U.S. DEPARTMENT OF STATE OFFICE OF THE SPOKESMAN 1996 BUDGET SUBMISSION FEBRUARY 6, 1995 ON THE RECORD BRIEFING BY SECRETARY OF STATE WARREN CHRISTOPHER AND L. CRAIG JOHNSTONE, DIRECTOR OFFICE OF RESOURCES, PLANS & POLICY ON THE STATE DEPARTMENT'S 1996 BUDGET SUBMISSION Washington, D.C. February 6, 1995 SECRETARY CHRISTOPHER: Good morning. Just a few words about procedure here. I'll be making a brief statement on the budget and then taking just a couple of questions because the South Koreans are here today and I'll be going up there for lunch with the new Foreign Minister, Mr. Gong, and will be taking some questions up there. After I've finished, Craig Johnstone will be here to give you more detailed information on the budget and will answer the detailed questions that you might have. As I said, I'm here to give you an overview of the l996 International Affairs budget, which funds the State Department and the related international affairs agencies. I'll be joined by Craig Johnstone, who will take you through all the details. By any measure, this new budget is an austere budget. Since l984, the International Affairs budget has been reduced by 45 percent in real terms. It now represents around one percent of total Federal spending, notwithstanding the extraordinary array of challenges, some of them new challenges. Our l996 spending request of just over $2l billion is essentially what we're spending in the current Fiscal Year. We've been tough-minded in putting this budget together. I believe the resources that we are requesting are the rock- bottom minimum that we need to defend and advance America's interests. Last November's elections certainly changed many things, but they were not a license to lose sight of our global interests or to walk away from our commitments around the world. This budget does maintain our commitments. Approving it will be a stern test of our nation's willingness to dedicate the resources necessary to protect the security and protect the prosperity of the American people. It is essentially a test of our commitment to lead. Just consider what the world would be like without American leadership. In the last two years alone we would have had four nuclear states in the former Soviet Union, instead of one, with Russian missiles still targeted at our homes. We would have had a full-throttled nuclear program in North Korea; no GATT Agreement and no NAFTA; brutal dictators still terrorizing Haiti; very likely, Iraqi troops back in Kuwait; and an unresolved Mexican economic crisis, which would have threatened stability on our border. For the coming year, I have identified five specified areas of opportunity for American foreign policy, as you all know. I'd like to mention each of them and describe how each of them is supported in this new budget. First, we must maintain the momentum to open new markets. To do so, we'll begin to implement the Uruguay Round Agreement and the free trade commitments we have here in the Western Hemisphere as well as in the Asian Pacific region. American companies and workers must be able to take advantage of these opportunities, and this budget requests some $900 million to promote export and investments through programs run by the Ex-Im Bank, OPIC, AID, and other agencies. In the last two years, these efforts have supported over one million high-paying jobs. Second, we will continue to build a new European security structure. Secretary Perry will be discussing our overall commitments to NATO, but I want to emphasize that our budget provides $85 million to help countries participate in the Partnership for Peace -- of course, a key element in extending NATO's reach to the new democracies to the East, as well as in laying the groundwork for NATO expansion. Through the $480 million program that we have requested in the Seed Program, we maintain our assistance for democratic and economic reform in Central and Eastern Europe. This budget also requests $788 million in support of democratic reform in Russia and the other states of the former Soviet Union, with more than half going to so-called New Independent States other than Russia. This investment in Russia and the other states of the former Soviet Union remains the least expensive investment that we can make for our long-term security. Russia's indiscriminate and excessive use of force in Chechnya has certainly dealt a setback to reform in that country, but it has not altered our fundamental interest in helping Russian reformers build a nation that finally is at peace with itself and its neighbors. Our third area of opportunity in the coming year is advancing peace and security in the Middle East. This budget maintains our commitments there by allocating $5.24 billion to sustain our effort at a time when the peace process stands at a decisive moment. Our critical support for that peace process in the Middle East simply must not be allowed to falter. Fourth, we will intensify our efforts to stop the proliferation of weapons of mass destruction. This budget meets that threat. Among other things, it supports the Arms Control and Disarmament Agency. It provides assistance to the International Atomic Energy Agency, an organization that's vital in our program to halt the nuclear program in North Korea, and it replenishes the non-proliferation fund which we use to combat nuclear smuggling, to enforce export controls, and to ensure missile dismantlement. Fifth, the budget will help us intensify the fight against global terrorism. It provides a foundation for an intensive campaign against narcotics trafficking. It more than doubles our funding to fight against international crime. Taken together, this budget requests $240 million for these vital efforts. Of course, this budget, in addition to the five areas of opportunity, covers a number of other important foreign policy objectives. I'll just mention a few of them here today. The budget makes a $1.5 billion commitment to democracy around the world. In addition to our support for reform in Central and Eastern Europe, the former Soviet Union, we provide $220 million for countries in transition, such as Haiti, Angola, and Cambodia. We believe that this support can make a vital difference in the pursuit of democracy and stability in these countries in transition. This budget also supports international peacekeeping. As I've said before, where our vital interests are at stake, we must be prepared to defend them alone. But sometimes by leveraging our power and resources, by leading through alliances and institutions, we can achieve better results at a far lower cost to our national treasure and in human life. Of course, if we can do that, that's a sensible bargain that I know the American people will want to support. We strongly oppose the efforts in Congress that threaten to remove peacekeepers from vital troubled areas of the world and threaten to leave the President with an unacceptable choice when a crisis occurs, a choice only between acting alone and doing nothing. The Administration has made a commitment to address a number of long-term threats to the future of the nation -- threats that were too often ignored to our detriment -- threats such as environmental degradation, unsustainable population growth, and the endemic poverty that feeds instability and blocks prosperity. Among other efforts, the budget that we have before us today funds programs to curb air pollution, to improve basic education, and to implement health initiatives for women and children that were agreed to in the Cairo Summit. All told, this budget requests just over $1 billion for global population and environmental programs. Our ability to advance these interests of course depends upon equipping the men and women who serve in our international affairs agencies, giving them the skills and resources they need to do the job. Like our soldiers, they must be prepared to fight for America's interests. Clearly, no American wants to live in a world in which nuclear weapons have fallen into the wrong hands, a world in which America has retreated from economic leadership, a world in which the post-Cold War momentum toward peace and freedom has been reversed. We believe -- I believe -- this budget meets the minimum but essential test. It sustains our intensive, effective engagement on behalf of these vital interests around the world. I'll be making that case to the Congress and the American people. I appreciate this opportunity to give you this capsule summary of the directions of our new budget. As I say, I'll take just a few questions. If you have more detailed questions, Craig (Johnstone) will be giving you a fuller account of what the budget does and be prepared to answer those questions. QUESTION: Mr. Secretary, could you talk for a second about the $763 million cut in peacekeeping programs? SECRETARY CHRISTOPHER: The reason for that is that the cut takes into account last year's supplemental. The amount that has been budgeted for this year takes into account the anticipated expenditure for this year. The reason for the difference, or the disparity, is because of the number that you're seeing there, and which reflects that amount of the cut, takes into account the supplemental. QUESTION: On that, then, will the amount -- in bringing in all these categories -- will the amount for peacekeeping remain about level from the current year? SECRETARY CHRISTOPHER: It will be the amounts that we have mentioned there. The Congress has never been willing to have a contingency fund. So, in the past, we've had to deal with supplementals where it became necessary to spend more money as the year went along. If there are no supplementals this year, the budget will be -- the figure you used, I believe, was $763 million less. On the other hand, there are a number of contingencies ahead and there could conceivably have to be supplementals. For example -- and Craig can correct me on this -- I think it's correct to say that this budget funds UNPROFOR for the first six months of the new Fiscal Year. So if UNPROFOR were to go longer than a year from March, and that were to be regarded as in our interest, then we would have supplemental obligations there. I mention that only to illustrate the fact that this budget is our best estimate of what the costs will be for the forthcoming year. As I also said, Congress has never been willing to fund a contingency. QUESTION: Mr. Secretary, can you talk about any cuts in specific country accounts? SECRETARY CHRISTOPHER: Carol, the country-specific numbers will not be available for several days. We'll be briefing them at a later time. I've given you the overall numbers for Russia and the New Independent States. I think I've said before, there will be no cuts for Egypt or Israel. I cannot be more specific than that at this time. Lee. QUESTION: Can you tell us, even though you oppose Congressional efforts to reduce peacekeeping activities, did you take into account at all the feeling on Capitol Hill toward peacekeeping when you drew up this budget? SECRETARY CHRISTOPHER: Lee, if I could quarrel just a little bit with your premise. I certainly am supportive of efforts to make international peacekeeping more efficient. I'm supportive of efforts to be very selective about the peacekeeping we undertake; to ask the hard questions in a way that they were not at a prior time. But what I objected to on Capitol Hill -- and strongly object to -- is taking steps that would gut the program and would leave the President in the future will only the choice of going alone or doing nothing; because I still think there are great opportunities to share the burden, in the right circumstances, with other countries. Those factors were all taken into account as we tried to estimate what the most likely cost of the current peacekeeping endeavors will be for the future year. I'll take one more. QUESTION: Does this budget foresee closing any overseas missions -- diplomatic missions? SECRETARY CHRISTOPHER: We are committed to closing additional overseas missions, as the Vice President said in his statement the other day. I believe we are committed at the present time to closing 15 missions overseas. When I use "missions," I mean a facility of one kind or another. Thank you very much. Craig will be here. MR. JOHNSTONE: Thank you very much. I wanted to run through the budget with you. I wanted to tell you first of all what it is that you have in front of you. We have passed out to each of you two packages: one including the Secretary's statement with a few checklists on what is in the budget; secondly, a budget which is drawn in two different forms. The first page that you have there is a budget by objective, which is the way that we actually compile our budget internally. In the subsequent pages, what you have in front of you is a budget by appropriation line item, which is the way that it is delivered to Capitol Hill. It is more coherent and I think a little bit sounder to go through the budget by objective, so I thought I'd just cover very quickly some of the items in this budget and then take your questions. First of all, under the Promoting Prosperity, as the Secretary said, we have about $900 million -- in fact, $901 million --devoted to it, and that includes the financing for Ex-Im Bank, OPIC, TDA and PL-480 Title I. Although this represents a decrease from last year, the overall program levels that will be funded under the budget for OPIC, TDA and Ex-Im Bank are not decreased this year. The decrease essentially has been offset by reflows; that is to say, businesses pay back into these accounts, and that accounts for the differences in the funding. The Newly Independent States: the funding that we have for the NIS states, including Russia but now refocused on the Ukraine, Georgia and the other independent states of the Soviet Union is up somewhat from last year's levels, reflecting in fact some of the reforms that have been taking place in the countries outside of Russia within the NIS category. Central and Eastern Europe is up $120 million in our 1996 request. That is actually for two reasons. One is that it reflects a $60 million sum which has been set aside for Bosnia reconstruction, and the balance of that increase is to fund an increased effort in the southern tier countries. As we begin the process of wrapping up our programs in the northern tier countries -- that is, primarily in Poland -- and moving into the southern tier in a more aggressive way and supporting reform and reformers in those countries, there is a need for additional funds before the funds begin to lower in the northern tier countries. The Other Countries in Transition category funds regional democratization programs in Africa, Latin America and Asia, as well as whole country programs in Haiti, Cambodia and Angola. Looking down through the budget at the principal differences with last year, under Sustainable Development you will see that there has been an increase in the budget category of $440 million. That can be entirely attributed to an increase in the payments of arrearages to the multilateral development banks. There is a redistribution of funds within the bilateral programs and some of our multilateral programs in the sense that we have increased the total amount of funds for population growth and for the global environment in this funding category by modest amounts. Population Growth has been increased essentially to take into account the commitments made at the Cairo Conference; the Global Environment funds, to meet the pressing needs of biodiversity, the depletion of the ozone layer and global warming issues. In the Promoting Peace category, the levels for the Middle East Peace Process remain largely unchanged. There is an increase in military assistance for Jordan which has gone from $7 million to $30 million in this budget category. Otherwise, the Middle East Peace Process is funded at the $5.243 billion level out of the overall budget level of $6.6 billion. Peacekeeping Programs was addressed by the Secretary, and he got it right on. The Non-Proliferation and Disarmament line you will notice has also gone up in this year by $62 million. That funds part of what we are trying to achieve with Korea, the establishment of KEDO, the organization to oversee the change in the nuclear status of North Korea, as well as increased funding for the Non-Proliferation Fund which is designed to counter in part nuclear smuggling. A big increase in appropriate levels, but not necessarily in request levels for Counter-Narcotics, Crime and Anti- Terrorism. There, the Secretary announced in Boston the Administration's new initiative on crime, and this helps to fund that new initiative. Humanitarian Assistance I think remains largely unchanged from last year's levels -- pretty much a straight line. The Advancing Diplomacy section -- that is to say, the support for our people overseas and for our infrastructure, which essentially makes it possible to conduct our foreign policy this year -- is in fact slightly less than it was last year, owing primarily to a decrease in requirements for broadcasting services within the USIA budget. That in a nutshell, and I'll be glad to get into any specifics that you'd like to, with the exception that country numbers will not be available for a couple of days yet. QUESTION: Where do you account for the debt forgiveness for Jordan? MR. JOHNSTONE: The debt forgiveness for Jordan is carried under the multilateral development banks, IMF and debt reduction number. The total amount in the supplemental is $275 million, carried in the FY-1995 estimate column. QUESTION: You've gone down here just about $80 billion -- excuse me, $81 million -- MR. JOHNSTONE: $81 million. QUESTION: $81 million from your '95 estimate to your '96 estimate -- and I don't know how that compares to '94 -- but basically you're going down in real dollars. With inflation taken into account, what is the decrease from last year to this? MR. JOHNSTONE: I haven't run an inflationary deflater on it. This is our projected spending level for 1995. It includes the supplemental request for 1995 in this request. We're not, of course, sure that we're going to get all of the supplementals there, so it's still a little early to really make the year-to-year comparison. But by and large this is a stay-flat budget; but not allowing for inflation, you're absolutely right. If you figure the inflationary level -- and I don't know what it would be; two-and-a-half, three percent, something in that order -- then you could make the calculation. This reflects a number of cuts, in point of fact, and I can assure you that the budget requests of all of the individual agencies was substantially higher than this level; so we did some pretty stringent cutting of this budget when we put it together. QUESTION: Would it be fair to say that the budget in fact is going to take a decrease according to the inflation? MR. JOHNSTONE: The year-to-year 1995 estimates to 1996 request, yes, it would be fair to say that. QUESTION: Under Sustainable Development, as you pointed out, the largest increase was for multilateral banks -- our contribution. Given the Mexican bailout program that was announced last week, are those estimates likely to change? MR. JOHNSTONE: The Mexican bailout program is not a budget line item and doesn't appear in this. The effort to bring economic stability to Mexico does not appear as a budget line item in here, so it doesn't have an impact on these numbers. QUESTION: May I ask you to play handicapper for a second. Can you tell us the likelihood of asking for a supplemental for peacekeeping for this year? MR. JOHNSTONE: That is for 1996, because we have a request in here of $672 million for a supplemental for 1995. It's still too early to say. I think if there are no new operations required over the course of the next 18 months and if UNPROFOR wraps up after six months of the new Fiscal Year -- that is to say, after a year and a few months from now -- then these numbers should obtain. If there are requirements for new operations or if UNPROFOR has to be extended beyond that time, then additional funds would be required. QUESTION: Will we be up to date then at that point with our assessments? MR. JOHNSTONE: Yes. QUESTION: In the back there's a -- under Advancing Diplomacy, there's a $119 million cut in information exchange programs. It excludes NED -- is that -- or maybe - - what is it -- MR. JOHNSTONE: Yes. The NED is carried in a different line in the budget up under Building Democracy. QUESTION: Is that primarily broadcasting? MR. JOHNSTONE: That is primarily broadcasting, yes. QUESTION: In regards to Cuba, you don't put any budget authority money. Do you mean that you want to close all the broadcasting to Cuba? MR. JOHNSTONE: No. The broadcasting for Cuba funds have been consolidated into the overall broadcasting category. There's no intent to close the broadcasting for Cuba. QUESTION: Last year the Congress, they put some conditions -- ten percent conditions about Greece and Turkey; but I realize that this year your budget resolution, you already put before the Congress voluntarily this ten percent condition. Is that the Administration policy to put that situation -- MR. JOHNSTONE: No. The ten percent requirement was not in the budget request that went up in 1995, and was nonetheless included in the congressional request levels. The request for 1996, though we don't have specific numbers, will include for Turkey, for example, a certain level of economic assistance and will include the last payment of our FMF loan guarantee program which related to weapons purchases by the Government of Turkey. QUESTION: Can I just clarify on Mexico. Any number here does not reflect the Mexican bailout relief -- MR. JOHNSTONE: No. The guarantee for Mexico is exactly that. It's a guarantee which doesn't have a budget line- item impact on this budget. QUESTION: On this budget, or on Treasury's budget -- MR. JOHNSTONE: That's correct. QUESTION: If you're down 45 percent in about 12 years from where you were, I don't see how you can call this a strengthening of the U.S. role in international affairs. I mean, there are huge numbers of unmet needs, and nobody knows that better than you, and you call this a strengthening of the U.S. role in international affairs. It seems to me you're -- you know, you don't even have enough to get by. MR. JOHNSTONE: We would stand by the Administration's request level in terms of being a solid and constructive budget that will make it possible for us to meet the leadership requirements for our country and the world. Is it everything that we could have hoped for? It's never everything that you could have hoped for; but on the other hand, it is a budget that will make it possible for us to exert the kind of leadership around the world that we think is necessary to have. Yes, there are still post closings that are required, and, if you think that post closings are not desirable in this day and age, then this is a budget which forces us to take some post closings. On the other hand, I think this long trend that you see here of decline -- now we have a process of leveling off here in this budget request which I think is a very healthy process, both in terms of the supplemental requests for 1995 and the 1996 request amount. QUESTION: Could you tell me the amount of the fund which will be allocated for KEDO and its projects from the federal budget and the State Department budget? MR. JOHNSTONE: I think within this budget as a whole, there is $22 million set aside for KEDO-related activities. It isn't just KEDO but for the entire Korean issue. I'm not aware of what it is that's in the other budgets in the federal budget. QUESTION: You mean the light-water project? MR. JOHNSTONE: The KEDO -- that is to say, our non- proliferation efforts in North Korea are treated in a number of different budgets. There is a $22 million component in this budget. We'd have to get back to you with anything that exists within any other budget. QUESTION: Of this $763 million cutoff from peacekeeping programs, do you know how much will be cut from Operation Provide Comfort? MR. JOHNSTONE: Operation Provide Comfort is not a peacekeeping operation; it's a humanitarian assistance effort. This budget has a line item for Provide Comfort in the budget, and you know Provide Comfort was paid for last year out of the Department of Defense budget. The total cost of Provide Comfort is something in the order of $30 million, and in this budget this year we are picking up that requirement that used to be a Department of Defense requirement under our Office of Disaster Assistance. The total for that budget will go from $170 million last year to $200 million this year because of the Provide Comfort provision. QUESTION: I'm a little confused about this cut in peacekeeping, because if you combine the supplemental for Fiscal '94 and the '95 money, you get about 1.3, is that right? And then this year's, if you combine the '96 request with the '95 supplemental request, you're not talking about all that different then, are you? I mean, the numbers we're talking about is a couple hundred million, really. MR. JOHNSTONE: When we go up for the supplemental request at this time of the year, the supplemental relates to 1995; the new money is 1996. We have $672 million then of funding that is being requested as a supplemental for 1995. That brings in fact the 1995 request levels much closer to the 1996 request level. QUESTION: I mean, I'm a little unclear. Since you have to go through this supplemental process every year, it seems to me, how do you know you're not going to need another supplemental in '96? I mean, can you really predict that at this -- MR. JOHNSTONE: You certainly don't know that. That is to say, if you operate off the assumption that the Congress likes us to operate on, on this budget, you will only budget those items that you already know about. These peacekeeping funds are a little bit like disaster assistance in the sense that ideally you would have a set of money at the beginning of the year and then you'd draw it down according to disasters. The Congress has not seen fit to appropriate the contingency funds for peacekeeping, so we have to do it this way. QUESTION: Again, on the peacekeeping. It's a little strange, where you've done it to me. You're only budgeting the Bosnia mission through six months? MR. JOHNSTONE: For six months of Fiscal 1996, which means all of the rest of '95 plus six months of 1996. QUESTION: So, undoubtedly, you're going to need to ask for more on that. Why did you understate it like that? I don't understand the rationale. MR. JOHNSTONE: We tried in the course of the last three years, with the Congress, a number of different formulas for how you go about funding peacekeeping. Clearly, what would be the best mechanism for funding of peacekeeping would go to something like the way that one would fund humanitarian assistance and set up a contingency fund for peacekeeping. So far the Congress hasn't seen fit to approve any kind of contingency fund. So we're pretty much stuck requesting monies on the basis of existing expectations for existing missions, which always runs the risk of underfunding the program. QUESTION: Your expectation the is that the Bosnia peacekeeping mission will only be six more months? MR. JOHNSTONE: At this stage -- where that's over a year away -- it's almost impossible to tell. So that was just a swag that was taken as being a number with the recognition, and very up front, telling the Congress that we'll have to come back and ask for more money if that turns out not to be the case. QUESTION: For example, if you're renovating your house, you don't want the contractor to come to you with half the expenses he thinks it's going to be and then come back later for the other half. Don't you think Congress would be better to get the bad news up front and deal with it, rather than six months down the road? MR. JOHNSTONE: I think in a very practical sense, though, if the contractor were to come to you with half the expenses and say how the expenses were developed and say that if things change from the conditions on that half expenses, you would have to have more money to complete the job, that would be a perfectly acceptable way of doing business. That's the way that we've been forced to do business with the Congress on peacekeeping funds. QUESTION: Why do you have such a high increase for ACDA? MR. JOHNSTONE: It really is to fund the Chemical Weapons Convention implementation (and START II verification). I think ACDA's bottomline budget is a straightline budget. You can refer that to -- I don't know if anybody is here from ACDA. The Chemical Weapons Convention implementation is now funded in this budget category where it has not in the past, and that accounts for the plus-up.* _________ * The Chemical Weapons Convention implementation is now at increased funding in this budget category. This, plus funding of $14 million for Cobra Dane for Start II veri- fication, account for the plus-up. _________ QUESTION: Two quick questions. On Poorest Country debt restructuring, there's quite an increase. I was wondering what that's for and how much borrowing that's supposed to leverage? Also, how much and where is the global environment facility located in the budget? MR. JOHNSTONE: The global environment facility is located under the Multilateral Development Banks section of the budget. It was in the budget last year as well, and was appropriated last year. QUESTION: How much are you asking for this year -- $100 million? MR. JOHNSTONE: (TO STAFF) Are we at $100 million this year on request level? A hundred and ten million. I think $90 million was appropriated last year. To go back to your original question, in terms of the debt, that really funds two kinds of programs. One is for the poorest of the poor nations, and Paris Club rescheduling -- there's an increase there -- plus also funding for nature- for-debt swaps in Latin American. I can get you the exact numbers if you like. David, if you would get the exact numbers on that score. QUESTION: On the 45 percent real cut -- where does that come from? Mainly military assistance, development assistance? MR. JOHNSTONE: I'll tell you, it comes from a number of categories. But the principal categories relate to what we call security assistance. That is to say, ESF funds. It used to be -- and, in fact, at many times and many different iterations in the past I've been called upon to reprogram funds for contingency circumstances when they arise for geopolitical concerns. ESF Funds today are almost non-available for the purposes of meeting short-term contingencies. They have essentially dried up over the years. This budget will restore a little bit of funding flexibility to the ESF account. More, perhaps, might be needed in future years. QUESTION: How many State Department posts does this envision closing in the coming year? MR. JOHNSTONE: This would envision closing l5. QUESTION: Beyond whatever closed last year? MR. JOHNSTONE: Yes. QUESTION: And do you have the list? MR. JOHNSTONE: I don't think the list has been determined yet. QUESTION: Can you give some examples of what you're thinking about? MR. JOHNSTONE: This would fall to the State Department side, not the Function l50 side; but I don't believe that they've yet formulated a list and I don't think are in a position to talk about it yet. QUESTION: Are you also contemplating closing any Bureaus? MR. JOHNSTONE: I think under the Vice President's initiative it was agreed that one Bureau would be closed. QUESTION: What is the U.S. position on seven-ten ratio between Greece and Turkey in this budget? MR. JOHNSTONE: I beg your pardon? QUESTION: Seven-ten ratio between -- MR. JOHNSTONE: It will be maintained in this budget. QUESTION: How much are you proposing in Economic Support Funds for Turkey? MR. JOHNSTONE: The individual country numbers won't be available until later this week, sorry to say. There will be some, but I can't tell you what the number is yet. QUESTION: Two really quick clarifications: The '95 estimate on peacekeeping of $l.3 billion -- that does include the $672 million supplemental for '95? MR. JOHNSTONE: Yes, it does. QUESTION: Okay. And the other one was: On Mexico and the loan guarantee, you said that it's not a line item. Would it be a supplemental in the event that additional money is required to meet the IMF obligation of $l8.7 billion? MR. JOHNSTONE: I'd have to take that and get back to you on it. I'm not sure exactly how that would be -- any contingencies with respect to Mexico would be funded. QUESTION: You don't have numbers for countries, but do you have anything about regions. It's going to be... MR. JOHNSTONE: Those will be available also a little later this week. QUESTION: Last budgeted -- QUESTION: Which Bureau are you considering cutting? MR. JOHNSTONE: We haven't yet begun the process by identifying the Bureau. QUESTION: This budget will keep the U.S. current on its peacekeeping and U.N. dues, is that right? MR. JOHNSTONE: This will bring us current on our peacekeeping obligations. It does not yet bring us current with respect to U.N. dues. We have a multi-year program that will achieve that objective, but this budget will not yet do that. QUESTION: And that is assumed? Part of that ongoing process of paying up there is assumed and it is included in this budget? MR. JOHNSTONE: I think the U.N. dues begins in Fiscal l996, if I'm not mistaken -- the first tranche of payment on U.N. dues. QUESTION: This pays for -- MR. JOHNSTONE: Fiscal '97 -- sorry. QUESTION: This pays our '96 obligations to the U.N. but does not pay what we owe them for past arrears? MR. JOHNSTONE: That's right. And the beginning of the repayment schedule will be l997. QUESTION: And you also cite an increase to the multilateral development banks. MR. JOHNSTONE: Strictly to pay the arrearages. QUESTION: Right. Will that cover all the arrearages that we have there now, or is that a payment? MR. JOHNSTONE: No, no. That is a payment toward covering the arrearages. I think the arrearages are to be paid up by the end of Fiscal l998. QUESTION: (Inaudible) is that a 25 or 3l percent assessment? When you say we're going to be current, is that using -- MR. JOHNSTONE: We based on budget on the basis of a 25 percent assessment. QUESTION: I see, okay. QUESTION: Thank you very much.
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