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. Last Updated: 07/27/2016

U.S. Rolling Back Funding for Muskie Programs

Freedom Support Act Funding
Soviet Union
* appropriation
** estimate
Source: USAID

Back in early 1990s, when the fate of the market reforms in the former Soviet Union was up in the air, the U.S. Congress rolled out the Muskie/FSA program to fund graduate studies in the United States.

Russia was a heavy-hitter back then, taking a large chunk of funding allocated to the former Soviet Union.

A decade later, the nation is no longer on the State Department's priority list, so the program is being scaled down and is scheduled to be phased out.

Russia is the only country in the former Soviet Union where the Muskie/FSA program is set to expire, although an exact deadline has not been set, said officials from the U.S. Agency for International Development and the U.S. Embassy in Moscow.

"We recognize that Russia has made enormous strides in the area of economic reform, although we realize that much remains to be done in the area of democratic reform," said Anne Chermak, minister counselor for public affairs with the U.S. Embassy in Moscow.

In terms of academic exchange programs, this translates into a shift away from funding of business and legal studies toward funding of studies in areas such as democratic development, civil society, independent media and the health sector.

And while a large number of other programs will continue, including the Fulbright scholarship program, which funds primarily post-graduate studies, the Muskie/FSA program, funded as part of the Freedom Support Act, is doomed for extinction.

"The idea about [the FSA] phase-out is on the table," said Robin Phillips, acting deputy director of USAID.

The FSA was approved in 1992 to help the reform effort embraced by the former Soviet Union, and included a broad set of measures ranging from food assistance and nuclear safety to support of academic exchange programs.

Funding for other programs will likely replenish part of the disbursements lost as a result of FSA's expiration, so academic exchange programs will remain in place, USAID officials said.

However, places in some programs, including business administration, are likely to become even more difficult to get as MBA applicants will have to switch gears into the Fulbright program.

In each of the last two years, the Russian portion of the Fulbright program provided funding for about 50 individuals to study in the United States, but so far it has involved funding MBA studies.

Last year it added law and public administration to its list and putting business administration on the roster could be done with ease, U.S. Embassy officials said.

It is expected that the Fulbright program will partly fill the niche that will become vacant after the Muskie/FSA program wraps up.

Muskie Fellowships For Russia
Source: American Councils for International Education

"Russia is one of the few countries in which the Fulbright program provides two-year funding," said Bill James, assistant cultural affairs officer at the U.S. Embassy. "So if we see an exceptional candidate applying for MBA studies, that person may be awarded a scholarship."

Both in Eastern Europe and in the Baltic States, Fulbright programs provide funding for just one year of studies, whereas typical MBA programs last two years, so in most countries Fulbright is not involved in business administration studies at all.

The MBA portion of the Muskie/FSA program is arguably the most competitive, attracting 35 percent of applications in 2003. This translates into a margin of fewer than 22 applicants for one MBA fellowship, and about nine contestants per slot on average for all other programs.

The share of MBA fellowships in the Muskie program for Russia fell from a high of 41 percent in 1998 to 18 percent this year.

Apart from that, applicants from areas such as Moscow, St. Petersburg and the Far East are likely to face additional hurdles.

"We try to focus on candidates from areas outside Moscow, St. Petersburg and the Far East and bring in more people from areas underrepresented in the past," Swenson said.

Edward Roslof, the director of the Fulbright office in Moscow, said his program is also trying to handpick candidates from other regions.

Support for Russia's reform effort within the academic exchange portion of the Muskie/FSA program peaked in 1994, when a total of 148 scholarships were awarded.

With only 60 fellowships being contested in 2003, it is almost back to the level of 1992, when the program was started.

Freedom Support Act assistance for the former Soviet Union peaked at $1.2 billion in 1993. This year, appropriation stands at $755 million, with Russia's share set at $142 million.

"Assistance is part of U.S. foreign policy," Phillips said. "There is a very close link."

In the second half of the 1990s, other countries such as Ukraine, Armenia and Georgia got into pole position. Ukraine was the largest recipient of aid under the FSA from 1996 through 1999, with more than one-third of total funding in 1997, but recently its numbers were close to those of Russia.

Armenia and Georgia each were allocated slightly less than $90 million in 2003 and, combined, outnumber Russia, which remains on the top of the list in absolute terms for now.

Armenia is currently the only country whose portion in the program is specified up to the last penny, a result of an organized lobby effort on part of the Armenian diaspora in the United States.

"There are members of the Congress who have large Armenian constituencies," Phillips of USAID said.

In the same manner, Russia's Far East has a prescribed amount of appropriations within the Freedom Support Act.

In the wake of Sept. 11, 2001, the United States has shifted gears into Central Asia.

For the 2004 financial year, the U.S. President's funding request emphasizes "a shift in regional focus toward Central Asia," said the text of a statement to the Senate Foreign Relations Committee presented by State Department officials in April this year.

Most of the reduction, estimated at $90 million for all FSA countries in the upcoming fiscal year, comes at the expense of Russia and Ukraine, whereas five Central Asian states are in for a funding increase.

The decrease includes a FSA funding drop of $179 million to a total of $576 million and a parallel increase in disbursement through other accounts.