US cuts aid by 35% to 'transforming' India

WASHINGTON: The US is set to cut aid to India by 35 percent in 2008 after the India was categorised as a "transforming" country with one of the best-performing economies in the world in a sweeping overhaul of US foreign assistance programme.

India's aid was slashed to $81 million after it was categorised as a "transforming" country instead of a "developing" one under a plan developed by Randall L. Tobias, a corporate veteran chosen by Secretary of State Condoleezza Rice to manage foreign assistance, the Washington Post said.

"India is now taking a different place on the global stage, in terms of diplomacy, politics and economy," US State Department spokesperson Sean McCormack was quoted as saying by The Post. "Aid programs had not caught up with these evolving realities" he added.

The Washington Post has pointed out that the  bulk of the USD 23 billion in annual US foreign aid goes to a handful of key countries, leaving about 120 nations to battle over USD 3 billion of the pie.

India  is one of the big losers in Rice's foreign aid revolution. All US aid to assist India in education, women's rights, democracy and sanitation will be terminated under the new overhaul of US foreign assistance programme.

One promising US-funded programme in India is QUEST, a partnership with technology firms such as Microsoft and Lucent aimed at teaching critical skills in Indian classrooms. With Washington promising about USD 2 million a year, QUEST expanded from 200 to 2,000 schools in just one year.

But without a continued US contribution, the initiative probably will not survive, Aakash Sethi, the programme's executive director, told The Post in a telephone interview from Bangalore.

While defending the Foreign Assistance package for 2008 in February, Tobias had labelled India as a "Transforming" country in contrast with countries like Pakistan and Bangladesh, which were labelled "developing" countries.

Huge sums have been devoted to administration priorities areas such as Iraq, Afghanistan and Pakistan.

Pakistan and Afghanistan together will receive more than 85 percent of the USD 2.2 billion aid budget for 12 countries in South and Central Asia. Iraq's aid was boosted five fold for 2008.

Tobias had previously overhauled US assistance to combat AIDS worldwide, and Rice wanted him to bring the same sensibility to remaking the full aid budget.

Under Tobias's plan, foreign aid should meet corporate standards for measuring inputs, outputs and efficiency.

Under a detailed grid that Tobias developed, every country receiving aid is placed into one of five categories - such as 'transforming countries' or 'rebuilding countries' - and every aid programme has to help meet one of five objectives, such as building 'peace and security' or 'governing justly and democratically.'

The administration "foreign aid" policy and strategy will be put under the scanner by lawmakers on Tuesday as the Senate takes up the nomination of Henrietta Fore, currently the Under Secretary of State for Management, to be the next Deputy Secretary of State in charge of Foreign Assistance.