U.S. Strategy for South Asia
The resolution of the Afghan conflict holds the key to the development of South Asia. It all depends on how the U.S. administration pursues its strategic interests in the fight against terrorism.
Before 9/11, the focus of United States’ foreign aid and investment in South Asia was aimed at promoting the cause of democracy, economic development, human rights and betterment of societies. For a region having over a billion people, the role of the U.S. economic program until recently, was very positive and productive. It not only opened new markets for U.S. investors but also provided local businessmen access to free world consumers. This mutually beneficial business relationship and generous foreign assistance helped most South Asian countries to counter poverty, unemployment and achieve improvements in all areas of governance. Unfortunately, post 9/11,the scenario changed everything for the worse. After the Bush administration’s declaration of war on terrorism, the foreign aid strategy was restructured “to serve the goal of transformational development, which places greater emphasis on U.S. security interests.”
Under the new strategy, assistance programs were diverted largely to “front line” states . For these countries, the U.S. directed not only increased security and military assistance but also development aid for counter-terrorism efforts, including programs aimed at mitigating conditions that could make radical ideologies and religious extremism attractive, such as cycles of violence, poverty, limited educational opportunities and ineffective or unaccountable governance.
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.
The war on terrorism has reoriented foreign assistance priorities in Asia and accelerated a trend towards increased aid to the region that began in 2000. Throughout the 1990s, U.S. assistance to Asia fell due to ebbing of Cold War security concerns, nuclear proliferation sanctions, and favorable economic and political trends. In the wake of the war on terrorism, Pakistan, India, the Philippines and Indonesia became the foci of the Bush Administration’s counter-terrorism efforts in South and Southeast Asia, due to their strategic importance, large Muslim populations, and insurgency movements with links to terrorist groups. 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. Beginning in 2004, both Indonesia and the Philippines received new funding for education programs 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).
In recent years, the Obama Administration carried forward many Bush-initiated foreign aid initiatives, including USAID’s Development Leadership Initiative (DLI), the Millennium Challenge Corporation and robust assistance to Iraq, Afghanistan, and Pakistan. The Obama Administration also largely continued Bush Administration’s investments in global health and HIV/AIDS treatment. In the FY2011 budget, the Administration further defined its international priorities, with emphasis on building State Department and USAID capacity, supporting multilateral food security and global climate change initiatives. Still, Obama’s main funding request for FY2011 contains assistance to countries of strategic interest in the fight against terrorism. The allocation includes $12.22 billion, or 34% of the total bilateral aid request for “front-line” states. For Afghanistan, $3.92 billion is requested for FY2011, primarily to increase U.S. civilian resources to balance the recent troop surge. For Pakistan, $3.05 billion is requested primarily to build Pakistan Government’s capacity and support infrastructure and economic development projects that provide tangible benefits to communities