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The goal of accelerating broadly-shared economic growth underpins all of USAID's efforts in the Asia and Near East region. But growth should also be sustainable. ANE is assisting the countries in the region to adopt contemporary institutions, market systems, regulatory regimes and corporate and civil governance structures that combine to increase sustainable growth. Progress towards sustainable development also minimizes debilitating domestic and regional conflicts while creating opportunities for further gains through mutually beneficial trade links with the U.S. economy.

USAID assistance programs in the Asia and Near East (ANE) regions are congruent with the Agency-wide goal, "Broad-Based Economic Growth and Agricultural Development Encouraged," and its three strategic objectives:

• Strengthening critical private markets;
• Promoting agricultural development; and,
• Expanding access and opportunity for the poor.

Development Challenges

Two of the Administration's highest foreign policy priorities are to promote comprehensive peace in the Middle East, and to strengthen trade and investment with Asia. USAID, as an economic development institution, sees poverty reduction as a third challenge that applies across the region.

USAID is employing three broad approaches to address the challenges of promoting Middle East peace, improving the trade and investment environment, and poverty reduction. They are:

1. indirect, country-wide, market-based solutions such as changing national policies and approaches aimed at increasing trade and investment or that increase competition;
2. direct, but more targeted approaches such as support for microfinance; and
3. in the special case of the Middle East, measures that stress inter-country economic linkages. In addition to reducing poverty, these are opportunities to expand markets for U.S. exports, and to support U.S. national security interests.

USAID's approach to improving the trade and investment environment and accelerating broad-based economic growth involves working with ANE countries to address the following problems, some of which are among the underlying causes of the current Asian financial crisis: macroeconomic, trade and investment policies that constrain broad-based growth; cumbersome or preferential regulations; inefficient financial markets; inadequate technology; inappropriate management practices; and insufficient investment in infrastructure, agriculture and agribusiness. Work in these areas also contributes directly to basic changes such as implementing trade barrier reductions in the WTO context. USAID efforts to improve governments' and the public's understanding of trade barrier reduction, for example, decrease the risk of back-sliding into protectionism and government intervention. USAID has a strong track record in helping countries in the ANE region to address these issues. USAID's work to open goods and investment markets also expands opportunities for U.S. exporters and investors. Asia has been the fastest growing regional market for U.S. merchandize exports through the late 1980s and well into the 1990s. U.S. exports to the region expanded by over 14 percent per year between 1986 and 1996. Nearly two million U.S. workers earn their living producing goods for export to ANE countries thereby linking U.S. national interests with the economic growth and stability of our trading partners in the ANE region.

With respect to the challenge of poverty reduction, USAID-assisted countries in the ANE region contain the largest proportion of the world's poor. Over 800 million people (out of a total Asian population of 1.8 billion people excluding China) live below the World Bank's poverty line. Eight hundred million people are more than three times the number of extreme poor (219 million) who live in Sub-Saharan Africa. The sheer magnitude of poverty in the ANE region creates pressure on the political systems, the economic infrastructure and poses adverse implications for unwanted immigration and accelerates environmental degradation. In addition to programs aimed at increasing economic opportunity, microfinance activities and programs increase the participation of women, addressing poverty reduction directly.

USAID's approach to the challenge of contributing to the achievement of comprehensive peace in the Middle East, includes economic policy improvement and direct poverty reduction programs, plus a special effort to promote economic cooperation within the Middle East region. The latter takes the form of efforts in the areas of water, trade and tourism as ways to increase mutual economic interests.