[Budget of the United States Government]
[IV. Preparing For the 21st Century]
[8. Advancing United States Leadership in the World]
[From the U.S. Government Publishing Office, www.gpo.gov]


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           8.  ADVANCING UNITED STATES LEADERSHIP IN THE WORLD

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    Of course, international engagement costs money. But the costliest peace is far cheaper than the cheapest
war.

                                      President Clinton
                                      August 1999


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  At the start of a new century, the United States has reached new 
heights of influence in the world. At the same time, the new challenges 
posed by rapid advances in technology and the opening of borders have 
increased our need to exercise this influence--more and more, what 
happens overseas affects our security, health, and prosperity at home.
  Our Nation now has the greatest opportunity in its history to advance 
American interests and values while building a better and more peaceful 
world. However, doing so requires leadership and engagement. We need to 
work with others to prevent war and defuse crises, combat terrorism and 
counter the spread of weapons of mass destruction, deepen democracy and 
the rule of law, strengthen free market economies, protect the global 
environment, and fight poverty and diseases. For if the United States 
can do this, using its resources effectively and wisely, our citizens 
will be safer, our economy stronger, our world more stable, and our 
freedoms more secure.
  In the past year, America's leadership was essential to the success of 
the NATO alliance in halting the ethnic cleansing of Kosovo's ethnic 
Albanians and containing the risk of wider war at the doorstep of our 
allies. Nearly a million Kosovars who fled in terror have returned to 
their homes and with our support, they have begun the difficult work of 
building a tolerant democratic society and a new economy. The United 
States has played a critical role in the strides made toward lasting 
peace in Northern Ireland and Sierra-Leone and ending the bloodshed in 
East Timor. Our support has also been crucial as Israelis, Palestinians, 
and others in the Middle East have taken brave steps toward forging a 
lasting peace there. The United States has worked to detect and counter 
terrorist threats, as well as to continue efforts with Russia and other 
former Soviet republics to halt the spread of dangerous weapons 
materials. We have also taken actions to advance global prosperity--
bringing China into the global trading system and launching a new debt 
reduction initiative to help the world's most impoverished nations 
eliminate crushing debt burdens and reform their economies.
  As we seek to build on these efforts, the 2001 Budget proposes several 
initiatives to further America's leadership in the world and address 
these and other challenges. During the coming year, the Administration 
intends to seek 2000 emergency supplemental appropriations to provide 
critical assistance to the people and Government of Colombia in their 
fight against narcotics traffickers. The supplemental, which is included 
in this budget, will help finance a multi-year strategy known as Plan 
Colombia, developed by the democratically-elected Government of 
Colombia. With this budget, the Administration is also requesting 2000 
emergency supplemental appropriations for renewed initiatives to promote 
economic growth, stability, and democracy in Kosovo and across Southeast 
Europe.
  For 2001, the budget requests increased funding for several 
priorities. Funding for international family planning assistance will 
total $541 million, with added funding from several accounts amounting 
to an increase

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of $169 million above 2000. Funding for U.S. Government efforts to 
contain the global spread of HIV/AIDS has been increased by $100 
million, more than double the amount spent in 1999. These initiatives 
will respond to pressing prevention, health infrastructure, and 
treatment needs, but will also be used to leverage increased funding 
from other donors, and from developing countries themselves, for these 
critical objectives. Increased funding for urgent humanitarian and 
refugee assistance programs is also proposed in the budget.
  Another 2001 priority is the $1.1 billion proposed for enhanced 
security in our diplomatic posts, which includes a $500 million increase 
over the 2000 level for initiatives that will further protect the men 
and women who serve America in our missions overseas. This request 
builds on last year's long-term proposal and is an essential step in the 
multi-year plan that is necessary to meet the Administration's 
commitment to the construction of secure diplomatic and consular 
facilities worldwide.
  The budget also proposes an increase of $241 million over the 2000 
level to support UN peacekeeping missions around the world. U.S. funding 
for these missions is critical to the success of diplomatic efforts to 
end destructive and costly conflicts in Africa and elsewhere.
  This chapter describes these and other initiatives in more detail, 
linking the budget resources of 2001 to our international policies and 
the Administration's commitment to protecting our national security, 
promoting prosperity, and advancing our values.

Protecting American Security by Promoting Peace and Democracy Abroad

  The budget proposes a substantial increase for counter-narcotics 
efforts in Colombia. Colombia supplies an estimated 80 percent of the 
cocaine in the United States. Colombia's role in the world heroin and 
cocaine market is growing rapidly as the production of cocaine in 
Colombia has more than doubled between 1997 and 1999. The Colombian drug 
trade is controlled largely by paramilitary groups and insurgents who 
are engaged in a 30 year old civil war against the Government of 
Colombia.
  Colombia President Andres Pastrana has devised a comprehensive, 
integrated plan, Plan Colombia, to address Colombia's narcotics and 
related political and economic troubles. As noted earlier, the budget 
proposes to increase assistance programs through 2000 emergency 
supplemental appropriations of $954 million and 2001 new funding of $318 
million in the international affairs and other budget areas. Funds will 
be used for Colombia's counter-drug efforts and for other programs to 
help President Pastrana deepen democracy and promote prosperity. The 
proposal will enhance alternative development, strengthen civil justice 
and democratic institutions, and provide military assistance to the 
counter-narcotics effort. The Administration will also encourage U.S. 
allies and the international financial institutions to assist Colombia 
in implementing President Pastrana's Plan Colombia strategy. 
Strengthening stability and democracy in Colombia, and fighting the drug 
trade, is in America's national interest.

  Kosovo: The budget proposes $175 million to help the people of Kosovo 
build a democratic society and a stronger economy. The members of the 
European Union will bear the bulk of these costs, but the United States 
must also contribute. In May 1999, shortly after the conflict ended and 
peace was reestablished in Kosovo, the United States pledged $556 
million to address humanitarian needs, such as the provision of shelter, 
health care, and food aid for returnees and other urgent requirements. 
On November 17, 1999, the international community pledged a total of 
$1.056 billion towards peace implementation, reconstruction and 
recovery, budget support, and humanitarian assistance, of which the U.S. 
Government pledged $156.6 million, or 14.8 percent.
  In 2001, resources will be used to help rebuild Kosovo's economy and 
society. A growing economy, with new employment opportunities, is 
critical if Kosovo is to overcome problems of crime and ethnic violence. 
Such assistance will create jobs for former refugees and provide 
incentives for segments of the population to lay down their arms. To 
address these issues, this assistance will help create

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jobs and build a more stable and peaceful society. In conjunction with 
other donors, U.S. resources will provide working capital to stimulate 
economic activity. The budget also proposes 2000 emergency supplemental 
appropriations of $624 million to address pressing requirements for 
Kosovo and Southeast Europe. The funds will be used for economic and 
democratic reform activities in Kosovo, Croatia, and Montenegro, as well 
as to provide additional assistance of the democratic opposition in 
Serbia. The additional funding will also be used to provide critical 
support needed in 2000 for the UN Mission in Kosovo (UNMIK), and to 
build secure U.S. diplomatic facilities in Kosovo, Bosnia, and Albania.

  Southeast Europe Initiative (SEI): Central to lasting peace in Europe 
is the political and economic integration of the Balkans into Europe and 
the global community. The budget requests $428 million for this 
important initiative. Also critical to a peaceful future for Europe is 
the replacement of the Milosevic regime. For that reason, about $96 
million will help promote the democratic opposition in Serbia and 
provide assistance to Montenegro.
  About $6 million of U.S. assistance is intended to accelerate the 
integration of Southeast Europe's countries into the global trading 
system by breaking down barriers to trade and investment. U.S. 
assistance will encourage economic reform, the rule of law, deepening of 
democracy, and adoption of international standards governing trade.

  UN Reform and Contributions to International Peacekeeping: Peace and 
security operations of the United Nations directly support U.S. national 
interests. Peacekeeping has the capacity to separate adversaries, 
maintain cease-fires, facilitate the delivery of humanitarian relief, 
enable refugees and displaced persons to return home, demobilize 
combatants, and create conditions under which political reconciliation 
may occur and free elections may be held. In so doing, it can help 
nurture new democracies, lower the global tide of refugees, and prevent 
small wars from growing into wider regional conflicts which would be far 
more costly in terms of lives and resources. The budget proposes an 
increase of $241 million above the 2000 level of $498 million for UN 
peacekeeping.
  In recent years, there have been significant improvements in the 
management, efficiency, and effectiveness of the UN and other 
international organizations. UN Secretary General Kofi Annan has carried 
out numerous restructuring and consolidation measures, many closely 
conforming to U.S. proposals, and there have been solid advances within 
major specialized agencies to improve management.
  The Administration is strongly committed to work with the Congress on 
a bipartisan basis to further advance the UN reform process. The 
Congress, with Administration support, has linked UN reform measures to 
U.S. payment of specific arrearage amounts in 2000. We will continue to 
use our influence to push for management improvements, organizational 
streamlining, and the necessary budget discipline to ensure zero nominal 
growth in UN and specialized agencies' budgets. We are also committed to 
working with other UN members to revise the scale of assessments--
including a reduction in the rate at which the United States is charged 
for the UN regular budget, UN peacekeeping, and the large specialized 
agencies.

  Expanded Threat Reduction Initiative (ETRI): The effort launched seven 
years ago, spurred by the bipartisan Nunn-Lugar legislation, to contain 
the spread of weapons of mass destruction (WMD) from the former Soviet 
Union and promote stability, has produced important results, helping to: 
deactivate nearly 5,000 nuclear warheads; eliminate nuclear weapons from 
Ukraine, Belarus, and Kazakhstan; strengthen the security of nuclear 
weapons and materials at over 100 sites; tighten export controls and 
detect illicit trafficking; and, engage over 30,000 former Soviet 
weapons scientists in productive civilian research. The recent 
conclusion of agreements between Georgia and Russia and between Moldova 
and Russia for the withdrawal of Russian troops creates the opportunity 
to help these countries address some of the costs associated with 
Russian force reductions, thereby strengthening the sovereignty of 
Georgia and Moldova and the stability of the region.
  But more work needs to be done. The two major economies in the Newly 
Inde

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pendent States--Russia and Ukraine--continue to require substantial 
external support to sustain the necessary infrastructure to protect 
against the diversion of WMD nuclear, biological, and chemical--and 
related technology. Scientists, facilities guards, customs officers, and 
technical experts are underpaid, vulnerable to temptations for illicit 
trafficking of WMD and related materials--clearly a threat to our 
interests.
  The $974 million 2001 request for ETRI programs includes $469 million 
in programs administered by the Department of Defense, $364 million in 
those administered by the Department of Energy (DOE), and $141 in those 
administered by the Department of State, a total that is $85 million 
above the 2000 level of $889 million. ETRI programs address nuclear 
security for existing weapons and delivery systems, protection and 
disposition of fissile materials, destruction of chemical weapons, 
military relocation and regional stabilization. Among the critical 
programs funded under ETRI are science centers and other programs to 
finance civilian research by former Soviet weapons experts, enhanced 
border control assistance to decrease the likelihood that critical 
weapons technologies or materials can be smuggled to other Nations, and 
programs to enhance regional security efforts in Georgia, Armenia, 
Azerbaijan, and Moldova. The proposed DOE request for ETRI includes a 
$100 million initiative in Russia to expand protection of fissile 
material; accelerate closure of nuclear weapons production facilities; 
and, provide an alternative to continued plutonium reprocessing in 
Russia.

  Middle East Peace: The 2001 requests for the Economic Support Fund 
(ESF) of $2.3 billion and Foreign Military Financing (FMF) grants of 
$3.5 billion will continue to support our efforts to promote progress 
and stability around the world, particularly the progress made recently 
in negotiations between Israel and its neighbors on a comprehensive 
peace for the Middle East. In emergency legislation, $1.9 billion was 
provided in 1999 and 2000 to Israel, Jordan, Egypt, and the West Bank to 
support the Wye River and Sharm-el-Sheikh interim accords between the 
Israelis and Palestinians. For 2001, ESF levels for Israel continue the 
declining path started last year and levels of FMF military assistance 
increase, as agreed to by the Administration and the Congress. The 2001 
request of $1.8 billion in ESF and $3.4 billion in FMF programs for the 
Middle East will provide a strong supporting base for the next phase of 
negotiations between Israel and its neighbors.
  Democracy Initiatives: In addition, the budget proposes increases for 
countries outside of the Middle East in both ESF and FMF. These funds 
will support the transitions to democracy that are emerging in Africa, 
including Nigeria, and in Indonesia, and will continue to support 
ongoing democratic reforms in Latin America. They will also support 
military modernization and increased civilian control over the military 
in eastern Europe, the states of the former Soviet Union, and Africa. 
Helping these nations build stable democracies will enhance America's 
own security and prosperity.
  Transnational Threats: The proliferation of weapons of mass 
destruction, the globalization of drug trafficking, and the spread of 
crime and terrorism on an international scale present a continuing 
threat to United States and global security. U.S. diplomacy and law 
enforcement play a key role in stemming the spread of weapons of mass 
destruction to countries such as Libya, Iraq, Iran, Syria, and North 
Korea.
  The Administration is strengthening its fight against terrorism by, 
among other things, increasing funding for the construction of new 
embassies overseas and continuing the ongoing worldwide program of 
physical security upgrades to our most at-risk posts. The budget also 
proposes a new initiative for the destruction of small arms abroad, 
which might otherwise be used by terrorists or others to foment local 
wars.
  America must continue to lead against the spread of weapons of mass 
destruction. The Comprehensive Nuclear Test Ban Treaty (CTBT) remains an 
important element of the global nuclear nonproliferation regime. The 
Administration is committed to working to create the conditions for a 
successful vote to approve the CTBT in the Senate at the earliest 
possible date. We will continue to adhere to our long-standing 
moratorium on nuclear tests and urge other Nations to do the same.

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  The budget proposes $194 million from the Congress to support multi-
national efforts to combat the spread of weapons of mass destruction: 
the International Atomic Energy Agency's (IAEA's) safeguards regime, the 
Organization for the Prohibition of Chemical Weapons, and a global 
network of sensors to detect nuclear explosions. The budget includes 
funding for the Korean Peninsula Energy Development Organization, which 
has just signed contracts to construct two proliferation-resistant 
nuclear power reactors in North Korea. Before key components are 
shipped, North Korea will have to come into full compliance with its 
commitments to the IAEA and the Nuclear Non-Proliferation Treaty.

Promoting Prosperity to Advance Stability

  Debt Forgiveness: The United States is committed to helping people in 
the world's poorest countries join the global economy and implement 
economic reform by expanding debt relief. At the Cologne Summit, the G-8 
expanded the Heavily Indebted Poor Country (HIPC) initiative to: include 
more countries; provide deeper debt relief (up to 90 percent of 
bilateral debt); increase participation by the international financial 
institutions; and, increase the focus of the resources freed by debt 
reduction on economic reform, health, education, and other human needs. 
The President led this effort with a proposal that was largely adopted 
and remains at the forefront on the issue with his commitment to forgive 
100 percent of debt owed to the United States by the poorest countries, 
a majority of them in sub-Saharan Africa. To fulfill the U.S. 
commitments, the Administration is requesting $600 million for the HIPC 
program in 2001, 2002, and 2003: $75 million to forgive about $450 
million in bilateral debt of the poorest countries; $150 million for the 
HIPC trust fund, which will allow for further debt relief through the 
multilateral organizations; and, $375 million in advance appropriations. 
The budget also includes $37 million for the Tropical Forest Initiative 
to use debt relief mechanisms in support of conservation. In order to 
fund HIPC trust fund requirements for the remainder of 2000, the 
Administration is also proposing a fully offset 2000 supplemental 
appropriation of $210 million.
  Multilateral Development Banks (MDBs): The MDBs play a prominent role 
in bringing developing and transition countries into the global economy 
through financial and technical assistance. Such a process not only 
helps lift people oversees from poverty and toward prosperity--it also 
creates new opportunities for U.S. businesses and workers and helps 
promote stability and enhance our security. As the largest shareholder 
in the World Bank and a significant shareholder in the other MDBs, the 
United States exercises considerable influence over the organizations' 
external lending policies and internal governance. The United States has 
been able to maintain this position despite lower levels of commitments, 
which have been reduced by forty percent since the mid-1990s. Beginning 
in 1998, the Administration and the Congress reached bipartisan 
agreement to reduce the level of MDB arrears. However, much of the 
progress in clearing MDB arrears was reversed by the 2000 appropriations 
process, with the overall arrears level rising from $335 million at the 
end of 1999 to an expected $451 million by the end of 2000. Increasing 
arrears limit the Administration's ability to engage other donors and 
gain agreement on important new policy measures and institutional 
reforms during new replenishment negotiations. The budget proposes to 
clear all MDB arrears by the end of 2003, with $167 million in 2001 
arrears payments. The budget also proposes $1.2 billion for scheduled 
payments to these institutions, meeting all current commitments.
  Trade Agreements: The Administration is committed to opening global 
markets and integrating the global economic system, which has become a 
key element of continuing economic prosperity here at home. The budget 
proposes significant increases for efforts by our trade negotiators to 
pursue open markets and fair, rules-based trading systems. The 
Administration will work within the World Trade Organization (WTO) to 
pursue the negotiating mandate for agriculture and services that were 
built into the Uruguay Round, develop consensus on the negotiating 
agenda for a new round of multilateral negotiations, work for China's 
membership in the WTO on the foundation of the historic bilateral 
agreement reached last November to open the Chinese market, and also 
pursue the accession to the

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WTO of a number of other important trading partners. In doing so, the 
Administration will work to ensure that the benefits of trade are shared 
broadly across all sectors of society and do not come at the expense of 
core labor standards or the environment.
  A key priority of the Administration, in addition to securing passage 
of permanent Normal Trade Relations with China, is to assure the 
enactment of the trade legislation that passed in the House and Senate 
addressing trade benefits for Africa, extending the Generalized System 
of Preferences (GSP), and enhancing the Caribbean Basin Initiative 
(CBI). The Administration has also submitted legislation that would 
extend new benefits to the Balkan countries. The budget supports a 10-
year initiative for Africa, five-year initiatives for the CBI and Balkan 
proposals, and for GSP, a 33-month extension is proposed to be added to 
the 27-month extension that passed in the first session of the 106th 
Congress.

  Trade and Investment Promotion: The budget proposes an increase of 
over $200 million in 2001 for the Export-Import Bank. To a large extent, 
this increase will enable the Bank to continue to increase the level of 
U.S. exports it supports given the upward revision in the cost of U.S. 
Government international lending in the wake of the recent global 
financial crisis. Some of this increase will also provide additional 
resources for the Export-Import Bank to finance the export of clean 
energy technologies. Finally, the budget proposes an increase in Export-
Import Bank administrative expenses, part of which will finance a modern 
information system critically necessary to improve the delivery of the 
Export-Import Bank's insurance product to U.S. exporters.
  The budget also proposes increased resources for the Overseas Private 
Investment Corporation (OPIC) and the Trade and Development Agency 
(TDA). An additional $4 million in administrative resources for OPIC 
will help modernize critical information systems, and improve vital 
portfolio, environmental, and worker rights monitoring. An additional 
$10 million for TDA will expand its capacity to conduct feasibility 
studies on international projects that can lead to U.S. exports, 
including clean energy projects and increased feasibility studies in 
Africa.

Providing Humanitarian Assistance

  The budget continues America's tradition of responding generously to 
address and mitigate human suffering caused by natural and man made 
crises. The budget increases funding for both the State Department's 
migration and refugee assistance programs and the U.S. Agency for 
International Development's (USAID's) international disaster assistance 
and food aid programs. The budget provides increases of $33 million for 
the migration and refugee assistance programs and $18 million for 
USAID's international disaster assistance programs over 2000 levels. 
These increases are justified given continued humanitarian needs as a 
result of crises in Sudan, Burundi, Angola, Afghanistan, the North 
Caucasus and elsewhere, and forecasting that indicates increasing 
numbers of natural disasters with devastating human consequences. The 
budget also funds bilateral demining efforts to reduce the dangers to 
civilians caused by land mines in areas of former conflict.

Developing Global Programs that Help Us by Helping Others

  In our increasingly interconnected world, it has become clear that 
many of the problems faced by the developing world are actually global 
problems that threaten the health and well being of all people, 
including our own. That is why the budget includes a number of foreign 
assistance initiatives, under the auspices of USAID and other Federal 
agencies, that are aimed at problems that directly affect the United 
States.

  International Family Planning: It is estimated that 34,000 children 
under age five in developing countries die every day, and that over 
580,000 women die each year of causes related to pregnancy and 
childbirth. By helping women bear their children at the healthiest times 
for both mother and baby, family planning helps prevent the deaths of 
children and mothers; it also prevents unintended pregnancies and 
abortion. By helping countries improve the health and prosperity of 
their citizens and stabilize their population growth, U.S. international 
family planning assistance

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also helps to ensure that we have increasingly stable and prosperous 
partners in the developing world. Therefore, the budget funds an 
increase of $169 million for international family planning assistance 
programs, bringing total resources for these programs to $541 million. 
It also removes unnecessary and harmful restrictions that were imposed 
on the implementers of this assistance during the 2000 appropriations 
process.
  HIV/AIDS: The budget provides a second consecutive $100 million 
Government-wide increase for programs that address the scourge of AIDS, 
which has become one of the most deadly diseases in the developing 
world. USAID will implement $54 million of this increase, almost 
doubling USAID's global AIDS effort since 1999. The bulk of this 
initiative will address the spread of HIV/AIDS in Africa, where AIDS has 
become the number one cause of death, and where infection rates in some 
countries exceed 30 percent. However, the initiative will also address 
AIDS in other countries where increasing infection rates are of 
particular concern. This significant increase in resources over the past 
two years should leverage additional resources from other donors and 
from the governments of developing countries. (See Chapter 3, 
``Strengthening Health Care,'' for additional details on the Global HIV/
AIDS Initiative.)
  Vaccines for Developing Countries: In his September 1999 address to 
the UN General Assembly, President Clinton called for a concerted effort 
to make vaccines more widely available in the developing world, where 
more than three million children die each year from vaccine-preventable 
diseases. As an important first step, the budget proposes a $50 million 
contribution to the newly-established Global Alliance for Vaccines and 
Immunizations (GAVI). These funds will be used to purchase existing 
vaccines for Hepatitis B, Haemophilus influenzae type B, and Yellow 
Fever, and to ensure their safe delivery. The U.S. contribution to GAVI 
is expected to leverage additional resources from other donors. This 
initiative will be complemented by increased funding for the National 
Institutes of Health to accelerate the development of vaccines for major 
infectious diseases. In addition, the budget proposes a new tax credit 
that will encourage the development of vaccines for diseases that occur 
primarily in the developing world. (See Chapter 3, ``Strengthening 
Health Care,'' for further details on this tax credit.)
  Clean Energy and Tropical Forests: The budget includes $50 million for 
international affairs agencies to promote the use of clean energy 
overseas. Of this total, USAID will use $30 million for technical 
assistance for legal and regulatory reform, and to expand training 
programs for energy sector policy makers and regulators. The Export-
Import Bank intends to use $15 million to assist in the financing of 
clean energy technology exports, especially renewable energy exports, 
while TDA will use $5 million to fund feasibility studies and other 
project planning activities to promote U.S. exports of clean energy 
technology.
  The budget includes $45 million for international affairs agencies to 
increase U.S. support for the preservation of tropical forests and other 
biologically-significant areas. Of this amount, $33 million will be 
added to USAID biodiversity resources (for a total of $100 million), 
allowing USAID to increase the work it does with host countries. The 
other $12 million will be added to Treasury Department resources (for a 
total of $37 million) for the budget cost of debt swaps and debt 
reduction agreements that require beneficiary countries to devote a 
portion of their own resources to tropical forest conservation.

  Peace Corps: The volunteer programs of the Peace Corps promote mutual 
understanding between Americans and the people of developing nations, 
while providing technical assistance in education, health, the 
environment, agriculture, and small business development. The agency 
also responds to humanitarian crises and natural disasters through its 
Crisis Corps program. The budget proposes $275 million, a 12-percent 
increase over the 2000 Budget for the Peace Corps. This increase will 
provide opportunities for 4,200 Americans in 2001 to enter service as 
new volunteers. With these levels, the Peace Corps can continue toward 
its goal of placing a total of 10,000 volunteers early in the next 
century.
  Development Foundations: The African Development Foundation (ADF) and 
the Inter-American Foundation (IAF) fund indigenous grassroots 
development efforts. The ADF's as

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sistance helps generate new jobs, protect Africa's environment, and 
strengthen basic democratic values and civil society. The budget 
proposes to increase funding for the ADF to support new initiatives for 
Nigeria and for AIDS/HIV awareness programs. The IAF provides social 
investment grants to local private sector partners, conducts joint 
ventures with Latin American corporate foundations, and promotes 
philanthropy and corporate social responsibility. The budget reverses 
the 2000 congressional appropriations action to phase out U.S. 
Government funding of the IAF by proposing to restore funding for the 
IAF to pre-2000 levels. This action is based on the significant reforms 
that have been adopted by the IAF, including: improved capabilities to 
effectively monitor projects and identify quality grant proposals; a 
greater emphasis on corporate and business involvement in the 
development process; and, increased involvement, including final 
approval authority, of U.S. embassies in grant making decisions.

Rightsizing and Protecting our Representation Abroad

  Advisory Panel on Overseas Presence: In the aftermath of the embassy 
bombings in Nairobi and Dar Es Salaam in 1998, and in response to 
recommendations of Admiral Crowe's Accountability Review Boards, the 
Secretary of State established an expert panel, chaired by Lewis Kaden, 
to recommend improvements with respect to the U.S. presence abroad. The 
panel released its report in November 1999. Among other recommendations, 
the panel reiterated the need for a sustained, multi-year program of 
investment in overseas facilities and security measures. The 
Administration has initiated a thorough review of recommendations 
contained in the Kaden panel's report including an examination of the 
U.S. Government's overseas presence needs and the current structure of 
financing and management for overseas facilities. The Administration 
will continue to work with Congress in a bipartisan manner to address 
the continuing challenge of making our overseas posts secure.
  The budget supports a strong U.S. presence at over 250 embassies and 
other posts overseas, promoting U.S. interests abroad and protecting and 
serving Americans by providing consular services. This work will be 
aided by an Administration review of the overseas presence of all 
agencies as recommended in the report of the Advisory Panel on Overseas 
Presence.
  Effective diplomacy is the foundation of our ability to meet foreign 
policy goals. The work of the Department of State and U.S. missions 
supports the aims of American foreign policy, and anticipates and helps 
to prevent threats to our national security. Overseas posts serve as the 
administrative platform for more than 30 other U.S. agencies with 
personnel abroad, including USAID and the Departments of Defense, 
Justice, Commerce, Agriculture, and the Treasury.

  Facility Vulnerability: Protection of American and foreign national 
employees who work abroad in U.S. Government facilities remains a top 
priority in the 2001 Budget. The budget proposes a total of $1.1 billion 
for embassy security initiatives, including $500 million for new State 
Department and USAID diplomatic facility construction, $200 million for 
additional steps to protect existing buildings from terrorist attack, 
and $400 million for maintenance of security readiness, including 
construction of a new Center for Anti-terrorism and Security Training. 
In total, this represents an increase of over $500 million, nearly 
doubling the 2000 enacted level for enhanced security measures. The 
budget continues the Administration's commitment to a long-term program 
of overseas facility construction including additional resources in 
future years necessary to fulfill the Administration's strategy to 
effectively and efficiently meet America's security needs.
  State Department Operations: The budget proposes $3.2 billion in 2001 
for the State Department, including public diplomacy and arms control 
activities. This funding level will maintain the Department's worldwide 
operations, continue efforts to upgrade information technology and 
communications systems, and accommodate increased security and facility 
requirements at posts abroad. It will also provide for additional 
technology and training investments as recommended by the Overseas 
Presence Advisory Panel.

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  USAID Operating Expenses: The budget proposes $520 million for USAID 
operating expenses. This is a $16 million increase over the 2000 level 
(excluding the $15 million for the new mission in Dar Es Salaam). The 
2001 increase is partly for information technology, including full 
implementation of the ``off-the-shelf'' financial management system. 
These remaining information technology improvements are critical to 
USAID's plan to fully comply with all Government-wide financial 
management requirements in 2001. This funding level will also help 
maintain work force levels necessary to effectively manage USAID's 
overseas programs.
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