U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends, and the FY2011 Request
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U.S. Foreign Assistance to the Middle East:
Historical Background, Recent Trends, and the
FY2011 Request
/name redacted/
Specialist in Middle Eastern Affairs
June 15, 2010
Congressional Research Service
7-....
www.crs.gov
RL32260
CRS Report for Congress
Prepared for Members and Committees of Congress
U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
Summary
This report is an overview of U.S. foreign assistance to the Middle East from FY2006 to FY2010,
and of the FY2011 budget request. It includes a brief history of aid to the region, a review of
foreign aid levels, a description of selected country programs, and an analysis of current foreign
aid issues. It will be updated periodically to reflect recent developments. For foreign aid
terminology and acronyms, please see the glossary appended to this report. For details on U.S.
reconstruction aid for Iraq, please see CRS Report RL31339, Iraq: Post-Saddam Governance and
Security, by (name redacted) .
For policymakers, foreign assistance plays a key role in advancing U.S. foreign policy goals in
the Middle East. The United States has a number of interests in the region, ranging from support
for the state of Israel and Israel’s peaceful relations with its Arab neighbors, to the protection of
vital petroleum supplies and the fight against international terrorism. U.S. assistance helps to
maintain the 1979 peace treaty between Israel and Egypt and the continued stability of the
Kingdom of Jordan, which signed its own peace treaty with Israel in 1994. U.S. funding also
works to strengthen Palestinian institutions, and aid officials have worked to ensure that U.S. aid
to the West Bank and Gaza Strip is not diverted to terrorist groups. Since the attacks of September
11, 2001, the United States has established region-wide aid programs to promote democracy and
encourage socio-economic reform in order to undercut the forces of radicalism in some Arab
countries.
U.S. aid policy has gradually evolved from a focus on preventing Soviet influence from gaining a
foothold in the region and from maintaining a neutral stance in the Arab-Israeli conflict, to
strengthening Israel’s military and economy and using foreign aid as an incentive to foster peace
agreements between countries in the region. When adjusted for inflation, annual U.S. assistance
to the Middle East in the decades following World War II was only a small fraction of current aid
flows. However, beginning in the early 1970s, the United States dramatically increased its foreign
assistance to the Middle East. After the U.S. withdrawal from South Vietnam, the Middle East as
a whole began to receive more U.S. foreign aid than any other region of the world, a trend that
has continued to this day.
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
Contents
Introduction ................................................................................................................................1
Foreign Aid to Support Key U.S. Interests.............................................................................1
Country Summaries ....................................................................................................................2
Israel.....................................................................................................................................3
Overview ........................................................................................................................3
Military Assistance..........................................................................................................3
Egypt ....................................................................................................................................4
Overview ........................................................................................................................4
Economic Assistance.......................................................................................................4
The Endowment..............................................................................................................5
Military Assistance..........................................................................................................6
Jordan ...................................................................................................................................7
Overview ........................................................................................................................7
Economic Assistance.......................................................................................................8
Military Assistance..........................................................................................................8
Palestinians—West Bank/Gaza..............................................................................................9
Overview ........................................................................................................................9
U.S. Contributions to UNRWA...................................................................................... 10
Lebanon.............................................................................................................................. 12
Other Recipients and Programs ........................................................................................... 13
Foreign Aid Issues .................................................................................................................... 15
Promoting Democracy and Reform ..................................................................................... 15
Overview ...................................................................................................................... 15
U.S. Programs............................................................................................................... 16
Restrictions on Aid to the Palestinians ................................................................................. 20
U.S. Support for Arab-Israeli Cooperation........................................................................... 21
Historical Background .............................................................................................................. 21
U.S. Assistance to the Middle East Since 1950 .................................................................... 21
1950-1970..................................................................................................................... 21
1971-2001..................................................................................................................... 23
Tables
Table 1. U.S. Foreign Assistance to the Middle East: FY2008-FY2011 Request...........................2
Table 2. U.S. Assistance to Israel, FY2006-FY2011 Request .......................................................4
Table 3. U.S. Assistance to Egypt, FY2006-FY2011 Request.......................................................7
Table 4. U.S. Assistance to Jordan, FY2006-FY20011 Request....................................................9
Table 5. U.S. Bilateral Assistance to the Palestinians, FY2006-FY2011 Request ........................ 11
Table 6. U.S. Assistance to Lebanon, FY2006-FY2011 Request ................................................ 13
Table 7. U.S. Contributions to UNIFIL...................................................................................... 13
Table 8. Other Regional Recipients, FY2006-FY2011 Request .................................................. 14
Table 9. Middle East Partnership Initiative Appropriations, FY2003-FY2011 Request .............. 18
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
Table 10. Total U.S. Foreign Assistance to the Middle East, 1950-1970 ..................................... 23
Table 11. Total U.S. Assistance to the Middle East: 1971-2001 .................................................. 25
Appendixes
Appendix. Glossary................................................................................................................... 26
Contacts
Author Contact Information ...................................................................................................... 27
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
Introduction
This report is an overview of U.S. foreign assistance to the Middle East.1 It includes a brief
historical review of foreign aid levels, a description of specific country programs, and an analysis
of current foreign aid issues.2 Congress both authorizes and appropriates foreign assistance and
conducts oversight on executive agencies’ management of aid programs. As the largest regional
recipient of U.S. economic and military aid, the Middle East is perennially a major focus of
interest as Congress exercises these responsibilities.
In the Middle East, the United States has a number of strategic interests, ranging from support for
the state of Israel and Israel’s peaceful relations with its Arab neighbors, to the protection of vital
petroleum supplies and the fight against international terrorism. U.S. assistance continues to
support the 1979 peace treaty between Israel and Egypt and the continued stability of the
Kingdom of Jordan, which signed its own peace treaty with Israel in 1994. U.S. funding also has
focused on strengthening Palestinian governance and civil society, and aid officials have worked
to ensure that U.S. aid to the West Bank is not diverted to terrorist groups, such as Hamas, which
controls the Gaza Strip. Since the attacks of September 11, 2001, the United States has
established region-wide aid programs that increase the focus on democracy promotion and
encourage socio-economic reform in an attempt to undercut the forces of radicalism in some Arab
countries.
Foreign Aid to Support Key U.S. Interests
Despite changing geopolitical conditions, U.S. foreign aid to the Middle East has historically
been a function of U.S. national security interests in the region. The United States has pursued a
foreign policy that seeks stability in a region with abundant energy reserves but volatile interstate
relationships. Policymakers have often employed foreign aid to achieve this objective. Foreign
aid has been used as leverage to encourage peace between Israel and her Arab neighbors, while
strengthening bilateral relationships between the United States and Israel and between the United
States and moderate Arab governments. Foreign aid has worked to cement close military
cooperation between the United States and governments in the region, discouraging local states
from engaging in uncontrollable arms races. Economic aid also has had an underlying strategic
rationale, as U.S. funds have been employed to promote development in an attempt to undercut
radicalism in partner countries.
The degree to which foreign assistance has contributed to the achievement of U.S. objectives in
the Middle East is difficult to measure, but the consensus among most analysts seems to be that
U.S. economic and security aid has contributed significantly to Israel’s security, Egypt’s stability,
and Jordan’s friendship with the United States. The promise of U.S. assistance to Israel and Egypt
during peace negotiations in the late 1970s helped to enable both countries to take the risks
needed for peace, and may have helped convince both countries that the United States was
committed to supporting their peace efforts. Excluding Iraq, Israel and Egypt are the largest two
recipients of U.S. aid respectively.
1
For the purposes of this report, the Middle East region, or Near East, is defined as an area stretching from Morocco in
the west to the Persian Gulf in the east, but not including Turkey.
2
For assistance with foreign aid terminology and acronyms, please see the glossary appended to this report.
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
There is debate over using foreign aid more aggressively to pursue various objectives in the
Middle East. Some critics of U.S. policy would like to see additional conditions placed on U.S.
aid to Egypt, for example, to achieve greater respect for democracy and human rights in that
country. Others favor using the aid program more assertively as leverage to restart the Middle
East peace process. Some might urge that aid should be conditioned on demonstrable progress in
extending full political and economic rights to women and religious minorities. Others, however,
assert that the overt use of aid—or the threat of aid reductions—to promote democracy and
reform in the Middle East region could lead to a backlash against the United States, as well as to
democratic reformers in those countries.
Critics of U.S. aid policy, particularly some in the Middle East, have argued that U.S. foreign aid
exacerbates tensions in the region. Many Arab commentators insist that U.S. assistance to Israel
indirectly causes suffering to Palestinians by supporting Israeli arms purchases. Another common
argument asserts that U.S. foreign aid bolsters autocratic regimes with similar strategic interests
to the United States. Some observers have called U.S. aid policy “contradictory,” accusing the
United States of bolstering its ties with autocratic regimes through military assistance, while
advocating liberalization in the region with less funds dedicated to reform and development aid.
As noted above, however, other analysts believe aid has helped protect Israel’s security and
stabilize the region.
Table 1. U.S. Foreign Assistance to the Middle East: FY2008-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
Aid Account
FY2008
FY2011
Request
FY2010
Estimate
FY2009
FMF
4,049.955
4,378.155
4,545.370
4,781.650
ESF
1,933.261
2,205.000
1,677.100
1,671.350
MRA/ERMA
342.641
435.440
555.000
NA
INCLE
115.356
214.000
180.500
512.960
NADR
56.809
NA
NA
68.215
DA
17.914
34.633
71.400
28.495
IMET
12.801
16.265
18.760
18.590
GH
2.833
3.000
4.800
21.000
Total
6,531.570
7,286.493
7,052.930
7,102.26
Source: State Department FY2010 Budget Justification
Country Summaries
The following section provides funding details on the largest regular aid recipients in the Middle
East: Israel, Egypt, Jordan, the Palestinians, and Lebanon. Each country section features a table
with a more elaborate breakdown of aid by account over the last five fiscal years. For information
on U.S. assistance for Iraqi reconstruction, see CRS Report RL31833, Iraq: Reconstruction
Assistance, by (name redacted) and CRS Report RL31339,
Iraq: Post-Saddam Governance and
Security, by (name redacted).
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Israel3
Overview
Since 1976, Israel has been the largest annual recipient of U.S. foreign assistance and is the
largest cumulative recipient since World War II. Strong congressional support for Israel has
resulted in Israel’s receiving benefits that may not be available to other countries. For example,
Israel can use U.S. military assistance for research and development in the United States and for
military purchases in Israel.4 In addition, all U.S. foreign assistance earmarked for Israel is
delivered in the first 30 days of the fiscal year. Other recipients normally receive their aid in
staggered installments at varying times. According to the Obama Administration’s 2011
Congressional Budget Justification (CBJ) for Foreign Operations, “U.S. assistance is also aimed
at ensuring for Israel the security it requires to make concessions necessary for comprehensive
regional peace.”5
In August 2007, the Bush Administration announced that it would increase U.S. military
assistance to Israel by $6 billion over the next decade. The agreement calls for incremental annual
increases in FMF to Israel, reaching $3.1 billion a year by FY2018. Military analysts speculate
that the increase in U.S. assistance will facilitate potential Israeli purchases of the most
sophisticated U.S. equipment, including a possible sale of the F-35 Joint Strike Fighter (JSF).
Under the terms of the agreement, Israel will still be able to spend 26.3% of U.S. assistance on
Israeli-manufactured equipment.
Military Assistance
Congress has taken measures to strengthen Israel’s security and maintain its technological
advantage over neighboring militaries. Annual Foreign Military Financing (FMF) grants to Israel
represent about 21%-22% of the Israeli defense budget. Israel also is eligible to receive Excess
Defense Articles under section 516 of the Foreign Assistance Act. For FY2011, the
Administration has requested $3 billion in FMF for Israel.
Since FY1988, Congress has allowed Israel to use approximately a quarter of its FMF funds as
cash grant to pay for Israeli defense purchases in Israel. Since 1990, Congress has provided for
Israel to receive its FMF aid in a lump sum during the first month of the fiscal year, which allows
Israel to invest the funds in U.S. Treasury notes and earn interest.
3
In addition to U.S. foreign assistance, Israel also receives funds from annual defense appropriations to support the
research and development of new military technologies such as the Arrow anti-missile system. See CRS Report
RL33222, U.S. Foreign Aid to Israel , by (name redacted).
4
In FY1977, the Israeli government, for the first time, received special permission to use FMF for research and
development in Israel on the Merkava tank. After this precedent was established, Israel has been allowed to spend a set
percentage of its annual FMF inside Israel.
5
The FY2010 CBJ stated that “Israel is a critical player in U.S. regional efforts to expand security and stability.
Helping Israel maintain its qualitative military advantage enhances security by preventing regional conflict and builds
the confidence necessary for Israel to take calculated risks for peace.”
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Table 2. U.S. Assistance to Israel, FY2006-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
Account
ESF
FMF
Humanitarian
Migrants to
Israel
Total
FY2006
FY2007
237.6
120.0
FY2008
FY2009
FY2010
FY2011
Request
—
—
—
—
2,775.0b
3,000.0
2,257.2
2,340.0
2,380.560
2,550.0a
40
40
39.676
30
25
25
2,534.8
2,500.0
2,420.236
2,580.0
2,800.0
3,025.0
Source: U.S. State Department
a.
Congress provided FY2009 FMF funds to Israel in two separate bills. Lawmakers appropriated $170 million
in FMF to Israel in P.L. 110-252, the FY2008 Supplemental Appropriations Act. Another $2.38 billion was
provided in P.L. 111-8, the FY2009 Omnibus Appropriations Act.
b.
Congress provided $555 million of Israel’s total FY2010 FMF appropriation in P.L. 111-32, the FY2009
Supplemental Appropriations Act. The remaining $2.22 billion was appropriated in P.L. 111-117, the FY2010
Consolidated Appropriations Act.
Egypt6
Overview
Since 1979, Egypt has been the second largest recipient of U.S. foreign assistance, receiving an
annual average of close to $2 billion in economic and military aid. In the past, Congress has
earmarked aid to Egypt in annual foreign operations legislation with an accompanying statement
calling on Egypt to undertake further economic reforms in addition to reforms taken in previous
years.7 In July 2007, as a part of a larger arms package to the region, the United States announced
that it would provide Egypt with $13 billion in military aid over a ten-year period. Since Egypt
has already been receiving approximately $1.3 billion a year in military assistance, the
announcement represented no major change in U.S. assistance policy toward Egypt.
Economic Assistance
The United States has significantly reduced economic aid to Egypt over the last decade. There are
several reasons for the reduction in U.S. assistance. Overall, U.S. economic aid to Egypt has been
trending downward due to a 10-year agreement reached in the late 1990s known as the “Glide
Path Agreement.” In January 1998, Israeli officials negotiated with the United States to reduce
economic aid and increase military aid over a 10-year period. A 3 to 2 ratio similar to total U.S.
aid to Israel and Egypt was applied to the reduction in economic aid ($60 million reduction for
Israel and $40 million reduction for Egypt), but Egypt did not receive an increase in military
assistance. Thus, the United States reduced ESF aid to Egypt from $815 million in FY1998 to
6
For additional information on U.S. aid to Egypt, see CRS Report RL33003, Egypt: Background and U.S. Relations,
by (name redacted).
7
In FY2006, Egypt’s FMF earmark was excluded from the Senate-approved version of the annual foreign aid bill but
was later reinstated by conferees.
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
$411 million in FY2008.8 For FY2011, the Administration is requesting $250 million in ESF for
Egypt, the same amount it has received since FY2009.
The Endowment
With the expiration of the Glide Path agreement, the continued expansion of Egypt’s economy, a
growing desire for more U.S.-Egyptian trade, and a reluctance by Egypt to accept “conditions”
for U.S. aid, U.S. and Egyptian officials have expressed a desire to “graduate” Egypt from U.S.
bilateral economic assistance. 9 However, neither the United States nor Egypt seem to agree on
how aid should be reduced over the coming decade. Egypt would like to establish an endowment
to jointly fund development projects.10 The Mubarak government argues that based on current aid
levels, Egyptian debt repayments to the United States exceed U.S. foreign assistance. 11 Some
analysts believe that the Egyptian government is seeking an endowment in order to shield aid to
Egypt from potential conditions mandated by Congress. For several years, there was limited U.S.
interest in pursuing an aid endowment. However, S. 1434, the Senate version of the Department
of State, Foreign Operations, and Related Programs Appropriations Act, 2010, included a
provision that would provide up to $200 million for an endowment to “further the shared interests
of the United States and Egypt.”
After several failed attempts to form a new Egypt aid mechanism, Congress passed into law a
new provision in P.L. 111-117 (section 7042) that called for the possible establishment of an
endowment to “further the shared interests” of the United States and Egypt. Congress specified
that up to $50 million in economic aid may be set aside for an endowment, though lawmakers
noted the process is in its early stages. Appropriators stated that “the conferees recognize that
discussions and negotiations on such an endowment will take time, and direct the Secretary of
State to consult with the Committees on these efforts. Consultation should include explanation of
the specific definition of shared interests, and how such interests would be furthered through an
endowment. The conferees note that such funds are subject to the regular notification procedures
of the Committees on Appropriations.” The Obama Administration’s 2011 CBJ for Foreign
Operations states that “the U.S. Government is considering a proposal for a bilateral endowment
and we are working with the interagency, in consultation with Congress, to develop a vision for it.
Discussion will continue with the Government of Egypt to deliver U.S. foreign assistance in ways
that reflect both countries’ interests.”
As of mid 2010, the U.S. and Egyptian governments have yet to reach an agreement on the
contours of an endowment. According to both sides’ proposals, which were published in the
media in the spring of 2010, the Egyptian government seeks a “phasing out mechanism [of U.S.
assistance] that would be: gradual, over time, predictable, not related to conditionalities.”12 On the
8
In FY2003, Egypt, along with Israel and several other regional governments, received supplemental assistance as part
of the FY2003 Iraq Emergency Supplemental Appropriations Act (P.L. 108-11). It included $300 million in ESF for
Egypt, which could have been used to cover the costs of up to $2 billion in loan guarantees. The loan guarantees were
to be issued over three years.
9
CRS conversation with U.S. and Egyptian officials, January 9, 2008.
10
The Senate version of the FY2008 Foreign Operations bill (H.R. 2764), contained an amendment, entitled “The
United States-Egypt Friendship Endowment,” that would have provided up to $500 million in ESF to establish an
endowment to “further social, economic and political reforms in Egypt.”
11
Egypt’s debt repayments to the United States, as of 2006, stood at an estimated $370 million a year, based on a total
debt estimated at $4.2 billion.
12
See, [http://foreignpolicy.com/files/fp_uploaded_documents/100512_USEconomicAssistance.pdf]
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U.S. Foreign Assistance to the Middle East: Historical Background, Recent Trends
other hand, the U.S. State Department is seeking to “start slowly to test the endowment’s success,
and to avoid redirecting significant amounts of ESF funding away from current development
programs that further U.S. objectives in Egypt, including democracy programs.”13 There seems to
be agreement on both sides that the education and science and technology sectors could be
potential areas of cooperation for endowment funding. However, observers note that the seed
funding for any U.S.-Egyptian endowment would have to be significant, possibly over at least $1
billion, in order to generate enough interest revenue to fund daily operations and programming.
The $50 million in FY2010 ESF set aside for the endowment is available for obligation through
FY2011.14
Military Assistance
The Administration has requested $1.3 billion in FMF for Egypt in FY2011—the same amount it
received in FY2010. FMF aid to Egypt is divided into three general components: (1) acquisitions,
(2) upgrades to existing equipment, and (3) follow-on support/maintenance contracts. According
to U.S. and Egyptian defense officials, approximately 30% of annual FMF aid to Egypt is spent
on new weapons systems, as Egypt’s defense modernization plan is designed to gradually replace
most of Egypt’s older Soviet weaponry with U.S. equipment. That figure is expected to decline
over the long term due to the rising costs associated with follow-on maintenance contracts.
Egyptian military officials have repeatedly sought additional FMF funds to offset the escalating
costs of follow-on support. Egypt also receives Excess Defense Articles (EDA) worth hundreds of
millions of dollars annually from the Pentagon. Egyptian officers also participate in the IMET
program ($1.4 million requested for FY2010) in order to facilitate U.S.-Egyptian military
cooperation over the long term.
13
14
See, [http://foreignpolicy.com/files/fp_uploaded_documents/100512_EgyptAssistance.pdf]
See, Title III, Bilateral Economic Assistance as contained in P.L. 111-117.
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Table 3. U.S. Assistance to Egypt, FY2006-FY2011 Request
(Regular and Supplemental Appropriations; Current Year $ in millions)
Account
FY2006
FY2007
FY2008
FY2009
FY2010 Estimate
FY2011 Request
ESF
490.050
455.0
411.639
250.0a
250.0
250.0
FMF
1,287.0
1,300.0
1,289.470
1,300.0
1,300.0b
1,300.0
IMET
1.208
1.203
1.237
1.316
1.900
1.400
NADR/INCLEc
1.029
1.545
3.545
52.000d
3.80
6.600
1,779.287
1,757.748
1,705.891
1,603.316
1,555.7
1,558.0
Total
Source: U.S. State Department.
a.
Egypt received $200 million in ESF from P.L. 111-8, the FY2009 Omnibus Appropriations Act. It then
received an additional $50 in ESF from P.L. 111-32, the FY2009 Supplemental Appropriations Act.
b.
Congress provided $260 million of Egypt’s total FY2010 FMF appropriation in P.L. 111-32, the FY2009
Supplemental Appropriations Act. The remaining $1.04 billion was appropriated in P.L. 111-117, the FY2010
Consolidated Appropriations Act.
c.
This category includes funds (INCLE, NADR) for counter terrorism, border control, and technical
cooperation.
d.
P.L. 111-32, the FY2009 Supplemental Appropriations Act, provided $50 million in NADR funds for border
security in Rafah, Egypt along the Gaza border.
Jordan15
Overview
The United States has provided economic and military aid, respectively, to Jordan since 1951 and
1957. Total U.S. aid to Jordan through FY2010 amounted to approximately $11.38 billion. Levels
of aid have fluctuated, increasing in response to threats faced by Jordan and decreasing during
periods of political differences or worldwide curbs on aid funding.
On September 22, 2008, the U.S. and Jordanian governments reached an agreement whereby the
United States will provide a total of $660 million in annual foreign assistance to Jordan over a 5year period. Under the terms their non-binding Memorandum of Understanding (MOU), this firstof-its-kind deal commits the United States, subject to future Congressional appropriation and
availability of funds, to providing $360 million per year in Economic Support Funds (ESF) and
$300 million per year in Foreign Military Financing (FMF).
The Administration’s FY2011 request to Congress is $682.7 million for U.S. aid to Jordan. This
includes $360 in economic aid and $300 million in military assistance. In addition to funds
specifically earmarked for Jordan, previous emergency supplemental bills have contained funds
to reimburse Pakistan, Jordan, and other key cooperation states for logistical expenses in support
of U.S. military operations in Iraq and Afghanistan.
15
For more information on Jordan, see CRS Report RL33546, Jordan: Background and U.S. Relations, by (name reda
cted).
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H.R. 4899, the FY2010 Supplemental Appropriations bill, provides an additional $100 million in
ESF and $50 million in FMF to Jordan, bringing total FY2010 aid to an estimated $842 million.
Economic Assistance
The United States provides economic aid to Jordan as both a cash transfer and for USAID
programs in Jordan. The Jordanian government uses cash transfers to service its foreign debt
(approximately $6.7 billion). Approximately 45% of Jordan’s ESF allotment each year goes
toward the cash transfer.16 USAID programs in Jordan focus on a variety of sectors including
democracy assistance, water preservation, and education. In the water sector, the bulk of U.S.
economic assistance is devoted to optimizing the management of scarce water resources, as
Jordan is one of the most water-deprived countries in the world. USAID is currently subsidizing
several waste treatment and water distribution projects in the Jordanian cities of Amman, Aqaba,
and Irbid.
Military Assistance
U.S. military assistance is primarily directed toward upgrading Jordan’s air force, as recent
purchases include upgrades to U.S.-made F-16 fighters, air-to-air missiles, and radar systems.
FMF grants also provide financing for Jordan’s purchase of U.S. Blackhawk helicopters in order
to enhance Jordan’s border monitoring and counter-terror capability. In addition, according to the
Obama Administration’s 2011 CBJ for Foreign Operations, “FMF will continue to develop
counterterrorism capabilities by expanding, training, and equipping small, elite units such as the
Special Operations Aviation Brigade and Jordan Special Operations Command.”
16
According to the Obama Administration’s 2011 CBJ for Foreign Operations, “Cash transfer assistance bolsters
Jordan’s short-term stability by helping the GOJ pay down external non-military debt. This program is conditioned on
policy reform across sectors and, results in the GOJ programming an equivalent amount of local currency each year for
mutually agreed priority development projects.”
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Table 4. U.S. Assistance to Jordan, FY2006-FY20011 Request
(Regular & Supplemental Appropriations; Current Year $ in millions)
Account
FY2006
FY2007
FY2008
FY2009
FY2010 Estimate
FY2011 Request
ESF
297.500
255.300
361.412
513.547a
463.000f
360.000
FMF
207.900
252.900
348.380b
335.000c
350.000d
300.000
IMET
3.020
2.922
2.941
3.109
3.800
3.700
CSH
—
—
—
13.144
—
—
Othere
2.491
26.741
25.059
20.150
26.150
19.000
Total
510.911
537.863
737.792
884.950
842.950
682.700
Source: U.S. State Department
a.
Congress provided FY2009 ESF aid to Jordan in 3 separate appropriations acts, including: $150 million from
P.L. 111-32, $263.547 million from P.L. 111-8, and $100 million from P.L. 110-252.
b.
Congress provided FY2008 FMF aid to Jordan in 2 separate appropriations acts, including: $298 million
from P.L. 110-161 and $50 million from P.L. 110-252.
c.
Congress provided FY2009 FMF aid to Jordan in 2 separate appropriations acts, including: $235 million
from P.L. 111-8 and $100 million from P.L. 110-252.
d.
Congress provided $150 million of Jordan’s total FY2010 FMF appropriation from P.L. 111-32, the FY2009
Supplemental Appropriations Act. The remaining $150 million was appropriated in P.L. 111-117, the FY2010
Consolidated Appropriations Act. Another $50 million in FMF is being provided to Jordan from H.R. 4899,
the FY2010 Supplemental Appropriations bill.
e.
This category includes funds for counter terrorism, border control, and technical cooperation.
f.
Jordan is receiving an additional $100 million in FY2010 ESF from H.R. 4899, the FY2010 Supplemental
Appropriations bill.
Palestinians—West Bank/Gaza17
Overview
Since the signing of the Oslo Accord in 1993, the U.S. government has committed more than $3.8
billion in bilateral economic assistance to the Palestinians, of which more than $2.3 billion has
been provided since FY2004.18 According to annual foreign operations legislation,
congressionally approved funds for the West Bank and Gaza Strip cannot be used for the
Palestinian Authority (PA), unless the President submits a waiver to Congress citing that it is in
the interest of national security.19 Should the Hamas “government” in Gaza form a unity
government with the Palestinian Authority in the West Bank, a provision in the FY2010
Consolidated Appropriations Act (P.L. 111-117) would allow the U.S. government to provide
17
See also CRS Report RS22967, U.S. Foreign Aid to the Palestinians, by (name redacted).
The USAID program in the West Bank and Gaza Strip provides assistance to the Palestinian people through
contractors and other non-governmental organizations. The PLO, which represents the Palestinian diaspora, has never
received funds from the U.S. government.
19
See P.L. 111-117, The Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010,
Limitation on Assistance for the Palestinian Authority, sec. 7040(b).
18
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assistance to a power-sharing PA government of which Hamas is a member if the President
certifies that such a government, including all of its ministers, acknowledges Israel’s right to exist
and commits and adheres to previous international agreements, including the 2003 Roadmap.20
Since the death of Yasser Arafat in November 2004, U.S. assistance to the Palestinians has
averaged about $388 million a year. During the 1990s, U.S. foreign aid to the Palestinians
averaged approximately $75 million per year. Most U.S. assistance to the Palestinians is provided
through USAID’s West Bank and Gaza program. USAID allocates funds for projects in sectors
such as humanitarian assistance, economic development, democratic reform, improving water
access and other infrastructure, health care, education, and vocational training (currently most, if
not all, funds for the Gaza Strip are dedicated to humanitarian assistance and economic recovery
needs). By law, U.S. assistance to the West Bank and Gaza Strip, as well as for all other aid
recipients, must be vetted and audited to ensure that no U.S. funds are provided to or through any
individual, private or government entity, or educational institution that advocates, plans, sponsors,
engages in, or has engaged in, terrorist activity. Lawmakers usually include funds in annual
foreign operations legislation providing for audits and
inspections of USAID projects in the West Bank and Gaza
Recent U.S. Contributions to
Strip.
UNRWA
U.S. assistance also reaches Palestinians through
contributions to the United Nations Relief and Works
Agency for Palestine Refugees in the Near East
(UNRWA), which provides humanitarian relief and basic
services to Palestinian refugees living in the West Bank,
Gaza Strip, Jordan, Syria, and Lebanon.
U.S. Contributions to UNRWA
FY2003 $134 million
FY2004 $127 million
FY2005 $108 million
FY2006 $137 million
FY2007 $154 million
FY2008 $184 million
FY2009 $267.9 million
The United Nations Relief and Works Agency (UNRWA)
provides food, shelter, medical care, and education for many of the three million Palestinian
refugees from the 1948-1949 Arab-Israeli war.21 U.S. contributions to UNRWA come from the
general Migration and Refugee Assistance (MRA) account and also through the Emergency
Refugee and Migration Assistance (ERMA) account. The U.S. contribution to UNRWA usually
covers 20 to 25% of the UNRWA total budget.22 The United States is the largest bilateral donor to
20
See Section 7040 (f) of P.L. 111-117. This section would prohibit U.S. assistance to Hamas, but, according to
Section 7040 (f) (2), “Notwithstanding the limitation of subsection (1), assistance may be provided to a power-sharing
government only if the President certifies and reports to the Committees on Appropriations that such government,
including all of its ministers or such equivalent, has publicly accepted and is complying with the principles contained in
section 620K(b)(1)(A) and (B) of the Foreign Assistance Act of 1961, as amended.”
21
See CRS Report RS21668, United Nations Relief and Works Agency for Palestine Refugees in the Near East
(UNRWA), by (name redacted).
22
According to the State Department, U.S. contributions in 2008 constituted approximately 17.8% of the UNRWA
General Fund budget and a major share (up to 25%) of other UNRWA funds benefitting Palestinian refugees in
Lebanon, the West Bank, and Gaza. Aggregate contributions from the European Commission and European states
(including both EU members and non-members) and regions constitute approximately 60% of all UNRWA
contributions, according to UNRWA’s 2006-2007 financial statement. See UNRWA Financial Report and Audited
Financial Statements (for the Biennium Ended 31 December 2007) and Report of the Board of Auditors, U.N. General
Assembly Official Records (63rd Session, Supplement No. 5C), 2008.
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the UNRWA and second only to the European Commission as a contributor. U.S. support for
UNRWA is not treated as bilateral economic aid to the Palestinians.
With Hamas in control of the entire Gaza Strip, some lawmakers are concerned that U.S.
contributions to UNRWA could inadvertently be used to support Hamas activities in Gaza.23 A
May 2009 Government Accountability Office (GAO) report has provided details on how
effectively (1) USAID vets its contractors for its West Bank and Gaza program and (2) the State
Department monitors UNRWA’s compliance with its requirements (under the 1961 Foreign
Assistance Act (P.L.87-195), as amended) that it “take all possible measures” to avoid furnishing
assistance to Palestinian terrorists.24
Table 5. U.S. Bilateral Assistance to the Palestinians, FY2006-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
Account
FY2006
FY2007
FY2008
FY2009
FY2010 Estimate
FY2011 Request
148.5
50.0
389.5
776.0a
400.4
400.4
P.L. 480 Title II
4.4
19.488
—
—
—
—
INCLE
—
—
25.0
184.0b
100.0
150.0
Total
152.9c
69.488
414.5
960.0
500.4
550.4
ESF
Source: U.S. State Department, USAID.
a.
Congress provided FY2009 ESF aid to the Palestinians in 3 separate appropriations acts, including: $551
million from P.L. 111-32, $75 million from P.L. 111-8, and $150 million from P.L. 110-252.
b.
Congress provided FY2009 INCLE aid to the Palestinians in 3 separate appropriations acts, including: $109
million from P.L. 111-32, $25 million from P.L. 111-8, and $50 million from P.L. 110-252.
c.
Following the formation of the Hamas-led PA government in March 2006, USAID suspended many of its
programs in the West Bank and Gaza. However, in order to alleviate a humanitarian crisis in the West Bank
and Gaza stemming from the cutoff of aid from Western donors, the State Department and USAID
redirected U.S. assistance to the Palestinian groups not affiliated with Hamas. The assistance came from
several foreign aid accounts and funds appropriated in prior years, which were reprogrammed and delivered
through international organizations such as the United Nations. The State Department also transferred
approximately $35 million in appropriated FY2006 ESF funds for the West Bank and Gaza to other foreign
aid accounts.
In June 2010, the Obama Administration announced that it would provide an additional $400
million in economic aid to Palestinians in the West Bank and Gaza Strip, though only about $70
million represented a new U.S. commitment. According to the U.S. State Department, U.S. funds
will be disbursed as follows:
23
Section 301(c) of the 1961 Foreign Assistance Act (P.L. 87-195), as amended, says that “No contributions by the
United States shall be made to [UNRWA] except on the condition that [UNRWA] take[s] all possible measures to
assure that no part of the United States contribution shall be used to furnish assistance to any refugee who is receiving
military training as a member of the so-called Palestine Liberation Army or any other guerrilla type organization or
who has engaged in any act of terrorism.”
24
See U.S. Government Accountability Office (GAO), Measures to Prevent Inadvertent Payments to Terrorists Under
Palestinian Aid Programs Have Been Strengthened, but Some Weaknesses Remain, GAO Foreign Assistance Report
09-622, May 2009, p. 15, available at http://www.gao.gov/new.items/d09622.pdf.
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•
$240 million investment by the Overseas Private Investment Corporation (OPIC)
in the AMAL mortgage finance program in the West Bank.
•
$75 million in funding through USAID for infrastructure development in the
West Bank and Gaza.
•
$10 million in USAID-funded activities aimed at enhancing the private sector.
•
$40 million to support UNRWA's Emergency Appeal for Gaza and the West
Bank.
•
$14.5 million in USAID projects for school rehabilitation, small-scale
agriculture, the repair of a hospital facility and other community infrastructure in
Gaza.
•
$10 million for the construction of five new UNRWA schools in Gaza.
•
$5 million to complete nine USAID-funded projects to repair water distribution
and wastewater collection systems in Gaza.
Lebanon
In recent years, U.S. assistance to Lebanon has increased nearly six-fold due to a strong U.S.
commitment to support Lebanon’s internal security and economy in the wake of multiple crises
between 2005 and 2009. Syria’s 2005 withdrawal from Lebanon and the election of the March
14th coalition opened the door for an expanded U.S. role in Lebanon. Subsequent domestic and
regional events, such as the 2006 Hezbollah-Israel war, Lebanese military operations against
militants in Palestinian refugee camps (2007), and Hezbollah activities against the government
(2008), all reinforced the need for expanded U.S. support.
U.S. economic assistance is used both to strengthen USAID democracy and development
programming and to reduce Lebanon’s external debt. Congress also has sought to ensure that U.S.
aid supports educational scholarships for students in Lebanon with high financial need.
U.S. military aid is used to train and equip the Lebanese Armed Forces (LAF) and the Internal
Security Forces (ISF). In annual foreign operations legislation, Congress has sought to ensure that
the State Department establish vetting procedures to determine eligibility to participate in U.S.
training and assistance programs in order to ensure that U.S. aid does not benefit Hezbollah
fighters.25
For FY2011, the Obama Administration is seeking $246.3 million in total aid for Lebanon.
According to the U.S. State Department, the FY2011 request, among other things, “will build
critical institutions, particularly Lebanon’s security services - the Lebanese Armed Forces (LAF)
25
In conference report language accompanying P.L. 111-32, the Supplemental Appropriations Act, 2009, lawmakers
wrote that “no assistance may be made available for obligation until the Secretary of State reports to the Committees on
Appropriations on the vetting procedures in place to determine eligibility to participate in United States training and
assistance programs funded under this account. The conferees direct the Secretary of State to report on the procedures
in place to ensure that no funds are provided to any individuals or organizations that have any known links to terrorist
organizations including Hezbollah, and mechanisms to monitor the use of the funds. The conferees direct that the
Department of State consult with the Committees on Appropriations prior to the obligation of funds provided for
assistance for Lebanon in this title.” See H.Rept. 111-151.
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and Internal Security Forces (ISF) - to address border security, counter negative extremist
elements, and curb the influence of Syria and Iran.”
In addition to bilateral assistance, U.S. aid also supports the United Nations peacekeeping mission
in southern Lebanon, known as the UN Interim Force in Lebanon or UNIFIL. Lebanon also is a
recipient of Department of Defense Global Train and Equip funds, authorized by Section 1206 of
the National Defense Authorization Act for Fiscal Year 2006 (P.L. 109-163). Since its inception in
FY2006, DoD has provided $61 million to Lebanon for counterterrorism assistance.
Table 6. U.S. Assistance to Lebanon, FY2006-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
Account
FY2006
FY2007
FY2008
FY2009
FY2010 Estimate
FY2011 Request
ESF
39.600
334.6
44.636
67.5
109.0
109.0
FMF
3.713
224.8
6.943
159.7a
100.0
100.0
INCLE
—
60.0
.496
6.0
20.0
30.0
NADR
2.978
8.5
4.745
4.0
6.8
4.8
IMET
.752
.905
1.428
2.278
2.5
2.5
DA
2.000
—
—
—
—
—
Total
49.043
628.805
58.248
239.478
238.3
246.3
Source: U.S. State Department, USAID.
a.
Congress provided FY2009 FMF aid to Lebanon in 3 separate appropriations acts, including: $69 million
from P.L. 111-32, $32.5 million in P.L. 110-252, and $58.2 million from P.L. 111-8.
Table 7. U.S. Contributions to UNIFIL
(regular and supplemental appropriations; current year $ in millions)
Fiscal Year
CIPA Account
FY2007
184.0
FY2008
35.628
FY2009
186.4
FY2010
210.914
FY2011
212.0
Source: U.S. State Department
Other Recipients and Programs
Excluding the region’s top recipients of U.S. assistance (such as Israel, Egypt, and Jordan), the
rest of the Middle East receives only a small portion of the total bilateral assistance to the region.
The following table provides aid figures for individual countries not listed in the “country
summaries” section.
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Table 8. Other Regional Recipients, FY2006-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
FY2010
Estimate
FY2011
Request
1.798
2.610
2.770
.813
.500
.950
.550
—
.198
—
—
.870
.823
.840
.696
.898
.950
.950
DA
—
—
—
.400
.710
.400
ESF
—
—
.400
—
—
—
Bahrain Total
19.005
17.630
5.840
9.161
20.800
21.700
FMF
15.593
15.750
3.968
8.000
19.000
19.500
NADR
2.761
1.240
1.250
.500
1.100
1.500
IMET
.651
.640
.622
.661
.700
.700
Kuwait Total
.628
1.090
—
.015
.015
.010
NADR
.628
1.070
—
—
—
—
IMET
—
.020
—
.015
.015
.010
Libya Total
—
—
.633
3.250
.780
.875
NADR
—
—
.300
.750
.300
.275
IMET
—
—
.333
—
.330
.350
ESF
—
—
—
2.500
—
—
FMF
—
—
—
—
.150
.250
Morocco Total
35.198
40.170
26.661
25.196
35.296
42.500
ESF
10.890
18.000
15.374
—
3.000
3.000
FMF
12.375
12.500
3.625
3.655
9.000
9.000
NADR
.775
1.295
1.317
.625
1.200
1.100
INCLE
.990
1.000
.496
1.000
.750
3.000
DA
8.284
5.400
4.136
18.000
19.546
24.500
IMET
1.884
1.975
1.713
1.916
1.800
1.900
Oman Total
15.395
16.505
8.229
9.400
15.028
16.150
FMF
13.860
14.000
4.712
7.000
11.848
13.000
NADR
.400
1.370
2.089
.950
1.655
1.500
IMET
1.135
1.135
1.428
1.450
1.525
1.650
Qatar Total
.906
1.493
.282
—
.010
.010
NADR
.906
1.493
.268
—
—
—
IMET
—
—
.014
—
.010
.010
Saudi Arabia Total
1.576
.420
.113
.361
.208
.370
NADR
1.576
.400
.099
.350
.200
.360
IMET
—
.020
.014
.011
.008
.010
Country/Account
FY2006
FY2007
Algeria Total
.888
1.915
2.107
NADR
.065
1.075
INCLE
—
IMET
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FY2009
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FY2010
Estimate
FY2011
Request
14.600
19.150
7.200
8.345
12.000
15.000
4.900
—
.992
.800
2.000
—
.025
.755
.497
.100
.200
—
INCLE
—
—
.198
—
—
—
IMET
1.847
1.975
1.713
1.700
1.950
2.300
United Arab
Emirates Total
.961
1.335
.314
.925
.240
.240
NADR
.961
1.335
.300
.925
.230
.230
IMET
—
—
.014
—
.010
.010
18.700
25.336
18.680
39.925
67.250
106.600
8.415
8.500
3.952
2.800
12.500
35.000
—
—
2.833
3.000
8.000
21.000
ESF
7.920
12.00
1.500
19.767
5.000
34.000
NADR
1.441
3.751
4.034
2.125
4.650
4.500
INCLE
—
—
.496
—
1.000
11.000
DA
—
—
4.913
11.233
35.000
—
IMET
.924
1.085
.952
1.000
1.100
1.100
Country/Account
FY2006
FY2007
Tunisia Total
10.285
11.230
11.475
FMF
8.413
8.500
ESF
—
NADR
Yemen Total
FMF
Global Health Child
Survival
FY2008
FY2009
Source: U.S. State Department, USAID.
Foreign Aid Issues
Promoting Democracy and Reform
Overview
Since the terrorist attacks of 9/11 and the U.S. invasion of Iraq in 2003, the degree to which the
United States promotes democracy, human rights, and reform across the Middle East has been the
subject of vigorous debate. Some experts argue that the United States should advocate strongly
for democracy in the Arab world and beyond (such as in Iran) as a counterweight to antiAmerican extremism and acts of terrorism. Democracy advocates assert that the lack of good
governance in the region is the reason why most Arab countries score low on various socioeconomic development indicators. They suggest that the key to the region’s stability and
prosperity, a key U.S. national security interest, is democratization, even if it entails the
empowerment of certain Islamist movements that oppose peace with Israel and security
cooperation with the United States.
On the other hand, foreign policy “realists” insist that the pursuit of U.S. strategic interests should
be paramount in dealing with the region’s authoritarian governments. Although most realists
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would likely encourage the United States to incorporate a reform strategy into its overall policy
for the region, in their view, it should not supersede more vital U.S. goals, such as resolving the
Arab-Israeli conflict. As the United States scales back its involvement in Iraq, some experts
charge that, short of a policy of regime change, the U.S. government has limited ability to
dramatically restructure a foreign nation’s political system, particularly in the Middle East.
Overall, many experts have charged that the U.S. commitment to promoting democracy in the
Arab world and in Muslim-majority countries has waned and realism has replaced idealism in
U.S. foreign policy. Since the 2006 victory of Hamas in Palestinian Authority elections, the 2006
War in Lebanon, and public revelations of Iran’s expanding nuclear program, the United States
appears to have less aggressively pursued political reform as a counterweight to Islamist-inspired
radicalism. Regional security issues are seen as having returned to the forefront of U.S. policy, as
U.S. officials have concentrated more on revitalizing the peace process, stabilizing Iraq, winning
the war in Afghanistan and Pakistan, and preventing Iran from developing nuclear weapons.
Critics charge that the Obama Administration has downplayed the role of democracy promotion
in U.S. foreign policy, while Administration officials suggest that President Obama has attempted
to strike a balance between the realist and idealist camps. Some observers believe that the
Administration has attempted to repair U.S.-Arab bilateral relations in the wake of the previous
Administration’s “freedom agenda.” In his June 2009 Cairo speech, President Obama remarked,
“I know—I know there has been controversy about the promotion of democracy in recent years,
and much of this controversy is connected to the war in Iraq. So let me be clear: No system of
government can or should be imposed by one nation by any other.”
Events on the ground, particularly in Egypt where a possible succession to President Mubarak
may occur in the near future, will continue to test the United States’ commitment to promoting
democracy in the region. Iran, where reformists continue to struggle against an alliance of
clerical and military elites, is another country targeted for U.S. support.
U.S. Programs26
U.S. officials promote reform both publically through their rhetoric and behind-the-scenes
through quiet diplomacy. U.S. financial support to foster reform in the Middle East is a third
component of the overall democracy and development approach. Since funding levels are
quantifiable, reform programs are often seen as a barometer for an Administration’s commitment
to the issue. During the Bush Administration, officials created new regional programs and
expanded existing ones to focus U.S. efforts, among other things, on political reform, education,
and women’s rights. The Obama Administration has retained aid programs, such as the Middle
East Partnership Initiative (see section below) intact, while making certain adjustments in how
assistance is delivered, such as channeling some democracy funding away from bilateral
programs and into regional accounts where U.S. support is less overt and therefore a target for
critics.27
26
U.S. funding for democracy promotion in the Middle East also comes from the State Department’s Bureau of
Democracy, Human Rights, and Labor and USAID’s Bureau for Democracy, Conflict, and Humanitarian Assistance.
Congress also supports the National Endowment for Democracy.
27
This decision has generated some controversy in the democracy promotion community in the United States, where
some critics charge that, in the case of Egypt, the Administration reduced overall funding for International nonregistered NGOs working in Egypt and transferred funding for International unregistered NGOs away from the bilateral
(continued...)
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There is no single U.S. government agency or office responsible for coordinating democracy
promotion in the Middle East. Instead, several agencies and initiatives both at the bilateral and
multilateral levels focus on reform. They include the following:
The Middle East Partnership Initiative (MEPI)
MEPI is an office within the Bureau for Near Eastern Affairs at the U.S. State Department that
supports political reform, women’s and youth empowerment, quality education, and developing
economic opportunity in the Arab world. Since its inception in 2002, Congress has provided
MEPI with over $582 million in Economic Support Funds, although the program rarely receives
its full Administration request from Congress. In general, while the program has been praised for
helping to elevate democracy promotion in the Arab world to a somewhat higher priority within
the U.S. foreign policy bureaucracy, critics occasionally question its impact and whether the
program is designed to stabilize or destabilize autocratic regimes in the Arab world. Others assert
that its work duplicates much of USAID’s programming in the Middle East region.
One of MEPI’s major contributions to U.S. democracy promotion in the Arab world has been to
directly fund indigenous Arab non-governmental organizations (NGOs) throughout the Middle
East and North Africa in order to amplify their reform agenda in their home countries. In general,
Arab regimes severely restrict local NGOs from receiving external support, and sometimes
MEPI-funded activities have been obstructed by host governments.
In 2004, MEPI began issuing small grants directly to NGOs in the Middle East in order to support
political activists and human rights organizations. Congressional action played a large role in
facilitating MEPI’s small grants program in Egypt. The FY2005 Consolidated Appropriations Act
(P.L. 108-447) stipulated that U.S. funds for democracy and governance activities in Egypt were
no longer subject to the prior approval of the Egyptian government. Now, U.S. government
agencies can directly fund NGOs in Egypt. Consequently, MEPI grants were awarded to some
NGOs to help train election monitors for the 2005 presidential and parliamentary elections in
Egypt. MEPI also supported election monitoring efforts for the 2005 elections in Lebanon as well
as elections in Yemen, Morocco, and Kuwait. In the past, MEPI has provided grants to fund
political activities in Iran and Syria.
Recent examples of MEPI-funded programs include:
•
Saudi Arabia—In April 2009, MEPI began funding a pilot program on women's
social entrepreneurship in Jeddah, Saudi Arabia culminating in a conference in
March 2010 called the U.S.-Saudi Women's Forum on Social Entrepreneurship.
The program’s mission is to teach college-age women in Saudi Arabia how to
build their own businesses and leadership skills. In February 2010, Secretary of
State Hillary Rodham Clinton spoke at the elite Saudi women’s Dar al Hekma
College in Jeddah, one of the partnering organizations for the MEPI program.
(...continued)
assistance program into regional accounts, thereby symbolically paying deference to Egypt’s authoritarian regime.
Supporters of this policy assert that the action simultaneously reduced tensions with a key regional ally without
significantly altering U.S. assistance. For further details, see “The Federal Budget and Appropriations for Fiscal Year
2011,” Project on Middle East Democracy, April 2010.
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•
Israel—In conjunction with the New Israel Fund, MEPI funds the Min Ajlina
(“For Us”) Bedouin Women's Empowerment Project in Israel's Negev region.
The goal of the project is to strengthen Bedouin women as leaders in order to
advance the status and lives of Bedouin women in the Negev.
•
Egypt—In 2009, MEPI supported the Egyptian Association for Dissemination
and Development of Legal Awareness (EADDLA) to train young representatives
of Egyptian political parties in political party organization, election organizing
and monitoring, campaigning, and holding elections in democratic systems.
Table 9. Middle East Partnership Initiative Appropriations,
FY2003-FY2011 Request
(regular and supplemental appropriations; current year $ in millions)
ESF
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011 Request
90.0
89.4
74.4
113.8
50.0
49.5
50.0
65.0
86.0
Source: U.S. State Department, USAID.
The Millennium Challenge Account28
The Millennium Challenge Account (MCA) is based on the premise that economic development
succeeds best where it is linked to free market economic and democratic principles and policies,
and where governments are committed to implementing reform measures in order to achieve such
goals. MCA funds are available on a competitive basis to a few countries which have
demonstrated a commitment to sound development policies and where U.S. support is believed to
have the best opportunities for achieving the intended results. These “best-performers” would be
selected based on their records in three areas—ruling justly, investing in people, and pursuing
sound economic policies.
Morocco—Morocco was named eligible for Millennium Challenge Compact assistance on
November 8, 2005. In 2007, Morocco signed a five-year $697.5 million agreement with the
Millennium Challenge Corporation (MCC). At the time, this was the largest compact agreement
the MCC had ever awarded since its establishment in 2004. According to the MCC’s 2008
scorecard for Morocco, the government scores below the median in almost all areas related to
political reform but performs better in fields related to economic freedom and investments in
people. 29
The Compact agreement has multiple components, all aimed at increasing private sector growth.
These include efforts to increase fruit tree productivity ($300.9 million), modernize the smallscale fisheries industry ($116.2 million), and support artisan crafts ($111.9 million). In addition,
the Compact will fund financial services to micro-enterprises ($46.2 million) and will provide
business training and technical assistance aimed at young, unemployed graduates ($33.9 million).
28
29
For more information on the MCC, see CRS Report RL32427, Millennium Challenge Corporation, by (name redacted).
The MCC’s Morocco scorecard is available at http://www.mcc.gov/documents/score-fy08-morocco.pdf.
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Jordan—In FY2006, Jordan was listed by the Millennium Challenge Corporation (MCC) as a
threshold country in the lower middle-income bracket. On September 12, 2006, the MCC’s Board
of Directors approved up to $25 million in Threshold Program assistance for Jordan. Even prior
to the selection, the possible choice of Jordan had come under severe criticism. Freedom House,
the organization whose annual Index of Freedom is drawn upon for two of the “Ruling Justly”
indicators, had urged the MCC Board to bypass countries that had low scores on political rights
and civil liberties. It argued that countries like Jordan that fall below 4 out of a possible 7 on its
index should be automatically disqualified. Jordan, however, did well on three of the six other
indicators in this category. Several development analysts further argued that Jordan should not be
selected, because the MCA is not an appropriate funding
Near East Regional
source. They assert that Jordan already is one of the largest
Democracy
Funding
recipients of U.S. aid, has access to private sector capital, and is
FY2009 $25 million
not a democracy. In selecting Jordan, the MCC Board appears
not to have been swayed by these arguments.
FY2010 $40 million
Jordan’s Threshold assistance is being used to improve water
access and quality. USAID is the main U.S. government agency
charged with implementing the Jordan Threshold Program.
According to the last update, MCC aims to sign a Compact
agreement in FY2010.
FY2011 Request $40 million
Source: U.S. State Department
Near East Regional Democracy (NERD)
The Near East Regional Democracy fund is considered by many observers to be the Obama
Administration’s successor to previous Bush Administration programs to fund democracy in Iran.
However, unlike earlier appropriations, the NERD account does not specifically single out Iran
for reform programming. In conference report language accompanying P.L. 111-117, the FY2010
Consolidated Appropriations Act, lawmakers specified that $10 million in NERD funding be used
“for programs and activities to expand unmonitored, uncensored access to the Internet for large
numbers of users living in closed societies that have acutely hostile Internet environments,
including in the People's Republic of China and Iran.”30 NERD is managed by the Office of
Iranian Affairs inside the Bureau of Near Eastern Affairs at the State Department. According to
the FY2011 CBJ, the State Department intends to use NERD funding to “emphasize programs
that strengthen local organizations' ability to promote fair electoral processes and legal
frameworks for elections. Additionally, the United States will support projects that provide online
access to independent information about domestic and international electoral issues, including
uncensored information about political competition, in an effort to increase civic participation.”
Foundation for the Future
The Foundation for the Future (FFF) is a multilateral grant-making organization designed to fund
Arab Civil Society Organizations (CSOs) in the Broader Middle East and North Africa (BMENA)
region. The FFF was born out of the Bush Administration’s Broader Middle East and North
Africa Initiative (BMENA), a 2004 multilateral development and reform plan aimed at fostering
economic and political liberalization in a wide geographic area of Arab and non-Arab Muslim
30
P.L. 111-117
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countries. The FFF itself was launched in 2005. It is based in Amman, Jordan with a satellite
office in Washington, D.C.
At the second Forum for the Future31 in Bahrain in 2005, the United States pledged $35 million to
help establish the FFF. In 2007, the State Department obligated $21.3 million from the MEPI
program (see above) to help seed the FFF’s endowment.32
Restrictions on Aid to the Palestinians33
Annual Foreign Operations Appropriations measures include several limitations on funding for
Palestinian organizations and institutions including the following provisions:
•
Limitation on Assistance to the Palestinian Authority. Bans direct U.S.
assistance to the Palestinian Authority (PA) unless the President submits a waiver
to Congress citing that such assistance is in the interest of national security. The
waiver can be for up to one year, and must be accompanied by a report to the
appropriate congressional committees on PA actions to stop terrorism.
•
Limitation on Assistance for the PLO for the West Bank and Gaza. Bans aid
to the Palestinian Liberation Organization (PLO) for the West Bank and Gaza.
No U.S. aid has ever been provided to the PLO. This provision states that no
funds may be provided to the Palestine Liberation Organization for the West
Bank and Gaza unless the President has waived Section 307 of the Foreign
Assistance Act of 1961,34 as amended.
•
Restrictions Concerning the Palestinian Authority. Bans using U.S. funds for
a new office in Jerusalem for the purpose of conducting diplomatic business with
the “Palestinian Authority over Gaza and Jericho.”
•
Prohibition on Assistance to the Palestinian Broadcasting Corporation. Bans
U.S. assistance to the Palestinian Broadcasting Corporation (PBC). Israel accuses
the PBC of inciting violence against Israelis.
•
Auditing USAID’s West Bank and Gaza Program. Calls for annual audits of
all U.S. assistance to the West Bank and Gaza Strip in order to ensure that funds
are not being diverted to terrorist groups. This provision also states that the
Secretary of State shall certify to Congress that the Comptroller General of the
United States has access to financial data on the Economic Support Funds (ESF)
for the West Bank and Gaza. And, the Secretary of State “shall take all
appropriate steps” to ensure that no U.S. assistance is provided to any person or
31
The annual Forum for the Future is a conference that brings together Arab civil society activists and regional
governments to discuss issues of political and economic reform. It was first held in Morocco in 2004. Since then, the
forum has convened in Bahrain (2005), Jordan (2006), Abu Dhabi (2008), and Morocco again in 2009. The 2007 forum
did not take place, though the parallel civil society forum was held.
32
CRS interview with Foundation for the Future staff, May 2010.
33
For additional detail, see CRS Report RS22967, U.S. Foreign Aid to the Palestinians, by (name redacted).
34
Section 307 (P.L. 87-195. Section 307 is at 22 U.S.C. 2227) withholds a proportionate share of U.S. contributions to
international organizations for programs benefitting the PLO. Section 3 of the Middle East Peace Facilitation Act of
1993 provided a presidential waiver for Section 307 (extended in the Middle East Peace Facilitation Act of 1995) that
is the same waiver referred to in annual foreign operations appropriations bills.
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group engaged in terrorism. The Section states that the USAID Administrator
should ensure that all contractors and sub-contractors are audited annually, and
sets aside ESF funds for the USAID Inspector General to conduct audits.
•
Palestinian Statehood. Bans U.S. assistance to a future Palestinian state unless
the Secretary of State certifies, among other things, that the leadership of the new
state has been democratically elected, is committed to peaceful coexistence with
Israel, and is taking appropriate measure to combat terrorism. The President can
waive the certification if he determines that it is important to U.S. national
security interests.
U.S. Support for Arab-Israeli Cooperation
For decades, Congress has appropriated funds to support programs encouraging Arab-Israeli
cooperation. The following is a list of several active programs funded in the annual foreign
operations appropriations bill:
•
Middle East Regional Cooperation (MERC)—The Middle East Regional
Cooperation (MERC) program promotes normalized relations and science and
technology in the Middle East by supporting joint projects, such as those
addressing water issues, of Arab and Israeli scientists. MERC is a long-standing
program initiated by Congress in 1979 after the Camp David Accords and
subsequently expanded beyond Israeli-Egyptian cooperation to include
participation from Morocco, Jordan, Tunisia, Lebanon, and the West Bank and
Gaza. In FY2010, MERC is receiving $4 million in Economic Support Funds
(ESF). The FY2011 request is for $1.5 million.
•
USAID’s Middle East Regional Program (OMEP)—The Office of Middle East
Programs is funded through appropriations from both the Development
Assistance account (DA) and ESF. On average, this office obligates between $2
to $4 million annually to “carry out activities to support trans-boundary
cooperation over water and improve water management and water-use
efficiency.”
•
Middle East Multilaterals (MEM)—MEM was established after the 1991 Madrid
Peace Conference as part of the multilateral track of the peace process. MEM
provides funding and support for cooperative projects that support important
aspects of a comprehensive peace, such as water management and environmental
activities. It is receiving $1 million in FY2010 ESF. MEM grants help support the
work of the Middle East Desalination Center located in Oman.
Historical Background
U.S. Assistance to the Middle East Since 1950
1950-1970
Even when adjusted for inflation, annual U.S. assistance to the Middle East in the decades
following World War II was only a small fraction of current aid flows to the region. Under vastly
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different geopolitical circumstances, U.S. policy was geared toward supporting the development
of oil-producing countries, maintaining a neutral stance in the Arab-Israeli conflict while
supporting Israel’s security, and preventing Soviet influence from gaining a foothold in Iran and
Turkey. U.S. policymakers used foreign aid in the 1950s and 1960s to support these objectives.
U.S. aid to Israel was far less in the 1950s and 1960s than in later years.35 Although the United
States provided moderate amounts of economic aid (mostly loans) to Israel, at the time, Israel’s
main patron was France, which supported Israel by providing it with advanced military
equipment and technology. 36 In 1962, Israel purchased its first advanced weapons system from
the United States (Hawk antiaircraft missiles). 37 In 1968, a year after Israel’s victory in the Six
Day War, the Johnson Administration, with strong support from Congress, approved the sale of
Phantom fighters to Israel, establishing the precedent for U.S. support for Israel’s qualitative
military edge over its neighbors.38
Between 1950 and 1967, the United States courted Egypt using foreign aid as a bargaining chip.
Cold War competition for Egypt was fierce during this time period, as Egypt received a steady
stream of surplus U.S. wheat shipments under the Food for Peace Program (P.L. 480). Despite
these measures, offers of additional economic aid failed to convince Egypt to abandon a parallel
relationship with the Soviet Union, as Egypt pursued a strict Arab nationalist and neutral policy
that shunned close alliances with Western powers and cooperation and peace with Israel.
Internationally, after 1955, Egypt obtained military aid mainly from the Soviet Union.
Beginning in 1965, foreign assistance levels to the region began to decline considerably,
culminating in an almost 80% drop in economic aid to the Middle East by 1970. A host of factors,
most notably the June 1967 War and the rising cost of the war in Vietnam, led Congress to cut
funding for a number of countries. Egypt, which had already seen its annual aid reduced, lost
food aid entirely after it severed relations with the United States during the 1967 War. Jordan and
other Arab states also saw their aid reduced. By 1970, annual appropriations to Iran were close to
being phased out, as many policymakers considered Iran to be a middle-income state that was
economically self-sufficient.
35
In 1948, President Harry Truman, who sympathized with the plight of Israel in its early days, placed an arms
embargo on Israel and her Arab neighbors in order to keep the United States neutral in the ongoing Arab-Israeli
conflict.
36
France supplied Israel with military equipment mainly to counter Egyptian power in the region. In the 1950s and
early 1960s, Egypt antagonized France by providing arms and training to Algerian fighters in Algeria’s war for
independence against France.
37
“America’s Staunchest Mideast Ally,” Christian Science Monitor, August 21, 2003.
38
Section 651 of P.L. 90-554, The 1968 Foreign Assistance Act, expresses the sense of Congress to see the United
States negotiate the sale of supersonic aircraft to Israel.
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Table 10.Total U.S. Foreign Assistance to the Middle East, 1950-1970
(Loans & Grants; Current Year $ in millions)
Country/Region
Economic
Military
Total
Iran
750.9
1,396.7
2,147.6
Israel
986.0
277.3
1,263.3
Egypt
884.1
0.0
884.1
Jordan
601.0
95.0
696.0
Libya
220.6
17.4
238.0
Lebanon
111.0
9.6
120.6
Iraq
45.2
50.0
95.2
5,610.4
2,244.4
7,854.8
Total Near East
(including other
recipients not listed)
Source: U.S. Agency for International Development (USAID), Overseas Loans and Grants, Obligations and Loan
Authorizations July 1, 1945 - September 30, 2001. The report is commonly known at USAID as “The Greenbook.”
1971-2001
The decade of the 1970s witnessed a dramatic increase in U.S. foreign assistance to the Middle
East. After the U.S. withdrawal from South Vietnam, the Middle East as a whole began to receive
more U.S. foreign aid than any other region of the world, a trend that has continued to today. U.S.
foreign aid programs became more comprehensive in nature driven by large assistance packages
to Israel and later to Egypt and other Arab governments.
Large-scale U.S. assistance for Israel increased considerably after a series of Arab-Israeli wars
created a sense among many Americans that Israel was continually under siege. 39 Consequently,
Congress, supported by broad U.S. public opinion, committed to strengthening Israel’s military
and economy through large increases in foreign aid. In 1971, the United States provided Israel
with military loans of $545 million, up from $30 million in 1970. Also in 1971, Congress first
designated a specific amount of aid for Israel (an “earmark”). Economic assistance changed from
project aid, such as support for agricultural development work, to the Commodity Import
Program (CIP) for the purchase of U.S. goods. 40 In effect, the United States stepped in to fill the
role that France had relinquished after French President Charles De Gaulle refused to supply
Israel with military hardware to protest its preemptive launch of the June 1967 War. Israel became
the largest recipient of U.S. foreign assistance in 1976. From 1971 to the present, U.S. aid to
Israel has averaged over $2 billion per year, two-thirds of which has been military assistance.
Just as Israel’s long-standing relationship with the United States was in its incipient stages, Egypt,
its economy in desperate need of investment and capital after two wars, began to look to the
United States to help stimulate economic growth. Egypt’s new leader, Anwar Sadat, who had
39
Between 1967 and 1973, Israel and its Arab neighbors fought the June 1967 War, the ensuing War of Attrition
(1969), and the October 1973 War. Israel also was engaged in continual low level guerrilla warfare with the Palestinian
Liberation Organization and other guerilla groups, which had bases in Jordan and later in Lebanon. The 1974
emergency aid for Israel, following the 1973 war, included the first U.S. military grant aid.
40
The Commodity Import Program for Israel ended in 1979 and was replaced with direct, unconditional cash transfers.
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been eager to rid Egypt of excessive Soviet influence and embark on a program of economic
liberalization, improved U.S.-Egyptian relations in the mid 1970s, leading to a resumption in
economic aid in 1975, and the signing of two disengagement agreements with Israel concerning
the Sinai desert. To a lesser extent, the United States significantly increased its economic and
military aid to Jordan after the 1970-1971 civil war, in which the Jordanian Armed Forces
expelled Palestinian guerrillas from Jordan where they had seriously threatened stability.
The 1979 peace treaty between Israel and Egypt ushered in the current era of U.S. financial
support for peace between Israel and her Arab neighbors. In exchange for a complete cessation of
hostilities and Israel’s return of the Sinai Peninsula, the United States provided a total of $7.3
billion to both parties in 1979. The “Special International Security Assistance Act of 1979” (P.L.
96-35) provided both military and economic grants to Israel and Egypt at a ratio of 3 to 2,
respectively. 41 From the Egyptian standpoint, U.S. funds helped to subsidize its defense budget
and upgrade its aging Soviet hardware. Egypt became the second largest recipient of U.S. aid
after 1979.
Since the Camp David Accords, U.S. assistance levels have remained relatively consistent, and
the United States has continued to support the peace process and the strengthening of Israel. Israel
and Egypt have been the top two regional recipients of U.S. aid for more than two decades, while
Jordan became a leading recipient in the 1990s. Notable events involving significant transfers of
U.S. aid since the 1979 Camp David Accords include the following:
•
In 1985, Congress approved a $2.25 billion supplemental funding package for
Israel, Egypt, and Jordan to help stabilize their deteriorating economies.
•
In 1991, Egyptian support for the U.S.-led international coalition against Iraq’s
invasion of Kuwait led Congress to authorize the cancellation of Egypt’s $6.7
billion military debt. Congress also provided Israel $650 million in emergency
ESF grants to pay for damage and other costs from the war. In addition, Israel
was given Patriot missiles during the Persian Gulf war. Aid to Jordan was
reduced significantly (nearly a 75% overall decrease) after the late King Hussein
was unwilling to join the allied coalition against Iraq.
•
In October 1992, Congress approved $10 billion in loan guarantees for Israel to
help it absorb a massive influx of Jews from the former Soviet Union.42 The
approval of the loan guarantees was delayed due to disagreements between the
George H.W. Bush Administration and Israel over use of U.S. funds in the West
Bank and Gaza Strip. Of the $10 billion authorized, the United States deducted
$774 million as a penalty for Israeli settlement construction in the West Bank and
Gaza Strip, leaving $9.226 billion available to cover Israeli loans.
•
In September 1993, after Israel and the Palestinian Liberation Organization
(PLO) accorded mutual recognition of each other in a step intended to lead to a
41
This ratio is not found in the text of the 1979 Israel-Egypt Peace Treaty. U.S. officials have not officially recognized
the ratio. The Egyptian government claims that a 3 to 2 ratio between Israel and Egypt was established during the
negotiations.
42
The U.S. loan guarantee to Israel is not a direct transfer of U.S. government funds to Israel’s treasury. Rather, it is a
guarantee on a commercial loan between the borrower (Israel) and a private lender. A U.S. subsidy may be
appropriated and set aside in a Treasury account, held against a possible default or may be paid by the borrower
(Israel). The subsidy usually is a percentage of the total loan based in part on the credit rating of the country.
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future peace agreement, the United States offered $500 million ($125 million in
loans or loan guarantees and $375 million in grants) over five years for economic
development of the Palestinian entity.43
•
In 1994, in recognition of Jordan’s signing a peace treaty with Israel, President
Clinton asked Congress to pass legislation to forgive Jordan’s $702.3 million
debt to the United States (approximately 10% of Jordan’s worldwide debt).
Congress appropriated a total of $401 million in subsidies, which under pertinent
budgetary procedures were sufficient to forgive the entire $702.3 million owed to
the United States at the time.
•
In November 1999, Congress approved $400 million in grants for the
Palestinians, $300 million for Jordan, and $1.2 billion for the Israelis in 2000 to
fund the implementation of the Wye River Agreement.44
Table 11.Total U.S. Assistance to the Middle East: 1971-2001
(loans and grants; current year $ in millions)
Country/Region
Economic
Military
Total
Israel
28,402.9
50,505.7
78,908.6
Egypt
25,095.8
27,607.0
52,702.8
Jordan
2,440.1
2,137.2
4,577.3
Lebanon
470.5
273.7
744.2
Palestinians
703.4
0.0
703.4
Syria
539.0
0.0
539.0
62,449.8
82,519.2
144,969.0
Total Near East
(including other
recipients not listed)
Source: U.S. Agency for International Development (USAID), Overseas Loans and Grants, Obligations and Loan
Authorizations July 1, 1945 - September 30, 2001. The report is commonly known at USAID as “The Greenbook.”
43
See CRS Report RL33530, Israeli-Arab Negotiations: Background, Conflicts, and U.S. Policy, by (name
redacted).
44
Signed on October 23, 1998, the Wye River Agreement delineated steps to complete the implementation of 1993
Oslo Peace agreement between Israelis and Palestinians. See CRS Report RL33530, Israeli-Arab Negotiations:
Background, Conflicts, and U.S. Policy, by (name redacted).
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Appendix. Glossary
Bilateral assistance
Economic aid provided by the United States directly to a country or through
regional programs to benefit one or more countries indirectly.
Development assistance (DA)
Aid provided under Chapters I and 10 of the Foreign Assistance Act primarily
designed to reduce poverty and promote economic growth.
Economic Support Fund (ESF)
An appropriation account for funding economic assistance to countries based on
considerations of special economic, political or security needs and U.S. interests.
Foreign Assistance Act, 1961
(FAA)
The primary, permanent authorization for conducting U.S. foreign assistance
programs.
Foreign Military
Financing (FMF)
The major U.S. military aid program extending credits on a grant basis to finance
U.S. overseas arms transfers.
International Military Education
and Training (IMET)
A U.S. military aid program providing grant military training to selected foreign
military and civilian personnel.
Iraq Relief and Reconstruction
Fund
(IRRF)
A catch-all development and security account controlled by the President
containing funds for reconstruction activities in Iraq.
Middle East Partnership Initiative
(MEPI)
A State Department program to encourage political, economic, and educational
reforms in Arab countries.
Multilateral assistance
Assistance which the United States provides to developing nations through
multilateral development banks, United Nations agencies, and other international
organizations with development purposes.
Non-governmental
organizations (NGOs)
Organizations that are independent of government. NGOs are frequently funded
to implement foreign aid programs.
Palestinian Authority
The Palestinian National Authority is a semi-autonomous quasi-state institution
nominally governing the Palestinians in West Bank and the Gaza Strip
Pipeline
The amount of economic assistance that has been obligated by U.S. agencies but
has not yet been expended.
P.L. 480
Refers to the Agricultural Trade Development and Assistance Act of 1954, which
governs administration of the U.S. food aid program. The Department of
Agriculture manages title I of P.L. 480 (food aid provided on concessional loan
terms) and USAID manages title II (food grants provided for development and
humanitarian purposes).
Private Voluntary Organizations
(PVOs)
Non-profit, tax-exempt and nongovernmental organizations established and
governed by a group of private citizens whose purpose is to engage in voluntary
charitable and development assistance operations overseas.
United Nations Relief
and Works Agency for Palestine
Refugees (UNRWA)
UNRWA provides relief and social services, including food, housing, clothing, and
basic health and education to over 4.1 million registered Palestine refugees living
mostly in the West Bank and Gaza Strip, but also in Jordan, Lebanon, and Syria.
U.S. Agency for International
Development (USAID)
An independent government agency under the direction of the Secretary of State
that manages most U.S. bilateral economic assistance programs.
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Author Contact Information
(name redacted)
Specialist in Middle Eastern Affairs
[redacted]@crs.loc.g
ov, 7-....
Congressional Research Service
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