Following is a Web version of a document from USAID's 1997 Congressional Presentation. Please note that some formatting may have been lost in the automated conversion of the original file. This document is also available for download in its original WordPerfect 5.1 format.

FY 1997 Economic Support Fund Request: .$19,600,000

Introduction.

Years of strife and civil conflict have had a devastating effect on the social fabric and economy of Northern Ireland and the six counties of the Republic of Ireland which border Northern Ireland (Donegal, Sugo, Leitrim, Cavan, Monaghan, and Louth). Investment is inadequate, unemployment is high, and economic opportunity only a dream. These harsh conditions are self perpetuating and lead to distrust, inequity, and anger. The resulting unrest discourages investment and the cycle begins again. Economic assistance at the community level has been identified as the most effective means to break the cycle. Job growth has been the chief determinant of civic stability. The United States provides economic assistance to address these concerns through the International Fund for Ireland (the Fund).

The objectives of the Fund are to promote economic and social advancement; and to encourage contact, dialogue and reconciliation between Nationalists and Unionists throughout Ireland. The Fund seeks to reach these objectives by supporting and promoting social reconciliation through economic development in Ireland and Northern Ireland, with priority given to new investments that create jobs and reconstruct disadvantaged areas. The Fund has been very successful in encouraging communities to take ownership of projects which can benefit their areas. The jobs and social stability which result from the U.S. contribution to the Fund are a tangible expression of the U.S. policy of encouraging peace and reconciliation through economic progress.

The United States has contributed approximately $248,000,000 to the Fund since its inception in 1986.

The Development Challenge.

Northern Ireland and the bordering Irish counties have seen over 25 years of armed struggle. Long-standing lack of equal opportunity is key to the conflict. All major social and economic indicators continue to show that Catholics in Northern Ireland are more disadvantaged than Protestants. Long-term unemployment is severe, with 55% being jobless for a year or more. The rate of unemployment among Catholic males is twice that of Protestant males. Inability to travel freely throughout the security zones compounds the difficulties for both groups in seeking employment. In addition, nationalists have been reluctant to seek employment in the security zones.

The Disadvantaged Areas Initiative continues to be a primary focus for the Fund, enabling its resources to be targeted at the areas of greatest need. Projects in support of the Initiative focus on community economic regeneration, community improvement, and border towns and villages with special emphasis on employment and business creation. Another area of great importance is the Fund's Communities Initiative, which is concerned with providing people in the most disadvantaged areas with the skills, resources and self-confidence to undertake the social and economic regeneration of their communities. Special emphasis in the Communities Initiative is on leadership potential, reconciliation and conflict resolution.

The Fund views itself as a facility to catalyze and support economic, political and social initiatives aimed at permanent reconciliation among Catholic and Protestant communities. The significant reduction of external debt since 1987 (40% of GDP in 1994) indicates positive movement on the economic front. However, the recent set-back in the ongoing peace process in Northern Ireland brings added urgency to its work.

Other Donors.

The Fund's activities are financed through international contributions from the United States, the European Union, Canada, New Zealand, and Australia. Each of the donors sends a non-voting observer to all Board meetings. In 1995, the European Union was the largest donor to the Fund, providing approximately 50% of total donor funding.

FY 1997 Program.

The Fund's principal efforts are directed at reducing the economic hardships of unemployment and communityinfrastructure decay in order to reduce the economic differences that exacerbate social disruption along religious lines.

Cross-cutting and Special Initiative: Promoting Peace in Northern Ireland
and the Republic of Ireland

It is at the local community level that real change has to take place in order to achieve increased employment, social progress and promote reconciliation between people from different cultural backgrounds. The Fund supports the active involvement of communities in shaping their own futures. The Fund will continue its emphasis on projects which support economic regeneration. The focus on disadvantaged areas will also continue.

The Fund is multilateral and non-partisan. It disburses funds in accordance with the economic and social policies and priorities of both the Irish and United Kingdom governments. Funding supports employment generation and investment promotion, with special emphasis on projects promoting communal reconciliation. A recently completed independent assessment verifies that as of September 1994 Fund-supported projects have created 23,787 jobs. Four hundred forty-one organizations have been assisted to promote social and economic development, involving over 5,700 community leaders.

Director, Office of European Country Affairs: David Cowles