US Cuts Bilateral Aid to North Korea, Eyes Increased Funding for Iraq

In seeking funding for U.S. foreign aid programs, the Obama administration has acknowledged that it will need to make tough choices to help ensure the wise use of taxpayers’ money. U.S. bilateral aid to North Korea is one of the casualties of such a tradeoff.

>> State, USAID Eye a Mixture of Budget Hikes and Cuts

>> Obama Unveils 2012 Budget Request; Foreign Aid Largely Spared from Cuts

In U.S. President Barack Obama’s budget request for fiscal 2012, bilateral aid to North Korea has been cut. A senior administration official said the State Department’s Democracy, Human Rights, and Labor Bureau will use its funding to finance aid requirements in North Korea in 2012.

“The budget for North Korea for 2012 has been ‘taken out’ of the bilateral program as part of our issue in terms of making tough tradeoffs,” according to the official, noting that bilateral aid for North Korea is usually earmarked for democracy assistance programs.

“So we didn’t make the reduction in 2012 with prejudice to the programs there (North Korea), but because we had a very tight budget, we are – we’re simply asking that our centrally managed programs work with those programs. And we don’t have a dedicated bilateral line to it anymore. We are not providing, as best I know, food aid to North Korea at this time,” the official said during a teleconference arranged by the State Department on Feb. 15.

For fiscal 2012, Obama is seeking USD50.9 billion for the State and other international programs. Of the amount, USD47 billion is proposed to replenish the coffers of the State and USAID - excluding costs for Overseas Contingency Operations - which represents a 1 percent increase from 2010-enacted funding levels. The remaining amount will support the Millennium Challenge Corp., Peace Corps, Overseas Private Investment Corp. and other international programs.

Obama’s fiscal 2012 funding request for the State and other international programs also proposes reduced bilateral programs and assistance for Europe, Eurasia and Central Asia, as well as decreased funding for the African Development Foundation and Inter-American Foundation.

Meanwhile, funding for overseas contingency operations in Iraq is set at USD5.2 billion in 2012, twice the 2011 level of USD2.5 billion.

The State Department and USAID “as a whole are taking over missions (in Iraq) that [the Department of Defense] formerly ran, and we’re also having to run a diplomatic presence with all of the security costs as DOD prepares to withdraw,” a senior State Department official said during the teleconference, explaining the increase in overseas contingency funding for Iraq.

The OCO budget for Iraq, according to the official, includes USD1 billion for a police training program, another USD1 billion for a foreign military financing scheme and USD436 million in economic aid.

Read more about U.S. development aid.

About the author

  • Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.