Get Poles’ Aid From Greece, Sen. Dole

There is good news and bad news about the trial balloon Sen. Robert Dole (R., Kan.) released Tuesday — apparently with the blessing of the Bush administration. The good news is that, in proposing a modification of the arcane allocation of foreign aid among U.S. friends and allies, Sen. Dole has precipitated a needed debate on the long-running abuse of this important policy tool and on how America can finance its assistance to emerging democracies in Eastern Europe and elsewhere.

The bad news is that Sen. Dole’s proposal has been designed in a way that would make additional resources available for the new democracies by stripping it from some who genuinely rely upon the security assistance component. More troubling still, the senator’s approach would prevent the serious scrutiny that should be applied to U.S. foreign aid to Greece, a nation that has scandously abused American Foreign Military Sales credits.

The Dole proposal, published on the New York Times’ op-ed page Tuesday, points out that most of the total security assistance budget ($3.96 billion out of $4.7 billion in fiscal year 1989), goes to just five countries: Israel ($1.8 billion), Egypt ($1.3 billion), Turkey ($500 million), Pakistan ($230 million) and the Philippines ($125 million). The numbers for 1990 are expected to be roughly the same, with the exception of the Philippines, whose security assistance allocation is likely to reach $200 million in the aftermath of the latest coup attempt against the Aquino government.

When the non-military side of the foreign aid program — the Economic Support Fund — is added in, the total aid for 1989 amounts to: $3 billion for Israel, $2.12 billion for Egypt; $560 million for Turkey, $495 million for Pakistan (including $50 million in development assistance); and $264 million for the Philippines (including $15 million in develpment aid). Only $836 million in non-military aid was left to be divided up among the rest of the world.

At a time of budgetary austerity and swelling demands for foreign assistance, it is reasonable to re-examine how existing aid programs are apportioned. Sen. Dole has challenged the body politic to disregard vocal constituencies by reallocating funds from the “Big Five” to other worthy recipients.

Yet the Dole proposal fails to live up to its own challenge. In the first instance, the senator stipulates that the money to meet new foreign assistance needs must be found within the existing foreign aid program. Many of his Democratic colleagues are keen on diverting defense dollars for this purpose: The $140 million last year granted to Poland and Hungary came from the Pentagon.

But why not tap other sources instead, funds that could be drawn upon without compromising the security of either the U.S. or those of its friends who rely on U.S. security assistance? Since Sen. Dole is urging his country to be politically courageous, perhaps he might demonstrate his own nerve by offering agriculture subsidies as a source of funds for democracies abroad.

Instead, by proposing an across-the-board, 5% reduction in the foreign assistance granted to earmarked countries, Sen. Dole seems prepared to make precisely the sort of irrational, politically motivated allocation of foreign aid to which he has objected so vehemently. Israel, Turkey and the Philippines would lose funds, even though events in Eastern Europe have not materially altered their need for assistance.

Worse still, Sen. Dole’s plan would limit the reduction in military assistance to Greece to a mere 5% cut. Athens would therefore continue to receive security assistance even though it has proved unable — or unwilling — to expend the credits it has already received.

Athens has an $818 million backlog in uncommitted U.S. security assistance credits. The anti-American government of Socialist Prime Minister Andreas Papandreou chose not to spend these funds, preferring to use its own taxpayers’ money to purchase military equipment from other nations rather than spend U.S. taxpayers’ money to buy equipment from the U.S.

Why would the U.S. continue under these circumstances to throw good credits after bad? Why especially would America do so at the expense of others who need — and would use — them? The answer is that foreign aid to Greece is the quintessential example of what is wrong with the practice of earmarking security assistance on political grounds.

In response to fighting on Cyprus between the Greek and Turkish armed forces, Congress in 1978 imposed the “Seven-Ten Ratio.” For every $10 granted to Ankara, $7 had to be granted to Athens. This principle has become an “idee fixe” for the Greek lobby and an immutable feature of every subsequent foreign assistance bill. As a result, even though the principal military threat against which Mr. Papandreou believed Greece needed to be defended was its NATO ally Turkey — not the Warsaw Pact — and despite his manifest determination not to use them, hundreds of millions of U.S. credits were annually showered on the Greek government.

This year is no exception; Greece is likely to receive a further $350 million in security assistance credits. Under Sen. Dole’s proposal, this amount would fall to roughly $330 million. That is exactly the amount that Sen. Dole believes needs to be raised for unbudgeted foreign assistance initiatives. He contends in his Times article that such an amount would be “enough to respond to the needs of new democracies such as Poland, Hungary, Panama and countless needy countries that under current allocations will not receive one penny of American aid.”

If Sen. Dole and the Bush administration are serious about applying limited aid resources efficiently, a different approach is needed:

• No nation should be permitted to retain uncommitted security assistance credits for longer than two years. At the end of that time, such credits would become available for allocation elsewhere.
• There should be no earmarking of security assistance funds on grounds unrelated to the actual threat posed to the security of recipient nations. The requirements of a nation like Israel, whose adversaries are busily acquiring ballistic missiles, chemical weapons and nuclear technology should be evaluated on their merits.
• If funds must be reallocated from the 1990 account, it should be done on a considered basis, not according to an arbitrary figure.
• The temptation should be resisted to view security assistance as a slush fund from which resources can be readily drawn to meet the needs of nascent democracies for economic assistance. The post-Cold War world is proving to be every bit as dangerous — if not more so — for many of America’s friends as the previous security regime. Under such circumstances, the U.S. must maintain a vigorous and well-funded security assistance program.
• To the extent the U.S. embarks on a major effort to provide foreign aid to East European members of the Warsaw Pact, it should ensure that such aid fosters real progress toward democracy and free market economies. To this end, the U.S. will have to insist upon greater discipline and transparency in its aid to these nations.

If practices like these are permitted to govern American foreign-assistance programs, this aid could once again serve as a valuable instrument for advancing U.S. interests around the world. In the absence of such practices, however, Sen. Dole’s trial balloon ought to go over like the proverbial lead one.

Mr. Gaffney , formerly in the Reagan Defense Department, is director of the Center for Security Policy in Washington.