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U.S.: Bush's 2004 Foreign-Aid Budget Rewards Allies In War On Terrorism

U.S. President George W. Bush has unveiled an ambitious foreign-assistance package that slashes funds for countries not seen as vital to the war on terrorism while rewarding those that are. But the 2004 fiscal-year budget that is due to become effective on 1 October still needs approval by Congress.

Washington, 4 February 2003 (RFE/RL) -- Reflecting the new priorities of fighting terrorism and defending the homeland, the U.S. foreign-affairs budget for fiscal year 2004 cuts aid to Russia and Ukraine but raises it to Central Asian allies in the war on terrorism.

Bush sent his overall budget proposal of $2.2 trillion to Congress yesterday. It calls for a $15 billion increase in military spending and $2.3 billion in aid to "vulnerable states on the front line of the war against terrorism like Afghanistan and Turkey."

Vowing to win that war and protect the United States from any future terrorist attacks, Bush said his budget reflects the United States' shifting priorities. He said, "The first responsibility of our government is to defend our nation."

Among the big "victims" of the new priorities are Russia and Ukraine, whose combined assistance will be slashed by 32 percent as part of what the State Department calls a "phasing down" similar to what the United States has done in Eastern Europe in recent years.

Moscow will see its aid funds fall by more than half, from $148 million to $73 million. Kyiv, whose ties with Washington have soured, is set to receive $94 million, down from $155 million in 2003. The funds will largely go to democracy-building and civil-society programs.

In a brief on the foreign-affairs budget, the State Department said the new "priority in the proposed budget is the advancement of the global fight against terrorism" through economic, military, and democracy assistance to key partners and allies.

Christopher Burnham, assistant U.S. secretary of state for resource management, discussed the new budget during a briefing yesterday at the State Department in Washington. "There is no doubt that this budget funds the president's commitment to winning the war on terror. It's reflected throughout the numbers. It's reflected throughout the foreign assistance. And this is a very good budget to accomplish that task," Burnham said.

Allies that lent a direct hand in the war on terrorism appear to have been rewarded for their efforts. The Central Asian states that helped Washington's campaign in Afghanistan by providing bases for troops and granting overflight rights appear to have come out on top.

The State Department said that in 2004 more than $171 million is earmarked to fund assistance programs in Uzbekistan, Kyrgyzstan, and Tajikistan "in recognition that Central Asia is of strategic importance in fighting terrorism."

Tashkent will get $42 million ($31.5 million in 2003), Bishkek will receive $40 million ($36 million in 2003), and Dushanbe is allocated $35 million ($22.5 million in 2003).

In all, that's a 55 percent increase over 2003 and a nearly 100 percent rise from levels prior to the terrorist attacks of 11 September 2001. The money is intended to back civil-society development, small-business promotion, conflict reduction, and economic reforms.

Even isolated Turkmenistan is set to receive $8 million, that is, $1 million more than in 2003. Only Kazakhstan sees a cut, to $32 million from $43 million.

The proposed budget also contains indications of where U.S. policy on key international questions will be headed this year.

On Iraq, for example, the budget contains no funds whatsoever for the opposition, which had received $25 million in each of the last two years.

Asked if Washington believes the foreign-based Iraqi opposition will no longer be needed because the United States will have toppled Iraqi President Saddam Hussein, Assistant Secretary of State for Foreign Assistance Joseph Bowab told the briefing, simply: "When we put the budget together, and we looked at the line when we put the budget together, we felt that in '04 that that line would not be necessary."

In addition, the budget forecasts $700,000 in spending for United Nations guards in Iraq, a further indication that Washington expects "regime change" in Baghdad this year. The budget does not include, however, the cost of any war against Iraq, estimated at more than $60 billion.

Another policy indication in the budget comes on North Korea. Where the United States had previously allocated $75 million a year to support programs associated with the 1994 Agreed Framework, which gave Pyongyang oil and aid in exchange for a pledge not to build nuclear weapons, no money has been budgeted in 2004.

Peter Hayes directs the Nautilus Institute, a California-based think tank that focuses on East Asian security issues. Hayes said the new "zero" in the budget for the Agreed Framework is curious because the United States actually never said that it considers the framework to be dead, despite violations by North Korea.

Washington says Pyongyang has violated the agreement by secretly enriching uranium for nuclear weapons, restarting a banned nuclear-power plant, and pulling out of the Nuclear Non-Proliferation Treaty.

But Hayes told RFE/RL that by cutting funding, Washington has signaled that it will not adhere to the Agreed Framework either. "Putting it sort of bluntly, the United States is now enacting its reneging of its obligations under the Agreed Framework. And it is a reneging, because the United States has been very careful to maintain [that] it hasn't actually pulled out of the Agreed Framework," Hayes said.

Elsewhere, the 2004 budget proposal sees a slight decrease in aid to Eastern and Central Europe, to $435 million from $495 million in 2003. The chief losses were in the Balkans: Yugoslavia, which dropped to $113 million from $135 million; Macedonia ($39 million from $50 million); and Kosovo ($79 million from $85 million).

Bush may face a battle over some aspects of the proposal in Congress, but most criticism is likely to be aimed at the domestic side of the plan, which proposes tax cuts worth nearly $700 billion. Critics say the tax cuts benefit mainly the wealthy and may create long-term deficits that will hinder rather than help economic growth, as Bush says they will.

(For the complete U.S. budget, see