Congress Reducing Foreign Aid -- Again

by Jim Lobe

As in the past, much of the decline will hit the world's poorest countries hardest. Proposals by Clinton to fund substantial debt reduction for the world's poorest and most heavily indebted countries have been rebuffed, while contributions to multilateral agencies which provide concessional loans and grants are also being cut.

In addition, the Republican-led Congress appears determined to limit U.S. contributions to United Nations peacekeeping operations (PKOs), by withholding money for specific PKOS, almost all of them in sub-Saharan Africa.

"This looks to be another truly dismal year on the foreign-aid front," sighed one Congressional aide, who noted that total U.S. foreign aid per capita has been the lowest among all Western industrialized countries for several years now.

U.S. foreign aid is largely provided through two separate pieces of legislation: a Foreign Operations bill which covers most traditional aid programs, and another bill which covers the State Department budget and assessments to the United Nations and its PKOs.

During the past two weeks, the Senate approved its version of the 2001 Foreign Operations bill, while the House of Representatives is likely to take up its bill, as prepared by the Appropriations Committee. The House also approved its version of the State Department bill this past week, while the Senate has yet to take it up.

The picture so far appears pretty clear, however. Congress is likely to approve no more than $13.4 billion for the 2001 Foreign Operations bill, about $1.7 billion less than the amount requested by the Clinton administration, or some two percent below current aid levels.

That calculation does not include some $1.3 billion in supplemental 2000 funding in military and anti-drug aid for Colombia and its Andean neighbors which will be sent to Clinton for signature as early as this weekend.

Senior administration officials have already suggested that Clinton will veto the 2001 foreign aid bill if certain accounts, notably debt reduction for the poorest countries, are not increased. Such a deadlock has worked well for Clinton in the past two years when he successfully negotiated major increases in aid from the tight-fisted Republican leadership just before the annual adjournment.

Last year, for example, he wrested some $2.6 billion more in foreign aid, including some $1.8 billion to support the Wye River peace accord between Israel and the Palestinian Authority than Congress had initially approved. "His powers of persuasion should not be underestimated," said one State Department official.

However, this year Clinton will not have the powerful Israel lobby in the trenches with him as he did in 1999 when the Wye accord had to be funded.

Total aid to Eastern Europe and the Former Soviet Union (FSU) also has emerged more or less intact compared to last year, despite some cuts to the latter account. Total aid to both regions next year should come to about $1.3 billion.

Much of the rest of the world, particularly the poorest regions, are likely to see their aid cut. Of particular concern is a two-year, $472 million request by Clinton, most of which would be used to reduce billions of dollars in debt owed by the poorest nations to the World Bank, the International Monetary Fund (IMF), and other multilateral agencies.

In action taken so far, the Senate has approved only $75 million, while the House Appropriations Committee is recommending slightly more, $82.4 million. Efforts by a number of Democrats in both chambers to increase those amounts so far have failed against an almost-solid wall of Republican opposition.

Failure to appropriate the full amounts which some analysts believe are likely to be used as a Republican bargaining chip in end-of-session budget negotiations with Clinton -- could well delay full implementation of the so-called Highly Indebted Poorest Countries (HIPC) initiative, which was originally proposed by Clinton himself at a Group of Seven summit in Denver last year.

Not only is HIPC at risk, but the World Bank and other multilateral agencies may also be short of U.S. contributions if the current bills become law.

U.S. contributions to the International Development Association (IDA), the World Bank's affiliate which provides concessional loans to more than 80 of the world's poorest countries, may fall as much as $100 million short of more than $800 million annual commitments. Similar contributions to the soft-loan arms of the Asian and African Development banks could be cut by 25 percent or more as well.

The Global Environment Facility (GEF), which provides grants to poor countries which are trying to address problems like ozone depletion and global warming, also stands to be a big loser this year. Out of Clinton's $175 million request, the House committee has approved only $35.8 million and the Senate, $50 million.

Washington is already lagging far behind its industrialized allies in financing its commitments to the GEF whose creation resulted from the 1992 Earth Summit conference in Rio de Janeiro.

Republican also appear determined to slash a White House request of $555 million for population assistance. The Senate approved $425 million, while the House Committee recommended maintaining the program at current levels of $385 million.

In the State Department bill, House Republicans approved only $498 million out of a Clinton request of $739 million to support United Nations PKOs in 2001 and repeatedly rejected amendments by Democrats to add money to the account.

In addition, the House bill explicitly denies funds to several specific PKOs for mostly African countries, including Sierra Leone, the Democratic Republic of Congo, the Western Sahara, and between the recently warring nations of Ethiopia and Eritrea.

The United States pays 25 percent of all U.N. PKO costs, so its failure to make any contribution to these PKOs could threaten their viability, according to U.N. sources. Washington already owes the UN's peacekeeping account more than $1.2 billion in accumulated arrears.

The administration is counting on the Senate to fund those operations, or at least strip from any final bill language that would prohibit spending on them, but it may face an uphill fight, according to Congressional aides.

On the more positive side, Congress this year appears to be taking more seriously the threat posed by infectious diseases in Africa and elsewhere. The Senate bill includes a new account for $651 million for global health initiatives focused on diseases like HIV/AIDS, tuberculosis, and malaria, which mainly afflict people in the world's poorest countries.