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.

For Fiscal Year 1997, the President is requesting appropriations of $6,881,826,000 for USAID- administered programs, including those jointly administered with the State Department. The FY 1997 request compares to the FY 1996 appropriation level of $6,573,064,000.

The FY 1997 USAID request includes funding for the Development Assistance Fund (DAF), Development Fund for Africa (DFA), the Economic Support Fund (ESF), Assistance for Eastern Europe and the Baltic States (Special Assistance Initiative, or SAI), and Assistance for the New Independent States of the former Soviet Union (NIS). Also included in this request is funding for P.L. 480 Titles II and III (Food for Peace) resources administered by USAID but formally requested as a part of the U.S. Department of Agriculture budget.

The chart on the following page and subsequent descriptions provide further details in support of the budget request.

DEVELOPMENT ASSISTANCE

The Development Assistance Fund and Development Fund for Africa provide support for activities worldwide that are designed to promote sustainable development in some of the poorest countries in the world. These nations represent the world's last gre at underdeveloped markets. USAID strongly believes that the modest and well targeted investments we make today in the form of human capital and the partnerships we establish with their communities will pay economic and political dividends to the United S tates well into the future.

Development Assistance Fund

The FY 1997 request of $1.006 billion for Development Assistance will support programs aimed at improving the economic and social well-being of developing countries. By using an integrated portfolio of activities aimed at promoting broad-based and s ustainable economic growth, stabilization of population growth rates and improved health for children and adults, protection of the environment and increased democratic participation in open governments, USAID strives to create the economic and social sta bility needed for the next wave of U.S. trading partners to evolve and increase its democratic allies around the world.

The assistance that the U.S. taxpayers provide to the developing world is ultimately in the self-interest of the United States. USAID's programs address the primary causes of social instability and underdevelopment by joining in partnership with the government and citizens of the country to address mutually identified problems. Development is sustainable when it permanently enhances the capacity of a society to improve its quality of life. Thus, while addressing problems in any one of USAID major goals, we also can achieve the facilitation of progress in the other areas. This is because our programs aim at increasing participation and empowerment; the impact of our activities is felt far beyond any one specific development problem. USAID's progr ams bring people at all income levels into the economic, social, and political processes in order that they may contribute to and benefit from national progress, with women and ethnic minorities emphasized. This is what sustainability is all about -- it is also the process to create lasting trade and social linkages between the United States and the developing world.

Development Fund for Africa

USAID has implemented high-impact, innovative programs under the Development Fund for Africa. The Administration is requesting reinstatement of a separate appropriation to underscore the U.S. commitment to tackling Africa's complex development chall enges. USAID's resources are concentrated in those countries which are committed to sound economic policies and democratic governance. USAID believes that the $704 million requested for the DFA represents a sound and prudent investment in preventing cri ses and promoting sustainable development. U.S. assistance is providing hope for the future of this continent of more than a half billion people. USAID also is making investments that will benefit the United States -- reducing the likelihood of costly f uture humanitarian and disaster relief requirements and growing new markets for American trade and investment. Our efforts to promote market-based economic policies and stimulate economic growth help fuel demand for U.S. goods and services, which expande d in Africa by 22 percent between 1994 and 1995. The proposed assistance for Africa is a modest but sound and critical investment -- in improving the lives of millions of Africans and in strengthening our own economic future.

Credit Programs

USAID's credit guarantee programs include the Microenterprise and Small Enterprise Development Program and the Housing Guarantee program. These programs share the common goal of addressing credit restraints in the nascent market economics of dev eloping countries. These programs enable people to feed themselves and their families better, educate their children, improve their health, and upgrade housing standards. Ultimately, the goal of all USAID credit programs is to allow the citizens of the developing world to concentrate on something beyond their next meal and free up economic growth potential of the next generation of U.S. economic partners.

Microenterprise and Small Enterprise Development Program

The Administration requests appropriations (totaling $1,500,000 for the cost of direct loans and loan guarantees and $500,000 in administrative costs in FY 1997) to cover the direct loans, loan guarantees and administrative costs associated with this program. With this amount of appropriated money, USAID, through private sector lenders, can leverage nearly $50 million for small business and microenterprise loans.

The Micro and Small Enterprise Development program is designed to help those people, who would not otherwise have access to bank financing, create employment for themselves, acquire incomes, build assets and join in the strengthening of the formal se ctor of the economy. In FY 1995, under this program, over 3,000 loans were made which, on average, were for amounts of less than $5,000.

Housing Guaranty Program

This USAID program extends guaranties to U.S. private sector investors who make loans to developing countries to support the formulation and implementation of sound housing and community development activities. These activities are targeted excl usively to meet the needs of lower-income groups in the assisted country. The FY 1997 request for these activities totals $5,000,000 for loan guaranties and $6,000,000 for administrative costs. This request will leverage approximately the cost of $41 mi llion in housing guaranties.

International Disaster Assistance

International Disaster Assistance funds support emergency relief efforts. The funds also are used to improve the capacity of foreign nations to prepare and plan for disasters, mitigate their effect,and teach prevention techniques, increasing the skills available locally to respond when disaster strikes. In 1995, the USAID Office of International Disaster responded to 57 emergencies saving hundreds of thousand of lives. The FY 1997 request for these activities is $190 million.

Funding in this appropriation will also underwrite longer-term rehabilitation and recovery efforts for countries emerging from complex crises. This work is managed by the USAID Office of Transition Initiatives and focuses on the special post-crises needs of nations that are not addressed by either emergency relief of long-term development programs. These efforts are designed to help nations return to the path of sustainable development, prevent crises from becoming more impacted, and minimize the n eed for future, ongoing humanitarian and disaster relief.

USAID Operating Expenses

This appropriation covers the salaries and other support costs associated with the operations of USAID worldwide. Operating expenses for USAID's Inspector General, and the costs associated with the administration of USAID's credit programs are r equested separately.

Since the beginning of 1994, USAID has abolished 90 organizational units (25 percent reduction), consolidated bureaus and support facilities, and eliminated unnecessary supervisory and administrative layers in its headquarters. By the end of FY 1996 , USAID will have closed 21 overseas missions. Staffing levels have been reduced by almost 22 percent during the period from January, 1994 to December, 1995. However, the FY 1997 request of $495 million, when combined with local currency trust funds and other funding sources, represents a reduction of almost 5 percent from FY 1996 availabilities. USAID will continue to reengineer its management to increase efficiency and free field managers to focus on results, but additional staffing reductions will b e required to cover higher costs incurred due to inflation and pay raises while operating with a lower budget. We estimate that a further staff reduction of around 10 percent will be required. Normal attrition and early outs, however, will not accomplis h this additional required reduction, so a reduction-in-force of about 200 U.S. direct hire employees will be necessary.

Inspector General Operating Expenses

This appropriation covers salaries and other support costs associated with USAID's Inspector General FY 1997 operations worldwide. Activities covered include audits, investigations, and security relating to USAID's worldwide programs and operations. The Office of Inspector General has reduced the number of supervisors, managers, and Senior Foreign Service-designated positions as well as overall staffing levels worldwide during the past two years. The Inspector General can operate at the requested funding level by using $4.3 million in no-year and multi-year funds to support FY 1997 operations.

The request of $30 million covers both the domestic and overseas operations of USAID's Inspector General.

Foreign Service Retirement and Disability Fund

The funds cover the mandatory costs associated with the inclusion of USAID foreign service employees in the fund. The FY 1997 request is $43.826 million.

ECONOMIC SUPPORT FUND

The Economic Support Fund 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 USAID's sustainable development assistance. ESF c an finance balance of payments and economic stabilization programs, frequently in a multi-donor context.

The FY 1997 request of $2.408 billion will be used to support countries in transition such as Haiti and Cambodia and to promote peace and stability in such countries as Israel, Egypt, West Bank Gaza, Turkey, Ireland and Cyprus.

ASSISTANCE FOR EASTERN EUROPE AND THE BALTICS

This funding supports activities authorized under the Support for East European Democracy (SEED) Act of 1989. These programs help establish competitive, market-oriented economies, build democratic institutions and establish linkages to the democraci es of the west, and help sustain the neediest sectors of the population during the transition period. USAID assistance helps provide the skills and attitudes of a modern accountable state, strengthen the rule of law, and advance the restructuring of thes e formerly socialist economies. The FY 1997 request is $475 million, of which $200 million is for Bosnia Reconstruction.

ASSISTANCE TO THE NEW INDEPENDENT STATES OF THE FORMER SOVIET UNION

These funds support the activities established under the FREEDOM Support Act of 1992. USAID's assistance supports the fundamental U.S. foreign policy goals of consolidating improved U.S. security, building a lasting partnership with the individual N ew Independent States, and providing access to each other's markets, resources and expertise. The FY 1997 request is $640 million.

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. Although requested by the Department of Agriculture, P.L. 480, Titles II and III are administered by USAID.

Title II provides resources to U.S. private voluntary organizations (PVOs) and the World Food Program to implement sustainable development programs targeted to improve the food security of needy people, either by the direct distribution of agricultur al commodities or the use of local currencies generated by the sale of these commodities in the recipient county. Title II also provides the vast majority of U.S. food assistance used to respond to emergencies and disasters around the world. The FY 1997 request is $837 million.

The Title III Food for Development program provides country-to-country grants of agricultural commodities to improve food security in the developing country and to promote agricultural policy reforms that encourage food production. These programs ar e tightly targeted on the poorest, most food- deficient countries in the world. The FY 1997 request is $40 million.

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