17

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗřȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Ž˜™•ŽȂœȱŽ™ž‹•’Œȱ˜ȱ‘’—ŠȱǻǼŗŞȱ

. U.S. Assistance to China, 2005-2009

Table 4

(thousands of dollars)

Account

CSH

DA

ESF

ESF/Tibet

GHAI

NADR

Peace Corps

Totals

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

0

0

19,000

4,216

0

0

1,476

24,692

0

4,950

20,000

3,960

0

0

1,683

21,683

4,800

5,000

19,000

3,960

1,950

0

1,886

36,596

4,960

9,919a

15,000a

4,712a

0

0

1,953

36,544

5,000

—

—

1,400

0

600

—

7,000

U.S. Department of State, USAID (Congressional Notification, August 14, 2008).

The Consolidated Appropriations Act, FY2008 (P.L. 110-161) authorized $10 million for U.S.-China

educational exchanges (DA), $15 million for China/Hong Kong/Taiwan democracy programs (ESF), and

$5.25 million for Tibetan community assistance (ESF).

Sources:

a.

USAID does not have a presence or mission in the People’s Republic of China (PRC). However,

the Peace Corps has been involved in English language and environmental education in China

since 1993, and United States funding primarily to U.S.-based non-governmental organizations

(NGOs) for democracy and Tibet programs has grown substantially since 2002 (approximately

$15 million per year).

China received only Peace Corps assistance prior to 2000. The Consolidated Appropriations Act

for FY2000 provided $1 million for foreign-based NGOs working in Tibet and authorized ESF

for foreign NGOs to promote democracy in China. For FY2001, the United States extended $28

million to the PRC as compensation for damages caused by the accidental NATO bombing of the

Chinese Embassy in Belgrade in 1999. Congress has increased its annual appropriation for

democracy, human rights, and rule of law programs in China from $10 million in 2002 to $23

million in 2006.19 Appropriations for cultural preservation, economic development, and

environmental conservation in Tibetan communities in China have also grown. In 2004, the

Bureau of Democracy, Human Rights and Labor (DRL) of the Department of State became the

principal administrator of China democracy programs.20 Major U.S. grantees have included the

National Endowment for Democracy (NED), the Asia Foundation, Temple University (School of

Law), the American Bar Association, and the Bridge Fund (Tibet). In addition, NED provides

grants (approximately $2 million per year since 1999) for programs that promote human rights,

18

Since 2004, the annual congressional authorization for democracy funds for China have included Hong Kong and

Taiwan. Funding for legal and political reforms in Taiwan shall only be made available to the extent that they are

matched from sources other than the United States Government.

19

For further information, see CRS Report RS22663, U.S.-Funded Assistance Programs in China, by (name redacted).

20

For descriptions of HRDF projects in China, see U.S. Department of State, Bureau of Democracy, Human Rights and

Labor, FY2005-2006 Human Rights and Democracy Fund Projects Fact Sheet, December 6, 2005.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŚȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

labor rights, electoral and legal reforms, and independent mass media in China from its annual

congressional appropriation.21

Since 2006, Congress has appropriated Development

Assistance (DA) to American educational institutions for

exchange programs related to democracy, rule of law, and the

environment in China. In 2007, the U.S. government began

funding HIV/AIDS programs in China.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to China

1. Japan: 1,662

2. Germany: 470

3. France: 164

4. United Kingdom: 74

5. EC: 58

2004-2005 average. Source: OECD

The United States continues to impose other restrictions that

were put in place in the aftermath of the 1989 Tiananmen

Square military crackdown, including “no” votes or

abstentions by U.S. representatives to international financial

institutions regarding loans to China (except those that meet

basic human needs) and a ban on Overseas Private Investment Corporation (OPIC) programs in

the PRC. The Foreign Operations Appropriations Act for FY2002 (P.L. 107-115) lifted the

restrictions (effective since FY2000) requiring that ESF for China democracy programs be

provided only to NGOs located outside the PRC. However, Tibet programs are still restricted to

NGOs. Congress continues to require that U.S. representatives to international financial

institutions support projects in Tibet only if they do not encourage the migration and settlement of

non-Tibetans (Han Chinese) into Tibet or the transfer of Tibetan-owned properties to nonTibetans.22 In addition, foreign operations appropriations legislation forbids funding to the United

Nations Population Fund (UNFPA) for programs in China due to alleged coercive family

planning practices.

Šœȱ’–˜›ȱǻŽ–˜Œ›Š’ŒȱŽ™ž‹•’Œȱ˜ȱ’–˜›ȬŽœŽǼȱ

Table 5. U.S. Assistance to East Timor, 2005-2009

(thousands of dollars)

Account

CSH

DA

ESF

FMF

IMET

INCLE

PKO

Peace Corps

Totals

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

0

500

21,824

1,023

364

0

1,228

1,372

25,811

0

0

18,810

990

193

1,485

0

827

22,305

1,000

0

18,810

475

254

0

0

0

20,539

1,000

5,000

16,862

0

381

20

0

0

23,263

0

8,140

—

0

300

1,010

0

—

9,450

21

See General Accounting Office, “Foreign Assistance: U.S. Funding for Democracy-Related Programs (China),”

February 2004.

22

For further information, see CRS Report RL31910, China: Economic Sanctions, by (name redacted).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗśȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

P.L. 480 Title II Granta

994

1,182

2,172

0

0

Food Aid

U.S. Department of State; USAID; U.S. Department of Agriculture.

USAID data—includes freight costs.

Sources:

a.

Top Donors of Bilateral

East Timor (Democratic Republic of Timor-Leste) gained full

independence in May 2002. The United States supports a wide

Official Development

range of aid programs in East Timor, one of Asia’s poorest

Assistance ($US million)

countries, with the goal of building a viable economy,

to East Timor

functional government, and democratic political system. The

1. Australia: 37

2. Portugal: 30

largest strategic objective of U.S. assistance is economic

3. United States: 24

growth, targeting agriculture, private sector competitiveness,

4. Japan: 22

and economic opportunity. Other major objectives are

5. EC: 11

improved governance and peace and security. Program areas

2004-2005 average. Source: OECD

include rule of law, human rights, and civil society. IMET

activities aim to develop more professional military and police

forces. In November 2005, the Millennium Challenge Corporation selected East Timor as eligible

for MCA assistance.

In May 2006, the Peace Corps suspended its programs in East Timor due to civil and political

unrest in the country.

—˜—Žœ’Šȱ

Table 6. U.S. Assistance to Indonesia, 2005-2009

(thousands of dollars)

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

37,100

27,848

68,480

0

0

728

0

6,262

140,418

28,017

33,199

69,300

990

0

938

4,950

6,888

144,282

27,507

29,524

69,300

6,175

250

1,398

4,700

8,881

147,321

25,737

70,953

64,474

15,572

—

927

6,150

5,861

189,674

30,883

122,021

—

15,700

—

1,500

9,450

6,750

186,304

10,489

12,886

10,951

0

0

FFPb

6,194

0

0

—

—

Section 416(b)b

9,078

0

0

—

—

Account

CSH

DA

ESF

FMF

GHAI

IMET

INCLE

NADR

Totals

Food Aid/Disaster Relief

P.L. 480 Title II Granta

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŜȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Account

Tsunami Reliefc

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

400,000

—

—

—

—

U.S. Department of State; USAID; U.S. Department of Agriculture.

a. USAID data—includes freight costs.

b. USDA data—does not include freight costs.

c. Tsunami Recovery and Reconstruction Fund, P.L. 109-13

Sources:

The U.S. State Department reports that the “overarching U.S. foreign policy priority in Indonesia

is to assist its transformation into a stable, moderate democracy capable of addressing regional

and global challenges in partnership with the international community.” The country faces many

development and security challenges, including terrorist threats, ethnic and separatist conflicts,

weak institutions, high levels of corruption, poverty and unemployment, low levels of education,

and poor health conditions.23 The largest strategic objective in terms of funding is investing in

people ($87.6 million), which includes education, health, and clean water programs. A major U.S.

assistance initiative is the six-year, $157 million education program that began in 2004. The

second largest area of U.S. aid is peace and security—the Administration requested $41.7 million

for FY2008 for the Indonesian military and police to fight terrorism, combat weapons

proliferation and other transnational crimes, monitor strategic waterways, and cooperate with the

United States armed forces. This increase in funding reflects the normalization of military ties

in 2005.

For FY2008, over $29 million in U.S. assistance are to support programs for strengthening the

justice and legislative branches, participatory governance, human rights, and civil society.

Economic growth programs worth $27 million are to promote greater transparency and combat

corruption, and are expected to lead to an improved trade and investment climate, financial sector

soundness, and increased private sector competitiveness.

The MCC has designated Indonesia as a “threshold” country for 2006, meaning that the country is

close to meeting MCA criteria and may receive assistance in reaching eligibility status. In

November 2006, USAID and the government of Indonesia signed a $55 million, two-year

agreement for MCA assistance under the MCC Threshold Program.

Žœž–™’˜—ȱ˜ȱ’•’Š›¢ȱœœ’œŠ—ŒŽȱ

In 2005, the Bush Administration determined that Indonesia had met legislative conditions for the

resumption of full IMET and waived restrictions on FMF on national security grounds, thus

lifting sanctions on military assistance that were first imposed in 1993.24 The Consolidated

Appropriations Act for 2004 (P.L. 108-199) made IMET available to Indonesia if the Secretary of

State determined that the Indonesian government and armed forces (TNI) were cooperating with

the United States in the investigation regarding the August 2002 attack in Timika, Papua, in

23

Congressional Budget Justification for Foreign Operations, FY2008.

Notwithstanding the restrictions on IMET and FMF, from 1997-2004, Congress allowed Indonesia to participate in

Expanded International Military Education and Training (E-IMET), which emphasizes and teaches human rights,

military codes of conduct, and civilian control of the military; the FY2005 foreign operations appropriations measure

(P.L. 108-447) allowed FMF to the Indonesian navy to enhance maritime security.

24

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŝȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

which three school teachers, including two Americans, were killed. P.L. 108-199 continued the

ban on FMF unless the President certified that the Indonesian government was prosecuting and

punishing those members of the Indonesia armed forces credibly alleged to have committed gross

violations of human rights, particularly in East Timor in 1999. The FY2005 foreign operations

appropriations measure (P.L. 108-447) contained similar provisions. In February 2005, Secretary

of State Condoleezza Rice determined that the Indonesian government and armed forces had

cooperated with the FBI’s investigation into the Papua murders, thereby satisfying legislative

conditions, and certified the resumption of full IMET for Indonesia. The foreign aid

appropriations act for FY2006 (P.L. 109-102) continued existing restrictions on FMF to

Indonesia; however, the law provided that the Secretary of State may waive restrictions if such

action would be in the national security interests of the United States. In November 2005, the

Secretary of State exercised the waiver authority and allowed FMF for Indonesia.

The Consolidated Appropriations Act for FY2008, Section

679(a) appropriated up to $15.7 million in Foreign Military

Financing (FMF) for Indonesia, of which $2.7 million “may

not be made available” unless the Government of Indonesia

has taken steps to prosecute and punish members of the TNI

credibly alleged to have committed human rights violations in

East Timor and elsewhere, implement reforms related to

improved transparency and accountability of the military, and

allow public access to Papua.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Indonesia

1. Japan: 963

2. Germany: 191

3. United States: 163

4. Australia: 145

5. Netherlands: 128

2004-2005 average. Source: OECD

ŘŖŖŚȱœž—Š–’ȱŽ•’Žȱ

The December 26, 2004 tsunami caused catastrophic losses of lives and property in Aceh

province, Indonesia, with nearly 130,000 persons dead and over 500,000 displaced.25 The

Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami

Relief, 2005 (P.L. 109-13) appropriated $631 million for tsunami recovery and reconstruction in

East and South Asia. Of this amount, the Bush Administration pledged $400 million for relief and

reconstruction efforts in Indonesia.26

Š˜œȱ

Table 7. U.S. Assistance to Laos (LPDR), 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

0

0

0

0

0

0

0

0

1,000

0

375

40

992

0

298

67

1,000

250

—

100

CSH

DA

ESF

IMET

25

26

USAID, Fact Sheet #39, Indian Ocean—Earthquakes and Tsunamis (July 7, 2005).

USAID, USAID Rebuilds Lives after the Tsunami (April 27, 2006).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗŞȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

INCLE

NADR

Totals

1,984

2,500

4,484

990

3,300

4,290

900

2,550

4,865

1,567

2,953

5,877

1,000

1,900

4,250

0

289

290

—

—

Food Aid

FFEa

U.S. Department of State; USAID (Congressional Notification, August 14, 2008); U.S. Department of

Agriculture.

a. USDA data—does not include freight costs.

Sources:

Top Donors of Bilateral

The bulk of U.S. aid programs in Laos are related to peace and

security. The Administration’s request for FY2008 includes the

Official Development

following programs: removing unexploded ordnance (UXO),

Assistance ($US million)

English language training for Lao defense officials, counterto Laos

narcotics efforts, and combating transnational crime. Other

1. Japan: 65

2. France: 21

program areas include public health, rule of law, and

3. Sweden: 19

improving the country’s trade and investment environment.

4. Germany: 15

Laos also receives assistance through the Leahy War Victims

5. Australia: 12

Fund ($1.5 million during the 2004-2009 period) to assist

2004-2005 average. Source: OECD

victims of UXO. U.S. mines from the Vietnam War cause an

average of 120 deaths per year (nearly 4,000 deaths, and over

13,000 casualties, since 1975). UXO also takes a significant economic toll on rural areas,

affecting 25% of villages or one-third to one-half of the nation’s land area.

In October 2005, U.S. Secretary of Health and Human Services Michael Leavitt signed a

cooperation agreement with Lao officials in which the United States pledged $3.4 million to Laos

for controlling outbreaks of avian flu.

ЕТœ’Šȱ

Table 8. U.S. Assistance to Malaysia, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

IMET

INCLE

NADR

Totals

1,100

0

2,308

3,408

891

0

1,526

2,417

871

0

2,401

3,272

876

0

1,998

2,874

750

400

1,540

2,690

Sources:

U.S. Department of State; USAID.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŗşȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Malaysia

Malaysia is not a recipient of U.S. development and economic

aid. The U.S. State Department describes Malaysia as a “key

Muslim-majority state in Southeast Asia and an important

contributor to conflict resolution and peacekeeping both

regionally and internationally.”27 Regional terrorist

organizations, most notably Jemaah Islamiyah, are known to

use Malaysia for planning and fund raising. Over half of U.S.

assistance to the country is related to antiterrorism and nonproliferation activities. Other assistance is provided for

military operations and law enforcement restructuring.

1. Japan: 297

2. Denmark: 14

3. Germany: 8

4. France: 4

5. United States: 2

2004-2005 average. Source: OECD

The U.S. State Department’s 2007 Trafficking in Persons

Report placed Malaysia in the “Tier 3” category for failing to “make significant efforts to bring

itself into compliance with the minimum standards for the elimination of trafficking in persons.”

Such an assessment could trigger the withholding of non-humanitarian, non-trade-related U.S.

foreign assistance.

˜—˜•’Šȱ

Table 9. U.S. Assistance to Mongolia, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

DA

ESF

FMF

IMET

INCLE

NADR

0

9,920

992

1,009

0

0

0

7,425

2,970

866

0

0

0

6,625

3,791

955

0

0

4,577

0

993

923

0

0

0

6,800

2,000

970

420

250

Peace Corps

1,694

1,747

1,694

1,995

—

13,615

13,008

13,065

8,488

10,440

3,658

5,375

0

—

—

0

0

0

—

—

Totals

Food Aid

FFPa

Section 416(b)a

U.S. Department of State; USAID; U.S. Department of Agriculture.

USDA data—does not include freight costs.

Sources:

a.

27

Congressional Budget Justification for Foreign Operations, FY2008.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŘŖȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

U.S. assistance efforts in Mongolia aim to build foundations

for the country’s private economic and democratic political

development. Security assistance focuses on reform of the

Mongolian armed forces and regional stability. In September

2005, the government of Mongolia submitted a proposal to the

Millennium Challenge Corporation for several projects to be

funded by MCA funds, including railroad construction,

improved housing, and health services. In October 2007, the

Mongolian government and the Millennium Challenge

Corporation (MCC) signed a five-year, $285 million

agreement.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Mongolia

1. Japan: 67

2. Germany: 28

3. United States: 22

4. Netherlands: 9

5. Turkey: 8

2004-2005 average. Source: OECD

‘’•’™™’—Žœȱ

Table 10. U.S. Assistance to Philippines, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

IMET

INCLE

NADR

Peace Corps

Totals

27,050

27,576

30,720

29,760

2,915

3,968

2,257

2,820

127,066

24,651

24,212

24,750

29,700

2,926

1,980

4,968

2,767

115,954

24,362

15,448

29,750

39,700

2,746

1,900

4,198

2,820

120,924

24,967

27,321

27,773

29,757

1,475

794

4,531

2,753

119,371

20,043

56,703

—

15,000

1,700

1,150

4,625

—

99,221

Food Aid

P.L. 480 Title I USDA Loana

20,000

0

0

0

0

FFPb

1,720

6,335

3,655

—

—

Section 416(b)b

5,644

0

0

—

—

U.S. Department of State; USAID; U.S. Department of Agriculture.

a. USAID data—includes freight costs.

b. USDA data—does not include freight costs.

Sources:

The United States shares important security, political, and commercial interests with the

Philippines, a Major Non-NATO Ally and front-line state in the global war on terrorism. Since

2001, the Philippines has received the most dramatic increases in U.S. foreign assistance in the

EAP region. The main goals of U.S. assistance in the Philippines are: fighting terrorism through

military means and education; supporting the peace process in Muslim Mindanao; improving

governance; promoting economic reform and encouraging foreign investment; preserving the

environment; and reversing the deterioration of the educational system. The largest U.S. aid

accounts in the country fund health and education programs, especially in conflict-affected areas

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

Řŗȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

of Mindanao. Other large funding priorities are economic growth and security. Security programs

include support for Philippine Defense Reform, joint military exercises, and enhanced

counterterrorism capabilities. U.S. assistance also supports the battle against transnational crime

(money laundering, trafficking in persons, and narcotics trade).

In 2006, the MCC designated the Philippines as a “threshold”

country or close to meeting MCA criteria and eligible for

assistance in qualifying. The Philippines recently initiated a

two-year, $21 million MCA threshold program that focuses on

fighting corruption and improving government revenue

collection.

The Consolidated Appropriations Act for FY2008, Section

699E provided up to $30 million for FMF for the Philippines,

of which $2 million may be made available after the Secretary

of State reports that:

Top Donors of Bilateral

Official Development

Assistance ($US million)

to the Philippines

1. Japan: 706

2. United States: 114

3. Germany: 60

4. Australia: 38

5. EC: 20

2004-2005 average. Source: OECD

•

the Philippine government is implementing the recommendations of the United

Nations Special Rapporteur on Extrajudicial, Summary or Arbitrary Executions;

•

the Philippine government is implementing a policy of promoting military

personnel who demonstrate professionalism and respect for human rights, and is

investigating and prosecuting military personnel and others who have been

credibly alleged to have committed extrajudicial executions or other violations of

human rights; and

•

the Philippine military is not engaging in acts of intimidation or violence against

members of legal organizations who advocate for human rights.

The United States signed a Tropical Forest Conservation Act Agreement with the Philippines on

September 19, 2002.28 This accord cancels a portion of the Philippines’ debt to the United States.

The money saved by this rescheduling—estimated at about $8 million—is to be used for forest

conservation activities over a period of 14 years.

‘Š’•Š—ȱ

Table 11. U.S. Assistance to Thailand, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

IMET

0

0

992

1,488

2,526

0

0

990

1,485

2,369

1,400

0

990

0

0

992

0

0

149

1,142

1,000

4,500

0

800

1,400

28

The Tropical Forest Conservation Act (P.L. 105-214).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŘŘȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

INCLE

NADR

Peace Corps

Totals

1,608

1,782

2,143

10,539

990

3,989

2,212

12,035

900

2,100

2,144

7,534

1,686

2,483

2,278

8,730

1,400

2,000

—

11,100

Sources:

U.S. Department of State; USAID.

Thailand is one of five U.S. treaty allies in Asia and was designated a Major Non-NATO Ally in

2003. Thailand has sent troops to both Afghanistan and Iraq and has aggressively pursued

terrorist cells in its southern provinces. For FY2008, the Bush Administration proposed funding

for domestic counterterrorism activities, border security, countering the proliferation of weapons

of mass destruction, and military reform. Thailand would also receive funding for HIV/AIDS

programs.

Ž™Ž–‹Ž›ȱŘŖŖŜȱ’•’Š›¢ȱ˜ž™ȱŠ—ȱǯǯȱ’ȱŠ—Œ’˜—œȱ

In response to the September 19, 2006, military coup in Thailand, the U.S. State Department

announced the suspension of nearly $24 million in U.S. foreign assistance to the country,

including military and peacekeeping assistance and training under foreign operations

appropriations ($7.5 million) and counterterrorism assistance under Section 1206 of the National

Defense Authorization Act for FY2006 ($16.3 million).29 The bans were imposed pursuant to

Section 508 of the Foreign Operations Appropriations Act, which provides that such funds shall

not be made available to any country whose duly elected head of government was deposed by a

military coup. Under Section 508, the funds can be reinstated once a democratically-elected

government is in place. Other aid programs not affected by Section 508 or in the U.S. national

interest would continue to receive funding. In February 2008, the United States resumed security

and military assistance to Thailand following the holding of democratic elections.

‘Ž›ȱ›˜›Š–œȱ

In 2001, the United States and Thailand signed an agreement

pursuant to the Tropical Forest Conservation Act (P.L. 105214), providing $11 million in debt relief to Thailand. In

return, Thailand is to contribute $9.5 million over 28 years

toward the protection of its mangrove forests. The United

States government pledged $5.3 million in relief and

reconstruction assistance for areas in Thailand affected by the

December 2004 tsunami.

29

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Thailand

1. Japan: 765

2. Germany: 31

3. France: 27

4. EC: 19

5. Denmark

2004-2005 average. Source: OECD

For further information, see CRS Report RL32593, Thailand: Background and U.S. Relations, by (name redacted

).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

Řřȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

’Ž—Š–ȱ

Table 12. U.S. Assistance to Vietnam, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

GHAI

IMET

INCLE

NADR

Totals

1,200

4,750

0

0

24,044

50

0

3,331

33,375

0

3,818

1,980

0

31,214

49

0

3,770

40,831

0

2,480

1,980

0

62,935

279

0

3,200

70,874

0

2,420

10,613

0

86,000

186

0

3,075

102,294

0

10,700

—

500

86,000

195

200

1,920

99,515

U.S. Department of State; USAID (Congressional Notification, August 14, 2008); U.S. Department of

Agriculture.

Sources:

Vietnam, with over 250,000 HIV-positive persons in 2006, is

the largest Asian recipient of Global HIV/AIDS Initiative

(GHAI) funds under the President’s Emergency Plan for AIDS

Relief (PEPFAR). Other U.S. assistance objectives in Vietnam

include the following: accelerating Vietnam’s transition to an

open and market-based economy; de-mining; promoting

human rights and supporting civil society; and countering

illegal cross-border transport of arms and narcotics. IMET

programs include training in English language and

international peacekeeping.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Vietnam

1. Japan: 670

2. France: 116

3. United Kingdom: 82

4. Germany: 79

5. Denmark: 73

2004-2005 average. Source: OECD

The Vietnam Human Rights Act of 2007 (H.R. 3096), passed

by the House on September 18, 2007, would freeze U.S. nonhumanitarian assistance to the

government of Vietnam at FY2007 levels unless the President certifies to Congress that the

government of Vietnam has made substantial progress in the following areas: the release of

political and religious prisoners; religious freedom; the rights of ethnic minorities; access to U.S.

refugee programs by Vietnamese nationals; and combating trafficking in persons.

˜ž‘ȱœ’Šȱ

Key U.S. foreign aid objectives in South Asia include combating terrorism, developing bilateral

military ties, and reducing the social and economic sources of political instability and extremist

religious and political thinking. These causes include lack of accountable governance, inter-ethnic

conflict, poverty, disease, and illiteracy. Prior to September 2001, South Asia was the smallest

regional recipient of U.S. non-food assistance. Since the war on terrorism began, counterterrorism

and related funding for South Asia, especially Afghanistan and Pakistan, have made the region a

relatively large recipient of humanitarian, development, and economic assistance and the second-

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŘŚȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

largest beneficiary of military assistance after the Middle East. Before 2002, India and

Bangladesh were the largest recipients of U.S. bilateral aid in South Asia. Following Pakistan’s

participation in Operation Enduring Freedom (OEF) in Afghanistan, the country became the

largest beneficiary of U.S. foreign assistance in the region after Afghanistan, followed by India.

See Figure 7.

. U.S. Assistance to South Asian Countries (excluding Food Aid), 2001-2008

($million)

Figure 7

Note:

2008 data is estimated.

Regional programs focus upon economic growth, combating terrorism, and fighting international

crime. The South Asia Regional Fund ($5 million in FY2007) promotes economic growth through

addressing energy needs in South Asia, such as assisting countries to find energy resources and

facilitating trade in energy. The South and Central Asia Regional Fund ($1.5 million in FY2007)

supports programs related to border control and education. The aim of assistance for education is

to help reduce religious and ideological extremism and regional instability.

˜›Ž’—ȱ’ȱŽœ›’Œ’˜—œȱ

Both India and Pakistan faced sanctions on non-humanitarian aid for conducting nuclear weapons

tests in 1998. The United States imposed additional restrictions on aid to Pakistan because of its

delinquency on foreign loan payments and because of the military coup that took place in October

1999. Many of the nuclear test-related sanctions were lifted soon after they were imposed, and the

United States reportedly was prepared to normalize relations with India in the first half of 2001.

On September 22, 2001, President Bush issued a final determination removing all nuclear testrelated sanctions against India and Pakistan pursuant to the Department of Defense

Appropriations Act, 2000 (P.L. 106-79). On October 27, 2001, the President signed S. 1465 into

law (P.L. 107-57), exempting Pakistan from coup-related sanctions through FY2002, providing

waiver authority on the sanctions through FY2003, and granting an exemption from foreign aid

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

Řśȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

prohibitions related to the country’s loan defaults. In subsequent years, Congress has extended the

waiver authority on coup-related sanctions. Since 2003, President Bush has annually exercised

the waiver authority. A crucial challenge for the United States, according to some U.S. leaders, is

how to assist Pakistan in its counterterrorism activities and reward its cooperation in Operation

Enduring Freedom while still applying pressure regarding democratization, nuclear nonproliferation, and other U.S. foreign policy imperatives.

’œŠœŽ›ȱœœ’œŠ—ŒŽȱ

In the December 2004 earthquake and tsunami, Sri Lanka suffered heavy human losses and

property damage. The United States government pledged $134 million in disaster assistance

(including USAID disaster assistance and food aid and USDA food aid) to Sri Lanka and $17.9

million to India.30 On October 8, 2005, a catastrophic, magnitude 7.6 earthquake struck Pakistan,

killing over 73,000 persons in Pakistan and 1,333 in India and leaving nearly 3 million people

homeless. The United States pledged $300 million in economic assistance to the affected region.31

˜ž—›¢ȱ’ȱŽŸŽ•œȱŠ—ȱŽœ›’Œ’˜—œȯ˜ž‘ȱœ’Šȱ

Š—•ŠŽœ‘ȱ

Table 13. U.S. Assistance to Bangladesh, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

IMET

INCLE

NADR

Peace Corps

Totals

33,412

16,535

4,960

248

1,035

0

893

1,773

58,856

31,509

10,889

4,950

990

930

0

5,094

706

55,068

29,935

10,430

3,750

990

934

0

2,575

0

48,614

37,181

29,190

0

595

761

198

6,301

0

74,226

29,575

39,060

0

1,000

800

800

3,600

—

74,835

P.L. 480 Title II Granta

22,122

30,207

35,618

30,783

32,000

3,257

3,833

5,379

—

—

0

2,868

0

—

—

Food Aid

Section 416(b)b

FFEb

30

USAID, Fact Sheet no. 39, Indian Ocean—Earthquake and Tsunamis (July 7, 2005); USAID, Tsunami Assistance,

One Year Later (December 21, 2005).

31

USAID, Fact Sheet no. 44, South Asia—Earthquake (August 25, 2006).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŘŜȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

U.S. Department of State, USAID, U.S. Department of Agriculture.

a. USAID data—includes freight costs.

b. USDA data—does not include freight costs.

Sources:

In addition to problems related to development, corruption remains a key obstacle to social,

economic, and political advancement in Bangladesh. The largest elements of the U.S. aid

presence involve public health, including HIV/AIDS programs, and basic education. In other

areas, the U.S. government provides support for anti-corruption reforms and democratic

institutions. U.S. assistance also aims to expand economic opportunities and equitable growth in

the country. Security and military assistance help to strengthen the police and military forces to

counter terrorist activity, enhance border security, and fight international financial and drug

crimes.

In March 2006, the Peace Corps suspended its programs in

Bangladesh due to concerns that volunteers might become

targets of terrorists.

In 2000, the United States signed an agreement with

Bangladesh reducing the country’s debt payments to the

United States by $10 million over 18 years. In return,

Bangladesh is to set aside $8.5 million to endow a Tropical

Forest Fund to protect and conserve its mangrove forests.32

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Bangladesh

1. Japan: 234

2. United Kingdom: 232

3. United States: 89

4. EC: 68

5. Netherlands: 63

2004-2005 average. Source: OECD

—’Šȱ

Table 14. U.S. Assistance to India, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

GHAI

IMET

INCLE

NADR

Totals

53,222

24,856

14,880

0

1,502

0

4,181

98,641

52,815

19,700

4,950

0

1,272

0

2,711

81,448

53,411

15,676

4,875

8,971

1,501

0

1,108

85,542

58,947

10,547

0

—

1,237

0

2,684

73,415

59,682

900

—

—

1,200

400

1,700

63,882

P.L. 480 Title II Granta

35,763

43,501

31,034

13,406

13,500

Food Aid

U.S. Department of State, USAID, U.S. Department of Agriculture.

USAID data—includes freight costs.

Sources:

a.

32

Pursuant to the Tropical Forest Conservation Act (P.L. 105-214).

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

Řŝȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

The United States significantly increased bilateral aid to India

in FY2002 and FY2003, largely as part of its counterterrorism

efforts in the region. The current aid program aims to further

Indian economic development in order to enhance the

country’s rise as “an influential U.S. partner in the

international system.”33 Furthermore, U.S. assistance serves

the poorest segments of the population in order to mitigate

economic and social conditions that may give rise to political

extremism.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to India

1. Japan: 651

2. United Kingdom: 535

3. Germany: 166

4. EC: 164

5. United States: 164

2004-2005 average. Source: OECD

For FY2008, the largest portion of U.S. assistance to India

funds public health and HIV/AIDS care, treatment, and

prevention. Security and military assistance supports programs related to military

professionalism, counterterrorism, counternarcotics, and border security. Economic Support

Funds are to promote the private agricultural sector.

ޙЕȱ

Table 15. U.S. Assistance to Nepal, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

IMET

INCLE

NADR

Peace Corps

Totals

25,165

10,000

4,960

648

0

2,771

179

43,723

18,613

8,393

4,950

644

0

0

0

32,600

18,090

10,447

11,250

793

0

840

0

41,420

19,891

9,136

9,423

752

30

1,141

0

40,373

13,667

—

13,015

800

10,000

700

—

38,182

966

1,213

6,056

0

0

3,871

0

0

—

—

Food Aid

P.L. 480 Title II Granta

FFEb

U.S. Department of State, USAID, U.S. Department of Agriculture.

a. USAID data—includes freight costs.

b. USDA data—does not include freight costs.

Sources:

33

Congressional Budget Justification for Foreign Operations, FY2008.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŘŞȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

U.S. assistance to Nepal aims to further the peace process

between the government of Nepal and Maoist insurgents,

establish stability, and promote development. IMET, INCLE,

and NADR programs help the Nepal military and police to

restore law and order. The Consolidated Appropriations Act

for FY2008 allows for only Expanded International Military

Education and Training (E-IMET) for Nepal. E-IMET

emphasizes and teaches the military about human rights,

military codes of conduct, and civilian control of the military.

Other major components of United States aid programs in

Nepal include building the capacity of local and national

governments to provide social services and improving public

health.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Nepal

1. Japan: 76

2. United Kingdom: 64

3. Germany: 58

4. United States: 45

5. Denmark: 31

2004-2005 average. Source: OECD

In 2004, the United States suspended the Peace Corps program in Nepal after Maoist rebels

bombed the United States Information Center in Kathmandu.

Š”’œŠ—ȱ

Table 16. U.S. Assistance to Pakistan, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

IMET

INCLE

21,000

29,000

297,600

298,800

1,885

32,150

7,951

688,386

22,757

26,990

296,595

297,000

2,037

34,970

8,585

688,934

22,385

95,327

283,673

297,000

1,992

24,000

9,977

734,354

29,816

29,757

347,165

297,570

2,103

21,822

9,725

737,958

27,855

—

603,200d

300,000

1,950

32,000

11,250

976,255

0

17,675

0

0

0

FFPc

10,170

11,197

0

—

—

FFEc

5,796

5,169

0

—

—

Section 416(b)c

1,972

0

276

—

—

NADR

Totalsa

Food Aid

P.L. 480 Title II Grantb

U.S. Department of State; USAID (Congressional Notification, August 21, 2008); U.S. Department of

Agriculture.

a. Totals include supplemental appropriations.

b. USAID data—includes freight costs.

c. USDA data—does not include freight costs.

d. Includes a “bridge fund” appropriation of $150 million: P.L. 110-252, Supplemental Appropriations Act, 2008

(supplemental appropriations for FY2008 and FY2009).

Sources:

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

Řşȱ

ȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

Pakistan is a front-line state in the global war on terrorism.

Top Donors of Bilateral

Most U.S. assistance programs in the country claim to directly

Official Development

or indirectly serve U.S. counterterrorism goals. The United

Assistance

($US million):

States government has pledged $600 million in economic and

Pakistan

security assistance and $50 million in earthquake

1. United States: 224

reconstruction aid on an annual basis through FY2009.

2. Japan: 120

Approximately 43% of U.S. assistance to Pakistan supports

3. United Kingdom: 92

counterterrorism and border security efforts. The second

4. Turkey: 63

5. Norway: 45

largest strategic objective (36% of funding) is economic

growth, aimed at nurturing a middle class as a foundation for

2004-2005 average. Source: OECD

democracy. Economic Support Funds (13%) “help Pakistan to

improve the quality of and access to public education, primary

healthcare, and water and sanitation services” in part to help provide alternatives to services

provided by terrorist-linked charities and schools.34 Other assistance directly promotes democracy

through support of legislative processes, democratic practices within political parties, free and fair

elections, civil society, and the mass media.

’’—ȱ˜ȱ˜›Ž’—ȱ’ȱŽœ›’Œ’˜—œȱ

Pakistan received limited U.S. assistance during the 1990s—counter-narcotics support, food aid,

and Pakistan NGO Initiative programs—due to congressional restrictions in response to

Pakistan’s nuclear weapons program.35 In 1985, the Pressler amendment to the Foreign Assistance

Act of 1961 (Section 620E(e)) barred U.S. foreign assistance to Pakistan unless the President

determined that Pakistan did not possess nuclear weapons and that U.S. assistance would reduce

the risk of Pakistan’s obtaining them. In 1990, President George H. W. Bush declined to make

such determinations, thus triggering Pressler amendment sanctions against Pakistan. This

restriction was eased in 1995 to prohibit only military assistance.36 In 1998, following nuclear

weapons tests carried out by India and Pakistan, President Clinton imposed restrictions on nonhumanitarian aid to both countries pursuant to the Arms Export Control Act (Section 102, the

Glenn amendment). Furthermore, Pakistan became ineligible for most forms of U.S. foreign

assistance due to its delinquency in servicing its debt to the United States and to a 1999 military

coup.37

Following the September 2001 terrorist attacks on the United States, Pakistan was designated as a

front-line state in the war on terrorism and received dramatically increased U.S. aid levels. In late

September 2001, Congress enacted and the President exercised waivers to nuclear weapons

sanctions that had prohibited military and economic aid to India and Pakistan. The Bush

Administration rescheduled $379 million of Pakistan’s $2.7 billion debt to the United States so

that Pakistan would not be considered in arrears, a requirement for further foreign assistance. The

President also made $100 million in ESF available before the various sanctions were eased or

lifted, exercising authority afforded him under Section 614 of the Foreign Assistance Act of 1961.

34

Congressional Budget Justification for Foreign Operations, FY2008.

The USAID Pakistan NGO Initiative delivered education and health services primarily through the Asia Foundation

and Aga Khan Foundation USA and independent of the government of Pakistan. Total funding for the program (19942003) was $10 million.

36

The Brown amendment to the Foreign Assistance Act eased the prohibition to military assistance only.

37

The annual Foreign Operations Appropriations Act, usually at Section 508, denies foreign assistance to any country

whose duly elected head of government is deposed by military coup or decree.

35

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

řŖȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

On October 27, 2001, President Bush signed S. 1465 into law (P.L. 107-57), allowing the United

States government to waive sanctions related to the military coup and authorizing presidential

waiver authority through 2003, provided the President determined that making foreign assistance

available would facilitate democratization and help the United States in its battle against

international terrorism. P.L. 107-57 also exempted Pakistan from foreign assistance restrictions

related to its default on international loans.38

Since 2003, President Bush has annually exercised the waiver authority on coup-related sanctions

against Pakistan.39 On March 25, 2008, President Bush waived democracy-related aid sanctions

on Pakistan for FY2008, stating that such a waiver would facilitate the transition to democratic

rule in Pakistan and was important to U.S. counterterrorism efforts. Following the national and

provincial elections of February 2008, which many observers considered free, fair, and credible,

the Bush Administration issued an April 2008 determination that a democratically elected

government had been restored in Islamabad after a 101-month hiatus. This determination

permanently removed coup-related aid sanctions.40

›’ȱŠ—”Šȱ

Table 17. U.S. Assistance to Sri Lanka, 2005-2009

(thousands of dollars)

Account

FY2005

FY2006

FY2007

FY2008

estimate

FY2009

request

CSH

DA

ESF

FMF

IMET

INCLE

NADR

Totals

300

6,774

9,920

496

461

0

2,700

20,651

0

3,705

3,960

990

529

0

3,615

12,799

0

3,557

3,000

990

483

0

1,050

9,080

0

5,241

0

422

571

20

1,143

7,397

0

4,000

—

900

600

350

650

6,500

1,996

9,690

0

134,600

0

8,798

70

—

14,086

4,600

0

—

0

—

—

—

0

—

—

—

Food Aid/Disaster Assistance

P.L. 480 Title II Granta

FFPb

Section 416(b)b

Tsunami Reliefc

U.S. Department of State, USAID, U.S. Department of Agriculture.

USAID data—includes freight costs.

Sources:

a.

38

See P.L. 107-57, Sections 1(b) and 3(2).

For additional information on aid, including U.S. Department of Defense programs in Pakistan, see CRS Report

RL33498, Pakistan-U.S. Relations, by (name redacted).

40

Federal Register Vol. 73, no. 69, p. 19276-19277, April 9, 2008. “Pakistan Poll Process ‘Credible’—U.S. Senators,”

BBC Monitoring South Asia, February 20, 2008.

39

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

řŗȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

b. USDA data—does not include freight costs.

c.

Tsunami Recovery and Reconstruction Fund, P.L. 109-13

United States assistance programs aim to promote the peace

process between the government of Sri Lanka and Tamil

separatists led by the Liberation Tigers of Tamil Eelam

(LTTE). In order to help pressure the LTTE to return to the

negotiating table, the United States provides assistance to help

strengthen the capabilities of the Sri Lankan military. INCLE

and NADR programs support the police force and

counterterrorism activities. U.S. assistance also promotes

economic growth, especially in less developed, conflict-ridden

areas, and helps to advance democracy, human rights, and civil

society.

Top Donors of Bilateral

Official Development

Assistance ($US million)

to Sri Lanka

1. Japan: 317

2. Germany: 65

3. Norway: 48

4. United States: 43

5. Netherlands: 38

2004-2005 average. Source: OECD

In 2004, Sri Lanka met eligibility requirements for MCA funding, due in large part to positive

governmental, social, and economic indicators in Western provinces. Although a Compact was

expected in 2007, the MCC put an agreement on hold in early 2007 pending improvements in the

overall human rights and security situations, and in December 2007 the MCC decided not to

reselect Sri Lanka for 2008 Compact eligibility.

Sri Lanka suffered heavy human losses (an estimated 31,000 dead, 4,100 missing, and 519,000

displaced) and property damage worth approximately $1 billion (or 4.4% of GDP) in the

December 2004 earthquake and tsunami.41 The Bush Administration pledged $134.6 million for

disaster relief and reconstruction to Sri Lanka. In 2006, Sri Lanka received Transition Initiative

(TI) funding ($1.7 million) for the peace process and $1.1 million in disaster assistance.

ŘŖŖŞȱ™™›˜™›’Š’˜—œȱ

The Consolidated Appropriations Act for FY2008, Section 699G, withheld FMF from Sri Lanka,

with the exception of technology or equipment related to maritime and air surveillance and

communications, unless the following conditions were met:

41

•

the Sri Lankan military is suspending and the Sri Lankan government is bringing

to justice members of the military who have been credibly alleged to have

committed gross violations of human rights or international humanitarian law,

including complicity in the recruitment of child soldiers;

•

the Sri Lankan government is providing access to humanitarian organizations and

journalists throughout the country consistent with international humanitarian law;

and

•

the Sri Lankan government has agreed to the establishment of a field presence of

the Office of the United Nations High Commissioner for Human Rights in Sri

Lanka with sufficient staff and mandate to conduct full and unfettered monitoring

throughout the country and to publicize its findings.

USAID, Fact Sheet no. 39, Indian Ocean—Earthquake and Tsunamis, July 7, 2005.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

řŘȱ

ǯǯȱ˜›Ž’—ȱ’ȱ˜ȱŠœȱŠ—ȱ˜ž‘ȱœ’ŠDZȱŽ•ŽŒŽȱŽŒ’™’Ž—œȱ

ȱ

™™Ž—’¡ǯ Ž•ŽŒŽȱŒ›˜—¢–œȱ˜›ȱǯǯȱ˜›Ž’—ȱ’ȱ

ŒŒ˜ž—œȱŠ—ȱ›˜›Š–œȱ

CSD:

CSH:

DA:

DF:

EAP:

EDA:

ERMA:

ESF:

FFP:

FFE:

FMF:

GHAI:

IMET:

INCLE:

MCA:

MCC:

MRA:

NADR:

OECD:

OFDA:

PKO:

P.L. 480 Title I:

P.L. 480 Title II:

Section 416(b):

USAID:

USDA:

Child Survival and Disease

Child Survival and Health (replaces CSD)

Development Assistance

Democracy Funds

East Asia and the Pacific

Excess Defense Articles

Emergency Migration and Refugee Assistance

Economic Support Funds

Food for Progress

Food for Education

Foreign Military Financing

Global HIV/AIDS Initiative

International Military Education and Training

International Narcotics Control and Law Enforcement

Millennium Challenge Account

Millennium Challenge Corporation

Migration and Refugee Assistance

Non-proliferation, Anti-terrorism, De-mining, and Related Programs

Organization for Economic Co-operation and Development

Office of Foreign Disaster Assistance

Peace-keeping Operations

Food Aid (USDA loans)

USAID emergency food program

Surplus Food Commodities

United States Agency for International Development

United States Department of Agriculture

ž‘˜›ȱ˜—ŠŒȱ —˜›–Š’˜—ȱ

(name redacted)

Specialist in Asian Affairs

/redacted/@crs.loc.gov, 7-....

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

řřȱ

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