03 February 2003
Bush Asks For $27,400 Million for Fiscal Year '04 Foreign Affairs
(Proposal includes $2,300 million for anti-terrorism) (7920)
President Bush February 3 proposed $27,400 million in spending for
foreign operations for the fiscal year beginning October 1 (FY04), an
11.6 percent increase over the amount requested for the current fiscal
year.
The budget proposal sent to Congress includes $2,300 million for
economic and military support to countries joining the United States
in fighting terrorism, the proposal's top priority. It also includes
$2,000 million to combat global HIV/AIDS, $1,300 million for the
Millennium Challenge Account (MCA) and $359 million to support 10,000
Peace Corps volunteers.
MCA is a bilateral assistance program announced in March 2002 that
will support countries committed to governing justly, investing in
people and encouraging economic freedom. It supplements existing
humanitarian assistance and development programs. The budget proposal
says the Peace Corps will reach the 10,000-volunteer level by the end
of 2004.
The proposed budget includes a $620 million increase in spending for
the State Department to $9,761 million. It allocates $17,039 million
for international development assistance programs administered by the
U.S. Agency for International Development (USAID) and other
international agencies, a jump of $2,807 million over the current
year's request. It also provides $1,555 million for the multilateral
development banks (MDBs), a $12 million increase over the current
year's request, and $950 million for the International Development
Association (IDA), the World Bank's lender to the least developed
countries.
The Senate and the House of Representatives will consider the Bush
administration budget proposal in completing its budget legislation,
including 13 spending bills for various government functions. The
president can sign or veto the bills.
Bush's proposal would allocate more than $1,000 million to assist
refugees and internally displaced persons and $200 million to
establish a "Famine Fund" to provide emergency food, grants and other
forms of support to countries facing food crises. Another new $100
million fund would respond to emerging crises such as territorial
disputes, civil conflicts and acts of ethnic cleansing that threaten
regional and international peace.
The budget would allocate $171 million for programs to assist Central
Asia, 55 percent more than the amount requested for the current fiscal
year. It would provide $731 million for the Andean Counterdrug
Initiative, the same as the 2003 request, including $463 million to
help Colombia fight terrorism and the drug trade that funds their
activities.
The budget proposes $35 million for the Nonproliferation and
Disarmament Fund (NDF), more than twice the 2003 request, and
increases to $40 million funding for overseas export controls and
border security. It provides $30 million for the American-style Arabic
Middle East Radio Network launched in 2004 and $145 million to support
development programs in the Middle East, particularly those focused on
women and children.
The budget would provide $142 million for African education assistance
programs, a doubling of the 2003 request, and $75 million for a trust
fund to finance debt forgiveness for heavily indebted poor countries.
It includes $286 million to support environmental programs and $71.4
million to renew the U.S. membership in the United Nations
Educational, Scientific and Cultural Organization (UNESCO).
The proposal would increase to $1,500 million funding for embassy
security, construction and maintenance, $208 million more than the
2003 amount.
(Note: In the following text "billion" equals 1,000 million.)
Following is an excerpt on proposed spending for the Department of
State and international assistance programs from the president's
budget proposal:
(begin text)
DEPARTMENT OF STATE AND INTERNATIONAL ASSISTANCE PROGRAMS
The President's Proposal:
-- Targets security and economic assistance to sustain key countries
supporting the United States in the war on terrorism;
-- Reinforces the U.S. commitment to fighting AIDS and alleviating
humanitarian hard-ships;
-- Launches the Millennium Challenge Account, a new partnership to
support countries that rule justly, invest in their people, and
encourage economic freedom;
-- Builds a world-class diplomatic corps, focusing on the people,
places, and tools needed to promote the Administration's foreign
policies worldwide; and
-- Funds embassy and consulate security to protect American officials
assigned abroad to represent their country.
The Major Challenges:
-- Strengthening the global coalition against terrorism;
-- Increasing effectiveness and accountability of foreign assistance;
and
-- Making substantial progress on the management agenda, including
fixing financial management systems, effectively managing a worldwide
workforce, and integrating performance information into the budget.
Department of State
Colin Powell, Secretary
www.state.gov
202-647-4000
Number of Foreign Service Officers: 11,062
Number of Civil Service Employees: 7,656
Number of Foreign Service Nationals: 9,526
2003 Spending: $11. 0 billion
Major Assets: Operates a total of 261 embassies, consulates, and posts
in 180 countries.
The Department of State advances American foreign policy in diplomatic
relations with the world. The State Department represents the United
States in 180 foreign countries and 43 international organizations,
operating a total of 261 embassies, consulates and other posts. The
Department supports more than 90,000 Foreign Service and civil service
employees, dependents, and local hires overseas.
The Department is America's chief communicator on every foreign policy
issue from strengthening alliances like the North Atlantic Treaty
Organization (NATO) and preventing conflict in South Asia, to
combating terrorism and the proliferation of weapons of mass
destruction. It also addresses refugee crises and promotes
environmentally sound growth.
For many Americans, the State Department is both a gateway to the
world and a safe haven abroad. The Department's core programs include
issuing passports and providing essential services to American
citizens abroad. The Department of State stands on the front line in
America's border security efforts, scrutinizing prospective visitors
to the country so that those who would pose a threat are denied access
while maintaining our openness to legitimate travel and commerce
through prudent management of the visa process. Every year, the State
Department issues more than seven million passports to U.S. citizens
so they can travel abroad, and it processes an average of six million
visa applications for visitors.
U.S. Agency for International Development
Andrew Natsios, Administrator
www.usaid.gov
202-712-0000
Number of Foreign Service Officers: 1,082
Number of Civil Service Employees: 1,079
Number of Foreign Service Nationals: 4,749
2003 Spending: $3. 6 billion
Major Assets: Owns offices in eight of 75 countries where USAID
operates.
The U.S. Agency for International Development (USAID) advances U.S.
foreign policy through development and humanitarian assistance
pro-grams. USAID works abroad in 75 countries, implementing programs
that promote economic growth, education, sound environmental policies,
agriculture, trade, and global health. Its work also includes treating
and preventing Human Immunodeficiency Virus/Acquired Immune Deficiency
Syndrome (HIV/AIDS), promoting democracy, providing conflict
management and humanitarian assistance. Many of USAID's programs are
designed in the field and carried out by private-sector firms or
non-profit, non-governmental organizations.
The U.S. foreign affairs team also involves other U.S. agencies. The
Department of the Treasury does technical training, formulates
international financial policy, and makes U.S. contributions to the
Multilateral Development Banks (MDBs). Other agencies involved
directly in U.S. foreign affairs include the Broadcasting Board of
Governors, which expands the availability of information through radio
and television broadcasts, the Peace Corps, the Export-Import Bank,
the Overseas Private Investment Corporation, the Trade and Development
Agency, the Inter-American and African Development Foundations, the
U.S. Institute of Peace and the office of the U.S. Trade
Representative.
Overview
The 2004 Budget proposes several initiatives to further America's
leadership in the world. Funding requested for 2004 for the Department
of State, USAID, and other international agencies is $27.4 billion, an
11.6 percent increase over the $24.5 billion requested for 2003.
The number one priority in the proposed budget is the advancement of
the global fight against terrorism. The budget furthers this goal by
providing economic, military, and democracy assistance to key foreign
partners and allies, including $2.3 billion to vulnerable states on
the front lines of the war against terrorism like Afghanistan and
Turkey.
The budget also promotes international peace and prosperity by
launching the most innovative approach to U.S. foreign assistance in
more than 40 years. The new Millennium Challenge Account, a government
corporation funded at $1.3 billion, will redefine aid by focusing new
assistance on countries where governments rule justly, invest in their
people, and encourage economic freedom. Further, the budget offers
hope and a helping hand to countries facing health catastrophes and
humanitarian disasters. It provides $2 billion to combat the global
HIV/AIDS epidemic and more than $1 billion to meet the needs of
refugees and internally displaced peoples. Finally, the 2004 Budget
will give American diplomats the tools they need to perform these
complex tasks, by ensuring adequate training, institutional support,
and information technology for U.S. officials overseas.
This chapter describes the recent accomplishments, initiatives, and
challenges that the Department of State and international assistance
agencies face, while linking the resources proposed for 2004 policy
reforms to anticipated performance. It documents the ways that
business as usual is being changed to achieve better results.
Prosecuting the War on Terrorism
A new kindergarten in Afghanistan supported by USAID. The United
States will provide extensive assistance to states on the front lines
of the anti-terror struggle, both in terms of financial assistance and
training and support for allied governments. Working one-on-one with
countries and through multilateral organizations, we have frozen more
than $110 million in terrorist assets, launched new initiatives to
secure global networks of commerce and communication, and
significantly increased the cooperation of our law enforcement and
intelligence communities with other countries. Afghanistan is no
longer a haven for al Qaeda. The United States and allied nations are
working with the Afghan Authority to build roads, schools, deliver
health services, and rebuild the economy.
Assistance to Frontline States: Standing with our Friends
The 2004 Budget for International Affairs provides approximately $2.3
billion for assistance to countries around the world that have joined
us in the war on terrorism. These include Afghanistan, Colombia,
Jordan, Pakistan, and Turkey. This funding will provide economic and
military support to enable these countries to strengthen their
economies, internal counter-terrorism capabilities, and border
controls.
The President's Budget proposes $800 million in the Economic Support
Fund (ESF) for the front-line states, including $250 million for
Jordan, $200 million each for Pakistan and Turkey and $150 million for
Afghanistan. In Afghanistan, $70 million will be used to fulfill our
commitment to rebuild the Kabul-Kandahar-Herat Highway, as well as
provide for other infrastructure such as secondary roads, water and
sewer projects, and electrification. The remaining amount will provide
budget support and further democracy and governance programs. In
Pakistan, ESF will be used to provide assistance to the government of
Pakistan to fund social service projects.
The Foreign Military Financing program will provide equipment,
training, and defense services to countries for programs that counter
terrorism and develop institutions to prevent the emergence of
terrorism. For example, the President is requesting $150 million in
Foreign Military Financing as well as $20 mil-lion in the Peacekeeping
Operations account as part of the ongoing efforts to train the Afghan
National Army, to maintain internal security and prevent the country
from again becoming a terrorist haven. This aid will be supplemented
by donations of equipment and training from other countries allied in
the effort to reconstruct a viable Afghan state.
The State Department's Anti-Terrorism Assistance (ATA) program will
continue to provide frontline states a full complement of courses,
such as training on how to conduct a post-terrorist attack
investigation or how to respond to a weapons of mass destruction
attack. The budget will also fund additional equipment grants to
sustain the skills and capabilities acquired in the ATA courses. It
will support in-country training programs in Afghanistan, Pakistan,
and Indonesia as well. The 2004 Budget increases the ATA program to
$106 million, $42 million over the 2003 requested level.
Central Asia and the New Independent States
In 2004, over $171 million will go to assistance programs in the
Central Asian states. The 2004 Budget continues to focus funds on
programs in Uzbekistan, Kyrgyzstan, and Tajikistan in recognition that
Central Asia is of strategic importance in fighting terrorism.
Assistance to these countries has almost doubled from levels preceding
September 11, 2001, and is 55 percent above levels proposed for 2003.
These funds will support civil society development, small business
promotion, conflict reduction, and economic reform efforts in the
region. These efforts are designed to promote economic development and
strengthen the rule of law in order to reduce the appeal of extremist
movements and stem the flow of illegal drugs that finance terrorist
activities.
Funding levels and country distributions reflect a shifting of
priorities. For example, after more than 10 years of high levels of
assistance, it is time to let some countries in this region graduate
from economic assistance, as we have done with many in Eastern Europe.
The U.S. economic assistance to Russia and Ukraine will begin phasing
down in 2004, with a decrease of 32 percent from 2003. America will,
however, continue providing assistance to democracy building and civil
society programs.
Stemming Narco-terrorism
The President's request for the Andean Counterdrug Initiative includes
$463 million for Colombia. This funding will support the new Colombian
government's unified campaign against terrorists and the drug trade
that fuels their activities. The aim is to put up a backstop for
democracy, extend security, and restore economic prosperity to
Colombia while preventing the narco-terrorists from spreading
instability to the broader Andean region. Critical components of this
effort include resumption of the Airbridge Denial program to stop
internal and cross-border aerial trafficking in drugs, stepped up
eradication of crops coupled with alternative development efforts, and
technical assistance for strengthening Colombia's police and judicial
institutions.
Countering the Threat from Weapons of Mass Destruction
On December 11, 2002, President Bush announced a new National Strategy
to Combat Weapons of Mass Destruction (WMD). The strategy is based on
three pillars:
-- Pursue robust counterproliferation policies and capabilities to
deter and defend against the use of these weapons;
-- Strengthen nonproliferation measures to prevent states and
terrorists from acquiring weapons of mass destruction; and
-- Increase our preparations to respond effectively to any use of
these weapons against us or our friends and allies.
The 2004 Budget proposes $35 million for the Nonproliferation and
Disarmament Fund (NDF), more than double the 2003 request. It also
increases funding for overseas Export Controls and Border Security
(EXBS) to $40 million and supports strengthening the nuclear safeguard
and security capabilities of the International Atomic Energy Agency.
The NDF and EXBS programs help prevent weapons of mass destruction
from falling into the hands of terrorist groups or states by helping
foreign governments establish and strengthen export and border control
systems to prevent the proliferation of weapons of mass destruction,
materials, technology, and expertise.
Explaining America Through a New Middle East TV Network
Public diplomacy and international broadcasting activities open
communication channels and understanding worldwide. The President's
Budget builds on the successful launch of the Middle East Radio
Network in 2002 and provides $30 million in 2004 to use television to
engage people throughout the region. The Middle East Television
Network, an American-style Arabic language news and information
satellite network, will broadcast directly into the homes of up to 50
million viewers, providing them with a means to better understand
America, its policies, and people.
War Against Poverty and Despair: American Leadership in Fighting AIDS
and Alleviating Humanitarian Hardships
"The HIV/ AIDS pandemic has taken the lives of more than 20 million
people and is projected to take millions more. On World AIDS Day,
countries around the world are united to support the individuals,
families, and communities affected by this disease, and to renew our
commitment to preventing the spread of HIV/ AIDS, developing and
delivering more effective treatments, and finding a cure."
-- President George W. Bush, November 29, 2002
This budget reaffirms the United States' role as the leading donor
nation confronting the greatest challenges faced by many developing
countries today. The 2004 Budget proposes a number of foreign
assistance initiatives managed by USAID and other federal agencies
that provide crucial resources that prevent and ameliorate human
suffering worldwide.
Fighting the Global AIDS Pandemic
The 2004 Budget continues the Administration's commitment to combat
the spread of HIV/AIDS and to help bring care and treatment to
infected people overseas. The HIV/AIDS pandemic has killed 23 million
of the 63 million people it has infected to date, and left 14 million
orphans world-wide. President Bush has made fighting this pandemic a
priority of U.S. foreign policy. The United States was instrumental in
launching the Global Fund to Fight HIV/AIDS, Malaria and Tuberculosis
in 2001. The United States was the first country to make a
contribution to the fund and leads the world in having committed $500
million to it -- 23 percent of total pledges to date. In 2002,
President Bush launched a $500 million initiative to prevent
mother-to-child-transmission of HIV/AIDS. This initiative is targeted
at the 14 countries in Africa and the Caribbean hardest hit by the
HIV/AIDS pandemic.
The President believes the global community can -- and must -- do more
to halt the advance of the pandemic, and that the United States should
lead by example. Thus, the President's 2004 Budget request signals a
further, massive increase in resources to combat the HIV/AIDS
pandemic. Specifically, the President is committing to provide a total
of $15 billion over the next five years to turn the tide in the war on
HIV/AIDS. These funds will be targeted on the hardest hit countries in
Africa and the Caribbean with the objective of achieving dramatic
on-the-ground results. Implementation of this initiative will be based
on the "network model" being successfully employed in a number of
countries. This model is based on a layered network of central medical
centers that support satellite centers and mobile units with
descending levels of medical expertise as treatment moves from urban
to rural communities. In an effort to capitalize on recent advances in
therapy, this initiative will provide advanced antiretroviral
treatment on a large scale, together wit prevention and care.
The $15 billion in funding for this initiative assumes baseline
spending of $5.2 billion. It also includes new funding for bilateral
assistance totaling $9 billion, and an additional $1 billion for the
Global Fund, conditioned on the Fund showing results. This new,
dramatic commitment is reflected in the 2004 Budget, which includes
$450 million for the initiative. With this new commitment, U.S.
international assistance to combat HIV/AIDS will have increased by 198
percent since President Bush took office.
In order to ensure accountability for results, the President proposes
to establish at the Department of State a new Special Coordinator for
International HIV/AIDS Assistance. The Special Coordinator ill have
the rank of ambassador and will be responsible for coordinating all
international HIV/AIDS programs and the efforts of the agencies that
implement them.
A New Approach to Hunger, Famine, and Other Emergencies
Food Aid. Historically the United States has been the largest donor of
assistance for victims of protracted and emergency food crises.
Droughts, earthquakes, and other natural disasters sometimes lay
otherwise self-sufficient nations low. Early in the Administration,
the President determined that preserving this U.S. leadership role was
a high priority. He would not idly stand by while these crises
occurred. However, improvements were needed in the management of our
programs. In particular, since 1999, an increasing percentage of food
assistance was dependent upon the unpredictable supply of surplus
commodities. A Presidential Management Initiative directed reforms
that would increase the amount of food going to hungry populations,
and rationalize U.S. Department of Agriculture (USDA) and USAID
program management.
In 2003, discretionary funding increased from $864 million to $1.185
billion. That level will be enhanced significantly in 2004 with two
new initiatives: a Famine Fund and an emerging crises fund to address
complex emergencies.
Famine Fund. The 2004 Budget includes a new $200 million fund with
flexible authorities to provide emergency food, grants or support to
meet dire needs on a case-by-case basis. This commitment reflects more
than a 15-percent increase in U.S. food assistance, one of the largest
increases in programs in the budget.
Emerging Crises Fund. The budget also requests $100 million for a new
Presidential-level account and mechanism that will allow the
Administration to respond swiftly and effectively to prevent or
resolve unforeseen complex foreign crises. This account will provide a
mechanism for the President to support actions to advance American
interests, including to prevent or respond to foreign territorial
disputes, armed ethnic and civil conflicts that pose threats to
regional and international peace and acts of ethnic cleansing, mass
killing and genocide.
Partnerships with Other Countries
The United States wants to help countries who help themselves. In
March 2002, President Bush called for a new compact for development,
emphasizing that increased assistance from donor countries be linked
to sound policies in recipient countries.
Millennium Challenge Account
The 2004 Budget request of $1.3 billion for a new Millennium Challenge
Account (MCA) fulfills the President's March 2002 pledge to create a
new bilateral assistance program along markedly different lines. The
MCA breaks with the outdated models of economic development
assistance. As the President stated in his speech before the
Inter-American Development Bank, "When nations refuse to enact sound
policies, progress against poverty is nearly impossible. In these
situations, more aid money can actually be counterproductive, because
it subsidizes bad policies, delays reform, and crowds out private
investment." This new compact for global development ties increased
assistance to performance.
This budget marks a first step towards the President's commitment of
$5 billion in annual funding for the MCA by 2006, a 50-percent
increase in core development assistance. The MCA supplements U.S.
commitments to humanitarian assistance and existing USAID development
programs.
MCA funds will go only to selected developing countries that
demonstrate a commitment to sound policies -- based on transparent,
concrete, and objective criteria. The selection process will use 16
indicators to assess national performance relative to governing
justly, investing in people, and encouraging economic freedom.
MCA resources will be used in partnership with recipient countries,
with a limited number of measurable goals, activities, and benchmarks
and thorough financial accountability standards.
The MCA will be run by a new government corporation designed to ensure
accountability for measurable results. The Secretary of State will
preside over a board of directors supervising the corporation. MCA
personnel will be drawn from a variety of government agencies and
non-governmental organizations and serve limited-term appointments.
In 2004, the MCA will consider countries both eligible to borrow from
the International Development Association (IDA) and which have per
capita incomes below $1,435 (the historical IDA cutoff for aid). In
2005, all countries with per capita incomes below $1,435 will be
considered. In 2006, all countries with per capita incomes up to
$2,975 (the current World Bank cutoff for lower middle income
countries) will be eligible.
Strengthening American Assistance
While the MCA offers a new approach to a selected group of partners,
the President is committed to preserving existing commitments to
economic, development and humanitarian assistance. However, even
within these accounts, business as usual is not acceptable.
Improvements in management and implementation of aid programs must be
accelerated to reach all communities to help them succeed.
As a first step, the Administration will focus on developing plans for
a small group of countries ready to graduate from U.S. assistance.
With the view that these graduations will free resources for countries
with sustained greater needs, the Administration will work in
partnership to develop plans to generate growth, jobs and access to
private capital.
Clearly not all countries are ready to graduate from assistance
programs. Many, if not most, of the current recipients of aid will
continue to receive some form of U.S. support. However, specific and
sustained levels of funding to support a results-driven plan for
action offers a concrete promise of stability and prosperity for many
transitioning countries.
In 2002-2003, the U.S. Embassy in Sofia, Bulgaria, has developed such
a plan. Consistent with its NATO aspirations and ambition to integrate
into the European economy, a three-year U.S. pledge for $28 million
annually will fund a transition plan to secure stronger good
governance and broader economic opportunity.
The U.S. assistance to Bulgaria has been substantially modified with a
much stronger focus on anti-crime and anti-corruption assistance to
the police, prosecutors and court systems that are demonstrably
committed to democratic standards of rule of law. With a successful
model in place, these programs will be used more broadly over the next
three years, until Bulgaria graduates from all such assistance in
2007.
The United States reaches out to serve and support those in real need.
Especially those who live in poverty should have hope that our aid
programs will contribute to building better, safer communities with
expanded opportunities to learn and work. Non-Government Organizations
(NGOs), the Congress and the American public have long been critical
of U.S. assistance as slow to arrive, indifferent to local concerns
and unlikely to show signs of success in any meaningful time period.
For a nation that continues to rank as the single largest donor to
countries in need, a new agenda with clear goals is essential. The
graduation program represents a first step to change the way we work.
African Education Initiative
The Administration's financial commitment to the African Education
Initiative doubles this year. Begun in 2001, the initiative focuses on
increasing access to quality education in Africa. Over its five-year
life the African Education Initiative will achieve: 160,000 new
teachers trained; 4.5 million textbooks distributed; an increase in
the number of girls attending school through more than a quarter
million scholarships and mentoring; and an increase in African
Education Ministries' capacity to address the impact of HIV/AIDS. The
2004 Budget requests $142 million for African education assistance.
Pushing for Results from Multilateral Development Banks [MBDs]
The MDBs provide over $40 billion in financing annually to foster
economic growth and poverty reduction around the world. The U.S. share
of MDB funding is over 22 percent. The Administration is promoting
reform in all the MDBs to ensure that their assistance increases the
productivity of people and countries receiving aid. The 2004 Budget
provides $1.55 billion for the MDBs, which includes $1.36 billion for
scheduled payments to the MDBs and $195.5 million to clear existing
overdue debt. The budget provides $950 million for IDA, $100 million
of which is contingent on IDA establishing a results measurement
system. By spring 2003, IDA is to have completed an outline of
approach to results measurement, presented baseline data and
identified outcome indicators in health, education, and private sector
development and expected progress targets. By that same time, IDA is
due to complete specified numbers of reviews and assessments in
financial accountability, procurement, public expenditure, investment
climate, and poverty.
Forgiving Debt: Helping Heavily Indebted Poor Countries
The Administration requests an additional $75 million for the Trust
Fund for Heavily Indebted Poor Countries (HIPC). These funds will go
towards fulfilling the President's commitment at the G-8 [Group of 8:
Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United
States] Summit in Canada to contribute to the projected HIPC Trust
Fund financing shortfall. The HIPC Trust Fund finances debt
forgiveness of heavily indebted poor countries that have committed to
economic reforms and pledged to increase domestic funding of health
and education programs. The President's request also provides $300
million to fund debt reduction for the Democratic Republic of the
Congo under the HIPC Initiative. In addition, $20 million will fund
the cost of debt reduction under the Tropical Forest Conservation Act,
allowing benefiting countries to use forgone debt payments to fund
forest preserves and other activities to protect tropical forests and
the species that inhabit them.
Debt Reduction. For the designated 26 Heavily Indebted Poor Countries
(HIPC) that have begun to receive debt reduction thus far, spending on
health, education and other social investments as a share of gross
domestic product has increased from six percent in 1999 to a projected
nine percent in 2002. Uganda, which completed its HIPC debt reduction
in 2000, increased its spending on health and education from five
percent in 1999 to a projected nine percent in 2002. Uganda is using
HIPC debt relief to eliminate grade school fees, which had been a
major impediment to enrollment, and to expand the country's successful
HIV/AIDS awareness program.
The Administration believes that offering indebted poor countries new
loans and debt forgiveness at the same time risks their return to
crushing indebtedness -- the very condition debt forgiveness seeks to
resolve.
In order to address this situation, the Administration recently
proposed a one-year moratorium on new federal loans or loan guarantees
to countries that receive debt forgiveness. Should countries
demonstrate serious economic gains before the moratorium ends,
agencies may resume new lending. Loans to the private sectors in these
countries are not affected by this policy. The Administration hopes
that this policy will bring an end to the historically vicious cycle
of indebted poor countries.
World Summit on Sustainable Development
The World Summit on Sustainable Development in August 2002 engaged
more than 100 countries and representatives of businesses and NGOs in
developing and implementing results-focused partnerships in the areas
of water, energy, and hunger. At the end of the Summit, new
relationships and partnerships were forged, and a global commitment
was reached to halve the proportion of people who lack access to clean
water or proper sanitation by 2005. The 2004 Budget supports these
partnerships with $337 million in international assistance funding.
Middle East Partnership Initiative
The President's Budget includes $145 million for the Middle East
Partnership Initiative. This framework will permit the United States
to work with other donors, academic institutions, the private sector,
non-governmental organizations, and governments in the Arab world to
expand economic, political, and educational opportunities for all.
Potential programs include literacy training and scholarships for
girls and women, technical assistance to Arab members of the World
Trade Organization, and assistance to NGOs working for political
reform. Existing U.S. assistance programs in the Middle East will be
reviewed to ensure that aid is reaching as many people across the
region as possible, with an emphasis on women and children.
Assistance to Refugees and Disaster Victims
Refugee Admissions. Since 1975, the State Department's Refugee
Admissions program has resettled nearly 2.5 million refugees from all
over the world. A refugee is defined as a person outside of his or her
country of nationality who is unable or unwilling to return because of
persecution or a well-founded fear of persecution on account of race,
religion, nationality, membership in a particular social group, or
political opinion.
The President's Budget includes over $1 billion to provide
humanitarian assistance to refugees, internally displaced persons, and
other vulnerable persons worldwide. These funds will allow
international and non-governmental organizations to provide shelter,
safe water, and health care, among other services to people fleeing
persecution, or natural disaster, such as those living near the
volcano eruption in Goma, Democratic Republic of Congo. These
humanitarian assistance funds also support the admission of refugees
to the United States.
Supporting International Environmental Programs
The Administration actively participates in the development of
bilateral and multilateral agreements to better manage the world's
most valuable natural assets. The 2004 Budget includes $286 million in
development assistance funding for environmental programs. USAID
proposes about $155 million for global climate change programs. The
United States continues to be the largest donor to the Global
Environment Facility (GEF), a multilateral fund that helps developing
countries mitigate environmental problems with potential global
impact. The Administration has pledged $500 million over the next four
years for the GEF.
Rejoining the United Nations Educational, Scientific, and Cultural
Organization
The President's Budget provides $71.4 million to support renewed U.S.
membership in the United Nations Educational, Scientific, and Cultural
Organization (UNESCO). In September 2002, President Bush announced
that the United States would return to UNESCO and that, "This
organization has been reformed and America will participate fully in
its mission to advance human rights, tolerance, and learning."
Increasing the Number of Peace Corps Volunteers
The first American many people around the world meet is a Peace Corps
volunteer. The President wants more such volunteer "ambassadors" in
the field contributing their skills and initiative to foreign
communities. The budget provides $359 million to support 10,000
volunteers by the end of 2004. This increase will keep the Peace Corps
on track to reach the President's goal of 14,000 volunteers by 2007.
The added funds will open new programs and be targeted to assist host
countries and local communities through such activities as business
development and prevention of HIV/AIDS. In 2002, Peace Corps began
working in East Timor, Peru, Botswana, and Swaziland. In 2003, Peace
Corps will set up new programs in Chad, Albania, Azerbaijan, and Fiji.
Carrying Out the President's Management Agenda and Building a World
Class Diplomatic Corps
Over 60,000 employees from more than 40 federal agencies work at 261
posts overseas. The embassy bombing murders of 12 Americans and over
200 foreign nationals in Kenya and Tanzania demonstrated that many
existing embassies do not meet current security standards. The 2004
Budget provides $1.5 billion for embassy security, construction, and
maintenance, an increase of $208 million over 2003. This level of
funding will enable the State Department to address major
rehabilitation needs of embassies and consulates around the world, as
well as fund major security-related construction projects.
Proposed funding for 2004 will enable the construction of secure
embassies in eight countries including Ghana and Panama. In addition,
annex buildings for USAID will be constructed with State Department
funds in several countries including Ghana and Nigeria.
The State Department and USAID are working to implement the
President's Management Agenda (PMA) and build a world class diplomatic
corps. As the PMA scorecard shows, the Department of State and USAID
face stiff management challenges. Over the last year, both agencies
have made progress in addressing these problems. The State Department
for example, is on schedule to implement its Regional Financial
Management System. USAID has made considerable progress on a model
allocating resources based on objective performance criteria. The
Secretary of State may need more personnel management flexibility to
accomplish our objectives.
The Department and USAID are working together to identify information
technology (IT) systems where collaboration would be beneficial,
beginning with financial management systems.
Completing the Diplomatic Readiness Initiative
This budget completes the Diplomatic Readiness Initiative by funding
399 additional foreign and civil service officers to help the
Department effectively implement the President's foreign policy goals.
The initiative will fill critical staffing gaps, properly train staff
and better respond to crises and emerging priorities. This is the
third year of funding for this major initiative. In total, the
Administration has requested 1,158 new staff for the Department of
State. The Administration expects the Department's recruiting efforts
to show reduced time in getting new officers to posts abroad with the
proper language, economics, and management skills needed to carry out
American foreign policy.
USAID is also undertaking a major effort to increase its ability to
effectively implement programs. As a step toward strengthening the
workforce, the budget proposes hiring up to 50 additional foreign and
civil service staff in key areas, such as HIV/AIDS.
Visa and Consular Services
Since September 11, 2001, the Department of State has increased
resources for visa application reviews, doubled the number of names on
the Lookout System, improved collaboration with law enforcement
agencies using new legal authorities to access relevant background
information and strengthened clearance processes.
Beginning in 2003, the Department of Homeland Security will assume
responsibility for the policy guidance and regulation governing visa
issuance to refine visa processes further to meet security concerns.
Rightsizing the U.S. Government Presence Overseas
The President's "Right-Sized" Overseas Presence Initiative, a part of
the PMA, is intended to define who will work for the federal
government overseas, determine how much each United States employee
overseas costs and evaluate if these people are fulfilling a need
where they are located.
There are several key initiatives underway within the rightsizing
agenda. Within the next two years, all of the initiatives will
fundamentally change how federal agencies think about their plans for
staffing overseas through fostering better monitoring, evaluation and
management of U.S. staff overseas and more closely linking performance
and management to the budget.
The first step within the right-sizing initiative was to develop a
profile of the current U.S. government staff overseas, including
part-time and foreign workers. The U.S. government is responsible for
more than 90,000 people (including dependents) overseas. Costs per
person range from $90,000 to $665,000 per year. Overseas staffing and
cost data collection have been systematized in the formal annual
agency budget submission process.
The four right-sizing initiatives currently underway include:
-- The development of a better way for posts to link budgets to
performance and staffing to mission goals through the Mission
Performance Planning and Bureau Performance Planning processes;
-- A review of the staffing patterns, costs, security issues and
missions at posts in one region of the world. OMB chose Europe and
Eurasia and has been collaborating with the State Department and the
General Accounting Office to develop a framework to right-size
existing embassies worldwide;
-- Regionalization of functions and developing existing or new U.S.
regional centers on each continent; and
-- The development of a cost-sharing mechanism to distribute the costs
of constructing and maintaining new embassies worldwide in order to
make sure that all agencies with staff overseas fully recognize and
take into consideration all costs associated with sending staff
overseas. The initial year of this cost-sharing mechanism is included
in the 2004 Budget proposal.
The goal is to assure that the United States has the staff it needs to
carry out the specific functions required in each overseas post and
that decisions as to whether existing or new staff are needed are
based on true cost and justified in terms of performance and impact.
Information Technology
The State Department is forging ahead to improve Information
Technology (IT) management and provide staff the IT backbone needed to
successfully carry out the President's foreign policy mission.
IT investments are funded at $939 million in 2004, an increase of five
percent from the 2003 request. The State Department began a
comprehensive modernization of its IT infrastructure in 1997. Before
then, many key systems were obsolete. Even in 2001, most employees did
not have direct Internet access. The priorities of the Department's
strategic plan are an increasingly transparent and interconnected
diplomacy. In fall 2002, the Department created the E-Diplomacy Office
to put these priorities into effect. The Department intends to further
upgrade systems including cables, messaging, knowledge management, and
document archiving. These functions will be replaced by a new, fully
integrated, state-of-the-art system called SMART. SMART is funded at
$10 million in 2003 and $15 million in 2004. The new system is being
designed with the cooperation of its users and will embody the
multi-agency operating environment of U.S. staff.
USAID is moving ahead with increasing the agency's IT planning and
project management capacity to ensure successful implementation of the
worldwide automated accounting and procurement systems. The agency is
working with the State Department to improve its telecommunications
capacity and infrastructure security. IT investments are funded in
2004 at $20 million, an increase of $7 million from 2003. USAID
continues to actively support the E-Government Initiative by
participating actively on E-Travel, Integrated Acquisition, and
E-Training working groups, and by using E-Government technologies to
enhance agency business functions. USAID and the Department of State
intend to work together to develop a joint enterprise architecture to
guide IT investments and outline where joint IT systems are feasible.
Performance Evaluation of Select Programs
Ten State Department programs and seven International Assistance
Programs were reviewed for performance effectiveness. Some of the
programs evaluated are highlighted in the accompanying table. For
further details refer to the Department of State and International
Assistance Programs chapter in the Performance and Management
Assessments volume.
-- International Development Association. (IDA) IDA is well-managed,
but lacks a system to measure, monitor, and evaluate overall results.
The latest resource replenishment agreement calls for the
establishment of such a system.
Provide $1.0 billion for IDA, $100 million of which is contingent on
IDA meeting specific benchmarks by spring 2003 in establishing the
results measurement system.
-- Overseas Private Investment Corporation (OPIC). The program
generally manages its resources well, but it cannot adequately show
what results it achieves due to the lack of long-term goals and
insufficient annual performance measures.
Establish specific and appropriate long-term goals and annual
performance measures that capture the range of developmental impact
that OPIC's programs have on foreign countries, including private
sector growth, job creation, transfer of skills and technology,
improvements in corporate citizenship, and infrastructure
enhancements.
Security Assistance to Sub-Saharan Africa. It is difficult to evaluate
the performance of these programs, because performance plans do not
contain annual goals and program evaluations are not geared to measure
achievement of performance goals.
Restructure performance plans to include separate annual and long-term
goals, targets and baseline information. Collect performance
information in a standardized manner and include in performance
reports that evaluate progress related to key performance goals.
Capital Security Construction Program. In recent years the embassy
construction program has undergone a reorganization of its strategic
planning and its management team. These steps, including the
development of standardized embassy design, should result in increased
performance in future years.
Increase funding for capital security construction, including
additional funds for a new overseas capital security cost sharing
initiative that will ensure that all agencies with staff overseas pay
their fair share of the cost to keep those employees safe and that
agencies think carefully before posting additional personnel overseas.
Anti-Terrorism Assistance (ATA) Program. The ATA program builds the
capacity of key countries abroad to fight terrorism by training
foreign officials in anti-terrorism techniques and building working
relationships that enhance cooperative efforts. The program meets
annual performance goals for number of courses taught and course
content and effectively teaches anti-terrorism skills.
Increase funding to continue all training programs currently underway
and to expand to new areas that respond to the evolving terrorist
threat. Improve long-term performance measurement to enable a
quantifiable assessment of increased anti-terrorism capabilities of
key countries.
USAID Development Assistance-Population. The program has been
effective in increasing contraceptive use in assisted countries and
has improved its measurement of results, but does not allocate
resources across countries to respond to greatest needs.
Fully fund the program at the 2003 level of $425 million. Better align
resource allocation with country needs through improved USAID
performance budgeting model.
Update on the President's Management Agenda
The Department of State is making progress but continues to face
challenges in meeting the PMA goals. The Department has improved in
the first quarter of 2003 in four of five PMA areas. Continued senior
management commitment will be required throughout 2003 to maintain
momentum and address red status conditions. That commitment includes
aggressively addressing financial performance standards, successful
implementation of the OPM Human Capital Assessment and Accountability
Framework, improved execution of competitive sourcing, completing an
Enterprise Architecture and security certification, and linking
performance to budgeting decisions. The Department remains at yellow
for progress in E-Government initiatives because of improving, but
still insufficient, implementation of enterprise architecture and
security remediation plans.
USAID has made little progress over the past year and continues to
face serious challenges in improving management given the low starting
point and complexity of programs. However, for the first time the
USAID Inspector General was able to provide at least qualified
opinions on three of the agency's financial statements and the
reporting capacity of the accounting system was expanded. The agency
developed a model for allocating resources based on objective criteria
and began implementing full-cost accounting. The agency does not have
a comprehensive workforce planning model for its multiple personnel
systems, nor does it have a plan to compete any of the nearly 600
commercial positions on the FAIR Act inventory. Senior USAID staff are
well aware of these problems and continue to refine their approach to
improving management at the agency.
Over the past year, the Administration has developed and implemented
two new Presidential Management Initiatives in the international
affairs arena: Reform of Food Aid Programs and a "Right-Sized"
Overseas Presence. Each of these initiatives challenged existing
policies and was designed to improve program management and outcomes.
Reform of Food Aid Programs. The Administration has successfully
reformed federal food aid policy to provide greater certainty of
funding, target funding to feeding hungry people and to increase
consistency in USDA and USAID management of food aid programs. Based
on these successes, this initiative will no longer be monitored as
part of the President's Management Agenda.
A Right-Sized Overseas Presence. Over the past year, OMB and the State
Department have worked with agencies to develop a capital surcharge
proposal to cover agency costs for housing their employees at
facilities paid for by the State Department. The Administration will
continue to advance this initiative.
Department of State and International Assistance Programs
(In millions of dollars)
2002 Estimate
Actual 2003 2004
Spending
Discretionary Budget Authority:
Department of State:
Diplomatic and Consular Programs 3,673 3,937 4,164
Embassy Security, Construction,
and Maintenance 1,474 1,305 1,514
International Organizations
and Conferences 1,724 1,617 1,561
Andean Counterdrug Initiative 645 731 731
All other programs 1,869 1,551 1,793
Subtotal, Department of State 9,385 9,141 9,761
International Assistance Programs:
Foreign Military Financing 4,007 4,107 4,414
Nonproliferation, Anti-Terrorism, Demining
and Related Programs 398 372 385
Economic Support Fund 2,670 2,490 2,535
Development Assistance 1,150 1,366 1,345
Child Survival and Disease Programs 1,338 1,474 1,495
Multilateral Development Banks 1,026 1,437 1,555
Millennium Challenge Account -- -- 1,300
Peace Corps 275 317 359
Global AIDS Initiative -- -- 450
Famine Fund -- -- 200
All other programs 2,785 2,669 3,001
Subtotal, International Assistance
Programs 13,649 14,232 17,039
Other International Affairs Activities:
Export-Import Bank 738 596 -37
USDA International Food Aid (non-add) 850 1,185 1,185
All other programs 613 609 674
Subtotal, Other International Affairs
Activities 1,351 1,205 637
Total, Discretionary Budget
Authority (1) 24,385 24,579 27,438
Mandatory Outlays:
Department of State 470 369 452
International Assistance Programs -1,801 -1,628 -908
Other International Affairs Activities -941 -3,957 -346
Total, Mandatory outlays -2,272 -5,216 -802
Credit activity
Direct Loan Disbursements:
Department of State 1 1 1
International Assistance Programs 438 142 47
Export-Import Bank 920 813 395
Total, Direct loan disbursements 1,359 956 443
Guaranteed Loans:
International Assistance Programs 562 704 676
Export-Import Bank 7,859 7,543 8,662
Total, Guaranteed loans 8,421 8,247 9,338
(1) Includes $1.3 billion in 2002 supplemental funding.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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