US Department of State Dispatch Supplement
VOL. 4, NO 1
Title: FY 1994 International Affairs
Budget Requests
PA
Source: Office of Public Communication, Bureau of Public
Affairs
Date: Apr, 15 19934/15/93
Description: Annual Report
Region: Whole World
Country: United States
Subject: State Department, Resource Management, Environment,
International Law, Arms Control, Immigration,
Military Affairs, Trade/Economics, Development/Relief Aid,
United Nations, NATO, International Organizations
ARTICLES IN THIS SUPPLEMENTS [ALSO REVIEW THE TABLE OF CONTENTS F4]:
1. Statement by the Secretary of State
2. FY 1994 International Affairs Budget: Promoting peace,
Prosperity, and Democracy
3. Budget Highlights by Major Area
Building Democracy
Promoting and Maintaining Peace
Promoting Economic Growth and Sustainable Development
Addressing Global Problems
Promoting Humanitarian Assistance
Advancing Diplomacy
[TEXT]
ARTICLE 1: Statement by the Secretary of State
President Clinton has summoned us to national renewal with a call
for innovation, investment, and a new partnership between the
American people and their government. Our foreign policy must play
a vital part in that renewal. It must reflect the realities of the
post-Cold War era. It must be more closely integrated with our
domestic priorities. And it must directly serve the prosperity,
security, and values of all Americans.
The FY 1994 budget is a transitional budget. It marks a first but
important step toward accepting the very new challenges we face
abroad. It begins the process of redirecting our foreign policy,
refocusing our foreign affairs budget, and reforming our foreign
policy institutions. Each of these will promote the three
overarching goals that President Clinton has set for American policy
in the post-Cold War era.
First, we must revitalize the American economy. This hinges, above
all, on prompt congressional passage of the President's economic
program. As the world's most powerful economy, its largest market,
and its leading exporter, we must use all the tools at our disposal to
generate growth here at home and bring down barriers to our goods
and services worldwide. This includes macroeconomic coordination
among the industrial democracies, the negotiation of a new accord
of the General Agreement on Tariffs and Trade, the speedy
conclusion of the North American Free Trade Agreement with
protection for workers and the environment, and vigorous export
promotion.
Second, we must modernize our security structures to mirror post-
Cold War realities. We must adapt our military forces to address
enduring and emerging threats to our national security. With our
partners, we must reshape old alliances, like NATO, to meet new
missions. We need more robust international peace-keeping
capabilities to face the challenges to international peace posed by
ethnic and regional conflicts. We must work closely with our
partners to confront the global threat of international crime. And
we require stronger non-proliferation regimes if we are to stem the
spread of dangerous weapons and technology.
Third, we must encourage the democratic revolution that has swept
much of the world. By strengthening democracy, respect for human
rights, and free markets, we do more than honor the universal values
upon which our nation is founded. We help ensure our own security
and prosperity. Democracies make more reliable partners in
diplomacy, trade, arms agreements, and cooperation on global
environmental protection. Democracy cannot be imposed from above;
by its very nature, it must be built, often slowly, at the grassroots
level. We should embrace and encourage this process by patient
support for democratic institution-building around the world.
All three goals are vitally at stake in the former Soviet Union. If
the forces of freedom prevail in Russia, Ukraine, and the other newly
independent states, we will acquire partners in peace, open vast new
markets for our goods and services, and see our national ideals
flourish on once hostile soil. Americans have a real material and
moral stake in the future of the former Soviet Union. Aid to the
forces of freedom in Russia and elsewhere is not just a helping hand:
It is an investment in American security, American prosperity, and
American values.
Achieving our goals, in the former Soviet Union and around the
world, will require more than a declaration of principles. Success
will require a sustained diplomacy that looks beyond this week's or
next month's crisis; a flexible diplomacy that uses the full range of
bilateral, regional, and multilateral tools at our disposal; and an
activist diplomacy that puts a premium on timely prevention, rather
than costly cure.
We present the FY 1994 budget at a time of fiscal austerity. We see
this austerity, not as a hardship to be endured, but as a challenge to
innovate. In the months and years ahead, we will redouble our
efforts to realign our priorities, reorient our budget, and restructure
our institutions in ways that will promote the well-being of our
citizens.
This budget presentation is not meant to foreclose options or
preclude a full debate. We look forward to full partnership with the
Congress as we fundamentally restructure our foreign affairs
programs and institutions over the next years. But the
Administration intends to do more: We will take foreign affairs to
the American people, explaining our initiatives, justifying our
expenditures, and seeking their support as we craft a new course
through the end of this century and beyond.
In both foreign and domestic affairs, we must put people--the
American people--first.
--Warren Christopher
ARTICLE 2: FY 1994 International Affairs Budget: Promoting Peace,
Prosperity, and Democracy
Summary
The President's FY 1994 International Affairs Budget* signals
important new directions and re-orients resources toward meeting
new challenges in the post-Cold War environment. At the same time,
funds will be redirected toward programs that yield more direct
benefits to the American people.
* Some funding categories within the total FY 1994 International
Affairs Budget Request contain preliminary estimates. Estimates
may change once final foreign assistance allocations re determined.
US economic prosperity remains directly tied to world economic
growth and international peace and stability. By investing scarce
international affairs resources in a few priority areas, the United
States will be investing in its own long-term economic and security
interests and will avoid far greater costs in the future. For
example, modest investments in promoting democratic reforms in
Russia; preventing regional, religious, and ethnic conflicts; and
attacking the problems of environmental degradation, unchecked
population growth, and the proliferation of weapons will reap
immeasurable benefits and contain federal spending over the long-
run.
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Graphic: FY 1994 International Affairs Budget $21.6 Billion in
budget Authority
Data: Economic Growth and Sustainable Development $5,269 (24%),
Addressing Global Problems $1,488 (7%). Humanitarian Assistance
$2,031 (9%), Advancing Diplomacy $3,720 (17%), Other $100 (1%),
Building Democracy $2,723 (13%), Promoting and Maintaining Peace
$6,236 (29%)
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The FY 1994 budget is based on five overarching, mutually
reinforcing objectives that reflect vital US interests and
fundamental values. They are:
-- Building democracy;
-- Promoting and maintaining peace;
-- Promoting economic growth and sustainable development;
-- Addressing global problems; and
-- Providing humanitarian assistance.
A sixth theme, "advancing diplomacy," refers to one of the most
important means to achieve progress in the above five areas. The
effective use of diplomacy and international organizations is a
critical and cost-effective ingredient to success in these areas.
The President's FY 1994 budget requests about $21.6 billion in
budget authority (the authority to commit funds) and $21.3 billion in
outlays (actual spending) for FY 1994. This is about $450 million
more in budget authority and $250 million less in outlays than FY
1993 enacted levels. Compared to the FY 1993 budget, the
Administration has redirected more than $700 million from existing
international affairs programs toward higher priorities. In real
terms, the budget is about $200 million in budget authority and $100
million in outlays below the current services baseline (the current
level of spending adjusted for inflation). Over 4 years, the budget
reflects the importance of containing federal spending by saving
nearly $3 billion in outlays from the current services (no real
growth) level.
Significant changes in the FY 1994 budget from FY 1993 levels are:
-- An increase of more than $300 million in assistance to the
former Soviet Union;
-- A net increase of nearly $170 million to support multilateral and
bilateral peace-keeping efforts (this is in addition to increases for
peace-keeping in the Department of Defense (DOD) budget);
-- About $100 million more for programs addressing the problems
of population growth;
-- $50 million for a new non-proliferation fund to stem the flow of
weapons;
-- $35 million more for environmental programs aimed at tackling
global environmental degradation;
-- $20 million more for the Trade and Development Agency and
nearly $1 billion more in Export-Import Bank guarantees to increase
opportunities for US business overseas and expand exports;
-- $190 million more for increased commitment to the
International Development Association for assistance to the poorest
and least creditworthy countries, in addition to increases for other
multilateral development banks.
To offset much of these increases, the FY 1994 budget reduces a
number of existing programs, the largest being a reduction of more
than $400 million in security assistance programs, including phasing
out the Special Defense Acquisition Fund. Other programs have been
cut by more than $250 million, including a $50 million reduction in
development assistance by the US Agency for International
Development (USAID).
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Graphic: FY 1994 International Affairs Budget Authority and
Outlays
Year 1992 1993 1994
Budget Authority $20,927 $21,119 $21,567
Outlays $19,160 $21,588 $21,339
-------------------------------------------------------------------
New Budget Presentation
Table 1 presents the funds requested under each of the six new
categories and highlights the changes proposed in the FY 1994
budget. This new presentation clarifies the link between budget
decisions and policy objectives. While actual appropriations
continue to be requested within the existing account structure (See
Tables 2 and 3 and Appendices A and B at end of document), the FY
1994 budget represents a first step in working with Congress to
undertake a more fundamental restructuring of international
programs. The objectives listed are preliminary pending a more
comprehensive review. While reflecting general Administration
priorities, the functional categories are intended to reflect foreign
policy objectives, not programs.
The six categories are mutually reinforcing and interdependent. For
example, maintaining peace and addressing global problems are
integrally linked to economic growth and sustainable development.
ARTICLE 3: Budget Highlights by Major Area
Building Democracy
Building democracy is a fundamental long-term goal of US foreign
policy. By promoting and protecting human rights and basic
freedoms, the United States not only honors the values on which it is
founded, but also helps ensure the prosperity and security of its
citizens. Democracies are more representative of their citizens and
are less aggressive abroad. They make better partners in diplomacy,
trade, arms control, and cooperation on global issues such as the
environment, narcotics, and terrorism. Americans have a clear
moral and material stake in the expansion of democratic values. And
that stake is no more vital than in Russia and the other new
independent states (NIS) of the former Soviet Union. The long-term
security of the United States is integrally linked to the progress
made in Russia and the other new independent states toward
democracy and the establishment of a market economy. A successful
transition also is important to world economic growth and the US
economic future.
New Independent States of The Former Soviet Union
Supporting reforms in the new independent states is vital to US
interests, because those reforms offer unique and historic
opportunities:
-- Enhancing US security, through weapons reductions agreements
and peaceful relations with new democratic states;
-- Resolving global problems by engaging the new states as
partners, rather than as adversaries in foreign policy;
-- Increasing US economic growth by investing more at home while
spending less on defense; and
-- Strengthening US prosperity as the new states move to become
attractive markets and prosperous trading partners.
The FY 1994 budget requests $704 million for grant assistance for
democratic and economic reform in the new independent states of
the former Soviet Union. This is an increase of $311 million over
last year's level. The Administration intends to focus assistance on
expediting delivery of emergency humanitarian relief and technical
assistance in support of democratic and market economic reforms.
Specifically, the President requests $704 million to provide
technical assistance to create and strengthen democratic
institutions; to encourage private sector development; to strengthen
key human services and to provide medical and food supplies; to
promote sectoral reform in the areas of agriculture, energy,
environment, and housing; and to support research and training.
Resources from other budget functions also will provide support for
Russia. For example, the Department of Defense (DOD) will be
requesting $400 million for dismantlement of weapons. The FY 1994
request builds on the President's commitment at the Vancouver
Summit to deliver concrete, visible assistance in order to reinforce
democratic reforms in Russia and the other new independent states
at all levels of their economies and societies. The Administration is
reviewing additional options for expanding these efforts and will
work with Congress to identify additional support as part of a broad
internationally coordinated effort.
Central and Eastern Europe
The successful transformation of the democracies in Central and
Eastern Europe will provide the best proof to reformers elsewhere
that democracy, along with economic prosperity, can be built on the
ashes of failed communist systems. Prosperous, democratic
countries in Central and Eastern Europe provide more than hope and
example for the NIS: They also contribute to Western security by
providing stability against the spread of further nationalist fighting
or of retrenchment further east.
The FY 1994 budget requests $409 million for assistance to Central
and Eastern Europe. The program provides assistance to more than a
dozen new democracies, from Estonia to Albania, with a population
exceeding 135 million.
The program is designed to consolidate and strengthen the new
democracies of Central and Eastern Europe with three mutually
reinforcing objectives:
-- Developing and strengthening democratic institutions, including
national parliaments, local governments, independent media, and
other key institutions;
-- Developing a market economy and strong private sector through
removing constraints to entrepreneurship, advancing privatization
and enterprise restructuring, providing capital and assistance to
new entrepreneurs, and supporting the development of the financial
sector; and
-- Improving the basic quality of life in key areas through
assistance to build cost-efficient health care and housing systems,
labor retraining and unemployment services, and regulations and
policies to promote responsible environmental management.
A related objective which applies to all major priorities above is
the use of US assistance resources whenever possible as leverage to
bring in US private sector capital, goods, services, and expertise.
The involvement of the Western private sector is key to the
successful transformation of these countries, and the US assistance
program can help the US private sector take advantage of
commercial opportunities in the region.
Information and Exchange
The free international exchange of information and ideas is a
critical, cost-effective, and integral part of the Administration's
foreign policy strategy. Two agencies lead US public diplomacy
efforts--the United States Information Agency (USIA) and the Board
for International Broadcasting (BIB).
USIA increases international understanding of American society and
foreign policy through personal contacts, academic and leadership
exchanges, distribution of books and periodicals, English-language
teaching, operation of cultural centers abroad, and global satellite
television and radio broadcasting. USIA has found ready audiences
for its programs in democracy-building, rule of law, freedom of the
press, and free market institutions. Proposed funding for USIA is
about $1.2 billion in FY 1994. The budget includes increases for two
key initiatives:
-- $30 million is requested for the creation of a new "Radio Free
Asia" operation under the USIA umbrella in FY 1994 to provide
surrogate broadcasting to China and other communist countries in
Asia; and
-- $20 million is requested to increase the budget of the National
Endowment for Democracy (NED) to $50 million. NED will provide
"venture capital" to help nascent democratic movements in non-
democratic societies overcome social, cultural, political, and
historical obstacles and will support independent, politically active
organizations working to broaden democratic participation in newly
democratic countries.
Through grants to Radio Free Europe/Radio Liberty, BIB provides
surrogate broadcasts to the people of Central and Eastern Europe,
the former Soviet Union, and Afghanistan. Surrogate broadcasting
operates as a domestic radio service in the target countries,
providing local news and analysis of regional developments where
independent media are weak or do not exist at all.
In light of both the dramatic changes in the world and the need to
increase government efficiency, the Administration plans to
consolidate all US-funded, non-military international broadcasting
by the end of FY 1995. Consolidation will eliminate administrative
overlap and save an estimated $243 million between 1994 and 1997.
Specific measures to effect consolidation are the subject of an
Administration review.
Other Democracy Programs
USAID also will undertake democracy-building programs in Asia,
Latin America and the Caribbean, and Africa using Economic Support
Funds and Development Assistance. More than $100 million in
Development Assistance will be devoted to democratization and
governance projects, a $15-million increase over FY 1993. These
longer term investments are designed to improve the institutional
underpinnings of democracy, from reform of judicial systems to
decentralized government structures.
Promoting and Maintaining Peace
For 40 years, containing the Soviet threat defined US national
security. With the demise of the Soviet Union and the Warsaw Pact,
America entered into a new more complicated and unstable security
environment. Now, more than ever, the United States must be
engaged in promoting peace. The lesson of this century and its two
great wars is clear: The cost of American neglect is high, not just
for the world, but also for Americans.
The US approach must take into account the complex post-Cold War
security environment. Americans must work to adapt US military
forces to new challenges. The United States must give sustained
attention to advancing peace processes in vital regions like the
Middle East. But above all, the United States must work collectively
with other nations to solve conflicts and crises, promote peace, and
combat proliferation of dangerous weapons and technologies. The FY
1994 budget reflects these new realities.
The end of the Cold War has unleashed long-suppressed ethnic,
religious, and regional conflict in the former Soviet bloc and
elsewhere. But it also has opened up new possibilities for
international cooperation. Our task is to harness that cooperation to
contain and, far more importantly, to prevent conflict.
The FY 1994 budget shifts more than $200 million of resources from
traditional security programs to peace-keeping and non-
proliferation.
Peace-Keeping And Related Programs
The President's FY 1994 federal budget will request more than $1
billion in State and Defense Department accounts to support
international peace-keeping. Significant increases are requested to
support assessed UN peace-keeping operations and other regional
peace-keeping efforts that are funded on a voluntary basis. Some
security assistance funding supports the goals of peace-keeping.
The President's budget also funds peace-keeping in a new, separate,
DOD account of $300 million.
About $700 million is requested in the International Affairs
function of the budget for assessed and voluntary contributions for
peace-keeping activities. This includes:
-- $445 million for the Contributions for International Peace-
keeping Activities (CIPA) account to pay the US share of UN assessed
peace-keeping costs in FY 1994, including large UN operations in
Somalia and the former Yugoslavia. About $22 million will be used
to pay arrears to the United Nations.
-- $175 million in "no-year contingency funds" requested in the FY
1994 CIPA account for unanticipated peace-keeping activities
(assessed and voluntary) and related activities of the United Nations
and other multinational organizations.
-- $77 million for the peace-keeping operations account to make
voluntary contributions to multinational peace-keeping efforts, such
as the Conference on Security and Cooperation in Europe (CSCE) in
the former Soviet Union and the UN/Organization of American States
(OAS) observer mission in Haiti. This is $50 million above FY 1993
enacted levels. Voluntary contributions can be a cost-effective
alternative to paying 30.4% of UN peace-keeping costs, because the
Administration can determine the extent of its financial
involvement on a case-by-case basis.
In addition, security assistance programs will provide bilateral
support to peace-related efforts in Africa, Southeast Asia, El
Salvador, and Cyprus.
Non-Proliferation and Arms Control
One of the main security problems of the post-Cold War era is the
risk of proliferation of deadly weapons--nuclear, chemical,
biological, and enhanced conventional weapons--as well as their
delivery systems. This Administration gives high priority to
preventing proliferation. Our task is to fulfill President Clinton's
promise to the American people in his campaign ". . .to clamp down
on countries and companies that sell proscribed technologies, punish
violators, and work urgently with all countries for tough,
enforceable, non-proliferation agreements."
To help achieve this, the FY 1994 federal budget request includes
almost $600 million to support non-proliferation programs; $441
million of this amount will be requested by DOD, and $3 million will
be a part of the Department of Energy's budget request. Within the
International Affairs function of the budget, the State Department
and the Arms Control and Disarmament Agency (ACDA) will request
$197 million for these purposes, including the US contribution to the
International Atomic Energy Agency and a new Non-Proliferation and
Disarmament Fund. ACDA requests an incremental $16 million for
expenses related to implementation of the Chemical Weapons
Convention Preparatory Commission in The Hague, which commenced
in February 1993. These costs include both the US shared
contribution and the administrative support costs for the US
delegation.
Together, these programs are designed to:
-- Support weapons reductions agreements with Ukraine, Belarus,
and Kazakhstan during the 7-year implementation period of the
Strategic Arms Reduction Treaties (START), or sooner if possible,
and to reduce and restructure the Russian strategic nuclear force
into a smaller and less destabilizing force;
-- Support and enhance US bilateral and multilateral efforts to
establish effective controls on destabilizing weapons systems and
materials;
-- Dismantle existing systems and create effective export controls
on related technologies and materials; and
-- Increase the effectiveness of existing non-proliferation and
arms control agreements, particularly in the states of the former
Soviet Union and in Central and Eastern Europe.
The funds will support four primary program areas:
Education and training programs to fund education of foreign
government officials about non-proliferation issues and instruction
in the creation and implementation of effective export control
mechanisms in areas of high proliferation concern;
Destruction/conversion programs aimed at eliminating activities of
"proliferation concern" as well as implementation of global
conventions and treaties, such as the Chemical Weapons Convention
and START;
Enforcement and interdiction programs to help curb illicit trade in
materials related to weapons of mass destruction; and
Safeguards and verification programs to assist international
agencies in application of Non-Proliferation Treaty safeguards and
in the verification of international non-proliferation regimes.
Middle East Peace
The search for peace in the Middle East has challenged every US
Administration since 1948. This is one of the Clinton
Administration's highest foreign policy priorities. The more than $5
billion requested for Middle East peace supports the long-standing
foreign policy goal of seeking a just, lasting, and comprehensive
peace between Israel and its Arab neighbors, including the
Palestinians. Secretary of State Christopher, in his confirmation
hearings, reaffirmed this commitment and promised to "build upon
the considerable accomplishments" of previous Administrations in
the quest for Middle East peace.
To this end, this budget reflects the Administration's unshakable
commitment to Israel's security and to preserving its qualitative
edge over any likely combination of aggressors and to support
Egypt's vital role in regional stability, security, and the promotion
or peace. For the past several years, roughly $3 billion in security
assistance has been provided to Israel and $2.1 billion to Egypt
annually. Because of declining overall levels, these programs have
grown from 70% of total US security assistance in the late 1980s to
almost 85% in FY 1993 and 87% in the FY 1994 budget. A new
request for $5 million to support the multilateral working groups of
the peace process will help fund activities agreed upon in the groups
and augment progress in the bilateral talks.
Middle East peace assistance will support economic growth and
stability while helping these countries meet their legitimate
defense needs. Over time, economic reforms being undertaken will
strengthen their economies so that they can meet their own
economic and security needs.
Defense Cooperation And Regional Security
About $260 million is requested to support key countries which have
close cooperative defense relations with the United States and
provide access by US forces to important military facilities which
are essential to US power projection capabilities. Significant
economic assistance will be requested for Turkey, an important ally
which plays a constructive role in several areas of strategic
importance, such as the Middle East, the Balkans, the Caucasus, and
Central Asia. Most of the Foreign Military Financing is for loan
programs for Greece, Turkey, and Portugal which finance the
purchase of defense equipment and services from US sources,
bolstering the security of the recipient countries.
The FY 1994 International Affairs function requests about $50
million in Foreign Military Financing and Economic Support Funds to
promote regional stability and to assist key friends and allies in
meeting their critical defense and economic needs. In recognition of
generally reduced levels of tension throughout the world and the
need to invest greater resources in promoting sustainable economic
growth, the amounts requested for military assistance represent a
substantial reduction from the levels requested in prior years. A
savings of $266 million also is realized by a proposal to terminate
the Special Defense Acquisition Fund beginning in FY 1994.
Promoting Economic Growth and Sustainable Development
Growing global economic interdependence has brought down forever
the wall between foreign and domestic economic policy. US policy
goals and mechanisms are being redesigned to keep the US secure
and competitive in a global economy.
Prompt congressional passage of the President's economic renewal
program is but the first, most critical step toward improving
America's competitive position in the international economy. His
program challenges American firms and workers to win in world
markets, while it seeks to support these efforts by reducing
barriers--those of trade, of poverty, and the waste of
underdevelopment--and by engaging in cooperative activities with
other nations to support international growth and stability.
This budget signals the President's commitment to a comprehensive
approach to the global economy that promotes:
-- Macroeconomic policy coordination among industrial nations;
-- Hemispheric trade and investment through implementation of the
North American Free Trade Agreement and the Enterprise for the
Americas Initiative (EAI);
-- Successful conclusion of a new multilateral trade agreement
under the General Agreement on Tariffs and Trade (GATT) accord;
-- Vigorous promotion of US trade opportunities, including funding
efforts by existing programs to identify markets for and finance US
exports (e.g. Export-Import Bank (Eximbank), the Overseas Private
Investment Corporation (OPIC), the Trade Development Agency (TDA),
and the Commodity Credit Corporation--a program in the domestic
budget;
-- Targeted provision of funds to support economic development;
and
-- Support for international institutions, both those which help
strengthen the international financial system and also generate
development and trade benefits (the International Monetary Fund and
multilateral development banks) and those with a specific focus on
economic development issues (e.g., the UN Development Program).
Bilateral Economic Development Programs
The FY 1994 budget requests about $1.7 billion for human capital
development, building markets and income opportunities, and
expanding science and technology efforts in developing countries.
This includes funding from a number of accounts, including
development assistance, Economic Support Funds, PL-480 Title III
food aid, OPIC, the Peace Corps, and debt restructuring under the EAI
(see Appendix A).
Human Capital Development. To contribute to a dynamic and growing
world economy, countries must have a strong human capital base.
Countries lacking this resource have fallen further behind in efforts
to achieve strong economic growth and to increase the standard of
living for their citizens. Without basic health and nutrition,
competence in both literacy and numeracy, as well as a set of
productive skills, it is nearly impossible for people to create and/or
to take advantage of opportunities to better their own lives.
Technical skills and professional competencies in management,
research, and science also are of growing importance in today's
dynamic global economy. Thus, US programs will include efforts to
enhance these human resources by "investing in people."
Building Markets and Income Opportunities. Some of the fastest-
growing markets for US goods are the emerging economies of
developing countries. Programs in the FY 1994 budget will
encourage policies that provide incentives for investment (public
and private) and production, while protecting the natural and social
environment. Programs will help transfer the know-how and
materials for technological improvements and increase the flow of
and broad access to financial capital. The Administration
recognizes the need to use resources more effectively to eliminate
the bottlenecks to individual initiative and to allow "spontaneous"
and "demand-driven" change to take place from the grassroots to the
national level.
Expanding Science and Technology. If developing countries are to
contribute to global prosperity in the 21st century, greater access
to and better management of science and technology will be
essential. US programs aim to uncover ways to identify and adapt
new and existing knowledge to increase economic productivity in
specific sectors such as agriculture (where there have been many
breakthrough successes), health care, environmental conservation
and protection, manufacturing, telecommunications and other key
utilities, and transportation throughout the world. The advancement
of technology and science, along with development of human and
other economic capital, is a critical element in creating the
resources to improve people's standard of living.
Building Institutions. Funding also will support the development and
strengthening of those key economic, political, and social
institutions--both micro and macro--which are vital contributors to
achieving sustainable economic development. Institutions that
promote market-driven growth are particularly critical. Examples
include credit unions, chambers of commerce, research institutes,
and other non-governmental community organizations.
Multilateral Development Programs
In an era of tight government budget constraints and heavy demands
on world capital markets, multilateral institutions are key to the
continuing ability of the international financial system to support
and encourage economic reform and development in a fast-changing
world. Each taxpayer dollar invested in the multilateral
development banks (MDBs) generates more than $20 in the same year.
The US economy also benefits from the long-term growth and
stability that MDB lending and advice foster. More immediately, US
companies receive a larger share of MDB procurement contracts than
any other donor country.
The need for international resources and cooperation and the US
stake in the success of these efforts, also have increased as a result
of the economic transformations being undertaken in the countries
of Central and Eastern Europe and the former Soviet Union.
Multilateral Development Banks. The FY 1994 budget requests $1.9
billion for contributions to the MDBs. About $1.2 billion of the
request is for the US contribution to the recently negotiated 10th
replenishment of the International Development Association.
Resources will be targeted on poverty alleviation and the
enhancement of good governance and sustainable development in the
world's poorest countries.
UN Development Program (UNDP). The FY 1994 request also includes
about $127 million for the UNDP. It provides technical assistance
with an emphasis on building recipient country capacities to manage
their own development, policy planning, human resource
development, and environmental protection. Public and private
follow-up investment exceed UNDP contributions.
Trade Promotion
Trade promotion aims to create new markets for US goods and
services, thus generating new jobs. In addition, it enables the
United States to forge market ties to facilitate developing new
product lines and processes, thus speeding US technological and
commercial advancement. Many federal programs contribute to
enhancement of US trade, but targeted efforts are being made in
large part through the programs described below.
US Export-Import Bank. Eximbank finances US exports to developing
country and emerging markets through direct loans, loan guarantees,
and insurance programs. Eximbank programs assist US exporters by
absorbing reasonable credit risks that are beyond the current reach
of the private sector and by matching officially supported foreign
credit competition. The Administration's FY 1994 request of $752
million will support an increase of more than $1 billion in export
financing to support a significant expansion of US exports,
stimulating economic growth and job creation.
Through Eximbank and other federal agencies, developed countries
have agreed to reduce subsidies for "tied aid" credits (export credits
offered in combination with direct foreign aid grants). By reducing
trade-distorting tied aid, this agreement helps US exporters
compete in expanding global markets.
Trade and Development Agency. TDA funds feasibility studies and
other project planning services on major infrastructure and
industrial projects in developing and middle-income countries. By
positioning a US firm at the initial planning stages of a project, TDA
increases the likelihood that US equipment and services will be used
in the implementation of the project. Through this process, TDA
leverages its funds for the benefit of both the recipient country and
the US private sector. The Administration's request of $60 million
will enable TDA to provide greater assistance to developing and
middle-income countries, while at the same time increasing US
exports and jobs.
Overseas Private Investment Corporation. OPIC supports, finances,
and insures sound business projects that positively affect US
employment, US global competitiveness, and the host countries'
economy and development. OPIC participation promotes
privatization and market-oriented economic reforms in Central and
Eastern Europe; it is expected to play a similar role as US investors
seek participation in the emerging market economies of the former
Soviet Union.
For FY 1994, the Administration requests $17.9 million for OPIC,
$8.1 million for credit, related administrative expenses, and $9.8
million of subsidy budget authority to support loans and guarantees.
These funds will support $20.7 million of direct loans and $375
million of loan guarantees.
Addressing Global Problems
The FY 1994 budget also reflects the Administration's strong
commitment to demonstrating US leadership on pressing global
concerns. Protecting the environment, reducing rapid population
growth, suppressing narcotics trafficking, and combatting terrorism
are essential to US domestic and international future. Addressing
these problems today will be of fundamental importance to the
well-being of all Americans as the United States prepares for the
21st century. Budget increases are proposed for population and
environment programs.
Population Programs
The Administration proposes a $100-million funding increase for
population programs over FY 1993 enacted levels. Enhanced funding
will help position the United States to broaden the scope of its
efforts to address population growth and to exert strong leadership
for the 1994 International Conference on Population and
Development. This includes a State Department request for a $50
million contribution to the UN Population Fund (UNFPA) and a $50
million increase, over the FY 1993 level of $420 million, for
population programs funded from USAID's Development Assistance
and Development Fund for Africa programs.
Global Environment
The Administration request includes enhanced funding to address
global environmental concerns such as global warming, ozone
depletion, ocean pollution, and biodiversity conservation. Key
multilateral initiatives include a proposed $31 million contribution
for the Global Environmental Facility, which provides grants to
developing countries for projects that benefit the global
environment. Funding also is requested for international funding
mechanisms designed to combat ozone depletion and strengthen
environmental capabilities in developing nations. A $25 million
contribution is requested for the UN Environment Program.
Bilateral initiatives include a $10 million request for the
Department of State's environmental and scientific grants program
and increased funding for USAID's environmental assistance efforts.
USAID environmental funding will increase to $304 million, from the
FY 1993 level of $279 million, to support ongoing international
forestry, pollution, and soil and water conservation initiatives, as
well as new efforts to preserve biodiversity and stem
desertification abroad.
Combatting AIDS, Narcotics, Terrorism, and Crime
International affairs resources also will be devoted to other priority
global issues, such as fighting the spread of AIDS and combatting
international crime, terrorism, and narcotics production and
trafficking.
Strengthening Institutions
In addition to the resources being devoted to these global problems,
the Administration is committed to making US institutions more
effective in dealing with global problems. The Administration has
proposed creating an Under Secretary for Global Affairs in the
Department of State to give greater voice to these priority issues.
Providing Humanitarian Assistance
America's conscience always has been a fundamental part of
America's character. During FY 1993, US Government foreign
humanitarian assistance programs will provide relief to refugees
and victims of poverty, natural disasters, and crises, such as war,
famine, and drought in Africa, Asia, Europe, and Latin America and
the Caribbean. Large amounts of humanitarian assistance will be
directed to the Horn of Africa and Southeastern Europe in response
to events in Somalia and the former Yugoslavia. Alleviating human
suffering remains a high priority in the FY 1994 budget, and the
Administration is committed to continuing the high funding levels
that Congress has provided for these activities in FY 1993. At the
same time, achievements in other programs designed to promote
peace, economic growth, and the spread of democracy abroad
(addressed above) should work to reduce the need for humanitarian
assistance in the future.
Refugee Programs
The Administration's FY 1994 budget request includes nearly $641
million for Migration and Refugee Assistance (MRA) and $49 million
to replenish the US Emergency Refugee and Migration Assistance
Fund. MRA includes $353 million to support international efforts to
provide protection, care and maintenance, local resettlement, and
repatriation assistance to refugees and conflict victims abroad. It
also includes $221 million to support the admission of about
120,000 refugees for resettlement in this country; $55 million is
requested to support the resettlement of refugees in Israel.
Disaster Assistance
The Administration requests $149 million for USAID's Disaster
Assistance Program. This level continues the FY 1993 combined
funding level for the worldwide program and the separate
appropriation for disaster assistance to Sub-Saharan Africa. The FY
1994 request consolidates disaster assistance into one account to
allow for its use where the need is greatest worldwide.
Food Aid
Title II of the PL-480 Food Aid program administered by USAID
supports emergency and humanitarian food aid programs sponsored
by private voluntary organizations, the UN's World Food Program, and
foreign governments in emergency situations. The Title II request,
by the US Department of Agriculture, will total $832 million, a $22
million increase over the FY 1993 enacted level reflecting the
continuing need for significant levels of emergency feeding in Africa
and elsewhere.
Development Assistance
USAID's Development Assistance program funds humanitarian
assistance in the form of child survival interventions (aimed at
reducing child mortality through immunizations, oral rehydration
treatment for diarrheal diseases, and improvements in child
nutrition) through related health efforts to deal with the spread of
tropical diseases such as malaria, to increase the capacity of health
care systems, and to improve women's health and nutrition. Funding
for this program will be maintained at roughly last year's level.
Advancing Diplomacy
The effective use of diplomacy and international organization is
critical to success in achieving all US goals. This budget is based on
the need for timely prevention, rather than costly cure, in US foreign
policy. The tragedies of Somalia and the Balkans bear grim witness
to the price of international delay--a human price paid daily by their
inhabitants in pain, privation, and death. But Americans, too, pay a
price if US diplomacy is reactive, rather than active. By spending
millions on peace-keeping today, we may save hundreds of millions
in humanitarian relief tomorrow. By combatting proliferation now,
we can avoid rising defense expenditures later. And by aggressively
moving to arrest environmental degradation, we can dispense with
heavy clean-up costs during the years to come. In short, assertive,
preventive American diplomacy, especially in the multilateral
realm, constitutes an investment in America's future.
State Department
The State Department provides the diplomatic and operational
support to advance US foreign policy leadership. Its people and
missions are crucial components of US efforts to promote peace,
prosperity, and democracy in a changing world. The Department
understands that it must change with changing times abroad and at
home. It is moving forward aggressively with a broad-based reform
of its organization and operations. Streamlining, more efficient
decision-making, and a division of labor that reflects post-Cold War
realities and our new global agenda are key elements of this reform.
Within the context of a constrained operating budget, the
Department will reprogram resources when necessary to reflect new
priorities and reallocate resources from lower priorities to
accomplish these tasks. Above all, however, the Department's
ability to operate effectively abroad must be preserved.
In this context, the FY 1994 request of $2.2 billion for the
Department's salaries and expenses account reflects increased
attention on emerging diplomatic and economic opportunities in the
post-Cold War period. The Department's operating budget is frozen
at FY 1993 funding levels and is consistent with the President's
directive to cut the federal work force by 4% over the next 3 years
and reduce operating expenses by 14% by FY 1997. In addition, the FY
1994 request reflects the closing of a number of posts where it is
no longer economically feasible or practical for the United States to
maintain an on-site diplomatic presence. Finally, the FY 1994
request includes modest systems investments to promote less
personnel intensive operations.
The FY 1994 budget requests $420 million for the third year of
projects and activities programmed for the Department's initial 5-
year plan for the overseas facilities program ("Foreign Buildings").
The funds will be used for the acquisition, construction,
maintenance, and repair of diplomatic facilities abroad in support of
State Department and other agencies' overseas operations.
International Organizations
In the wake of the Cold War, the United Nations and other
multilateral bodies are taking on the most intractable problems of
the new era, such as ethnic conflicts, aggression, genocide, famine,
epidemics, refugees, population growth, proliferating weapons of
mass destruction, global warming, grinding poverty, and the survival
of democracy in the face of tyranny. With strong US support, the UN
can take the lead in responding to these international crises.
The President's budget includes $959 million for the US share of
assessed contributions to international and regional organizations.
The request meets our treaty obligations for annual payments to the
regular budget of the United Nations and such international bodies as
the International Atomic Energy Agency, International Civil Aviation
Organization, and GATT. Other treaty obligations include annual
assessments for regional bodies like the Organization of American
States, Asia-Pacific Economic Cooperation, and North Atlantic
Treaty Organization.
The request also recognizes the President's commitment to
restoring the financial stability of the United Nations and other
multilateral organizations and includes a plan to pay off US arrears
over the next 2 years. The budget includes $98 million for a FY 1994
arrearage payment and appropriation language seeking $163 million
in advance budget authority for completing arrears payments in FY
1995. Payment of arrears will be directed toward activities that
are mutually agreed upon by the United States and respective
multilateral institutions.
The budget also includes a $65-million increase over FY 1993
enacted budget levels for voluntary contributions to international
organizations that serve US interests through their support of
development, humanitarian, scientific, and environmental activities.
Increases for specific programs have been discussed above.
US Agency for International Development Operating Expenses
USAID operating expenses finance salaries and support costs of
personnel responsible for administering Development Assistance,
the Development Fund for Africa, the Economic Support Fund, Special
Assistance Initiatives, and the new Humanitarian Assistance
Program in the former Soviet Union. Because of the initiation of
programs in Central and Eastern Europe and the former Soviet Union,
USAID has experienced a dramatic increase in the number of
countries with operational aid programs. The FY 1994 request for
operating expenses is at the same level as the FY 1993 enacted level
of $512 million. The Administration is working to restructure
USAID to enable it to achieve maximum development results using
the resources available.
Presentation of Request by Appropriation Account
This presentation of the FY 1994 budget is intended to begin the
process of redefining US international affairs programs and
institutions. The Administration views this as a dynamic and
cooperative process with Congress and public and private groups.
With a few exceptions, the actual appropriation requests will be
within last year's appropriation account structure. Tables 2 and 3
show the Function 150 request by subfunction and by appropriation
bill.
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