    [Budget of the United States Government]
    [III. Creating a Better Government]
    [3. International Affairs]
    [From the U.S. Government Publishing Office, www.gpo.gov]

                            3.  INTERNATIONAL AFFAIRS

      ----------------------------------------------------------------------

                            Table 3-1.  Federal Resources in Support of International Affairs
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                   Estimate
                   Function 150                   2000   -----------------------------------------------------------
                                                 Actual     2001      2002      2003      2004      2005      2006
    ----------------------------------------------------------------------------------------------------------------
    Spending:
      Discretionary Budget Authority..........    23,459    22,651    23,867    24,388    24,918    25,468    26,031
      Mandatory Outlays:
        Existing law..........................    -4,069    -6,651    -3,543    -3,422    -3,438    -3,408    -3,361
    Credit Activity:
      Direct loan disbursements...............     1,571     2,252     2,047       476       226       224       119
      Guaranteed loans........................    11,443    11,110    11,544    10,829    10,743    11,585    11,215
    Tax Expenditures:
      Existing law............................    16,630    18,060    18,340    18,910    20,040    21,260    22,590
    ----------------------------------------------------------------------------------------------------------------

      ----------------------------------------------------------------------
      The Administration proposes $23.9 billion for International Affairs
    programs in 2002. By fully funding these programs, the United States can
    provide the global leadership needed to enhance national security,
    including the security of Americans overseas; promote free trade and
    open markets; counter the threat posed by the global trade in illegal
    drugs; provide humanitarian and development assistance to address the
    global spread of poverty and diseases; and provide the modern technology
    and working conditions that our diplomats need in their efforts to
    secure our national interests overseas.
      The performance goals that follow represent key U.S. foreign policy
    priorities based on the Administration's initial review of our
    international affairs programs and objectives. As the Administration
    continues to refine U.S. national security and foreign policy
    strategies, additional objectives and performance goals are likely to be
    identified. These goals should, therefore, be viewed as preliminary and
    not as an exhaustive list. International affairs agencies have
    additional performance goals that meet their legislative mandates in
    ways that contribute to U.S. national interests.

    National Security

      Vigorous engagement and leadership in international affairs are
    essential to U.S. national security. Experienced and skilled
    professionals are required to protect America's security interests,
    along with an active diplomacy and sufficient resources to address
    challenges anywhere in the world. The Administration's efforts to reduce
    the threat of weapons of mass destruction will combine active diplomacy
    with critical, targeted assistance programs. The United States will
    continue its bilateral efforts to resolve destabilizing regional
    conflicts, including the use of economic and reconstruction assistance,
    which will be complemented by multilateral work through international
    financial institutions and the United Nations. These tools for
    leadership in international affairs require a sustained commitment of
    resources to achieve results.
      American resolve to advance national security and foreign policy
    interests throughout the world is unmatched. The advancement of those
    interests requires a day-to-day American presence in dangerous locations
    despite continued threats of terrorist violence. Effective performance
    of embassy security measures

    [[Page 24]]

    must be an integral component of efforts to meet our national security
    goals. The Administration has accepted the management challenge to
    achieve efficiently and effectively global embassy security upgrades and
    maintain a high level of readiness at U.S. overseas posts. The budget
    proposes $1.3 billion for enhanced security measures, including $665
    million for new, secure facility construction, which includes funding
    for U.S. Agency for International Development (USAID) facilities, $211
    million for additional security upgrades to existing facilities, and
    $428 million for security readiness.
      In addition to enhanced security, the Administration intends to review
    America's official presence overseas. According to one study, the
    distribution of U.S. Government staff overseas is based more on
    historical legacy and bureaucratic inertia than by a clear commitment to
    advance American policy goals. In some embassies, up to 30 U.S. agencies
    may be represented. Frequently, agencies do not know the true costs of
    having their staff in foreign countries. This situation clearly does not
    reflect the desired goal of a well managed, rational, and cost effective
    American presence overseas.
      United Nations peacekeeping efforts can benefit U.S. national
    security. Working with the UN allows the United States to address policy
    objectives and share the cost among all nations, while reducing the
    possible requirement to deploy U.S. troops abroad. The United States
    must continue to address the need for UN management reforms. The United
    States must ensure that UN peacekeeping mission goals are defined and
    achievable, that vital national interests are identified, and that there
    is not only a planned exit strategy, but also a ``success'' strategy to
    UN peacekeeping operations.
      The Department of State will meet the following goals in 2002:
      Continue to make full use of active and defensive measures to
              prevent and deter terrorist attacks and the loss of human
              life. The resources requested will support maintenance of
              counter-surveillance programs, integration of threat
              intelligence into an active security posture, inspection of
              all vehicles entering U.S. diplomatic compounds, and 24-hour
              guard coverage and electronic monitoring of embassy
              facilities.
      Improve the security posture of all agencies overseas, make
              more reliable the Department's ability to project resource
              needs in the future, and examine the current financing
              structure for overseas facilities to determine if it provides
              a sound basis for long-term capital needs.
      Set standards to measure the effectiveness of UN peacekeeping
              activities and bilateral U.S. assistance programs designed to
              build regional and national peacekeeping and peace enforcement
              capacities worldwide. Make decisions concerning continued
              support for and funding of these activities based on whether
              these standards are being met.
      Achieve demonstrable reductions in the flow of the material,
              equipment, and technology needed to acquire, produce, or
              deploy weapons of mass destruction, by helping officials in
              exporting countries and key transshipment points to improve
              their systems of export controls.

    State Department Management and Operations

      The budget provides funding to modernize and improve State Department
    management, which is expected to enable the Department to achieve its
    strategic and performance goals. The Department will identify
    appropriate quantitative indicators to measure the success of management
    reforms and ensure that budgetary resources are directly linked to
    management performance.
      As with any institution, excessive layers of bureaucracy and
    duplicative bureaus impede effective management. In the case of the
    State Department, they can hinder the prompt and effective execution of
    foreign policy. To reduce the number of middle management positions that
    complicate lines of authority and hinder the development and
    presentation of coherent foreign policy, the Department of State will
    empower line officers. The budget also provides the necessary resources
    to improve needed work force planning and to strengthen the Department's
    human

    [[Page 25]]

    resource management to enable the Department to effectively recruit,
    assess, and retain the highest possible caliber work force.
      The budget includes $210 million for information technology
    investments that will improve interaction and information sharing among
    agencies in the foreign affairs community and modernize secure
    communications capabilities. The budget also provides the necessary
    funding to ensure that diplomatic and consular facilities are planned
    and constructed effectively, efficiently, and on budget.
      In the context of the biennial authorization process, the Department
    will propose legislative changes needed to implement management reforms.
    In addition, the Department will improve its financial management
    practices to identify savings and performance enhancements accruing from
    the United States Information Agency (USIA)/Arms Control Disarmament
    Agency (ACDA) merger. This merger brought 4,000 staff under the direct
    control of the Secretary of State.
      The Department will meet the following performance goals in 2002:
      Identify and eliminate bureaucratic layers that hinder
              effective foreign policy.
      Undertake and implement a comprehensive review of the
              Department's organization to realize efficiency gains by
              eliminating duplication in bureau functions.
      Review current administrative practices in overseas facilities
              and undertake reforms, including increased use of Foreign
              Service Nationals, to reduce substantially the cost of
              administrative support.
      Design and implement a long-term investment strategy in new
              technology that enables employees to communicate more
              effectively and that realizes increased cost savings and
              efficiencies.
      Complete and implement a comprehensive examination of current
              and future work force needs. The Department will demonstrate
              with measurable criteria how additional personnel contribute
              to fulfillment of specific program goals.
      Create and implement policies to ensure that the Department
              recruits, hires, and retains Foreign and Civil Service
              officers with the proper skills needed to fulfill the
              Department's strategic and performance goals. The Department
              will develop and apply performance criteria to measure the
              effectiveness of its recruitment, examination, and retention
              strategies.
      Identify, review, and implement, as necessary, overseas
              facility planning, construction, and management processes to
              ensure effective and on-budget service delivery.
      Describe savings and performance enhancements deriving from
              the USIA/ACDA merger and take steps to ensure that this merger
              achieves scale and other benefits as originally anticipated.
      Make substantial progress toward financial systems compliance
              with the Federal Financial Management Improvement Act.
      Present an authorization proposal that includes a blueprint
              for substantial management reforms.

    Free Markets

      As the President said in his Address to the Joint Session of Congress:
    ``The cause of freedom rests on more than our ability to defend
    ourselves and our allies. Freedom is exported every day, as we ship
    goods and products that improve the lives of millions of people. Free
    trade brings greater political and personal freedom.''
      International affairs programs work to increase our economic freedom
    and prosperity in several ways. First, the United States Trade
    Representative (USTR), supported by the Departments of State and
    Commerce, and other agencies, works to reduce barriers to trade by
    negotiating new trade liberalizing agreements and by enforcing existing
    agreements. To reach this objective, the President has called on
    Congress to quickly give him, as each of the previous five Presidents
    has had, the ability to negotiate far reaching trade agreements with
    presidential trade promotion authority. This authority will enable the
    Administration to proceed aggressively with its negotiating agenda,
    which includes the World Trade Organization's (WTO) built-in agenda on
    agriculture and services, the

    [[Page 26]]

    Free Trade Area of the Americas (FTAA), and bilateral free trade
    agreements.
      Second, the Export-Import Bank provides export financing to correct
    market distortions that can put U.S. exports at a competitive
    disadvantage. The Overseas Private Investment Corporation (OPIC)
    provides investment insurance and financing for projects involving U.S.
    business. The President has pledged to reduce unnecessary corporate
    assistance and to support an active, but limited, Government. To this
    end, the Export-Import Bank must sharpen programs by focusing on support
    that would not otherwise be available in the private market or which
    redresses officially supported foreign competition. Similarly, OPIC's
    activities should focus more closely on companies and countries that
    cannot access private financing or insurance. These efforts should
    enhance the value added of Export-Import Bank's programs and make OPIC's
    programs complementary, not competitive, with the private market.
      At the moment, these agencies have similar client bases and sometimes
    overlapping product lines. For example, both the Export-Import Bank and
    OPIC offer political risk insurance. The Administration intends to
    review how these agencies, along with the U.S. Trade and Development
    Agency, can serve American clients more effectively.
      The trade agencies will meet the following performance goals in 2002:
      USTR will work with Congress to obtain trade promotion
              authority and use this to provide impetus for a new
              negotiating round in the WTO, progress in the FTAA, and
              negotiation of other free trade agreements, including with
              Chile and Singapore.
      USTR, working with the Treasury Department and Congress, will
              seek extension of the Generalized System of Preferences and
              extension and enhancement of the Andean Trade Preference Act,
              as included in the President's revenue proposals.
      The Export-Import Bank will expand its direct support to small
              business above 2001 levels, as well as improve its internal
              processes and outreach through use of proven technologies.
      OPIC will strive to support a stable level of private U.S.
              investment in 2002 that promotes American development goals,
              while continuing to expand its lending to U.S. small business
              above 2001 levels.

    Andean Initiative

      Andean countries are the source of virtually all of the cocaine in the
    United States and an increasing share of the heroin--Colombia is the
    primary regional source of both. This drug trade contributes to
    political, economic, and social instability.
      The budget includes $731 million for U.S. funding for the Andean
    regional initiative, which will support drug eradication, interdiction,
    alternative development in Colombia, Peru, Bolivia, Ecuador, and other
    countries in the region. (Additional funding from economic assistance
    accounts will augment these reforms directed toward democratic
    strengthening and economic growth.) This initiative will build upon the
    resources provided in the 2000 Emergency Supplemental Appropriations Act
    for Plan Colombia and ongoing regional counterdrug funding for the State
    Department's Bureau of International Narcotics and Law Enforcement
    Affairs. About 50 percent of this combined new funding will go to Peru,
    Bolivia, Ecuador and neighboring countries to maintain and continue
    their success in eradicating illegal drug crops and to prevent spillover
    of violence and the drug trade from Colombia. Additionally, about 50
    percent of these 2002 funds will support alternative development, human
    rights, displaced persons, judicial reform and democratic institution
    building programs.
      The State Department, working with other U.S. agencies, will meet the
    following performance goals:
      Reduce Colombian coca production by 30 percent from calendar
              year 2000 levels by the end of calendar year 2002.
      Eliminate all illicit coca production in Bolivia by the end of
              calendar year 2002.
      Negotiate revised coca and poppy control goals with the new
              Government of Peru after it assumes power in July 2001.

    [[Page 27]]

      Establish meaningful, aggressive, achievable, and quantifiable
              goals for counterdrug efforts in other countries in the region
              by August 15, 2001, to be used in carrying out programs in
              2002.

    International Development/Humanitarian Response

      The United States has a long and proud history of providing assistance
    to poor countries, both to alleviate the human suffering brought on by
    poverty and man-made and natural disasters. U.S. assistance must also
    help to improve opportunities for freedom and prosperity. The United
    States will work with other countries to help meet the needs of the poor
    and vulnerable around the globe. The budget for USAID provides an
    increase in funding to fight the spread of HIV/AIDS and other infectious
    diseases. This will continue recent efforts by the United States to
    combat the global spread of this disease and maintain the pressure on
    other donors, multilateral organizations, and non-governmental
    organizations to make greater efforts to address a plague that threatens
    to undermine the economies and national security of affected countries,
    especially those in sub-Saharan Africa where prevalence rates often
    exceed 20 percent of the adult population. The budget also increases
    investment in such key social sectors as basic education.
      In addition, the United States will continue to leverage international
    donor resources to promote global economic growth and reduce poverty by
    seeking funding for our commitments to the Multilateral Development
    Banks and to the Heavily Indebted Poor Country (HIPC) multilateral debt
    reduction initiative. These multilateral programs assist countries to
    reach their potential for sustainable growth through adoption of policy
    reforms that promote market-oriented economies, fight corruption, and
    improve transparency and accountability. The United States will continue
    to make resources available to carry out agreements under the Tropical
    Forest Conservation Act, which allows for restructuring debt to generate
    funds for conservation projects.
      One aspect of debt forgiveness, however, is the coordination of that
    forgiveness with new lending. Four U.S. Government agencies currently
    have direct loan and guarantee programs that are subject to debt
    forgiveness initiatives. In some cases, agencies have offered new
    credits to a country, only to have the country qualify for debt
    reduction a short time later. The Administration intends to reconcile
    the goals of debt forgiveness and credit management in a rational
    manner.
      Relevant agencies will meet the following performance goals for 2002:
      USAID will increase funding to support prevention and care
              programs that combat the HIV/AIDS pandemic.
      USAID will increase support for economic growth, leveraging
              private sector resources to foster agricultural development,
              improve the business and trade climate, expand access to basic
              education and increase the efficient use of energy in
              developing countries.
      USAID will expand conflict prevention and development relief
              efforts, facilitating increased support from non-governmental
              organizations, other private sector entities and other donors
              to respond to crises, and recovery and support prevention
              including support for democracy.
      The United States will support the HIPC initiative to reduce
              the debt burden of the poorest countries to more sustainable
              levels in return for adopting appropriate policies to reduce
              poverty and enhance economic growth. As part of this
              initiative, the Department of Treasury will fund the
              forgiveness of debt owed to the United States by an expected
              33 qualifying countries and will provide contributions to the
              HIPC Trust Fund in order to finance debt reduction by
              multilateral institutions. The budget requests $224 million,
              which along with $16 million from existing balances of
              previously appropriated funds, will fully meet the U.S.
              commitment for contributions to the HIPC Trust Fund.
      Under the Tropical Forest Conservation Act (TFCA), the
              Department of the Treasury has restructured some of
              Bangladesh's debt in order to generate funds for conservation
              programs. Treasury expects to continue making progress on this
              initiative by completing agreements with two or

    [[Page 28]]

              three additional countries in 2001 with a budget cost of
              approximately $13 million. In 2002, Treasury will make more
              funds available for further programming under TFCA, as well as
              up to $13 million that may be transferred from USAID.
      The State Department, through the help and advice it provides
              countries to clear land mines and other unexploded ordnance,
              will expand by 3,500 square kilometers over 2001 the amount of
              land available for local agricultural and other economic
              activity. These efforts, funded primarily by $40 million from
              the Nonproliferation, Anti-terrorism, Demining, and Related
              Programs account, will speed economic and social recovery and
              will reduce the casualties suffered by innocent civilians,
              including children.
      State, in cooperation with USAID and other relevant agencies,
              should make and implement recommendations based on the 2000
              review of humanitarian assistance programs to improve the
              administration and delivery of relief.
      The Peace Corps expects to have more than 7,000 volunteers to
              address a variety of problems in the areas of agriculture,
              environment, small business, and health, including a multi-
              faceted initiative to fight the HIV/AIDS pandemic.

    International Broadcasting

      International broadcasting directly impacts the global free flow of
    information by providing accurate coverage of world and local events to
    foreign audiences with limited access to unbiased news reports. To meet
    the President's Government-wide performance goals for 2002, the
    Broadcasting Board of Governors will:
      Reduce the number of upper- and middle-level managers in each
              of the four broadcasting entities.
      Link budget and management decisions more closely to
              performance by revamping the strategic planning and
              performance management system that incorporates Government
              Performance and Results Act (GPRA) planning, the annual
              language service review process, and the program reviews of
              individual language services. By early 2002, the Broadcasting
              Board of Governors will produce an over arching strategic plan
              containing specific criteria for measuring the need for and
              effectiveness of individual language services and programs and
              explaining how they relate to one another and to overall GPRA
              planning. This strategy will reduce duplication among the
              various broadcast entities, eliminate ineffective or low-
              priority language services and programming, and direct
              resources to highest-priority, most effective languages and
              programming.
      By the middle of 2002, finalize and implement a uniform,
              agency-wide strategy for capital planning, using private
              contractors whenever possible, that will improve the operating
              efficiency and reach of its broadcast network by taking
              advantage of emerging technologies. Such a strategy will
              address the latest broadcast technologies to combat jamming
              and other transmission difficulties while ensuring that
              worldwide audiences receive broadcasts via the media they are
              most likely to use.
      Actively solicit the participation of private-sector firms in
              competitive bidding for contracts.