Order Code RL31362
U.S. Foreign Aid to East and South Asia:
Selected Recipients
Updated January 3, 2007
Thomas Lum
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division

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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 the war on terrorism began in 2001, and the Bush Administration’s
Millennium Challenge Account (MCA) and Global HIV/AIDS Initiative (GHAI)
were initiated in 2004, the United States has increased foreign aid spending
dramatically in some regions. The United States has raised military, economic, and
development assistance primarily for counterterrorism objectives in the East Asia-
Pacific (EAP) and South Asia regions, with Pakistan, India, the Philippines, and
Indonesia receiving the bulk of the increases. Average annual funding for the EAP
region (excluding North Korea) during 2002-2006 was $494 million compared to
$368 million in 2001. Annual foreign aid spending for South Asia (excluding
Afghanistan) during 2002-2006 averaged $953 million compared to $201 million in
2001. The United States has acknowledged other aid recipients, particularly
Malaysia and Mongolia, for cooperating with global counterterrorism efforts and for
making progress in developing their economies and democratic institutions.
The Bush Administration has emphasized using foreign aid to promote
democracy which it sees as advancing global development and U.S. strategic
interests. The United States restricts foreign assistance to many countries in East and
South Asia in order to encourage democracy or discourage the spread of nuclear
weapons capabilities. Several countries in Asia — including Burma, Cambodia,
Indonesia, Thailand, and Pakistan — face constraints or conditions on U.S. bilateral
assistance because of past or ongoing human rights violations. In 2005, the Bush
Administration resumed full military assistance to Indonesia, based upon the
satisfaction of legislative conditions and national security grounds. The FY2006
foreign operations appropriations measure renewed the President’s waiver authority
on coup-related sanctions against Pakistan. The President certified the waiver on
February 8, 2006, thus making U.S. foreign assistance available to Pakistan for
another year.
The House passed H.R. 5522, the Foreign Operations Appropriations bill for
FY2007, on June 9, 2006. The Senate Appropriations Committee reported out the
measure on July 10, 2006 (S.Rept. 109-277) but no further action was taken. Foreign
operations programs are currently operating under the terms of the continuing
appropriations resolution (P.L.109-383) which extends funding at the FY2006 level
or the House-approved FY2007 level, whichever is less. The continuing
appropriations resolution expires on February 15, 2007.
This report will be updated periodically.

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Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
New Approaches to Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Conflicting Policy Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FY2007 Budget Request and the 109th Congress . . . . . . . . . . . . . . . . . . 4
Regional Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
September 2006 Military Coup in Thailand . . . . . . . . . . . . . . . . . . . . 10
Indian Ocean Earthquake and Tsunami . . . . . . . . . . . . . . . . . . . . . . . . 10
Country Aid Levels and Restrictions — East Asia . . . . . . . . . . . . . . . . . . . . . . . 11
Regional Development Mission-Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Burma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
People’s Republic of China (PRC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
East Timor (Democratic Republic of Timor-Leste) . . . . . . . . . . . . . . . . . . . 17
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Military Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2004 Tsunami Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Laos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Mongolia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
September 2006 Military Coup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Environmental and Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . 25
Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
South Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Country Aid Levels and Restrictions — South Asia . . . . . . . . . . . . . . . . . . . . . . 28
Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Non-Proliferation Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Foreign Aid Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Lifting of Foreign Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2004 Tsunami Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix. Selected Acronyms for U.S. Foreign Aid
Accounts and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

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List of Figures
Figure 1. Major U.S. Aid Recipient in Asia, by Aid Amount
(millions of current U.S. dollars), 2001-2006 . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 2. Health and Development Assistance (CSH and DA) by Region,
FY2005 (millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Figure 3. Economic Support Funds by Region, FY2005 (millions of dollars) . . . 7
Figure 4. Military Assistance by Region, FY2005 (millions of dollars) . . . . . . . . 7
Figure 5. U.S. Foreign Aid (Non-food) to East Asian Countries, FY2005
(millions of dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Figure 6. U.S. Assistance to South Asia (Excluding Food Aid), 2001-2006
(millions of current U.S. dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
List of Tables
Table 1. U.S. Foreign Assistance by Region
(Excluding Food Aid), 2001-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. Regional Development Mission-Asia, 2003-2007 . . . . . . . . . . . . . . . . 11
Table 3. U.S. Assistance to Burma, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 4. U.S. Assistance to Cambodia, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . 13
Table 5. U.S. Assistance to China, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 6. U.S. Assistance to East Timor, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . 17
Table 7. U.S. Assistance to Indonesia, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . 18
Table 8. U.S. Assistance to Laos (LPDR), 2003-2007 . . . . . . . . . . . . . . . . . . . . 20
Table 9. U.S. Assistance to Malaysia, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . 21
Table 10. U.S. Assistance to Mongolia, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . 21
Table 11. U.S. Assistance to Philippines, 2003-2007 . . . . . . . . . . . . . . . . . . . . . 22
Table 12. U.S. Assistance to Thailand, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . 24
Table 13. U.S. Assistance to Vietnam, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . 25
Table 14. U.S. Assistance to Bangladesh, 2003-2007 . . . . . . . . . . . . . . . . . . . . 28
Table 15. U.S. Assistance to India, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 16. U.S. Assistance to Nepal, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 17. U.S. Assistance to Pakistan, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . . 34
Table 18. U.S. Assistance to Sri Lanka, 2003-2007 . . . . . . . . . . . . . . . . . . . . . . 37

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U.S. Foreign Aid to East and South Asia:
Selected Recipients
Overview
New Approaches to Foreign Aid
The United States acts to advance U.S. foreign policy and national security goals
and respond to global development and humanitarian needs through its foreign
assistance programs. Traditionally, U.S. foreign aid has emphasized economic and
social development as foundations for democracy and regional stability. Following
the September 2001 terrorist attacks, foreign aid gained importance as a “vital
cornerstone,” along with diplomacy and defense, in U.S. national security strategy.1
Within this context, the Bush Administration reoriented U.S. foreign assistance
programs: aid to “front line” states in the war on terrorism has been directed at the
conditions that may make radical ideologies and religious extremism attractive, such
as poverty, limited educational opportunities, and ineffective or unaccountable
governance; special attention has been placed upon “fragile states” that may allow
international security threats, particularly terrorist ones, to spread; promoting
democracy has become key to advancing global development and U.S. strategic
interests. In addition, foreign aid now aims to help achieve “transformational
development” — development that “transforms countries, through far-reaching,
fundamental changes in institutions of governance, human capacity, and economic
structure that enable a country to sustain further economic and social progress
without depending on foreign aid.”2 This objective is reflected in the Millennium
Challenge Account (MCA), established in 2004, which rewards countries that
demonstrate good governance, investment in health and education, and sound free
market policies.
1 See CRS Report RL33491, Restructuring U.S. Foreign Aid: The Role of the Director of
Foreign Assistance, by Larry Nowels and Connie Veillette.
2 Another State Department initiative,”transformational diplomacy,” involves restructuring
and repositioning U.S. diplomatic resources in order to achieve the objective of working
“with our many partners around the world to build and sustain democratic, well-governed
states that will respond to the needs of their people and conduct themselves responsibly in
the international system.” See U.S. Agency for International Development, “U.S. Foreign
Aid: Meeting the Challenges of the Twenty-first Century,” January 2004; U.S. Department
of State, Fact Sheet: Transformational Diplomacy, January 18, 2006; Roger Winter,
Statement before the Committee on International Relations, Subcommittee on International
Terrorism, Nonproliferation and Human Rights, July 7, 2004.

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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.
Administration officials suggest that the Millennium Challenge Account — a
separate assistance program that conditions U.S. foreign aid on social, economic, and
political criteria — provides a means of rewarding or encouraging effective and
accountable government independently of U.S. efforts to garner international
cooperation in the war on terrorism. Furthermore, they contend, the MCA’s
emphasis upon good governance in developing countries supports U.S. economic and
security interests around the globe. 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.3 Others argue that development
programs may suffer a lack of U.S. support in countries that neither play a role in
U.S. global counterterrorism efforts nor meet MCA criteria.
Foreign Aid Restrictions. The United States has imposed restrictions on
non-humanitarian development aid, Economic Support Funds (ESF),4 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, Thailand, and Pakistan, have faced congressional restrictions on U.S.
bilateral assistance. However, the United States continues to fund non-governmental
organizations (NGOs) that run development and democracy programs in some of
these countries.5 Most sanctions on aid to Indonesia and Pakistan have been lifted.
Funding Trends
Foreign operations appropriations declined from a peak of $35 billion in 1985
to $15.3 billion in 1997 (in constant 2007 dollars). Many of the fluctuations in aid
flows over the past 25 years can be attributed to U.S. foreign policy responses to
events such as natural disasters, humanitarian crises, and wars and to U.S. military
assistance and other security initiatives in the Middle East. Since 2001, U.S.
assistance to front line states in the war on terror and Iraq war-related aid have
propelled foreign aid funding to new highs. Other sources of growth include the
3 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, Millennium Challenge Account, by Curt Tarnoff.
4 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.
5 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).

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Millennium Challenge Account, the President’s Emergency Plan for AIDS Relief
(PEPFAR), and U.S. assistance to Africa. Despite the growth in foreign aid spending
since 2001, however, the share of the federal budget allocated for foreign policy
programs has declined (with the exception of FY2004).6
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.
Since the war on terrorism began in 2001, and the Bush Administration’s
Millennium Challenge Account (MCA) and Global HIV/AIDS Initiative (GHAI)
were initiated in 2004, the United States has increased foreign aid spending
dramatically in some regions. Pakistan, India, the Philippines, and Indonesia became
the foci of the Bush Administration’s counterterrorism efforts in South and Southeast
Asia, due to their strategic importance, large Muslim populations, and insurgency
movements using terrorist methods. These countries have received the bulk of the
increases in U.S. foreign aid (non-food) to Asia (excluding Afghanistan). Average
yearly U.S. assistance to Pakistan during 2002-2006 is estimated to be $678 million
compared to $3.4 million in 2000-2001. Annual U.S. assistance to India has
increased by over 50% in 2002-2006 compared to 2000-2001, while annual U.S.
assistance to the Philippines during the same period has tripled compared to 2000-
2001. Beginning in 2004, both Indonesia and the Philippines received new funding
for education programs in order 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). See Figure 1.
As part of the Bush Administration’s emphasis on, and congressional support
for, democracy-building around the world, the Department of State’s Human Rights
and Democracy Fund (HRDF) has grown significantly. HRDF spending 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. Congress appropriated $63 million for
HRDF in FY2006. For 2005-2006, approximately one-third of the Democracy Fund
was allocated to Asia, mostly for democracy programs in China.7
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
6 CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-Year Review, by Larry
Nowels.
7 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).

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were chosen.8 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. The Consolidated Appropriations Act, FY2004 (P.L. 108-199)
extended nearly $1 billion to the Millennium Challenge Corporation (MCC) for
development assistance, about one-third less than 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. For FY2007, the House and Senate Appropriations
Committees of the 109th Congress recommended $2 billion and $1.87 billion,
respectively, for the MCC compared to the Administration’s request of $3 billion.
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.
The People’s Republic of China (PRC) has become an important source of
economic assistance to the Southeast Asian least developed countries of Burma,
Cambodia, and Laos. Such assistance includes low-interest loans, trade agreements,
foreign direct investment, technical assistance, and infrastructure and public works
projects. Some specialists criticize PRC assistance and investments for being non-
transparent, supporting urban “trophy projects” rather than sustainable development,
and lacking environmental safeguards and human rights conditions. Others argue
that the benefits of PRC assistance to these countries, particularly Cambodia and
Laos, outweigh any adverse effects and that China helps to fill needs not met by
Western and Japanese aid. Many U.S. observers argue that the United States should
bolster its aid programs, trade activities, and diplomatic presence in the region in
order to help counteract China’s growing influence.

FY2007 Budget Request and the 109th Congress. The FY2007 budget
request for foreign operations was $23.69 billion, 14% above FY2006 appropriations
(not including supplemental appropriations). A large portion of the increase
constituted additional funding for Iraq, Afghanistan, and counterterrorism programs,
the Millennium Challenge Account, and HIV/AIDS relief. However, “core”
assistance — Child Survival and Health (CSH) and Development Assistance (DA)
— would decrease by 11.8% under the request.9 The FY2007 budget request for
East Asia and the Pacific ($514 million) was 1.8% less than FY2006 appropriations.
Under the FY2007 budget, funding for South Asia (excluding Afghanistan) would
be 2.3% less than FY2006. The House version of H.R. 5522, the foreign operations
appropriations bill for FY2007, provided a total of $21.3 billion for foreign assistance
in 2007.10 The Senate Appropriations Committee recommended $21.5 billion for
8 Murray Hiebert, “More Aid, but Strings Attached,” Far Eastern Economic Review,
February 20, 2003.
9 CRS Report RL33420, Foreign Operations (House)/State, Foreign Operations, and
Related Programs (Senate): FY2007 Appropriations, by Larry Nowels, Connie Veillette,
and Susan B. Epstein.
10 The House of Representatives passed H.R. 5522 on June 9, 2006.

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CRS-5
foreign aid in 2007.11 The House-backed bill suspended IMET funds to Nepal and
reduced FMF to Pakistan by one-third below the Administration’s budget request.
The Senate Appropriations Committee proposed raising the amount of democracy
assistance for several countries, including Burma, Cambodia, China, East Timor,
Indonesia, the Philippines, Thailand, and Pakistan, and increasing FMF for the
Philippines to fight terrorism. Foreign operations programs are currently operating
under the terms of the continuing appropriations resolution (P.L.109-383) which
extends funding at the FY2006 level or the House-approved FY2007 level,
whichever is less. The continuing appropriations resolution expires on February 15,
2007.
Figure 1. Major U.S. Aid Recipient in Asia, by Aid Amount (millions of
current U.S. dollars), 2001-2006
1200
1000
800
600
400
200
0
2001
2002
2003
2004
2005
2006 est.
Bangladesh
Cambodia
India
Indonesia
Pakistan
Philippines
Regional Comparisons. Africa remained the largest regional recipient of
Child Survival and Health (CSH) and Development Assistance (DA) funding in
FY2006, according to estimates.12 The largest regional recipients of Economic
Support Funds in FY2006 were Near East Asia (Middle East) and South and Central
Asia (mostly to Afghanistan, with a large portion going to Pakistan as well). The
largest recipient of military assistance was Near East Asia followed by South Asia.13
These rankings were the same as those for FY2005. See Table 1 and Figures 2-4.
11 S.Rept. 109-277 on H.R. 5522.
12 The State Department divides foreign aid allocations into six regions: Africa, East Asia
and the Pacific (EAP), Europe and Eurasia, Near East Asia (Middle East), South and Central
Asia (formerly South Asia), and Western Hemisphere (Latin America and Carribean).
13 Military Assistance includes International Military Education and Training (IMET),
Foreign Military Financing (FMF), and Peacekeeping Operations (PKO).

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Table 1. U.S. Foreign Assistance by Region
(Excluding Food Aid), 2001-2007
(millions of current U.S. dollars)
FY06
FY07
FY01
FY02
FY03
FY04
FY05
est.
req.
Africa
1,313
1,481
1,706
2,091
2,795
2,924
3,826
East Asia-
Pacific
368
455
477
474
525
523
514
(excluding
North Korea)
Europe and
2,017
2,435
2,871
1,577
1,323
1,068
900
Eurasia
Near East
5,401
5,567
8,409
5,556
5,755
5,369
6,039
Asia
South Asia
(excluding
201
1,403
785
685
970
966
910
Afghanistan)
Western
749
1,385
1,559
1,545
1,723
1,581
1,512
Hemisphere
Source: U.S. Department of State, Country/Account Summaries (2001-2007)
Note: 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.
Figure 2. Health and Development Assistance (CSH and DA) by
Region, FY2005 (millions of dollars)
total: $1,915 million
Africa, 887
EAP, 193
South and Central
Asia, 423
Europe, 15
Near East, 6.5
Western Hemis, 391
(U.S. Department of State)

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Figure 3. Economic Support Funds by Region, FY2005 (millions of
dollars)
total: $3,822 million
South and Central
Asia, 1,643
Western Hemis,
163
Africa, 126
EAP, 186
Europe, 35
Near East, 1,669
(U.S. Department of State)
Figure 4. Military Assistance by Region, FY2005 (millions of dollars)
total: $5,273 million
Near East, 3,902
Europe, 244
EAP, 45
Africa, 232
South and Central
Asia, 729
Western Hemis,
121
(U.S. Department of State)

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East Asia
Major objectives and program areas for U.S. assistance in East Asia include
counterterrorism, 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
counterterrorism 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 home 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).14 USAID’s programs in East Asia
aim to address the conditions that may give rise to radical ideologies and terrorism,
such as poverty and unemployment, lack of education, failing governments, political
disenfranchisement, and violent conflict. In October 2003, the Bush Administration
launched education programs in Muslim communities in the Philippines and in
Indonesia as part of its regional counterterrorism efforts.
Figure 5. U.S. Foreign Aid (Non-food) to East Asian Countries, FY2005
(millions of dollars)
total: $451.7 million
Laos, 4.5
Indonesia, 140
Malaysia, 3.5
Mongolia, 13.6
E. Timor, 26
China, 24.7
Philippines, 127
Cambodia, 60
Burma, 7.9
Thailand, 11.5
Vietnam, 33
(U.S. Department of State)
14 For further information on Southeast Asian terrorist activities, see CRS Report RL31672,
Terrorism in Southeast Asia, by Bruce Vaughn, et. al.

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CRS-9
Among EAP countries (excluding the Pacific Island nations), in FY2006,
Indonesia was the largest recipient of U.S. foreign aid, particularly ESF and health
and development assistance (CSH and DA), followed by the Philippines. The
Philippines was the region’s largest beneficiary of Foreign Military Financing (FMF)
and International Military Education and Training (IMET). Counter-narcotics and
law enforcement assistance (INCLE) were provided to Indonesia, the Philippines, and
East Timor. Indonesia, Cambodia, and the Philippines were the largest recipients of
Non-proliferation, Anti-terrorism, De-mining, and Related programs (NADR). See
Figure 5. Vietnam, as one of 15 focus countries under the President’s Emergency
Plan for AIDS Relief (PEPFAR), was 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, Developing
Asian Institutions Fund, and Regional Women’s Issues. The ASEAN Fund,
introduced in FY2004, promotes regional cooperation on several fronts, including
terrorism, border security, HIV/AIDS and avian influenza, human trafficking,
narcotics, and trade. The Asian Institutions Fund advances U.S. strategic interests
through support of regional, multilateral fora such as the Asia-Pacific Economic
Cooperation (APEC) meeting and the ASEAN Regional Forum (ARF). EAP also
receives assistance through USAID’s Regional Development Mission-Asia, including
programs for reducing trafficking in persons, improving economic policy and
governance, protecting the rights of people with disabilities, and preventing and
controlling HIV/AIDS and other infectious diseases. The Bush Administration’s
FY2007 budget request included $26 million in ESF for the Asia-Pacific Partnership,
a cooperative arrangement with China, India, South Korea, Australia, and Japan
formed to address climate change. The FY2007 foreign operations appropriations
bill as reported out of and passed by the House (H.Rept. 109-486) did not approve
the request.
Foreign Aid Restrictions. In some East Asian countries, the United States
has withheld assistance or restricted it to non-governmental organizations (NGOs)
or to exiled democratic political groups in response to government actions that the
United States has deemed undemocratic. The foreign operations spending measure
for FY2006 (P.L. 109-102) maintained human rights-related restrictions on U.S.
foreign assistance to the governments of Burma, Cambodia, and Indonesia while
supporting Burmese dissident groups and promoting civil society, human rights, and
democracy in Cambodia, Indonesia, East Timor, Thailand, China, and Mongolia.
Between 1993 and 2005, Indonesia faced sanctions on military assistance largely
due to U.S. congressional concerns about human rights violations, particularly those
committed by Indonesian military forces (TNI). In February 2005, Secretary of State
Condoleezza Rice determined that the Indonesian government and armed forces
(TNI) had satisfied legislative conditions and certified the resumption of full IMET
for Indonesia. 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

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CRS-10
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).
September 2006 Military Coup in Thailand. In response to the September
19, 2006, military coup in Thailand, the U.S. State Department suspended military
and peacekeeping assistance and training under foreign operations appropriations and
counterterrorism assistance under Section 1206 of the National Defense
Authorization Act for FY2006. The bans were imposed pursuant to Section 508 of
the Foreign Operations Appropriations Act, which provides that such funds shall not
be made available to any country whose duly elected head of government was
deposed by military coup. Other aid programs not affected by Section 508 or in the
U.S. national interest would continue to receive funding.
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.15 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 in East and South Asia. The Bush Administration pledged $400
million for relief and reconstruction efforts in Indonesia and $5.3 million for
Thailand.16
15 USAID, Fact Sheet #39, Indian Ocean — Earthquakes and Tsunamis (July 7, 2005).
16 USAID, USAID Rebuilds Lives after the Tsunami (April 27, 2006).

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CRS-11
Country Aid Levels and Restrictions — East Asia17
Regional Development Mission-Asia
USAID’s Regional Development Mission-Asia (RDM-Asia), inaugurated in
2003 to manage regional and country-specific aid primarily in mainland Southeast
Asia, administers the following programs: Vulnerable Populations & Foreign Policy
Interests; HIV/AIDS and Other Infectious Diseases; Improved Environmental
Conditions in Asia; and Regional Governance and Economic Reform. The
vulnerable populations program supports basic education, health care, victims of war,
anti-trafficking, and mass media activities in Burma, Vietnam, Laos, and Thailand.
Regional health programs assist related efforts in China, Laos, Thailand, and
Vietnam. Environmental assistance includes improved access to clean water and
sanitation, sustainable management of natural resources and biodiversity
conservation, and pollution mitigation in Southeast Asia. Regional government
programs focus on commercial legal reforms in Laos, Thailand, and Vietnam.
Funding for RDM-Asia has increased dramatically since 2003. See Table 2.
Table 2. Regional Development Mission-Asia, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
9,602
17,073
18,511
18,941
20,007
DA
1,969
9,200
10,400
16,446
14,440
ESF
3,720
994
3,472
18,216
11,400
Global
0
0
16,370
8,385
8,385
HIV/AIDS
Totals
15,291
27,267
48,753
61,988
54,232
Source: U.S. Agency for International Development, Budget Justification to the Congress, FY2007.
17 Including Southeast Asia and excluding North Korea and Pacific Island nations.

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CRS-12
Burma
Table 3. U.S. Assistance to Burma, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
2,000
0
0
0
0
DA
0
0
0
0
0
ESF
6,950
12,923
7,936
10,890
7,000
Other
4,000a
3,000a
—
Totals
8,950
12,923
11,936
13,890
7,000
Sources: U.S. Department of State; USAID
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. Furthermore, the SPDC reportedly has
mismanaged the economy and has embarked upon a sudden, costly relocation of the
capital from Rangoon to Pyinmana, a remote town in the center of the country. The
United States 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.18 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 Burmese pro-democracy students and mass media
personnel living outside the country.19
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. Additional U.S. foreign aid sanctions against Burma include
opposition to international bank loans to Burma and a ban on debt restructuring
assistance. U.S. foreign operations legislation mandates withholding 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.20 Since the
Office to Monitor and Combat Trafficking in Persons was established by the U.S.
18 For Burma aid sanctions, see P.L. 104-208, Section 570. For further information on
Burma, see CRS Report RL33479, Burma.-U.S. Relations, by Larry A. Niksch.
19 The State Department has also awarded grants to the National Endowment for Democracy
(NED) for assisting Burmese pro-democracy groups.
20 See P.L. 109-102, Section 526.

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CRS-13
State Department in 2001, Burma has received a “Tier 3” assessment annually by the
Office for failing to make significant efforts to bring itself into compliance with the
minimum standards for the elimination of trafficking in persons. The Tier 3 ranking
could serve as a basis for withholding non-humanitarian aid.
Cambodia
Table 4. U.S. Assistance to Cambodia, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004
FY2005 estimate
request
CSH
22,100
29,360
29,300
28,556
27,378
DA
3,687
2,750
8,950
5,487
6,597
ESF
15,000
16,900
16,864
14,850
13,500
FMF
0
0
992
990
500
NADR
2,765
3,916
4,170
3,700
5,050
Totals
43,552
52,926
60,276
53,583
53,025
Food Aid
P.L. 480 Title
II Granta
0
703
0
0
0
FFPb
1,715
3,444
3,643
—
—
FFEb
650
0
0
—
—
Section
416(b)b
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.
Cambodia ranks 129th 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.
U.S. restrictions on foreign assistance to Cambodia reflect congressional
disapproval of Prime Minister Hun Sen’s seizure of power in 1997 and other
undemocratic political practices. 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. 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

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CRS-14
prevention, treatment, and control of HIV/AIDS and other infectious diseases; and
counter-narcotics activities.21
Cambodia is the recipient of a relatively large amount of foreign aid from a
variety of sources. External funding accounts for over half of the country’s
government budget. Since 1996, the Consultative Group for Cambodia, a consortium
of seven international financial organizations and 22 donor countries under the
auspices of the World Bank, has met annually to set economic and political reform
guidelines for the Cambodian government and to extend aid packages averaging $500
million per year. Japan, Australia, and the United States are the largest bilateral aid
donors to Cambodia.
ESF for Cambodia supports justice system reform, anti-corruption activities,
democratic political parties, and civil society groups that monitor human rights
conditions and investigate allegations of abuse. For FY2007, the Bush
Administration requested $2.5 million for a garment sector competitiveness program.
The Cambodian garment sector, which generates 80% of the country’s export
earnings, faces formidable competition from larger developing countries such as
China.
Cambodia receives FMF for border control and counterterrorism efforts, subject
to congressional notification requirements. The United States provides small
arms/light weapons destruction (NADR/SALW) funds to control their proliferation.
The FY2007 congressional budget justification requested NADR Terrorist
Interdiction Program (NADR/TIP) funds to help provide for a computerized system
for collecting and analyzing traveler data to identify possible terrorists.
In other U.S. assistance programs, Cambodia, one of the top five countries in
the world for the number of landmine casualties (approximately 800 victims per
year), is to receive approximately $5 million annually in 2006 and 2007 for de-
mining activities (NADR/HD). In addition, in the past decade, USAID has supported
programs worth $13 million providing for prostheses, physical rehabilitation,
employment for persons with disabilities, and coordination of services using Leahy
War Victims Funds. Cambodia participates in a USAID Office of Foreign Disaster
Assistance (OFDA)-funded project (2003-2007) that aims to improve flood
forecasting capacity and communications capabilities in communities in the Lower
Mekong River Basin. On October 12, 2005, U.S. Secretary of Health and Human
Services Michael Leavitt, on a visit to Southeast Asia, signed a cooperation
agreement with Cambodian officials in which $1.8 million was pledged to help the
country guard against the spread of H5N1 (avian influenza).
21 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.

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CRS-15
People’s Republic of China (PRC)
Table 5. U.S. Assistance to China, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
DA
0
0
0
4,950d
5,000
ESF
15,000
13,500a
19,000b
23,000c
—
ESF/Tibet
—
3,976a
4,216b
3,960d
—
Peace Corps
977
863
1,476
1,785
1,886
Totals
15,977
18,339
24,692
33,695
6,886
Sources: U.S. Department of State, USAID.
a. P.L. 108-199.
b. P.L. 108-447.
c. H.Rept. 109-265.
d. P.L. 109-102, Sections 534 and 575.
USAID does not have a presence or mission in the People’s Republic of China
(PRC). However, the Peace Corps has been involved in English language and
environmental education in China since 1993, and United States funding primarily
to U.S.-based non-governmental organizations (NGOs) for democracy and Tibet
programs has almost doubled since 2003. Beginning in 2006, Congress has
appropriated funding for U.S. educational programs in China.
China received only Peace Corps assistance prior to 2000. The consolidated
appropriations act for FY2000 provided $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. Congress has increased its annual earmark for democracy, human
rights, and rule-of-law programs in China from $10 million in 2002 to $23 million
in 2006. Appropriations for cultural preservation, economic development, and
environmental conservation in Tibetan communities in China has also grown.22 In
2004, the Bureau of Democracy, Human Rights and Labor (DRL) of the Department
of State became the principal administrator of China democracy programs.23 Major
22 The conference agreement (House Rpt. 109-265) on the FY2006 foreign operations
appropriations bill (H.R. 3057, signed into law as P.L. 109-102) authorized $20 million for
China/Hong Kong/Taiwan from the Human Rights and Democracy Fund (HRDF). In
addition, Congress provided $3 million to NED for democracy programs in China. For
Tibet, the FY2006 foreign aid measure authorized $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.
23 For descriptions of HRDF projects in China, see U.S. Department of State, Bureau of
Democracy, Human Rights and Labor, FY2005-2006 Human Rights and Democracy Fund

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CRS-16
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). In addition, NED provides grants (approximately $2
million per year since 1999) for programs that promote human rights, labor rights,
electoral and legal reforms, and independent mass media in China from its annual
congressional earmark.24
In 2006, Congress appropriated $5 million in Development Assistance (DA) to
American educational institutions for programs in China related to democracy, rule
of law, and the environment. The Senate Appropriations Committee of the 109th
Congress recommended $49 million for democracy and rule of law programs in the
PRC for 2007, an increase of $44 million above the President’s budget request,
including $14 million in DA funds to American educational institutions (S.Rept. 109-
277).
Since 2002, foreign operations appropriations legislation has prohibited funding
to the United Nations Population Fund (UNFPA) because of its programs in China,
which the State Department has determined involve coercive abortion. 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.25
Projects Fact Sheet, December 6, 2005.
24 See General Accounting Office, “Foreign Assistance: U.S. Funding for Democracy-
Related Programs,” February 2004.
25 For further information, see CRS Report RL31910, China: Economic Sanctions, by
Dianne E. Rennack.

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CRS-17
East Timor (Democratic Republic of Timor-Leste)
Table 6. U.S. Assistance to East Timor, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
DA
0
0
500
0
0
ESF
24,838
22,367
21,824
18,810
13,500
FMF
1,990
2,420
1,023
990
500
IMET
119
159
364
297
320
INCLE
0
0
0
1,485
0
PKO
3,250
1,050
1,228
0
0
Peace Corps
1,219
1,320
1,372
1,632
1,703
Totals
31,416
27,316
25,811
23,214
16,023
Food Aid
P.L. 480 Title
II Granta
0
669
994
0
0
Sources: U.S. Department of State; USAID; U.S. Department of Agriculture
a. USAID data — includes freight costs.
East Timor (Democratic Republic of Timor-Leste) gained full independence in
May 2002. The United States supports a wide 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. USAID programs in the country support maternal and
child health. Economic programs include commercial law development, private
sector competitiveness, trade and foreign investment. Aid for developing political
institutions includes building judicial institutions, supporting political parties and the
electoral process, 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 Timor Leste Defense Force,
with an emphasis on maritime security and the transition to a democratic,
professional, and effective force. In November 2005, the Millennium Challenge
Corporation selected East Timor as eligible for MCA assistance. The United States
is the third largest bilateral aid donor to East Timor after Australia and Portugal.
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.26
26 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.

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CRS-18
Indonesia
Table 7. U.S. Assistance to Indonesia, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
31,955
33,000
37,100
28,017
27,507
DA
39,016
33,291
27,848
33,212
26,724
ESF
59,610
49,705
68,480
69,300
80,000
FMF
0
0
0
990
6,500
IMET
0
599
728
792
1,285
INCLE
0
0
0
4,950
4,700
NADR 1,008
5,998
6,262
6,092
7,771
Totals 131,589
122,593
140,418
143,353
154,487
Food Aid/Disaster Relief
P.L. 480 Title I
0
0
0
—
—
USDA Loan
P.L. 480 Title II
Granta
29,540
4,115
10,489
0
24,000
FFPb
0
5,597
6,194
—
—
Section 416(b)b
7,926
17,700
9,078
—
—
Tsunami Reliefc
—
—
400,000
—
—
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. Tsunami Recovery and Reconstruction Fund, P.L. 109-13
Indonesia plays an important role in U.S. efforts toward maintaining political
and economic stability in Southeast Asia, curbing terrorism in the region, and
promoting democracy in the region and the Islamic world. According to the
Department of State, Indonesia, as the largest Muslim country in the world, “is
known for its moderate, pluralistic, and tolerant practice of Islam.” The country
“continues to cooperate with the U.S. and regional players on improving its law
enforcement capabilities to deter terrorist attacks and financial crimes associated with
them.”27 U.S. assistance programs target corruption, terrorism, and weak foreign
investment inflows. A major U.S. aid initiative is the six-year, $157 million
education program begun in 2004. The MCC has designated Indonesia as a
“threshold” country for 2006, meaning that the country is close to meeting MCA
criteria and may receive assistance in reaching eligibility status. The United States
is the second-largest bilateral donor to Indonesia after Japan.
Other USAID programs and proposals for Indonesia include the following:
CSH funds for local maternal and child health care, clean water, and HIV/AIDS and
other infectious diseases prevention and treatment; DA allocations for natural
27 U.S. Department of State, FY2006 Congressional Budget Justification for Foreign
Operations.

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CRS-19
resource management and biodiversity conservation; and ESF for several targeted
areas — the justice sector, government accountability, corruption, conflict resolution,
civil society, and economic growth.
INCLE programs aim to help develop the Indonesian National Police “into
modern and effective civilian forces respectful of the rule of law and human rights.”
NADR assistance for Indonesia includes counterterrorism training, counterterrorism
financing, and export control and border security.
Military Assistance. In 2005, the Bush Administration determined that
Indonesia had met legislative conditions for the resumption of full IMET and waived
restrictions on FMF on national security grounds, thus lifting sanctions that were first
imposed in 1993.28 The Consolidated Appropriations Act for 2004 (P.L. 108-199)
made IMET available to Indonesia if the Secretary of State determined that the
Indonesian government and armed forces 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 Indonesian government was
prosecuting and punishing those members of the Indonesia armed forces credibly
alleged to have committed gross violations of human rights, particularly in East
Timor in 1999. The FY2005 foreign operations appropriations measure (P.L. 108-
447) contained similar provisions. 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 aid
appropriations act for FY2006 (P.L. 109-102) continued existing restrictions on FMF
to Indonesia; however, the law provided that the Secretary of State may waive
restrictions 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 and
allowed FMF for Indonesia.
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.29 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 in East and South
Asia. Of this amount, the Bush Administration pledged $400 million for relief and
reconstruction efforts in Indonesia.30
28 Notwithstanding the restrictions on IMET and FMF, from 1997-2004, Congress allowed
Indonesia to participate in Expanded International Military Education and Training (E-
IMET), which emphasizes and teaches human rights, military codes of conduct, and the
principles and practices of civilian control of the military; the FY2005 foreign operations
appropriations measure (P.L. 108-447) allowed FMF to the Indonesian navy to enhance
maritime security.
29 USAID, Fact Sheet #39, Indian Ocean — Earthquakes and Tsunamis (July 7, 2005).
30 USAID, USAID Rebuilds Lives after the Tsunami (April 27, 2006).

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CRS-20
Laos
Table 8. U.S. Assistance to Laos (LPDR), 2003-2007
(thousand of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
ESF
0
0
0
0
500
CSH
1,000
0
0
0
0
DA
1,000
0
0
0
0
INCLE
2,500
2,000
1,984
990
900
NADR
1,200
1,412
2,500
3,300
3,400
Totals
5,700
3,412
4,484
4,290
4,800
Food Aid
P.L. 480 Title
II Granta
685
0
0
0
0
Section
416(b)b
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.
Laos is one of the poorest countries in the world, with a per capita GDP of
$1,900 (purchasing power parity), a life expectancy of 55 years, and a literacy rate
of 66%.31 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 and to the country’s status as a Tier 3 country on the
State Department’s 2006 Trafficking in Persons Report (TIP).32 INCLE funding
supports counter-narcotics efforts, such as road construction, which would help
enable farmers to market crops other than opium, and the training of counter-
narcotics police units.33 NADR humanitarian demining (HD) assistance is provided
in cooperation with NGOs and UXO Lao, a quasi-governmental entity. In addition,
USAID has administered two projects to assist victims of UXO accidents in Laos
using Leahy War Victims Funds ($917,000 in 2004-2007). 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. For
FY2007, the Bush Administration requested $500,000 in ESF to promote economic
and judicial reform.
31 CIA, The World Factbook, 2006.
32 Department of State, Office to Monitor and Combat Trafficking in Persons, Trafficking
in Persons Report, 2006.
33 Laos is the world’s third-largest producer of opium.

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CRS-21
In October 2005, U.S. Secretary of Health and Human Services Michael Leavitt
signed a cooperation agreement with Lao officials in which the United States pledged
$3.4 million to Laos for controlling outbreaks of avian flu.
The major bilateral donors to Laos are Japan, Germany, Sweden, France,
Australia, and Norway.
Malaysia
Table 9. U.S. Assistance to Malaysia, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003
FY2004
FY2005
estimate
request
IMET
831
939
1,100
891
885
NADR
1,267
230
2,308
1,632
3,465
Totals
2,098
1,169
3,408
2,523
4,350
Sources: U.S. Department of State; USAID
The United States and Malaysia share important interests in Southeast Asia,
including counterterrorism objectives, 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 Malaysia. 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 support joint counterterrorism activities, counterterrorism financing, the
Southeast Asia Regional Counterterrorism Center based in the country, and export
control and border security.
Mongolia
Table 10. U.S. Assistance to Mongolia, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003
FY2004
FY2005
estimate
request
ESF
10,000
9,941
9,920
7,425
7,500
FMF
990
995
992
2,970
3,000
IMET
767
872
1,009
866
910
Peace Corps
1,765
1,646
1,694
1,876
1,956
PKO
0
1,000
0
0
0
Totals
13,522
14,454
13,615
13,137
13,366
Food Aid
FFPa
3,612
8,572
3,658
—
—
Section 416(b)a
0
0
0
—
—

---

CRS-22
Sources: U.S. Department of State; USAID; U.S. Department of Agriculture
a. USDA data — does not include freight costs.
U.S. assistance programs in Mongolia, a strategically-important nation which
has actively supported U.S. policy goals in the East Asia-Pacific region and in the
global war on terrorism, aim to help the country transform itself into a free market
democracy. Economic Support Funds target private sector development and effective
and accountable governance. FMF supports efforts aimed at controlling Mongolia’s
borders with China and Russia against trafficking in illegal drugs and goods. IMET
objectives include civilian control of the military, respect for international human
rights standards, officer training, military justice, and preparation for participation in
peacekeeping operations. Since 2004, Mongolia has been eligible for MCA
assistance. In September 2005, the government of Mongolia submitted a proposal
to the Millennium Challenge Corporation for several projects to be funded by MCA
funds, including railroad construction, improved housing, and health services.

The top bilateral aid donors to Mongolia are Japan, Germany, and the United
States.
Philippines
Table 11. U.S. Assistance to Philippines, 2003-2007
(thousands of dollars)
FY2003
FY2006
FY2007
Account
FY2003
W.S.a
FY2004 FY2005 Estimate
Request
CSH
22,920
—
28,850
27,050
22,671
21,072
DA
28,209
—
21,568
27,576
25,522
19,603
ESF
15,000
30,000
17,645
30,720
19,800
20,000
FMF
19,870
30,000
19,880
29,760
29,700
17,600
IMET
2,400
—
2,700
2,915
2,871
2,865
INCLE
0
—
2,000
3,968
1,980
1,900
NADR
2,094
—
750
2,257
5,277
5,487
Peace Corps
2,624
—
2,774
2,820
2,776
2,910
PKO
0
—
15,000
0
0
0
Totals
93,117
60,000
111,167
127,066
110,597
91,437
Food Aid
P.L. 480 Title I
40,000
—
20,000
20,000
—
—
USDA Loan
FFPc
0
—
3,517
1,720
—
—
Section 416(b)b
7,936
—
0
5,644
—
—
Sources: U.S. Department of State; USAID; U.S. Department of Agriculture
a. Emergency Wartime Supplemental Appropriations (P.L. 108-11).
b. USDA data — does not include freight costs.

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CRS-23
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 in the EAP region. The major program areas of U.S. foreign
aid are corruption and economic governance; basic education; family planning and
health care; and the environment. Most education assistance and 60% of all CSH,
DA, and ESF to the Philippines support programs in Muslim areas of Mindanao. The
MCC has designated the Philippines as a “threshold” country for 2006 or close to
meeting MCA criteria and eligible for assistance in qualifying.
CSH programs in the Philippines support maternal and child health and
nutrition, the prevention and treatment HIV/AIDS and other infectious diseases, and
family planning. Development Assistance targets corruption, economic growth, the
environment, and education. Economic Support Funds promote economic
development and access to education in Mindanao, home of Philippine Muslim
insurgency groups such as the Moro Islamic Liberation Front (MILF) and Abu
Sayyaf, which reportedly have ties to Jemaah Islamiyah (JI). JI is a Southeast Asian
Islamist terrorist organization which purportedly has links to Al Qaeda. FMF
contributes to the military capabilities of the armed forces of the Philippines and to
the Philippine Defense Reform Initiative. 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 the anti-narcotics
and anti-trafficking-in-persons capabilities of the Philippines police forces. Other
NADR activities include counterterrorism financing, terrorist interdiction, and export
control and border security. In addition, the Philippines has been made eligible for
priority delivery of Excess Defense Articles (EDA).34
The United States signed a Tropical Forest Conservation Act Agreement with
the Philippines on September 19, 2002.35 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.
The United States is the largest grant donor to the Philippines. According to
USAID, other major bilateral donors are Japan, China, Germany, and the United
Kingdom.
34 Excess Defense Articles consist of used U.S. weapons and equipment given away for free.
35 The Tropical Forest Conservation Act (P.L. 105-214).

---

CRS-24
Thailand
Table 12. U.S. Assistance to Thailand, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
DF
—
—
—
1,980
—
CSH
1,500
0
0
0
0
DA
1,250
0
0
0
0
ESF
0
0
992
990
0
FMFa
1,990
881
1,488
1,485
1,300
IMETa
1,768
2,572
2,526
2,376
2,370
INCLE
3,700
2,000
1,608
990
900
NADR
200
1,380
1,782
4,301
2,134
Peace Corps
1,818
1,840
2,143
2,190
2,185
PKOa
0
500
0
0
0
Totals
12,226
9,173
10,539
14,312
8,889
Sources: U.S. Department of State; USAID
a. Suspended under Section 508 of the Foreign Operations Appropriations Act (P.L. 109-102).
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 2006, the U.S. State
Department declared, “U.S. government assistance to Thailand enhances U.S.
influence in a strategically important region, strengthens Thailand’s efforts to combat
terrorism, narcotics trafficking and other international crime, and reinforces military
cooperation.”36 FMF programs help to boost the counterterrorism capabilities of
Thailand’s Special Forces units. Thai IMET graduates hold a majority of senior
military positions. INCLE activities help Thailand fight corruption in its criminal
justice system as well as organized crime in the region. NADR assistance supports
Thai police against terrorist activities in majority-Muslim provinces of the south,
where a separatist insurgency has claimed the lives of 1,300 Thais since 2004.
September 2006 Military Coup. In response to the September 19, 2006,
military coup in Thailand, the U.S. State Department announced the suspension of
nearly $24 million in U.S. foreign assistance to the country, including military and
peacekeeping assistance and training under foreign operations appropriations ($7.5
million) and counterterrorism assistance under Section 1206 of the National Defense
Authorization Act for FY2006 ($16.3 million).37 The bans were imposed pursuant
36 U.S. Department of State, FY2006 Congressional Budget Justification for Foreign
Operations.
37 The United States government announced the suspension in aid on September 28, 2006.
For further information, see CRS Report RL32593, Thailand: Background and U.S.
Relations, by Emma Chanlett-Avery.

---

CRS-25
to Section 508 of the Foreign Operations Appropriations Act, which provides that
such funds shall not be made available to any country whose duly elected head of
government was deposed by a military coup. Under Section 508, the funds can be
reinstated once a democratically-elected government is in place. Other aid programs
not affected by Section 508 or in the U.S. national interest would continue to receive
funding. Prior to the coup, the Senate Appropriations Committee recommended $5
million in Democracy Funds for Thailand for FY2007 (S.Rept. 109-277).
Environmental and Disaster Assistance. 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.
Since 2003, Thailand has participated in an OFDA-funded, five-year Mekong River
flood early warning project. The United States government pledged $5.3 million in
relief and reconstruction assistance for areas in Thailand affected by the December
2004 tsunami.
Vietnam
Table 13. U.S. Assistance to Vietnam, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
5,300
6,100
1,200
0
0
DA
7,671
3,000
4,750
2,818
2,440
ESF
0
0
0
1,980
1,000
GHAI
0
10,000
24,044
31,214
54,000
IMET
0
0
50
50
95
NADR
2,527
3,214
3,331
3,690
3,700
Totals38
15,498
22,314
33,375
39,752
61,235
Food Aid
FFPa
15,122
7,898
0
—
—
FFEa
4,796
0
0
—
—
Section
416(b)a
0
6,170
0
—
—
Sources: U.S. Department of State; USAID; U.S. Department of Agriculture
a. USDA data — does not include freight costs.
The United States is not a major aid donor to Vietnam. However, Vietnam,
with over 200,000 HIV-positive persons and a higher HIV infection rate than India
and China, is the only Asian country to receive assistance through the President’s
38 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, Bureau of International Labor Affairs projects in Vietnam, Centers for Disease
Control (CDC) HIV/AIDS programs, and Fulbright educational exchanges.

---

CRS-26
Emergency Plan for AIDS Relief (PEPFAR) using Global HIV/AIDS Initiative
(GHAI) funds. When PEPFAR is included, Vietnam is one of the largest recipients
of U.S. assistance in East Asia. Other U.S. assistance provided 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 NADR support programs for war and land mine victims.
Development Assistance (DA) for Vietnam supports the country’s efforts to
implement the 2001 Bilateral Trade Agreement with the United States and prepare
for World Trade Organization (WTO) accession, which is expected in 2007.39 ESF
supports development projects in the Central Highlands, where many reported human
rights abuses against the Christian, ethnic minority Montagnards allegedly have
occurred. 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.40
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
forecasting capacity and early-warning information transfer to communities in the
Lower Mekong River Basin.
South Asia
Key U.S. foreign aid objectives in South Asia include combating terrorism,
developing bilateral military ties, 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, counterterrorism 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 after Afghanistan, followed by India. See Figure 6.
South Asia faces daunting development challenges, including poverty,
HIV/AIDS and childhood diseases, illiteracy, and fast-growing populations. These
conditions in turn threaten political stability and, according to some observers, create
fertile ground for the rise of radical religious thinking and political ideologies. India,
39 On December 9, 2006, Congress passed legislation granting permanent normal trade
relations (PNTR) treatment to Vietnam (H.R. 6406).
40 Sharon Behn, “U.S. Military Specialists Headed to Vietnam,” Washington Times, June 23,
2005.

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CRS-27
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.41 Since 2005, Bangladesh, India, and Nepal have received significant
increases in NADR Anti-Terrorism Assistance (ATA).
USAID’s South Asia Regional Initiative for Energy promotes international
energy cooperation, infrastructure investment, and regulatory reform. The South
Asia Regional Fund (an estimated $900 million in 2006) addresses “the conditions
that breed extremism as well as the perceptions that feed extremism” with programs
that advance economic opportunity, democracy projects that foster government
accountability and citizen participation, and education initiatives that aim to enhance
tolerance, critical thinking, problem solving, and employment skills. South Asian
countries also receive assistance through USAID’s Asia Near East (ANE) regional
programs, including workforce development, democracy building, and education
programs for promoting social tolerance and political moderation.
Figure 6. U.S. Assistance to South Asia (Excluding Food Aid), 2001-
2006 (millions of current U.S. dollars)
1400
1200
1000
800
600
400
200
0
2001
2002
2003
2004
2005
2006
(est.)
India
Bangladesh
Nepal
Sri Lanka
Pakistan
Foreign Aid Restrictions. Both India and Pakistan 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 its delinquency on
foreign loan payments and because of the military coup that took place in October
1999. Many of the 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
41 See CRS Report RL32259, Terrorism in South Asia, by K. Alan Kronstadt and Bruce
Vaughn.

---

CRS-28
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.42 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. A crucial challenge for the
United States, according to some U.S. leaders, is how to assist Pakistan in its
counterterrorism activities and reward its cooperation in Operation Enduring
Freedom while still applying pressure regarding democratization, nuclear non-
proliferation, and other U.S. foreign policy imperatives.
Disaster Assistance. In the December 2004 earthquake and tsunami, Sri
Lanka suffered heavy human losses and property damage. The United States
government pledged $134 million in disaster assistance (including USAID disaster
assistance and food aid and USDA food aid) to Sri Lanka and $17.9 million to
India.43 On October 8, 2005, a catastrophic, magnitude 7.6 earthquake struck
Pakistan, killing over 73,000 persons in Pakistan and 1,333 in India and leaving
nearly 3 million people homeless. The United States pledged $300 million in
economic assistance to the affected region.44
Country Aid Levels and Restrictions — South Asia
Bangladesh
Table 14. U.S. Assistance to Bangladesh, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003
FY2004
FY2005
estimate
request
CSH
27,600
35,500
33,412
26,384
25,884
DA
21,391
18,200
16,535
10,859
8,400
ESF
4,000
4,971
4,960
4,950
5,000
FMF
0
0
248
990
875
IMET
772
862
1,035
891
985
NADR
0
0
893
200
3,713
Peace Corps
1,248
1,566
1,773
1,804
1,870
Totals
55,011
61,099
58,856
46,078
46,727
42 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.
43 USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis (July 7, 2005);
USAID, Tsunami Assistance, One Year Later (December 21, 2005).
44 USAID, Fact Sheet no. 44, South Asia — Earthquake (August 25, 2006).

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CRS-29
FY2006
FY2007
Account
FY2003
FY2004
FY2005
estimate
request
Food Aid
P.L. 480 Title
II Granta
38,577
33,451
22,122
29,934
46,000
Section
416(b)b
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. According to the Department of State, Bangladesh
is a moderate Islamic democracy; however, poverty, political divisiveness, and
corruption, combined with porous borders, have increased the attractiveness of
radical ideologies, including rising Islamist militancy: “Bolstering democracy and
advancing development in Bangladesh are, therefore, essential to promoting stability
and preventing the spread of terrorism in South Asia.”45 CSH funding supports the
following efforts: child, maternal, and reproductive health; family planning;
HIV/AIDS programs; and TB and Avian Influenza prevention. Development
Assistance (DA) targets effective and accountable governance, anti-corruption
activities, private sector development, basic education, water and sanitation, and
disaster mitigation. ESF programs support parliamentary reforms and economic
initiatives. FMF helps to build the country’s Coast Guard. IMET aims to promote
an apolitical, professional Bangladeshi military as well as build counterterrorism and
peacekeeping capabilities. NADR programs include anti-terrorist police training,
counterterrorist financing, and terrorist interdiction.
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
and conserve its mangrove forests.46
The major bilateral aid donors to Bangladesh are Japan, the United Kingdom,
and the United States.
45 U.S. Department of State, “FY2007 Congressional Budget Justification for Foreign
Operations,” February 2006.
46 Pursuant to the Tropical Forest Conservation Act (P.L. 105-214).

---

CRS-30
India
Table 15. U.S. Assistance to India, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003
FY2004 FY2005 estimate
request
CSH
47,438
47,800
53,222
47,690
48,366
DA
34,495
22,539
24,856
10,892
10,004
ESF
10,500
14,912
14,880
4,950
6,500
IMET
1,000
1,366
1,502
1,188
1,480
NADR
1,000
685
4,181
2,445
1,478
Totals
94,433
87,302
98,641
67,165
67,828
Food Aid
P.L. 480 Title
II Granta
42,812
40,869
35,763
44,053
45,000
Section
416(b)b
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.
The United States significantly increased bilateral aid to India in FY2002 and
FY2003, largely as part of its counterterrorism efforts in the region. Both
counterterrorism efforts and daunting economic and social problems remain targets
of U.S. assistance. Current programs are viewed in the context of a strengthening
strategic partnership between the two countries.
CSH funds target health programs, HIV/AIDS prevention and treatment, and
family planning. According to the Department of State, India is home to one-third
of the world’s poor, and more than half of the country’s children are malnourished.
India has an estimated 5.1 million people infected with the HIV virus, the second
highest national total in the world after South Africa. Many members of Congress
have called for India to be included in the President’s Emergency Plan for AIDS
Relief.47 Development Assistance (DA) initiatives include water and sanitation
programs, basic education, disaster management, and economic growth programs that
may provide opportunities for U.S. investment. ESF for India has several
components, including fiscal reform, power sector distribution, vocational education,
disaster mitigation, and urban infrastructure and services. IMET helps to strengthen
professionalism in the Indian military and facilitate cooperation in U.S.-India joint
exercises. NADR Anti-Terrorism Assistance supports training courses related to
explosive detection and counter measures. NADR funding for the Export Control
and Related Border Security Assistance (EXBS) program assists India in
strengthening its export control system in order to help stem the spread of weapons
of mass destruction.
47 See 108th Congress, H.R. 4449 and S. 2203 and 109th Congress, H.R. 1408 and S. 674.

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CRS-31
Non-Proliferation Sanctions. 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.48 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 all
remaining sanctions on India and Pakistan resulting from their 1998 nuclear tests.
The United States government pledged $17.9 million in disaster relief and
reconstruction assistance to India for areas affected by the December 2004 tsunami.
The United States is the fifth-largest bilateral aid donor to India, after Japan, the
United Kingdom, and Germany.
48 Department of Defense Appropriations Act, FY2000 (P.L. 106-79).

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CRS-32
Nepal
Table 16. U.S. Assistance to Nepal, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
19,899
24,840
25,165
18,613
17,985
DA
10,247
8,874
10,000
7,895
7,051
ESF
4,000
4,971
4,960
4,950
5,000
FMF
2,950
3,975
0
—
1,300
IMET
500
546
648
644
790
NADR
0
0
2,771
991
1,186
Peace
2,624
2,108
179
—
—
Corps
Totals 40,220
45,314
43,723
33,093
33,312
Food Aid
P.L. 480
Title II
0
0
966
0
0
Grantb
FFEc
2,130
0
3,871
—
—
Section
416(b)c
0
0
0
—
—
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.
In 2005-2006, Nepal experienced a period of political instability marked by
sharp conflict between King Gyanendra, democratic political parties, students, and
Maoist insurgents. According to the Department of State, U.S. assistance in Nepal
has refocused on democracy and governance objectives: “Working to persuade
Nepal’s constitutional political actors to reconcile in order to counter that Maoist
threat from a position of strength is key to achieving U.S. regional and bilateral
goals.”49 The FY2007 budget request included a new, multi-pronged development
program to enhance stability and security through addressing “key sources of
fragility” — political exclusion, weak governance, lack of economic opportunities
and inequitable growth.
49 U.S. Department of State, “FY2007 Congressional Budget Justification for Foreign
Operations,” February 2006.

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CRS-33
IMET helps the Royal Nepal Army (RNA) to conduct disciplined military
operations within the constraints of the rule of law, international human rights
standards, and democratic values. In 2006, the House Appropriations Committee,
expressing concern about the alleged “disproportionate military response” to student
democracy demonstrators in Kathmandu, recommended a review of the IMET
program in Nepal and a suspension of IMET funding in 2007.50 NADR Anti-
Terrorism Assistance helps the military respond to a resurgent Maoist insurgency.
The FY2007 budget request included funding for a NADR Terrorist Interdiction
Program.
Since 2005, the United States has placed restrictions upon FMF for Nepal due
to human rights concerns. These restrictions can be waived if the Secretary of State
determines that removing them is in the national security interests of the United
States. The Foreign operations appropriations measure for FY2006 (P.L. 109-102)
provided that FMF may be made available to Nepal only if the Secretary of State
certifies that the Government of Nepal is protecting human rights and has restored
civil liberties and demonstrated a commitment to restoring multi-party democratic
government. The Administration’s FY2007 budget justification stated that “FMF is
critical, both for combating the Maoists and for the incentive it provides for the
country to improve its record in human rights and democracy in order to qualify for
FMF.”
In 2004, the United States suspended the Peace Corps program in Nepal after
Maoist rebels bombed the United States Information Center in Kathmandu.
The largest aid donors to Nepal are Japan, the United States, Denmark, the
United Kingdom, and Switzerland.
50 H.Rept. 109-486

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CRS-34
Pakistan
Table 17. U.S. Assistance to Pakistan, 2003-2007
(thousands of dollars)
FY2003
FY2004
FY2005
FY2006
FY2003
W.S.a
FY2004
E.S.b
FY2005
E.S.c
FY2006 est.
E.S. est.d
FY2007 req.
CSH
15,645
—
25,600
—
21,000
—
32,172
—
21,700
DA
34,500
—
49,400
—
29,000
—
40,590
—
29,000
ESF
188,000
—
—
200,000
297,600
—
337,095
40,500
350,000
FMF
49,500
175,000
74,560
—
148,800
150,000
297,000
—
300,000
IMET
990
—
1,384
—
1,885
—
2,024
—
2,075
INCLE
6,000
25,000
31,500
—
32,150
—
37,620
18,700
25,500
NADR
717
—
4,930
—
7,951
—
7,800
—
10,920
Totals 295,352
200,000
187,374
200,000
538,386
150,000
754,301
59,200
739,195
Food Aid
P.L. 480 Title IIe
6,792
—
13,067
—
0
—
3,427
—
0
FFE
4,200
—
0
—
5,796
—
—
—
—
FFP
8,977
—
5,980
—
10,170
—
—
—
—
Section 416(b)
0
—
9,583
—
1,972
—
—
—
—
a. Emergency Wartime Supplemental Appropriations Act, 2003 (P.L. 108-11).
b. Emergency Supplemental Appropriations for Iraq and Afghanistan Security and Reconstruction Act, 2004 (P.L. 108-106). The $200 million in ESF was allocated to help Pakistan
meet debt obligations 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.”
c. Emergency Supplemental Appropriations Act, 2005 (P.L. 109-13).
d. Emergency Supplemental Appropriations Act, 2006 (P.L. 109-234).
e. USAID data — includes freight costs.

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CRS-35
Foreign Aid Programs. The State Department’s FY2007 congressional
budget justification states that “Pakistan is a front-line state and firm ally in the
global war on terrorism.” Most U.S. assistance programs in the country claim to
directly or indirectly serve U.S. counterterrorism goals. To offset the costs of related
military operations, Pakistan has received emergency economic aid and bilateral debt
reduction assistance. Programs supporting health care, education, economic
development, and democratization aim to promote social and political moderation.
Since 2002, USAID has carried out a $100 million, five-year education program,
especially in Baluchistan and Sindh provinces in southern Pakistan.51
In other programs, ESF and DA funds support activities to improve and
strengthen elections processes, political parties, legislative functions, local
government, and human rights. The United States government has committed over
$69 million in humanitarian assistance to Pakistan in response to the devastating
October 2005 earthquake centered in Pakistan-administered Kashmir.52 In addition,
in 2006, USAID implemented an earthquake reconstruction program with planned
and proposed expenditures of $55 million and $50 million in FY2006 and FY2007,
respectively.
In 2007, FMF is to be used for Pakistani military modernization, including the
acquisition of helicopters, vehicles, spare parts, communications and surveillance
equipment, and night vision gear. IMET supports education in professional military
conduct and increasingly technical training in information and financial management,
logistics, and weapons operation and maintenance. INCLE programs focus on
reversing the recent growth in opium production, after almost eradicating poppy
cultivation in 2000, providing economic alternatives, and reducing demand for
heroin. NADR programs include anti-terrorism assistance, including crisis response
training, terrorist interdiction software, counterterrorism finance capabilities, and
reform of export control laws.
Lifting of Foreign Aid Restrictions. Pakistan received limited U.S.
assistance during the 1990s — counter-narcotics support, food aid, and Pakistan
NGO Initiative programs53 — due to congressional restrictions in response to
Pakistan’s nuclear weapons program. 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
51 Pakistan’s literacy rate, at 49%, ranks among the world’s lowest.
52 The United States government pledged a total of $300 million in economic assistance to
the areas affected by the disaster. See USAID, South Asia — Earthquake, Fact Sheet #44
(August 25, 2006).
53 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.

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CRS-36
in 1995 to prohibit only military assistance.54 In 1998, following nuclear weapons
tests carried out by India and Pakistan, President Clinton imposed restrictions on
non-humanitarian aid to both countries pursuant to the Arms Export Control Act of
1968 (Section 102). Furthermore, Pakistan continued to be ineligible for most forms
of U.S. foreign assistance due to its delinquency in servicing its debt to the United
States and to the 1999 military coup.55 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 on
Pakistan (e.g., USDA credits and U.S. commercial bank loans) as compared to India.
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 India and
Pakistan. 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 military coup 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.56 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.57 The House-passed foreign
operations appropriations legislation for FY2007 (H.R. 5522) would have provided
another one-year extension, but the Senate did not take action on the bill.
54 The Brown Amendment to the Foreign Assistance Act (1995) narrowed the prohibition
to military assistance only.
55 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. 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. P.L. 106-429,
Section 512 (the Brooke Amendment), prohibits assistance to any country that is in default
on loan payments to the United States for over one year. This latter restriction includes no
waiver authority for the President.
56 See P.L. 107-57, Sections 1(b) and 3(2).
57 For additional information, see CRS Report RL33498, Pakistan-U.S. Relations, by K.
Alan Kronstadt.

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CRS-37
The House version of H.R. 5522 recommended $300 million for ESF programs
and $200 million for FMF for Pakistan, decreases of $50 million and $100 million
from the Bush Administration’s FY2007 request, respectively.58
The United States is the major bilateral aid donor to Pakistan, followed by Japan
and the United Kingdom.
Sri Lanka
Table 18. U.S. Assistance to Sri Lanka, 2003-2007
(thousands of dollars)
FY2006
FY2007
Account
FY2003 FY2004 FY2005 estimate
request
CSH
300
300
300
0 0
DA
6,150
4,750
6,774
3,465
3,500
ESF
3,950
11,929
9,920
3,690
4,000
FMF
0
2,495
496
990
900
IMET
307
553
461
445
540
NADR
2,400
1,775
2,700
4,075
1,200
Totals
13,107
21,802
20,651
12,665
10,140
Food Aid/Disaster Assistance
P.L. 480 Title
II Granta
596
4,190
1,996
0
0
FFPb
2,775
0
9,690
—
—
Section
416(b)b
0
923
0
—
—
Tsunami
Reliefc
—
—
134,600
—
—
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. Tsunami Recovery and Reconstruction Fund, P.L. 109-13
USAID programs aim to promote the peace process between the government of
Sri Lanka and Tamil separatists led by the Liberation Tigers of Tamil Eelam (LTTE).
In 2006, the 2002 ceasefire agreement showed signs of unraveling. U.S. assistance
also helps to promote economic growth and advance democracy and human rights.
Sri Lanka suffered a major setback from its reconstruction efforts due to the 2004
tsunami disaster. Since 2004, Sri Lanka has been eligible for MCA assistance. The
United States ranks fourth after China, Japan, and Germany in foreign aid assistance
to the country.
58 H.Rept. 109-486

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CRS-38
ESF and DA funding support programs that foster non-violent dispute
resolution, reconstruction, economic reintegration and growth, local democratic
processes and institutions, political party development, civil society, and objective
mass media. FMF enables the Sri Lankan military to purchase non-weapon items
such as uniforms, flack vests, night vision goggles, and communications equipment.
IMET helps to professionalize the Sri Lankan military, build the capabilities of its
officers in combat against the LTTE and in global counterterrorism activities, and
enhance interoperability with U.S. forces. NADR programs include de-mining
activities and non-proliferation efforts.
2004 Tsunami Relief. 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.59 The Bush Administration pledged $134.6 million for disaster relief and
reconstruction to Sri Lanka.
59 USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis, July 7, 2005

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CRS-39
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
DF: Democracy Funds
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

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