US President Donald Trump is proposing to cut foreign aid by 21 per cent while allocating more than $2 billion to support the Indo-Pacific Strategy in the $4.4 trillion budget for the next fiscal year.
The allocations in the budget unveiled on Monday seek to counter “the Chinese Malign influence and champions security, democracy, and economic growth for a free and open Indo-Pacific”, the State Department said.
The $1.5 billion in foreign assistance and $596 million in diplomatic engagement for Indo-Pacific strategy is “to enable countries to assess the full costs of Chinese loans; facilitate US private sector investment; expand security cooperation in the region; promote a US model of democratic, transparent, responsive and business-friendly governance; and engage foreign audiences to strengthen alliances”, the Department said.
The US has expressed concern over China’s ‘One Belt, One Road’ initiative that is pulling developing countries into deep debt from which they find difficult to recover and could potentially cede control of vast tracts of their economies to Beijing.
The budget proposal has incentives for allies and partners like India to buy more weapon systems from the US and build their militaries around American systems.
The budget will have to be approved by the Democrat-controlled House of Representatives, which has a different set of priorities and will hedge its bets with the November 3 presidential election.
The budget for this year was passed only last December.
The budget proposal includes $5.6 billion in Foreign Military Financing (FMF) grant assistance, along with a provision to offer FMF loans to NATO and major non-NATO allies, to make American Defence equipment “a more competitive and more affordable option”, according to the State Department.
“This expanded toolkit increases opportunities for allies and partners to build their militaries around US innovation and quality,” it said.
The proposed budget seeks to allocate $753.6 million to combat the proliferation of weapons of mass destruction, reinforce counterterrorism efforts, and support demining and other weapons destruction.
The State Department said that “this includes programming aimed at preventing Iran and other states and terrorist actors from acquiring weapons of mass destruction”.
The budget proposal calls for allocating $763.8 million in foreign aid and $24 million in dedicated funding to counter what it calls “Russian malign influence and disinformation” in Europe, Eurasia and Central Asia.
Domestically, NASA will be one of the biggest winners in the proposed budget with its allocation increased by about 13 per cent to $25.2 billion with nearly half of it going to ambitious Trump plans to send manned missions again to the moon and eventually to Mars. The budget proposal offers cuts to social services, education, health and environment, which will be resisted by the Democrats.