Non-First World ~ Second and Third World
My sole point being that not all Second/Third World countries whose governments directly fund SRS do so for homophobic reasons. Cuba's Universal Healthcare pays for SRS, and can hardly be considered homophobic, as sodomy and homosexuality have been legal in Cuba since the late 70s, whereas it was not legal in the US until 2003 [interestingly, the same EXACT year homosexuality was legalized in Iraq].
Iran and Pakistan are pretty much the only Middle Eastern countries that permit sex changes, yet outlaw homosexuality.
I think its misleading, historically, to say that the reasoning has to do with homophobia, and transsexuality being preferable to being gay.
Hijira have a long history within Persian culture, and it is that history [with heavy Mughal Empire influence] that creates the bizarre imbalance between transgender acceptance and homophobia in Persian nations. Culture, not any notion that it is better to have a sex change than be gay.