US plans to gut aid to India but continue with $200mn to Pakistan

Minus 100%.

America plans to bring to a screeching halt its development funds to India in FY18 while US aid to Pakistan of $200 million remains untouched, according to a “sensitive” document on the yet to be announced United States foreign aid budget.

In a line, the Trump government needs $ 54 billion to fund an uptick in defense spending and sees the State Department budget as a rough and ready fix.

“While the Trump administration seems favorably disposed toward India, I’m starting to worry that New Delhi runs the risk of being back-burnered,” says Alyssa Ayres, Senior Fellow for India, Pakistan and South Asia at the Council on Foreign Relations and former State Department deputy assistant secretary for South Asia.

Link: Document on proposed budget cuts

This comes at a time when India’s economic muscle and global influence is translating into $1.16 billion in grants and loans worldwide - “a four-fold jump in only a decade”, says Tanoubi Ngangom of Observer Research Foundation, a think tank.

"In absolute terms as well, back-of-the-envelope calculations estimate that the current $1.35 billion earmarked for overseas grants, concessional loans, and technical training will rise to approximately $15 billion by 2030. To put this in perspective, the UK’s budget for global development in 2015-16 was $12 billion, a figure likely to come under further stress in the years to come," says Ngangom in an ORF working paper.

 US plans to gut aid to India but continue with 0mn to Pakistan

America plans to gut foreign aid and fund instead for 'quick results'. Rex Tillerson and Donald Trump in pic/ Reuters

Categorised by State bureaus and operating units, the 15 page leaked document is the State Department’s blueprint for deep cuts worldwide.

The numbers for India, Pakistan and China are like this:
India’s development assistance of $19.2 million and Economic Support Fund of $8.2 million will be stopped completely, money to global health programs will be chopped by nearly half to $ 29.6 million.

The corresponding numbers for Pakistan and China are like this:

ESF: $200 million - unchanged
Health aid: Down to $11.25million from $22.5 million ( 50% cut)

Development Assistance: Down to 0 from $23.0 million
Health aid: Stays at $1.5million

If the plan goes through Congress, US assistance to India will remain only in health programs.

US sponsored foreign aid adds up to a princely one percent of the federal budget, but American people ( based on opinion polling) believe it’s close to 25 percent of government spending, says Brookings, a think tank.

Link: Brookings on myths that surround foreign aid

“The larger message the Trump assistance budget signals appears to be we will close the funding support for collaboration with rising power India on development innovation; we will shift emphasis in Bangladesh with unclear impact on the highly-successful programs on education, food security, and others; we cut by half our assistance to troubled Nepal, the second-poorest country across South and Central Asia; and we will shrink the ability to promote sustainable economic activity in Afghanistan even before the larger strategy review for U.S. involvement there has been concluded,”writes Ayres in Forbes.

Massive, across the board foreign aid budget cuts are planned for FY 18 alongwith staff cuts too in the Department of State and moves afoot to merge USAID with the State Department.

Although Trump’s opponents within the party claim these spending cuts will be “dead on arrival”, the fact that the Obamacare repeal whisked passed Congress means direct financial assistance to the world outside America will come under the knife.

“Washington plans to reduce the kinds of foreign aid that have underwritten a focus on U.S. values like democracy, governance, and human rights,” writes Ayres in Forbes.

US Secretary of State Rex Tillersen in a 6000 word speech to staff makes the distinction between values and policies — “…if you condition our national security efforts on someone adopting our values, we probably can’t achieve our national security goals or our national security interests. If we condition too heavily that others must adopt this value that we’ve come to over a long history of our own, it really creates obstacles to our ability to advance our national security interests, our economic interests.”

And later, again:
“I think it’s really important that all of us understand the difference between policy and values, and in some circumstances, we should and do condition our policy engagements on people adopting certain actions as to how they treat people. They should. We should demand that. But that doesn’t mean that’s the case in every situation. And so we really have to understand, in each country or each region of the world that we’re dealing with, what are our national security interests, what are our economic prosperity interests, and then as we can advocate and advance our values, we should – but the policies can do this; the values never change.”

“When administrations change, policies do as well—but these changes don’t even appear to align with Trump administration priorities,” writes Ayres.

The Trump administration has submitted a "skinny budget," a broad outline of spending proposals which will be followed by lengthy volumes of fiscal plans and projections for the fiscal year that begins October 1, 2017. The White House is proposing a combined $25.6 billion budget for the State Department and USAID, a 28 percent reduction from current spending with a desire to prioritize military power over the influence that can flow from development aid.

Meanwhile, Reuters reports that the first U.S. blueprint in six years outlining how to combat Islamic extremism, is being being fine-tuned at the White House even as the State Department continues to cede power to the National Security Council. Now, the only agency that's spending cash on new hires is the CIA, currently advertising for Operations Officers across the world with "no specific work background required".

Updated Date: May 06, 2017 06:46:48 IST

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