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. Other sources of growth include the Millennium Challenge Account (MCA) and the President's Emergency Plan for AIDS Relief (PEPFAR). These 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. Foreign Aid Restrictions

In the past decade, the United States has imposed restrictions on non-humanitarian development aid, Economic Support Funds (ESF), 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. 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). The FY2008 budget raised assistance to South Asian countries by 8% (from $900 million in FY2007 to $974 million). 2764 , signed into law as P.L. East Asia

Since 2001, foreign aid spending in East Asia has grown markedly, largely due to counterterrorism efforts in the Philippines and Indonesia. In November 2005, the Secretary of State waived restrictions on FMF to Indonesia on national security grounds pursuant to Section 599F(b). The Foreign Operations Appropriations Act for FY2002 ( P.L. 109-13 ) appropriated $631 million for tsunami recovery and reconstruction in East and South Asia. The United States government has pledged $600 million in economic and security assistance and $50 million in earthquake reconstruction aid on an annual basis through FY2009. 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. Since 2003, President Bush has annually exercised the waiver authority on coup-related sanctions against Pakistan. 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 conduct full and unfettered monitoring throughout the country and to publicize its findings.
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.