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21 May 2001
[Federal Register: May 21, 2001 (Volume 66, Number 98)] [Page 27931] AGENCY FOR INTERNATIONAL DEVELOPMENT Notice of Meeting Pursuant to the Federal Advisory Committee Act, notice is hereby given of a meeting of the Advisory Committee on Voluntary Foreign Aid (ACVFA). Date: May 31, 2001 (8:45 a.m. to 4 p.m.). Location: Wyndham Washington DC, 1400 M Street, NW., Washington, DC. This meeting will feature discussion of USAID's new approach to doing business in the Bush Administration. The new USAID Administrator, Andrew S. Natsios, will speak about his priorities for foreign assistance and his plans for the Agency. The meeting is free and open to the public. Persons wishing to attend the meeting can fax or e-mail their name to Rhonda Fagan, (703) 931-9300, rfagan@datexinc.com. Dated: May 1, 2001. Noreen O'Meara, Executive Director, Advisory Committee on Voluntary Foreign Aid (ACVFA). [FR Doc. 01-12665 Filed 5-18-01; 8:45 am] BILLING CODE 6116-01-M
US Department of State
International Information Programs
Washington File
_________________________________
17 May 2001
Andrew Natsios, administrator of the U.S. Agency for International
Development (USAID), says his agency is reorienting its programs to
focus on "four pillars" to support U.S. foreign assistance goals.
The first of the pillars is the new "Global Development Alliance,"
whereby USAID works with private organizations in overseas assistance
projects. The other three pillars integrate and reorient current USAID
programs into three categories: "Economic Growth and Agriculture,"
"Global Health," and "Conflict Prevention and Development Relief," he
said.
Natsios described the new approach at a May 17 hearing of the House of
Representatives appropriations subcommittee on foreign operations,
where he presented the Bush administration's budget request for USAID.
For fiscal year (FY) 2002, which begins October 1, the administration
seeks $7,716 million for USAID operations, about 32 percent of the
total spending for international affairs programs. The FY 2002 request
for USAID is about $129 million more than the appropriation for the
current year.
Of the four pillars, the Global Development Alliance (GDA) will
receive the smallest amount, $160 million to fund alliances and
partnerships, Natsios said.
GDA is USAID's "business model for the 21st century," Natsios said in
his statement to the subcommittee. With GDA, USAID will use its
resources to help private sector partners "who can bring new
investments and new ideas to the overseas development arena," he said.
USAID has already engaged in several successful alliances, such as the
Global Alliance on Vaccines and Immunizations (GAVI), which includes
the United States, the United Nations, The Gates Foundation, the
Rockefeller Foundation and the International Federation of
Pharmaceutical Manufacturer, Natsios said.
In the Economic Growth and Agriculture pillar, the FY 2002 budget
proposes to spend $3,383 million. Natsios emphasized that most of the
world's poorest people live in rural areas and work in agriculture.
Within this category, Natsios said, annual funding for basic education
for children will increase to $123 million.
For the Global Health category, USAID proposes to spend $1,460 million
in FY 2002. This category includes maternal and child health,
nutrition, family planning, HIV/AIDS, and programs to address other
infectious diseases such as malaria and tuberculosis.
"One major and ongoing effort is to address the spread of HIV/AIDS,"
Natsios said. The Bush administration has pledged a 10-percent
increase in USAID's HIV/AIDS funding for FY 2002 to total $369 million
from all accounts, with an emphasis on programs for preventing
transmission of the disease, Natsios said.
The Conflict Prevention and Development Relief pillar will include
$2,193 million in spending, Natsios said. To complement USAID's
strength in disaster assistance, Natsios said USAID must be able to do
more to promote conflict prevention.
Note: In the following text, "billion" equals 1,000 million.
Following is the text of Natsios' testimony as submitted for the
subcommittee's record:
(begin text)
Testimony of Andrew Natsios,
Administrator
United States for International Development
before the Senate Appropriations Committee
Subcommittee on Foreign Operations
Washington, DC
May 17, 2001
Introduction
Chairman Kolbe, Representative Lowey, Members of the Committee, good
morning. Thank you for inviting me here today to present the
Administration's budget request for foreign assistance programs for
Fiscal Year 2002. I know you heard from Secretary Powell last week; I
would like to reiterate our priorities for the Agency.
Foreign Assistance and Foreign Policy
As a great power, I believe America's foreign assistance both serves
to accomplish our foreign policy objectives, and expresses the deep
humanitarian instincts of the American people.
Foreign assistance is an important tool for the President and the
Secretary of State to further America's interests. In fact, foreign
assistance is sometimes the most appropriate tool, when diplomacy is
not enough or military force imprudent. In general, foreign assistance
works hand-in-hand with other foreign policy tools. Foreign assistance
implements peace agreements arranged by diplomats and often enforced
by the military; foreign assistance supports peacekeeping efforts by
building economic and political opportunity; foreign assistance helps
developing and transition nations move toward democratic systems and
market economies; foreign assistance helps nations prepare for
participation in the global trading system and become better markets
for U.S exports. All of these activities help build a more peaceful,
stable, and prosperous world -- which is very much in the interest of
the United States.
Foreign assistance does work, but it takes years of investment and
hard work. I am asking for your support today to let me continue that
work.
Globalization and Conflict Prevention
USAID's FY 2002 budget marks the beginning of a new strategic
orientation and the incorporation of a new way of doing business to
ensure that USAID's long-term development assistance and
humanitarian/disaster relief programs better respond to U.S. national
interests.
The two most distinctive trends in the world since the fall of the
Berlin Wall have been globalization and conflict. The rise of the
internet, of a more open international trading and financial system,
the spread of democratic capitalism as the preferred model of
political and economic development, contrast remarkably with the
increase in the number of failed or failing states and the increasing
number of civil wars, many of enormous brutality.
In many ways, globalization has meant demolishing barriers to the
exchange of information, technology, finance, goods and services with
startling speed over the past decade. With appropriate and timely
assistance, the spread of information and technology can foster
increased productivity, economic prosperity and political stability in
developing countries -- and ultimately lead to secure markets for U.S.
exports and investments. Conversely, if developing countries and their
people are left out of the information age, and do not realize any
real benefits from the international trading system, then the promise
of globalization will be squandered. In stead of prosperity and
stability, we will likely see increased gaps between rich and poor,
extremism of increasing violence, and acceleration of global health
problems like HIV/AIDS and other infectious diseases. These problems
contribute to human suffering, instability and conflict.
The increasing number of states that are unable to deal with problems
that are potential sources of conflict is of grave concern to the
United States. The ensuing regional instabilities, complex
humanitarian emergencies and, in some cases, chaos are threatening
USAID's development objectives and broader U.S. foreign policy goals.
Nearly two-thirds of the countries with USAID field missions have been
ravaged by civil conflict over the past five years, in some cases
destroying years of economic and political progress. I have witnessed
the horror of these conflicts, the widespread starvation of civilians,
terrible atrocities, the collapse of governments and national
economies.
USAID's "Four Pillars"
While many of USAID's programs already respond to these challenges
individually, in order to improve the Agency's effectiveness as a key
foreign policy instrument, the Secretary noted that this
Administration intends to coordinate and focus Agency resources and
capabilities to address globalization and conflict.
This budget request marks the reorientation of USAID programs to focus
on "Four Pillars," which separately and together support achievement
of U.S. foreign assistance and foreign policy objectives. The first
pillar introduces the "Global Development Alliance" as USAID's new
model for doing business. We also simplify, integrate and reorient
current programs into three new program pillars: Economic Growth and
Agriculture; Global Health; and Conflict Prevention and Developmental
Relief,
USAID's First Pillar: Global Development Alliance
We need to fundamentally change the way we do business, because the
provision of foreign assistance has changed drastically. The
globalization of the world economy has meant that governments, while
still essential, are not the only institutions through which public
services are provided. The role of religious institutions,
non-governmental organizations, private foundations, universities,
corporations, and even individuals in providing services and
accomplishing public objectives has dramatically increased.
The Global Development Alliance (GDA) is USAID's business model for
the 21st Century. We propose to serve as a catalyst to mobilize the
ideas, efforts, and resources of the public sector, corporate America,
the higher education community and non-governmental organizations in
support of shared objectives.
As the Secretary noted to you, we want to fill the role of a strategic
alliance investor, a role akin to that of a venture capital partner,
to address important development needs. The difference is that we are
not looking for quick results and early exits from our investments.
Sustained improvement over the long haul will remain USAID's prime
objective. With GDA, USAID will use its resources and expertise to
help its partners in their investment decisions, and we will look for
new partners who can bring new investments and new ideas to the
overseas development arena. We believe that investing relatively small
amounts of risk or start-up capital can generate much larger benefits
in the achievement of our development objectives.
Of course, the Agency will continue to deploy resources where private
funding is not available and for activities where the governmental
role is clear and pre-eminent to stimulate institutional and policy
change.
Why will this work? Because U.S. organizations and companies want to
and already do help less fortunate people worldwide, out of American
compassion and out of the desire to create new markets. For example,
Hewlett Packard partnered with the world-famous Senegalese musician
Youssou N'Dour to launch the "Joko Project." Designed to bridge the
digital divide between Senegal and the West, HP is providing equipment
and services to develop Joko Clubs throughout Senegal, many in small
rural villages. Each club will provide affordable Internet access and
computer training. I want companies to consider working with us on
such projects, in collaboration with U.S. universities and NGOs, to
maximize their impact.
But many organizations don't know how to get involved in providing
foreign assistance, and USAID has not been prepared to take full
advantage of the resources private organizations can bring us. The GDA
will change this by actively seeking out partners willing to commit
real resources -- funding, information, or personnel -- to support
development programs. With these partners, we will build alliances
that target specific development objectives, and leverage private
funds and expertise to accomplish those objectives.
This is not an entirely new way of doing business for the Agency:
USAID already engages in several successful alliances. For example,
the Global Alliance on Vaccines and Immunizations (GAVI) is an
alliance of the United States, the United Nations, the Gates
Foundation, the Rockefeller Foundation, and the International
Federation of Pharmaceutical Manufacturers to coordinate a worldwide
effort to protect children from vaccine-preventable diseases.
Incorporating GDA as a pillar of our new approach means we will pursue
a systematic approach to alliances on a much larger scale and will
institutionalize these alliances as a central business model across
Agency operations.
To jump-start the process, we intend to establish a special unit to
focus on expanding outreach into the private, for-profit and
not-for-profit sectors. We intend to target $160 million in FY 2002
funds specifically to fund alliances and partnerships around the
world. GDA will not become a separate account; we plan to fully
integrate GDA concept into USAID's operations not later than FY 2004.
USAID's Program Pillars
We will bring together USAID programs and activities into three
program pillars that cut across all USAID funding accounts. By
aggregating current and new programs that are mutually reinforcing
into these pillars USAID will be able to use scarce budget and human
resources more effectively, and to describe its programs more clearly.
The program pillars are: Economic Growth and Agriculture; Global
Health; and Conflict Prevention and Developmental Relief.
Economic Growth and Agriculture
More than 1.2 billion people live on less than a dollar a day; more
than 800 million people continue to go to bed hungry; and more than
113 million children are not in school. The Economic Growth and
Agriculture pillar will strengthen U.S. efforts to ensure that these
people are able to take advantage of the potential of globalization,
rather than becoming its victims. It highlights the interrelationship
and interdependence of economic growth and agricultural development,
environmental sustainability, and the development of a country's human
capital -- with the ultimate goal of creating and cultivating viable
market-oriented economies. Programs in this pillar will encourage
economic opportunity, agricultural development, education and
training, and effective management of natural resources.
Given the importance of agriculture and basic education (especially
for girls and women) in most recipient countries, USAID plans to
increase its emphasis in these sectors. Without economic growth and
food security, no development effort is sustainable. We will increase
support for economic growth and agriculture programs that reduce
poverty and hunger, while finding better ways to mobilize and partner
with the private sector.
It's been said that the most important and rewarding investment any
country can make is in the education of its children, and especially
young girls. The President believes that. For FY 2002, USAID plans to
increase its support for basic education for children from $103
million to $123 million.
Microenterprise development plays an increasingly important role in
job creation and economic opportunity. This budget guarantees that
USAID will remain the world's leader in microenterprise programs that
provide microloans to the world's poorest microentrepreneurs
(especially women), services to help improve their businesses, and
policy changes to improve business climates.
The Economic Growth and Agriculture pillar will incorporate $3.383
billion of FY 2002 funds from all accounts.
Global Health
I intend to include in this pillar maternal and child health,
nutrition, women's reproductive health, HIV/AIDS, and programs that
address other infectious disease such as malaria and tuberculosis.
These are global issues with global consequences: the health of a
population directly affects their productivity, and unchecked
infectious diseases in other countries pose threats to our own.
USAID will maintain its international leadership in health. Our
programs in women's reproductive health, children's health, HIV/AIDS,
infectious diseases, and nutrition are among the best in the world. As
a nation, we can be proud of our successes in global health. Over the
past 15 years USAID, with Congress's support, has spent over $3.5
billion on child survival programs. Over this same period, we have
seen a 20 percent reduction in under-five mortality, from 145 deaths
per 1,000 live births in 1985 to about 116 per 1,000 today. Deaths
from measles have been cut in half, from some 2 million in years past
to about 970,000 in 1998. Increased access to Vitamin A, which USAID
helps to distribute in about 20 countries, improves vulnerable
children's chances of survival by up to 30 percent. Americans can be
proud of the leadership role our country has played in eradicating
polio around the world; the number of reported cases in the world
dropped from 350,000 in 1988 to fewer than 7,000 in 1999, a year in
which 470 million children were immunized against polio.
However, many problems remain. Immunization levels for children in
some countries are stagnating or declining, and millions of children
continue to suffer from malnutrition. Women continue to die in
childbirth from preventable causes.
One major and ongoing effort is to address the spread of HIV/AIDS. The
HIV/AIDS pandemic is devastating many nations in Africa, and
transmission is escalating in other regions. The HIV/AIDS epidemic is
now reaching such catastrophic levels it is decimating entire
societies, creating negative population growth rates: we are beginning
to see famine-like conditions developing in some particularly hard hit
countries. Up to 40 million children will be orphans because of AIDS
in the next decade. This Administration pledged a 10 percent increase
in USAID's HIV/AIDS funding for FY 2002 to a total of $369 million
from all accounts, with the emphasis on preventing transmission of the
disease.
Because of our nation's efforts, we have also made great progress in
addressing family health, reducing maternal deaths last year and
abortions. More than fifty million couples in the developing world
make more educated and informed decisions about having children and
taking care of them as a direct result of USAID-supported programs.
But again, our work is far from complete. More than 580,000 women die
annually from preventable pregnancy-related causes. To promote
improvements in reproductive health and for voluntary family planning
practices that allow couples to choose family size and child spacing,
the total amount available for family planning is $425 million from
all appropriate accounts.
The Global Health pillar incorporates $1.46 billion of FY 2002 funds
from all accounts.
Conflict Prevention and Developmental Relief Pillar
USAID continues to stand at the forefront of agencies around the world
in its ability to respond to man-made and natural disasters. The
request will enable USAID to maintain this capability to provide
needed help rapidly when international emergencies occur.
To complement our strength in disaster assistance, USAID must improve
its ability to promote conflict prevention. To address the rising
number of collapsed states, internal violent conflicts and complex
humanitarian emergencies in the post-Cold War era, some of which have
become focal points of U.S. foreign policy, USAID will undertake a
major new conflict prevention, management, and resolution initiative.
We want to integrate foreign policy and foreign assistance in a way
that accommodates both short-term operational and longer-term
structural prevention needs. To do so, we need to strengthen current
partnerships and create new ones with the U.S. military, the
international community, and U.S. and indigenous private and religious
institutions dedicated to conflict prevention and resolution. This
approach will require even closer collaboration within the U.S.
foreign affairs community, especially between USAID and the Department
of State.
This initiative will integrate the existing portfolio of USAID
democracy programs with new approaches to crisis and conflict
analysis, and new methodologies to assist conflicting parties resolve
their issues peacefully. Our experience has proven that by promoting
and assisting the growth of democracy -- by giving people the
opportunity to peacefully influence their government -- the United
States advances the emergence and establishment of societies that will
become better trade partners and more stable governments. By
facilitating citizens' participation and trust in their government,
our democracy efforts can help stop the violent internal conflicts
that lead to destabilizing and costly refugee flows, anarchy and
failed states, and the spread of disease.
The Conflict Prevention and Developmental Relief pillar will
incorporate $2.193 billion in FY 2002 funds from all accounts. This
amount includes $835 million requested in FY 2002 for P.L. 480 Title
II (Food for Peace) programs.
Management Challenges
The Agency cannot make sweeping changes to its business model without
overhauling the central management systems through which USAID does
its work. USAID, and its ability to perform optimally, has been
seriously compromised for a number of years by ineffective management
systems -- particularly those related to finance and budgeting, human
resources, information management and procurement. The books of USAID
have been unauditable for four years. In a recent study of federal
agencies, USAID finished second to last in a survey of whether the
personnel system rewards managers for accomplishing the objectives of
the agency.
While some progress has been made in fixing these systems, it has been
too slow, and neither innovative nor sweeping enough to get the job
done. As I said earlier, the business of foreign assistance has
changed drastically in recent years. The Agency has 35 percent fewer
staff than it did ten years ago, while the number and size of awards
and contracts has grown significantly. The Agency has not adjusted to
these changes.
Let me say that I have been extremely impressed with the Agency's
career civil and Foreign Service employees. These people are working
their hearts out to do the very best for the American people, to
capture the spirit of American values, and to take that spirit around
the world. But USAID's career officers are demoralized and frustrated
by these systems, which make it nearly impossible for them to get
their work done. Our procurement officers are overloaded and coping
with archaic and inefficient systems. They want to help me overhaul
the systems.
Secretary Powell told you, he expects me to focus on overhauling
command of the Agency's finance, budgeting, and personnel systems.
Secretary Powell made it clear that I am to be a change agent, and
make sure that we are doing the best job for the American people and
the people of the world with the money that Congress is providing us
to use.
The ultimate goal of implementing a new way of doing business and
management reforms is to provide the most effective and efficient
foreign assistance programs possible. USAID's experts and partners who
live and work in developing countries are best positioned to know
which programs will best serve U.S. national interests and the needs
of people in those countries. I hope the Congress will help us be
effective and efficient by reducing the number and intrusiveness of
earmarks. Earmarks divert scarce resources away from field-initiated
programs that address U.S. development and foreign policy goals.
Budget Request Summary
The President had a number of tough choices to make in putting this
budget together, and I was very pleased that he saw fit to continue to
support International Affairs programs including foreign assistance.
For FY 2002, the Administration proposes $23.9 billion for
International Affairs programs. Of that amount, USAID will manage $7.7
billion or 32 percent, which includes programs that USAID manages and
those we administer in cooperation with the Department of State and
other agencies. The FY 2002 USAID budget request is an increase of
$129 million, or less than two percent, over the previous year's
appropriation.
I will summarize our request in terms of existing appropriations
accounts, and briefly describe how they relate to my focus on the
Agency's four pillars. For your convenience, the attached tables show
this budget request by account and by pillar.
Development Assistance
The Administration requests $1.325 billion for Development Assistance
(DA) programs, an increase of $23 million over FY 2001 appropriations.
This account supports programs that promote economic growth,
agricultural development, human capacity development, women's
reproductive health, environmental protection and biodiversity, and
democracy and governance in some of the poorest countries in the
world. With this request, USAID will increase support for economic
growth, renew its focus on agricultural development to reduce hunger
and malnutrition, improve business and trade climates in developing
countries, and continue its work to promote efficient energy
technology in developing countries.
The DA account also includes $358 million for USAID family planning
programs, of a total $425 million from all accounts. We will use these
funds to promote family health and to strengthen support for voluntary
family planning practices, that cut child mortality rates and improve
health by allowing couples to choose family size and child spacing.
DA funds support all three of the Agency's program pillars:
Economic Growth and Agriculture: $817.8 million. DA funds in this
pillar go to activities that ultimately serve to provide poor people,
especially women, access to real economic opportunity. Our programs
help expand and strengthen private markets and institutions, encourage
agriculture development and food security, promote efficient growth
and energy use, and protect valuable natural resources. For example,
microenterprise development efforts play an increasingly important
role in building futures for women and the rural poor. We expect to
meet the congressionally authorized target of $155 million for
microenterprise programs in FY 2002. This pillar includes USAID funds
to expand its leadership in helping the developing world participate
effectively in the global trading system; such participation is
critical to sustainable economic development for developing and
transition economies, and important to the economic future of our own
nation.
Global Health: $375.5 million. The majority of DA funds for Global
Health are for USAID's family planning and reproductive health
programs. The total request for $425 million from all accounts
includes $358 million in Development Assistance. The President knows
that one of the best ways to prevent abortion is by providing quality
voluntary family planning services, and decided to maintain the FY
2001 funding level in his FY 2002 budget request.
The remainder of DA funds in this pillar fund important health
programs such as $10 million for the Leahy War Victims Fund, which
contributes to improving the mobility, health, and socioeconomic
integration of civilians who have sustained physical disabilities as a
result of armed conflict.
Conflict Prevention and Developmental Relief: $131.7 million. USAID's
democracy and local governance programs funded by DA fall under this
pillar. USAID's programs work to build democracy, support human
rights, strengthen the rule of law, create a strong, politically
active civil society, and combat corruption around the world. Our
democracy efforts have paid dividends: never before in human history
have more nations embraced democracy, and more than fifty have made a
transition to democracy in the past fifteen years.
But many fledgling democracies are vulnerable to military takeover,
corruption, organized crime, civil strife and economic chaos. We will
respond to this need with a new initiative to integrate existing
democracy programs and new approaches in conflict prevention,
including addressing the economic causes of conflict.
I intend to target $110 million of Development Assistance for the
Global Development Alliance. There are many exciting opportunities for
strong public-private partnerships using DA funds, and this investment
indicates my commitment to seeking new partners and leveraging private
funding for our development programs.
Child Survival and Disease Account
We have requested $1.011 billion for the Child Survival and Disease
Program Fund (CSD) for FY 2002, an increase of $50 million over FY
2001 appropriations. This amount includes a transfer of $110 million
to the United Nations Children's Fund (UNICEF).
The CSD funds cover programs that address child survival and maternal
health, HIV/AIDS, other infectious diseases such as malaria and
tuberculosis, reducing the spread of antimicrobial resistance, and
improving basic education. Experts say that these programs save more
than three million lives a year, and have helped drop infant mortality
rates in the developing world to their lowest levels ever.
Of this request, $901 million falls under Global Health. This request
meets the Administration's commitment to increase funding to support
prevention and care programs that combat the HIV/AIDS pandemic. The
funding target of HIV/AIDS programs in FY 2002 is $369 million from
all accounts, including $329 million from CSD. We will use these funds
to expand primary prevention efforts and reduce the risk of
mother-to-child transmission, improve community and home-based care,
and increase support for those suffering from the AIDS virus. We will
also target resources to help the growing crisis of AIDS orphans.
The remaining $110 million in CSD is for basic education, which comes
under the Economic Growth and Agriculture pillar. We have also
targeted $12.6 million from the Development Assistance to bring the
total request for basic education to $122.6 million. Basic education
plays a critically important role in protecting both the health and
the future of children in developing countries. We want children to go
to school and receive a quality education, not to work for pennies
wages in lousy conditions. Toward that goal, USAID's basic education
programs work to strengthen education and teacher training programs
throughout the developing world, with particular focus on Africa.
USAID will set aside $25 million in CSD for our fourth pillar, the
Global Development Alliance. The Agency has developed successful
public-private alliances in the past to address important health
needs. I mentioned GAVI earlier; another example is USAID's and Rotary
International's successful public-private partnership to eradicate
polio -- a partnership that led to polio vaccinations for literally
hundreds of millions of children. We will use this funding to form and
bolster such public-private alliances that allow us to tackle critical
health, nutrition and education needs more effectively than ever.
Regional Requests
Africa
Reflecting our priority to promote stability and integrate sub-Saharan
Africa into the global economy, the Administration is requesting a
total of $1.055 billion in FY 2002 for this region.
This amount includes $434 million from Development Assistance, $356
million from the Child Survival and Diseases Program Fund, and $105.5
million of ESF. Also, we intend to program $160 million of P.L. 480
Title II resources for developmental food programs in Africa.
As Americans, we are not content to sit idly by while people suffer
from starvation, disease, and tyranny. We want to try to solve those
problems, and we want people to be able to build their own societies
and take advantage of economic opportunities. USAID's work to address
health challenges and promote broad-based economic and social
development in Africa goes to the heart of American values. And by
encouraging participation in the global trading system, addressing the
HIV/AIDS epidemic, and building stability by setting the foundations
of democratic governance, we also support U.S. national interests in
Africa.
There has been significant progress in Africa. Countries that only ten
years ago were ruled by dictators are today democracies, such as
Nigeria and Mozambique. The growth rate in sub-Saharan Africa has
averaged 4.9 percent over the past five years, the highest in two
decades. Unfortunately, a combination of poverty, infectious diseases,
conflict, complex emergencies and natural disasters have tarnished the
promise of progress in sub-Saharan Africa. Nearly half of sub-Saharan
Africa is at risk of violent conflict and instability. Recognizing the
importance of conflict prevention to our entire development mission,
we will integrate conflict analysis into the Agency's strategic
planning process for this region.
USAID's challenges in Africa span all three of our program pillars,
and we will use our new program focus to meet these challenges in a
targeted, coordinated, and effective manner. Of the total request for
Africa, $401.4 million would fund activities in Economic Growth and
Agriculture, $376 million would fund activities in Global Health, and
$277.75 million would fund activities in Conflict Prevention and
Developmental Relief.
In addition, we will use the Global Development Alliance to build
stronger public-private partnerships that will leverage much-needed
financial and human resources for our development goals, particularly
in key sectors of agriculture and basic education.
Asia and the Near East
In FY 2002, the Administration intends to request $2.34 billion from
all accounts for the Asia and Near East region. This amount includes
$205.5 million in Development Assistance, $112.1 million from the CSD
account, and $1.9 billion in ESF. In addition, the Administration
requests $140 million in P.L. 480 Title II resources for the region.
The Asia and Near East region (ANE) encompasses East Asia, South Asia,
and the Middle East/North Africa. The stability and growth of this
very large and diverse region is essential to U.S. national security
and economic interests. The United States trades more with this region
than any other; after Europe, the ANE region is the second most
important market for U.S. goods and services. The challenges in this
region are equally diverse: addressing humanitarian needs, supporting
conflict prevention and democratic transition, promoting sustainable
economic growth, and tackling HIV/AIDS and mother-child health.
USAID's programs in this region support economic and political reform
and transparency in East Asia; promote more equitable economic growth
and reduced poverty in South Asia; seek to improve the supply and
efficient allocation of water resources, and expand employment
opportunities in the Middle East; combat the spread of HIV/AIDS, and
promote clean and efficient energy use. In so doing, we not only help
the people of this region, but also improve business climate and
opportunities for U.S. businesses. I also want to give USAID's Asia
and Near East staff credit for leading the attack in this region on
two reprehensible practices: the trafficking of women and girls, and
abusive child labor. This Administration will continue to support
those efforts.
With this request, we intend to provide $1.76 billion for programs
under Economic Growth and Agriculture; $267 million under Global
Health; and $310 million under Conflict Prevention and Developmental
Relief. We will use the Global Development Alliance to create new
partnerships here, building on the success of the U.S.-Asia
Environmental Partnership, which has a great record of matching U.S.
businesses with environmental and energy efficiency opportunities in
the region.
One management challenge USAID must resolve is the increasing amount
of work in "non-presence" countries -- countries with USAID programs
but without a USAID mission. USAID already supports programs in
Pakistan, Vietnam, Burma, and 15 other non-presence countries in the
region; we must identify new ways to maximize the efficiency of our
personnel and management resources throughout this region.
The ESF funds are primarily used to support economic growth
initiatives in the Middle East, including $720 million for Israel,
$655 million for Egypt, $150 million for Jordan, and $75 million for
the West Bank and Gaza. ESF will also fund bilateral programs in
Cambodia and Mongolia.
The P.L. 480 Title II funds will help improve child survival and
nutrition in India and Bangladesh.
Latin America and the Caribbean
Because the countries assisted by USAID in Latin America and the
Caribbean (LAC) are our neighbors, their economic, social, and
political development have an extremely important impact on our own
security and well-being. Americans benefit directly when the economies
of developing LAC countries expand and their markets open. Since 1990,
the number of U.S. jobs supported by exports to the region has
increased by 2.3 million. But when nations in this region face
political instability and failing economies, the United States sees
the consequences directly through increased illegal immigration and
illegal narcotics. None of us should ignore the cross-border spread of
communicable diseases such as TB and HIV/AIDS. Finally, environmental
degradation and pollution can affect U.S. border states directly and
also aggravate regional instability and migration, as well as increase
the risk of death and destruction from disasters in the region.
To fund USAID's programs in this region, the Administration requests a
total of $878.6 million from all accounts. The request includes $207.3
million in Development Assistance, $100.2 million from CSD, $177.5
million from ESF, and $108.1 million of P.L. 480 Title II funds.
USAID's total funding incorporates $292.5 million from the
International Narcotics Control account, included in the State
Department's budget request
We intend to allocate $398 million of total funds for Economic Growth
and Agriculture, $153 million for Global Health, and $327.5 million
for Conflict Prevention and Developmental Relief.
USAID's programs in the Western Hemisphere support U.S. national
interests. We will continue to work to prevent conflict by encouraging
democracy and good governance throughout the region. We will continue
to work to increase economic opportunity and reduce poverty, through
microenterprise programs, improving access to quality education and
training, and encouraging better management of the environment.
Equally critically, the United States must ensure that post-hurricane
and post-earthquake reconstruction in Central America not only
replaces what was destroyed, but builds back better in ways that lay
the foundation for sustainable growth.
Let me briefly discuss the Andean Regional Initiative. The President
and Secretary Powell recognized that the United States must adopt a
regional strategy to assist Colombia and the neighboring democracies
to confront narco-terrorism and the associated threats to their
societies. In FY 2002, the Andean Regional Initiative will provide
$494 million from DA, CSD, ESF, International Narcotics Control, and
P.L. 480 Title II accounts for non-enforcement related activities in
Bolivia, Brazil, Peru, Ecuador, Colombia, Panama, and Venezuela. We
will use these funds in a regional framework to intensify Alternative
Development programs that move farmers from coca to licit crops, and
for democracy programs that improve local governance and the
administration of justice.
Europe and Eurasia
The stability and security of Europe and Eurasia directly impacts
fundamental U.S. security and economic interests. USAID's challenge is
to help nations in this region continue their transformation from
authoritarian, centrally planned and oppressive societies into
participatory democracies with strong market economies. Our work in
this region shows both the incredible risks and rewards of foreign
assistance as a tool of U.S. foreign policy. On one hand, USAID
assistance last year provided crucial support to democratic elections
in Croatia and Serbia, bringing a decade of political misrule and
Serbian expansionism to an end. On the other, current ethnic clashes
in Macedonia remind us how fragile stability and democracy are in the
region.
The Administration's total FY 2002 funding request for USAID programs
in the region is $1.46 billion. The request includes $610 million for
the Assistance for Eastern Europe and the Baltic States (AEEB)
account; $808 million for the Assistance for the Independent States of
the Former Soviet Union (FSA) account; $39.6 million from ESF; and
$6.5 million from the CSD account.
The Global Development Alliance will play an extremely important role
in this region. The partnerships the Agency already has developed,
such as with the American International Health Alliance, have brought
additional knowledge and resources to these countries. Ultimately,
these private-public partnerships help sustain progress when USAID's
role inevitably starts to decline. USAID will use GDA funding to
aggressively seek out new ways to engage potential partners in the
delivery of foreign assistance to the people of this region.
This request includes $145 million in AEEB funds for Montenegro and
Serbia. This request allows the United States to continue its
important efforts to prevent conflict, reform the economy, and build
the institutions that underpin a market-oriented, democratic society.
Our work in Montenegro will encourage the rule of law and democratic
processes as Montenegrins decide whether to remain part of Yugoslavia
or become independent.
USAID's request of $39.6 million in ESF funds for this regions
includes $19.6 million for the International Fund for Ireland, $5
million for Irish visas, and $15.0 million for Cyprus.
Economic Growth and Agriculture will receive $700.4 million to foster
the emergence of competitive, market-oriented economies in which
people, not governments, control economic resources. Conflict
Prevention and Developmental Relief will receive $688.1 million in
support of programs in this pillar, covering a continuum of assistance
from humanitarian relief, to easing the transition from disaster to
development, to promoting peaceful and accountable government by
promoting democratic processes and freedom of information. In
recognition of increasing health risks in the region, Global Health
will receive $75.6 million to improve primary health care and fight
the spread of infectious diseases including HIV/AIDS and tuberculosis.
The new Administration is undertaking a series of foreign policy
reviews, of which Russia will be the first. This review may result in
changes to the U.S. assistance program over the near future.
Development Credit
Another important tool in USAID's development arsenal is the
Development Credit Program. When appropriate, the Agency can use
credit in the form of direct loans or loan guarantees to support true
risk-sharing ventures with private firms. That credit authority gives
USAID the ability to mobilize substantial private capital for
development purposes.
This program consolidates former credit programs: Urban and
Environment Credit Program, the Micro and Small Enterprise Development
Program, and the Development Credit Authority. By consolidating
various credit initiatives under the Development Credit Program, the
Agency ensures that all credit activities will use the same strict
rules regarding accountability and risk-sharing. The Agency has
officially instituted a clear policy that the consolidated credit
program will not engage in sovereign risk activity.
For FY 2002, the Administration is requesting transfer authority of up
to $25 million from other USAID program accounts (DA, CSD, ESF, SEED,
FSA) for the Development Credit Program. We also requested $7.5
million for administrative costs of the expanded program. This request
for $25 million in transfer authority for the Development Credit
Program could mobilize $250 million or more of local private capital
for projects that support our development goals in countries where we
work.
International Disaster Assistance
The FY 2000 request for International Disaster Assistance is $200
million, an increase of $35 million over the FY 2001 appropriated
level (not including supplemental appropriations). This request is to
fund the work of USAID's Office of Foreign Disaster Assistance (OFDA)
to support emergency relief and rehabilitation programs in response to
natural and manmade disasters, and other emergencies that displace
large numbers of people.
Our ability to respond rapidly to emergencies is known and respected
worldwide, and USAID staff work in close collaboration with U.S. and
international agencies and private organizations. I take some pride in
having been a part of building that respect during my previous life
here. These programs are first and foremost to meet the critical needs
of vulnerable people in emergency situations. But that is not enough
-- we also use our Disaster Assistance funds to help countries adopt
disaster prevention and mitigation measures so the next calamity cause
less damage. Right now the Agency is in the process of preparing for
the upcoming hurricane season, working with the Fairfax County and
Miami-Dade County Search and Rescue Teams and prepositioning emergency
disaster kits at Homestead Air Force Base in Florida.
Demands on disaster assistance resources have increased for a number
of years. In particular, complex emergencies -- involving civil
conflicts and often complicated by natural disasters -- account for
the lion's share of International Disaster Assistance Funds, more than
70 percent. These emergencies can require long-term relief assistance
for those displaced or devastated by the conflicts.
All International Disaster Assistance funds fall into the pillar of
Conflict Prevention and Developmental Relief. I intend to use $25
million of these funds for implementation through the Global
Development Alliance. For example, we will use the GDA to develop new
partnerships with faith-based organizations already providing relief
to disaster victims around the world.
Transition Initiatives
For the Transition Initiatives (TI) account, we have requested $50
million, the same as appropriated this fiscal year. These funds, which
fall under the Conflict Prevention and Developmental Relief pillar,
support the work of the Office of Transition Initiatives (OTI).
I have already spoken at length about the emergence of conflict as a
defining trend of this new century, and the importance of conflict
prevention to both our development and humanitarian goals and to U.S.
national interests. OTI supports conflict prevention by assisting
countries making the transition from complex emergency to economic and
political stability. OTI provides fast, flexible, short-term,
high-impact assistance designed to strengthen peace, reconciliation,
and reconstruction efforts.
ESF funds
The Economic Support Fund (ESF) account advances the economic and
political foreign policy interests of the United States. ESF funding
can be used, for example, to finance balance of payments and economic
stabilization programs, often in a multilateral context.
For FY 2001, USAID is requesting $2.29 billion in ESF funds. As
detailed in other parts of my testimony, this funding will be used to
support the Middle East peace process and several initiatives Latin
America, Asia and Africa. Of this amount, $1.75 billion will fall
under Economic Growth and Agriculture, $115 million under Global
Health, and $328 million under Conflict Prevention and Developmental
Relief.
Operating Expenses
For FY 2002, USAID requests $549 million in Operating Expenses (OE)
compared to this year's post-rescission OE level of $532 million.
However, factoring in other OE funding sources, such as local currency
trust funds, the total OE budget -- at $613 million -- is just $1
million more than the current year budget, an increase of less than
1.5 percent.
These funds cover the costs of salaries, benefits, and other
administrative costs of Washington and overseas operations associated
with management of USAID's $7.7 billion worldwide programs.
The Secretary has spoken of three priorities for the Department of
State's operating funds: hiring staff, modernizing information systems
and improving facilities security. These are the same priorities for
USAID's OE account. First, the request will permit the Agency to
continue its efforts to restore its direct-hire staff, which has been
reduced to unacceptably low levels through the same combination of
attrition and previous administrative cost-cutting efforts affecting
many other federal agencies. It is absolutely essential that the
Agency have sufficient funds to recruit, train and deploy the
additional staff needed to assure adequate stewardship of its program
responsibilities.
Second, the OE request includes the funds needed to continue
modernizing USAID's information technology and financial management
capabilities. The request will permit the Agency upgrade its
telecommunication capacity and continue modernization of its
accounting and procurement systems.
And third, the request includes funds to upgrade the security of
vulnerable overseas posts which are not collocated with embassies. It
is critical that we have funds to assure the security of our Foreign
Service personnel abroad. Additionally, $50 million has been included
in the Department's budget request to improve USAID facilities
security in countries where our missions are located on embassy
grounds.
In order to have the funds to cover these priorities while also
meeting projected federal pay increases and high inflation rates
overseas, I will have to identify ways to cut costs and increase
productivity both at headquarters and in our Missions overseas. This I
plan to do. I understand the budget pressures you face, but you should
know that this OE request is critical to USAID's operations -- and is
the bare minimum I need for the staff and technology to successfully
carry out transformation of the Agency.
Inspector General
The Administration requests $32 million for FY 2002, an increase of
more than $5 million over FY 2001. The Office of the Inspector General
(OIG) plays an important role in helping USAID implement its
strategies effectively, and in protecting the integrity of the Agency.
This request covers operations, including the salaries, expenses, and
support costs, for the work of the to conduct audits and
investigations relating to the programs and operations of USAID around
the world, plus the foundations assigned to the OIG for review. In FY
2001, the OIG's funds included $3.8 million of no-year funds that the
OIG had identified and reported to OMB and the Congress. These funds
will be depleted during FY 2002.
CONCLUSION
With this budget request, we have taken the first steps toward the
transformation this Agency must embrace in order to respond to
fundamental changes in foreign policy and foreign assistance. Our new
approaches will enable us to coordinate our programs and leverage
substantial private resources to achieve our development and foreign
policy goals. The result will be a world that is safer, more
prosperous, and more free than ever. I appreciate the President's and
the Secretary's confidence in me to begin this process, and I ask for
your support as well.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)