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Axe Descends on U.S. Overseas Aid

WASHINGTON, Feb 16 2011 (IPS) - With U.S. President Barack Obama’s release of his Fiscal Year (FY) 2012 foreign affairs budget Monday and a proposal currently in the U.S. House of Representatives for massive cuts in FY 2011 international spending, the fight to sustain U.S. aid abroad is intensifying.

Development and foreign policy analysts largely praised the administration’s funding appeal for reflecting conscientious adjustments in this constrained economic environment and for maximising returns by focusing spending on strategic areas such as global health, food security and climate change.

“The U.S. Global Leadership Coalition (USGLC) today rallied behind the Obama administration’s FY 2012 international affairs budget request for 53.1 billion dollars and urged Congress to fully fund the request,” said the bipartisan network of some 400 development- and diplomacy- minded organisations and experts chaired by former Secretary of State Colin Powell in a statement Monday.

“At just over 1 percent of the federal budget and 7.1 percent of security funding, the international affairs budget is a critical investment in America’s national security and economy,” it noted.

The USGLC’s 53.1-billion-dollar figure includes spending appropriated for international programmes under the Departments of State, Treasury, Labour and Health and Human Services as well as USAID, the country’s development agency.

Regional Snapshots

Note: Figures are from of the U.S. Office of Management and Budget and are not exhaustive of regional funding. Comparisons are to FY 2010 enacted funds.

Africa • Global Health and Child Survival (DoS and U.S.A.I.D.): 5.4 billion dollars; (+) 12.8 percent • Development Assistance: 1.2 billion dollars; (+) 9 percent • Economic Support Fund: 618.5 million dollars; (-) 1.8 percent

• International Narcotics Control and Law Enforcement: 91.7 million dollars; (+) 158 percent • International Military Education and Training: 15.5 million dollars; (+) 1.8 percent • Foreign Military Financing: 18.8 million dollars; No change

East Asia and Pacific • GH & CS: 273.7 million dollars; (-) 16.2 percent • DA: 380.6 million dollars; (+) 58 percent • ESF: 57.7 million dollars; (-) 67.8 percent • INCLE: 21.1 million dollars; (+) 13.5 percent • IMET: 9.2 million dollars; (+) 2.9 percent • FMF: 42.2 million dollars; (-) 32.1 percent

Europe and Eurasia • GH & CS: 46.7 million dollars; (+) 40.9 percent • ESF: 6.0 million dollars; (-) 81.8 percent • INCLE: 500,000 dollars; All new funding • IMET: 30.1 million dollars; (+) 0.3 percent • FMF: 123.4 million dollars; (-) 10.5 percent

Near East • GH & CS: 21.0 million dollars; (+) 162.5 percent • DA: 30.0 million dollars; (-) 53.9 percent • ESF: 1.6 billion dollars; (-) 2.0 percent • INCLE: 154.6 million dollars; (+) 22.5 percent • IMET: 18.3 million dollars; (-) 1.7 percent • FMF: 4.9 billion dollars; (+) 7.0 percent

South and Central Asia • GH & CS: 292.0 million dollars; (-) 5.8 percent • DA: 180.4 million dollars; (+) 60.0 percent • ESF: 3.0 billion dollars; (-) 10.5 percent • INCLE: 455.2 million dollars; (-) 40.4 percent • IMET: 14.7 million dollars; (+) 9.2 percent • FMF: 359.0 million dollars; (+) 19.2 percent

Western Hemisphere • GH & CS: 340.4 million dollars; (+) 12.3 percent • DA: 415.1 million dollars; (+) 0.2 percent • ESF: 477.6 million dollars; (-) 1.6 percent • INCLE: 565.6 million dollars; (-) 19.4 percent • IMET: 16.6 million dollars; (+) 0.9 percent • FMF: 85.6 million dollars; (-) 75.7 percent

This core budget excludes an 8.7-billion-dollar request for Overseas Contingency Operations (OCO) – a fund for joint military-civilian operations in Iraq, Afghanistan and Pakistan that is appropriated separately.

Compared to FY 2010 enacted funds, the FY 2012 foreign affairs budget thus represents an increase of 3.1 percent, while the OCO account boosts spending levels by 71 percent, according to the USGLC’s number-crunching.

While the overall FY 2012 core international spending proposal represents just a marginal increase from FY 2010, significant amounts are shuffled from one account to another. This redirection of funds is reflected in double- digit percent increases and decreases in key areas.

Spending Slashes

Major cuts include a 115-million-dollar, 15-percent reduction in assistance for Europe, Eurasia and Central Asia; a 250-million-dollar, 22-percent reduction in United Nations and non-U.N. peacekeeping operations; and a 105- million-dollar, 15-percent reduction in voluntary and non- voluntary contributions to international organisations and programmes, according to USGLC figures.

“We don’t like to see cuts, but they’re made based on a logic of what are the most important investments that we can make right now,” Gregory Adams, Oxfam America’s director of aid effectiveness, told IPS in a telephone interview. “If it’s going to be a tough budget year, we’d rather have these decisions made based on a thoughtful strategic approach and that’s what we think we see here.”

Bilateral assistance for six countries – Iceland, Kuwait, Qatar, Saudi Arabia, Tonga and the United Arab Emirates – has also been eliminated completely, while Foreign Military Financing programmes for five countries and International Military Education and Training programmes for nine have been zeroed out.

“[W]e’re trying to move… our budget towards less very, very small programmes, because we’re going to… have less money down the road to allocate, and we want to make sure we allocate it to the highest priorities,” a senior State Department official told reporters Monday in reference to these bilateral programme eliminations, which represent less than a three-million-dollar reduction.

“[T]he savings that these cuts generate are very, very small, but you have to start somewhere,” the official added.

Spending Spikes

Major funding hikes include an 850-million-dollar, 10.8- percent raise for global health and child survival programmes; a 400-million-dollar, 16-percent raise for development assistance – which includes a 1.1-billion- dollar, 23-percent boost to the Feed the Future Initiative and a 651-million-dollar, 28-percent boost to the Global Climate Change Initiative – and a 1.28-billion-dollar, 63- percent raise in contributions to International Financial Institutions.

This movement of funds represents increased selectivity, Adams told IPS. “At the same time we’re doing that, we’re increasing investments to a lot of the multilateral development banks… partially because in light of the global financial crisis a couple of years ago, we urged a lot of these international development banks to up their funding… to try to push back on the global recession – and it worked,” he argued. “Now the bill is coming due for that and a lot of these institutions need replenishment.”

A new Global Security Contingency Fund worth 50 million dollars has also been created in the proposal and pools money from the Department of Defence for security crises that involve both the civilian and military sectors. Adams expressed caution over this joint account. “We just don’t know enough about it [yet],” he explained.

Last week, Oxfam released a report cautioning against the militarisation of development aid, which can often lead to ineffective and even dangerous policies if not implemented and monitored in an appropriate way, the advocacy group said.

“When you’ve got those situations where you’ve got multiple priorities – like security and development – what’s the criteria by which you’re measuring success?” he asked. “Are your development [policies] being held to a development standard? … [T]hat sometimes gets muddied when you have these pooled resource funds.”

A Looming Budget Battle

In her letter introducing the foreign affairs funding proposal released Monday, Secretary of State Hillary Clinton called the request a “lean budget for lean times”, adding, “We have scrubbed it for every dollar of savings, because we know we have to make the most of our resources.”

But if a current proposal in the House to slash total FY 2011 spending by 100 billion dollars – which includes a steep 19-percent drop from FY 2010 core international affairs spending levels, according to USGLC figures – is any indication, the administration’s FY 2012 request is likely to be pared down significantly once Congress gets its hands on it.

In his State of the Union speech last month, Obama pledged to freeze domestic, non-security discretionary funding for the next five years. While the foreign affairs budget has been categorised as security spending by the last two administrations, largely protecting it from cuts, conservative lawmakers are moving to lump the international budget with non-security accounts in a bid to make massive reductions.

“Cuts of this magnitude will be devastating to our national security, will render us unable to respond to unanticipated disasters, and will damage our leadership around the world,” Clinton argued in a letter to Representative Harold Rogers Monday. Rogers is the chair of the House Appropriations Committee, which allocates funding.

With an estimated 1.4-trillion-dollar deficit for FY 2011 and a national debt of over 14 trillion dollars and climbing, officials are scrambling to curb spending.

“[T]he president’s budget appears to be long on rhetoric and lean on spending cuts,” claimed Rogers in a statement Monday. “We must go much further than this anaemic effort of symbolic reductions and additional spending.”

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