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| >> Return to CBJ F Y 2002 Home Page >> Regional Overview |
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(text taken from the FY 2002 Congressional Budget Justification) U.S. NATIONAL INTERESTSThe Asia and Near East (ANE) region consists of three subregions: East Asia, South Asia, and the Middle East and North Africa. The United States has major economic and strategic interests in this very large and diverse region. The ANE region is the second most important market (behind Europe) for U.S. goods and services, ANE countries supply 50% of the oil to the United States and its Asian partners, and ANE countries control crucial shipping lanes essential for international commerce. Instability in the region threatens U.S. efforts to stem the proliferation of weapons of mass destruction, to combat terrorism, and to promote access to commercial opportunities for American businesses. Poverty, infectious diseases, and environmental degradation are not only of concern within Asia and the Near East-they also pose serious threats to global health and well being. USAID's development programs serve U.S. foreign policy objectives within Asia and the Middle East, particularly the promotion of international peace and prosperity, while simultaneously addressing humanitarian needs.
DEVELOPMENT CHALLENGEUSAID works in three priority areas: economic growth; global health; and conflict prevention and developmental relief. Economic Growth and AgricultureEast Asia: East Asian economies grew rapidly prior to 1997, due largely to sound macroeconomic policies. Thailand and Indonesia had been growing annually at around 7%, while the Philippines doubled its annual growth rate to 3% during the first half of the 1990s. However, the financial crisis in 1997 demonstrated the importance of complementing sound economic policies with adequate economic governance and transparency, especially in the financial sector. But instead of aggressively pursuing economic reform in the wake of the crisis, many governments in East Asia have responded lethargically, or have not implemented planned reforms fully. Asian countries still must contend with massive banking and corporate debts, serious social dislocations, poor quality of education, and pervasive economic governance problems. The U.S. economic slowdown and the shrinking demand for Asian exports, coupled with high oil prices, will make real reform and sustainable economic recovery even more difficult, leaving the subregion vulnerable to future economic shocks. The Institute for Management Development's World Competitiveness Scoreboard for 2000 still ranks many Southeast Asian countries near the bottom due to poor economic governance and lack of transparency. Thailand, the Philippines, and Indonesia ranked 33rd, 39th, and 45th respectively out of 47 countries surveyed. East Asia still faces major challenges to improve economic governance and ensure broader participation in the economy. USAID is helping East Asian countries meet these challenges through programs that increase competition, transparency, and accountability in capital markets and other financial sector institutions. Its programs work to liberalize international trade, increase the degree of competition within domestic economies, eliminate restraints on foreign and domestic investment, and privatize infrastructure. USAID's investments are paying off. For example, it supported a groundbreaking competition law in Indonesia in 1999, a first step in dismantling monopolies. USAID advisors have begun to prepare the government and business communities to comply with the law. Through support for economic law reform in Indonesia and other East Asian nations, USAID is helping to lay the foundation for renewed growth. South Asia: Development conditions in South Asia are paradoxical. It has achieved strong economic growth-its 5.4% growth in gross domestic product (GDP) in 1999 made it the fastest growing developing region in the world for the second consecutive year.1 However, this growth has not translated into reduced poverty levels: half a billion people still live on less than a dollar a day, and South Asia is home to 40% of the world's poor.2 India alone accounts for one-quarter of the world's total undernourished persons. With the world's highest adult illiteracy rate (35% for men, 59% for women), economic growth does not benefit all segments of South Asian society equally. USAID is trying to maintain the gains already achieved while increasing the equity of economic growth in South Asia through programs that target neglected segments of the population such as women, children, and the destitute. USAID support for microfinance institutions and female literacy programs affirms its commitment to equitable growth. Energy fuels economic growth, and its availability is central to future economic development. Demand for energy in South Asia is already high, and will skyrocket in coming years. Energy consumption grew at an annual rate of 5.5% between 1988 and 1998 in South Asia, making it the fastest growing energy consumer in the world.3 The kind of energy consumed is crucial to development as well. Dirty fuels (coal, fuel woods, and agricultural waste) cause costly health and environmental degradations that impair economic growth and hurt the most vulnerable. Facilitating growth without further damaging environmental or health conditions in South Asia demands improved energy efficiency and cleaner industrial processes. USAID is leading donors in South Asia with programs like its South Asia Regional Initiative/Energy (SARI/Energy) that promote the development and trade of clean energy technologies to respond to growing energy demands and to promote regional economic linkages. Another program, the United States-Asia Environmental Partnership (USAEP), drives long-term improvements in urban and industrial environmental performance by linking economic growth to environmental protection. USAEP has assisted in over $1.26 billion in U.S. clean-energy technology exports to Asia, plus numerous joint ventures and licensing agreements benefiting literally hundreds of new-to-market American firms. The United States benefits through increased exports, penetration into Asian markets, and a safer global environment. Middle East and North Africa: Many economic indicators for the Middle East and North Africa look promising-these countries have a higher gross national product (GNP) per capita and lower levels of poverty on average than the developing countries of East and South Asia. However, these positive signs are likely to erode due to high birth rates, which already produce more people than labor markets can absorb. The World Bank estimates that most of the countries in the subregion have unemployment rates in excess of 15%,4 with even higher rates in the West Bank and Gaza Strip. High birth rates ensure that a large percentage of the Middle East and North Africa's population are children or young adults-59% of Arabs are younger than 25 years old.5 The subregion could become increasingly unstable if economic growth fails to create enough jobs for its unemployed, as well as for the legions of young people who enter the workforce every year. Promoting reform, investment, and employment opportunities are the keys to economic growth. Countries like Egypt, Jordan, and Tunisia have made limited progress toward reforming their economies. Still, more is needed to promote investment and stimulate growth. Privatization remains slow and the public sector large. Although many individuals attend and graduate college each year, very few have the skills necessary to thrive in a global economy. The subregion attracts less foreign investment than either South Asia or East Asia, and needs to adjust legal and regulatory systems further to encourage competition and investor interest. USAID's economic growth programs in the Middle East and North Africa address these weaknesses. They promote faster economic growth and increased job creation through improved economic policies, trade and investment liberalization, and expanded microfinance activities. USAID supported the efforts of Jordan to join the World Trade Organization (WTO) in 2000, and helped other member countries understand and meet their WTO obligations. USAID also is working to strengthen the policy and regulatory environment for information and communications technologies to make economies more competitive in the global marketplace. Moreover, USAID-supported microfinance activities spread the benefits of economic growth and create jobs by encouraging formal banking systems to lend to small commercial borrowers. Global HealthEast Asia: High fertility rates, mother-child health, and HIV/AIDS are the major global health issues across the ANE region. In East Asia, stemming the tide of HIV/AIDS is the priority. The rapid increase in HIV prevalence in Cambodia, Burma, and south China and sustained high prevalence in Thailand constitute a growing threat. Approximately 4% of Cambodians are infected with HIV, the highest prevalence in East Asia.6 The need to care for orphans and children affected by AIDS is becoming increasingly acute. To combat the spread of HIV/AIDS and other infectious diseases, USAID has developed bilateral and cross-border prevention programs, as well as outreach and clinical services that reduce risk and save lives. In countries like the Philippines and Indonesia, where the spread of HIV is considerably slower, USAID supports the monitoring and evaluation of HIV and other sexually transmitted diseases as well as operations and behavior research. The regional financial crisis has seriously eroded governments' abilities to respond to the HIV/AIDS crisis and to maintain existing and basic healthcare services. Accordingly, USAID is working with the East Asian countries to develop safety nets for those least able to afford care. South Asia: Mother-child health and HIV/AIDS remain the most glaring health issues in South Asia. The subregion accounts for one-third of the world's maternal deaths. All South Asian countries except Sri Lanka have exceptionally high infant mortality rates per thousand live births (India=70, Nepal=77, Bangladesh=73, Pakistan=91, Afghanistan=149). (The U.S. infant mortality rate is 7 per 1,000 live births.) USAID programs aim to stabilize population growth and protect human health by expanding access to quality maternal-child care and family planning services, and by improving monitoring to warn of growing resistance to antibiotics by selected infectious diseases. Bangladesh offers an excellent example of USAID's impact on family planning and reproductive health work. Since the mid-1970s, overall births per woman have decreased from seven or eight in the 1970s to three today. In urban areas in Bangladesh, fertility is now at the replacement level of 2.1 births per woman, comparable with developed countries. Similar to East Asia, HIV prevalence continues to increase in South Asia. India has an estimated three to five million HIV cases-second only to South Africa in total number-although infection rates are concentrated in a handful of states and among high-risk populations such as prostitutes and their clients, mobile workers, and injecting-drug users. Along with bilateral HIV/AIDS programs in USAID presence countries, since 1993 USAID has supported a regional strategy focused on mobile populations, regional capacity building, and programs in non-presence countries.7 In 2000, this program was expanded to address concerns about the increasing incidence of tuberculosis and drug-resistant malaria. Key regional issues include prevention, improved response capacity, and policy reform to increase political and private sector leadership. Middle East and North Africa: Very high fertility levels dominate the health sector in the Middle East and North Africa, coupled with their related maternal and child health concerns. The total fertility rates for most countries far exceed the replacement level of 2.1 births per woman. The average woman in Gaza and Yemen has more than six children,8 and women in the Middle East and North Africa usually give birth at home without the help of skilled personnel. Yemen and Morocco have the highest maternal mortality rates in this subregion at 350 and 230 per 10,000 live births respectively (maternal mortality rates in the United States are approximately 8 per 10,000 live births),9 which corresponds to the low levels of trained professionals attending births. Infant mortality rates (number of deaths per 1,000 live births) have declined significantly in the subregion in recent years, mostly due to improved immunization coverage, but are still high relative to the United States' and Europe's seven and nine deaths, respectively. Yemen and Egypt have particularly high infant mortality rates at 70 and 62 infant deaths, respectively.10 USAID's population and health programs in the Middle East and North Africa provide information and increase reproductive health options that will reduce maternal and infant mortality and enhance the opportunities for women to improve their lives. Family planning programs also are expected to yield declines in population growth that will reduce the pressure on very limited jobs, water resources and public services, and will improve the context for economic growth. USAID is working with governments to improve health systems, health planning, and policies; to reduce the impact of infectious diseases such as hepatitis C and tuberculosis; and to respond to growing concerns about sexually-transmitted diseases and the emergence of HIV/AIDS. Conflict Prevention and Developmental ReliefEast Asia: Most East Asian countries assisted by USAID have weak or nascent democratic institutions. However, a series of tumultuous events (e.g., the Asian financial crisis, ethnic and separatist violence in Indonesia and the Philippines, various leadership scandals) have propelled Asian civil societies into action. The Asian financial crisis has forced subjects like corruption, public participation, and labor rights into open public debate. In this sense, upheaval in East Asia has created opportunities for programs to improve transparency and accountability in government and private institutions, to strengthen nongovernmental organizations (NGOs), and to make local and national governments more responsive to citizen needs. In this new environment, USAID democracy and governance programs can have a significant impact. In the wake of political turmoil in Cambodia, USAID has redoubled its efforts to strengthen NGOs that protect and enhance human rights. Where institutional reform has been slow in East Asia, USAID has emphasized democracy and governance programming to strengthen civil society organizations. While still challenging, this approach is designed to create more political openness and higher levels of participation among average citizens in national affairs. USAID also helps to mitigate conflict in Asia by assisting refugees and displaced persons, and demobilizing former combatants. For example, in Mindanao, Philippines, the long conflict between Muslim separatists and the central government has sown destruction and poverty. USAID's Growth with Equity in Mindanao program is helping to rebuild the island's war-torn communities and engage former combatants in the economy through activities like producing hybrid corn and seaweed. These activities help provide food security and steady livelihoods for former combatants and their families. USAID activities in Indonesia train specialists in conflict and dispute resolution at the national level as well as in sensitive regions like Papua and Aceh. These activities emphasize interfaith dialogue and land and labor rights. USAID assists in resolving overlapping claims to forests through a mapping process that includes all relevant stakeholders. Finally, USAID provides assistance to internally displaced persons in Indonesia, most recently to ethnic Madurese forced to flee their homes because of sectarian violence in Kalimantan. South Asia: Oppression in South Asia is most evident in the subregion's high levels of human trafficking and child labor. Vulnerable women and children have little voice and scant choice in controlling their physical, social, and psychological well being. Modern-day traders traffic children as young as seven years old within and between South Asian countries. The International Labor Organization estimates that India, Bangladesh, Pakistan, and Nepal have the highest percentage of children in hazardous work, where deaths and dismemberment are common. Worldwide concerns about these centuries-old crimes and injustices have intensified in recent years. USAID's SARI/Equity program strengthens local NGO capacity to document human rights abuses and child labor conditions and sponsors badly needed demographic studies on trafficking and child labor, networking among NGOs, and advocacy training. USAID also will provide women with literacy training and children with basic education, and will fund non-formal education and microcredit programs to eliminate the underlying conditions that allow human trafficking and child labor to continue. Natural disasters have intensified human-caused problems and misery in South Asia. The January 2001 earthquake in Gujarat, India, killed 20,000 people, injured 150,000 people, destroyed 750,000 shelters, left 800,000 homeless, and caused $2.3 billion in infrastructure damage. While the immediate relief needs largely have been met, the longer-term recovery effort is just beginning. This comes during a time of drought in the subregion, which already is taxing the ability of the agricultural-based economy to meet the needs of the citizens of Gujarat. In response, USAID is reprogramming $10 million in FY 2001 funds to support recovery and reconstruction efforts that resulted from the Gujarat earthquake. These funds complement the approximately $12.5 million invested to date by the United States for immediate relief efforts. Quick initiation of this new earthquake recovery objective will avoid a gap between the provision of relief assistance and longer-term recovery needs. Middle East and North Africa: Beyond the immediate Palestinian-Israeli conflict, longer-term concerns about conflict center on water shortages. Addressing the critical water situation is a top priority for USAID assistance to this subregion. It has the lowest per capita availability of fresh water in the world: from a subregional average of less than 1,000 cubic meters per year to 100 cubic meters per year in the Gaza Strip.11 High population growth may reduce per capita resources to 600 cubic meters in 25 years. Furthermore, over-extraction, increased salinity from over-irrigation, and raw or inadequately treated wastewater all are degrading water quality. Reduced water availability and quality will increase the propensity for water conflict between competing users. To address this problem, USAID bilateral and regional programs in Egypt, Jordan, Morocco, and the West Bank and Gaza target improved water management, increased access to water and wastewater services, water policy reforms, strong water-sector institutions, and decentralization and privatization. Other than the water sector, USAID is assisting civil society organizations in the Middle East and North Africa that play an increasing role in decision-making and government oversight. Their participation brings added perspective to the dialogue on regional conflict and democratic development. OTHER DONORSIn response to the complex issues and limited resources, USAID must coordinate effectively with other major donors and mobilize consulting and NGO partner resources efficiently. In addition, USAID has engaged directly with other U.S. Government agencies and the commercial private sector to mobilize their expertise and resources towards these development challenges. To do so, USAID has converted from being a leading development practitioner to being an innovator and mobilizer of other development resources. USAEP provides an example of USAID's ability to nurture public-private partnerships. The program promotes private-sector funding for technologies that produce a safer global environment, and U.S. companies benefit from increased exports and penetration into Asian markets. Excluding its assistance to Israel, USAID ranks third among donors in this region, supplying $1.693 billion, or 9.8%, of bilateral and multilateral assistance flows to ANE countries (East Asia, South Asia, and the Middle East/North Africa).12 The top two lenders are Japan ($6.625 billion, 38.5% of total assistance flows) and the World Bank ($1.807 billion, 10.5% of total assistance flows). Other significant bilateral donors in the region include the European Union ($1.0613 billion, 6.2%), Germany ($955 million, 5.6%), France ($919 million, 5.3%), and the Asian Development Bank ($816 million, 4.7%). USAID continues to work with these donors and United Nations agencies to reach a consensus on development priorities and to coordinate programs in every USAID-assisted country in the region. In particular, USAID will seek new opportunities to further the U.S.-Japan Common Agenda, and to cooperate with Japan on parallel programs in East and South Asia. PROGRAM AND MANAGEMENT CHALLENGESUSAID faces four main program and management challenges in the ANE region. First, USAID must be prepared to respond to major political upheavals like those occurring in Indonesia and the West Bank and Gaza where it has major bilateral investments. It must remain flexible in such unstable political environments and be poised to adjust programs to accommodate fluid conditions. Second, USAID must manage an increasing number of requests to work in USAID nonpresence countries due to various political, economic, or national security imperatives. USAID will continue to support programs in Pakistan, Yemen, Vietnam, Burma and 12 other nonpresence countries, while identifying ways to maximize its personnel and management resources. Third, transnational challenges increasingly shape development and demand transnational solutions. In response, USAID has launched regional initiatives to more effectively address cross-border development issues such as the spread of deadly diseases, the growing worldwide threat from air and water pollution, participation in the globalizing economy, and the trafficking of women and children. Finally, USAID must constantly anticipate future development challenges and opportunities. To maintain relevancy in the evolving field of international development, analyzing and adapting to trends is essential. For example, as Internet communication technologies and human capacity development become more central tools for achieving development, ANE is devoting increased attention to them. By thinking strategically about emerging fields, USAID's program responses will continue to reflect development needs, U.S. national interests, and USAID capabilities and comparative advantages. FY 2002 PROGRAMFor the ANE region, $2,338,842,000 is requested for FY 2002 programs. Of this amount, $205.5 million is Development Assistance (DA), $112 million is Child Survival and Disease (CSD) program funds, $1.882 billion is Economic Support Funds (ESF), and $139.5 million is P.L. 480 (Title II) resources. The specific programs and results to be achieved with these funds are described in the detailed country and regional program narratives and activity data sheets. USAID's priorities for DA and CSD resources include the following:
The bulk of ESF assistance will continue to support conflict prevention and peace-building initiatives in the Middle East. ESF assistance also will fund bilateral programs in Cambodia and Mongolia and contribute to democratic transitions in East Timor and Indonesia; economic recovery in East Asia; regional trade and investment in North Africa; child labor and anti-trafficking activities in South and East Asia; and regional democracy and environmental programs across the region. P.L. 480 Title II funds will support programs to improve child survival and nutrition in India and enhance rural incomes and nutritional status in Bangladesh.
1 "South Asia Regional Brief, 2000." World Bank. September 2000. |
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