Summary of FY 2001 Budget Request Statement of the Administrator Summary of FY 2000 Emergency Supplement Request Program Performance & Prospects Management Improvements & Challenges Operating Expenses, USAID Operating Expenses, Inspector General Foreign Service Disability and Retirement Fund Summary Tables Regions    Africa,    Asia & the Near East,    Europe & Eurasia,    Latin America & the Caribbean Central Programs BHR, Global, PPC Glossary Abbreviations & Acronyms Friday, 03-Aug-2001 23:37:52 EDT

SUMMARY OF USAID FISCAL YEAR 2001 BUDGET

For Fiscal Year 2001, the President is requesting appropriations of $7,506,000,000 in discretionary funds for USAID-administered programs, including those jointly administered with the State Department.

The FY 2001 USAID request includes funding for the Child Survival and Disease Programs Fund (CSD), Development Assistance (DA), the Development Fund for Africa, the Economic Support Fund (ESF), Support for East European Democracy (SEED), and Assistance for the Independent States of the former Soviet Union (Freedom Support Act or FSA).

P.L. 480 (Food for Peace) resources administered by USAID are formally requested as a part of the U.S. Department of Agriculture budget.

The following table and subsequent descriptions provide further details in support of the budget request.

Note that FY 1998 levels include funds transferred to USAID for International Cooperative Administrative Support Services (ICASS). FY 1999 includes enacted supplementals. FY 2000 includes both enacted and proposed supplementals; those being requested are discussed at the end of this narrative. USAID-managed portions are identified in FY 2000 levels below.

FY 2000 levels reflect distribution of a government-wide .38% rescission; the DA account excludes $12.5 million planned for population activities which was transferred to the CSD account. The table is in dollars thousands.

All programs managed by USAID, as noted under the Program Performance section, are an integral part of U.S. foreign policy objectives, particularly in the areas of fostering economic growth and promoting sustainable economic development; investing in human capacity development; encouraging democracy and good governance; stabilizing world population growth and protecting human health; improving the global environment; and, providing humanitarian and transitional assistance to victims of crisis and disaster. These programs do much to help people around the world and directly serve U.S. foreign policy goals.

SUSTAINABLE DEVELOPMENT ASSISTANCE

The Child Survival and Disease Programs Fund, the Development Assistance account, and the Development Fund for Africa provide support for activities worldwide that are designed to promote economic and social development in some of the poorest countries in the world. These nations represent the world's last great underdeveloped markets. USAID strongly believes that the modest and well-targeted investments it makes today in the form of human capital and the partnerships the Agency establishes with the overseas communities will pay economic and political dividends to the United States well into the future. These three accounts constitute the core of USAID's sustainable development programs and support five of USAID's seven strategic goals­­integrated, interrelated and mutually reinforcing goals that are aimed at addressing the long-term interests of the United States. (The sixth goal of humanitarian assistance includes USAID's request for International Disaster Assistance, as well as the USAID-managed Food For Peace account. The seventh goal, that USAID remain the premier bilateral development agency, is supported by USAID and Inspector General (IG) Operating Expenses to strengthen effective management of all USAID programs and the goals sought by these programs).

These five goals include activities aimed at promoting broad-based and sustainable economic growth and agricultural development ($445 million); building human capacity through education and training ($146 million); strengthening democracy and good governance ($164 million); stabilizing population growth rates ($484 million) and protecting human health ($569 million); and protecting the environment ($333 million). (USAID's credit programs also cut across many of these goals, as do our programs in the Central and Eastern Europe and the Independent States, and some of the programs funded under the Economic Support Fund.)

See Table 5 in the Summary Tables section of this volume for a breakout of the Sustainable Development accounts - the Child Survival and Disease Program Fund, Development Assistance, and the Development Fund for Africa - by the agency's five major goals and sub-goals.

Child Survival and Disease Programs Fund

For FY 2001, USAID requests $659 million for the Child Survival and Disease Programs Fund for USAID's efforts in 1) child survival, maternal health and building health systems; 2) targeted infectious diseases including HIV/AIDS, and USAID. s infectious disease initiative; and 3) basic education. These funds support the U.S. foreign assistance and policy objectives of economic development (in terms of human capacity development), protecting human health and reducing the spread of infectious diseases. Programs covered under this account are important forerunners of efforts to support economic growth and stability, as well as being a necessary adjunct to family planning efforts. The President's request for UNICEF and the Global Assistance Vaccine Initiative (GAVI) is in the State Department budget request under the International Organization and Progams account, for $110 million and $50 million respectively.

• Child/Maternal Health and Health Promotion:

  Two of USAID's health objectives are focused on improving infant and child health and survival and reducing deaths due to pregnancy and child birth. In addition, in collaboration with other partners, USAID focuses attention on strengthening in-country systems and capacity to deliver health services, and prevent and monitor health problems.

  Child survival ($236 million): USAID's child survival program is aimed at improving infant and child health and nutrition and reducing infant and child mortality. Along with broader health sector resources described below, USAID is also working with partners to reduce deaths, nutritional insecurity and adverse health outcomes to women as a result of pregnancy and child birth. Reducing maternal mortality is a critically important intervention for improving child survival; the children of mothers who die in childbirth are much more likely to die themselves, or suffer health and development problems. Improved nutritional status for young women and mothers is also extremely important for reducing low-birth weight babies, a key risk factor for deaths in the first month of life.

  In FY 2001, emphasis will continue to be put on improving immunization rates, in collaboration with the Global Alliance for Vaccines and Immunization (GAVI) and a number of partners. In addition, USAID will continue to work with host country partners to develop the capacity and systems to address the major causes of mortality among children in the developing world; improve nutritional status, including micronutrients with increased attention to eliminating vitamin A deficiency; improve maternal health and nutrition; and develop more effective and efficient approaches to improving child health and survival.

  USAID's child survival request also includes funding for the Polio Eradication Initiative. Significant progress has been made ­­ the wild polio virus is limited to about 30 countries in Africa and South Asia ­­ down from 160 countries 10 years ago. Most countries will succeed in interrupting virus transmission by the end of 2000. To ensure successful completion of this effort, USAID will target its resources to support for National Immunization Days, strengthening non-governmental organizations (NGOs) to reach the hardest to reach children, strengthening surveillance systems, and complete laboratory accreditation. Current plans are to program $25 million in the CSD account for polio eradication.

  Health promotion/health development ($27 million). Critical to the achievement of specific objectives in child survival, HIV/AIDS, and infectious diseases are efforts that are typically described as "general health promotion". These include health care policy reform, health care financing, environmental health activities that are not necessarily child-specific but critical for improvements in health, building NGO health service capacity, and building public/private partnerships for health care. Some of these funds are also used to support maternal health interventions, including nutrition, early detection and management of serious obstetric complications and emergency obstetric care, and promotion of safe delivery by trained personnel.

  Maternal health. While not a specific and separate funding subcomponent of the child survival/disease fund, USAID expects to spend approximately $50 million for improving maternal health and reducing deaths to women as a result of pregnancy and child birth. More than 580,000 women die each year from pregnancy related causes, and more than half of their infants also die as a result. In addition, each year, 15 million women suffer painful and debilitating pregnancy related injuries and infections. USAID will work with international partners and host country governments to ensure that there is commitment at all levels to addressing this devastating problem. Efforts will focus on a set of key interventions that mark the pathway to maternal survival, including improving maternal nutrition; birth preparedness; treatment of complications; and safe delivery, postpartum and newborn care.

• Targeted Infectious Diseases:

  HIV/AIDS ($244 million)(plus $10 million P.L. 480). For a decade USAID has led the fight against the global AIDS pandemic, providing HIV/AIDS assistance to 46 developing countries; 22 in Africa. The U.S. Government has been the largest donor for fighting AIDS globally and is recognized as a leader in technical skills. In FY 2000, the President's LIFE Initiative, combined with additional funding from Congress increased HIV/AIDS funding managed by USAID dramatically, to $200 million (which includes funding from other USAID-managed accounts). With a heavy focus on Africa, these resources are being targeted for the expansion of primary prevention efforts, improved community and home based care and treatment, addressing the needs of children affected by HIV/AIDS, and improving the in-country capacity and infrastructure development.

  In FY 2001, USAID will use increased resources to "scale up" prevention efforts now estimated to only reach less than 10% of vulnerable persons; provide better support for those sick and dying of AIDS; help the vast numbers of AIDS orphans; provide pregnant women with access to new treatments to reduce transmission to their newborns; and, finally, build critical health and educational infrastructure in these countries so that African and Asian institutions and community organizations can better lead the battle in their own countries.

  Infectious Disease Initiative ($54 million). In FY 2000, USAID will continue its efforts to reduce the threat of infectious diseases of major public health importance. This initiative complements on-going efforts in child survival and HIV/AIDS, but represents a focused effort at several critical issues. Working in close collaboration with international, U.S. and developing country partners, USAID's efforts are focused on reducing the spread of antimicrobial resistance; improving control of tuberculosis; reducing mortality due to malaria and other diseases; and improving surveillance and response capacity. In 2001, USAID will continue to expand programs at the country level, and particularly increase country level tuberculosis efforts. The current estimate for FY 2001 levels for tuberculosis programs is $14 million in the CSD account (and a potential additional amount of $4-$5 million from other accounts).

• Basic education ($98 million):

  USAID's basic education for children program works to strengthen pre-primary, primary, and secondary education and teacher training. Efforts are focused primarily in Africa, but also include targeted work in Asia and the Near East and Latin America.

Development Assistance Account (DA)

The request for this account in FY 2001 is $948.8 million, and includes funding for two new initiatives. USAID's request includes $30 million as part of the President's $100 million interagency Clean Energy Initiative. USAID is proposing to increase its tropical forestry/biodiversity efforts to $100 million with a new $33 million initiative (part of this funding is included in the Development Fund for Africa). Overall, the DA request includes $234 million for economic growth, $12 million for human capacity development, $92 million to support democratic participation, $225.7 million for the environment, and $385 million for population programs and protecting human health. The Administration is putting increasing emphasis on population programs in this request; $542 million in funding from all USAID-managed accounts is planned, which would return the program to its historic high level.

Economic growth funds will expand and strengthen private markets, encourage more rapid and enhanced agricultural development for food security, and provide access to economic opportunity for the rural and urban poor. USAID programs in these areas have yielded significant results in all regions but there remains a formidable challenge of maintaining economic and social progress in developing and transition countries into the next entury

Scores of nations are making the transition from repressive, autocratic regimes to democratic governance, and some of these funds will help countries build democratic institutions, strengthen the societal underpinnings essential to success, and move toward more open and representative governments. Agency programs have benefited the everyday lives of people around the world and assisted organizations and individuals have influenced government decisions that directly concern citizens.

Funding for environmental and energy programs will help reduce the threat of global climate change, conserve biological diversity, provide for sustainable urbanization and pollution control, increase environmentally sound energy services, and promote the sustainable management of natural resources. There is increasing attention worldwide to environmental issues. However, given the immensity of the challenge, there are serious resource constraints. Therefore, the Agency works mostly at pilot sites to develop and test interventions.

Funds for family planning activities will help reduce unintended pregnancies, improve infant and child health and nutrition­­while reducing their mortality rates­­and decrease maternal deaths associated with childbirth through better access to improved obstetrical services. Stabilizing population growth can contribute to global economic growth, reduce environmental degradation, and promote political stability. In USAID-assisted countries, the contraceptive prevalence rate has risen, in some cases quite significantly.

Development Fund for Africa

USAID is renewing its request for a separate appropriation for the Development Fund for Africa (DFA) as a reflection of the high priority this Administration places on aiding the sustainable development of Africa. The FY 2001 request for this account is $532.9 million. Within this request is $211 million for economic growth and agricultural development, $36 million for human capacity development (other than basic education), $73 million for building democracy, $103 million for population programs, and $107 million for protection of the environment. In addition to the DFA, Africa will receive $304 million from the Child Survival and Diseases Program Fund and $98 million from the Economic Support Fund. The total request of $935 million under all these accounts permits the Administration to meet the President's commitment to seek a return to historically high levels. This excludes $161 million programmed for Africa in the PL 480 Title II account.

Two policy goals define U.S. foreign policy in Africa: accelerating Africa's full integration into the global economy and combatting transnational security threats. The United States cannot afford to ignore Africa ­­ either as a source of threats or as a significant and growing investment opportunity. The fundamental development challenge facing Africa is its extreme poverty and weak institutions. USAID recognizes, moreover, that broad-based, equitable development diminishes the potential for conflict, promotes political stability and builds more prosperous nations.

Economic growth programs, consistent with the President's partnership for Economic Growth and Opportunity in Africa, provide assistance for implementing policy reforms at the national level and assistance to small and medium business enterprises at the local level. In keeping with the Africa Seeds of Hope Act, USAID programs help build capacity in the agriculture sector through a variety of investments, including rural roads, agricultural technology, commodity networks and research systems. A two-year transition strategy expands assistance to Nigeria to support economic reform, agriculture, education, democracy, energy and infrastructure. Significant increases in funding for both family planning and environment programs are also included in the request for Africa.

USAID Credit Programs

Credit is often the best means to leverage private funds for development purposes. It enables USAID to make more rational choices among loans, guarantees, grants (or a combination of these) to address market imperfections in developing countries. It also will allow greater development results. Credit assistance is principally intended for use where a development activity is financially viable, where borrowers are creditworthy, and where there is true risk sharing with private capital in developing countries for sustainable development projects. These loans are, for the most part, planned as non-sovereign.

USAID's credit programs address a variety of development objectives, including economic development, securing a sustainable environment, achieving a sustainable world population, and protecting human health.

These objectives have previously been covered under several credit programs, including the Micro and Small Enterprise Development (MSED) Program, the Urban and Environmental (UE) Credit Program (formerly the Housing Guaranty program), and the Development Credit Authority (DCA), and the Direct Loan (DL) program. In FY 2000, the $3 million in direct subsidy costs includes $1.5 million for Micro and Small Enterprise Program and $1.5 million for the Urban and Environmental Credit program. The $3 million in transfers is for the Development Credit Authority.

As part of its ongoing effort to improve credit management within the Agency, a plan for consolidating credit programs has been developed which involves a number of organizational and management changes. This includes a decision to outsource a number of loan management functions; the hiring of additional staff, review and monitoring of USAID's entire loan portfolio, development of financial performance indicators in conjuction with OMB, and establishment of an Agency Credit Review Board to oversee all Agency credit activities.

The FY 2001 request includes the new Development Credit Program account, which consolidates all Agency credit programs. This consolidation will allow USAID to use credit as a flexible development tool for a wide range of development purposes. Authority to transfer up to $15 million is requested in FY 2001 from the DA, SEED and FSA accounts. In addition, $8 million is requested for a direct appropriation to fund all administrative expenses associated with the existing credit portfolio and the new Development Credit Program. The existing credit portfolio currently amounts to $13.3 billion from Micro and Small Enterprise Development ($143 million), Urban and Environmental Guarantee ($2.3 billion), Direct Loan ($10.8 billion), and DCA ($93 million).

It is intended that all future Agency credit assistance will be offered under the Development Credit Program and the strict disciplines of the Federal Credit Reform Act of 1990.

International Disaster Assistance

USAID requests $220 million for this program, which includes $165 million for disaster relief managed by the U.S. Office of Foreign Disaster Assistance (OFDA) and $55 million for transition assistance programs managed by the Office of Transition Initiatives (OTI). First priority in utilizing International Disaster Assistance (IDA) resources will be given to life-saving, emergency assistance.

An integrated approach to humanitarian assistance ­­ emergency relief, prevention and transition ­­ reduces suffering and the need for future aid.

The United States' ability to respond rapidly to emergencies is already known worldwide. Disaster assistance funds are used to improve the capacity of foreign nations to prepare and plan for disasters, mitigate their effect, and teach prevention techniques that increase the skills available locally to respond when disaster strikes. OFDA also fields disaster assistance response teams (DARTs); for example, after Hurricane Mitch, USAID established a DART to coordinate the entire $300 million U.S. Government relief effort. In Kosovo, $117 million provided food, shelter, water, sanitation and health services to hundreds of thousands.

OTI funds underwrite transition efforts for countries emerging from complex crises. OTI activities focus on special post-crisis needs not addressed by either emergency relief or long-term development programs. This includes support for demobilization and reintroduction of excombatants into civilian society; support for justice initiatives including war crimes tribunals; landmine awareness and removal; and community self-help projects that reduce tensions and promote democratic processes and conflict resolution within communities. These efforts are designed to help nations return to the path of sustainable development, prevent crises from becoming more impacted, and minimize the need for future, ongoing humanitarian and disaster relief.

Operating Expenses

The appropriation request of $520 million for USAID Operating Expenses (OE) covers the salaries and other support costs associated with the operations of USAID worldwide, including those managed by USAID and financed through sustainable development programs, Disaster Assistance, the Economic Support Fund, the Support for Eastern European Democracy Act, the Freedom Support Act and the Food for Peace program. Operating Expenses for USAID's Inspector General, and the costs associated with the administration of USAID's credit programs, as discussed above, are requested separately, as discussed above.

A large portion of the OE budget is either fixed or directly related to staffing levels; reductions in the requested funding would immediately impact on the ability of USAID to maintain staff necessary to monitor and manage programs. In FY 2001, about 36% of the total resources available for OE will be required to fund salaries and benefits of the 2,034 U.S. direct hire employees anticipated to be on-board. The request would allow the Agency to maintain a staffing level on board at the end of FY 1999­­14% below the staffing levels on September 30, 1996, following a reduction-in-force. Given the large staff reductions which have been required during the past several years, it is essential that sufficient funding be provided to prevent further erosion of this staffing level.

Another 38% of the total budget is required to cover the costs associated with the Agency's field presence, including office and residential rents and utilities, security guards, and post assignment costs.

In addition to normal recurring costs of USAID, funding will be required in FY 2001 for two major information technology requirements. The first is continuing work to complete the commercial off-the-shelf (COTS) accounting package ($10.7 million), implement it throughout Washington and begin implementation overseas. This will include work to integrate the existing procurement system with the COTS financial accounting package. The second is a requirement ($14.4 million) to upgrade the Agency's operating system worldwide. Vendor support for the system currently in use is being discontinued and the system must be replaced at all USAID locations.

In the area of overseas security, funding has been included in the Department of State's Foreign Buildings Office budget in the amount of $50 million to support construction of new, secure facilities for USAID staff in Kenya and Uganda.

Inspector General Operating Expenses

The request for Inspector General Operating Expenses covers salaries and other support costs associated with USAID's Inspector General operations worldwide. Activities covered include audits and investigations relating to USAID's worldwide programs and operations.

The request of $27 million covers both the domestic and overseas operations of USAID's Inspector General (IG). The Omnibus Appropriations Act of October 21, 1998, transferred the IG's security operations to the Administrator of USAID. From FY 1999 onward, funding for Security Operations has been provided under USAID's Operating Expense account.

Foreign Service Retirement and Disability Fund

This request covers the mandatory costs associated with the inclusion of USAID foreign service employees in the fund. The FY 2001 request is $44.5 million.

ECONOMIC SUPPORT FUND

The Economic Support Fund (ESF) advances economic and political foreign policy interests of the United States. To the extent feasible, the use of ESF conforms to the basic policy directions underlying our sustainable development assistance. ESF can finance balance of payments and economic stabilization programs, frequently in a multi-donor context.

The FY 2001 request of $2.313 billion will be used to support the Middle East peace process ($1.828 billion); assist countries in transition such as Haiti and Guatemala; support democracy efforts worldwide, including in Indonesia, East Timor, Cambodia and Nigeria; support several initiatives in Africa; and promote peace and stability in such countries as Ireland and Cyprus. Support for democracy will be provided through assistance with elections, political party building and legislative training. Funds will also be used to respond to emerging environmental crises and priorities, including climate change and biodiversity. Funding will continue to support the Sweatshops initiative and the Human Rights Fund.

SUPPORT FOR EAST EUROPEAN DEMOCRACY

This funding supports activities authorized under the Support for East European Democracy (SEED) Act of 1989. SEED is a transitional program designed to aid central and eastern European countries through their passage to democracy and market economies. These programs help establish competitive market-oriented economies, build democratic institutions and establish linkages to the democracies of the west, and help sustain the neediest sector of the population during the transition period.

The FY 2001 request is $610 million, including $175 million for Kosovo stabilization and revitalization programs. Funding for Bosnia-Herzegovina is $90 million, a decrease from prior years reflecting the substantial progress on commitments under the Dayton Peace Accords. Estimated transfers for activities managed by other agencies are $173 million.

By the end of FY 2000, eight of the 15 original SEED countries will have graduated, including Lithuania, Poland, and Slovakia, where USAID missions will be closing. As a result, bilateral assistance to the Northern Tier will be discontinued. Regional funding, at reduced levels, continues for Northern Tier countries to help ensure the success of their transitions and to meet limited special or emergency needs.

ASSISTANCE FOR THE INDEPENDENT STATES OF THE FORMER SOVIET UNION

These funds support the activities established under the Freedom Support Act (FSA). USAID's assistance supports the fundamental U.S. foreign policy goals of consolidating improved U.S. security, building a lasting partnership with the individual independent states and providing access to each other's markets, resources and expertise.

The FY 2001 request is $830 million, of which $87 million is for the State Department's Expanded Threat Reduction Assistance Initiative aimed at dealing with reducing crises associated with weapons of mass destruction; this program is not administered by USAID. Estimated transfers to other agencys managing programs are $383 million.

This request will allow selective increases to key, primarily grassroots, economic and democratic reform programs. Assistance will encompass exchanges of citizens of the Independent States and the United States, institutional partnerships, and support for non-governmental organizations.

Programs will include regional initiatives to faciitate trade and investment outside capital cities as well as support for small and medium-sized businesses through training and greater access to credit. Resources will also be directed at law enforcement cooperation to help fight organized crime and corruption. Humanitarian assistance will help mitigae the negative impact of the financial and economic crisis in this region.

P.L. 480 FOOD FOR PEACE PROGRAMS

USAID's Food for Peace programs (P.L. 480) provide both humanitarian and sustainable development assistance in the form of U.S. agricultural commodities. In addition, P.L. 480 also funds the farmer-to-farmer exchange program and a grant program to U.S. private voluntary organizations and cooperatives implementing P.L.480 activities.

Title II provides resources to U.S. private voluntary organizations (PVOs) and the World Food Program to help implement sustainable development programs targeted to improve the food security of needy people, either by the direct distribution of agricultural commodities or the use of local currencies generated by the sale of these commodities in the recipient country. Title II also provides the vast majority of U.S. food assistance used to respond to emergencies and disasters around the world. The FY 2001 request is $830 million. Although requested by the Department of Agriculture, through the Agriculture Subcommittee, the PL 480 program is administered by USAID.