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Summary:
The U.S. war on terrorism has given new impetus to U.S. aid to Asia. In addition to the goals of alleviating poverty, encouraging democratic social and political forces, fostering economic growth and stability, and cultivating bilateral relations in Asia, since September 2001, the United States has redoubled its efforts in fighting terrorism in parts of the region. This report discusses changing U.S. aid programs for 16 East Asian and South Asian countries. Before September 2001, U.S. development and security-related economic assistance to East Asia and South Asia was projected to rise about 8% and 6.5%, respectively, in FY 2002 over FY 2001. After the war on terrorism began, the United States promised increases of 17% and 250% to East Asia and South Asia, respectively. In South Asia, Pakistan and India have become "front line" states in the U.S. campaign against terrorism. Pakistan will receive an estimated $610 million in Economic Support Funds (ESF) in FY 2002. For FY 2003, the State Department has requested $200 million in ESF for Pakistan and $25 million in ESF for India (compared to an estimated $7 million in ESF for India in Fy 2002). The Bush Administration has also significantly raised military assistance to the Philippines, as part of an expansion of U.S. anti-terrorism efforts in Southeast Asia. In FY 2002, the Philippines will receive 80% of all Foreign Military Financing (FMF) assistance to East Asia. For years, the United States has restricted foreign assistance to many countries in East and South Asia in order to encourage democracy and reduce the spread of nuclear weapons capabilities. The Foreign Operations Appropriations Act, 2002 (P.L. 107-115) includes provisions restricting U.S. foreign assistance to Burma, Cambodia, China, Indonesia, and Laos. Both India and Pakistan faced sanctions on nonhumanitarian foreign aid for conducting nuclear weapons tests in 1998. The United States imposed additional restrictions on aid to Pakistan because of debt delinquency and the military coup that took place in 1999. In order to promote bilateral cooperation in the U.S. war on terrorism, on September 22, 2001, President Bush issued a final determination removing all remaining nuclear test-related economic sanctions against Pakistan and India. On October 27, 2001, the President signed S.1465 (P.L. 107-57) into law, providing waiver authority on sanctions related to democracy and debt arrearage against Pakistan through 2003. Asia (East Asia and South Asia combined) remains a large recipient of development aid, about the same level as the Latin America and Carribean region but less than Africa. Indonesia is the largest recipient of U.S. development aid in East Asia. India is one of the largest recipients in the world of U.S. development and food aid. For FY 2003, the Bush Administration has requested $500 million for HIV/AIDS programs, an increase of 25% over FY 2002, which would benefit several Southeast Asian and South Asian countries. Despite the focus on targeted anti-terrorism measures, many policy-makers continue to advocate using foreign aid to build democratic institutions and alleviate poverty in Asia and elsewhere.
