Copyright 2000 Federal News Service, Inc.
Federal News Service
March 15, 2000, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 8561 words
HEADLINE:
PREPARED TESTIMONY OF J. BRADY ANDERSON ADMINISTRATOR U.S. AGENCY FOR
INTERNATIONAL DEVELOPMENT
BEFORE THE HOUSE
INTERNATIONAL RELATIONS COMMITTEE
BODY:
Mr.
Chairman and Members of the Committee, I am pleased to be here today in my
capacity as Administrator of USAID to present the President's budget for foreign
assistance programs and to set out the priorities of the Agency.
I
appreciate this opportunity to be heard on behalf of USAID, an agency that does
so much to help people around the world, and directly serves our foreign policy
goals. I look forward to working with you throughout the coming year in this
same spirit of cooperation and mutual respect.
I've been at USAID for
nearly seven months now. That's not very long in a job as complex as this, and
there is still so much that I'm learning. But overall this has been a very
rewarding experience. I have been to Kosovo, the Middle East and Central America
and personally observed USAID at work. I am impressed by the work done by USAID
and by the dedication of our staff. I am honored to serve as USAID
Administrator. And I would like to share with you some of my initial
observations as Administrator, some of the accomplishments that have most
impressed me, and some of my priorities for the remaining year of this
Administration. As you may know, my own experience comes from the people in the
villages of East Africa -- Kenya and Tanzania - where I witnessed first-hand h0w
political instability and violence can hold nations hostage and rob individuals
of their potential. But I also have seen, both in East Africa and on my recent
trips, how US development assistance has brought hope and new opportunities to
communities -- through improved education, health care, and sanitation, and by
providing training and assistance to open up both markets and political regimes.
Every time I am thanked for the work that USAID is doing- whether by a simple
villager or a head of state -- it makes me proud of our country and what we
stand for.
I know that there are some important things we need to work
on in the coming year, in particular to make sure Americans know what USAID does
and why it is important. I want to make sure people understand that foreign
assistance is not global charity or international welfare; it is about making a
secure environment for U.S. business and citizens abroad. It is an investment in
our future.
Put most simply, through United States development
assistance programs we apply our knowledge to help improve the lives of hundreds
of millions of people around the world, and in the process we improve our own
security and prosperity. This knowledge is drawn from a wide variety of sources
-- U.S. universities, non-governmental organizations and the private sector, as
well as from USAID's own professional staff. Our programs are not simply
directed at governments. We work with citizens and citizen groups throughout the
world to help them improve their own lives and expand the livelihood of their
communities. It is important that we give the American people confidence that
the resources they provide are being well spent, and I welcome your help in
doing this.
Americans also need to know that foreign assistance isn't
just about the well being of people overseas. It is about our own security as
well. It's been said that stable democracies don't go to war, and to me, that's
a pretty good reason to try to strengthen democratic institutions in the
countries where we work. Moreover, there are harsh reminders that diseases like
tuberculosis, HIV/AIDS and polio don't respect national
borders. If we want to protect our citizens, we need to be concerned about the
capacity to control these diseases in the countries where they are now taking
the heaviest toll. Not only does foreign assistance contribute to our health
security it contributes to our economic security as well. History has shown us
that countries with open market economies make strong trading partners for
America. U.S. exports of goods to the developing world in 1998 alone totaled
more than $295 billion. The developing world is our fastest
growing trading partner. In fact 80 percent of the world's consumers live in
developing countries. It is evident to me that we have an important stake in how
these economies and societies develop.
Americans deserve to know that
their money is working and being used effectively and has been for a long time.
Since 1961, when USAID was created, worldwide literacy has risen by almost 50%,
life expectancy has risen by a decade, smallpox has been eliminated and the
percentage of people living in absolute poverty has been cut almost in half. We
didn't do it alone. But it wouldn't have happened without us.
Mr.
Chairman, foreign assistance - both development and humanitarian - is an
essential American foreign policy tool to help deal with the fundamental causes
of instability and other problems within societies. I believe that the economic
health and prosperity of the United States depends on the development of free
markets and the establishment of democratic institutions abroad because it
brings benefits home to America. US foreign assistance strengthens our ability
to promote peace, to combat the spread of illegal drugs, to fight terrorism, and
combat nuclear proliferation. Poverty, hunger, illiteracy and disease suffocate
hope and create the circumstances for upheaval and instability. USAID programs
help people transform how they live so that they can become more productive
participants in the global marketplace. And, in return, foreign assistance helps
secure our own safety and economic health.
USAID Program Overview:
As you know, the U.S. foreign assistance request has a large number of
distinct components - Development Assistance, Child Survival and Diseases, the
Development Fund for Africa, credit programs, International Disaster Assistance,
Operating Expenses and PL 480 Food for Peace. We also work closely with the
Department of State in programming and managing the Support for East European
Democracy Account, the Freedom Support Act programs, and Economic Support Funds.
The complexity of our program can sometimes be overwhelming, and as we focus on
particular accounts or particular countries, we must not lose sight of the
bigger picture. As I see it, the United States, through USAID, is addressing a
range of problems that are or can become global in scope and that can and do
affect our own quality of life and the security of this country. Before moving
to the details of the FY2001 request, let me give you some examples of how USAID
serves U.S. foreign policy priorities.
In Egypt, as in much of the
Middle East, our focus is on regional stability and the peace process. While
there are other important components to our activities in Egypt, the key US
strategy is to provide programs that stimulate economic growth and create jobs
in order to benefit the whole of Egyptian society. USAID has been in partnership
with Egypt since the Camp David Peace Accords were signed over 20 years ago.
In Nigeria, a country which is just emerging from 15 devastating years
of a corrupt military dictatorship, USAID is focused on efforts to bolster the
urgent needs of the new and struggling democracy under the leadership of
President Obasabjo. We are engaged in economic reform, health and education
programs, infrastructure policy and activities to promote the successful
transition to democratic governance. It is very important to the U.S. and to all
of Africa that Nigeria succeeds.
And in El Salvador, where I recently
visited, USAID is helping the new democratically elected leadership pursue
policies that are needed to ensure that its citizens share equitably in the
reforms.
Our programs concentrate on consolidating and sustaining the
gains that have been made. A peaceful transition to democracy in Central America
will create more opportunities for American investment, which will benefit both
the United States and Central America.
In other areas important to our
national security interests, we are working hard to make similar progress. In
Indonesia we are providing assistance to help them emerge from the political and
economic chaos of the last three years. In Russia, our programs continue to
target selected democratic and economic reforms. And in Colombia we are working
with President Pastrana to eliminate the production of narcotics and to foster a
secure and responsive governmental structure. We are making progress, but the
challenge ahead of us is great.
Turning now to the major elements of our
program, I know that this Committee is certainly aware of the global
environmental challenges we face -- degradation and depletion of natural
resources, rapid urbanization, the substantial environmental and health problems
often associated with energy inefficiency, and the economic and ecological
challenges of global climate change. USAID will participate in two inter-agency
Presidential initiatives: Greening the Globe, to protect forests and biological
diversity around the world, and International Clean Energy, to accelerate
globally the development and deployment of clean energy technologies.
Environmental challenges pose real threats to America's economic and political
interests, and our request addresses conservation of natural resources,
pollution prevention, and cleaner energy worldwide.Examples of USAID's
environmental work in the past year include improvements in the management of
coastal resources in Mexico, Indonesia, Tanzania and Kenya; the institution of
awareness campaigns on water conservation in Central America and the Middle
East; and promotion of cleaner manufacturing processes in Bolivia, Ecuador and
Egypt. Our children will inherit a cleaner and healthier world as a result of
the environmental investments we are making today.
As this Committee
certainly appreciates, open markets and economic growth are important to the
United States, and we are working to promote these goals worldwide. Now,
everyone knows that economic growth brings benefits to all groups in society,
including the poor, the disadvantaged and the marginalized. But whether
countries can achieve broad-based growth and reduced poverty depends on the
development of a policy environment that promotes efficiency and economic
opportunity for all members of society, as well as institutions that are soundly
organized and managed. A level playing field requires good government. More than
anything else, our programs help countries to become full participants in the
global economy. This is at the heart of USAID's development assistance effort.
For example, microenterprise is an important part of USAID's overall
poverty-reduction strategy, and we expect to continue to fund these efforts from
all accounts. In 1998 USAID microenterprise programs served a record 3.5 million
clients worldwide, and 83 percent were poverty loans. The average loan size in
Africa was $170, and women constituted 84% of all microfinance
clients. These programs helped millions of the poorest households in the world
to help themselves.
USAID's worldwide agriculture programs are another
important element of our overall program. With the world's population at 6
billion and growing at a rate of 73 million a year, mainly in the developing
world, we all need to be concerned about how countries will ensure adequate food
supplies, generate rural incomes and employment, and service the growing urban
areas without decimating the environment.
USAID collaborates with the
U.S. university community as well as private industry to develop and promote
technological improvements that will improve agricultural productivity that
benefits farmers everywhere, including in the U.S. It has been estimated that
improved productivity from USAID-sponsored work on improved wheat and rice
varieties has resulted in an additional $14.7 billion for our
farmers between 1970-1993. We expect to maintain programs worldwide to improve
agriculture in FY 2001.
USAID's health and family planning programs have
long demonstrated that health improvements are essential for a better quality of
life for individuals. It has also become increasingly clear that reducing
illness, death rates and population pressures lowers the risk of humanitarian
crises in countries where population growth is the highest. There is little
disagreement that by protecting human health in developing and transitional
countries we also directly benefit public health in the United States as we are
a mobile society that travels throughout the world coming into contact with
unhealthy conditions and diseases not seen here at home. Unhealthy conditions
and inadequate health systems elsewhere in the world increase the incidence of
disease and threat of epidemics.
I am happy to report that significant
gains have been made in protecting human health and stabilizing population
growth. Through USAID's programs, millions of children's lives have been saved
and fertility rates have continued to decline in all regions. The latest data
available on fertility reduction and mortality rates for children under 5 shows
that there continues to be steady progress. In Romania, where USAID has provided
family planning assistance, we have dramatic new evidence that in the past six
years the use of modern methods of contraception has doubled while abortion
rates have declined by one third. As a global leader and the largest bilateral
donors in this sector, the United States can claim considerable credit for these
achievements. However, we recognize we still have much to do to meet the needs
of the estimated 150 million married women who want to space or limit births but
still don't have access to modern methods of contraception.
In order to
make further progress in health and to safeguard the health gains achieved
during the past few decades, we need to address changing disease patterns and
shifting population demographics. The biggest challenges are the
HIV/AIDS pandemic, stagnating rates of immunizations, and the
rising incidence of anti-microbial resistant strains of malaria, tuberculosis
and other infections diseases.Progress with child survival appears to be ahead
of targets in all regions except Africa, which is lagging behind expectations
primarily because of the HIV/AIDS epidemic and political
instability, which disrupts health care services. Many couples still do not have
the means to choose the number and spacing of their children. In January 2000,
at an historic UN Security Council session, Vice President Gore announced an
increase of $150 million to fund the fight against
HIV/AIDS and other infectious diseases internationally. For
FY2001, we are seeking over $1 billion for these population,
health and nutrition programs worldwide. President Clinton is actively
supporting the Global Alliance for Vaccines and Immunization
(GAVI) recently announced in Davos, Switzerland. In FY 2000 USAID started an
important $10 million initiative to "Boost Immunization" in
countries where vaccination rates are lagging.
As we end a most violent
and conflicted century, we recognize that developing a community of democratic
nations is a goal we must continue to pursue. As we have seen in Indonesia,
structural flaws in the economy can be hidden when not accompanied by progress
in democracy, and the economy can fall apart. In the past decade alone, we
witnessed some of the most important events of our age including the collapse of
communism and the end of the Cold War. In many places, opportunity for freedom
has been accompanied by internal conflict. As these countries have moved ahead
with the transition to market economies and democratic governance, we recognize
that our best hope to prevent a recurrence of conflict is through the
strengthening of these nascent democratic states. USAID has been at the
forefront of efforts to support progress toward the establishment of democratic
societies around the world.
Mr. Chairman, as you know, there has been an
unparalleled movement toward more open and transparent political systems around
the globe. Today, more people live in freedom than ever before in human history.
However, political change is rarely linear and we have learned that the
democratic gains are often fragile and can be reversed. We must continue to
support the efforts of determined men and women around the world who are working
to build political systems that are representative, accountable and transparent.
USAID funds rule of law programs to help curb the abuse of power and authority
within societies. We support political processes, including elections that allow
citizens to choose their representatives and hold them accountable. We have
assisted the growth of organizations for citizen participation (civil society),
which have emerged as a major democratic force in many countries around the
world.Finally, we are helping societies to build national and local government
institutions that are responsive to citizen needs and are accountable and
transparent, such as rules for the banking sector, capital markets and
appropriate regulatory bodies. This year, we have put a special emphasis on
addressing the corrosive effects of corruption, and are working to encourage the
transparency and accountability so needed in government, no matter where it is
in the world. As a result of USAID's technical assistance and institutional
support to the Supreme Audit Institutions in Benin, they have started to audit
electoral campaign expenses and develop a manual for transparent financial and
procurement operations.
Mr. Chairman, I take very seriously my
responsibilities as the President's Special Coordinator for International
Disaster Response. We live in a dangerous and uncertain world. Last year
humanitarian crises affected an estimated 418 million people: natural disasters
accounted for some 315 million, while complex emergencies affected an additional
103 million. The number of people receiving USAID assistance rose from 40.6
million in 1997 to 140.8 million in 1998. USAID responded to 87 declared
disasters in 1998, of which 65 were natural disasters, up from 27 the previous
year. Several of the major emergencies were associated with weather anomalies
related to the El Nino phenomenon.
When Hurricane Georges swept across
the Dominican Republic, there were critical shortages of food, water and
shelter. Malaria, cholera, dengue fever, conjunctivitis and respiratory
infections were serious health problems. Hurricanes Mitch and Georges affected
over 12 million people, caused more than $10 billion in damage,
and drove down the annual GDP growth rates of Honduras and Nicaragua by several
percentage points each. Americans were profoundly affected by this tragedy. We
all can remember pictures of people and homes being washed away and communities
being smothered by mud. The loss of life was staggering. Americans wanted to
help.
As part of our response to these crises and others, in 1998, USAID
provided over 920,000 metric tons of food to some 22 countries, and provided
more than 200,000 metric tons to the World Food Program's Protracted Relief
Operations in 12 countries. This latter contribution represents 41% of total
tonnage of food provided to the WFP by all donors. While the United States does
not often get credit for it, we can be proud of being the largest food
aid donor in the world and that these programs provide a direct
benefit to our farmers at home. The recovery and reconstruction of these
countries is not only a humanitarian issue, it directly affects the economy of
the United States.
In addition to responding to immediate disaster
recovery needs, USAID has also been called on to support longer-term
rehabilitation and recovery for countries in transition, especially those
emerging from complex emergencies, frequently caused by civil strife, manifested
by armed conflict, death, displaced populations, hunger, injury, torture and
massive human rights abuses. Helping societies and governments shift from
emergency relief to the reestablishment of political and social stability is an
important component of what we do. This includes demobilization of ex-combatants
and removal of land mines to enhance local security. We help strengthen local
.governance and institutions in order to promote reconciliation and help the
reintegration of ex-combatants into society.
There are many other
aspects of US development assistance that assume greater significance when
viewed globally. For instance, USAID has played an important role in improving
education around the world, especially for girls, I am personally convinced that
teaching girls and young women how to read and write may be our most important
contribution toward moving the development of countries forward.
As I
have noted earlier, USAID has helped countries establish the policies necessary
to encourage private investment and trade, including accession to the World
Trade Organization, which opens more markets to American business.
USAID
has worked tirelessly to identify and address human rights abuses ranging from
torture to trafficking in women and children. For example, in Nepal, USAID is
funding microcredit, health, and education activities in rural communities that
are specifically targeted at preventing the trafficking of thousands of
vulnerable young women and girls.
Through all of these programs we are
improving the lives of countless millions, promoting the values that Americans
most cherish, and making the world a safer and more prosperous place for all of
us.Before I turn to the specifics of our budget request, let me touch on a few
other important areas of concern to you, and to me. When I assumed leadership of
the Agency, I pledged to you that I would focus my attention and best efforts on
a number of issues that were of concern to this committee, including the
management of USAID and our relationship with the Department of State. While we
still have a way to go, I am here to report on the important progress that has
been made. USAID mission critical systems were made Y2K compliant and to date
because of our efforts, no USAID program activities have suffered Y2K problems.
I was made acutely aware of the problems we have had with our financial
and other information systems that made it extremely difficult for us to provide
consistent, timely and complete information. Though it has been time consuming
and costly, it is a priority for me to increase our management efficiency and to
make demonstrable progress this year in fixing these systems.
We are in
the process of developing a five-year information management strategic plan,
which will guide all agency information technology investments over this period.
We have awarded the contract to install a new core accounting system, which will
be completed in Washington by the end of this year and completed overseas by the
end of 2002.
Additionally, we have trained almost 500 staff and partners
in more than 45 countries to plan, report and manage for results. And finally,
we are now better able to collect comprehensive.information regarding the award
of contracts and grants overseas. By the end of the calendar year we expect to
have the entire 3 year backlog of data entered into the database and available
to meet the federal requirement for reporting.
I must admit that I was
disappointed that USAID did not receive the requested authority to implement a
Working Capital Fund. The absence of this fund is making it much more difficult
for USAID to continue to be a source of high quality, lower cost services to
other agencies in the field. I look forward to working with the Committee to
address any congressional concerns so that we can add this important tool for
resource management in the field.
This Committee has a special interest
in USAID's relationship with the State Department, and I am pleased to report
that the relationship has never been closer. For example, this year was the
first time the Secretary of State undertook a formal review of USAID's budget.
We worked closely with the State Department to determine funding levels, and to
manage all foreign assistance so that it supports foreign policy goals. We are
working closely with the State Department to ensure that our overseas security
and facility costs are being adequately addressed. Two working groups have been
established to address issues of concern to the Secretary and me. And based on
agreement between State and USAID, several operations have been consolidated,
including retirement processing, travel contract, information technology main
frame collection, training, and storage of household effects. Additionally,
eight press staff were transferred to the State Department last April. Overall,
the closer alliance between our two organizations is working very well.
The Request:
The Administration request for FY2001 is for a
total of $2.141 billion for Sustainable Development Assistance
programs in three accounts: the Development Assistance Account, at
$949 million, the Child Survival and Diseases Fund, at
$659 million and the Development Fund for Africa Account, at
$533 million.
Development Assistance (DA):
The
requested $949 million for Development Assistance is an
increase of $212 million over the amount provided in FY2000 for
programs outside of Africa. This account supports programs that promote open and
democratic systems, economic growth and agricultural development, education and
training, population stabilization and environmental management in some of the
poorest countries in the world.Child Survival and Diseases Fund Programs:
The request for Child Survival and Diseases Fund programs for FY2001 is
$659 million. This is $44 million more than
last year. These funds will be used for Child Survival,
HIV/AIDS, infectious diseases and other health programs, and
for basic education, particularly for girls. The level for
HIV/AIDS has been increased by $54 million in
support of the President's new LIFE Initiative (Leadership and Investment in
Fighting Epidemics).
We have seen some striking successes in the child
survival programs. Infant mortality rates have dropped, polio is on the verge of
being eradicated, and deaths from measles have been cut in half. Last year,
USAID launched the Global Alliance for Vitamin A, a partnership with UNICEF and
other major donors, including U.S. food and pharmaceutical companies. Through
this program we are using food fortification to accelerate the elimination of
vitamin A deficiency, which causes blindness, and other serious problems.
In FY2000 USAID launched a $10 million initiative to
"Boost Immunization" in countries where vaccination rates are lagging. Recently,
President Clinton proposed a U.S. Government contribution of
$50 million in FY2001 to the new Global Alliance for
Vaccines and Immunization (GAVI).
Development Fund for Africa
(DFA):
The Administration places a high priority on broad-based economic
growth in Africa, which is an extremely diverse and complex environment. The DFA
request for Africa this year is $533 million, in addition to
another $304 million for Africa planned from the Child Survival
and Diseases Fund.
U.S foreign policy and development assistance for
Africa is focused on efforts to reduce poverty and to accelerate Africa's
integration into the global economy by meeting and overcoming the problems that
threaten development. This includes strengthening economic growth and education
and training in order to expand opportunities, which helps to prevent conflict
and outbreaks of violence. It means addressing environmental degradation,
building classroom-based education reform, providing humanitarian assistance,
supporting Nigeria's difficult democratic transition, which is a priority for
this Administration, and perhaps of greatest importance, by continuing to
address the HIV/AIDS crisis.
USAID programs are making
a positive difference in African economic and democratic institutions. Despite
the encouraging signs of progress, however, development in Africa is not
assured. Even while democracy and good governance programs are helping to shift
control of the economy and political power to the hands of the people, the
HIV/AIDS pandemic and the destructiveness of both old and new
conflicts continue to have a severe impact on progress. For development to
proceed in Africa, we must help Africa meet these threats head on, and stop
their deadly effect on African society.
In Africa, the impact of
HIV/AIDS is staggering. This year, for the first time, the
majority of new HIV infections will affect women. It is a crisis that threatens
to undermine Africa's progress because whole generations are being lost to this
deadly disease. Societies are being crippled as mothers, fathers, children,
teachers, doctors, and other core workers, all are being lost to
AIDS. The statistics are overwhelming. As of December 1998,
nearly 23 million adults and children were estimated to be living with
HIV/AIDS in sub=Saharan Africa. UN figures indicate that
eastern and southern Africa account for more than 50 percent of the world's
HIV-positive population. There are 11 million AIDS orphans in
Africa today, and the number is rising. Additionally, in the area of health,
mortality rates for children under five are increasing and immunization levels
are declining. USAID is taking a lead role in addressing the many aspects of
these problems from prevention to impact mitigation.
Latin America, and
the Caribbean:
The core request for the Latin America and Caribbean
region for FY2001 is $539 million. Of this
$264 million is for Development Assistance,
$86 million for Child Survival and Diseases Fund, and
$133.6 million for the Economic Support Fund, and
$55.5 million is for the International Narcotics Control. This
FY 2001 request is the minimum needed to continue USAID's solid record of
achievement in the region, and to mitigate the problems inflicted by Hurricane
Mitch.Program priorities for Development Assistance and Child Survival and
Diseases Fund for this region include: $41 million to
Strengthen democratic institutions, and promote broad citizen participation;
$62 million to expand economic growth, reduce poverty and
improve income equality; $144 million in programs involving
population growth, improve maternal and child health, and slow the spread of
HIV/AIDS and other infectious diseases; $73
million to maintain biological diversity and sound environmental practices; and
$29 million to improve the quality of education.
Mr.
Chairman, I just returned from Latin America, where I visited USAID programs in
Guatemala, Honduras and El Salvador. As you know, these countries suffered the
destructive ravages of Hurricane Mitch, which caused more than
$10 billion in damages in Central America, and severely
threatened the progress these countries had made in the past decade.
I
know that there are concerns about the pace of implementation of the
reconstruction. I was concerned as well with reports that little of the
supplemental funding has been expended. Let me put this in perspective.
Immediately following the Hurricane, our Missions on the ground put all
available resources to work, including funds from our Office of Foreign Disaster
Assistance (OFDA), food aid, and funds reprogrammed from
ongoing activities. After visiting our projects, it is clear to me that our
people in the field began working immediately following the Hurricane and have
not slowed down. They are now using the supplemental funds as fast and as
responsibly as possible to help build back these countries. Virtually all the
funds have been notified to the Congress and obligated to the countries.
It is important to remember that after Hurricane Mitch we saw no
uncontrolled outbreaks of epidemics in Central America. Today, because of our
efforts, people have been moved into shelters, schools have reopened, and
throughout the region, microenterprise institutions have been re-capitalized.
Borrowers have continued to repay their loans and economic enterprise has
continued, even though their national economies suffered enormously.
As
we continue to design reconstruction programs, USAID is doing everything
possible to ensure an extra layer of accountability. We have included concurrent
auditing, and hired independent accounting firms to assist the work of host
country Controllers General, who play a role similar to our General Accounting
Office. We have worked with other donors to create additional monitoring
mechanisms that will review procurements, audit the financial side and inspect
work completed under the reconstruction program. We believe that all these steps
are necessary to give the American taxpayer, as well as the citizens of these
countries a greater feeling of confidence that these funds are being spent
wisely. We continue to view this undertaking as a two-year mission and believe
that we can achieve the bulk of the relief and reconstruction results premised
to Congress by the end of 2001.
USAID's work on reconstruction work,
along with the contributions of other U.S. Government agencies, is highlighted
in a report we sent to the oversight committees last week. I have additional
copies to leave with the Committee or to include in the record, if desired.
Turning to another part of the region, as you know over the last three
years in Peru and Bolivia, USAID has instituted a program of interdiction and
alternative development to reduce the number of hectares in coca cultivation.
The results have been significant with increased public commitment to
voluntarily reduce coca cultivation, participation at community and local
government levels, and a substantial increase in the growth of the legitimate
economy. Building on the success of this approach, the Administration is
initialing comprehensive support in FY2000 for President Pastrana's "Plan
Colombia." As an integral component of the USG support, USAID will help Colombia
provide people with viable alternatives to illicit drug production and
strengthen the country's democracy by assisting the people displaced by violence
and improving human rights and rule of law.
Asia and the Near East:
The Administration is requesting 52.4 billion for Asia and the Near East
programs for FY2001. Of this amount, 5271.4 million is for Development
Assistance, and 597.6 million is for the Child Survival and Diseases Fund, and
52 billion is for the Economic Support Fund. In FY2001, the United States has an
unprecedented opportunity to significantly affect the transitions occurring in
Asia and the Middle East, both in the recovery from the Asian economic crisis
and in the crucial task of helping the Middle East make the promise of peace,
opportunity and security a reality. Unfortunately, the region continues to be
plagued by critical problems such as high unemployment and water scarcity that
if not managed carefully, could lead to conflict. Our national security
interests compel us to remain actively engaged in this region.The last two years
have been landmarks in the region's slow progression toward regional peace and
cooperation. Implementation of the Wye River Accords has been a top priority for
this Administration. USAID has been providing development assistance which is
improving the quality of life and economic opportunity for the Palestinian and
Jordanian people.
In Asia, the region is still suffering from the
aftershock of the economic crisis. While there are positive signs of economic
recovery, the underlying economic infrastructure in Indonesia, the Philippines
and Thailand remain weak and in need of reform and restructuring. To address
this problem, USAID is helping to improve economic transparency, reduce "crony
capitalism", and create a better environment for investment in the region.
As the economic crisis spread to Indonesia, we saw the fall of the
Suharto recline, initiating what we hope will be a continued transition to
democratic stability. However, economic recovery has been delayed due to social
and political instability. The most tragic example of such instability was seen
last year in East Timor where the previous regime consistently violated
international standards on human rights.
USAID invested over
$33 million to help increase the transparency and fairness of
Indonesia's first free and fair elections in over a generation. We provided
technical assistance to establish a framework for those elections including
voter education, conflict resolution and election day monitoring.
USAID's Asia and Near East priorities for the FY2001 funding request
include support for Indonesia's transition to democracy, facilitating economic
reforms especially in the countries hardest hit by the Asian financial crisis,
and supporting a comprehensive peace in the Middle East. USAID will also
encourage regional economic integration by promoting cooperation and trade in
clean energy production and technology among South Asian countries.
We
are also working hard to support a comprehensive peace in the Middle East, by
supporting the critical preconditions for peace. U.S assistance to the Middle
East has contributed to regional stability and has helped build the foundation
for economic prosperity and increased adherence to democratic principles. Our
programs in Egypt and in Jordan concentrate on promoting broad-based economic
development and also include support for democratic institutions.
In the
West Bank-Gaza, the US has focused efforts on strengthening the Palestinian
Council, and assisting local non-governmental organizations working to improve
living conditions for Palestinians. USAID has provided more than 14,000 small
businesses with essential start-up microenterprise loans, created an industrial
light- manufacturing center that will employ 20,000 and increased the
availability of safe drinking water.
As you know, water is one of the
key issues in the Palestinian/Israeli peace negotiations. In my recent visit to
the Middle East, I took part in the dedication of the Bethlehem-Hebron water
supply system. This is a $72 million USAID effort that includes
the drilling of four wells, the installation of 31 kilometers of transmission
lines, the construction of reservoirs and the completion of pumping stations.
This will double the quantity of water for Bethlehem-Hebron and bring the water
usage for 500,00 people close to the minimum household water supply set by the
World Health Organization.
International Disaster Assistance Account:
This has been a challenging year marked by hurricanes, earthquakes,
flooding, such as the current flooding in Mozambique, and marred by conflicts in
places like Kosovo and East Timor. Funded by this separate account, USAID has
been involved in efforts to deal with disasters, both political and natural in
nearly every region of the world. For FY2001, we are requesting
$220 million for the International Disaster Assistance Account
to provide relief, rehabilitation, reconstruction and transition assistance to
victims of such disasters through the Office of U.S. Foreign Disaster Assistance
(OFDA) and the Office of Transition Initiatives (OTI). Of the total,
$55 million is requested for OTI.
USAID's three
objectives for Humanitarian Assistance programs are prevention, relief, and
transition. These objectives form the heart of current relief efforts. I know
you agree that emergency assistance is not a substitute for long term
development programs but it is a safeguard for economic and social development.
Development Credit Program:
For FY2001 we are proposing
consolidation of our various credit programs into a single new Development
Credit program. This program would consolidate the current Urban and Environment
credit program, the Micro and Small Enterprise Development credit program and
the Development Credit Authority. This new program will give USAID a flexible
means of using credit to achieve our economic development objectives where
credit is financially viable, where borrowers are credit-worthy, and where there
is opportunity for effectively involving private lenders in development. We have
requested authority to transfer into this new account up to $15
million from other assistance accounts and an appropriation of
$8 million for the administrative costs of managing all our
current and new credit activities.
Economic Support Fund:
The
Economic Support Fund is budgeted at $2.313 billion for FY2001.
$1.818 billion will be used for economic reforms and as
continued support for the Middle East peace process as I described earlier,
which includes $840 million for Israel, $150
million for Jordan, and $695 million for Egypt. ESF funding
will assist other countries in their transition to democracy, promote stability
in Ireland and Cyprus and promote Human Rights. Additionally ESF funds will be
used in certain countries to respond to environmental crises, for water
management, primary health care, and priorities such as climate change and
biological diversity.
Freedom-Support Act:
Mr. Chairman, the
request for the FREEDOM Support Act for the Eurasian states is
$830 million. This includes $87 million to
continue the Expanded Threat Reduction Initiative. This initiative, to reduce
the threat of proliferation of technology and weapons of mass destruction, began
last year in response to growing concerns over security issues due to the
Russian financial crisis, which has impeded economic progress in the region. The
potential for scientists or others with access to this technology to sell theft
services to other states posed unacceptable risks to the United States. USAID
transfers funds to other agencies such as DOE and State, which manage these
programs. USAID-managed programs will continue to focus on longer-term efforts
that support the transition to democracy and free markets and trade in the
former Soviet states.We have learned that our work in the former Soviet states
will take more time than we originally thought. While communism has failed, in
many cases the communist mindset has not disappeared. Official corruption has
hindered progress, both political and economic. While it is far too early to
assess the policies that Acting President Vladimir Putin will embrace, we know
that a free and democratic Russia is in the best interest of the United States.
We are helping maximize the chance that they will stay on the right path toward
a better future by working at the grassroots level, and in the regions far from
Moscow to help support advocates of reform in the non-governmental and business
communities and to build lasting partnerships between U.S. and local
organizations. We were encouraged by the positive results of the election to the
Duma in December, and we are emphasizing the importance of holding a free and
fair election for President next month. We will encourage the winner to carry
out the fundamental reforms needed for Russian economic and democratic
development.
While challenges continue to be great, we have also made
considerable progress. For example Kyrgyzstan was the first NIS country to
accede to the World Trade Organization. Armenia has excelled during the first
six months of a comprehensive market reform program adopting new measures in
privatization, accounting and tax reform, and land management. Environmental
issues such as greenhouse gases are being addressed throughout the region.
Support for East European Democracy Account:
The request for
Eastern European Democracy (SEED) Act countries is $610
million, which is a $77 million increase over the FY2000
funding level of $532.97 million. As you know, SEED is a
transitional program to assist Central and Eastern European countries as they
shift to democracy and free market economies.
This request reflects a
dramatic shift of funds away from "graduating" Northern tier countries to
Southern tier countries such as Romania, Bulgaria and Albania where progress has
been slower. By the end of this year we expect all of the Northern Tier
countries will have graduated from direct bilateral assistance. Poland,
Lithuania and Slovakia are joining previous graduates - Estonia, Latvia,
Slovenia, the Czech Republic and Hungary. The Northern Tier countries remain
politically and economically important to the United States; therefore regional
mechanisms will still be available for limited support in the event of a crisis
and to ensure continued relationships between local and U.S. organizations. We
hope these Northern Tier countries will be able to provide help and guidance to
their neighbors as they move forward in their transition.
But we are
proud to say that our job is basically done.
In the Southeast European
countries of Bulgaria, Romania, Albania, Macedonia and Croatia, the conflict in
Kosovo had severe economic costs and has set back the timetable for their full
integration into the international economy. We are working closely with other
donors to help these countries integrate their economies including facilitation
of trade and customs reforms, and to continue the structural reforms that are
building stronger democratic market economies.
The request also includes
$90 million for Bosnia-Herzegovina, a sharp reduction from
previous years, as the program shifts from its earlier emphasis on
reconstruction to greater efforts to establish and implement the legal framework
and institutions of a market economy. It also requests $175
million for Kosovo, to help build basic governmental, economic and judicial
structures, and to jump-start the economy to create jobs and provide needed
basic goods and services. While accepting the need for a temporary UN
administration, the Kosovar people and the U.S. are anxious to see a
representative government formed.
Much of the Kosovo request will go to
address the need for basic security, good governance and human rights programs
funded through transfers of funds to other USG agencies such as the State
Department. USAID-managed programs, which account for less than one-third of the
funds requested, will address the need to restore basic community services and
infrastructure, establish the institutions of a market economy, restore the
agricultural sector, provide credit to micro- enterprises, and strengthen
democratic 'institutions such as the media, political parties, the judiciary and
other elements of civil society. We are creating the building blocks for a
functioning and capable local economy and society.
The Kosovo conflict
also underscored the challenge, and the importance, of supporting democratic
forces in Montenegro and even inside Serbia itself. As this Committee has
recognized, support to the Serbian opposition is critical to build pressure
against the Milosevic regime. Our request includes $55 million
for support to media, the democratic opposition, and reform-minded
municipalities. In Montenegro, we will provide vital budget support to the
courageous Djukanovic regime, which will be complemented by our assistance in
creating strong economic and democratic structures.
We clearly recognize
that it will take a generation or more to fully realize the progress made in
each of these countries as they make the difficult transition to free and open
societies.
P.L.480 Food for Peace Programs:
While I am aware
that a different committee authorizes the P.L. 480 programs, I believe this
Committee has an interest in this important part of USAID's overall program. The
request for P.L. 480 Title H non- emergency and emergency food assistance has
been set at $837 million. This will allow the Office of Food
for Peace to continue efforts to promote managed growth in Title H programs and
to meet critical emergency food needs of targeted Vulnerable groups including
refugees, internally displaced families or those who lose their land or
livelihoods due to natural or man-made disasters. This year, renewed attention
will be given to the use of food for nutritional feeding programs such as the
President's LIFE Initiative to mitigate the negative impact of
HIV/AIDS in sub-Saharan Africa and India.
On a global
level, more than 800 million people are chronically undernourished. The P.L. 480
Food for Peace program has provided over $500 million in
emergency food aid to an estimated 11 million people, it has
used resources to reduce food insecurity in the developing world by enhancing
household nutrition and increasing agricultural production.
Title II
funds are also used to support the Farmer to Farmer program, which provides
voluntary technical assistance to farmers, farm groups and agribusinesses to
enhance the potential for substantial increases in food production, processing
and marketing. The program relies on volunteers from U,S. farms, land grant
universities, cooperatives and private agribusiness and non-profit
organizations. Volunteers for this program have been recruited from all 50
States and the District of Columbia. This program has had a positive impact on
the US and raised public awareness about the needs of developing
countries.Operating Expenses:
For Operating Expenses the request is
$520 million for FY2001. This is almost equal to the FY2000
level. These funds cover salaries, benefits and other administrative costs that
assure effective oversight of USAID programs worldwide. OE provides the
oversight of the programs funded through Development Assistance, Child Survival
and Diseases, the Economic Support Fund, the Support for Eastern European
Democracy Act, the FREEDOM Support Act and the International Disaster Assistance
account, and the P.L. 480 Title H resources. The requested amount will permit
USAID to maintain the current levels of direct-hire staff overseas, though at
the cost of continuing reductions to our staff in the U.S. It also provides for
essential training to maintain and upgrade the skills of Agency staff.
Additionally, OE funds will permit the continuation of Agency efforts to
modernize its financial and other information systems. The financial system
purchased by USAID in FY2000 will begin to be deployed overseas in FY2001 and
will include significant upgrades to information technology for effective ad
efficient use of our automated systems.
Conclusion:
This is an
especially challenging time to be heading USAID. I want to work more closely
with you to meet these challenges. I am making it a top priority to meet with
more Members of Congress, one on one, in order to build a better understanding
of the vital role of this Agency.
This is my message to you today.
USAID's work in development assistance takes time. It is an incremental process
that pays off for America and for the world. Foreign assistance is a national
security priority. USAID is a smart investment and one of the most effective
tools the U.S. Government has in building the foundations for trade and markets,
and the spread of democratic ideas.
As President Clinton stated in his
State of the Union address: "Globalization is the central reality of our time
.... We cannot build our future without helping others build theirs."
This has been the decade of globalization, let it become the century for
democratization.
Thank you for your contribution to USAID's success. And
thank you for your attention this morning.
END
LOAD-DATE: March 17, 2000 
