Reuter: McConnell Determined to Pre

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Subject: Reuter: McConnell Determined to Press For a Mandatory Ban on U.S. Investment

McConnell Determined to Press For a Mandatory Ban on U.S. Investment

    By Jackie Frank
     WASHINGTON, July 26 (Reuter) - The Senate on Friday voted to cut the
U.S. foreign aid budget after agreeing to impose sanctions on Burma if
political repression increases and approving more aid to help North Korea
end its nuclear programme.
     The Senate passed the $12.2 billion foreign aid budget on a vote of
97-3, less than the $12.4 billion spent last year and $700 million below
President Bill Clinton's request. The aid budget has fallen by 50 percent
since 1984.
     Faced with threats that North Korea would back out of its agreement to
freeze its nuclear weapons programme, the Senate doubled the U.S. purchase
of heavy fuel oil for North Korea to $25 million from $12 million. The vote
was 73-27.
    Secretary of State Warren Christopher had warned that Clinton might
veto the entire foreign aid bill unless the full $25 million for the Korean
Peninsula Energy Development Organisation (KEDO) was approved.
     Final approval of KEDO funding may be difficult to achieve given
strong opposition in the House, Republican Sen. Mitch McConnnell of
Kentucky told reporters. His subcommittee wrote the Senate's foreign aid
bill.
     McConnell, the driving force behind economic sanctions on Burma, said
the Senate vote for a less stringent sanctions bill sought by the White
House was "better than nothing." But he chided the administration for what
he said was "absolutely no indication of interest in Burma."
    The Senate plan would direct the president to force U.S. investors out
of Burma if repression increases or if pro-democracy leader Aung San Suu
Kyi is arrested, exiled or harmed. But he could waive sanctions if it were
in the U.S. national security interest.
     U.S. aid to Burma, which is zero now, would be banned unless it is for
humanitarian purposes or if the Burmese regime starts cooperating in
narcotics interdiction efforts.
     Suu Kyi has urged international sanctions but Asian nations have
responded that they would be counterproductive. The European Parliament is
on record in favour of economic sanctions and some companies including
PepsiCo, Heineken, Amoco and Carlsberg have pulled out of Burma.
    McConnell told reporters he was determined to press for a mandatory ban
on U.S. investment. "I assure you I am not going away until SLORC (Burma's
ruling State Law and Order Restoration Council) goes away," he said. His
next action could come later this year or on next year's foreign aid bill.
     Christopher phoned McConnell from Asia urging him to back down on his
strict sanctions. McConnell attributed the defeat of his plan to White
House opposition and heavy lobbying by Unocal and Texaco, which have large
investments in the area. An aide to the senator said total U.S. investment
in the country from 1989-1994 was $213 million.
     In the full $12.2 billion foreign aid bill, Israel and Egypt are again
the two largest recipients of U.S. aid with a total of $5 billion in
economic and military assistance. Money is also set out for the states of
the former Soviet Union -- $640 million, of which $225 million goes to
Ukraine.
     It bars aid to Mexico unless the government moves to prosecute drug
kingpins. The 1996 level was $35 million.
     Sen. Patrick Leahy, who holds an influential position on the
appropriations panel, called for a major review of U.S. foreign aid next
year. He expressed concern that the decline in foreign aid would diminish
U.S. influence in foreign affairs and give other countries, especially
Japan, an opportunity to move into foreign markets.
     "There are those in that country that are delighted to see us keep
withdrawing and withdrawing from foreign aid," the Vermont Democrat said.
     But foreign aid is unpopular with voters, making it an easy target for
budget cuts in an election year. And polls have shown voters vastly
overestimate the amount of money spent on foreign aid, often putting it
above the more than $200 billion spent on domestic health care for the
elderly.
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