Order Code RL31362
CRS Report for Congress
Received through the CRS Web
U.S. Foreign Aid to East and South Asia:
Selected Recipients
Updated March 7, 2006
Thomas Lum
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
U.S. Foreign Aid to East and South Asia:
Selected Recipients
Summary
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 September 2001, the United States has raised military, economic, and
development assistance for anti-terrorism objectives in the East Asia-Pacific (EAP)
and South Asia regions. Pakistan, India, the Philippines, and Indonesia have received
the bulk of the increases in U.S. foreign assistance to EAP and South Asia since
2001.
The Foreign Operations, Export Financing, and Related Programs
Appropriations Act for FY2006 (P.L. 109-102) raised spending on democracy
programs for Burma and government institution-building in East Timor beyond the
Bush Administration’s FY2006 budget request. P.L. 109-102 also appropriated
Foreign Military Financing (FMF) for the Philippines and Bangladesh in amounts
that exceeded the Administration’s request.
The United States restricts foreign assistance to many countries in East and
South Asia in order to encourage democracy and discourage the spread of nuclear
weapons capabilities. Several countries in Asia — including Burma, Cambodia,
Indonesia, and Pakistan — face constraints or conditions on U.S. bilateral assistance
because of past or ongoing human rights violations. In February 2005, the Secretary
of State determined that the Indonesian government and armed forces had satisfied
legislative conditions for the resumption of full International Military Education and
Training (IMET). In November 2005, the Bush Administration waived restrictions
on Foreign Military Financing to Indonesia on national security grounds pursuant to
Section 599F(b) of P.L. 109-102. The FY2006 foreign operations appropriations
measure renewed the President’s waiver authority on coup-related sanctions against
Pakistan. The President again certified the waiver on February 8, 2006, thus making
U.S. foreign assistance available to Pakistan for another year.
This report will be updated periodically.
Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Congressional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Conflicting Policy Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Indian Ocean Earthquake and Tsunami . . . . . . . . . . . . . . . . . . . . . . . . . 8
Country Aid Levels and Legislative Conditions — East Asia . . . . . . . . . . . . . . . . 9
Burma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
People’s Republic of China (PRC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
East Timor (Democratic Republic of Timor-Leste) . . . . . . . . . . . . . . . . . . . 13
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2004 Tsunami Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Restrictions on IMET and FMF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Laos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mongolia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
South Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Country Aid Levels and Legislative Conditions — South Asia . . . . . . . . . . . . . 26
Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Foreign Aid Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Lifting of Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Appendix. Selected Acronyms for U.S. Foreign Aid
Accounts and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
List of Figures
Figure 1. Economic Support Funds by Region, FY2004 (millions of dollars) . . . 5
Figure 2. Humanitarian and Development Assistance (CSH and DA)
by Region, FY2004 (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 3. Military Assistance by Region, FY2004 (millions of dollars) . . . . . . . . 6
Figure 4. U.S. Foreign Aid (Non-food) to East Asian Countries, FY2004
(millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Figure 5. U.S. Assistance to South Asia (Excluding Food Aid), 2001-2005
(millions of current U.S. dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
List of Tables
Table 1. U.S. Foreign Assistance by Region
(Excluding Food Aid), 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 2. U.S. Assistance to Burma, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 3. U.S. Assistance to Cambodia, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . 10
Table 4. U.S. Assistance to China, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 5. U.S. Assistance to East Timor, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . 13
Table 6. U.S. Assistance to Indonesia, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 14
Table 7. U.S. Assistance to Laos (LPDR), 2002-2006 . . . . . . . . . . . . . . . . . . . . 17
Table 8. U.S. Assistance to Malaysia, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 18
Table 9. U.S. Assistance to Mongolia, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 18
Table 10. U.S. Assistance to Philippines, 2002-2006 . . . . . . . . . . . . . . . . . . . . . 19
Table 11. U.S. Assistance to Thailand, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 20
Table 12. U.S. Assistance to Vietnam, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 21
Table 13. U.S. Assistance to Bangladesh, 2002-2006 . . . . . . . . . . . . . . . . . . . . 26
Table 14. U.S. Assistance to India, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 15. U.S. Assistance to Nepal, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 16. U.S. Assistance to Pakistan, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . . 30
Table 17. U.S. Assistance to Sri Lanka, 2002-2006 . . . . . . . . . . . . . . . . . . . . . . 34
U.S. Foreign Aid to East and South Asia:
Selected Recipients
Overview
Congressional Interests
The United States responds to global humanitarian needs and advances U.S.
foreign policy and national security goals through its foreign assistance programs.
Traditionally, U.S. foreign aid policy has emphasized social and economic
development as foundations for effective governance, democratization, and regional
security. Since the war on terrorism began in 2001 and the Bush Administration’s
Global HIV/AIDS Initiative (GHAI) and Millennium Challenge Account (MCA)
were initiated in 2004, the United States has increased foreign aid spending
dramatically in some regions. Most of the additional anti-terrorism resources have
been targeted toward “front line” states and the conditions that make radical
ideologies attractive, such as poverty, limited educational opportunities, and
ineffective governance. Special emphases also have been placed upon health crises
and democracy building.
The United States has imposed restrictions on non-humanitarian development
aid, Economic Support Funds (ESF),1 and military assistance to some Asian countries
in order to pressure them to improve performance related to democracy, human
rights, weapons proliferation, foreign debt payments, and other areas. Several
countries in Asia, including Burma, Cambodia, China, Indonesia, and Pakistan, have
faced congressional restrictions on U.S. bilateral assistance because of human rights
violations. However, the United States continues to fund non-governmental
organizations (NGOs) that run development and democracy programs in some of
these countries.2 Most sanctions on aid to Indonesia and Pakistan have been lifted.3

1 Economic Support Funds (ESF) programs involve a wide range of uses (except military)
that support U.S. security interests and promote economic and political stability in the
recipient countries and regions.
2 Democracy programs are administered by the U.S. Department of State’s Bureau for
Democracy, Human Rights, and Labor (DRL), and by the U.S. Agency for International
Development’s (USAID) Office of Democracy and Governance in the Bureau for
Democracy, Conflict, and Humanitarian Assistance (DCHA).
3 Sanctions against Pakistan related to the 1999 military coup and debt arrearage have been
waived or lifted on an annual basis since 2002.
CRS-2
Conflicting Policy Objectives. Some policy-makers have expressed
concern that the emphasis on fighting terrorism may conflict with other U.S. foreign
aid objectives, such as promoting democracy and funding development programs.
Others argue that the Millennium Challenge Account — a new, separate assistance
program that conditions U.S. foreign aid on social, economic, and political criteria
— provides a means of rewarding or encouraging good governance independently
of U.S. efforts to garner international cooperation in the war on terrorism.
Furthermore, they contend, the MCA’s emphasis upon good or fair governance in
developing countries supports U.S. economic and security interests around the globe.
However, due to competing budget priorities, since the MCA’s inception in 2004,
Congress has not granted the Bush Administration’s full requests for MCA funding.
Some foreign aid experts contend that new programs, such as the MCA and Global
HIV/AIDS Initiative, are making U.S. foreign aid increasingly incoherent and ad
hoc.4
Funding Trends
The war on terrorism has reoriented foreign assistance priorities in Asia and
accelerated a trend toward increased aid to the region that began in 2000.
Throughout the 1990s, U.S. assistance to Asia fell due to the ebbing of Cold War
security concerns, nuclear proliferation sanctions, and favorable economic and
political trends in much of the region. For example, the withdrawal of U.S. military
forces from the Philippines, nuclear proliferation and other sanctions against
Pakistan, and the reduced need for economic assistance, particularly in Southeast
Asia, contributed to declines in U.S. aid levels. The Asian financial crisis of 1997-98
reversed the downward trend, as USAID funded a regional economic recovery
program for Indonesia, the Philippines, Thailand, and Vietnam.
Following the New York and Washington, D.C. terrorist attacks in 2001,
Pakistan, India, the Philippines, and Indonesia became the foci of the Bush
Administration’s anti-terrorism efforts in South and Southeast Asia, due to their
strategic importance, large Muslim populations, and insurgency movements using
terrorist tactics. These countries have received the bulk of the increases in U.S.
foreign aid (non-food) to the South Asia and East Asia-Pacific regions. Average
yearly U.S. assistance to Pakistan during 2002-2005 is estimated to be $675 million
compared to $3.4 million in 2000-2001. Annual U.S. assistance to India has
increased by over 50% in 2002-2005 compared to 2000-2001, while annual U.S.
assistance to the Philippines during the same period has tripled compared to 2000-
4 Murray Hiebert, “More Aid, but New Strings,” Far Eastern Economic Review, February
20, 2003; Harold Molineu, “Linking Aid to Democracy Will Be a Challenge,” Newsday,
March 5, 2003; Paolo Pasicolan, “How to Prevent the Millennium Challenge Account from
Becoming Like Traditional Foreign Aid,” Heritage Foundation Executive Memorandum,
no. 892, July 14, 2003; Emad Mekay, “War Spending Expected to Cut into Foreign Aid,”
Global Information Network, September 17, 2003; InterAction Policy Paper, “Foreign
Assistance in Focus: Emerging Trends,” November 2003. For further information, see CRS
Report RL32427, The Millennium Challenge Account: Implementation of a New U.S.
Foreign Aid Initiative, by Larry Nowels; CRS Report RS21181, HIV/AIDS International
Programs: Appropriations, FY2003-FY2005, by Raymond W. Copson.
CRS-3
2001.5 Beginning in 2004, both Indonesia and the Philippines received new funding
for education programs in efforts to promote diversity, non-violent resolution of
social and political conflict (Indonesia), and livelihood skills among Muslims
residing in impoverished and conflict-ridden areas (southern Philippines).
The Bush Administration has bolstered democracy programs as a means toward
reducing the appeal of terrorist movements. The Department of State’s Human
Rights and Democracy Fund (HRDF) increased from a yearly average of $13 million
in 2001-2002 to $31.4 million in 2003, $34.2 million in 2004, and $35.7 million in
2005. Nearly one-third of the Democracy Fund is allocated to Asia, with a large
portion supporting democracy programs in China.6 P.L. 109-102, the Foreign
Operations, Export Financing, and Related Programs Appropriations Act for
FY2006, recommends $63.2 million for the HRDF.
Some analysts have estimated that the MCA would substantially bolster U.S.
foreign assistance to Asia, if fully funded and if several candidate countries in Asia
were chosen.7 Since the program’s inception, however, Congress has not provided
it with the levels of funding that the Bush Administration has requested. The
Consolidated Appropriations Act, FY2004 (P.L. 108-199) extended nearly $1 billion
to the Millennium Challenge Corporation (MCC) for development assistance,
compared to the Bush Administration’s request of $1.6 billion. Congress
appropriated $1.5 billion and $1.77 billion for the MCC in 2005 and 2006,
respectively, compared to the President’s requests of $2.5 billion for 2005 and $3
billion for 2006. Three Asian countries are eligible to apply for MCA assistance —
East Timor, Mongolia, and Sri Lanka — while two countries — Indonesia and the
Philippines — have been designated as “threshold” or close to meeting MCA criteria
and eligible for assistance in qualifying.
Africa remained the largest regional recipient of humanitarian and development
assistance — Child Survival and Health (CSH) and Development Assistance (DA)
in FY2004.8 The largest regional recipient of Economic Support Funds in FY2004
was Near East Asia (Middle East) while the largest recipient of military assistance
was Near East Asia followed by South Asia.9 See Table 1, Figures 1-3, and
Appendix.
5 FY2005 figures are based upon the FY2005 Congressional Budget Justification for Foreign
Operations.
6 The Human Rights and Democracy Fund, administered by the Bureau of Democracy,
Human Rights, and Labor (DRL) of the Department of State, was established by the Foreign
Relations Authorization Act, FY2003 (P.L. 107-228).
7 Murray Hiebert, “More Aid, but Strings Attached,” Far Eastern Economic Review,
February 20, 2003.
8 The State Department divides foreign aid allocations into six regions: Africa, East Asia-
Pacific (EAP), Europe and Eurasia, Near East Asia (Middle East), South Asia, and Western
Hemisphere (Latin America and Carribean).
9 Military Assistance includes International Military Education and Training (IMET),
Foreign Military Financing (FMF), and Peace keeping Operations (PKO).
CRS-4
Table 1. U.S. Foreign Assistance by Region
(Excluding Food Aid), 2002-200610
(millions of current U.S. dollars)
FY2004
FY2005
FY2006
FY2002
FY2003
actual
est.
request
Africa
1,481
1,706
2,091
2,444
2,803
East Asia-
Pacific
455
477
474
523
489
(excluding
North. Korea)
Europe and
2,435
2,871
1,577
1,401
1,266
Eurasia
Near East Asia
5,567
8,409
5,556
5,343
5,878
South Asia
(excluding
1,403
785
685
966a
969
Afghanistan)
Western
1,385
1,559
1,545
1,713
1,585
Hemisphere
Sources: U.S. Department of State, FY2006 Budget Request — International Affairs; U.S.
Department of State, FY2005 Congressional Budget Justification for Foreign Operations; United
States Agency for International Development, FY2005 Budget Justification to the Congress.
a. This table reflects the President’s FY2005 Supplemental Budget Request, which includes $150
million in FMF for Pakistan.
10 USAID administers emergency and humanitarian food assistance pursuant to P.L. 480,
Title II (the Agricultural Trade Development Act of 1954, as amended). USDA’s Foreign
Agricultural Service (FAS) administers P.L. 480, Title I — sales of agricultural
commodities under concessional or favorable credit terms, Food for Progress programs
(Food for Progress Act of 1985), Food for Education (Farm Security and Rural Investment
Act of 2002), and Section 416(b) (Agricultural Act of 1949, as amended) — donation of
surplus commodities.
CRS-5
Figure 1. Economic Support Funds
by Region, FY2004
(millions of dollars)
Europe 70
Near East 1,616
EAP 159
Africa 74
Western Hemis 148
South Asia 1138
Figure 2. Humanitarian and Development
Assistance (CSH and DA)
by Region, FY2004
(millions of dollars)
Africa 943
EAP 184
Europe 6
South Asia 417
Near East 6
Western Hemis 409
CRS-6
Figure 3. Military Assistance
by Region, FY2004
(millions of dollars)
Europe 261
EAP 50
Africa 62
Near East 3761
Western Hemis 133
South Asia 520
East Asia
Major objectives and program areas for U.S. assistance in East Asia include
counter-terrorism, economic growth, HIV/AIDS prevention, the development of civil
society, democratization, environmental management, and restricting the
international flow of arms. The United States also sponsors counter-narcotics,
counter-trafficking-in-persons, and de-mining activities in the region. Since 2001,
foreign aid spending in East Asia has grown markedly, largely due to anti-terrorism
efforts in the Philippines and Indonesia. The Philippines, a major non-NATO ally,
and Indonesia, a democratizing nation with the world’s largest Muslim population,
are homes to several insurgency movements and radical Islamist organizations, some
with ties to Al Qaeda, such as the Abu Sayyaf Group (Philippines) and Jemaah
Islamiyah (Indonesia). Furthermore, Jemaah Islamiyah reportedly has made small-
scale attempts to recruit members or smuggle terrorist weapons in Burma, Cambodia,
and Laos.11 USAID’s programs in East Asia aim to address the conditions that may
be conducive to radical ideologies and terrorism — poverty and unemployment, lack
of education, failing governments, political disenfranchisement, and violent conflict.
In October 2003, the Bush Administration announced initiatives to support education
programs in Muslim communities in the Philippines and in Indonesia as part of its
regional counter-terrorism efforts.
11 See also CRS Report RL31672, Terrorism in Southeast Asia, by Bruce Vaughn, et al.
CRS-7
Figure 4. U.S. Foreign Aid (Non-food)
to East Asian Countries, FY2004
(millions of dollars)
Burma 12.9
Vietnam 22
Cambodia 52
Thailand 9
China 13.5
E. Timor 27
Philippines 111
Mongolia 14
Indonesia 122
Malaysia 1
Laos 3.4
Among EAP countries (excluding the Pacific Islands), in FY2004, Indonesia
was the largest recipient of U.S. foreign aid, particularly humanitarian and
development assistance and ESF, followed by the Philippines. The Philippines was
the region’s largest beneficiary of Foreign Military Financing (FMF) and
International Military Education and Training (IMET). Thailand and Malaysia were
the second- and third-largest recipients, respectively, of IMET. Laos, the Philippines,
and Thailand each received $2 million in counter-narcotics assistance and law
enforcement assistance (INCLE). Indonesia, Cambodia, and Vietnam were the
largest recipients of Non-proliferation, Anti-terrorism, De-mining, and Related
programs (NADR). See Figure 4. Vietnam is the only Asian country to receive
Global HIV/AIDS Initiative (GHAI) funding.
Economic Support Funds support several EAP regional programs. These
include the Association of Southeast Asian Nations (ASEAN) fund, Anti-Terrorism
Assistance, Developing Asian Institutions Fund, and Regional Women’s Issues. The
ASEAN fund, introduced in FY2004, promotes regional cooperation on several
fronts, including terrorism, HIV/AIDS, human trafficking, narcotics, and economic
integration and development. Anti-Terrorism Assistance provides grants for
equipment and training for terrorism event responses and investigations. The Asian
Institutions Fund supports multilateral fora such as the Asia-Pacific Economic
Cooperation (APEC) meeting and the ASEAN Regional Forum (ARF). Asia Near
East (ANE) regional programs, administered by USAID, include the East-Asia and
Pacific Environmental Initiative and post-tsunami reconstruction. EAP also receives
assistance through USAID’s Regional Development Mission-Asia, including
programs for reducing trafficking in persons, improved economic policy and
governance, protecting the rights of people with disabilities, and the prevention and
control of HIV/AIDS and other infectious diseases.
CRS-8
Foreign Aid Restrictions. In some East Asian countries, the United States
has withheld assistance or restricted it to non-governmental organizations (NGOs)
or to democratic political groups in response to government actions that the United
States has deemed undemocratic. The Consolidated Appropriations Act for FY2005
included human rights-related provisions restricting some U.S. foreign assistance to
Burma, Cambodia, and Indonesia while supporting Burmese dissident groups and
promoting civil society, human rights, and democracy in Cambodia, China, East
Timor, Indonesia, Mongolia, and Thailand.
Indonesia has faced sanctions on military assistance following the Indonesian
army’s reported human rights violations in East Timor in 1999.12 The Consolidated
Appropriations Legislation for FY2003 (PL 108-7) dropped restrictions on IMET to
Indonesia. However, foreign operations appropriations legislation for FY2004 (P.L.
108-199) re-imposed IMET sanctions unless the Secretary of State determined that
the Indonesian government and armed forces (TNI) were cooperating with the
Federal Bureau of Investigation regarding the August 2002 attack in Timika, Papua,
where three school teachers, including two Americans, were killed. P.L. 108-199
continued the ban on FMF unless the President certified that the Indonesia
government was prosecuting those members of the Indonesia armed forces credibly
alleged to have committed gross violations of human rights. These restrictions
remained in effect under P.L. 108-447, the FY2005 foreign operations appropriations
measure, with the exception of FMF to the Indonesian navy to enhance maritime
security. In February 2005, Secretary of State Condoleezza Rice determined that the
Indonesian government and armed forces had cooperated with the FBI’s investigation
into the Papua murders, thereby satisfying legislative conditions, and certified the
resumption of full IMET for Indonesia. The foreign operations appropriations act for
FY2006 (P.L. 109-102), Section 599F(a), continued existing restrictions on FMF,
stating that such assistance may be made available for Indonesia only if the Secretary
of State certifies that the Indonesian government is prosecuting, punishing, and
resolving cases involving members of the TNI credibly alleged to have committed
gross violations of human rights in East Timor and elsewhere. Section 599F(b)
provided that the Secretary of State may waive restrictions on FMF for Indonesia if
such action would be in the national security interests of the United States. In
November 2005, the Secretary of State waived restrictions on FMF to Indonesia on
national security grounds pursuant to Section 599F(b).
Indian Ocean Earthquake and Tsunami. The December 26, 2004
tsunami caused catastrophic losses of lives and property in Aceh province, Indonesia,
with nearly 130,000 persons dead and over 500,000 displaced.13 The Emergency
Supplemental Appropriations Act for Defense, the Global War on Terror, and
Tsunami Relief, 2005 (P.L. 109-13) appropriated $631 million for tsunami recovery
and reconstruction. The Bush Administration has pledged $400 million for relief
and reconstruction efforts in Indonesia and $5.3 million to Thailand.14
12 See the Consolidated Appropriations Act for FY2000 (P.L. 106-113, Section 589).
13 USAID, Indian Ocean — Earthquakes and Tsunamis, Fact Sheet #39 (July 7, 2005).
14 USAID, Tsunami Assistance, One Year Later (December 21, 2005); See also CRS Report
RL32715, Indian Ocean Earthquake and Tsunami: Humanitarian Assistance and Relief
CRS-9
Country Aid Levels and Legislative Conditions —
East Asia15
Burma
Table 2. U.S. Assistance to Burma, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
CSH
0
2,000
0
0
0
DA
0
0
0
0
0
ESF
6,500
6,950
12,923
7,936
10,890
Other
4,000a
3,000a
Totals
6,500
8,950
12,923
11,936
13,890
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture
a. Humanitarian assistance for displaced Burmese and host communities in Thailand through an
unspecified account.
Burma has significant foreign aid needs. It has the largest population of
displaced persons in East Asia and one of the world’s highest HIV/AIDS infection
rates. The country is the world’s largest trafficker of methamphetamine and second-
largest producer of opium. According to USAID, ethnic fighting and deteriorating
economic conditions have compelled 1.6 million persons to flee Burma and displaced
1.5 million Burmese within the country. The United States suspended bilateral
assistance to Burma in 1988 and resumed it on a limited basis in 1993. The United
States restricts assistance to Burma and provides no direct aid to the Burmese
government in response to the Burmese military junta’s (State Peace and
Development Council or SPDC) repression of the National League for Democracy
(NLD), failure to honor the NLD’s parliamentary victory in 1990, and harassment of
its leader, Aung San Suu Kyi, who remains under house arrest.16 Continuing U.S.
sanctions against Burma include opposition to international bank loans to Burma and
a ban on debt restructuring assistance. In addition, the United States shall withhold
contributions to the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM)
in amounts that correspond to the GFATM’s assistance to the Burmese government.17
U.S. foreign aid to Burma is limited mainly to Burmese victims of trafficking, ethnic
minorities, displaced persons, refugees along the Burma-Thailand border, and
Operations, by Rhoda Margesson, et al.
15 Including Southeast Asia and excluding North Korea and Pacific Island nations.
16 For Burma aid sanctions, see P.L. 104-208, Section 570.
17 See P.L. 109-102, Section 526.
CRS-10
Burmese pro-democracy students and mass media personnel living outside the
country.18
On June 11, 2003, the 108th Congress passed the Burmese Freedom and
Democracy Act of 2003 (P.L. 108-61), which bans imports from Burma unless
democracy is restored.
The Organization for Economic Cooperation and Development (OECD) ranks
the United States fourth among Burma’s principal aid donors behind Japan, France,
and Germany.
Cambodia
Table 3. U.S. Assistance to Cambodia, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004
FY2005 estimate
CSH
15,000
22,100
29,360
29,300
28,556
DA
0
3,687
2,750
8,950
5,487
ESF
20,000
15,000
16,900
16,864
14,850
FMF
0
0
0
992
990
NADR
2,290
2,765
3,916
4,170
3,700
Totals
37,290
43,552
52,926
60,276
53,583
Food Aid
P.L. 480 Title
II Granta
1,085
0
703
0
0
FFPb
1,432
1,715
3,444
3,643
—
FFEb
0
650
0
0
—
Section
416(b)b
9,920
0
0
0
—
Sources: U.S. Department of State; USAID; U.S. Department of Agriculture, Foreign Agricultural
Service (FAS).
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
Cambodia ranks 130th out of 175 countries and regions on the United Nations
Development Programme’s Human Development Index, which measures GNP per
capita, life expectancy, and educational attainment. The country’s poverty, primitive
infrastructure, and weak human resource base hinder not only economic but also
political development.
18 The State Department has also awarded grants to the National Endowment for Democracy
(NED) for assisting Burmese pro-democracy groups.
CRS-11
U.S. restrictions on foreign assistance to Cambodia reflect congressional
disapproval of Prime Minister Hun Sen’s seizure of power in 1997, sporadic, ongoing
political violence, and other human rights violations. Foreign operations
appropriations have barred U.S. assistance to the central government of Cambodia
and to the Khmer Rouge tribunal and instructed U.S. representatives to international
financial institutions to oppose loans to Cambodia, except those that meet basic
human needs. The Foreign Operations, Export Financing, and Related Programs
Appropriations Act for FY2006 (P.L. 109-102) does not include restrictions
regarding international bank lending and the Khmer Rouge tribunal but continues the
restriction on aid to the central government. U.S. assistance may be provided only
to Cambodian and foreign NGOs and to local governments. Statutory exceptions
allow for the following categories of U.S. assistance to the central government of
Cambodia: reproductive and maternal and child health care; basic education;
combating human trafficking; cultural and historic preservation; the prevention,
treatment, and control of HIV/AIDS and other infectious diseases; counter-narcotics
activities; and developing international adoptions procedures.19 Cambodia has also
received FMF for border control and counter-terrorism efforts, subject to
congressional notification requirements. ESF for Cambodia supports democracy and
democratic political parties.
Leahy War Victims Funds assist Cambodians injured by land mines
(approximately 800 victims per year). Other foreign aid programs include
strengthening democratic processes and political parties. USAID grantees include
the Asia Foundation, the National Democratic Institute, the International Republican
Institute, and Cambodian NGOs. Cambodia also participates in USAID Office of
Foreign Disaster Assistance (OFDA)-funded activities that enhance flood forecasting
capacity and early-warning information transfer to communities in the Lower
Mekong River Basin.
19 For most of these activities, USAID collaborates with the central government of
Cambodia but continues to provide funding through the country’s large and vibrant NGO
community.
CRS-12
People’s Republic of China (PRC)
Table 4. U.S. Assistance to China, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
ESF
10,000
15,000
13,500a
19,000b
23,000c
ESF/Tibet
—
—
4,000a
4,250b
4,250d
Peace Corps
1,559
977
863
1,476
1,807
Totals
11,559
15,977
18,363
24,726
29,057
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. P.L. 108-199.
b. P.L. 108-447.
c. House Rpt. 109-265.
d. P.L. 109-102, Section 575.
USAID does not have a presence or mission in the People’s Republic of China
(PRC) and China does not receive development aid, largely stemming from U.S.
objections regarding human rights conditions in China. However, the Peace Corps
has been involved in English language and environmental education in China since
1993, and Economic Support Funds (ESF) have been appropriated for democracy,
human rights, and rule-of-law programs in China since 2000, primarily to U.S.-based
non-governmental organizations (NGOs) working in the PRC.
China received only Peace Corps assistance prior to 2000. The consolidated
appropriations act for FY2000 appropriated $1 million for foreign-based NGOs
working in Tibet and authorized ESF for foreign NGOs to promote democracy in
China. For FY2001, the United States extended $28 million to the PRC as
compensation for damages caused by the accidental NATO bombing of the Chinese
Embassy in Belgrade in 1999. Since 2002, Congress has increased its annual
earmark for democracy, human rights, and rule-of-law programs in China, from $10
million in 2002 to $19 million in 2005. Appropriations for cultural preservation,
economic development, and environmental conservation activities in Tibetan
communities in China has also grown. In 2004, the Bureau of Democracy, Human
Rights and Labor (DRL) of the Department of State became the principal
administrator of China democracy programs. Major U.S. grantees have included the
National Endowment for Democracy (NED), the Asia Foundation, Temple
University (School of Law), the American Bar Association, and the Bridge Fund
(Tibet).
The conference agreement (House Rpt. 109-265) on the 2006 foreign operations
appropriations bill (H.R. 3057, signed into law as P.L. 109-102) recommends $20
million for China/Hong Kong/Taiwan from the Human Rights and Democracy Fund.
In addition, NED is to receive $3 million for democracy programs in China. P.L.
109-102 also provides up to $5 million in Development Assistance to American
educational institutions for programs in China related to democracy, rule of law, and
CRS-13
the environment, subject to the regular notification procedures of the Committees on
Appropriations. For Tibet, the FY2006 foreign aid measure authorizes $4 million to
NGOs for cultural preservation, sustainable development, and environmental
conservation in the Tibetan Autonomous Region and in Tibetan communities in
China and $250,000 to NED for human rights and democracy programs related to
Tibet. In addition, the National Endowment for Democracy (NED) provides grants
(approximately $2 million per year since 1999) for programs that promote human
rights, labor rights, legal and electoral reforms, and independent mass media in China
through its annual congressional appropriation.20
Foreign operations appropriations legislation prohibits funding to the United
Nations Population Fund (UNFPA) for programs in China. The United States
continues to impose other restrictions that were put in place in the aftermath of the
1989 Tiananmen Square military crackdown, including “no” votes or abstentions by
U.S. representatives to international financial institutions regarding loans to China
(except those that meet basic human needs) and a ban on Overseas Private
Investment Corporation (OPIC) programs in the PRC. The Foreign Operations
Appropriations Act for FY2002 (P.L. 107-115) lifted the restrictions (effective since
FY2000) requiring that ESF for China democracy programs be provided only to
NGOs located outside the PRC. However, Tibet programs are still restricted to
NGOs. Congress continues to require that U.S. representatives to international
financial institutions support projects in Tibet only if they do not encourage the
migration and settlement of non-Tibetans (Han Chinese) into Tibet or the transfer of
Tibetan-owned properties to non-Tibetans.
East Timor (Democratic Republic of Timor-Leste)
Table 5. U.S. Assistance to East Timor, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
DA
0
0
0
500
0
ESF
25,000
24,838
22,367
21,824
18,810
FMF
1,000
1,990
2,420
1,023
990
IMET
50
119
159
364
297
INCLE
0
0
0
0
1,485
PKO
8,000
3,250
1,050
1,000
0
Peace Corps
612
1,219
1,320
1,402
1,583
Totals
34,662
31,416
27,316
25,613
23,165
Food Aid
P.L. 480 Title
0
0
669a
405b
0
II Grant
20 See General Accounting Office, “Foreign Assistance: U.S. Funding for Democracy-
Related Programs,” February 2004; CRS Report RL31910, China: Economic Sanctions, by
Dianne E. Rennack.
CRS-14
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
East Timor (Democratic Republic of Timor-Leste) gained full independence in
May 2002. The United States supports a range of aid programs in East Timor, one
of Asia’s poorest countries, with the goal of building a viable economy and
democratic political system. Economic programs include developing small-scale
coffee and vanilla production for export, business management training, and health
care for workers. Political activities include supporting independent media, civil
society organizations, and political parties, building judicial institutions, and
strengthening governmental capacity. USAID helped to design East Timor’s
constitution and provided assistance for the presidential elections of 2002, which
many international observers reported as free and fair. U.S. military assistance to the
country helps to equip and train the East Timor Defense Force. In November 2005,
the Millennium Challenge Corporation selected East Timor as eligible for MCA
assistance in 2006.
On March 28, 2003, President Bush issued a certification and report pursuant
to Section 637(a)(2) of the Foreign Relations Authorization Act, FY2003 (P.L. 107-
228), granting excess defense articles and International Military Education and
Training (IMET) to East Timor.21
In addition to the United States, major bilateral donors to East Timor include
Japan, Portugal, and Australia.
Indonesia
Table 6. U.S. Assistance to Indonesia, 2002-200622
(thousands of dollars)
FY2002
FY2006
Account
FY2002
S.A.a
FY2003 FY2004 FY2005 estimate
CSH
35,568
—
31,955
33,000
37,100
28,017
DA
38,704
—
39,016
33,291
27,848
33,212
ESF
50,000
—
59,610
49,705
68,480
69,300
FMF
0
—
0
0
0
990
IMET
405
—
0
599
728
792
NADR 0
8,000
1,008
5,998
5,300
5,750
INCLE
0
4,000
0
0
0
4,950
Totals 124,677
12,000
131,589
122,593
139,456
143,011
21 The President must certify that East Timor has established an independent armed forces;
and that the provision of defense articles and services is in the national security interests of
the United States, and will promote both human rights and the professionalization of the
armed forces in East Timor.
22 This table does not include 2004-2005 tsunami disaster relief.
CRS-15
FY2002
FY2006
Account
FY2002
S.A.a
FY2003 FY2004 FY2005 estimate
Food Aid
P.L. 480
Title I USDA
19,000
—
0
0
0
—
Loan
P.L. 480
Title II
10,400
—
29,540
3,315
11,900
18,190
Grantb
FFPc
10,927
—
0
5,597
6,194
—
Section
416(b)c
11,209
—
7,926
17,700
9,078
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. Supplemental Appropriations (P.L. 107-206).
b. USAID data — includes freight costs.
c. USDA data — does not include freight costs.
The world’s largest Muslim country, Indonesia plays an important role in U.S.
efforts toward curbing terrorism, maintaining regional economic and political
stability, and promoting democracy in Southeast Asia and Muslim countries.
According to the Department of State, Indonesia “has made significant progress in
consolidating democratic reforms and processes” and has “demonstrated its resolve
to fight terrorists” following the bombings in Bali in October 2002 and Jakarta in
July 2003. The State Department’s FY2005 budget request for Indonesia stated that
these developments could have profound, positive implications for U.S. strategic
interests, although serious problems remain, including political corruption, poverty,
a broken educational system, and a lack of governmental capacity.23 The MCC has
designated Indonesia as a “threshold” country for 2006, meaning that it is close to
meeting MCA criteria and may receive assistance in reaching eligibility status.
USAID programs and proposals for Indonesia include the following: CSH
funds for maternal and child health care and HIV/AIDS prevention and treatment;
DA allocations for education, watershed management and water treatment, and trade
and investment; and ESF for several targeted areas — economic policy, democratic
institutions, elections, rule of law, local governmental capacity building, and basic
education. Basic education programs are part of an education initiative announced
by President Bush in October 2003. NADR supports training and expansion of the
Police Counter-terrorism Task Force. INCLE programs support judicial capacity-
building.
2004 Tsunami Relief. The December 26, 2004 tsunami caused catastrophic
losses of lives and property in Aceh province, Indonesia, with nearly 130,000 persons
dead and over 500,000 displaced.24 The Emergency Supplemental Appropriations
23 U.S. Agency for International Development, “FY2005 Budget Justification to the
Congress”; U.S. Department of State, “FY2005 Congressional Budget Justification for
Foreign Operations.”
24 USAID, Indian Ocean — Earthquakes and Tsunamis, Fact Sheet #39 (July 7, 2005).
CRS-16
Act for Defense, the Global War on Terror, and Tsunami Relief, 2005 (P.L. 109-13)
appropriated $631 million for tsunami recovery and reconstruction. The Bush
Administration has pledged $400 million for relief and reconstruction efforts in
Indonesia.
Restrictions on IMET and FMF. The Foreign Operations Appropriations
Act for 2002 (P.L. 107-115, Section 572(a)) stipulated that military assistance (IMET
and FMF) may be provided to Indonesia only if the President determined and
submitted a report to the appropriate congressional committees that the Indonesian
government and armed forces (TNI) were taking effective measures to prosecute and
punish members of the armed forces and militia groups who committed human rights
violations in East Timor in 1999. Notwithstanding the above restrictions, P.L. 107-
115 and subsequent foreign operations measures have allowed for Expanded
International Military Education and Training (E-IMET), available for Indonesia
since 2001, which emphasizes and teaches human rights, military codes of conduct,
and the principles and practices of civilian control of the military. On January 23,
2003, the Senate defeated an amendment to the FY2003 Consolidated Appropriations
bill that would block IMET to the Indonesian military. The Consolidated
Appropriations Resolution for 2003 (P.L. 108-7) applied restrictions only to Foreign
Military Financing (FMF). However, reportedly because of ongoing concerns about
the Indonesian military, no IMET funds were released in 2003.
The Consolidated Appropriations legislation for FY2004 (P.L. 108-199) made
IMET available to Indonesia if the Secretary of State determined that the Indonesian
government and armed forces (TNI) were cooperating with the United States in the
investigation regarding the August 2002 attack in Timika, Papua, in which three
school teachers, including two Americans, were killed. P.L. 108-199 continued the
ban on FMF unless the President certified that the Indonesia government was
prosecuting and punishing those members of the Indonesia armed forces credibly
alleged to have committed gross violations of human rights in East Timor and
elsewhere. The FY2005 appropriations act (P.L. 108-447) contained similar
provisions, but allowed FMF to the Indonesian navy to enhance maritime security.
In February 2005, Secretary of State Condoleezza Rice determined that the
Indonesian government and armed forces had cooperated with the FBI’s investigation
into the Papua murders, thereby satisfying legislative conditions, and certified the
resumption of full IMET for Indonesia. According to the U.S. State Department,
IMET in Indonesia will facilitate counter-terrorism cooperation through improved
communications between United States and Indonesian military officers.
The foreign aid appropriations act for FY2006 (P.L. 109-102) continued existing
restrictions on FMF to Indonesia; however, the law provides that the Secretary of
State may waive restrictions on FMF to Indonesia if such action would be in the
national security interests of the United States. In November 2005, the Secretary of
State exercised the waiver authority pursuant to the law and permitted FMF for
Indonesia. P.L. 109-102 also required the Secretary of State to report on the status
of the investigation of the Papua murders and on cooperation provided by the
Indonesian government in the investigation.
The United States is the second-largest bilateral donor to Indonesia after Japan.

CRS-17
Laos
Table 7. U.S. Assistance to Laos (LPDR), 2002-2006
(thousand of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
CSH
1,000
1,000
500c
0
0
DA
1,000
1,000
0
0
0
IMET
0
0
0
0
49
INCLE
4,200
2,500
2,000
1,984
990
NADR
1,328
1,200
1,412
2,500
3,000
Totals
7,528
5,700
3,912
4,484
4,039
Food Aid
P.L. 480 Title
II Granta
513
685
0
0
0
Section
416(b)b
330
0
0
0
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
c. Leahy War Victims Funds for land mine education.
Laos is one of the poorest countries in the world, with a per capita GDP of $310,
a life expectancy of 54 years, and a literacy rate of 53%. However, the country does
not receive CSH or Development Assistance. Although there are no formal
restrictions, U.S. foreign assistance to Laos remains relatively limited and channeled
through NGOs rather to the government of Laos, due to strained bilateral relations.
INCLE funding supports counter-narcotics efforts.25 NADR assistance focuses on
de-mining activities in cooperation with NGOs and UXO Lao, a quasi-governmental
entity. Unexploded ordnance from the Vietnam War has injured over ten thousand
Laotians and resulted in over five thousand deaths and continues to wreak havoc on
farmers and children. If an IMET agreement with Laos is concluded, funds would
be provided for English language training for Laotian personnel involved in U.S.-
Laos efforts to locate American Missing-In-Action from the Vietnam War. Other aid
programs in Laos include the Laos Economic Acceleration Program for the Silk
Sector (LEAPSS), initiated in 1998, which aims to develop an economic alternative
to opium production, HIV/AIDS prevention, and anti-trafficking-in-persons
activities. Laos participates in Office of Foreign Disaster Assistance (OFDA)-funded
activities that increase flood forecasting capacity and early-warning information
transfer to communities in the Lower Mekong River Basin.
25 Laos is the world’s third-largest producer of opium.
CRS-18
The major bilateral donors to Laos are Japan, Germany, Sweden, France,
Australia, and Norway.
Malaysia
Table 8. U.S. Assistance to Malaysia, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002
FY2003
FY2004
FY2005
estimate
IMET
831
831
939
1,100
891
NADR
150
1,267
230
1,020
1,650
Totals
981
2,098
1,169
2,120
2,541
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
The United States and Malaysia share important interests in Southeast Asia,
including counter-terrorism activities, regional security, trade, and democracy.
Because of its relatively high level of economic development, Malaysia is not a
recipient of U.S. development and economic aid. The United States extends IMET
and NADR funds to the country. IMET helps to familiarize the Malaysian armed
forces with U.S. military doctrine, management techniques, and equipment and
promotes military cooperation between the two countries. IMET also attempts to
impart democratic ideals and norms upon the armed forces of Malaysia. NADR
programs aid in controlling transfers of sensitive materials and technologies that
could contribute to weapons proliferation, and support the Malaysia Counter-
terrorism Center.
Mongolia
Table 9. U.S. Assistance to Mongolia, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002
FY2003
FY2004
FY2005
estimate
ESF
12,000
10,000
9,941
9,920
7,425
FMF
2,000
990
995
992
2,970
IMET
686
767
872
1,009
891
Peace Corps
1,710
1,765
1,646
1,820
1,872
PKO
0
0
1,000
0
0
Totals
16,396
13,522
14,454
13,741
13,158
Food Aid
FFPa
0
3,612
8,572
3,658
—
Section 416(b)a
3,350
0
0
0
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USDA data — does not include freight costs.
CRS-19
U.S. assistance to Mongolia aims to help the strategically-located nation make
its transition to a free market democracy. Economic Support Funds target private
sector development and democratic institution building. FMF assists efforts at
controlling Mongolia’s borders with China and Russia against drugs and illegal
goods trafficking. IMET aims to help transform the Mongolian military from a
Soviet-era organization into one that is compatible with democratic government and
capable of cooperating with U.S. military forces. Since 2004, Mongolia has been
eligible for MCA assistance.

The United States ranks a distant second, behind Japan, in development
assistance. Germany is another major aid donor.
Philippines
Table 10. U.S. Assistance to Philippines, 2002-2006
(thousands of dollars)
FY2002
FY2003
FY2006
Account
FY2002
S.A.a
FY2003
W.S.b
FY2004 FY2005 Est.
CSH
25,599
—
22,920
—
28,850
27,050
22,671
DA
24,459
—
28,209
—
21,568
27,576
25,522
ESF
21,000
12,000
15,000
30,000
17,645
30,720
19,800
FMF
19,000
25,000
19,870
30,000
19,880
29,760
29,700
IMET
2,025
—
2,400
—
2,700
3,000
2,900
INCLE
0
—
0
—
2,000
3,968
1,980
NADR
95
—
2,094
—
750
600
5,150
Peace Corps
2,436
—
2,624
—
2,774
2,846
2,973
PKO
0
—
0
—
15,000
0
0
Totals
94,614
37,000
93,117
60,000
111,167
125,520 110,696
Food Aid (not including freight costs)
P.L. 480 Title I
19,000
—
40,000
—
20,000
20,000
—
USDA Loan
FFPc
1,091
—
0
—
3,517
1,720
—
Section 416(b)c
12,787
—
7,936
—
0
5,644
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. Supplemental Appropriations (P.L. 107-206).
b. Emergency Wartime Supplemental Appropriations (P.L. 108-11).
c. USDA data — does not include freight costs.
The United States shares important security, political, and commercial interests
with the Philippines, a Major Non-NATO ally and front-line state in the war on
terrorism. Since 2001, the Philippines has received the most dramatic increases in
U.S. foreign assistance to the EAP region. The major program areas of U.S. foreign
aid are Muslim Mindanao; corruption and poor economic governance; education;
health care issues; and the environment.
CRS-20
CSH programs in the Philippines include HIV/AIDS prevention, tuberculosis
diagnosis and treatment, and family planning. DA funds support corruption
mitigation and economic and environmental governance. Economic Support Funds
promote economic development and infrastructure in Mindanao, home of the Moro
National Liberation Front, Abu Sayyaf, and other Muslim insurgency groups, some
of which purportedly have ties to Al Qaeda. DA and ESF aid local education
programs as part of an effort, launched in October 2003, to address “political,
economic, and social marginalization of Muslims and other impoverished and
conflict-affected communities in order to build peace and security.”26 FMF
contributes to the military capabilities of the armed forces of the Philippines and to
enhanced cooperation under the U.S.-Philippines Visiting Forces Agreement. IMET
promotes military professionalism, civilian control of the military, and military-to-
military contacts between the United States and the Philippines. INCLE and NADR
help to strengthen Philippine law enforcement, counter-terrorism capabilities, and
control over small arms proliferation. In addition, the Philippines has been made
eligible for priority delivery of Excess Defense Articles (EDA).27
The MCC has designated the Philippines as a “threshold” country for 2006 or
close to meeting MCA criteria and eligible for assistance in qualifying.
The United States signed a Tropical Forest Conservation Act Agreement with
the Philippines on September 19, 2002.28 This accord cancels a portion of the
Philippines’ debt to the United States. The money saved by this rescheduling —
estimated at about $8 million — is to be used for forest conservation activities over
a period of 14 years. In 2004, OFDA provided continued funding for a conflict
preparedness program in Mindanao ($500,000 since 2003).
The United States is the fifth-largest aid donor to the Philippines after Japan,
the Asian Development Bank, Germany, and the World Bank.
Thailand
Table 11. U.S. Assistance to Thailand, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
CSH
1,000
1,500
0
0
0
DA
750
1,250
0
0
0
ESF
0
0
0
992
990
FMF
1,300
1,990
881
1,488
1,485
26 U.S. Agency for International Development, “FY2005 Budget Justification to the
Congress.”
27 Excess Defense Articles consist of used U.S. weapons and equipment given away for
free. See Alex Spillius, “Bush Calls on Asia to Renew Support for War on Terror,” The
Daily Telegraph, October 20, 2003.
28 The Tropical Forest Conservation Act (P.L. 105-214).
CRS-21
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
IMET
1,650
1,768
2,572
2,526
2,376
INCLE
4,000
3,700
2,000
1,608
990
NADR
720
200
1,380
750
1,000
Peace Corps
1,267
1,818
1,840
2,243
2,373
PKO
0
0
500
0
0
Totals
10,687
12,226
9,173
9,607
9,214
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
Thailand is one of five U.S. treaty allies in Asia and was designated a Major
Non-NATO ally in 2003. Thailand has sent troops to both Afghanistan and Iraq and
has aggressively pursued terrorist cells within its borders. In 2003, Thai authorities,
in cooperation with the United States, apprehended Indonesian-born Hambali in
Thailand. Hambali is believed to be the operations chief of the Islamic militant
group Jemaah Islamiyah and mastermind of the 2002 bomb attack in Bali, the 2003
bombing in Jakarta, and other attacks in the Philippines. FMF, IMET, and INCLE
programs in Thailand support counter-terrorism activities, international peacekeeping
and reconstruction efforts (East Timor, Aceh, Afghanistan, and Iraq), military
professionalism and interoperability with U.S. forces, counter-narcotics efforts, and
border-control. NADR funds provide assistance for the control, detection, and
interdiction of transfers of sensitive materials and technologies that could contribute
to weapons proliferation. Since 2005, Thailand has received ESF for programs to
promote democracy and press freedoms.
Thailand participates in OFDA-funded activities that increase flood forecasting
capacity and early-warning information transfer to communities in the Lower
Mekong River Basin. The United States government has pledged $5.3 million in
relief and reconstruction assistance for areas in Thailand affected by the December
2004 tsunami.
In 2001, the United States and Thailand signed an agreement pursuant to the
Tropical Forest Conservation Act (P.L. 105-214), providing $11 million in debt relief
to Thailand. In return, Thailand is to contribute $9.5 million over 28 years toward
the protection of its mangrove forests.
Vietnam
Table 12. U.S. Assistance to Vietnam, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
CSH
4,106
5,300
6,600
1,200
0
DA
6,950
7,671
3,000
4,750
2,818
GHAI
—
0
10,000
22,044
31,214
IMET
0
0
0
50
50
CRS-22
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
NADR
1,500
2,527
3,214
3,130
4,350
Totals29
12,556
15,498
22,814
31,174
38,432
Food Aid
FFPa
992
15,122
7,898
0
—
FFEa
—
4,796
0
0
—
Section
416(b)a
3,674
0
6,170
0
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USDA data — does not include freight costs.
United States bilateral assistance to Vietnam focuses on the following:
accelerating Vietnam’s transition to an open and market-based economy; upgrading
access to services for selected vulnerable groups; and developing sustainable urban
and industrial environmental management.
CSH and DA for Vietnam provide assistance to victims of war, land mines, and
unexploded ordnance (Leahy War Victims Fund), orphans (Displaced Children and
Orphans Fund), and those at high risk of contracting HIV/AIDS. NADR programs
bolster export control and border security and help the Vietnamese government in de-
mining efforts and agricultural development. Vietnam receives EAP regional
assistance for economic development, environmental management, and anti-
trafficking-in-persons efforts. In June 2005, the United States and Vietnam
concluded an agreement whereby the United States would establish an IMET
program in Vietnam involving medical, technical, and language support.30
The United States also provides assistance for HIV/AIDS prevention, treatment,
and control in Vietnam through USAID regional programs, the President’s Global
HIV/AIDS Initiative (GHAI), and the Centers for Disease Control. Vietnam, with
an estimated 130,000 HIV-positive persons, is the only Asian country to receive
GHAI assistance. Vietnam is estimated to have fewer HIV/AIDS cases but a higher
infection rate than India or China.31
In 2004, USAID’s Office of Foreign Disaster Assistance provided $700,000 to
the U.N. Development Program for flood and storm early-warning systems in
Vietnam. Vietnam also participates in OFDA-funded activities that increase flood
29 These totals do not include other U.S.-sponsored programs in Vietnam funded outside the
foreign operations budget, such as Department of Defense de-mining assistance, Department
of Labor technical cooperation projects, Centers for Disease Control (CDC) HIV/AIDS
programs, and Fulbright educational exchanges.
30 Sharon Behn, “U.S. Military Specialists Headed to Vietnam,” Washington Times, June 23,
2005.
31 [http://www.kaisernetwork.org].
CRS-23
forecasting capacity and early-warning information transfer to communities in the
Lower Mekong River Basin.
Many Members of Congress have supported placing conditions upon U.S.
assistance to Vietnam. The Vietnam Human Rights Act of 2005 (H.R.3190)32 would
bar U.S. non-humanitarian assistance to the government of Vietnam unless the
President certifies that the country is making “substantial progress” in the areas of
political and religious freedoms, the rights of ethnic minorities, and combating
human trafficking.33
South Asia
Key U.S. foreign aid objectives in South Asia include combating terrorism,
developing bilateral military relations, reducing poverty and disease, spreading
secular education, fostering political stability, and strengthening democratic
institutions. Prior to September 2001, South Asia was the smallest regional recipient
of U.S. non-food assistance. Since the war on terrorism began, counter-terrorism and
related funding for South Asia, especially Afghanistan and Pakistan, have made the
region a relatively large recipient of humanitarian, development, and economic
assistance and the second-largest beneficiary of military assistance after the Middle
East. Before 2002, India and Bangladesh were the largest recipients of U.S. bilateral
aid in South Asia. Following Pakistan’s participation in Operation Enduring
Freedom (OEF) in Afghanistan, the country became the largest beneficiary of U.S.
foreign assistance in the region, followed by India. See Figure 5.
32 This bill was introduced as the Vietnam Human Rights Act of 2004 (H.R. 1587) in the
108th Congress.
33 For further information about United States foreign aid to Vietnam and proposed
sanctions, see CRS Report RL32636, U.S. Assistance to Vietnam, by Mark E. Manyin.

































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































CRS-24
Figure 5. U.S. Assistance to South Asia
(Excluding Food Aid), 2001-2005
(millions of current U.S. dollars)

1400
1200
1000
800
600
400
200
0
2001
2002
2003
2004
2005
Pakistan
Sri Lanka
Nepal
Bangladesh
India
South Asia faces daunting development challenges. According to USAID, the
region is home to one-fifth of the world’s population and 40% of the world’s poor.
More than half of the region’s children under the age of five are malnourished. South
Asia reportedly also has alarming infant and child mortality rates, the world’s highest
adult illiteracy rates, the second highest fertility levels, and a rapidly spreading
HIV/AIDS epidemic. These conditions, in turn, threaten political stability and,
according to some observers, create fertile ground for the rise of radical political
ideologies, organizations, and activities. India, Nepal, Pakistan, and Sri Lanka and
have long dealt with terrorist and insurgent groups to varying degrees, while some
Al Qaeda forces are believed to have fled to Bangladesh.34
South Asia regional programs include Anti-Terrorism Assistance, Migration and
Refugee Assistance (MRA), and South Asia Regional Funds for job-creation,
education, democracy, and conflict mitigation. South Asia also receives assistance
through USAID’s Asia Near East (ANE) regional programs, including the U.S.-Asia
Environmental Partnership, HIV/AIDS prevention and treatment, and secondary
education for Muslim youth.
Foreign Aid Restrictions. Both Pakistan and India faced sanctions on non-
humanitarian aid for conducting nuclear weapons tests in 1998. The United States
imposed additional restrictions on aid to Pakistan because of the military coup that
took place in October 1999 and delinquency on foreign loan payments. Many of the
34 See CRS Report RL32259, Terrorism in South Asia, by K. Alan Kronstadt and Bruce
Vaughn.
CRS-25
nuclear test-related sanctions were lifted soon after they were imposed, and the
United States reportedly was prepared to normalize relations with India in the first
half of 2001.
On September 22, 2001 President Bush issued a final determination removing
all nuclear test-related sanctions against India and Pakistan pursuant to the
Department of Defense Appropriations Act, 2000 (P.L. 106-79). On October 27,
2001, the President signed S. 1465 into law (P.L. 107-57), exempting Pakistan from
coup-related sanctions through FY2002, providing waiver authority on the sanctions
through FY2003, and granting an exemption from foreign aid prohibitions related to
the country’s loan defaults.35 Congress has extended the waiver authority on coup-
related sanctions and the exemption regarding loan arrearage on a yearly basis
through FY2006. Since 2003, President Bush has annually exercised the waiver
authority on coup-related sanctions against Pakistan. The President again certified
the waiver on February 8, 2006. A crucial challenge for the United States, according
to some U.S. leaders, is how to assist Pakistan in its anti-terrorism activities and
reward its cooperation in Operation Enduring Freedom while still applying pressure
regarding democratization, nuclear non-proliferation, and other foreign policy
imperatives.
Disaster Assistance. In the December 2004 earthquake and tsunami, Sri
Lanka suffered heavy human losses (an estimated 31,000 dead, 4,100 missing, and
519,000 displaced) and property damage worth approximately $1 billion (or 4.4% of
GDP). The United States government (USG) has pledged $134 million in disaster
assistance (including USAID disaster assistance and food aid and USDA food aid)
to Sri Lanka as well as $17.9 million to India.36 On October 8, 2005, a catastrophic,
magnitude 7.6 earthquake struck Pakistan, killing over 73,000 persons in Pakistan
and over 1,000 in India and leaving nearly 3 million people homeless. The United
States government has committed $83.5 million in humanitarian assistance to
Pakistan (including USAID/OFDA, USDA, and other assistance) out of a total of
$300 million in USG assistance pledged.37
35 Pursuant to P.L. 107-57, the President must determine and certify that such a waiver: (a)
would facilitate the transition to democratic rule in Pakistan; and (b) is important to United
States efforts respond to, deter, or prevent acts of international terrorism.
36 USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis, July 7, 2005;
USAID, Tsunami Assistance, One Year Later (December 21, 2005); See also CRS Report
RL32715, Indian Ocean Earthquake and Tsunami: Humanitarian Assistance and Relief
Operations, by Rhoda Margesson, et al.
37 USAID, Fact Sheet no. 38, South Asia — Earthquake, February 10, 2006.
CRS-26
Country Aid Levels and Legislative Conditions —
South Asia
Bangladesh
Table 13. U.S. Assistance to Bangladesh, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002
FY2003
FY2004
FY2005
estimate
CSH
39,950
27,600
35,500
33,412
26,384
DA
21,670
21,391
18,200
16,535
10,859
ESF
3,000
4,000
4,971
4,960
4,950
FMF
0
0
0
248
990
IMET
648
772
862
1,035
891
Peace Corps
581
1,248
1,566
1,759
1,776
Totals
65,849
55,011
61,099
57,949
45,850
Food Aid
P.L. 480 Title
II Granta
23,974
38,577
33,451
22,842
50,751
Section
416(b)b
12,871
49
53
3,257
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
U.S. foreign aid policy emphasizes sustainable economic development and
effective, democratic governance in Bangladesh, one of the poorest and most
populous countries in the world. The Department of State reports that Bangladesh
is a moderate Islamic democracy; however, poverty and political corruption,
combined with porous borders, have increased the attractiveness of radical
ideologies.38 U.S. development assistance program areas include family planning,
child health, HIV/AIDS prevention, private enterprise development, environmental
protection, political party reform, and local governance. Since 2003, USAID has
administered a basic education program primarily in rural areas. IMET programs
help to professionalize the Bangladesh military. IMET also enhances international
peacekeeping skills and U.S.-Bangladesh military relations.
In 2000, the United States signed an agreement with Bangladesh reducing the
country’s debt payments to the United States by $10 million over 18 years. In return,
Bangladesh is to set aside $8.5 million to endow a Tropical Forest Fund to protect
38 U.S. Department of State, “FY2005 Congressional Budget Justification for Foreign
Operations,” February 2004.
CRS-27
and conserve its mangrove forests.39 In FY2004, USAID’s Office of Foreign Disaster
Assistance provided $180,000 for flood monitoring and forecasting.
The major bilateral aid donors to Bangladesh are Japan, the United Kingdom,
and the United States.
India
Table 14. U.S. Assistance to India, 2002-2006
(thousands of dollars)
FY2006
Account
FY2002
FY2003
FY2004 FY2005 estimate
CSH
41,678
47,438
47,800
53,222
47,690
DA
29,200
34,495
22,539
24,856
10,892
ESF
7,000
10,500
14,912
14,880
4,950
IMET
1,000
1,000
1,366
1,502
1,188
NADR
900
1,000
685
685
600
Totals
79,778
94,433
87,302
95,145
65,320
Food Aid
P.L. 480 Title
II Granta
93,679
42,812
40,869
49,006
43,000
Section


—
416(b)b
11,961
0
0
0
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
In 1998, the United States imposed sanctions on India and Pakistan for
detonating nuclear devices. Non-humanitarian assistance was terminated or
suspended. India, one of the largest recipients in the world of U.S. development
assistance and food aid, continued to receive funding for health and food programs.
In 1998, Congress passed the India-Pakistan Relief Act of 1998 (P.L. 105-277, Title
IX), which authorized the President to waive the sanctions for one year. On October
25, 1999, Congress provided permanent waiver authority in the Department of
Defense Appropriations Act, FY2000 (P.L. 106-79). On October 27, 1999, President
Clinton, signaling a warming of bilateral relations, waived the applicability of
nonmilitary aid and IMET restrictions on India. On September 22, 2001, President
Bush issued a final determination removing remaining sanctions on Pakistan and
India resulting from their 1998 nuclear tests.
The United States significantly increased its foreign assistance to India in
FY2002 and FY2003. Development programs include health and family planning,
environmental protection, and disaster management. Since 2003, greater emphasis
39 Pursuant to the Tropical Forest Conservation Act (P.L. 105-214).
CRS-28
has been placed upon education for children and economic growth. Economic
growth programs are to focus on state fiscal reforms and economic sectors that will
likely produce investment opportunities for U.S. companies.
IMET helps to strengthen professionalism in the Indian military and facilitate
cooperation in U.S.-India joint exercises. NADR funding for the Export Control and
Related Border Security Assistance (EXBS) program assists India in strengthening
its export control system.
The United States government has pledged $17.9 million in disaster relief and
reconstruction assistance to India for areas affected by the December 2004 tsunami.
India has an estimated 5 million people infected with the HIV virus, the highest
national total in Asia. CSH funds support HIV/AIDS prevention and control
programs in three states. Many members of Congress have called for India to be
included in the President’s Emergency Plan for AIDS Relief.40
The United States is the fifth-largest aid donor to India, after Japan, the United
Kingdom, Germany, and the European Union.
Nepal
Table 15. U.S. Assistance to Nepal, 2002-2006
(thousands of dollars)
FY2002
FY2006
Account
FY2002
S.A.a
FY2003 FY2004 FY2005 estimate
CSH
20,000
—
19,899
24,840
25,165
18,613
DA
7,597
—
10,247
8,874
10,000
7,895
ESF
3,000
—
4,000
4,971
4,960
4,950
FMF
2,000
12,000
2,950
3,975
—
1,980
IMET
377
—
500
546
648
644
Peace
2,111
—
2,624
2,108
394
0
Corps
Totals 35,085
12,000
40,220
45,314
41,167
34,082
Food Aid
P.L. 480
Title II
2,352
—
0
0
1,000
0
Grantb
FFEc
—
—
2,130
0
3,871
—
Section
416(b)c
0
—
0
0
0
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
40 See 108th Congress, H.R. 4449 and S. 2203 and 109th Congress, H.R. 1408 and S. 674.
CRS-29
a. Supplemental Appropriations (P.L. 107-206).
b. USAID data — includes freight costs.
c. USDA data — does not include freight costs.
The United States has an interest in helping Nepal to reduce poverty in rural
areas, which have become recruitment areas for Maoist insurgents. The largest U.S.
aid program in Nepal is health and family planning, which includes child mortality
prevention and HIV/AIDS control. Other program areas include hydropower
development, civil society, women’s participation in politics, government
performance, rule of law, and political reform. In 2002, Nepal received $12 million
in supplemental appropriations (FMF) to help the government fight Maoist rebels.
IMET supports professionalism, intelligence, civil affairs, psychological operations,
special forces, medical, and logistics needs of the RNA. In 2004, the United States
suspended the Peace Corps program in Nepal after Maoist rebels bombed the United
States Information Center in Kathmandu.
Since 2005, the United States has placed restrictions upon FMF for Nepal due
to human rights concerns and unless the Secretary of State determines that waiving
such restrictions is in the national security interests of the United States. The Foreign
operations appropriations measure for FY2006 (P.L. 109-102) provides that FMF
may be made available to Nepal only if the Secretary of State certifies that the
Government of Nepal has restored civil liberties, is protecting human rights, and has
demonstrated a commitment to restoring multi-party democratic government.
The largest aid donors to Nepal are Japan, the United States, Denmark, the
United Kingdom, and Switzerland.
CRS-30
Pakistan
Table 16. U.S. Assistance to Pakistan, 2002-2006
(thousands of dollars)
FY2002
FY2002
FY2003
FY2004
FY2006
FY2002
E.R.F.a
S.A.b
FY2003
W.S.c
FY2004
E.S.d
FY2005
estimate
CSH
14,000
—
—
15,645
—
25,600
—
21,000
32,172
DA
10,000
—
—
34,500
—
49,400
—
29,000
40,590
ESF
9,500
600,000
15,000
188,000
—
—
200,000
297,600
337,095
FMF
0
—
75,000
49,500
175,000
74,560
—
298,800f
297,000
ERMA
—
25,000
—
0
—
0
—
0
0
IMET
894
—
—
990
—
1,384
—
1,885
2,024
INCLE
2,500
73,000
15,000
6,000
25,000
31,500
—
32,150
37,620
NADR
100
—
10,000
717
—
4,930
—
7,000
6,700
PKO
0
220,000
—
0
—
0
—
0
0
Totals 36,994
918,000
115,000
295,352
200,000
187,374
200,000
687,435
753,201
Food Aid
P.L. 480 Title I
10,000
—
—
0
—
0
—
0
—
USDA Loan
P.L. 480 Title II
Grantg
5,134
—
—
6,792
—
13,067
—
0
0
CRS-31
FY2002
FY2002
FY2003
FY2004
FY2006
FY2002
E.R.F.a
S.A.b
FY2003
W.S.c
FY2004
E.S.d
FY2005
estimate
FFEh
—
—
—
4,200
—
0
—
5,796
—
FFPh
0
—
—
8,977
—
5,980
—
10,170
—
Section 416(b)h
76,614
—
—
0
—
9,583
—
1,972
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. Emergency Response Fund (P.L. 107-38).
b. Supplemental Appropriations (P.L. 107-206).
c. Emergency Wartime Supplemental Appropriations (P.L. 108-11).
d. Emergency Supplemental Appropriations for Iraq and Afghanistan Security and Reconstruction Act, 2004 (P.L. 108-106).
e. Economic grants that can be used to cancel a total of approximately $2 billion in debt owed by Pakistan to the U.S. government. Amounts for FY2004 “shall not be considered
‘assistance’ for the purposes of provisions of law limiting assistance to a country” (P.L. 108-106).
f. Including the President’s FY2005 supplemental request of $150 million in FMF for Pakistan.
g. USAID data — includes freight costs.
h. USDA data — does not include freight costs.
CRS-32
Foreign Aid Programs. Pakistan faces daunting development challenges
related to not only the war on terrorism but also massive poverty and undemocratic,
weak, or ineffective political institutions. In addition to Pakistan’s anti-terrorism
efforts and cooperation with the United States in Operation Enduring Freedom
(OEF), U.S. assistance has focused upon educational activities. Since 2002, USAID
has carried out a $100 million, five-year secular education program with the goals of
offering a popular alternative to the madrassas, or religious schools, and building
foundations for economic development and political moderation. The program
identifies four areas: education sector policy and planning; capacity of teachers and
education administrators; youth and adult literacy; and public-private partnerships to
improve access and delivery of education services. Other major foreign aid areas are
health (including HIV/AIDS prevention), economic growth, and democratic
governance.
FMF helps Pakistan acquire training and purchase aircraft, helicopters, vehicles,
surveillance systems, and other equipment and for OEF along the Afghan border.
INCLE programs enhance the effectiveness of Pakistan’s police efforts in three areas
— law enforcement, border security, and counter-narcotics. NADR activities help
to prevent weapons transfers, support anti-terrorism training, and curtail the spread
of Man Portable Air-Defense Systems (MANPADS). IMET promotes increased
professionalism, interoperability between Pakistan and the United States, and
technical skills and expertise. The FY2005 appropriations measure (P.L. 108-447)
extended $200 million in ESF to Pakistan for debt relief.41
Lifting of Foreign Aid Restrictions. Pakistan received limited U.S.
assistance during the 1990s — counter-narcotics (INCLE) support, food aid, and
Pakistan NGO Initiative programs42 — due to U.S. prohibitions related to nuclear
weapons testing, delinquent debtor status, and the military coup of 1999. In 1985,
the Pressler Amendment to the Foreign Assistance Act of 1961 (Section 620e) barred
U.S. foreign assistance to Pakistan unless the President determined that Pakistan did
not possess nuclear weapons and that U.S. assistance would reduce the risk of
Pakistan’s obtaining them. In 1990, President George H. W. Bush declined to make
such determinations and imposed Pressler Amendment sanctions against Pakistan.
This restriction was eased in 1995 to prohibit only military assistance.43 Although
the Department of Defense Appropriations Act, 2000 (P.L. 106-79) gave the
President authority to permanently waive all nuclear test-related sanctions, President
Clinton waived few restrictions toward Pakistan (e.g., USDA credits and U.S.
commercial bank loans) compared to India. Furthermore, Pakistan continued to be
41 Such funds would not be considered “assistance” for the purposes of provisions of law
limiting assistance to Pakistan.
42 The USAID Pakistan NGO Initiative delivered education and health services primarily
through the Asia Foundation and Aga Khan Foundation USA and independently of the
government of Pakistan. Total funding for the program (1994-2003) was $10 million.
43 The Brown Amendment to the FAA (1995) narrowed the prohibition to military assistance
only.
CRS-33
ineligible for most forms of U.S. foreign assistance due to the 1999 military coup and
its delinquency in servicing its debt to the United States.44
Following the September 2001 terrorist attacks on the United States, Pakistan
was designated as a front-line state in the war on terrorism and received dramatically
increased U.S. aid levels. In late September 2001, President George W. Bush waived
nuclear weapons sanctions that prohibited military and economic aid to Pakistan and
India. The Bush Administration also rescheduled $379 million of Pakistan’s $2.7
billion debt to the United States so that Pakistan would not be considered in arrears,
a requirement for further foreign assistance. On October 27, 2001, President Bush
signed S. 1465 into law (P.L. 107-57), allowing the United States government to
waive sanctions related to the coup in 2002 and authorizing presidential waiver
authority through 2003, provided the President determined that making foreign
assistance available would facilitate democratization and help the United States in
its battle against international terrorism. P.L. 107-57 also exempted Pakistan from
foreign assistance restrictions related to its default on international loans.45 The
Emergency Supplemental Appropriations for Iraq and Afghanistan Security and
Reconstruction Act, 2004 (P.L. 108-106) amended P.L. 107-57 by extending the
President’s waiver authority and loan payment exemption through 2004. P.L. 108-
447 and P.L. 109-102 extended the provisions of P.L. 107-57 through FY2005 and
FY2006, respectively. Since 2003, President Bush has annually exercised the waiver
authority on coup-related sanctions against Pakistan.
The United States government has pledged approximately $300 million in
humanitarian and reconstruction assistance to Pakistan (including USAID/OFDA,
USDA, and other assistance) in response to the devastating October 2005 earthquake
that struck Pakistan, India, and Afghanistan.
44 See CRS Report RS20995, India and Pakistan: U.S. Economic Sanctions, by Dianne E.
Rennack. The Foreign Operations Appropriations Act, FY2001 (P.L. 106-429), Section
508, denies foreign assistance to any country whose duly elected head of government is
deposed by military coup or decree; Section 512 of the act, the Brooke Amendment,
prohibits assistance to any country that is in default on loan payments to the United States
for over one year. Sec. 620(q) of the Foreign Assistance Act of 1961 denies foreign
assistance to any country that is in default for more than six months in servicing or repaying
loans to the United States. The President may waive this restriction if he finds that
assistance is in the national interest and so notifies Congress. For additional information,
see CRS Issue Brief IB94041, Pakistan-U.S. Relations, by K. Alan Kronstadt.
45 See P.L. 107-57, Sections 1(b) and 3(2).
CRS-34
Sri Lanka
Table 17. U.S. Assistance to Sri Lanka, 2002-200646
(thousands of dollars)
FY2006
Account
FY2002 FY2003 FY2004 FY2005 estimate
CSH
300
300
300
300
—
DA
5,150
6,150
4,750
6,774
3,465
ESF
3,000
3,950
11,929
9,920
3,690
FMF
0
0
2,495
496
990
IMET
259
307
553
461
445
NADR
0
2,400
1,775
2,900
3,800
PKO
0
0
0
720
1,000
Totals
8,709
13,107
21,802
21,571
13,390
Food Aid (not including freight costs)
P.L. 480 Title
8,000
0
0
0
—
I USDA Loan
P.L. 480 Title
1,325a
596a
4,190a
1,073b
0
II Grant
FFPb
0
2,775
0
9,690
—
Section
416(b)b
0
0
923
0
—
Sources: U.S. Department of State, USAID, U.S. Department of Agriculture.
a. USAID data — includes freight costs.
b. USDA data — does not include freight costs.
USAID programs help to promote the peace process between the government
of Sri Lanka and Tamil insurgents, the Liberation Tigers of Tamil Eelam (LTTE).
U.S. assistance also helps to meet the reconstruction, rehabilitation, and
reconciliation costs stemming from the conflict. Ongoing and planned programs
include delivering “peace dividends,” such as skills training and local infrastructure
improvements; humanitarian assistance for victims of armed conflict, utilizing Leahy
War Victims Funds; economic growth; HIV/AIDS prevention and awareness; and
constitutional reform. FMF uses include maritime surveillance and interdiction
equipment, military communications and mobility items, defense and intelligence
improvements, and equipment for basic soldier safety and survivability. IMET helps
to professionalize the Sri Lankan military, build the capabilities of officers in the
fight against the LTTE and global anti-terrorism activities, and enhance
interoperability with U.S. forces. NADR programs assist in de-mining activities and
demilitarization efforts.
46 This table does not include 2004-2005 tsunami disaster relief.
CRS-35
Sri Lanka suffered heavy human losses (an estimated 31,000 dead, 4,100
missing, and 519,000 displaced) and property damage worth approximately $1 billion
(or 4.4% of GDP) in the December 2004 earthquake and tsunami.47 The Bush
Administration has pledged $134.6 million for disaster relief and reconstruction.
Sri Lanka has been eligible for MCA assistance since 2004.
47 USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis, July 7, 2005
CRS-36
Appendix. Selected Acronyms for U.S. Foreign Aid
Accounts and Programs
CSD:
Child Survival and Disease
CSH:
Child Survival and Health (replaces CSD)
DA:
Development Assistance
EDA:
Excess Defense Articles
ERMA:
Emergency Migration and Refugee Assistance
ESF:
Economic Support Funds
FFP:
Food for Progress
FFE:
Food for Education
FMF:
Foreign Military Financing
GHAI:
Global HIV/AIDS Initiative
IMET:
International Military Education and Training
INCLE:
International Narcotics Control and Law Enforcement
MCA:
Millennium Challenge Account
MCC:
Millennium Challenge Corporation
MRA:
Migration and Refugee Assistance
NADR:
Non-proliferation, Anti-terrorism, De-mining, and Related Programs
OFDA:
Office of Foreign Disaster Assistance
PKO:
Peace-keeping Operations
P.L. 480 Title I: Food Aid (USDA loans)
P.L. 480 Title II: USAID emergency food program
Section 416(b):
Surplus Food Commodities
USDA:
United States Department of Agriculture
crsphpgw