Order Code RL32866
CRS Report for Congress
Received through the CRS Web
U.S. Assistance to the Former Soviet Union
Updated March 16, 2006
Curt Tarnoff
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
U.S. Assistance to the Former Soviet Union
Summary
Since 1992, the United States has provided more than $28 billion in assistance
to the 12 states of the former Soviet Union (FSU). It continues to provide nearly $2
billion annually. This report describes the broad framework of U.S. assistance
programs and policies in the region and then focuses on the FREEDOM Support Act
(FSA) account under the foreign operations budget which, encompassing all U.S.
objectives in the region, has often been the means by which Congress has expressed
its views and sought to influence policy.
Three objectives have been most prominent in the U.S. assistance program to
the region — facilitating the transition from authoritarianism to democracy,
promoting the introduction and growth of free market economies, and fostering
security by controlling the proliferation of nuclear, chemical, and biological weapons
and expertise. More recently, a fourth objective, very much encompassing the other
three, has emerged — supporting the war on terror. A fifth objective of U.S.
assistance, humanitarian relief, was mostly applied in the early 1990s in response to
countries experiencing food shortages.
Under the control of the State Department’s Coordinator of U.S. Assistance to
Europe and Eurasia and encompassing all U.S. policy objectives, the FSA account
has been a special interest of Congress since its creation in 1992. About $11 billion
of the $28 billion in total U.S. aid provided between 1992 and 2005 has come from
the FSA account. The FY2006 Foreign Operations appropriations (P.L. 109-102,
H.R. 3057) provides $514 million, $509 million after a 1% across-the-board
rescission is applied. The Administration has requested $441 million for FY2007.
Perhaps the most notable feature of the FY2006 Administration foreign
operations request was the proposed cuts in aid. With democracy challenged in
Russia, leadership changes in Georgia, Ukraine, and Kyrgyzstan, that may open the
door to long-delayed economic and political reform, as well as important U.S.
interests in Central Asia, some observers argued for an increase in aid to the region.
In the case of Russia, managers of the FY2006 appropriations allocated $80 million
instead of the $48 million requested in the FSA account — the Administration
FY2007 request is $58 million.
The recent rise of democracy in Ukraine and Georgia and its evident decline in
Russia have highlighted the role and possible need for U.S. democratization
assistance. However, absolute levels of democracy aid to Russia in the FSA account
have not increased since 1999 when it reached a level of $64 million; it is $40
million in FY2006. Aid to the FSU has always come with conditions. The majority
of specific restrictions have been aimed at Russia. As a result, in most years as much
as 60% of planned U.S. assistance to the federal Russian government has been
withheld. Currently, the most difficult conditionality issue arises with respect to
human rights and democracy in Central Asia. This report will be updated as events
warrant.
Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Objectives and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Democracy and Economic Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Humanitarian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Anti-Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Funding Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FSA Account Current Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Millennium Challenge Account (MCA) . . . . . . . . . . . . . . . . . . . . . . . . 5
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FY2005 Supplemental Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FY2006 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FY2007 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Cuts in FSA Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Cuts in the Russia Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Support for Democratization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conditionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
List of Figures
Figure 1. Total U.S. Assistance to FSU: FY1992-2005 . . . . . . . . . . . . . . . . . . . . . 2
Figure 2. Total U.S. Assistance to FSU: FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . 2
Figure 3. U.S. Assistance to the FSU: All Spigots 1992-2005 . . . . . . . . . . . . . . . 3
Figure 4. FSA Account by Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Figure 5. FSA Account and Russia Aid ($ millions) . . . . . . . . . . . . . . . . . . . . . . . 7
List of Tables
FSA Account Country Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Assistance to the Former Soviet Union
Since 1992, the United States has provided more than $28 billion in assistance
to the 12 states of the former Soviet Union (FSU). It continues to provide nearly $2
billion annually. Over the years, various aspects of the program have drawn strong
congressional interest and sponsorship; some country programs have been the
subject of controversy and debate. At one time or another, these aid programs have
sought to address the range of U.S. foreign policy, strategic, and economic interests
in the region. This report describes the broad framework of U.S. assistance programs
and policies in the former Soviet Union and then focuses on the foreign operations
FREEDOM Support Act (FSA) account which, encompassing all U.S. objectives in
the region, has often been the means by which Congress has expressed its views and
sought to influence policy.
Background
Objectives and Programs
With the demise of the Soviet Union and emergence of a dozen new
independent states at the end of 1991, the United States launched assistance programs
aimed at accomplishing varied foreign policy objectives. Three objectives have been
most prominent — facilitating the transition from authoritarianism to democracy,
promoting the introduction and growth of free market economies, and fostering
security by controlling the proliferation of nuclear, chemical, and biological weapons
and expertise. A fourth objective of U.S. assistance, humanitarian relief, was
especially significant at discrete points in the 1990s when several countries
experienced critical food shortages. More recently, a fifth objective, very much
encompassing the other four, has emerged — supporting the war on terror.
Democracy and Economic Reform. Efforts to boost the objectives of
democratization and economic growth have been supported chiefly through
assistance programs authorized by the FREEDOM Support Act (FSA) of 1992 (P.L.
102-511). The assistance, usually in the form of expert advice and associated
materiel support or grants to indigenous organizations, has sought to affect a range
of sectors.
Among the democratic initiatives are technical assistance to political parties,
parliaments, and independent media and grants to encourage the development of civil
society non-governmental organizations (NGOs). Exchanges, most now funded
under State Department appropriations, contribute to democratization by introducing
FSU leaders and citizens to U.S. institutions and way of life. Nearly 11% of total
U.S. assistance since 1992 has supported democratization.
CRS-2
Economic and social reform programs include efforts to assist private sector
development — support for privatization of state-owned business; drafting of new
tax, securities, and commercial law; distribution of credit to micro and small
enterprise; equity investments in fledgling business; and provision of expertise to
farmers and businessmen. Assistance has also addressed related health, environment,
energy, and housing concerns, including efforts to combat infectious disease,
promote policy reforms, and introduce innovations such as a mortgage lending
system. About 24% of total aid has been devoted to economic and social
development.
Figure 1. Total U.S.
Assistance to FSU:
Humanitarian. Humanitarian programs
FY1992-2005
include the PL480 food aid program (roughly 80%
of humanitarian aid) and airlifts of food and
medical supplies. The latter was of special
Security 40.3%
importance in the first years of the transition, and
the former was an especially significant part of the
total aid program during discrete periods — 1993 Humanitarian 23.6%
Other 1.2%
and 1999 — when Russian farmers could not meet
their country’s food requirements and the United
Econ & Social Dev 24.1%
States wished to bolster President Yeltsin’s
Democracy 10.8%
position. About 24% of total aid has been
employed to fill humanitarian needs.
Security.1 Security programs mostly focus
Figure 2. Total U.S.
on non-proliferation concerns. They have been
Assistance to FSU:
implemented mainly under the so-called “Nunn-
FY2005
Lugar” Cooperative Threat Reduction (CTR)
Program legislation (P.L.102-228), much of the
language of which is duplicated in the FREEDOM
Security 66.7%
Support Act. Several government departments
have been actively engaged in implementing
security programs. Broadly, non-proliferation
Other 1.8%
programs conducted by the Department of Defense
(DOD) have included insuring the security of
Econ & Social Dev 14.4%
transport and storage and the elimination of
Humanitarian 2.8%
Democracy 14.4%
nuclear, chemical, and biological weapons and
materials. The Department of Energy’s Material
Protection, Control, and Accounting (MPC&A)
program sponsors numerous efforts to protect
nuclear sites and thwart smuggling of material. Both the State Department and DOE
have managed programs controlling the spread of weapons expertise by encouraging
scientists to remain in the FSU. State also supports export control and border
security assistance. More than 40% of total U.S. assistance to the FSU since 1992
has focused on security. Almost two-thirds of these funds were directed at Russia.
1 For detailed discussion of FSU security programs see CRS Report RL31957, Non-
Proliferation and Threat Reduction Assistance: U.S. Programs in the Former Soviet Union,
by Amy Woolf.
CRS-3
In recent years, the proportion of aid directed at security concerns has risen
substantially — in FY2005, it represented nearly 67% of total aid.
Anti-Terrorism. While there are discrete anti-terror programs aimed at the
region — such as border security and anti-terrorism training — all other assistance
objectives can be viewed as supporting this one. The securing of nuclear and other
weapons has always been as much to keep them out of the hands of stateless terrorist
groups as other nations. The achievement of economic growth and democracy are
seen as helpful conditions to discourage the sale of weapons and technology and the
eruption of discontent and instability that might offer havens to terrorist operations.
The emergency supplemental that followed September 11, 2001, targeted for special
funding Central Asian countries which provided bases for U.S. troops fighting in
Afghanistan and are themselves viewed as threatened by radical Muslim
organizations.
Funding Accounts
Multiple sources of U.S. funding (“spigots”) make up assistance to the region.
Most security-related aid has been funded through Department of Defense (DOD)
appropriations, but major related programs have also been funded under Department
of Energy (DOE) and Foreign Operations appropriations, in the latter case primarily
the FSA, Foreign Military Financing, and NADR (Non-proliferation, Anti-terrorism,
Demining) accounts. DOD, DOE, and Foreign Operations appropriations — mostly
for State Department programs — respectively account for $5.2 billion, $3.6 billion,
and $2.4 billion of total U.S. security aid to the FSU since 1992.
Figure 3. U.S. Assistance to the FSU: All Spigots 1992-2005
3 5 0 0
3 0 0 0
2 5 0 0
2 0 0 0
1 5 0 0
1 0 0 0
5 0 0
0
9 2
9 3
9 4
9 5
9 6
9 7
9 8
9 9
0
1
2
3
4
5
O th e r a pp rop r ia tio ns
U S D A a p pro pr ia tio n s
D O E a p pr o pr ia tio n s
D O D ap p ro p ria t ion s
F S A a cc o un t
CRS-4
Humanitarian programs are predominately composed of the PL480 food aid
program funded from Department of Agriculture (USDA) appropriations. Airlifts of
humanitarian supplies were funded out of both State and DOD appropriations.
Roughly two dozen U.S. government agencies and department offices have
implemented aid programs in the FSU. Among these are the Peace Corps volunteer
program, the State Department’s exchange and non-proliferation programs, and
Environmental Protection Agency, Department of Labor, and Treasury Department
activities. Many of these programs were originally supported largely or entirely by
the FSA account, but as that account has decreased in size, some agencies have
gradually been required to provide their own-agency appropriated funds (included in
the “other” category in the figure above).
Figure 4. FSA Account by Sector
FY 1999
FY 2005
FY 1994
Hum an 9.8%
Human 3.1%
Dem oc 16.2%
Dem oc 25.3%
Human 18.4%
S ecu rity 17.6%
Democ 31.9%
Security 19.2%
Securi ty 4.8%
Other 1 .2%
Other 1.2%
Other 5.6%
Econ&Soc 59.5%
Econ &Soc 46.1%
Econ&S oc 40.2%
Most democratization, economic, and social programs, have been funded
annually in the Foreign Operations appropriations bill under the “Independent States
of the Former Soviet Union” account (FSA account). Only the FSA account has
supported the whole range of U.S. policy objectives at one time or another.
FSA Account Current Program. Under the control of the State
Department’s Coordinator of U.S. Assistance to Europe and Eurasia, the FSA
account has been a special interest of Congress since its creation in 1992. About $11
billion of the $28 billion in total U.S. aid provided between 1992 and 2005 has come
from the Foreign Operations-funded FSA account. Unlike DOE or DOD security
programs, funding for which has trended upward in the past dozen years, the FSA
account has fluctuated considerably. Since 2002, however, it has been falling and,
at $509 million in FY2006, is at its lowest level since 1993. The decline may in part
be explained by the view that some countries have progressed sufficiently in their
economic and political development that they no longer require U.S. assistance (see
issues below).
The composition of the account has also changed significantly over 15 years.
In the early 1990s, economic and social reform was the largest component — as
much as two thirds of the account in some years. In 2005 it was down to only 40%
of the account, but still the largest component at $251 million. Hovering near the
CRS-5
15% mark during the early and mid-1990s, democratization efforts rose to make up
25% by late in the decade. In 2005, at nearly $200 million, it represented about one
third of the account. Security aid was only 5% of the account in the first part of the
program, but rose to a high of 25% in 2000 as a result of the so-called Expanded
Threat Reduction Initiative that increased the State Department role in non-
proliferation. As the State Department has moved non-proliferation program funding
to the NADR and other accounts, security as a component of the FSA account has
declined somewhat. It was 19% in 2004 at $120 million.
Millennium Challenge Account (MCA). When the MCA was established
in 2004, a new funding resource became available to some states of the former Soviet
Union. Implemented by the Millennium Challenge Corporation (MCC), the MCA
provides significant assistance to countries that meet certain standards of
accountability and commitment to economic and democratic reform. Currently, two
FSU states — Georgia and Armenia — meet the criteria that make them candidates
for MCA funds. On September 12, 2005, an agreement, or compact, was signed with
Georgia, providing $295.3 million over five years for the purposes of improving
transport, energy, and other infrastructure and to stimulate enterprise development,
especially in agriculture. A five-year $235.7 million compact with Armenia was
approved by the MCC board on December 19, 2005. Its purpose is reduction of rural
poverty through rehabilitation of rural roads and improved irrigation.
Legislation
FY2005 Supplemental Appropriations
In February 2005, the Administration submitted an $81.9 billion request for
emergency supplemental appropriations, most of which was intended for military
operations in Iraq. The request included $60 million for Ukraine, on top of its regular
foreign operations appropriation, to help newly elected President Viktor Yushchenko
pursue political as well as economic reforms. Of this amount, $19.2 million was for
anti-corruption and rule of law activities; $3 million for the new president’s
administration; $12.7 for economic reform; $10.1 million for civic organizations in
the east and south; $5 million to support parliamentary elections; $4.5 million for
HIV/AIDS; and $5.5 million for nuclear safety. The conference report on H.R. 1268
met the request on Ukraine and added $5 million for democratization activities in
Belarus and $5 million for relief and conflict management efforts in Chechnya and
the North Caucasus. The legislation was signed into law (P.L. 109-13) on May 11,
2005.
FY2006 Appropriations
The conference report on the FY2006 Foreign Operations appropriations (P.L.
109-102, H.R. 3057) provided $514 million, about $509 million after a 1% across-
the-board rescission is applied. While $27 million higher than the Administration
request of $482 million, the final figure is $46.5 million lower than the FY2005
regular appropriation. H.R. 2863 (P.L. 109-148), the FY2006 Defense appropriations
bill, provided $415.5 million for DOD CTR programs.
CRS-6
FY2007 Appropriations
The Administration has
FSA Account Country Allocations
requested $441 million under
(in $ millions)
the FSA account in FY2007,
a $68 million or 13%
Country
FY04
FY05
FY06 (est)
FY07 (req)
decrease from the FY2006
Armenia
74.6
74.4
74.3
50.0
level.
Azerbaijan
38.8
37.6
34.7
28.0
The FY2007 request for
Belarus
8.1
6.9*
11.9
10.0
DOD CTR programs is $372
Georgia
71.7
86.0
66.3
58.0
million. An additional $44.5
Kazakhstan
33.3
26.7
24.8
19.0
million is requested in the
Kyrgyzstan 36.2
35.1
24.8
32.0
F Y 2 0 0 6 e m e r g e n c y
Moldova
22.5
17.4
17.8
16.0
supplemental, and the House
Russia
96.4
85.0*
79.2
58.0
Appropriations Committee
Tajikistan
24.5
24.5
23.8
22.0
has met that request in its
Turkmenistan
5.7
6.5
5.0
5.0
version of the bill.
Ukraine
94.3
78.6*
83.2
85.0
Uzbekistan
35.9
31.5
17.8
15.0
Regional
42.6
45.2
45.5
43.0
Issues
Total app.
584.5
555.5*
508.9
441.0
* Not shown here is an additional $60 million for Ukraine, $5
Several concerns have
million for Belarus, and $5 million for Chechnya appropriated
been raised in recent years
in the FY2005 emergency supplemental (P.L. 109-13).
regarding U.S. assistance for
Source: Department of State
democracy and economic
r e f o r m . ( F o r n o n -
proliferation aid issues see footnote 1).
Cuts in FSA Account
The FY2007 Administration FSA account request under the foreign operations
appropriations continues an effort to cut aid to the region — as with the FY2006
request, the account would be cut by 13% from the previous year regular budget to
$441 million, continuing a decline from levels which in the past 10 years averaged
$725 million. With democracy challenged in Russia, leadership changes in Georgia,
Ukraine, and Kyrgyzstan that possibly open the door to long-delayed economic and
political reform, as well as important U.S. interests in Central Asia, some observers
have argued for an increase in aid to the region. In 2005, Congress mirrored this
division of views with a House-passed FY2006 measure $5 million lower than the
request and the Senate version $37 million over the request. In the end, the post-
rescission FY2006 appropriation was $27 million above that year’s request. The
FY2007 request is $68 million less than the FY2006 appropriation.
The proposed FY2006 cuts were to have fallen mostly on three of the four
countries which have perennially been the chief recipients of FSA aid in the past 14
years — Armenia, Georgia, and Russia. In the end, Congress insured that only
Georgia suffered a severe reduction — by 23% — and Uzbekistan — by 43%. For
FY2007, the Administration proposes modest decreases for many countries in the
CRS-7
region. The most significant changes would be a 33% cut for Armenia and a 27% cut
for Russia.
Cuts in the Russia Program. In 2005, Russia was the country most
threatened by proposed Administration cuts; this year it is again targeted for a severe
reduction meant, as before, to lead to a total “phase-out” of its aid program in the
next several years. Even at $80 million in FY2006, rather than the proposed $48
million, aid for Russia is at its lowest level. Although the Russia program has until
recently been the largest recipient on an absolute basis (but annually only 7th or more
in per capita terms — Armenia and Georgia have consistently been the highest in per
capita terms), it was often the target of those who were dissatisfied with former
President Yeltsin’s leadership and both his and Putin’s positions on issues such as
the transfer of nuclear reactor expertise to Iran and the war in Chechnya. Russia’s
importance to U.S. foreign policy and the view that aid is intended to address the
need for democracy and free markets have been the chief rationales for maintaining
the aid program at a higher level.
Although the FSA program was not established with any firm deadline in mind,
most observers assumed that the program was “transitional” and would not run as
long as programs in developing countries. A State Department strategy in 1994
suggested the Russia program would end around 1998. In 1997, the Partnership for
Freedom initiative, which chiefly sought to reverse a sharp decline in Russia aid,
made explicit a plan to wind down large-scale technical assistance to the whole FSU
in 2002, but with smaller grassroots cooperation programs continuing beyond then
to about 2006. In 2003, the Bush Administration decided to phase out Russia
programs over several years, beginning with economic sector programs by 2006.
Figure 5. FSA Account and Russia Aid
($ millions)
2500
2000
1500
1000
500
0
1993
1995
1997
1999
2001
2003
2005
2007req
1992
1994
1996
1998
2000
2002
2004
2006
FSA Account
Russia
FSA> 235
417 2158
846
641
622
771
847
836
808
958
755
585
556
509
441
Rus> 150
192 1289
344
135
92
132
179
186
164
162
144
96
85
79
58
CRS-8
The questions these or any proposed cuts raise is whether they are desirable or
justified in terms of what has been accomplished or remains to be achieved in each
country. In the case of Russia, the Administration argues that economic reform
programs are not required now that Russia is growing economically and that these
programs will be phased out first while democracy programs will be maintained.
Some might argue that much more remains to be done in the economic and social
development sectors, especially with regard to grassroots private sector activities that
might contribute as well to democratization. The claim that democracy activities will
be maintained at recent levels might be scrutinized more closely. In FY2002 and
2003, Russia FSA-funded democracy programs amounted to $63 and $61 million
respectively. However, in subsequent years, funding declined to $33 million in
FY2004, $43 million in FY2005, and $40 million in FY2006. The Administration
request for FY2007 contains about $32 million for democracy programs. When all
other accounts are included, funding for democracy in Russia has gone from $80
million in FY2003 to $63 million in FY2005.
Support for Democratization
Although from the beginning declared a major U.S. policy objective in the
region, democracy has never risen above 15% of total all-spigots spending in any
year. It is, however, now a significant part of FSA account spending, rising from 15-
18% in most of the 1990s to 24% by 1998, and 34% in 2003. It is 30% in 2006.
However, as overall account levels have fallen, democracy funding actually declined
significantly between 2003 and 2006 — in the FSA account, from $254 million to
$152 million. The FY2007 request would provide nearly $132 million for
democratization.
The recent rise of democracy in Ukraine and Georgia and its evident decline in
Russia have highlighted the role and possible need for U.S. democratization
assistance. The latter case, in particular, has elicited repeated calls for increased aid
by expert observers during the last five years as Putin has chipped away at democratic
institutions and practices. Congress indicated its concern by passing the Russian
Democracy Act of 2002 (P.L. 107-246) which called for increased aid and
emphasized the role of NGOs and independent media in democratization.
One aspect in the creeping diminution of democratic practices in Russia is the
attacks on aid recipients in civil society and especially NGOs that promote
democracy. In mid-2005, a U.S.-supported human rights organization found itself
accused of evading taxes, even though its U.S. foreign aid income is supposed to be
tax free. Similar problems occurred in the early 1990s until they were resolved
diplomatically by formal agreement with the U.S. embassy. This time, however, they
are combined with attacks from the head of the Federal Security Service on other
NGOs — as well as the Peace Corps which left Russia several years ago amid similar
attacks — and a statement by President Putin that foreign funding of political
activities would not be permitted. Legislation to control Russian NGOs and severely
restricting the ability of foreign organizations to assist them was approved by the
Duma in December and signed into law by President Putin. It takes effect on April
CRS-9
13. Analysts suggest that Russian authorities fear a Ukraine-like situation which has
been blamed on U.S. and other donor-funded NGOs.2
It is not possible to say to what degree U.S. assistance is responsible for the
positive developments in Georgia, Ukraine, and Kyrgyzstan.3 Although the United
States had previously pumped $807 million in FSA account aid to Georgia, $2.1
billion to Ukraine, and $408 million to Kyrgyzstan (including $138 million, $453
million, and $94 million respectively in democracy aid), these countries remained
corrupt, economically stagnant, and authoritarian up to the time of their democratic
revolutions. U.S. programs, however, may have planted seeds of change, especially
in support for civil society and political party training, both of which emphasize ways
in which advocacy groups can make their voices heard.
All U.S. democratization support carries the danger of charges of U.S.
interference in a country’s internal affairs. Implementors have been careful,
especially in providing aid to political parties, to be evenhanded and open to all
comers. But, if the government is authoritarian, then democracy aid may be viewed
as inherently subversive. Accordingly, NGOs throughout Central Asia are reportedly
being harassed, some U.S. officials believe, at the instigation of Russia.4
Conditionality
Aid to the FSU has always come with conditions. Both the FREEDOM Support
Act and annual foreign operations bills contain general and specific conditions that
all the states of the FSU are expected to meet in order to receive assistance.
Conditions left to the broad discretion of the President include whether these
countries are undertaking economic and political reform, are following international
standards of human rights, are adhering to international treaties, and are denying
support to terrorists. Other conditions established by Congress have been more firm
and specific. Among these is Section 907 of the FSA which for a decade prevented,
with some exceptions, policy reform and other direct assistance to the government
of Azerbaijan unless it took steps to cease blockades and other uses of forces against
Armenia and Nagorno-Karabakh. Beginning in 2002 and in each year following, the
President has waived this prohibition.
The majority of specific restrictions have been aimed at Russia. These include
directions that aid be cut or withheld if Russia implemented a law discriminating
against religious minorities, if its troops remained in the Baltics, if it did not provide
NGO access to Chechnya, or if it did not cooperate with war crime investigations in
2 “Putin Says Foreigners Use Private Groups to Meddle in Russia,” New York Times,
January 26, 2006; “Secretary Criticizes Russia’s NGO Law,” Washington Post, December
8, 2005; “Putin Vows to End Foreign Political Funding,” Financial Times, July 21, 2005;
“Russia Hounds Human Rights Group That Gets U.S. Help,” New York Times, Sept. 18,
2005.
3 Some suggest that the U.S. role was critical to events in Kyrgyzstan. “U.S. Helped To
Prepare the Way for Kyrgyzstan’s Uprising,” New York Times, Mar. 30, 2005.
4 “Pro-Democracy Groups are Harassed in Central Asia,” New York Times, December 4,
2005.
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Chechnya. Since FY1996, direct assistance to the government of Russia has hinged
on its continuing sale of nuclear reactor technology to Iran. As a result, in most years
as much as 60% of planned U.S. assistance to the federal Russian government has
been cut.
The new Millennium Challenge Account compacts also come with their own
conditionality. To become eligible for the program, countries must meet certain
standards of behavior related to governance, social development, and economic
freedom. While Armenia, for example, appears to have met those standards
sufficient to warrant a compact agreement, it also has been warned that it must
maintain them or risk losing aid. Even as its $236 million award was announced in
December 2005, a letter from the MCC to Armenia’s President Kocharian suggested
that steps be taken to correct problems raised in recent months, particularly with
regard to charges of electoral fraud and media restrictions in the November
constitutional referendum.5
Currently, the most difficult conditionality issue arises with respect to human
rights in Central Asia. The authoritarian governments of the so-called “stans” were
not seen as fertile territory for U.S. assistance in the 1990s. Consequently, most
received minimal aid. However, after 9/11, these states became potential targets for
Muslim radicalism as well as front lines in the war on terrorism. In FY2002, they
received an additional $174 million in FSA account funds from anti-terrorism
supplemental appropriations. Although their strategic value has increased, their poor
record in supporting human rights has raised concerns reflected in succeeding
appropriations bills. In the FY2006 Foreign Operations appropriations, for example,
aid to the central government of Uzbekistan is conditioned on its making “substantial
and continuing” progress in human rights and democratization. Aid to the
government of Kazakhstan similarly depends on its improvements in protection of
human rights, although the condition can be waived on national security grounds;
Secretary of State Rice most recently employed the waiver in May 2005.
In 2004, the Secretary of State was unable to make a determination allowing
Uzbek aid to go forward, and $18 million planned for the central government was
withheld. At the same time, DOD waived a human rights requirement under the
Nunn-Lugar Cooperative Threat Reduction legislation to allow non-proliferation aid
to Uzbekistan.6 Following a violent Uzbek government response to unarmed
demonstrators in mid-May 2005 and critical comments by the United States, relations
between the United States and Uzbekistan have been strained. Although the United
States had been negotiating for long-term use of the base there, the Administration
was forced to consider whether a military relationship was viable in a situation of
authoritarian rule and civil unrest. The decision appears to have been made for it
5 “U.S. Approves Grant to Armenia, but Urges Greater Political Rights,” New York Times,
December 20, 2005.
6 Although it is not unusual for different types (and objectives) of aid to be subject to
different legislative conditions and to be treated differently, the Washington Post reports the
unusual recent circumstance of the Chairman of the Joint Chiefs of Staff, General Myers,
criticizing the State Department’s aid cut-off while praising Uzbekistan’s cooperation with
DOD. “Barriers to Freedom,” Washington Post, Apr. 10, 2005.
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when, on July 31, 2005, the Uzbek government formally evicted U.S. forces from the
base, effective within six months, and, reportedly, has stopped cooperating with the
United States on counterterrorism activities. In 2005, the Secretary of State was
again unable to make the determination that would allow some kinds of aid to the
government of Uzbekistan to go forward.7
Increasingly, non-democratic countries in the region have placed constraints on
civil society and other non-governmental organizations that U.S. assistance targets.
In June 2005, the Peace Corps suspended the program in Uzbekistan, because the
Uzbek government did not renew the visas of volunteers. In September, the FSA
account-funded organization IREX, which had been working in the country since
1994, was ordered by a Uzbek court to stop its programs — exchanges, internet
access, and community development — for six months. And, in March 2006, the
U.S. human rights group Freedom House was ordered to end operations. Expecting
a similar action, the Eurasia Foundation announced it would close its office.8 In
addition to U.S. organizations, thousands of local NGOs have been forced to disband,
raising the question of how the United States can implement democracy programs in
Uzbekistan without appropriate partners.
7 Department of State Budget Justification for Foreign Operations, FY2007, p. 524;
“Uzbeks Stop Working with U.S. Against Terrorism,” Washington Post, Sept. 30, 2005.
8 “Uzbekistan Jails Opposition Leader and Rights Worker,” Washington Post, March 7,
2006. For more detail, see CRS Report RS22295, Uzbekistan’s Closure of the Airbase at
Karshi-Khanabad: Context and Implications, by Jim Nichol.