Obama earmarks $800m for Arab Spring nations

The proposals are part of President Barack Obama’s budget requests for fiscal year 2013 [Reuters]

United States President Barack Obama has announced plans to help Arab Spring countries with more than $800m in economic aid.

Most of the financial help for the Arab Spring countries, an estimated $770m, would go to establish a new “Middle East and North Africa Incentive Fund”, the president said in his annual budget speech on Monday.

Obama said  military aid to Egypt would be kept at the level of recent years, $1.3bn, despite a crisis triggered by an Egyptian probe targeting US democracy activists.

The proposals are part of Obama’s budget request for fiscal year 2013, which begins on October 1.

His requests need the approval of Congress, where some legislators want to cut overseas spending to address US budget shortfalls and are particularly angry at Egypt.

Obama proposed $51.6bn in funding for the state department and foreign aid overall, when $8.2bn in assistance to war zones is included.  The “core budget” for the category would increase by 1.6 per cent, officials said.

“As presented, it’s very difficult to determine if the Arab spring fund is new wine in new bottles or old wine in new
bottles,” said John Norris, a former US foreign aid worker now at the Center for American Progress.

‘Economic support’

The Middle East and North Africa Incentive fund “will provide incentives for long-term economic, political, and trade
reforms to countries in transition, and to countries prepared to make reforms pro-actively,” the White House budget document said.

The proposal said this approach “expands our bilateral economic support in countries such as Tunisia and Yemen, where
transitions are already underway”.
 
It would also build on other programs for the area, including up to $2bn in regional Overseas Private Investment Corporation financing, up to $1bn in debt swaps for Egypt, and approximately $500m in existing funds re-allocated to respond to the region last year, the budget document said.

It did not say how the Middle East and North Africa Incentive Fund would be divided between countries, or give any other details of the plan.

Egypt has long been among the top recipients of US aid, getting about $1.6bn annually, mostly in military assistance.

‘Enterprise fund’

In fiscal 2012, $250m of aid approved for Egypt was economic; $1.3bn was military and there was a $60m “enterprise fund” approved by Congress.

No US assistance is moving to Egypt at the moment, US legislators and their aides said last week. Some legislators favour cutting off aid to Egypt entirely if it does not drop the accusations against American democracy activists and lift a travel ban on them.

Obama continued the practice of putting proposed foreign assistance for war zones in a separate account. This account,
known as the “Overseas Contingency Operations,” includes $8.2bn the state and foreign aid.

It includes $3.3bn for Afghanistan, $1bn for Pakistan, and $4bn for Iraq, where US troops have left the country but the state department has picked up some of their functions such as police training.