US Department of State Dispatch Supplement VOL. 4, NO 1


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

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. -------------------------------------------------------------------
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%) ------------------------------------------------------------------- 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). -------------------------------------------------------------------
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. Contents of this publication are not copyrighted unless indicated. If not copyrighted, the material may be reproduced without consent; citation of the publication as the source is appreciated. Permission to reproduce any copyrighted material (including graphics) must be obtained from the original source. (###)