Meeting U.S. Political Objectives Through Economic Aid in the Middle East and Southern Africa

ID-79-23: Published: May 31, 1979. Publicly Released: May 31, 1979.

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The Economic Support Fund (ESF) is intended to advance U.S. political interest and demonstrate the U.S. commitment to, and concern for countries receiving such economic assistance. Notwithstanding the political focus of the fund, Congress has stressed in recent years that the assistance should, to the extent possible, be responsive to the New Directions policy set forth in the Foreign Assistance Act of 1961.

Most economic achievements of the fund have resulted from program assistance, specifically, large disbursements made against cash transfers, budget support, and commodity import forms of assistance. Substantial sums have been provided to ESF countries through various forms of program assistance to promote economic stability as well as advance political objectives and absorb high aid levels. The assistance has been instrumental in promoting a stable economic environment in Egypt and in Israel immediately after the 1973 October war. For Syria and Zambia, program assistance has helped increase the productive capacity of selective sectors. The continued need for high levels of program assistance will have to be based on an assessment of whether it is the appropriate tool for furthering particular economic and political objectives. Although progress has been made, program orientation can be expanded to meet basic human needs. Expanded efforts need to be made to facilitate participation of the urban poor in the development process and assist the poor in increasing their incomes through expanded training opportunities.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of the Agency for International Development (AID) should, with respect to the Syrian program, report to Congress in the fiscal year 1981 authorizing request, on progress made in funding some local costs incurred for fiscal year 1979 capital development projects and decide whether it would be appropriate to increase the commodity import portion of assistance if capital projects cannot be developed or implemented within a reasonable period. With respect to the Egypt aid program, AID should continue efforts to encourage the submission of annual estimates of local currency expenditures by other Egyptian assistance donors. The Administrator, AID, also should carry out plans to support training in the skills which improve tha access of Egypt's urban poor to employment opportuinties; initiate community-development activities which facilitate participation of Egypt's urban poor in the development process, utilizing U.S. voluntary agencies where possible;and report to Congress in the fiscal year 1981 authorization request, on the efforts to focus the Syria program on rural-development needs.

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