WASHINGTON, DC — The Bush Administration’s recently released foreign assistance proposal for fiscal year (FY) 2003 calls for a $20 million reduction in assistance to Armenia, while asking for $2.7 million in additional funds for Azerbaijan, reported the Armenian National Committee of America (ANCA). The proposed decrease for Armenia is, in percentage terms, the largest among the New Independent States.

“We are troubled that the Administration’s fiscal year 2003 request is $20 million less than the actual fiscal year 2002 figure for Armenia, but remain hopeful that the Congress, as it has in the past, will approve a meaningful increase in Armenia’s aid package,” said Aram Hamparian, Executive Director of the ANCA.

In a position paper on U.S. aid to Armenia issued last week, the ANCA explained that assistance to Armenia will “help offset the devastating effects of the Turkish and Azerbaijani blockades, estimated, according to World Bank figures, at over $570 million a year, and to help the Armenian people overcome the obstacles they face as they expand their economic partnership with the United States and their integration into the international economic system.”

According to the World Bank, the blockades of Armenia are costing Armenia between 30 to 38% of its Gross Domestic Product (GDP) and blocking up to 50% of Armenia’s potential exports. According to these figures and using the World Bank figure for Armenia’s 2000 GDP of $1.9 billion, the Turkish and Azerbaijani blockades costs Armenia between $570 million to $722 million annually. (Source: Trade, Transport and Telecommunications in the South Caucasus: Current Obstacles To Regional Cooperation – World Bank 2001)

In human terms, these blockades have caused economic hardships that have caused over 800,000 Armenians to leave their homeland out of desperation. Despite strong Congressional opposition to these illegal blockades, the Administration has not taken any meaningful steps to bring them to an end.

The Administration’s proposed budget figures would decrease U.S. FY2003 aid to Armenia to $70 million, down from close to $90 million (estimated) for FY2002. The White House FY2003 proposal of $46 million for Azerbaijan is $2.7 million more than the estimated FY2002 figure of $43,431,000. The White House proposal also includes $3 million in Foreign Military Financing (FMF) assistance and $750,000 in International Military Education and Training (IMET) funds for Armenia and an equal amount for Azerbaijan.

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Bush Administration Proposed Foreign Assistance Levels

FY01 Actual FY02 Estimate FY03 Request
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Armenia $89,802,000 $90,000,000 $70,000,000
Azerbaijan $36,024,000 $43,310,000 $46,000,000

Source: FY2003 International Affairs Function 150 Budget Request

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