Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
SUMMARY OF USAID
FISCAL YEAR 1999 BUDGET REQUEST
For Fiscal Year 1999, the President is requesting appropriations of $7,319,197,000 for USAID-administered programs, including those jointly administered with the State Department. The FY 1999 request compares to the FY 1998 appropriation level of $7,018,600,000. The FY 1999 USAID request includes funding for Development Assistance (DA), the Economic Support Fund (ESF), Support for East European Democracy (SEED), and Assistance for the New Independent States of the former Soviet Union (NIS). P.L. 480 Titles II and III (Food for Peace) resources administered by USAID are formally requested as a part of the U.S. Department of Agriculture (USDA) budget.
The following chart and subsequent descriptions provide further details in support of the budget request. FY 1998 levels include funds transferred to USAID for International Cooperative Administrative Support Services (ICASS).
(in Dollars Thousands)
FY 1997 FY 1998 FY 1999 Appropriated Appropriated Budget Appropriation level level Request Sustainable Development Assistance (DA)\1 1,130,000 1,172,134 1,265,798 Child Survival and Disease Programs 500,000 550,000 502,836 International Disaster Assistance 190,000 190,298 205,000 Credit Programs 11,500 11,053 14,053 Development Credit Authority -0- [8,000] [15,000] USAID Operating Expenses\2 488,250 478,858 483,858 Inspector General Operating Expenses 30,000 29,047 33,000 Foreign Service Disability & Retirement 43,826 44,208 44,552 Economic Support Fund & International Fund for Ireland 2,362,600 2,419,928 2,513,600 Assistance to New Independent States\1 625,000 770,798 925,000 Assistance for Eastern Europe and the Baltics\1 475,000 485,276 464,500 P.L. 480 Food For Peace Title II 837,000 837,000 837,000 P.L 480 Food For Peace Title III 29,500 30,000 30,000 USAID Total 6,722,676 7,018,600 7,319,197 __________________
1. To be consistent with the FY 1999 request, the FY 1997 and FY 1998 appropriated levels exclude transfers to the African Development Foundation, the Inter-American Development Foundation, and the International Fund for Agricultural Development but include transfers of SEED and NIS funds to other agencies.
2. FY 1997 includes $17.5 million of the Sustainable Development Assistance account used for operating expenses.
DEVELOPMENT ASSISTANCE
The Sustainable Development Assistance account and the Child Survival and Disease Program Fund 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 great 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 States well into the future. These accounts constitute the core of USAID's sustainable development programs and support five of USAID's six strategic goals -- integrated, 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 and the Food For Peace accounts). These five development goals include activities aimed at promoting broad-based and sustainable economic growth and agricultural development ( $463 million); building human capacity through education and training ($98.2 million); stabilizing population growth rates and protecting human health ($779.6 million); protecting the environment ($290 million); and strengthening democracy and good governance ( $137.8 million). (USAID's credit programs also cut across many of these goals, as do those of the Central and Eastern Europe and the New Independent States, and some of the programs funded under the Economic Support Fund. )
Sustainable Development Assistance
The request for the Development Assistance account in FY 1999 is $1,265.8 million, and includes funding for two new initiatives: the Africa Trade and Investment Initiative ($30 million), and the Americas Summit Initiative (a total of $20 million, a portion of which will be funded under the Child Survival and Disease account).
The aim of the Africa initiative is to improve prospects for increased growth and sustainable poverty reduction in Africa by enlarging foreign markets, promoting foreign investment, and facilitating the transfer of technology and knowledge; this will be done through work with the private sector, host country organizations and U.S. Government entities such as the U.S. Trade Representative and the Departments of Treasury, Agriculture, Commerce, and Justice. The Americas Summit Initiative is to be a follow-up to the second Summit of the Americas scheduled for April 1998 and will address three key priorities of the summit: weaknesses in basic education, access to financial systems by the poor, and expanded regional trade and investment for which USAID is uniquely positioned to assist due to its long history of involvement and in-country presence in these areas. These funds are also intended to leverage the much larger ordinary capital resources of the Inter-American Development Bank and the World Bank.
USAID's programs address the primary causes of social instability and underdevelopment by joining in partnership with the governments and citizens of host countries 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 the agency's five major development goals, USAID also can achieve the facilitation of progress in the other areas. This is because USAID programs aim at increasing participation and empowerment; the impact of USAID activities is felt far beyond any one specific development problem. USAID programs bring people at all income levels, with special emphasis on women and ethnic minorities, into the economic, social, and political processes in order that they may contribute to and benefit from national progress. Sustainable development also creates lasting trade and social linkages between the United States and the developing world.
Child Survival and Disease Programs
The FY 1999 request for the Child Survival and Disease Programs account is $502.8 million and includes $404.6 million for child survival, HIV/AIDS, infectious diseases and other health; and $98.2 million for basic education. These funds will support efforts to improve infant and child health and nutrition, reduce infant and child mortality, lower HIV transmissiion and the impact of HIV/AIDS, and mitigate the threat of infectious diseases of major public health importance through the provision of critical health services. These services are credited with preventing millions of infant and child deaths annually. Basic education programs will address the acquisition of literacy, numeracy, and problem-solving skills, especially among girls. Investments in health and basic education contribute to increases in productivity, improved health, and a more stable population growth.
USAID Credit Programs
USAID believes there are significant instances in which U.S. development priorities can be best funded through credit, especially in emerging market countries and in countries moving toward graduation status. Credit resources permit the leveraging of private sector resources to support sustainable development and to enable USAID to reach populations it would not otherwise be able to reach. 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.
USAID's credit guarantee programs include the Micro and Small Enterprise Development Program, the Urban and Environmental Credit Program (formerly the Housing Guaranty program), and a request for authority to transfer up to $15 million from the accounts of Sustainable Development Assistance, Support for Eastern Europe Democracy, and New Independent States for the Development Credit Authority program.
* Micro and Small Enterprise Development Program
This program requests appropriations totalling $1,500,000 for credit subsidies and $500,000 for program administration. The program uses loans and guarantees to encourage financial institutions to extend and expand credit to microenterpreneurs and small businesses. The Micro and Small Enterprise Development program is a grassroots program designed to help poor people create employment for themselves, acquire incomes, build assets and join in the strengthening of the formal sector of the economy. Microenterprise and small loan programs provide the bridge to society for poor people, who until now have had no real connection to the economic mainstream.
* Development Credit Authority
The Development Credit Authority provides the Agency with an important and timely tool to address its strategic priorities. It will leverage Agency resources more effectively through the use of market rate loans and guarantees to finance sovereign and non-sovereign development projects that are both developmentally sound and creditworthy. This authority assumes special importance in supporting efforts related to global climate change. Budget authority is being requested to transfer up to $15 million in FY 1999 from DA, SEED and NIS funds, of which up to $2 million would be for administrative expenses.
* Urban and Environmental Credit Program (formerly the Housing Guaranty Program)
This USAID program extends guarantees 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 exclusively to meet the needs of lower-income groups in the assisted country with an emphasis on addressing the urban and environmental problems that impair human health, decrease child survival rates and prevent economic growth. The FY 1999 request for these activities totals $6,000,000 for subsidies and $6,053,000 for program administrative costs.
International Disaster Assistance
USAID requests $205 million for this program which includes $160 million for disaster relief managed by the U.S. Office of Foreign Disaster Assistance (OFDA) and $45 million for programs managed by the Agency's Office of Transition Initiatives (OTI).
OFDA funds support emergency relief efforts. They also 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.
OTI funds underwrite rehabilitation and recovery efforts for countries emerging from complex crises. It focuses on the special post-crises needs of nations that are not addressed by either emergency relief or 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 need for future, ongoing humanitarian and disaster relief.
Operating Expenses
The Operating Expenses 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 requested separately.
The FY 1999 request is $483.9 million, which for the first time includes $5.9 million for International Cooperative Administration Support Services (ICASS). (Several program accounts also include funding for ICASS costs associated with program management.) While this is an increase of $5 million over the 1998 appropriated level, including the total amount available from other funds for operating costs (local currencies, recoveries, reimbursements, etc), there is a decrease of $15.3 million. We believe this net reduction can be sustained given the continuing reduction in total staff and other ongoing cost- efficiencies being implemented.
Inspector General Operating Expenses
The Inspector General Operating Expenses appropriation covers salaries and other support costs associated with USAID's Inspector General 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 in past years. The request of $33 million covers both the domestic and overseas operations of USAID's Inspector General.
Foreign Service Retirement and Disability Fund
The Foreign Service Retirement and Disability Fund covers the mandatory costs associated with the inclusion of USAID foreign service employees in the fund. The FY 1999 request is $44.552 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
sustainable development assistance. ESF can finance balance of payments and economic stabilization programs, frequently in a multi-donor context.
The FY 1999 request of $2.513 billion will be used to support the Middle East peace process, assist countries in transition, such as Haiti, Angola and Cambodia, to promote peace and stability in such countries as Ireland and Cyprus, and support democracy through assistance with elections, political party building and legislative training.
SUPPORT FOR EAST EUROPEAN DEMOCRACY ASSISTANCE
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 difficult 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. As countries consolidate their political and economic transitions, they will be graduated from the assistance category, and funding for bilateral SEED programs will be phased out. The FY 1999 request is $464.5 million, including $225 million for Bosnian reconstruction and $267 million for other countries in the Northern and Southern Tiers. The request also includes $12.5 million for the first of four tranches to capitalize a $100 trust fund, on a 50-50 basis, in a public and private partnership with a number of U.S. foundations.
ASSISTANCE TO THE NEW INDEPENDENT STATES OF THE FORMER SOVIET UNION
These funds support the activities established under the FREEDOM Support Act. USAID's assistance to the New Independent States (NIS) of the former Soviet Union supports the fundamental U.S. foreign policy goals of consolidating improved U.S. security, building a lasting partnership with the individual New Independent States, and providing access to each other's markets, resources and expertise. The FY 1999 request is $925 million, of which $234.9 million is for the Partnership for Freedom program which will build on achievements to date and reorient the U.S. assistance program, first to Russia and then for the other NIS countries, toward longer-term and more cooperative activities to spur economic growth and develop lasting links between our peoples.
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 U.S. Department of Agriculture, P.L. 480 Titles II and III are administered by USAID.
Title II provides resources to U.S. private and 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 agricultural 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 1999 request is $837 million.
The Title III Food for Development program provides country-to-country grants of agricultural commodities to improve food security and to promote agricultural policy reforms that encourage food production. in the poorest, most food-deficient countries in the world. The FY 1999 request is $30 million.
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