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

U.S. Foreign Aid to East and South Asia:
Selected Recipients
Updated October 8, 2008
Thomas Lum
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division

U.S. Foreign Aid to East and South Asia:
Selected Recipients
Summary
This report analyzes annual budget justifications and legislation for foreign
operations appropriations and discusses U.S. foreign aid trends, programs, and
restrictions in 16 East Asian and South Asian countries. It does not cover aid to
Pacific Island nations, North Korea, and Afghanistan. Country tables do not include
assistance from U.S. State Department programs funded outside the foreign
operations budget, such as educational and cultural exchange programs, and
assistance from other departments and agencies.
Since the war on terrorism began in 2001 and the Millennium Challenge
Account (MCA) and Global HIV/AIDS Initiative (GHAI) were launched in 2004, the
United States has increased foreign aid spending dramatically in some regions,
including East and South Asia. 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. In 2007, the Bush Administration
restructured U.S. foreign aid programs to better serve the goal of transformational
development, which places greater emphasis on U.S. security and democracy building
as the chief goals of foreign aid.
In the past decade, the United States government has restricted foreign
assistance to many countries in East and South Asia in order to encourage democracy
and respect for human rights. Some sanctions have been waived or lifted. The
Consolidated Appropriations Act for FY2008 (P.L. 110-161) placed human rights
conditions upon portions of the U.S. military assistance grants to Indonesia, the
Philippines, Pakistan, and Sri Lanka. Since 2003, President Bush has annually
exercised the waiver authority on coup-related sanctions against Pakistan. In 2005,
the United States government resumed full military assistance to Indonesia, based
upon the satisfaction of legislative conditions and national security grounds.
The FY2008 budget for the East Asian countries that are covered in this report
represented a slight increase compared to FY2007. The FY2008 budget raised
assistance to South Asian countries by 8%, according to estimates. In September
2008, the House and Senate passed the continuing resolution (CR), H.R. 2638
(Consolidated Security, Disaster Assistance, and Continuing Appropriations Act,
2009). The bill was signed into law as P.L. 110-329. The House and Senate
approved $36.6 billion and $36.7 billion, respectively, for Department of State and
Foreign Operations in FY2009, compared to $32.8 billion enacted in FY2008. The
CR for FY2009 continues most funding through March 6, 2009, at FY2008 levels.
This report will be updated periodically.

Contents
Overview ........................................................1
New Approaches to Foreign Aid..................................1
Critiques .................................................1
Funding Trends...............................................2
Foreign Aid Restrictions........................................4
The FY2008 and FY2009 Budgets................................4
Regional Comparisons..........................................6
East Asia........................................................8
Taiwan and Singapore......................................9
Foreign Aid Restrictions.......................................10
Lifting Sanctions on Indonesia..............................10
September 2006 Military Coup in Thailand....................11
Chinese Aid to Southeast Asia...................................11
Country Aid Levels and Restrictions — East Asia.......................12
Burma ......................................................12
Cambodia ...................................................13
People’s Republic of China (PRC)...............................15
East Timor (Democratic Republic of Timor-Leste)...................17
Indonesia ...................................................18
Resumption of Military Assistance...........................19
2004 Tsunami Relief......................................20
Laos .......................................................20
Malaysia ....................................................21
Mongolia ...................................................22
Philippines ..................................................23
Thailand ....................................................24
September 2006 Military Coup and U.S. Aid Sanctions...........25
Other Programs..........................................25
Vietnam ....................................................26
South Asia......................................................27
Foreign Aid Restrictions...................................27
Disaster Assistance.......................................28
Country Aid Levels and Restrictions — South Asia......................28
Bangladesh ..................................................28
India .......................................................30
Nepal ......................................................31
Pakistan ....................................................32
Lifting of Foreign Aid Restrictions...........................33
Sri Lanka...................................................34
FY2008 Appropriations....................................35
Appendix. Selected Acronyms for U.S. Foreign Aid
Accounts and Programs........................................37

Figure 1. Major U.S. Aid Recipients in Asia, by Aid Amount, 2001-2007.....3
Figure 2. Health and Development Assistance (DA and CSH) by Region,
FY2007 est...................................................6
Figure 3. Economic Support Funds by Region, FY2007 est. ($million).......7
Figure 4. Military Assistance by Region, FY2007 est. ($million)............7
Figure 5. U.S. Foreign Aid (Non-food) to East Asian Countries,
FY2007 est...................................................9
Figure 6. Top U.S. Foreign Aid Recipients in East Asia, FY2000,
FY2002-FY2007 .............................................10
Figure 7. U.S. Assistance to South Asian Countries (excluding Food Aid),
2001-2008 ..................................................27
List of Tables
Table 1. U.S. Foreign Assistance by Region (Excluding Food Aid),
2001, 2003-2007..............................................5
Table 2. U.S. Assistance to Burma, 2005-2009.........................12
Table 3. U.S. Assistance to Cambodia, 2005-2009......................13
Table 4. U.S. Assistance to China, 2005-2009..........................15
Table 5. U.S. Assistance to East Timor, 2005-2009......................17
Table 6. U.S. Assistance to Indonesia, 2005-2009.......................18
Table 7. U.S. Assistance to Laos (LPDR), 2005-2009....................20
Table 8. U.S. Assistance to Malaysia, 2005-2009.......................21
Table 9. U.S. Assistance to Mongolia, 2005-2009.......................22
Table 10. U.S. Assistance to Philippines, 2005-2009.....................23
Table 11. U.S. Assistance to Thailand, 2005-2009.......................24
Table 12. U.S. Assistance to Vietnam, 2005-2009.......................26
Table 13. U.S. Assistance to Bangladesh, 2005-2009....................28
Table 14. U.S. Assistance to India, 2005-2009..........................30
Table 15. U.S. Assistance to Nepal, 2005-2009.........................31
Table 16. U.S. Assistance to Pakistan, 2005-2009.......................32
Table 17. U.S. Assistance to Sri Lanka, 2005-2009......................34

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. 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 The Bush Administration reoriented foreign
assistance programs, particularly to “front line” states in the war on terrorism. For
many countries, the U.S. government directed not only increased security and
military assistance but also development aid for counterterrorism efforts, including
programs aimed at mitigating conditions that may make radical ideologies and
religious extremism attractive, such as cycles of violence, poverty, limited
educational opportunities, and ineffective or unaccountable governance.
In 2007, the Bush Administration restructured U.S. foreign aid programs to
better serve the goal of transformational development, which places greater emphasis
on U.S. security and democracy building as the principal goals of foreign aid.²
Toward these ends, the new Strategic Framework for U.S. Foreign Assistance divides
aid programming among five objectives: peace and security; governing justly and
democratically; investing in people; economic growth; and humanitarian assistance.
The Millennium Challenge Account (MCA), established in 2004, promotes these
objectives by rewarding countries that demonstrate good governance, investment in
health and education, and sound economic policies.
Critiques. According to some analysts, recent U.S. foreign policy trends have
weakened programs and institutions that specialize in basic development. Some
policy-makers have expressed concern that transformational development and MCA
funding priorities have taken resources away from traditional programs, particularly
in countries that contain lesser security threats to the United States or where
governments do not meet various U.S. performance criteria. Other analysts argue

¹ See CRS Report RL33491, Restructuring U.S. Foreign Aid: The Role of the Director of
Foreign Assistance in Transformational Development, by Larry Nowels and Connie
Veillette.
² Transformational development, which involves foreign aid, is to work in tandem with the
Administration’s transformational diplomacy, which emphasizes diplomatic resources. See
USAID Fact Sheet, “New Direction for U.S. Foreign Assistance,” January 19, 2006.

that promoting democracy in some countries prematurely may result in a waste of
aid.³ According to one study, insufficient funding for foreign assistance objectives
has reinforced a “migration of foreign aid authorities and functions to the Department
of Defense.”⁴
Funding Trends
Foreign operations appropriations declined from a peak in 1985 to a low in
1997, after which they began to grow again. 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 global war on terrorism and Iraq war-related
funding have propelled foreign aid funding to new highs.
Other sources of growth include the Millennium Challenge Account (MCA) and
the President’s Emergency Plan for AIDS Relief (PEPFAR).⁵ Four Asia-Pacific
countries are eligible to apply for MCA assistance — East Timor, Mongolia, Sri
Lanka, and Vanuatu — while two countries — Indonesia and the Philippines — have
been designated as “threshold,” qualifying them for assistance to help them become
eligible for MCA funds. In October 2007, the Mongolian government and the
Millennium Challenge Corporation (MCC) signed a five-year, $285 million
agreement. Vietnam is the largest Asian recipient of Global HIV/AIDS Initiative
(GHAI) funding under PEPFAR ($118 million between 2005 and 2007).
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. 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, 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 with links to terrorist groups. These

³ Marcela Sanchez, “A Risky Shift in Direction,” South Florida Sun-Sentinel, January 27,

2006; Guy Dinmore, “U.S. Poised for Radical Reform of Foreign Aid Programme,”

Financial Times, January 19, 2006; Guy Dinmore, “Critics of ‘Utopian’ Foreign Policy Fail
to Weaken Bush Resolve,” Financial Times, January 13, 2006.
⁴ Embassies Grapple to Guide Foreign Aid: A Report to Members of the Committee on
Foreign Relations, United States Senate Committee Print, November 16, 2007.
⁵ CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-Year Review, by Larry
Nowels.

countries have received the bulk of the increases in U.S. foreign aid (non-food) to
Asia (excluding Afghanistan), although funding for aid programs in India and the
Philippines reached a peak in 2006 and fell in 2007 and 2008. 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.
Figure 1. Major U.S. Aid Recipients in Asia, by Aid
Amount, 2001-2007 ($million)

Both the Bush Administration and Congress have supported increased funding
for the Department of State’s Human Rights and Democracy Fund (HRDF).
Spending for HRDF increased from a yearly average of $13 million in 2001-2002 to
$31 million in 2003-2005. The Fund received $71 million in both FY2006 and
FY2007. In addition, the U.S. government provided a total of $65 million for
National Endowment for Democracy (NED)-administered HRDF programs between

2003 and 2007. Approximately one-third of the Democracy Fund has been allocated⁶

to Asia, mostly for rule of law and civil society programs in China.
⁶ The Human Rights and Democracy Fund, administered by the Bureau of Democracy,
Human Rights, and Labor (DRL) of the Department of State, was established by the Foreign
Relations Authorization Act, FY2003 (P.L. 107-228).

Foreign Aid Restrictions
In the past decade, the United States has imposed restrictions on non-
humanitarian development aid, Economic Support Funds (ESF),⁷ 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. These countries include Burma, Cambodia, China, Indonesia,
Thailand, and Pakistan. However, the United States continues to fund non-
governmental organizations (NGOs) that run development and democracy programs
in some of these countries. Most sanctions on aid to Cambodia, Indonesia, Thailand,
and Pakistan have been lifted. The Consolidated Appropriations Act for FY2008
placed human rights conditions upon portions of the U.S. military assistance grants
to Indonesia, the Philippines, and Pakistan.
The FY2008 and FY2009 Budgets
The Administration’s FY2008 budget request for the East Asian countries that
are covered in this report ($453 million) represented a slight increase compared to
FY2007 ($442 million). With the exception of Indonesia and Vietnam, assistance
to most East Asian countries is to decrease or remain about the same in 2008
compared to 2007. The budget request for Indonesia included large increases in
Development Assistance (DA) and Foreign Military Financing (FMF). Global
HIV/AIDS Initiative funding for Vietnam is to grow by 36% in FY2008, from $63
million in FY2007 to $86 million.
The FY2008 budget raised assistance to South Asian countries by 8% (from
$900 million in FY2007 to $974 million). This reflected greater funding for
Bangladesh (mostly Development Assistance) and Pakistan (ESF). In addition, for
FY2008, the Administration requested new funding for law enforcement
enhancement activities in Nepal and Sri Lanka. Regional Development Mission Asia
programs (an estimated $13.7 million in FY2008) support public health efforts,
improved water and sanitation services, trade, environmental preservation, and
investments in energy efficiency, renewable energy, and clean technologies in East
and South Asia.
The Consolidated Appropriations Act, 2008 (H.R. 2764, signed into law as P.L.
110-161), Division J, made some changes to the Administration’s request. These
revisions included additional ESF for democracy and humanitarian activities for
Burma; funding for democracy, rule of law, and Tibet programs in China as well as
U.S.-China educational exchanges; and increased FMF for the Philippines. The
spending measure also imposed new restrictions on FMF for Sri Lanka.

⁷ 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.

FY2009 Continuing Resolution
The House and Senate passed the continuing resolution (CR), H.R. 2638
(Consolidated Security, Disaster Assistance, and Continuing Appropriations Act,
2009), on September 24, 2008 and September 27, 2008, respectively. The bill was
signed into law as P.L. 110-329. The House and Senate approved $36.6 billion
and $36.7 billion, respectively, for Department of State and Foreign Operations in
FY2009, compared to $32.8 billion enacted in FY2008. The CR for FY2009
continues most funding through March 6, 2009, at FY2008 levels.
For further information, see CRS Report RL34552, State, Foreign Operations, and
Related Programs: FY2009 Appropriations, by Susan B. Epstein and Kennon H.
Nakamura.
Table 1. U.S. Foreign Assistance by Region
(Excluding Food Aid), 2001, 2003-2007
($million)
FY2001FY2003FY2004FY2005FY2006 FY2007
Africa 1,313 1,706 2,091 2,795 2,771 3,486
East Asia-3684774745251,022500
Pacific
Europe and2,0172,8711,5771,3231,023845
Eurasia
Near East Asia5,4018,4095,5565,7555,2175,099
(Middle East)
South/Central
Asia (excl.2017856859708751,025
Afghanistan)
Western 749 1,559 1,545 1,723 1,516 1,439
Hemisphere
T otals 10,049 15,807 11,928 13,091 12,424 12,394
^Source:^{U.S. Departm}^eⁿ^t^of^State,^C^ount^r^y^/^A^ccount^Sum^m^a^rⁱ^es⁽^2001-2007)^.
^No^te:^In^addition^{to th}^{e abov}^{e, USA}^I^{D adm}ⁱⁿⁱ^s^t^ers^em^erg^eⁿ^c^y^an^{d h}^u^m^anⁱ^t^a^rⁱ^aⁿ^f^{ood as}^sⁱ^s^t^an^ce
^p^u^r^s^ua^nt^t^o^P.L^.^{480, T}ⁱ^tl^{e I}^I^(t^h^e^A^g^ri^cu^l^t^u^ral^T^r^{ade D}^e^v^e^l^opm^en^t^A^c^t^of^1954,^as^am^en^ded).
^US^DA^’^s^F^o^rei^gⁿ^A^g^ri^cul^t^u^r^a^l^S^e^rvⁱ^{ce (F}^A^S^{) adm}ⁱⁿⁱ^s^t^ers^P.L^.^{480, T}ⁱ^tl^{e I}^{— sa}^le^{s o}^f
^ag^rⁱ^cu^ltu^r^a^l^co^m^m^o^d^{ities u}ⁿ^d^er^coⁿ^cessioⁿ^{al o}^r^f^a^v^o^r^a^b^l^{e cr}^ed^{it ter}^m^s,^Food^{for Progres}^s
^prog^ram^s^(F^{ood f}^o^{r Prog}^res^s^A^c^t^of^1985),^Food^{for E}^d^u^c^ati^oⁿ^(Farm^Secu^rity^an^{d R}^u^ral
^In^v^e^s^t^m^eⁿ^t^A^c^t^of^{2002), an}^d^S^ecti^oⁿ^416(b⁾⁽^A^g^rⁱ^c^u^l^t^u^r^a^l^A^c^t^o^f^{1949, a}^s^a^m^eⁿ^d^e^d⁾^—
^d^oⁿ^atioⁿ^o^f^su^r^p^lu^{s co}^m^m^o^d^ities.

Regional Comparisons
Africa remained the largest regional recipient of Child Survival and Health
(CSH) and Development Assistance (DA) funding in FY2007.⁸ The largest regional
recipients of Economic Support Funds in FY2007 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, by far, was Near East
Asia followed by South and Central Asia.⁹ These rankings were the same as those
for FY2006. See Table 1 and Figures 2-4.
Figure 2. Health and Development
Assistance (DA and CSH) by Region,
FY2007 est. ($million)

⁸ 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).
⁹ Military assistance includes International Military Education and Training (IMET),
Foreign Military Financing (FMF), and Peacekeeping Operations (PKO).

Figure 3. Economic Support Funds
by Region, FY2007 est. ($million)
^Source:^{U.S. Departm}^eⁿ^t^of^State.
Figure 4. Military Assistance by
Region, FY2007 est. ($million)

^Source:^{U.S. Departm}^eⁿ^t^of^State.

East Asia
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). USAID’s programs in East Asia
also 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.
Among East Asia and the Pacific (EAP) countries (excluding the Pacific Island¹⁰
nations), in FY2007, Indonesia was the largest recipient of U.S. foreign aid,
particularly ESF, 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, Laos, and Thailand. Indonesia, Cambodia, and the
Philippines were the largest recipients of Non-proliferation, Anti-terrorism, De-
mining, and Related Programs (NADR).¹¹ Vietnam, as one of 15 focus countries
under the President’s Emergency Plan for AIDS Relief (PEPFAR), received $118
million from the Global HIV/AIDS Initiative (GHAI) account between 2005 and

2007 and is to receive $86 million in 2008. See Figures 5 and 6.

¹⁰ For information on U.S. foreign assistance to the Pacific Island countries, see CRS Report
RL34086, The Southwest Pacific: U.S. Interests and China’s Growing Influence, by Thomas
Lum and Bruce Vaughn.
¹¹ The INCLE and NADR accounts are often referred to as “security assistance.”

Figure 5. U.S. Foreign Aid (Non-food)
to East Asian Countries, FY2007 est.
($million)

^Source:^{U.S. Departm}^eⁿ^t^of^State.
U.S. assistance also finances several EAP regional programs. Estimated funding
for such programs in FY2007 was $27 million, a slight decrease from that provided
in FY2006. Most of the funding — approximately 75% — supports economic
growth efforts. In addition, the United States contributes to the Developing Asian
Institutions Fund as part of the establishment of a Free Trade Area of the Asia-
Pacific. The second largest regional aid objective is the advancement of peace and
security (nearly 20% of regional program funding), including the following aid
activities: counterterrorism, counternarcotics, fighting transnational crime, non-
proliferation, and maritime cooperation. The third largest aid area is democracy-
building.
Taiwan and Singapore. Taiwan and Singapore, two newly developed
countries in East Asia, also receive limited U.S. assistance. Taiwan receives over
$550,000 annually to develop its export control system and combat trafficking in
persons. The United States government provides Singapore roughly $700,000 per
year to help the country deter, detect, and interdict the flow of illegal arms across its
maritime borders.

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 U.S. government has
deemed in violation of international human rights standards. In the past decade,
foreign operations appropriations measures have imposed human rights-related
sanctions on U.S. foreign assistance to the governments of Burma, Cambodia, and
Thailand and to the Indonesian military while supporting Burmese dissident groups
and promoting human rights, civil society, and democracy in Cambodia, China, East
Timor, Indonesia, Mongolia, and elsewhere. Since 2006, most sanctions on aid to
the governments of Cambodia and Thailand and to the Indonesian military have been
lifted.
Figure 6. Top U.S. Foreign Aid Recipients in
East Asia, FY2000, FY2002-FY2007 ($million)

^Source:^{U.S. Departm}^eⁿ^t^of^State.
Lifting Sanctions on Indonesia. 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 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 Bush Administration suspended military and
peacekeeping assistance 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.
The U.S. government also suspended funding for counter-terrorism assistance
provided under Section 1206 of the National Defense Authorization Act for FY2006.
Other aid programs not affected by Section 508 or in the U.S. national interest
continued to receive funding. In February 2008, the United States resumed security
and military assistance to Thailand following the holding of democratic elections.
Chinese Aid to Southeast Asia
In comparison to major bilateral donors in the region, the People’s Republic of
China (PRC) provides relatively little official development assistance (ODA).
Furthermore, the PRC government appears to lack a foreign aid system with a
centralized organizational structure, long-term development goals, open funding
processes, and published data. Nonetheless, the PRC administers a wide range of
economic assistance to Southeast Asia that includes many forms of aid that generally
are not counted as ODA by established international aid agencies: infrastructure and
public works projects, trade and investment agreements, pledges of foreign direct
investment, and technical assistance. China is also a large source of loans.
According to some analysts, when these kinds of assistance are included, China is
one of the largest bilateral aid donors in Southeast Asia. The PRC has been
described as the “primary economic patron” of the region’s least developed countries¹²
(Burma, Cambodia, and Laos). China also has provided considerable foreign aid
to Vietnam as well as other large and more developed countries (Thailand, Indonesia,
and the Philippines).
Some analysts have criticized PRC assistance and investments for being non-
transparent, supporting urban “trophy projects” rather than sustainable development,
and lacking performance criteria and environmental safeguards. Others have argued
that the benefits of PRC assistance to these countries, particularly Cambodia and
Laos, have outweighed adverse effects, and that China has helped to address needs
not met by Western and Japanese aid. Many observers argue that the United States
should bolster its aid programs, trade activities, and diplomatic presence in the region
in order to counteract China’s growing influence.¹³

¹² Catherin E. Dalpino, “Consequences of a Growing China,” Statement before the Senate
Committee on Foreign Relations Subcommittee on East Asian and Pacific Affairs, June 7,
2005; Heritage Foundation program, “Southeast Asia’s Forgotten Tier: Burma, Cambodia
and Laos,” July 26, 2007.
¹³ For further information, see CRS Report RL34620, Comparing Global Influence: China’s
and U.S. Diplomacy, Foreign Aid, Trade, and Investment in the Developing World,
coordinated by Thomas Lum.

Country Aid Levels and Restrictions — East Asia¹⁴
Burma
Table 2. U.S. Assistance to Burma, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 0 0 2,100 2,083 2,100
DA0007170
ESF 7,936 10,890 10,890 12,895^b 13,750
Other^a4,0003,0003,000 3,000^b —
T otals 11,936 13,890 15,990 18,695 15,850
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^D.
^a.^Hum^a^nitarⁱ^{an assistance f}^o^r^dⁱ^sp^laced^B^u^r^m^{ese and}^ho^{st co}^m^m^{unities in T}^h^ailand^thr^o^{ugh an}
^uⁿ^s^pecifⁱ^{ed accou}ⁿ^t^.
^{b. P.L}^.^110-¹⁶¹
Burma’s political, economic, educational, and public health institutions and
systems have deteriorated under 40 years of military rule. 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.¹⁵ U.S.
sanctions were tightened, especially travel and financial restrictions against SPDC
leaders, following the Burmese government’s violent suppression of democracy
demonstrators in September 2007.
On June 11, 2003, the 108^th Congress passed
the Burmese Freedom and Democracy Act ofTop Donors of Bilateral
2003 (P.L. 108-61), which bans imports fromOfficial Development
Burma unless democracy is restored. AdditionalAssistance ($US million)
U.S. foreign aid sanctions against Burma includeto Burma
opposition to international bank loans to Burma
and a ban on debt restructuring assistance. Since^{1. Japan}^:²⁶^{2. EC}^:¹⁴
the Office to Monitor and Combat Trafficking in^{3. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:¹¹
Persons was established by the U.S. State⁴^.^A^u^str^a^{lia: 1}¹
Department in 2001, Burma has received a “Tier^{5. Korea: 7}
3” assessment annually by the Office for failing to
make significant efforts to bring itself into^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^O^E^CD

compliance with the minimum standards for the
¹⁴ Including Southeast Asia and excluding North Korea and Pacific Island nations.
¹⁵ For Burma aid sanctions, see P.L. 104-208, Section 570. For further information on
Burma, see CRS Report RS22737, Burma: Economic Sanctions, by Larry A. Niksch and
Martin A. Weiss.

elimination of trafficking in persons. The Tier 3 ranking could serve as a basis for
withholding non-humanitarian aid.
Inside Burma, the United States provides assistance for HIV/AIDS prevention,
care, and treatment, English language training, and civil society. The largest U.S. aid
programs assist Burmese refugees in Thailand.
The Consolidated Appropriations Act for FY2008 (P.L. 110-161) appropriated
$13 million (ESF) primarily for Burmese student groups and other democratic
organizations located outside Burma, and for the provision of humanitarian
assistance to displaced Burmese along Burma’s borders. The act also provides $3
million for community-based organizations operating in Thailand to provide food,
medical and other humanitarian assistance to internally displaced persons in eastern
Burma.
Cambodia
Table 3. U.S. Assistance to Cambodia, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 29,300 28,556 27,826 27,826 23,135
DA 8,950 5,483 7,922 8,087 17,226
ESF16,86414,85014,85014,879 —
FMF 992 990 990 198 750
GHAI001,600 — —
IMET0541016760
NCLE00000
NADR 4,170 5,000 3,987 3,937 4,200
Peace Corps000 1,379 —
T otals 60,276 54,933 57,276 56,373 45,371
Food Aid
P.L. 480 Title^a000 00
II Grant
FFP^b3,643 0 0 — —
FFE^b0 1,2572,373 — —
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^{D; U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
Cambodia ranks 131^st out of 177 countries and regions on the United Nations
Development Program’s Human Development Index, which measures GNP per
capita, life expectancy, and educational attainment. The U.S. State Department
reports that Cambodia’s fragile institutions, weak rule of law, and rampant corruption
are major challenges to Cambodia’s democratic development and economic growth.
Furthermore, Cambodia’s health and education systems were decimated under the

rule of the Khmer Rouge (1975-1979) and subsequent Vietnamese control.¹⁶ The
largest U.S. assistance sectors in Cambodia are health and education ($25 million),
including a significant HIV/AIDS program component. The U.S. assistance mission
in Cambodia also aims to promote transparency and accountability in government,
combat corruption, and strengthen civil society. Other program areas include
economic reform and growth and improving the military’s capability to protect
Cambodia’s borders from transnational threats.
In February 2007, the United States government lifted a decade-long ban on
direct bilateral aid to Cambodia. The U.S. government had imposed restrictions on
foreign assistance to Cambodia following Prime Minister Hun Sen’s unlawful seizure
of power in 1997 and in response to other abuses of power under his rule. Foreign
operations appropriations 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
met basic human needs. U.S. assistance was permitted only to Cambodian and
foreign NGOs and to local governments. Statutory exceptions allowed for the
following categories of U.S. assistance to the central government of Cambodia:
reproductive and maternal and child health care; basic education; combating human
trafficking; cultural and historic preservation; the prevention, treatment, and control
of HIV/AIDS and other infectious diseases; and counter-narcotics activities.¹⁷
Cambodia, one of the top five countries in
the world for the number of landmine casualtiesTop Donors of Bilateral
(approximately 800 victims per year), receivedOfficial Development
$5 million 2006 and an estimated $3.8 million inAssistance ($US million) to
2007 in U.S. de-mining assistance. Under theCambodia
Administration’s FY2008 budget, the country is
to receive $2.5 million in de-mining assistance.^{1. Japan}^:⁹⁴^{2. U}ⁿⁱ^t^e^{d S}^t^at^es^:⁶⁰
In addition, in the past decade, USAID has^{3. Fran}^{ce: 28}
supported programs worth $13 million providing⁴^.^A^u^str^a^{lia: 2}⁷
for prostheses, physical rehabilitation,^{5. G}^e^rm^an^y^:²⁴
employment, and related services for mine
victims using Leahy War Victims Funds.^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^O^E^CD

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).
In January 2007, the Peace Corps launched programs in Cambodia to teach
English and develop sustainable community activities.
¹⁶ Congressional Budget Justification for Foreign Operations, FY2008.
¹⁷ For most of these activities, the U.S. government collaborated with the central government
of Cambodia but continued to provide funding through the country’s large and vibrant NGO
community.

People’s Republic of China (PRC)¹⁸
Table 4. U.S. Assistance to China, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 0 0 4,800 4,960 5,000
DA04,9505,0009,919^a —
ESF19,00020,00019,00015,000^a —
ESF/Tibet 4,2163,960 3,9604,712^a1,400
GHAI001,950 0 0
NADR00006
Peace Corps1,4761,683 1,8861,953 —
T otals 24,692 21,683 36,596 36,544 7,000
^Sources^:^U^.^S.^D^e^p^a^r^t^m^e^nt^o^f^St^a^t^e^,^U^S^A^I^D⁽^C^o^ngr^e^ssi^oⁿ^a^l^N^o^tⁱ^fⁱ^c^a^tⁱ^o^n,^A^ugust¹⁴^,^2008).
^a^.^Th^e^C^oⁿ^s^o^lⁱ^d^a^t^e^d^A^p^p^r^o^p^rⁱ^a^tⁱ^oⁿ^s^A^c^t^,^F^Y^{2008 (}^P^.^L^.^110-^{161) au}^th^orized^{$10 m}^illion^f^o^{r U.S.-}
^C^hⁱⁿ^{a edu}^cation^a^{l ex}^ch^an^g^e^s^(DA⁾^{, $15 m}^illion^f^o^{r C}^hⁱⁿ^a/Hon^g^Kon^g^/^T^a^iw^an^dem^o^cracy
^p^r^o^g^r^a^m^s⁽^E^SF)^{, an}^d^$⁵^.²⁵^m^illioⁿ^f^o^r^Tⁱ^b^e^tan^co^m^m^uⁿ^ity^assistan^{ce (}^E^SF)^.
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 grown substantially since 2002 (approximately $15 million per year).
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 appropriation for
democracy, human rights, and rule of law programs in China from $10 million in
2002 to $23 million in 2006.¹⁹ Appropriations for cultural preservation, economic
development, and environmental conservation in Tibetan communities in China have
also grown. In 2004, the Bureau of Democracy, Human Rights and Labor (DRL) of
the Department of State became the principal administrator of China democracy

¹⁸ Since 2004, the annual congressional authorization for democracy funds for China have
included Hong Kong and Taiwan. Funding for legal and political reforms in Taiwan shall
only be made available to the extent that they are matched from sources other than the
United States Government.
¹⁹ For further information, see CRS Report RS22663, U.S.-Funded Assistance Programs in
China, by Thomas Lum.

programs.²⁰ Major U.S. grantees have included the National Endowment for
Democracy (NED), the Asia Foundation, Temple University (School of Law), the
American Bar Association, and the Bridge Fund (Tibet). In addition, NED provides
grants (approximately $2 million per year since 1999) for programs that promote
human rights, labor rights, electoral and legal reforms, and independent mass media
in China from its annual congressional appropriation.²¹
Since 2006, Congress has appropriated
Development Assistance (DA) to AmericanTop Donors of Bilateral
educational institutions for exchange programsOfficial Development
related to democracy, rule of law, and theAssistance ($US million) to
environment in China. In 2007, the U.S.China
government began funding HIV/AIDS programs
in China. ^{1. Japan}^:^1,662^{2. G}^e^rm^an^y^:⁴⁷⁰
^{3. Fran}^{ce: 164}
The United States continues to impose other^{4. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:⁷⁴
restrictions that were put in place in the^{5. EC}^:⁵⁸
aftermath of the 1989 Tiananmen Square
military crackdown, including “no” votes or^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

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.²² In addition, foreign
operations appropriations legislation forbids funding to the United Nations
Population Fund (UNFPA) for programs in China due to alleged coercive family
planning practices.
²⁰ 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
Projects Fact Sheet, December 6, 2005.
²¹ See General Accounting Office, “Foreign Assistance: U.S. Funding for Democracy-
Related Programs (China),” February 2004.
²² For further information, see CRS Report RL31910, China: Economic Sanctions, by
Dianne E. Rennack.

East Timor (Democratic Republic of Timor-Leste)
Table 5. U.S. Assistance to East Timor, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 0 0 1,000 1,000 0
DA 500 0 0 5,000 8,140
ESF21,82418,81018,81016,862 —
FMF 1,023 990 475 0 0
IM ET 364 193 254 381 300
INCLE 0 1,485 0 2 0 1,010
PKO1,2280 000
Peace Corps1,372827 00 —
T otals 25,811 22,305 20,539 23,263 9,450
Food Aid
P.L. 480 Title^a9941,1822,172 00
II Grant
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^{D; U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
East Timor (Democratic Republic of
Timor-Leste) gained full independence in MayTop Donors of Bilateral
2002. The United States supports a wide rangeOfficial Development
of aid programs in East Timor, one of Asia’sAssistance ($US million) toEast Timor
poorest countries, with the goal of building a
viable economy, functional government, and
democratic political system. The largest¹^.^A^u^str^a^{lia: 3}⁷^{2. Port}^u^g^a^l^:³⁰
strategic objective of U.S. assistance is^{3. U}ⁿⁱ^t^e^{d S}^t^at^es^:²⁴
economic growth, targeting agriculture, private^{4. Japan}^:²²
sector competitiveness, and economic^{5. EC}^:¹¹
opportunity. Other major objectives are
improved governance and peace and security.^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

Program areas include rule of law, human rights,
and civil society. IMET activities aim to
develop more professional military and police forces. In November 2005, the
Millennium Challenge Corporation selected East Timor as eligible for MCA
assistance.
In May 2006, the Peace Corps suspended its programs in East Timor due to civil
and political unrest in the country.

Indonesia
Table 6. U.S. Assistance to Indonesia, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 37,100 28,017 27,507 25,737 30,883
DA 27,848 33,199 29,524 70,953 122,021
ESF68,48069,30069,30064,474 —
FMF 0 990 6,175 15,572 15,700
GHAI00250 — —
IM ET 728 938 1,398 927 1,500
INCLE 0 4,950 4,700 6,150 9,450
NADR 6,2626,8888,8815,8616,750
Totals 140,418144,282147,321189,674186,304
Food Aid/Disaster Relief
P.L. 480 Title^a10,48912,886 10,95100
II Grant
FFP^b6,1940 0 — —
Section 416(b)^b9,078 0 0 — —
Tsunami^c400,000 — — — —
Relief
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^{D; U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
^{c. T}^s^uⁿ^a^mⁱ^R^ecov^e^ry^an^{d R}^econ^s^t^r^u^c^tⁱ^oⁿ^F^uⁿ^d^{, P.L}^.^109-¹³
The U.S. State Department reports that the “overarching U.S. foreign policy
priority in Indonesia is to assist its transformation into a stable, moderate democracy
capable of addressing regional and global challenges in partnership with the
international community.” The country faces many development and security
challenges, including terrorist threats, ethnic and separatist conflicts, weak
institutions, high levels of corruption, poverty and unemployment, low levels of
education, and poor health conditions.²³ The largest strategic objective in terms of
funding is investing in people ($87.6 million), which includes education, health, and
clean water programs. A major U.S. assistance initiative is the six-year, $157 million
education program that began in 2004. The second largest area of U.S. aid is peace
and security — the Administration requested $41.7 million for FY2008 for the
Indonesian military and police to fight terrorism, combat weapons proliferation and
other transnational crimes, monitor strategic waterways, and cooperate with the
United States armed forces. This increase in funding reflects the normalization of
military ties in 2005.
For FY2008, over $29 million in U.S. assistance are to support programs for
strengthening the justice and legislative branches, participatory governance, human

²³ Congressional Budget Justification for Foreign Operations, FY2008.

rights, and civil society. Economic growth programs worth $27 million are to
promote greater transparency and combat corruption, and are expected to lead to an
improved trade and investment climate, financial sector soundness, and increased
private sector competitiveness.
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. In November 2006, USAID and the government of
Indonesia signed a $55 million, two-year agreement for MCA assistance under the
MCC Threshold Program.
Resumption of Military Assistance. In 2005, the Bush Administration
determined that Indonesia had met legislative conditions for the resumption of full
IMET and waived restrictions on FMF on national security grounds, thus lifting²⁴
sanctions on military assistance that were first imposed in 1993. The Consolidated
Appropriations Act for 2004 (P.L. 108-199) made IMET available to Indonesia if the
Secretary of State determined that the Indonesian government and armed forces
(TNI) were cooperating with the United States in the investigation regarding the
August 2002 attack in Timika, Papua, in which three school teachers, including two
Americans, were killed. P.L. 108-199 continued the ban on FMF unless the
President certified that the Indonesian government was prosecuting and punishing
those members of the Indonesia armed forces credibly alleged to have committed
gross violations of human rights, particularly in East Timor in 1999. The FY2005
foreign operations appropriations measure (P.L. 108-447) contained similar
provisions. In February 2005, Secretary of State Condoleezza Rice determined that
the Indonesian government and armed forces had cooperated with the FBI’s
investigation into the Papua murders, thereby satisfying legislative conditions, and
certified the resumption of full IMET for Indonesia. The foreign aid appropriations
act for FY2006 (P.L. 109-102) continued existing restrictions on FMF to Indonesia;
however, the law provided that the Secretary of State may waive restrictions if such
action would be in the national security interests of the United States. In November
2005, the Secretary of State exercised the waiver
authority and allowed FMF for Indonesia.
Top Donors of Bilateral
The Consolidated Appropriations Act forOfficial Development
FY2008, Section 679(a) appropriated up toAssistance ($US million) to
$15.7 million in Foreign Military FinancingIndonesia
(FMF) for Indonesia, of which $2.7 million “may
not be made available” unless the Government of^{1. Japan}^:⁹⁶³
Indonesia has taken steps to prosecute and punish^{2. G}^e^rm^an^y^:¹⁹¹^{3. U}ⁿⁱ^t^e^{d S}^t^at^es^:¹⁶³
members of the TNI credibly alleged to have⁴^.^A^u^str^a^{lia: 1}⁴⁵
committed human rights violations in East Timor^{5. N}^e^t^h^erl^aⁿ^d^s^:¹²⁸

and elsewhere, implement reforms related to
²⁴ 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 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.

improved transparency and accountability of the military, and allow public access to
Papua.
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.²⁵ 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 $400 million for relief and
reconstruction efforts in Indonesia.²⁶
Laos
Table 7. U.S. Assistance to Laos (LPDR), 2005-2009
(thousands of dollars)
AccountFY2005 FY2006FY2007 FY2008estimateFY2009request
CSH 0 0 1,000 992 1,000
DA0000250
ESF00375298 —
IMET004067100
INCLE 1,984 990 900 1,567 1,000
NADR 2,500 3,300 2,550 2,953 1,900
T otals 4,484 4,290 4,865 5,877 4,250
Food Aid
FFE^a0289 290 — —
^Sources^:^U^.^S.^D^e^p^a^r^t^m^e^nt^o^f^St^a^t^e^;^U^S^A^I^D⁽^C^o^ngr^e^ssi^oⁿ^a^l^N^o^tⁱ^fⁱ^c^a^tⁱ^o^n,^A^ugust¹⁴^,^2008);^U^.^S^.
^Depart^m^eⁿ^t^of^A^g^ri^cu^l^t^u^re.
^{a. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
The bulk of U.S. aid programs in LaosTop Donors of Bilateral
are related to peace and security. TheOfficial Development
Administration’s request for FY2008 includesAssistance ($US million) to
the following programs: removing unexplodedLaos
ordnance (UXO), English language training
for Lao defense officials, counter-narcotics^{1. Japan}^:⁶⁵
efforts, and combating transnational crime. ^{2. Fran}^{ce: 21}
Other program areas include public health,^{3. Sw}^eden^{: 19}
rule of law, and improving the country’s trade^{4. G}^e^rm^an^y^:¹⁵⁵^.^A^u^str^a^{lia: 1}²
and investment environment. Laos also
receives assistance through the Leahy War^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

²⁵ USAID, Fact Sheet #39, Indian Ocean — Earthquakes and Tsunamis (July 7, 2005).
²⁶ USAID, USAID Rebuilds Lives after the Tsunami (April 27, 2006).

Victims Fund ($1.5 million during the 2004-2009 period) to assist victims of UXO.
U.S. mines from the Vietnam War cause an average of 120 deaths per year (nearly
4,000 deaths, and over 13,000 casualties, since 1975). UXO also takes a significant
economic toll on rural areas, affecting 25% of villages or one-third to one-half of the
nation’s land area.
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
$3.4 million to Laos for controlling outbreaks of avian flu.
Malaysia
Table 8. U.S. Assistance to Malaysia, 2005-2009
(thousands of dollars)
AccountFY2005FY2006 FY2007 FY2008estimateFY2009request
IM ET 1,100 891 871 876 750
NCLE000040
NADR 2,308 1,526 2,401 1,998 1,540
T otals 3,408 2,417 3,272 2,874 2,690
^Sources^:^{U.S. Departm}^eⁿ^t^of^{State; USA}^I^D.
Malaysia is not a recipient of U.S.
development and economic aid. The U.S. StateTop Donors of Bilateral
Department describes Malaysia as a “keyOfficial Development
Muslim-majority state in Southeast Asia and anAssistance ($US million) toMalaysia
important contributor to conflict resolution and
peacekeeping both regionally and²⁷
internationally.” Regional terrorist^{1. Japan}^:²⁹⁷²^.^D^e^nm^a^r^k:¹⁴
organizations, most notably Jemaah Islamiyah,^{3. Germ}^an^y^:⁸
are known to use Malaysia for planning and fund^{4. Fran}^{ce: 4}
raising. Over half of U.S. assistance to the⁵^.^Un^ited^{States: 2}
country is related to antiterrorism and non-
proliferation activities. Other assistance is^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

provided for military operations and law
enforcement restructuring.
The U.S. State Department’s 2007 Trafficking in Persons Report placed
Malaysia in the “Tier 3” category for failing to “make significant efforts to bring
itself into compliance with the minimum standards for the elimination of trafficking
in persons.” Such an assessment could trigger the withholding of non-humanitarian,
non-trade-related U.S. foreign assistance.
²⁷ Congressional Budget Justification for Foreign Operations, FY2008.

Mongolia
Table 9. U.S. Assistance to Mongolia, 2005-2009
(thousands of dollars)
AccountFY2005FY2006 FY2007 FY2008estimateFY2009request
DA0004,5770
ESF9,9207,4256,6250 6,800
FMF 992 2,970 3,791 993 2,000
IM ET 1,009 866 955 923 970
INCLE0000 420
NADR0000250
Peace Corps1,6941,7471,6941,995 —
Totals 13,615 13,008 13,065 8,488 10,440
Food Aid
FFP^a3,6585,375 0 — —
Section 416(b)^a0 0 0 — —
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^{D; U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
U.S. assistance efforts in Mongolia aim to
build foundations for the country’s privateTop Donors of Bilateral
economic and democratic politicalOfficial Development
development. Security assistance focuses onAssistance ($US million) to
reform of the Mongolian armed forces andMongolia
regional stability. In September 2005, the
government of Mongolia submitted a proposal^{1. Japan}^:⁶⁷^{2. G}^e^rm^an^y^:²⁸
to the Millennium Challenge Corporation for^{3. U}ⁿⁱ^t^e^{d S}^t^at^es^:²²
several projects to be funded by MCA funds,⁴^.^Neth^er^lan^d^{s: 9}
including railroad construction, improved^{5. T}^u^rk^ey^:⁸
housing, and health services. In October 2007,
the Mongolian government and the Millennium^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

Challenge Corporation (MCC) signed a five-
year, $285 million agreement.

Philippines
Table 10. U.S. Assistance to Philippines, 2005-2009
(thousands of dollars)
FY2008FY2009
AccountFY2005 FY2006 FY2007 estimaterequest
CSH 27,050 24,651 24,362 24,967 20,043
DA 27,576 24,212 15,448 27,321 56,703
ESF30,72024,75029,75027,773 —
FMF 29,760 29,700 39,700 29,757 15,000
IM ET 2,915 2,926 2,746 1,475 1,700
INCLE 3,968 1,980 1,900 794 1,150
NADR 2,257 4,968 4,198 4,531 4,625
Peace Corps2,8202,7672,8202,753 —
Totals 127,066115,954120,924119,37199,221
Food Aid
P.L. 480 Title I^a 20,0000 0 0 0
USDA Loan
FFP^b1,7206,335 3,655 — —
Section 416(b)^b5,644 0 0 — —
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^{D; U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
The United States shares important security, political, and commercial interests
with the Philippines, a Major Non-NATO Ally and front-line state in the global war
on terrorism. Since 2001, the Philippines has received the most dramatic increases
in U.S. foreign assistance in the EAP region. The main goals of U.S. assistance in
the Philippines are: fighting terrorism through military means and education;
supporting the peace process in Muslim Mindanao; improving governance;
promoting economic reform and encouraging foreign investment; preserving the
environment; and reversing the deterioration of the educational system. The largest
U.S. aid accounts in the country fund health and education programs, especially in
conflict-affected areas of Mindanao. Other large funding priorities are economic
growth and security. Security programs include
support for Philippine Defense Reform, joint
military exercises, and enhancedTop Donors of Bilateral
counterterrorism capabilities. U.S. assistanceOfficial Development
also supports the battle against transnationalAssistance ($US million) tothe Philippines
crime (money laundering, trafficking in
persons, and narcotics trade).
^{1. Japan}^:⁷⁰⁶
In 2006, the MCC designated the^{2. U}ⁿⁱ^t^e^{d S}^t^at^es^:¹¹⁴^{3. G}^e^rm^an^y^:⁶⁰
Philippines as a “threshold” country or close to⁴^.^A^u^str^a^{lia: 3}⁸
meeting MCA criteria and eligible for^{5. EC}^:²⁰
assistance in qualifying. The Philippines^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

recently initiated a two-year, $21 million MCA

threshold program that focuses on fighting corruption and improving government
revenue collection.
The Consolidated Appropriations Act for FY2008, Section 699E provided up
to $30 million for FMF for the Philippines, of which $2 million may be made
available after the Secretary of State reports that:
^!the Philippine government is implementing the recommendations of
the United Nations Special Rapporteur on Extrajudicial, Summary
or Arbitrary Executions;
^!the Philippine government is implementing a policy of promoting
military personnel who demonstrate professionalism and respect for
human rights, and is investigating and prosecuting military personnel
and others who have been credibly alleged to have committed
extrajudicial executions or other violations of human rights; and
^!the Philippine military is not engaging in acts of intimidation or
violence against members of legal organizations who advocate for
human rights.
The United States signed a Tropical Forest Conservation Act Agreement with
the Philippines on September 19, 2002.²⁸ This accord cancels a portion of the
Philippines’ debt to the United States. The money saved by this rescheduling —
estimated at about $8 million — is to be used for forest conservation activities over
a period of 14 years.
Thailand
Table 11. U.S. Assistance to Thailand, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 0 0 1,400 992 1,000
DA00004,500
ESF99299099000
FMF 1,488 1,485 0 149 800
IM ET 2,526 2,369 0 1,142 1,400
INCLE 1,608 990 900 1,686 1,400
NADR 1,782 3,989 2,100 2,483 2,000
Peace Corps2,1432,2122,1442,278 —
T otals 10,539 12,035 7,534 8,730 11,100
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State; USA}^I^D.

²⁸ The Tropical Forest Conservation Act (P.L. 105-214).

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 in its southern provinces. For FY2008, the
Bush Administration proposed funding for domestic counterterrorism activities,
border security, countering the proliferation of weapons of mass destruction, and
military reform. Thailand would also receive funding for HIV/AIDS programs.
September 2006 Military Coup and U.S. Aid Sanctions. 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 ($16.3
million).²⁹ The bans were imposed pursuant to Section 508 of the Foreign Operations
Appropriations Act, which provides that such funds shall not be made available to
any country whose duly elected head of government was deposed by a military coup.
Under Section 508, the funds can be reinstated once a democratically-elected
government is in place. Other aid programs not affected by Section 508 or in the
U.S. national interest would continue to receive funding. In February 2008, the
United States resumed security and military assistance to Thailand following the
holding of democratic elections.
Other Programs. In 2001, the
United States and Thailand signed anTop Donors of Bilateral
agreement pursuant to the Tropical ForestOfficial Development
Conservation Act (P.L. 105-214), providingAssistance ($US million) toThailand
$11 million in debt relief to Thailand. In
return, Thailand is to contribute $9.5 million
over 28 years toward the protection of its^{1. Japan}^:⁷⁶⁵^{2. G}^e^rm^an^y^:³¹
mangrove forests. The United States^{3. Fran}^{ce: 27}
government pledged $5.3 million in relief^{4. EC}^:¹⁹
and reconstruction assistance for areas in^{5. D}^eⁿ^m^ark
Thailand affected by the December 2004
tsunami. ^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

²⁹ For further information, see CRS Report RL32593, Thailand: Background and U.S.
Relations, by Emma Chanlett-Avery.

Vietnam
Table 12. U.S. Assistance to Vietnam, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH1,2000000
DA 4,750 3,818 2,480 2,420 10,700
ESF01,9801,98010,613 —
FMF0000500
GHAI 24,044 31,214 62,935 86,000 86,000
IM ET 50 49 279 186 195
INCLE0000200
NADR 3,331 3,770 3,200 3,075 1,920
Totals33,37540,83170,874102,29499,515
^Sources^:^U^.^S.^D^e^p^a^r^t^m^e^nt^o^f^St^a^t^e^;^U^S^A^I^D⁽^C^o^ngr^e^ssi^oⁿ^a^l^N^o^tⁱ^fⁱ^c^a^tⁱ^o^n,^A^ugust¹⁴^,^2008);^U^.^S^.
^Depart^m^eⁿ^t^of^A^g^ri^cu^l^t^u^re.
Vietnam, with over 250,000 HIV-
positive persons in 2006, is the largest AsianTop Donors of Bilateral
recipient of Global HIV/AIDS InitiativeOfficial Development
(GHAI) funds under the President’sAssistance ($US million) to
Emergency Plan for AIDS Relief (PEPFAR).Vietnam
Other U.S. assistance objectives in Vietnam
include the following: accelerating^{1. Japan}^:⁶⁷⁰^{2. Fran}^{ce: 116}
Vietnam’s transition to an open and market-^{3. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:⁸²
based economy; de-mining; promoting^{4. G}^e^rm^an^y^:⁷⁹
human rights and supporting civil society;⁵^.^D^e^nm^a^r^k:⁷³
and countering illegal cross-border transport
of arms and narcotics. IMET programs^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

include training in English language and
international peacekeeping.
The Vietnam Human Rights Act of 2007 (H.R. 3096), passed by the House on
September 18, 2007, would freeze U.S. nonhumanitarian assistance to the
government of Vietnam at FY2007 levels unless the President certifies to Congress
that the government of Vietnam has made substantial progress in the following areas:
the release of political and religious prisoners; religious freedom; the rights of ethnic
minorities; access to U.S. refugee programs by Vietnamese nationals; and combating
trafficking in persons.

South Asia
Key U.S. foreign aid objectives in South Asia include combating terrorism,
developing bilateral military ties, and reducing the social and economic sources of
political instability and extremist religious and political thinking. These causes
include lack of accountable governance, inter-ethnic conflict, poverty, disease, and
illiteracy. 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 7.
Figure 7. U.S. Assistance to South Asian Countries
(excluding Food Aid), 2001-2008 ($million)

Note: 2008 data is estimated.
Regional programs focus upon economic growth, combating terrorism, and
fighting international crime. The South Asia Regional Fund ($5 million in FY2007)
promotes economic growth through addressing energy needs in South Asia, such as
assisting countries to find energy resources and facilitating trade in energy. The
South and Central Asia Regional Fund ($1.5 million in FY2007) supports programs
related to border control and education. The aim of assistance for education is to
help reduce religious and ideological extremism and regional instability.
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
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. In subsequent years, Congress has extended the waiver
authority on coup-related sanctions. Since 2003, President Bush has annually
exercised the waiver authority. 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 to³⁰
India. 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.³¹
Country Aid Levels and Restrictions — South Asia
Bangladesh
Table 13. U.S. Assistance to Bangladesh, 2005-2009
(thousands of dollars)
AccountFY2005FY2006 FY2007 FY2008estimateFY2009request
CSH 33,412 31,509 29,935 37,181 29,575
DA 16,535 10,889 10,430 29,190 39,060
ESF 4,960 4,950 3,750 0 0
FMF 248 990 990 595 1,000
IM ET 1,035 930 934 761 800
INCLE 0 0 0 198 800

³⁰ USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis (July 7, 2005);
USAID, Tsunami Assistance, One Year Later (December 21, 2005).
³¹ USAID, Fact Sheet no. 44, South Asia — Earthquake (August 25, 2006).

AccountFY2005FY2006 FY2007 FY2008estimateFY2009request
NADR 893 5,094 2,575 6,301 3,600
Peace Corps1,77370600 —
T otals 58,856 55,068 48,614 74,226 74,835
Food Aid
P.L. 480 Title^a22,12230,20735,618 30,78332,000
II Grant
Section^b3,2573,8335,379 — —

416(b)

FFE^b02,8680 — —
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State, USA}^I^{D, U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
In addition to problems related to development, corruption remains a key
obstacle to social, economic, and political advancement in Bangladesh. The largest
elements of the U.S. aid presence involve public health, including HIV/AIDS
programs, and basic education. In other areas, the U.S. government provides support
for anti-corruption reforms and democratic institutions. U.S. assistance also aims to
expand economic opportunities and equitable growth in the country. Security and
military assistance help to strengthen the police and military forces to counter
terrorist activity, enhance border security, and fight international financial and drug
crimes.
In March 2006, the Peace Corps
suspended its programs in Bangladesh due toTop Donors of Bilateral
concerns that volunteers might becomeOfficial Development
targets of terrorists. Assistance ($US million) to
Bangladesh
In 2000, the United States signed an
agreement with Bangladesh reducing the^{1. Japan}^:²³⁴^{2. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:²³²
country’s debt payments to the United States^{3. U}ⁿⁱ^t^e^{d S}^t^at^es^:⁸⁹
by $10 million over 18 years. In return,^{4. EC}^:⁶⁸
Bangladesh is to set aside $8.5 million to⁵^.^Neth^er^lan^d^{s: 6}³
endow a Tropical Forest Fund to protect and
conserve its mangrove forests.³² ^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

³² Pursuant to the Tropical Forest Conservation Act (P.L. 105-214).

India
Table 14. U.S. Assistance to India, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007 FY2008estimateFY2009request
CSH 53,222 52,815 53,411 58,947 59,682
DA 24,856 19,700 15,676 10,547 900
ESF14,8804,9504,8750 —
GHAI008,971 — —
IM ET 1,502 1,272 1,501 1,237 1,200
INCLE0000400
NADR 4,181 2,711 1,108 2,684 1,700
T otals 98,641 81,448 85,542 73,415 63,882
Food Aid
P.L. 480 Title II^a35,76343,501 31,034 13,40613,500
Grant
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State, USA}^I^{D, U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
The United States significantly
increased bilateral aid to India in FY2002Top Donors of Bilateral
and FY2003, largely as part of itsOfficial Development
counterterrorism efforts in the region. TheAssistance ($US million) to
current aid program aims to further IndianIndia
economic development in order to enhance
the country’s rise as “an influential U.S.³³^{1. Japan}^:⁶⁵¹^{2. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:⁵³⁵
partner in the international system.”^{3. G}^e^rm^an^y^:¹⁶⁶
Furthermore, U.S. assistance serves the^{4. EC}^:¹⁶⁴
poorest segments of the population in order^{5. U}ⁿⁱ^t^e^{d S}^t^at^es^:¹⁶⁴
to mitigate economic and social conditions
that may give rise to political extremism. ^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

For FY2008, the largest portion of U.S.
assistance to India funds public health and HIV/AIDS care, treatment, and
prevention. Security and military assistance supports programs related to military
professionalism, counterterrorism, counternarcotics, and border security. Economic
Support Funds are to promote the private agricultural sector.
³³ Congressional Budget Justification for Foreign Operations, FY2008.

Nepal
Table 15. U.S. Assistance to Nepal, 2005-2009
(thousands of dollars)
FY2008FY2009
AccountFY2005 FY2006 FY2007estimaterequest
CSH 25,165 18,613 18,090 19,891 13,667
DA10,0008,39310,4479,136 —
ESF 4,960 4,950 11,250 9,423 13,015
IM ET 648 644 793 752 800
INCLE 0 0 0 30 10,000
NADR 2,771 0 840 1,141 700
Peace Corps179 0 0 0 —
T otals 43,723 32,600 41,420 40,373 38,182
Food Aid
P.L. 480
Title II^a9661,213 6,056 00
Grant
FFE^b3,871 0 0 — —
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State, USA}^I^{D, U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^a. ^USA^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
U.S. assistance to Nepal aims to further
the peace process between the government ofTop Donors of Bilateral
Nepal and Maoist insurgents, establishOfficial Development
stability, and promote development. IMET,Assistance ($US million) toNepal
INCLE, and NADR programs help the Nepal
military and police to restore law and order.
The Consolidated Appropriations Act for^{1. Japan}^:⁷⁶^{2. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:⁶⁴
FY2008 allows for only Expanded^{3. G}^e^rm^an^y^:⁵⁸
International Military Education and Training^{4. U}ⁿⁱ^t^e^{d S}^t^at^es^:⁴⁵
(E-IMET) for Nepal. E-IMET emphasizes⁵^.^D^e^nm^a^r^k:³¹
and teaches the military about human rights,
military codes of conduct, and civilian control^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

of the military. Other major components of
United States aid programs in Nepal include
building the capacity of local and national governments to provide social services and
improving public health.
In 2004, the United States suspended the Peace Corps program in Nepal after
Maoist rebels bombed the United States Information Center in Kathmandu.

Pakistan
Table 16. U.S. Assistance to Pakistan, 2005-2009
(thousands of dollars)
FY2008FY2009
AccountFY2005 FY2006FY2007 estimaterequest
^C^S^H^21,000^22,757^22,385^29,816^27,855
^D^A^29,000^26,990^95,327^29,757^—
^ES^F^297,600^296,595^283,673^347,165^603,200^d
^F^M^F^298,800^297,000^297,000^297,570^300,000
^IMET^1,885^2,037^1,992^2,103^1,950
^IN^C^L^E^32,150^34,970^24,000^21,822^32,000
^NA^DR^7,951^8,585^9,977^9,725^11,250
^T^o^tals^a^688,386^688,934^734,354^737,958^976,255
^Food^Aⁱ^d
^P^.^L^.^{480 T}^{itle II}^b⁰^17,675⁰⁰⁰
^Gran^t
^FFP^c^10,170^11,197⁰^—^—
^FFE^c^5,796^5,169⁰^—^—
^S^ectⁱ^oⁿ^416(b)^c^1,972⁰²⁷⁶^—^—
^Sources^:^U^.^S.^D^e^p^a^r^t^m^e^nt^o^f^St^a^t^e^;^U^S^A^I^D⁽^C^o^ngr^e^ssi^oⁿ^a^l^N^o^tⁱ^fⁱ^c^a^tⁱ^o^n,^A^ugust²¹^,^2008);^U^.^S^.
^D^e^part^m^eⁿ^t^of^A^g^ri^cu^l^t^u^re.
^{a. T}^o^{tals in}^clu^d^{e su}^p^p^l^em^en^{tal ap}^p^r^o^p^r^iatioⁿ^s^.
^{b. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{c. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
^{d. In}^clu^d^es^{a “}^b^ri^d^g^e^f^uⁿ^d^{” appropriation}^of^{$150 m}^illioⁿ^:^P^.^L^.^110-^{252, Su}^pplem^en^tal
^A^ppropri^a^tⁱ^oⁿ^s^A^c^t^,^{2008 (s}^u^ppl^em^en^t^a^l^appropri^a^tⁱ^oⁿ^s^f^o^{r F}^Y^{2008 an}^{d F}^Y²⁰⁰⁹⁾.
Pakistan is a front-line state in the global
war on terrorism. Most U.S. assistance programsTop Donors of Bilateral
in the country claim to directly or indirectly serveOfficial Development
U.S. counterterrorism goals. The United StatesAssistance ($US million):
government has pledged $600 million inPakistan
economic and security assistance and $50 million
in earthquake reconstruction aid on an annual^{1. U}ⁿⁱ^t^e^{d S}^t^at^es^:²²⁴^{2. Japan}^:¹²⁰
basis through FY2009. Approximately 43% of^{3. U}ⁿⁱ^t^e^{d K}ⁱⁿ^g^dom^:⁹²
U.S. assistance to Pakistan supports^{4. T}^u^rk^ey^:⁶³
counterterrorism and border security efforts. The^{5. N}^o^rw^ay^:⁴⁵
second largest strategic objective (36% of
funding) is economic growth, aimed at nurturing^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

a middle class as a foundation for democracy.
Economic Support Funds (13%) “help Pakistan to improve the quality of and access
to public education, primary healthcare, and water and sanitation services” in part to
help provide alternatives to services provided by terrorist-linked charities and

schools.³⁴ Other assistance directly promotes democracy through support of
legislative processes, democratic practices within political parties, free and fair
elections, civil society, and the mass media.
Lifting of Foreign Aid Restrictions. Pakistan received limited U.S.
assistance during the 1990s — counter-narcotics support, food aid, and Pakistan
NGO Initiative programs — due to congressional restrictions in response to
Pakistan’s nuclear weapons program.³⁵ In 1985, the Pressler amendment to the
Foreign Assistance Act of 1961 (Section 620E(e)) 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, thus
triggering Pressler amendment sanctions against Pakistan. This restriction was eased
in 1995 to prohibit only military assistance.³⁶ 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
(Section 102, the Glenn amendment). Furthermore, Pakistan became ineligible for
most forms of U.S. foreign assistance due to its delinquency in servicing its debt to³⁷
the United States and to a 1999 military coup.
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, Congress enacted and the
President exercised waivers to nuclear weapons sanctions that had prohibited military
and economic aid to India and Pakistan. The Bush Administration 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. The President
also made $100 million in ESF available before the various sanctions were eased or
lifted, exercising authority afforded him under Section 614 of the Foreign Assistance
Act of 1961. 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.³⁸

³⁴ Congressional Budget Justification for Foreign Operations, FY2008.
³⁵ The USAID Pakistan NGO Initiative delivered education and health services primarily
through the Asia Foundation and Aga Khan Foundation USA and independent of the
government of Pakistan. Total funding for the program (1994-2003) was $10 million.
³⁶ The Brown amendment to the Foreign Assistance Act eased the prohibition to military
assistance only.
³⁷ The annual Foreign Operations Appropriations Act, usually at Section 508, denies foreign
assistance to any country whose duly elected head of government is deposed by military
coup or decree.
³⁸ See P.L. 107-57, Sections 1(b) and 3(2).

Since 2003, President Bush has annually exercised the waiver authority on coup-
related sanctions against Pakistan.³⁹ On March 25, 2008, President Bush waived
democracy-related aid sanctions on Pakistan for FY2008, stating that such a waiver
would facilitate the transition to democratic rule in Pakistan and was important to
U.S. counterterrorism efforts. Following the national and provincial elections of
February 2008, which many observers considered free, fair, and credible, the Bush
Administration issued an April 2008 determination that a democratically elected
government had been restored in Islamabad after a 101-month hiatus. This
determination permanently removed coup-related aid sanctions.⁴⁰
Sri Lanka
Table 17. U.S. Assistance to Sri Lanka, 2005-2009
(thousands of dollars)
AccountFY2005 FY2006 FY2007FY2008estimateFY2009request
CSH3000 000
DA 6,774 3,705 3,557 5,241 4,000
ESF9,9203,9603,0000 —
FMF 496 990 990 422 900
IM ET 461 529 483 571 600
INCLE00020350
NADR 2,700 3,615 1,050 1,143 650
T otals 20,651 12,799 9,080 7,397 6,500
Food Aid/Disaster Assistance
P.L. 480 Title^a1,996014,086 0 0
II Grant
FFP^b9,6908,7984,600 — —
Section^b0 70 0 — —

416(b)

Tsunami^c134,600 — — — —
Relief
^Sources^:^{U.S. Dep}^a^rtm^eⁿ^t^o^f^{State, USA}^I^{D, U.S. Dep}^a^rtm^eⁿ^t^o^f^A^g^ricu^ltu^re.
^{a. USA}^I^{D data — in}^clu^d^es^f^r^eig^h^t^cos^t^s^.
^{b. USDA}^{data — does}ⁿ^o^{t in}^clu^d^{e f}^r^eig^h^t^cos^t^s^.
^{c. T}^s^uⁿ^a^mⁱ^R^ecov^e^ry^an^{d R}^econ^s^t^r^u^c^tⁱ^oⁿ^F^uⁿ^d^{, P.L}^.^109-¹³

³⁹ For additional information on aid, including U.S. Department of Defense programs in
Pakistan, see CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt.
⁴⁰ Federal Register Vol. 73, no. 69, p. 19276-19277, April 9, 2008. “Pakistan Poll Process
‘Credible’ — U.S. Senators,” BBC Monitoring South Asia, February 20, 2008.

United States assistance programs aim to
promote the peace process between theTop Donors of Bilateral
government of Sri Lanka and Tamil separatistsOfficial Development
led by the Liberation Tigers of Tamil EelamAssistance ($US million) to
(LTTE). In order to help pressure the LTTE toSri Lanka
return to the negotiating table, the United States
provides assistance to help strengthen the^{1. Japan}^:³¹⁷^{2. G}^e^rm^an^y^:⁶⁵
capabilities of the Sri Lankan military. INCLE^{3. N}^o^rw^ay^:⁴⁸
and NADR programs support the police force^{4. U}ⁿⁱ^t^e^{d S}^t^at^es^:⁴³
and counterterrorism activities. U.S. assistance⁵^.^Neth^er^lan^d^{s: 3}⁸
also promotes economic growth, especially in
less developed, conflict-ridden areas, and helps^2004-^{2005 a}^v^e^r^a^g^e^.^S^o^u^rce:^OECD

to advance democracy, human rights, and civil
society.
In 2004, Sri Lanka met eligibility requirements for MCA funding, due in large
part to positive governmental, social, and economic indicators in Western provinces.
Although a Compact was expected in 2007, the MCC put an agreement on hold in
early 2007 pending improvements in the overall human rights and security situations,
and in December 2007 the MCC decided not to reselect Sri Lanka for 2008 Compact
eligibility.
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.⁴¹ The Bush
Administration pledged $134.6 million for disaster relief and reconstruction to Sri
Lanka. In 2006, Sri Lanka received Transition Initiative (TI) funding ($1.7 million)
for the peace process and $1.1 million in disaster assistance.
FY2008 Appropriations. The Consolidated Appropriations Act for FY2008,
Section 699G, withheld FMF from Sri Lanka, with the exception of technology or
equipment related to maritime and air surveillance and communications, unless the
following conditions were met:
^!the Sri Lankan military is suspending and the Sri Lankan
government is bringing to justice members of the military who have
been credibly alleged to have committed gross violations of human
rights or international humanitarian law, including complicity in the
recruitment of child soldiers;
^!the Sri Lankan government is providing access to humanitarian
organizations and journalists throughout the country consistent with
international humanitarian law; and
^!the Sri Lankan government has agreed to the establishment of a field
presence of the Office of the United Nations High Commissioner for
Human Rights in Sri Lanka with sufficient staff and mandate to
⁴¹ USAID, Fact Sheet no. 39, Indian Ocean — Earthquake and Tsunamis, July 7, 2005.

conduct full and unfettered monitoring throughout the country and
to publicize its findings.

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
EAP: East Asia and the Pacific
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
OECD: Organization for Economic Co-operation and Development
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
USAID: United States Agency for International Development
USDA: United States Department of Agriculture