fully effective. There is no indication that western assistance efforts have been effectively
coordinated and no real division of labor appears to exist.
The subcommittee recommends that the U.S. and EC should adopt a timely
cooperative approach in their assistance to the region. Collaborative programs hnking U.S.
and EC efforts should be highlighted, particularly in the areas of development of local
government, public administration and rule of law. The subcommittee believes that AID
should give serious consideration to the funding of such joint US-EC projects with SEED
9. The subcommittee notes that Poland has recently embarked on a large scale bank
reform program which draws on $400 million in World Bank loans and $657 million from
the $1 billion Currency Stabilization Fund established by the major western donors for
Poland in 1989. The subcommittee also notes that the $199.1 million U.S. grant contribution
to the Stabilization Fund has been shifted to the newly created "Polish Bank Privatization
The subcommittee welcomes this important new bank reform initiative in Poland and
fully endorses the transfer of U.S. grant funds to the Polish Bank Privatization Fund.
10. The subcommittee believes that assistance to Estonia. Latvia and Lithuania shoulc
be a priority of future SEED assistance. The subcommittee considers the withdrawal of
Russian troops from the Baltic States as critical to the democratic and economic reform of
those countries. The subcommittee supports the model for the Freedom Support Act which
makes Russia ineligible for U.S. assistance unless there is significant progress on troop
withdrawals, but without imposing absolute and unachieveable conditions on Russia. The
subcommittee expects that the envisaged Enterprise Fund for the Baltic States will be
established expeditiously and in a manner that addresses the need to guard against the
repetition of abuses such as those recently identified in the Hungarian-American Enterprisi
11. The subcommittee expects that humanitarian assistance to refugees and other
victims of the wars in the former Yugoslavia will be a continuing and growing obligation
for the U.S. and the international community. The subcommittee supports ongoing
humanitarian assistance projects to the area and is prepared to support additional funding
for humanitarian relief as needs develop and to the extent it can be supported in the
The subcommittee recommends that sufficient resources be provided for helping the
victims of torture, including rape and other war crimes, in the former Yugoslavia and for
the families of such victims, especially children, with a particular focus on victims of the
war in Bosnia-Hercegovina. Such assistance should include provision of medical.
psychological and psychiatric care and crisis counseling for victims of war crimes and
training of individuals in the former Yugoslavia to provide medical, psychological and
psychiatric care and crisis counseling.
The subcommittee notes that, according to the UN. nearly 3.5 million of Yugoslavia's
pre-war population of 24 million are refugees. The subcommittee emphasizes that the full
rights of refugees in the former Yugoslavia must be upheld in accordance with the
principles of the Helsinki Final Act and other international agreements.
The subcommittee supports the UN's decision to establish an international tribunal to
prosecute war crimes in the former Yugoslavia. The subcommittee expects that every
effort will be made to bring the perpetrators of war crimes in the former Yugoslavia and
their patrons to justice.
12. The subcommittee supports the provision of another $5 million in FY 94 in
humanitarian assistance for Kosovo. While the $5 million appropriated for FY 93 has not
yet been completely dispersed, needs in Kosovo are great, particularly for medicines and
The subcommittee supports in principle the establishment of a permanent USIA
mission in Pristina. the capital of the autonomous province of Kosovo. The subcommittee
notes that such a mission can be established only when the Secretary of State determines
that U.S. employees will not be at physical risk. The subcommittee notes that three State
Department employees are presently assigned to Kosovo as representatives of the CSCE.
The danger of physical risk for USIA mission employees should be viewed within the
context of State Department employees already present in Pristina.
The subcommittee recognizes that the situation in Kosovo is extremely tense and
volatile. Ethnic Albanians who constitute 90% of the population have been deprived of
most of their basic human rights and freedoms by the repressive actions of the Serbian
authorities. Kosovo has been stripped of its autonomous status as guaranteed in the 1974
constitution. There is imminent danger of the spread of the violence and killing witnessed
in Bosnia to Kosovo. Urgent, preventative measures are needed to head-off the threat of
violence. The subcommittee notes the warning to the government of Serbia contained in a
letter sent by President Clinton that aggressive actions against Kosovo will be met with
force by the United States.
The subcommittee supports strong, unequivocal action by the United States
government and its European allies in the case of an escalation of ethnic cleansing in
Kosovo by the government of Belgrade. Such an escalation should be viewed by the
United States government as a direct threat to our allies in the region of the former
Yugoslavia and thus a direct threat to the strategic mterests of the United States.
13. The subcommittee remains concerned about ethnic tensions in Eastern Europe,
including the situation of the Hungarians in the Transylvania region of Romania. The
subcommittee believes that the U.S. Embassy in Bucharest should work to broaden and
deepen contacts with the Hungarian community in Transylvania, especially in the city of
14. The subcommittee notes the intention of the Administration to reorganize and
restructure U.S.-funded radio programming abroad, in particular RFE-RL. The
subcommittee strongly recommends, regardless of the outcome of this planned
reorganization, that the U.S. maintain a full program of radio broadcasting to the states oi
the region, concentrating on developments within the target country.
The subcommittee believes that the continuation of objective and extensive
broadcasting to the region remains essential at a time when political and ethnic relations
are unstable. The subcommittee notes that several, well-respected political leaders in the
region have strongly urged the continuation of such U.S.-f unded broadcasting. The
subcommittee also notes the urgent and particular need for objective broadcasting to the
states of the former Yugoslavia, where continuing state-control of the media has
exacerbated ethnic and mter-state relations.
(In millions of dollars)
1. A fundamental element of United States foreign policy has been support for a
strong and secure Israel. Since 1948. the United States has made a major contribution to
Israel's security and development. Israel remains a key strategic ally of the United States
in the Middle East, and a critical partner in the U.S. pursuit for a just and lasting peace
in the Middle East. The subcommittee recommends the authorization of the
administration's request of $1.2 billion in ESF assistance and $1.8 billion in FMF grant
assistance for Israel in fiscal year 1994.
2. The subcommittee strongly supports the Middle East p>eace process and
commends the efforts of the Bush and Clinton Administrations to initiate and pursue
direct Arab-Israeli p)eace talks. The subcommittee supports the policy of pursuing
Israeli-Palestinian peace as well as peace between Israel and the neighboring Arab
states. The subcommittee believes that neither the United States nor any other third
party can impose peace in the Middle East, but it does believe the United States can
serve as a critical catalyst in the peace process.
The subcommittee welcomes the Administration's decision to increase its
involvement in the role of "full partner" in the peace process. The subcommittee
hopes that this role will be further clarified in the next session of the talks. Progress
can only take place in peace talks if the U.S. plays a vigorous and active role as a
catalyst in talks. The subcommittee believes that a U.S. role in these talks is an
important element for progress in bridging existing differences between the parties in
the on-going peace process. Time is growing short, and the subcommittee believes
that all parties must now focus on substantive progress in the next round of talks.
Seeking to avert controversies over attendance at each renewed round of
negotiations, the subcommittee supports the Administration's proposal for continuous
3. The sutKommittee recommends authorization of the fiscal year 1994 request
for not less than $1.8 billion in FMF grant assistance for Israel. The subcommittee
also recommends disbursal of this FMF assistance within 30 days after the beginning
of the fiscal year or the date of enactment of the Act appropriating such funds
whichever is later. The assistance is designed to promote American strategic interests
in the region by allowing Israel to maintain its qualitative superiority in military
technology over p»otential belligerents in the region and to allow Israel to pursue the
peace process confident that its security interests are protected.
The subcommittee recognizes the many benefits to the U.S. resulting from our
strategic and mutually beneficial relationship with the State of Israel. The
subcommittee supports the administration's commitment to maintaining Israel's
qualitative techmcal edge over any possible combination of adversaries. The
subcommittee supports the administration's desire to enhance U.S.-Israel military and
technical cooperation, particularly in the areas of missile defenses and
counterproliferation. Further the subcommittee notes the establishment of the
U.S.-Israel Science and Technology Commission, the binational Senior Planning
Groups, and the Technology Transfer Working Group. The subcommittee believes
these bodies should work to strengthen existing cooperation mechanisms and break
down barriers to further cooperation.
4. The subcommittee supports allowing Israel to use $475 million of the FMF
grant assistance in fiscal year 1994 for offshore procurement expenditures in Israel as
an economic boost to employment, research and development, and production. The
subcommittee also notes that such offshore procurement is an important factor in
maintaining Israel's qualitative superiority in military technology. The subcommittee
recommends that $150 million in fiscal year 1994 be available for research and
development in the United States of weapons systems Israel may wish to procure.
The balance of the FMF recommended authorization for fiscal year 1994 will be
spent in the United States.
5. The subcommittee supports the provision in the 1991 Foreign Operations
Appropriations Act that provides for the drawdown for Israel of defense articles
from the stocks of the Department of Defense, and military education and training,
having an aggregate value of up to $700 million. The subcommittee recommends that
this drawdown authority be extended and remain available for Israel through the
end of fiscal year 1994.
The subcommittee also supports the extension of military stockpiles in Israel
and supports the administrations plans for an additional $200 million for fiscal years
1993 and 1994, which shall be available only for stockpiles in Israel.
6. The subcommittee supports the efforts of the Joint Political Military Group,
formed in November 1983. to enhance strategic cooperation between Israel and the
United States. The 19th meeting of the JPMG took place in May 1993 in Annapolis.
Maryland. Although the JPMG only meets twice a year, joint subcommittees meet
more frequently, and their members maintain regular channels of communication.
JPMG initiatives include combined planning, review of fX)ssible procedures for
pre-positioning U.S. supplies in Israel, as well as other types of contingency planning,
and joint exercises. The subcommittee believes this cooperation is important in
maintaining the U.S. military posture in the region.
7. The subcommittee supports Israel's continued eligibility under Section 516 of
the Foreign Assistance Act of 1961. as amended, as a major non-NATO ally for the
transfer of United States excess defense articles. The subcommittee believes excess
defense articles have been an important supplement to Israel's defense needs at a
time of growing pressure on the security assistance budget. The subcommittee
believes that Israel should be the highest priority recipient of U.S. military
equipment declared excess and made available for transfer to the Middle East.
8. The subcommittee recommends the authorization of not less than $1.2 billion
in ESF grant assistance for fiscal year 1994. This assistance is used to repay prior
loans to the U.S. and to help maintain economic stability in Israel by financing some
of the foreign exchange costs of economic growth and development. The
subcommittee believes U.S. ESF assistance to Israel has been important in supporting
structural economic reform.
The subcommittee supports the provision of the ESF cash transfer for Israel on
an expedited basis as in previous years. The provision of these funds in the first 30
days of the fiscal year, as opposed to its provision in four regular disbursements
during the fiscal year, maxmiizes the value of this assistance. Estimates are that this
program adds more than $30 million to the value of this assistance for Israel. This
value fluctuates according to prevailing interest rates.
9. The subcommittee notes that gains have been made in Israel's efforts to
confront its structural economic problems. The inflation rate has declined to under
10% for the first time in over twenty years. Real GDP growth has averaged roughly
5% per annum over the past three years (4.5% in 1992). Much of this growth was
fueled by a construction sector responding to a now slowing immigration boom. The
central government have made some progress in reducing its role in the economy
through restraint in defense spending, cuts in subsidies, and the sale of three
government owned companies. There has also been some progress in loosening
restrictions on foreign trade.
Nevertheless, difficult economic problems remain. Sluggish export growth and
a strong increase in imports is contributing to a growing balance-of -payments
problem. Progress on privatization has also been uneven. The subcommittee hopes
that the intra-ministerial committee formed by the Rabin government to sell off
government-owned companies will provide new impetus to the privatization effort.
Because of Congressional interest in the health of the Israeli economy, the
subcommittee supports the re-energization of the Joint Economic Development Group
(JEDG) as an active advisory board on Israeli reform. The JEEXJ proved its value in
the inid-1980s when it played a key role in making suggestions that were incorporated
into the largely successful Israeli stabilization plan. Unfortunately, the JEEXJ was
neglected during the last few years. The JEDG should be institutionalized and
staffed so that it functions on a permanent, ongoing basis to provide a forum for the
discussion of Israeli economic reform programs. These changes would also help to
assure the sort of continuity in JEDG sessions that has been lacking in the recent
past. The subcommittee recommends that the U.S. members of the JEDG file a brief
written report twice yearly on the progress in Israeli economic reform.
10. The subcommittee supports the provision of $2 billion in U.S. loan
guarantees for Israel in fiscal year 1994, according to the terms of the agreement
established between the U.S. Government and the Government of Israel, to assist the
Israeli economy in the absorption of Jewish immigrants from the former Soviet
Union. This is part of a five year program, pursuant to the Foreign operations
legislation for Fiscal Year 1992 signed into law on October 6, 1992. under which the
United States is providing Israel $10 billion in loan guarantees, at $2 billion per year.
Israel withdrew the first $1 billion in loans against this guarantee in March 1993.
Much of the loan is likely to be used to capitalize the private banking system to
finance infrastructure projects.
After peaking in 1990. immigration to Israel from the states of the former
Soviet Union has tapered off although it was higher in the 1990"$ than in the 1980's.
In 1989. 12.122 immigrants from the then-Soviet Union arrived in Israel: in 1990.
181.759; in 1991. 143.851: and in 1992. 64.057. Some 60-70.000 are expected again in
1993. There is no consensus on the reasons for this decline.
Prime Minister Rabin and President Bush last year reached agreement on the
conditions for the loan guarantees. According to their understanding, the amount of
any non-security funds e.\f)cndcd by Israel in the West Bank and Gaza may be
deducted from the total amount of guaranteed loan funds available to Israel. Prime
Minister Rabin has said that 11,000 previously constructed housing units in Jewish
settlements in the West Bank and Gaza will be completed after which no new
housing construction will be initiated by the government in these settlements.
The subcommittee also supports the Administration's stated plan to use the
JEEXj to monitor Israeli use of funds borrowed under the loan guarantee program.
11. The subcommittee recommended the start of a scholarship program in the
United States for Israeli Arabs eight years ago. Although the authorization
legislation was never enacted, the Department of State moved to use reprogrammed
funds to start a scholarship program and in 1990, close to $5 million was appropriated
and made available for this purpose. A USIA endowment was established with these
funds to carry out this initiative.
The intent of this program is to fund educational training in the United States
and prepare Israeli Arabs for careers in Israel. The subcommittee recognizes there
may be instances in which education should be acquired in Israel or a third country
instead of the United States. While most of the scholarships provided would be for
mid-level degrees, the subcommittee believes some doctorate degrees should be
supported. The subcommittee continues to support the implementation of this
12. The subcommittee recommends the authorization of not less than $10
million for the U.S.-Israel Cooperation Development Program (CDP) and the
U.S.-Israel Coopjerative Development Research (CDR) Program. It notes that these
programs comprise a significant proportion of Israel's entire official development
For several decades, Israel, a small country with few natural resources, has
sought rapid progress through technological innovation. The remarkable success of
this effort suggests that Israeli e.xperience and expertise can be used effectively to
help solve similar problems confronting less-developed countries (LDC's). Scientists
from LEXT's often want to obtain Israeli technology and to collaborate with Israeli
researchers. The U.S.-Israel CDP has become a valued part of the international
interchange between the development communities of Israel and developing
The U.S.-Israel CDR Program focuses on specific obstacles to development in
developing countries. It provides funding for Israeli and LDC scientists to cooperate
in joint research and for israel to bring valued agricultural, environmental, and
energy technology and expertise to these important countries. It seeks to strengthen
the ability of LDC scientists to do innovative research themselves. CDP and CDR are
an integral part of the U.S. program of development assistance to these LDC's.
13. The subcommittee recognizes that the United States Consulate in Jerusalem
operates in a special environment, and that in the past the coordination of activities
between the Consulate and the Embassy in Tel Aviv was difficult and often
inadequate. The subcommittee believes this process of coordination is now taking
place more smoothly. It recommends that the United States Embassy in Tel Aviv
and the United States Consulate in Jerusalem work to increase cooperation further.
14. The subcommittee notes two meritorious institutions in the Middle East
continue to receive ASH.A funding as evidence ot their contmued e.xcellence. They
are the Hadassah Medical Center and the Feinberg Graduate School of the
Weizmann Institute of Science in Israel. Hadassah provides health care of the very
highest quality to all who need it regardless of their ethnic origin, religious or
political beliefs, or ability to pay. The FGS is the academic center of Israel's world
renowned scientific research institution.
Hadassah's open door policy of health care at the Medical Center has been of
significant benefit to many, especially in the Palestinian community. Hadassah is
performing important outreach and training in parts of Africa and Latin America.
Hadassah deserves praise for its ongoing outreach efforts, including an eye camp
currently restoring sight to hundreds in Kenya.
The Feinberg Graduate School of the Weizmann Institute of Science is
recognized throughout the world for maintaining the very highest standards of
scientific and educational excellence. The FGS trains students from Asia. Afriau
Latin America and Eastern Europe, as well as the former Soviet Union, in disciplines
critical to sustainable development. Additionally, the FGS engages in cutting edge
medical, environmental and conservation related research which enables its students
to return to their native countries possessed with new knowledge and research
15. The subcommittee notes that America's links with Israel are broad and deep,
based on shared values, common interests and a commitment to democracy, rule of
law and freedom. Nevertheless, the subcommittee is troubled by the continuing cycle
of violence between Israelis and Palestinians. Palestinian attacks against Israelis, and
evidence of on-going human rights violations in the West Bank and Gaza. Killings of
Palestinians by Israeli Defense Forces in the West Bank and Gaza in 1992 increased
over 1991. from 98 to 158. This trend appears to be continuing in 1993. The
subcommittee views the current peace talks as providing the test opportunity to end
this cycle of violence.
The subcommittee understands and appreciates the serious security threat
facing Israel and notes the State Departments Country Reports on Human Rights
Practices for 1992 lists continuing instances of Israeli mistreatment of Palestinians
during arrest and interrogation, bans on travel and movement, restrictions on family
reunification, administrative detention, house demolitions, and discriminatory policies
in land and resources use and trade. The March 1993 "closure" of the West Bank and
Gaza has prevented most Palestinians from traveling to East Jerusalem and across
the Green Line to Israel and prevented some internal West Bank travel. On
December 17. Israel deported to Lebanon 415 Palestinians associated with the Islamic
extremist organizations Hamas and Palestinian Islamic Jihad. That number was
subsequently reduced to 396. still the largest such deportation in the 26-year history
of the Israeli occupation. In recent months. Israel has announced that 131 of the
deportees are eligible to return ~ they have declined - and that the length of the
deportations has been reduced form two years to one year. The Administration has
expressed its approval of these measures taken by the Israeli Government to mitigate
16. The subcommittee notes that there has been an alarming increase in
Palestinian extremism and Palestinian attacks against Israelis, which have escalated
from rock-throwing in Gaza and the West Bank to random knife attacks against
innocent civilians throughout Israel and which have resulted in numerous deaths and
serious injuries. The State Department's Country Reports on Human Rights Practices