-Caveat Lector- ------- Forwarded Message Follows ------- Date sent: Fri, 03 Sep 1999 15:28:40 -0600 To: [EMAIL PROTECTED] From: Progressive Response <[EMAIL PROTECTED]> Subject: Budget Priorities, East Timor -------------------------------------------------------------------------- --------------- The Progressive Response 3 September 1999 Vol. 3, No. 32 Editor: Tom Barry -------------------------------------------------------------------------- --------------- The Progressive Response (PR) is a weekly service of Foreign Policy in Focus (FPIF), a joint project of the Interhemispheric Resource Center and the Institute for Policy Studies. We encourage responses to the opinions expressed in PR. -------------------------------------------------------------------------- --------------- Table of Contents *** DIPLOMACY STARVED *** By Robert Borosage *** EAST TIMOR VIOLENCE: LEGACY OF U.S. INDONESIA POLICY *** By John Gershman -------------------------------------------------------------------------- --------------- *** DIPLOMACY STARVED *** By Robert Borosage (Editor's Note: The following analysis of the U.S. budget and international programs is excerpted from a timely FPIF Special Report entitled "Money Talks: The Implications of U.S. Budget Priorities." Written by Robert Borosage of the Campaign for America's Future, the report is intended to place the current budget wrangles in Washington into the larger perspective of how budget priorities reflect the role of U.S. in global affairs. The Special Report, which contains numerous helpful tables and charts, is posted on the FPIF website at: http://www.foreignpolicy-infocus.org/papers/money/index.html) In sharp contrast to its military spending, the U.S. devotes comparatively few dollars to foreign diplomacy, international assistance, and support for international institutions. The total net outlays in FY 1999 will be around $15 billion, less than 1% of the $1.66 trillion federal budget. This budget pays for the vast majority of the U.S. civilian role abroad. It includes 150 different account funds, ranging from food aid to the State Department's antiterrorism programs to the U.S. contributions to multilateral financial institutions like the World Bank and its affiliated regional banks. Major items include the State Department, with its worldwide infrastructure of embassies, missions, consulates, and an overseas staff of more than 35,000. Also included are the Agency for International Development (AID) and bilateral assistance programs, the United States Information Agency (USIA) and a range of activities called "public diplomacy," the Commerce Department's trade offices, as well as the Peace Corps and other humanitarian programs. The funding encompasses assistance to the Newly Independent States (once part of the Soviet Union), U.S. non-military aid commitments to Bosnia, security aid to Israel and the Middle East, and support for the Export-Import Bank and the Overseas Private Investment Corporation. (The figure does not include the $14.5 billion U.S. quota increase for the International Monetary Fund (IMF) nor the $3.4 billion credit commitment to the IMF's New Arrangements to Borrow program, still pending before Congress. IMF appropriations are considered monetary exchanges--with the IMF providing the U.S. with Special Drawing Rights--and thus are not considered budget outlays.) Secretary Albright is surely right to suggest that this total is shamefully inadequate. The U.S. is the world's wealthiest nation--and its largest scofflaw. As of mid-1999, our debt to the United Nations totals over $1.6 billion in back dues, and we owe more than $600 million to the international financial institutions (including the Global Environmental Facility). The U.S. provides less of its wealth to support the impoverished abroad than any other industrial country. U.S. spends less than one tenth of 1% of its GDP on official development assistance, and about the same amount on other aid related activities (including peacekeeping). The Organization for Economic Cooperation's Development's Development Assistance Committee (DAC) average is about four times as much or four-tenths of 1%. (And the official target of the United Nations is that donors provide seven-tenths of 1% in aid.) Despite having by far the world's largest economy, the U.S. is no longer the world's largest aid provider. Economically troubled Japan provides more aid in absolute dollar terms, giving $9 billion in 1997; the U.S., Germany and France each provided around $6.5 billion. These numbers are falling rapidly: since 1995 aid from these four countries has dropped 6% in real dollars and total DAC support has dropped 18%. Moreover, U.S. spending on international affairs when measured in constant dollars has been declining steadily since 1980. From 1992 through 1998, funding dropped an average of about 6% annually. Under the projected balanced budget agreements, international affairs funding is slated to be cut another 13% by 2002, and U.S. overseas development assistance could drop to about one-tenth of the global total. By 2002, international affairs spending will be about half of its 1980-95 average in constant 1997 dollars and at its lowest level since 1955. At a time of dramatically increasing U.S. investment, trade, travel, communications, and exchanges abroad, the State Department has been forced to close diplomatic missions and AID programs, to delay building consulates in the new states forming from the former Soviet Union and Yugoslavia, and to postpone expansion in China as provinces open up. Under President Clinton, the State Department has cut more than 2000 employees, closed more than 30 embassies and consulates, and deferred long-overdue modernization of computers and communications, to say nothing--as noted after the bombings in Tanzania and Kenya--of recommended security improvements. Foreign assistance programs have fallen 30% since 1991 in constant dollars. Of the funding that does exist, a striking portion is consumed by security or military concerns and commitments. From 1992 to 1998, fully one-third of international affairs spending was devoted to supporting international security and peacekeeping activities, including security assistance to Egypt and Israel and UN peacekeeping operations. Foreign military financing programs--grants, loans, and loan guarantees to foreign governments to purchase U.S. military weapons--continue to be the single largest component of security assistance contained in the international affairs budget. Similarly, our bilateral assistance programs are skewed toward security concerns rather than economic, development, and social needs. Support for Egypt and Israel consumes 82% of all security-related costs and almost 25% of all international affairs spending. Assistance to Bosnia, following the commitment of U.S. troops, is the single largest program of U.S. aid in Eastern Europe and the former Soviet Union. "Hot spots"--such as Somalia, Bosnia and Haiti--attract significant portions of a declining pool of money, with AID shifting funds from ongoing programs to meet demands essentially generated by military commitments. The anomaly is apparent: Israel, with a per capita GDP of over $12,000, receives over $3 billion in bilateral assistance each year, while all of sub-Saharan Africa, with a per capita GDP of under $500, receives a total of about $165 million. Even the State Department's budget reflects similar priorities: funding will swell in the wake of events like the bombings of the U.S. embassies in Kenya and Tanzania, but the increased funding will largely be devoted to fortifications, rather than to modernizing communications, increasing political reporting, or adding consulates to help handle the burgeoning traffic of tourists and business people. Only about 30% of the total FY 1999 budget of $22.5 billion for international affairs actually goes to bilateral assistance programs, the foreign aid that is routinely criticized as excessive and wasteful. Of the total $7.3 billion dollars requested in FY 1999 for the U.S. Agency for International Development (AID), about $867 million went to Food for Peace programs, $1.4 billion for aid to East Europe and the Newly Independent States (formerly the Soviet Union), $205 million for International Disaster Assistance, and $3.8 billion for programs included in such funding categories as Child Survival and Disease, Development Assistance, and Economic Support Funds. The remainder is allocated for AID operating expenses. Were Washington to match the aid level of our allies, significant additional resources would be available for international assistance. If the U.S. spent, as our allies average, 0.4% of its GDP on overseas development aid, it would quadruple its outlays from $6.8 billion to over $27 billion per year. If it invested as generously as Sweden does--nine-tenths of 1% of GDP--U.S. aid would rise to about $76 billion a year. -------------------------------------------------------------------------- --------------- *** EAST TIMOR VIOLENCE: LEGACY OF U.S. INDONESIA POLICY *** By John Gershman (Editor's Note: The upsurge of violence following the UN-supervised elections in Indonesian-occupied East Timor should be of major concern to the U.S. public and policy community. Not just because people are being killed and forced to leave their homes but also because of the central role that the United States has played in Indonesia political, economic, and military affairs for the last quarter century. Noam Chomsky, an IRC board member, addressed just this question of interest and responsibility in an August 26 article entitled, "Why Americans should care about East Timor." Chomsky says: "There are three good reasons why Americans should care about East Timor. First, since the Indonesian invasion of December 1975, East Timor has been the site of some of the worst atrocities of the modern era --atrocities which are mounting again right now. Second, the U.S. government has played a decisive role in escalating these atrocities and can easily act to mitigate or terminate them. It is not necessary to bomb Jakarta or impose economic sanctions. Throughout, it would have sufficed for Washington to withdraw support and to inform its Indonesian client that the game was over. That remains true as the situation reaches a crucial turning point--the third reason. President Clinton needs no instructions on how to proceed. In May 1998, Secretary of State Madeleine Albright called upon Indonesian President Suharto to resign and provide for "a democratic transition." A few hours later, Suharto transferred authority to his handpicked vice-president. Though not simple cause and effect, the events illustrate the relations that prevail. Ending the torture in East Timor would have been no more difficult than dismissing Indonesia's dictator in May 1998." The following analysis of Indonesia and East Timor is provided by John Gershman of the Institute for Development Research. It is excerpted from an FPIF essay, "Still the Pacific Century? U.S. Policy in Asia and the Pacific," forthcoming in an FPIF book published by St. Martin's Press. Also see FPIF policy brief, "Indonesia After Suharto," by Abigail Abrash of the Robert F. Kennedy Memorial Center for Human Rights, which is posted at http://www.foreignpolicy-infocus.org/briefs/vol3/v3n34ind.html) *** East Timor Violence: Legacy of U.S. Indonesia Policy *** By John Gershman Washington endorsed General Suharto's rise to power and, in 1975, gave its tacit approval to Indonesia's invasion of the island of East Timor, which had just emerged from Portuguese colonial rule. In the wake of Indonesia's invasion and occupation, a third of East Timor's population--some 200,000 East Timorese--were murdered. The U.S. supplied weapons to the Indonesian military and vetoed any effective UN intervention. The Suharto regime's legitimacy--based on vigorous economic growth and backed by repressive military force--was gradually discredited by revelations of military links to systematic rapes, disappearances, tortures, and extrajudicial killings. Despite these human rights abuses, Washington supported Suharto and his New Order with generous military assistance, foreign aid, and trade preferences. After the cold war, Suharto garnered further support from the U.S. for his opposition to anti-Western Islamist political movements in Indonesia, the world's most populous Islamic country. His family and other crony businesspeople provided political support in exchange for monopoly control of large sectors of the economy and access to public financing. The U.S. Commerce Department praised Indonesia as one of the world's "big emerging markets," and it became a favorite location for U.S. business, including 23 oil companies. As late as 1995, Suharto, while on a state visit to Washington, was described as "our kind of guy" by a senior Clinton administration official, quoted in the New York Times. The Suharto regime remained relatively stable as long as oil prices were high and short-term capital inflows sustained growth at a level where something could trickle down. But the Asian crisis unraveled the fragile foundation of this military-political-business coalition. Between the neoliberal technocrats (allied with the IMF) on one side and popular outrage at Suharto's protection of his cronies (amidst widespread misery) on the other, Suharto was caught in a bind. Other business elites, a segment of the military, the bureaucracy, and GOLKAR all persuaded Suharto to step down in order to preempt the radicalization of popular opposition, which threatened the entire edifice constructed under the New Order. The U.S., as well, weighed in with its support of a rapid handover of power in May 1998 to B.J. Habibie, the vice president and a Suharto protege. Since the fall of the Suharto regime, progress toward protecting human rights and sustainable development in Indonesia has been uneven. Habibie released several dozen prisoners, dropped charges against some detainees whose trials were pending, and "rehabilitated" other imprisoned opponents of the dictatorship. These moves, together with some greater press freedoms and the formation of new political parties, are positive signs. Other crucial matters that will help determine the prospects for democracy in Indonesia include the investigations of corruption under Suharto and the military's future role in politics. The latter is the most contentious issue, since the Indonesian military shows no sign of relinquishing its dwifungsi (dual function): forcibly protecting the government while helping to operate it. The military's 7.5% of seats in the parliament may enable them to play a decisive role in shaping the outcome of what is likely to be a coalition government. The Habibie government continues to engage in serious ongoing violations of human rights, including the continued imprisonment of some Suharto-era political prisoners, the repression of prodemocracy activists and workers, and military/paramilitary violence against independence activists in East Timor and Irian Jaya as well as autonomy movements in the province of Aceh. Major roadblocks to democratization include resolving the aforementioned independence and autonomy issues and addressing growing pressures for the renegotiation of relations between Jakarta and the Outer Islands. These resource-rich provinces are wanting the Indonesian government to decrease taxes and revenue extraction, increase public spending, and decentralize government decisionmaking. The Habibie administration tried to address autonomy demands with a decentralization law designed to provide something short of independence for East Timor and to undercut the widespread autonomy/secession demands by permitting more local control over government expenditures. In April 1999, Indonesia and Portugal (as the former colonial power in East Timor) negotiated an agreement under UN auspices for a referendum held in August 1999. But no truly free referendum can be held in East Timor or liberty achieved as long as the Indonesian military provides paramilitary militias with arms, transportation, medical support, and political protection, while permitting the militias to attack pro-independence activists. The U.S. needs to convince the Indonesian government and military to cease crackdowns on civilian dissenters, release all political prisoners, disarm paramilitary groups, reduce its troop presence in East Timor, and allow international humanitarian organizations, human rights groups, and the press to operate freely in East Timor. All U.S. military assistance and training as well as arms transfers to the Indonesian government should be halted until this is done. Similar steps should also be taken in Irian Jaya and Aceh, and negotiations with the leadership of opposition groups should be pursued in earnest. Source for More Information on East Timor: TimorNet http://www.uc.pt/Timor/TimorNet.html East Timor Action Network Website: http://www.etan.org Asia-Pacific Coalition for East Timor http://www.skyinet.net/~apcet/ Human Rights Watch (East Timor press release + links) http://www.hrw.org/press/1999/aug/timor0901.htm -------------------------------------------------------------------------- --------------- The Progressive Response aims to provide timely analysis and opinion about U.S. foreign policy issues. The content does not necessarily reflect the institutional positions of either the Interhemispheric Resource Center or the Institute for Policy Studies. We're working to make the Progressive Response informative and useful, so let us know how we're doing, via email to [EMAIL PROTECTED] Please put "Progressive Response" in the subject line. Please feel free to cross-post The Progressive Response elsewhere. 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