The Economic Support Fund

The Economic Support Fund (ESF) promotes America’s foreign policy interests by providing assistance to key U.S. allies and countries in democratic transition. The fund assists Middle East peace negotiations and finances economic stabilization programs, often in a multi-donor context. The U.S. Agency for International Development (USAID), with overall foreign policy guidance from the Department of State, implements most ESF programs.

For Fiscal Year 2006, the U.S. has earmarked more than $3 billion in ESF for job-creation programs, reductions in government control over domestic markets, development of transparent judicial systems that promote the rule of law, training of the media and public officials, and strengthening the efforts of local nongovernmental organizations (NGOs) to offer critical services to target communities.

With the enactment of the Nethercutt amendment in Fiscal Year 2005, however, ESF aid for key U.S. allies has been threatened. Under Nethercutt, the U.S. is prohibited from dispensing ESF aid to countries that have joined the International Criminal Court unless those countries have received a presidential waiver for national security interests, have signed a bilateral immunity agreement promising not to extradite U.S. nationals to the ICC, or the countries are eligible for foreign aid under the Millennium Challenge Act of 2002. This restriction on ESF aid was renewed for Fiscal 2006, putting 12 key U.S. allies at risk of losing an estimated $326.6 million in Economic Support Funds.