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

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Publication Date: October 2008

Publisher(s): Library of Congress. Congressional Research Service

Series: RL31362

Topic: Economics (Economic relations)
Government (Foreign relations)

Abstract:

This report analyzes annual budget justifications and legislation for foreign operations and discusses U.S. foreign aid trends, programs, and restrictions in 16 East Asian and South Asian countries. This report does not cover aid to Pacific Island nations, North Korea, and Afghanistan.

Since the war on terrorism began in 2001, and the Bush Administration's Millennium Challenge Account (MCA) and Global HIV/AIDS Initiative (GHAI) were initiated in 2004, the United States has increased foreign aid spending dramatically in some regions. The United States has raised military, economic, and development assistance primarily for counterterrorism objectives in the East AsiaPacific (EAP) and South Asia regions, with Pakistan, India, the Philippines, and Indonesia receiving the bulk of the increases. Average annual funding for the EAP region (excluding North Korea) during 2002-2006 was $494 million compared to $368 million in 2001. Annual foreign aid spending for South Asia (excluding Afghanistan) during 2002-2006 averaged $953 million compared to $201 million in 2001. The United States has acknowledged other aid recipients, particularly Malaysia and Mongolia, for cooperating with global counterterrorism efforts and for making progress in developing their economies and democratic institutions.

The Bush Administration has emphasized using foreign aid to promote democracy which it sees as advancing global development and U.S. strategic interests. The United States restricts foreign assistance to many countries in East and South Asia in order to encourage democracy or discourage the spread of nuclear weapons capabilities. Several countries in Asia -- including Burma, Cambodia, Indonesia, Thailand, and Pakistan -- face constraints or conditions on U.S. bilateral assistance because of past or ongoing human rights violations. In 2005, the Bush Administration resumed full military assistance to Indonesia, based upon the satisfaction of legislative conditions and national security grounds. The FY2006 foreign operations appropriations measure renewed the President's waiver authority on coup-related sanctions against Pakistan. The President certified the waiver on February 8, 2006, thus making U.S. foreign assistance available to Pakistan for another year.

The House passed H.R. 5522, the Foreign Operations Appropriations bill for FY2007, on June 9, 2006. The Senate Appropriations Committee reported out the measure on July 10, 2006 (S.Rept. 109-277) but no further action was taken. Foreign operations programs are currently operating under the terms of the continuing appropriations resolution (P.L.109-383) which extends funding at the FY2006 level or the House-approved FY2007 level, whichever is less. The continuing appropriations resolution expires on February 15, 2007.

This report will be updated periodically.