January 4, 2010

WASHINGTON: Just before Christmas, the US President, Barack Obama, signed into law one of his country's biggest aid pledges of the year. It was bound not for Africa or any of the many struggling countries on the World Bank's list.

It was a deal for $US2.77 billion ($3 billion) to go to Israel in 2010 and a total of $US30 billion over the next decade.

Israel is bound by the agreement to use 75 per cent of the aid to buy military hardware made in the US: in the crisis-racked US economy, those military factories are critical to many towns.

For the first time the US is also providing $US500 million to the Palestinian Authority, including $US100 million to train security forces, under the strict proviso that the authority's leadership recognises Israel.

For many years Israel has been the largest recipient of US foreign aid, followed by Egypt ($US1.75 billion), which also receives most of its assistance in tied military aid. (Sydney Morning Herald) The Congressional Research Service says that the US spent 17 per cent of its total aid budget - or $US5.1 billion - on military aid in 2008, of which $US4.7 billion was grants to enable governments to receive equipment from the US. The lion's share of political and strategic aid to Iraq and Afghanistan comes from separate funds and from the defence budget. Between 2003 and last year $US49 billion was poured into Iraq through the Iraq Relief and Reconstruction Fund and the defence budget. The Afghanistan program over the same period consisted of $US11 billion in traditional foreign aid and another $US15 billion in defence funds. Under the Obama Administration, this year's aid budget has been increased by 10 per cent to nearly $US50 billion to support his counter-terrorism strategy. Assistance to Pakistan was recently tripled, with an additional $US1.5 billion a year for the next five years. The author of the bill, Senator John Kerry, said it would ''build a relationship with the people [of Pakistan] to show that what we want is a relationship that meets their interests and needs''. But officials at the US embassy in Islamabad have alleged that Pakistan has diverted elsewhere 70 per cent of the $US9 billion in military assistance paid since 2001. The Obama Administration is finding that other expensive fronts are emerging in the fight against terrorism, the latest being Yemen. In the 2010 fiscal year US development and security assistance to Yemen is expected to rise 56 per cent to $US63 million. But this does not include so-called 1206 Pentagon counter-terrorism funds. Last year Yemen received $US67 million of those, up from just $US5 million. After the events of the past week or so, countries like Yemen are highly likely to receive significantly more this year.