[House Report 105-719]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-719
_______________________________________________________________________


 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                       APPROPRIATIONS BILL, 1999

                                _______
                                

Semptember 15, 1998.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. Callahan, from the Committee on Appropriations, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4569]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill making 
appropriations for Foreign Operations, Export Financing, and 
Related Programs, and for sundry independent agencies and 
corporations for the fiscal year ending September 30, 1999, and 
for other purposes.

                        INDEX TO BILL AND REPORT

_______________________________________________________________________


                                                               Page

                                                             BillReport
Summary of the bill........................................
                                                                      2
Committee Recommendations..................................
                                                                      3
Title I--Export and Investment Assistance:
        Export-Import Bank of the United States............     2
                                                                      4
        Overseas Private Investment Corporation............     4
                                                                      5
        Trade and Development Agency.......................     6
                                                                      6
Title II--Bilateral Economic Assistance:
        Child Survival and Disease Programs Fund...........     6
                                                                      7
        Development Assistance.............................     7
                                                                     12
        International Disaster Assistance..................    10
                                                                     22
        Micro and Small Enterprise Development Program.....    11
                                                                     23
        Urban and Environmental Credit Program.............    11
                                                                     24
        Payment to the Foreign Service Retirement and 
            Disability Fund................................    12
                                                                     24
        AID Operating Expenses.............................    12
                                                                     24
        Operating Expenses of the Agency for International 
            Development, Office of the Inspector General...    12
                                                                     25
        Economic Support Fund..............................    13
                                                                     26
        International Fund for Ireland.....................    13
                                                                     36
        Assistance for Eastern Europe and the Baltic States    14
                                                                     37
        Assistance for the New Independent States of the 
            Former Soviet Union............................    16
                                                                     40
Independent Agencies:
        Inter-American Foundation..........................    20
                                                                     51
        African Development Foundation.....................    20
                                                                     51
        Peace Corps........................................    21
                                                                     51
Department of State:
        International Narcotics Control....................    21
                                                                     52
        Migration and Refugee Assistance...................    22
                                                                     55
        Emergency Refugee and Migration Assistance Fund....    22
                                                                     55
        Nonproliferation, Anti-terrorism, Demining and 
            Related Programs...............................    23
                                                                     56
Department of the Treasury:
        Debt restructuring.................................    25
                                                                     57
        International affairs technical assistance.........
                                                                     59
        United States community adjustment and investment 
            program........................................
                                                                     59
Title III--Military Assistance:
        International Military Education and Training......    26
                                                                     59
        Foreign Military Financing Program.................    28
                                                                     63
        Peacekeeping Operations............................    32
                                                                     67
Title IV--Multilateral Economic Assistance:
        International Bank for Reconstruction and 
            Development (IBRD).............................    32
                                                                     68
        Global Environment Fund............................
                                                                     68
        International Development Association (IDA)........    32
                                                                     70
        Inter-American Development Bank (IDB)..............    33
                                                                     70
        Multilateral Investment Fund.......................    33
                                                                     71
        Asian Development Bank (ADB).......................    34
                                                                     71
        Asian Development Fund (ADF).......................    34
                                                                     71
        African Development Fund (AFDF)....................    34
                                                                     72
        European Bank for Reconstruction and Development 
            (EBRD).........................................    35
                                                                     73
        Enhanced Structural Adjustment Facility............
                                                                     73
Department of State:
        International Organizations and Programs...........    35
                                                                     73
Title V--General Provisions................................    36
                                                                     75
Title VI--International Monetary Programs:
        International Monetary Fund Quota Increase.........   110
                                                                     78
        New Arrangements to Borrow.........................   110
                                                                     80
House of Representatives Report Requirements...............
                                                                     80

                          Summary of the Bill

    The Committee has recommended foreign assistance and export 
financing funding at a level that is $1,256,103,000 below the 
Administration's fiscal year 1999 request in discretionary 
budget authority. The resulting total of $16,184,389,980 in 
discretionary appropriations is needed to meet the essential 
requirements of the United States and its President in 
conducting foreign policy and meeting urgent humanitarian needs 
abroad. The request and the Committee recommendation include 
$3,361,000,000 for the New Arrangements to Borrow.
    The section 302(b) allocation for foreign operations, 
export financing, and related programs is $12,475,000 in 
discretionary budget authority and $12,525,000 in outlays. The 
recommended funding levels for arrears for international 
financial institutions ($351,952,000) and for the New 
Arrangements to Borrow ($3,361,000,000) are not counted against 
this allocation. The Committee recommendation of 
$12,471,437,980 in discretionary budget authority, excluding 
these items, is $3,562,020 below the section 302(b) allocation, 
and consumes all of the allocation for outlays. On a 
comparative basis the Committee recommendation is $315,569,000 
below the 1998 level and $1,105,569,666 below the President's 
request for 1999.

                         looking to the future

    The Committee is seized by the deteriorating global 
monetary and financial environment. Although the United States 
so far has largely escaped the contagion from East Asia, our 
nation's leaders will be severely tested as they struggle to 
develop policies to restore a measure of stability to the 
global economy. The situations in Indonesia and Russia are also 
of concern to the Committee.
    In order to give the President and the Chairman of the 
Federal Reserve Board all possible tools to deal with 
unpredictable events in foreign markets, the Committee is 
prepared at a later step in the process to consider full 
funding of the International Monetary Fund, provided it first 
moves forward with extensive reform, especially in the area of 
transparency. Although funds for child survival and disease 
eradication are protected in the proposed bill, this year's 
priority must be the protection of export-related American jobs 
and the fight against the scourge of illegal narcotics traffic.
    As noted last year, the Committee is constrained by the 
fact that the budgetary resources for foreign aid are already 
extremely limited and are likely to be even more so in the 
future. The multiyear plans to reduce the level of assistance 
to the Camp David countries, undertaken with the full 
cooperation of Israel and Egypt, frees up money now going to 
the Middle East for other regions, such as Latin America and 
Africa, beginning in the year 2000. The Committee expects other 
traditional aid recipients who are becoming as prosperous as 
some regions of the United States to follow the bold path 
undertaken by Israel. The Committee is also increasingly 
impatient with countries which expect large amounts of American 
aid while they hold back from proposed solutions to tension and 
violence in their neighborhood. The Committee is more than 
willing to support reconstruction following a peace settlement. 
It is weary of financing stalemate.
    From the Committee's perspective, this simply means it is 
now more imperative than ever that the Committee forge a strong 
bipartisan consensus which will shape how scarce resources can 
be most effectively used . It would welcome the full engagement 
of the Executive branch of Government.

                       committee recommendations

    For export and investment assistance programs the Committee 
has recommended a gross total of $920,277,000, which is 
partially offset by collections and a negative subsidy 
totalling $285,000,000. The subsidy appropriation for the 
Export-Import Bank is $745,500,000 and the Trade and 
Development Agency is funded at $41,500,000. The Committee has 
provided $50,000,000 for subsidy appropriations requested on 
behalf of the Overseas Private Investment Corporation.
    The Committee has recommended $1,326,262,980 of the 
$1,657,762,980 requested for the international financial 
institutions. The overall reduction is $132,686,100 below the 
fiscal year 1998 enacted level and $331,500,000 below the 
request.
    For development assistance, the Committee has recommended a 
total of $1,981,500,000 of which $650,000,000 is for child 
survival and disease prevention programs. Another 
$1,174,000,000 is for longer term development assistance. The 
Committee has also included $150,000,000 for disasters 
worldwide. The Committee has included $36,000,000 for debt 
restructuring for poor countries and a new concessional debt 
relief program for sub-Saharan Africa.
    The Committee has continued its new account for child 
survival and disease programs. It is designed to ensure that 
there will not be reductions in these vital programs as the 
overall bilateral assistance program is constrained. The 
emphasis is on programs that directly affect younger children, 
including basic education, and on accelerating efforts to 
eradicate diseases that threaten younger children and 
caregivers alike. The account does not include population 
assistance which will be funded through the development 
assistance account. It does provide for a grant to UNICEF at a 
level of $105,000,000.
    The Committee has included a total of $590,000,000 in 
assistance to the new independent states of the former Soviet 
Union, and $450,000,000 for Eastern Europe and the Baltics.
    The Committee has recommended a total of $670,000,000 for 
refugee programs.
    For economic assistance under the Economic Support Fund, 
the Committee has recommended a total of $2,326,000,000.
    The Committee has recommended $152,000,000 for a 
Nonproliferation, anti-terrorism and demining account which 
includes funding for the Non-proliferation and Disarmament 
Fund, anti-terrorism assistance, demining activities, United 
States participation in the Korean Energy Development 
Organization (KEDO), and the U.S. voluntary contribution to the 
International Atomic Energy Agency (IAEA).
    For Foreign Military Financing, the Committee has 
recommended a grant program of $3,335,910,000 and a loan 
subsidy appropriation of $20,000,000. The FMF loan value 
supported by the loan subsidy appropriation is limited to 
$167,000,000.

               TITLE I--EXPORT AND INVESTMENT ASSISTANCE

                Export-Import Bank of the United States

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $683,000,000
Fiscal year 1999 request..............................       808,000,000
Committee recommendation..............................       745,500,000
                                                                        

                        administrative expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level...............................        $48,614,000
Fiscal year 1999 request.............................         51,940,000
Committee recommendation.............................         50,277,000
                                                                        

    The Committee has recommended a subsidy appropriation for 
the Export-Import Bank of $745,500,000 and an appropriation of 
$50,277,000 for administrative expenses.
    The Committee has continued prior year language limiting 
the export of nuclear technology or fuel to certain countries. 
The Committee has also included language making possible 
Export-Import Bank activity in Eastern Europe and the Baltic 
states.
    The Committee provided no additional funds for a tied-aid 
``war chest''. The estimated $330,000,000 remaining ``war 
chest'' balance for tied-aid purposes, may be used to support 
loans. If more funds are needed for the war chest, the 
Committee will promptly consider any additional requests from 
the President.
    Last year, the Committee warned that it would be hard 
pressed to sustain appropriations for the Eximbank at then-
current levels in future years. At present the Bank is facing a 
financial crisis as it is expected to exhaust its 1998 subsidy 
appropriation well before October 1, 1998, despite a 
Congressional initiative to provide $50,000,000 above the 
President's request for 1998. The Bank management is 
encouraged, once again, to begin consulting with the Committee 
regarding its plans for overcoming the likely gap between 
demand and federal resources in the near future.
    The Committee is concerned about the effect of certain 
Eximbank decisions on U.S. foreign policy objectives, in 
particular support for private sector development and 
investment specifically in the NIS. The Committee urges the 
Eximbank to take whatever steps are necessary to assure that 
the Bank's policies and activities are not contradictory to 
overall U.S. foreign policy.

                Overseas Private Investment Corporation

                        administrative expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $32,000,000
Fiscal year 1999 request..............................        34,000,000
Committee recommendation..............................        33,000,000
                                                                        

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $60,000,000
Fiscal year 1999 request..............................        50,000,000
Committee recommendation..............................        50,000,000
                                                                        

    The Committee has recommended a subsidy appropriation of 
$50,000,000 for the OPIC direct and guaranteed loan credit 
programs, and it has recommended $33,000,000 for administrative 
expenses.
    The Committee has continued prior year language required by 
the Federal Credit Reform Act and addressing representation 
expenses and availability of funds.
    The changing global investment climate in the face of the 
East Asian crisis makes the role of OPIC more vital while 
potentially increasing the possibility of losses, if workouts 
cannot be arranged. The Committee expects the management of 
OPIC to continue to consult closely with the Committee as it 
reacts to the trade and investment crisis in several regions.
    The Committee requests that OPIC, in consultation where 
feasible with the Department of the Treasury, provide it with 
three specific one-time reports on East Asia, on the People's 
Republic of China and on Vietnam, within the time frame 
specified:
          1. As soon as possible, but not later than 30 days 
        following House passage of this bill, a report on any 
        and all steps planned or considered by the Government 
        of the United States and the Government of the People's 
        Republic of China regarding the restoration of OPIC 
        programs suspended following the 1989 Tiananmen Square 
        massacre;
          2. Not later than 45 days following House passage of 
        this bill, a detailed report on the amount, type, and 
        investment location of pending claims and potential 
        claims known to OPIC;
          3. Not later than 6 months of enactment of this bill, 
        a report on the progress made by the Government of 
        Vietnam to meet worker rights requirements specified in 
        the Trade Act of 1974, including a list of U.S. 
        companies operating in Vietnam with OPIC support, and 
        comprehensive summaries of all internal reports by OPIC 
        on its monitoring of compliance with worker rights 
        provisions in OPIC contracts.
The report on China should include, but not be limited to, an 
assessment of China's respect for internationally recognized 
workers rights in the PRC, as required by the Trade Act of 
1974.
    The managers strongly support the efforts of the Overseas 
Private Investment Corporation to encourage development of 
Caspian oil and gas pipelines as key components of an East-West 
transport corridor. Such pipelines will strengthen U.S. 
national interests by bolstering the independence of the new 
independence states in the Caspian region, enhancing energy 
security of the U.S. and its allies, and providing commercial 
opportunities for U.S. companies. The managers urge OPICt to 
play an active and supportive role in fulfilling the financial 
conditions required for construction of these pipelines. The 
managers further encourage OPIC to bring its creativity and 
innovation to bear and to increase its internal project limits 
on political risk insurance and investment finance for these 
importance projects, subject to appropriate underwriting 
practices and financial due diligence and consistent with its 
self-sustaining charter.

                  Funds Appropriated to the President

                      Trade and Development Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $41,500,000
Fiscal year 1999 request..............................        50,000,000
Committee recommendation..............................        41,500,000
                                                                        

    The Committee has recommended funding for the Trade and 
Development Agency at the current level of $41,500,000. This 
reduction from the request is made because of limited budgetary 
resources.
    The Committee believes that this export agency has made 
significant contributions to non-traditional American exports 
in the service sectors such as consulting engineering. It is 
beginning to move away from its previous status as an all-grant 
agency. The Committee commends TDA for its leadership in 
promoting United States trade and investment in the Caspian Sea 
region and in Turkey.

                TITLE II--BILATERAL ECONOMIC ASSISTANCE

                  Funds Appropriated to the President

                  Agency for International Development

    The Committee, in order to give the President more 
flexibility, has recommended funding two accounts for 
development assistance programs currently administered by the 
Agency for International Development. As in fiscal year 1998 
and as requested in the President's budget, the bill provides 
for an overall development assistance account and an account 
for child survival, children's basic education, and disease 
prevention and treatment activities. The only structural change 
from the budget request is that funding for the United Nations 
Children's Fund (UNICEF) is included in ``Child Survival and 
Disease Programs Fund'' in fiscal year 1998 and in the 
Committee recommendation for fiscal year 1999. The budget 
request of the President proposes to fund the voluntary 
contribution for UNICEF in ``International Organizations and 
Programs''.

                Child Survival and Disease Programs Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $650,000,000
Fiscal year 1999 request (under fiscal year 1998                        
 account structure)...................................       602,836,000
Committee recommendation..............................       650,000,000
                                                                        

    The Committee has recommended $650,000,000 for ``Child 
Survival and Disease Programs Fund''. It includes bilateral 
programs intended to reduce infant mortality and improve the 
health and nutrition of children, especially in the poorest 
nations, as well as the second year of a $50,000,000 annual 
initiative to eliminate or drastically reduce the incidence of 
infectious diseases such as polio, tuberculosis, HIV/AIDS, 
yellow fever, malaria, and measles. It also includes 
$105,000,000 for the annual United States contribution to the 
United Nations Children's Fund (UNICEF), as well as funding for 
children's basic education at not to exceed $98,000,000.
    Funding for child survival activities, basic education, and 
non-child disease programs should be allocated as follows:

                                                                        
                                                                        
                                                                        
Child survival activities.............................      $245,000,000
Non-child diseases....................................       152,000,000
Children's basic education............................        98,000,000
Grant to UNICEF.......................................       105,000,000
Communicable Diseases Initiative......................        50,000,000
                                                       -----------------
      Total in this account...........................       650,000,000
                                                       =================
Child survival in Egypt-ESF and disaster assistance...        55,000,000
                                                           (approximate)
Basic education in other accounts.....................        12,000,000
                                                       -----------------
      Total in all accounts...........................       717,000,000
                                                                        

    Funds in this account may be used for activities in the New 
Independent States of the Soviet Union, Eastern and Central 
Europe, as well as other developing countries in other regions 
of the world. Funds would not be used for noninfectious adult 
diseases.
    Of the funds provided in this account, $105,000,000 shall 
be provided as a contribution in grant form to the United 
Nations Children's Fund. However, this does not preclude the 
Agency for International Development from providing additional 
funding for specific UNICEF projects as may be appropriate.
    The Committee intends that child survival funds in this 
account be used for traditional child survival programs. A 
significant proportion of these funds should be used for 
activities whose primary purpose is to reduce child morbidity 
and mortality.
    The total for bilateral child survival programs from all 
accounts should be a minimum of $300,000,000 in fiscal year 
1999, excluding funds which are provided from the Communicable 
Diseases Initiative. In order to provide the Agency for 
International Development with administrative flexibility, the 
Committee recommendation does not specify the amount of funds 
within the Communicable Diseases Initiative that should be 
focused on diseases that primarily affect children. However, 
the Committee intends a majority of the funds for this 
initiative should be provided for research, treatment, and 
prevention activities associated with childhood diseases. It 
commends the Agency for International Development for its 
responsive and transparent implementation of the initial year 
of funding for the Communicable Diseases Initiative.
    The Committee is including bill language that prohibits the 
use of any funds in this account for nonproject assistance, or 
cash grants to governments. The provision of cash grants as 
general budget support for governments is no longer an 
appropriate development tool, given current funding 
constraints. To the extent that cash grants are necessary for 
countries in transition or for specific foreign policy goals, 
funds are available through the ``Economic Support Fund'' and 
``Development assistance''.

                    communicable diseases initiative

    The Committee recommendation includes a second installment 
of $50,000,000 for a Communicable Diseases Initiative. This 
initiative is intended to respond to the dramatic increase in, 
and resurgence of, communicable diseases affecting both 
children and adults. Within the United States, there have been 
confirmed reports of yellow fever and malaria, diseases which 
infected millions earlier in our history. Of those deaths 
attributable to malaria throughout the world, 85 percent of the 
victims are children. In addition, measles continues to cause 
the deaths of millions of children throughout the world on an 
annual basis. Finally, experts are recognizing that acute 
respiratory infections (ARI) are, after malnutrition, the 
biggest killers of children on the planet.
    The Committee believes this initiative is not only good for 
the children of the world, but it will help prevent the spread 
of these diseases to our shores. To the extent that this 
initiative to control communicable diseases in developing 
countries is successful, American children will enjoy healthier 
and better lives.

                          eradication of polio

    The Committee recommendation includes $25,000,000 for the 
program initiated by the Committee in fiscal year 1996 to 
eradicate polio. Funds should be used to provide for the 
delivery of vaccines, and the development of the infrastructure 
necessary to implement the program. This funding is meant to be 
in addition to the resources for the regular immunization 
program of the Agency for International Development and is 
intended to supplement other related activities. The Committee 
has been informed by Rotary International and other 
collaborators in this effort that polio could be eradicated 
during the year 2000.

                              tuberculosis

    The Committee continues to be concerned about the global 
tuberculosis (TB) epidemic. This disease could result in the 
deaths of up to 30,000,000 people in the next decade. In 
addition, the Committee notes the threat to the United States 
from this disease due to international travel and immigration. 
Therefore the Committee recommends that a significant increase 
be provided to programs and activities involving tuberculosis 
and other acute respiratory infections in fiscal year 1999.
    In that regard, the Committee notes that the Gorgas 
Memorial Institute is developing a regional TB control 
initiative designed to address the major issues in reducing the 
global TB epidemic--training, operational improvement, and new 
approaches to disease control. The Committee supports this 
initiative, including the establishment of regional TB control 
activities in Latin America and Southeast Asia.
    The Committee has been made aware of a particularly 
threatening outbreak of tuberculosis along the border between 
Mexico and Texas. The Texas Department of Health has developed 
a comprehensive binational, multiagency approach that is 
designed to protect Americans from the spread of TB. The 
Committee directs USAID to work with the Department and to fund 
a substantial percentage, not to exceed $10,000,000 of the 
United States share of this binational effort. The Committee 
requests that USAID provide it with a brief written report on 
its proposed role in the binational effort within 120 days of 
enactment of this bill.

                  Multiple Drug Resistant Tuberculosis

    Although new incidents of tuberculosis in the United States 
have declined in recent years, the global incidence is being 
fed by an alarming high rate of multiple drug resistant 
tuberculosis (MDRT). This global trend is beginning to affect 
the United States. In 1997, thirty-nine percent of a total of 
19,851 cases reported to the Center for Disease Control were 
reported from foreign-born persons.
    Multiple Drug Resistant Tuberculosis, which can be 
virtually untreatable, is almost entirely preventable, because 
it is usually associated with an inadequate or poorly managed 
national tuberculosis programs. A poorly managed national 
tuberculosis program is worse than no program. The World Health 
Organization and the CDC recognize that the most effective way 
to improve the situation and prevent MDRT is to promote 
effective tuberculosis programs worldwide.
    The Committee believes that the Agency for International 
Development, in its mission to meet congressional objectives, 
should work to utilize and extend the expertise of the existing 
peer-reviewed CDC-funded multi-disciplinary Tuberculosis Model 
Centers in mounting a major program to improve national 
tuberculosis therapy worldwide.

       vitamin a, vitamin c, iodine and micronutrient deficiency

    The Committee supports continuation of programs for vitamin 
A and C deficiency, iodine deficiency and other micro-nutrient 
deficiencies and supports continuing these programs at least at 
the 1998 recommended level of $25,000,000.
    The Committee notes that iodine deficiency disorder is the 
leading preventable cause of mental retardation in children. It 
is the Committee's understanding that Kiwanis International has 
joined forces with UNICEF to eliminate iodine deficiency 
throughout the world by the end of the year 2000. Private 
funding raised by Kiwanis International is already saving more 
than 5,000,000 children from mental retardation in 55 
countries.
    The Committee directs the Secretary of State, in order to 
help meet the goals of the year 2000, to provide a minimum of 
$2,000,000 through UNICEF in support of the Kiwanis effort to 
eliminate iodine deficiency disorder.

                  Global HIV/AIDS prevention and care

    According to the World Health Organization and UNAIDS, the 
prevalence of HIV/AIDS infection is about 30 percent greater 
than previously believed. About 5,800,000 adults and children 
were newly infected with HIV in 1997, raising the total 
cumulative infections from 36,000,000 in 1996 to over 
42,000,000 in 1997. This represents a one-year increase of more 
than 15 percent. During 1996, approximately 1,000 children 
around the world died each day of AIDS, while another 1,000 
became newly infected.
    Funding for the United States global HIV/AIDS program has 
not increased since 1993. In light of the updated and alarming 
HIV prevalence estimates, the Committee strongly recommends 
that not less than $125,000,000 be provided for global HIV/AIDS 
prevention and care programs. This number is far below the 15 
percent increase warranted by the corresponding increase in the 
pandemic.
    Non-governmental organizations that have ``on the ground'' 
prevention and care programs in communities affected by HIV are 
important resources for AID to utilize. In addition, it is 
essential to maintain support for UNAIDS, at least at its 
current level. USAID is encouraged to continue to involve 
domestic groups working on HIV in international AIDS prevention 
and care efforts when appropriate.
    The Committee is concerned about the lack of formal 
coordination among federal agencies on global HIV/AIDS efforts. 
Accordingly, USAID is requested to submit a report to the 
Committee by February 1, 1999, on the status of efforts to 
coordinate federal global HIV/AIDS activities, taking into 
special account research undertaken with the Centers for 
Disease Control and the National Institutes of Health.

                           displaced children

    The Committee continues to support programs to help the 
more than 100,000,000 children worldwide who are displaced and/
or have become orphans. The Committee has placed a priority on 
the needs of these children and recommends that funding for the 
displaced children and orphans fund in fiscal year 1999 be no 
less than $12,000,000, including at least $2,000,000 from 
``Assistance for the New Independent States of the Former 
Soviet Union''.

                      basic education for children

    The Committee is keenly aware that a child's education 
provides an enduring opportunity for a healthier, more 
productive life. The highest poverty rates are found in nations 
with the lowest education and literacy levels. There is ample 
evidence in research and practice that investment in basic 
education, particularly in girls' education, provides the 
critical link to improved family health, enhanced status of 
women, reduced child labor, and greater political 
participation. Education also builds the capacity countries 
require to benefit fully from trade and development 
opportunities. The Committee recommends that the Secretary of 
State establish a target funding level for children's basic 
education of $110,000,000, of which $98,000,000 would be 
derived from the Child Survival and Disease Programs Fund and 
the remainder from the Economic Support Fund and regional 
accounts.
    Studies made available to the Committee have demonstrated 
that in developing countries the greatest progress has been 
made in reducing exploitative child labor where free and 
compulsory schooling is widely available. The Committee urges 
USAID to commit substantial resources--$5,000,000 is 
recommended--to programs designed to expand universal access to 
free and compulsory basic education for children who are 
trapped in exploitative child labor.
    An example of the link between the availability of 
affordable education and exploitative child labor is Kenya. It 
was one of the first African countries to adopt a free and 
compulsory basic education system. Unfortunately, access to 
primary education in Kenya is no longer free in practice, due 
to bad governance and economic deterioration. As a result, 
there has been a resurgence of child labor. Children now 
constitute an estimated 70 percent of the workers in Kenya's 
coffee plantations.

                    Pan American Health Organization

    The Committee continues to support funding for programs in 
Latin America and the Caribbean. The Pan American Health 
Organization promotes health programs throughout the region and 
supports programs that benefit citizens in countries in the 
region and citizens of the United States. The Committee urges 
USAID to fund programs in the region through PAHO and to work 
with PAHO on emerging diseases and other issues of interest to 
the United States.

                         Development Assistance

                     (Including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    $1,210,000,000
Fiscal year 1999 request..............................     1,265,798,000
Committee recommendation..............................     1,174,000,000
                                                                        

    The Committee has recommended $1,174,000,000 for a general 
account for development assistance. The amount recommended is 
$36,000,000 less than the amount provided in fiscal year 1998. 
However, after adjusting for the grants to the Inter-American 
and African Foundations funded through this account in fiscal 
year 1998, the Committee recommendation provides the same 
program level in 1999 as in 1998. As a result, the Committee 
directs that the Latin America and the Caribbean region, and 
the Sub-Saharan Africa region, receive funding allocations in 
1999 that are at least equal to the allocations provided in 
1998. Funding in this account includes activities for 
agriculture, rural development, population, adult literacy and 
adult basic education, environment, energy, science and 
technology and other programs related to longer-term 
development.

                restrictions on use of population funds

    The Committee has continued prior year language in the bill 
that requires that none of the funds appropriated in this bill, 
or any unobligated balances, be made available to any 
organization or program which, as determined by the President, 
supports and participates in the management of a program of 
coercive abortion or involuntary sterilization. The bill 
language also states that funds cannot be used to pay for the 
performance of abortions as a method of family planning or to 
motivate or coerce any person to practice abortions. Further, 
the language indicates that in order to reduce reliance on 
abortions in developing countries, population funds shall be 
available only to voluntary family planning projects which 
offer, either directly or through referral, information about 
access to a broad range of family planning methods and 
services. An additional provision in the bill requires that in 
awarding grants for natural family planning under section 104 
of the Foreign Assistance Act, no applicant shall be 
discriminated against because of such applicant's religious or 
conscientious commitment to offer only natural family planning.
    The Committee has also continued prior year language that 
states that nothing in the development assistance account 
portion of the bill is to alter any existing statutory 
prohibitions against abortion which are included under section 
104 of the Foreign Assistance Act.
    The Committee is also recommending the continuation of bill 
language to prohibit the use of funds for any activities in 
contravention of the Convention on International Trade in 
Endangered Species (CITES) in order to address concerns that 
AID funded activities in Zimbabwe are contributing to trade in 
elephant ivory.
    Bill language is also recommended to allow for the transfer 
of $2,500,000 from this account to ``International 
Organizations and Programs'' in order to provide for a grant to 
the International Fund for Agricultural Development (IFAD) as 
part of the U.S. contribution for the fourth replenishment. The 
Committee notes that IFAD continues to work successfully to 
help eradicate poverty, hunger, and malnutrition in rural areas 
in the developing world, especially among women. The Committee 
views agricultural development as one of the most important 
means to bring about economic growth in developing countries, 
and urges AID to seek ways in which it can increase 
collaboration with IFAD, in order to enhance its own programs 
in agriculture. One area the Committee recommends that AID 
consider is IFAD's ``Microfinance Capacity-Building Grant 
Initiative''. This initiative will help to create an 
environment in which microcredit projects, such as those 
conducted by AID, would be more effective. In addition, AID 
would have the opportunity to work with IFAD in efforts to 
combat desertification around the world.

                    latin america and the caribbean

    The Committee is pleased the Agency for International 
Development responded to last year's report language urging 
that greater emphasis be provided for programs in the Latin 
America and the Caribbean region. The Committee reiterates its 
intention that the allocation of funds for this region through 
this account and through the ``Economic Support Fund'' should 
be at least at the 1998 level.
    The Committee also supports the ongoing activities of the 
Caribbean Law Institute, which has done important work in 
commercial law reform in the Caribbean over the past decade. 
The Committee urges AID to continue this work, and to consider 
expanding the scope of the efforts of the Institute to bring 
consistency to commercial law in the Caribbean as a means of 
furthering U.S. trade opportunities. The agency should also 
review a proposal by the Trade/Cultural Center at Florida 
Memorial College for trade and economic development activities 
in the Caribbean.

              latin america and the caribbean: el salvador

    The Committee supports the continued and, if possible, 
enhanced funding of programs to implement the peace accords in 
El Salvador. The Committee encourages AID to continue to fund 
programs that promote democratic institutions, sustainable 
development, and rural poverty reduction, and that help build 
lasting solutions to the problems underlying the former 
conflict.

            latin america and the caribbean: parks in peril

    The Committee notes its strong support for the existing AID 
Parks in Peril program, a partnership with the private sector 
to promote biodiversity conservation in imperiled ecosystems 
throughout Latin America and the Caribbean. Parks in Peril has 
worked at 29 sites in twelve different countries, helping to 
protect 18,000,000 acres of land. The program has made 
significant progress in turning ``paper parks'' into genuine 
protected areas, to the extent that 14 sites have been 
``consolidated'' from the program; central AID funding is being 
phased out to those sites, and the program is shifting its 
successful methodology to 8 new locations. Since its inception, 
Parks in Peril has received $27,500,000 from central AID funds, 
$5,000,000 from the Nature Conservancy, and has leveraged more 
than $10,000,000 from foreign private sources and foreign 
governments.

      latin america and the caribbean: neotropical migratory birds

    The Committee recommends that $750,000 in fiscal year 1999 
be provided to the National Fish and Wildlife Foundation for 
continued implementation of the Neotropical forest and 
grassland migratory bird conservation initiative. The decline 
in populations of Neotropical migratory birds has been linked 
to habitat loss and degradation in Central America and the 
Caribbean. Recent scientific evidence suggests that further 
decline of these 350 species could pose significant domestic 
agricultural problems, as these birds play a significant role 
in control of forest and agricultural pests. The Committee 
urges AID to make this program part of its budget request for 
fiscal year 2000 in order to provide the year-to-year 
continuity required to fully implement this program.

          latin america and the caribbean: corps of engineers

    The Committee is concerned that the State Department and 
AID still have not utilized the planning, engineering and 
design, environmental, and technical capabilities of the U.S. 
Army Corps of Engineers, particularly in Latin America where 
the Corps has existing field offices in Honduras, El Salvador, 
Panama, Colombia, Bolivia, and Peru. A partnership between the 
Corps and USAID which takes advantage of these capabilities can 
significantly contribute to the strategic interests of the 
United States. The Committee intends that the State Department 
and AID use the Corps to support such activities as: child 
survival (water and sanitation); development assistance; 
disaster assistance; transitional initiatives; and narcotics 
control and interdiction. Further, the Committee expects that 
the Department of State and AID should not establish additional 
engineering capabilities for activities that can be 
accomplished by the Corps. The Committee requests that AID and 
the Department of State report separately within 30 days of 
enactment into law of this Act regarding plans to develop 
programs with the Corps during fiscal year 1999, including 
steps to develop a Memorandum of Agreement with the Corps.

                         Africa: horn of africa

    The Committee is concerned about the severe effects of the 
1997-1998 El Nino event on food security and health in the 
developing world, especially Africa. The International Research 
Institute for Climate Prediction (IRI) has been highly 
successful at predicting the global impact the El Nino 
phenomenon. The Committee notes the efforts of IRI to provide 
assistance to AID's Office of Foreign Disaster Assistance in 
predicting likely effects of weather patterns on Africa--
especially the Greater Horn of Africa region. To further this 
important work, the Committee recommends that AID commit 
$500,000 for the implementation of a modeling effort focused on 
climate impacts on water, including both water supply and 
water-borne diseases, and agriculture, in collaboration with 
the Nairobi Drought Monitoring Center.

                            Africa: burundi

    The Committee is concerned about human rights abuses in 
Burundi and the flow of arms to the belligerents in that 
country. The Committee notes the reactivation of the 
International Commission of Inquiry (UNICOI), the mandate of 
which is to investigate arms flows to the Rwandan former 
military forces and associated militia. The Committee urges the 
Administration to consider proposing an extension of the 
Commission's mandate to include Burundi.

                          Africa: south africa

    The Committee has included bill language that conditions 
assistance to the central government of South Africa on a 
report from the Secretary of State on steps being taken by the 
U.S. Government to negotiate the repeal, termination, or 
suspension of section 15(c) of the Medicines and Related 
Substances Act No. 90 of 1997, which allows the Minister of 
Health to expropriate, without notice or consent, the patent 
rights of pharmaceutical companies operating in South Africa.
    The Committee is concerned that section 15(c), by depriving 
companies of all patent rights, including protection against 
third party importation of patented goods, puts at risk the 
substantial investment of the U.S. pharmaceutical industry in 
South Africa, which employs more than 17,000 South Africans and 
generates $3,000,000,000 to $4,000,000,000 in income on an 
annual basis. In addition to threatening an important economic 
relationship, section 15(c) potentially threatens the health of 
the historically disadvantaged population the Medicines Act 
aims to protect--if counterfeit and substandard products are 
allowed on the market.
    The Committee is also concerned about South Africa's 
commitment to its international obligations. Patent rights on 
which pharmaceutical companies rely are guaranteed by the World 
Trade Organization (WTO) Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS), to which South Africa is 
a signatory. Section 15(c), if given effect, establishes a 
disturbing precedent for the erosion of intellectual property 
rights in South Africa, perhaps in sectors beyond 
pharmaceuticals. Weakening such rights in any field is certain 
to restrict South Africa's ability to attract vitally needed 
foreign investment. If private sector confidence is not 
restored in South Africa, the Committee fears there will be a 
greater need in the future for bilateral economic assistance. 
Repeal or terminating the implementation of section 15(c) would 
be a positive step.

                             africa: sudan

    The Committee directs AID to use development and disaster 
assistance funds for capacity building purposes in areas of 
southern Sudan outside the control of the government of Sudan. 
The Committee strongly encourages AID to make funds available 
to non-governmental organizations for this purpose. The 
Committee expects that these funds will not be used in areas 
controlled by southern factions that continue to cooperate with 
the Government of Sudan. Similar language was included in last 
year's report, and although funds have been identified for this 
purpose they have yet to be obligated. The Committee urges the 
agency to move forward with assistance to these areas.
    The Committee expects AID to immediately develop a plan to 
make funds available (through this account or through 
``Disaster assistance'', including costs for transportation) 
for organizations attempting to distribute humanitarian 
assistance in areas of southern Sudan not served adequately by 
other international organizations or the UN-sponsored 
``Operation Lifeline Sudan''. Such areas include the Bahr-el-
Ghazal region, the Nuba Mountains, and the El-Obeid region.

                  private and voluntary organizations

    The Committee has continued prior year language that 
requires that private voluntary organizations obtain not less 
than 20 percent of their total funding from sources other than 
the United States Government. In addition, the Committee has 
continued language from the 1998 act stating that support for 
private voluntary organizations should be made available at a 
level at least equivalent to that provided in fiscal year 1995.
    The Committee continues to strongly support adequate 
funding, at least at last year's level, for the Office of 
Private and Voluntary Cooperation (PVC) which leverages private 
resources by PVOs and cooperatives. This office supports PVO 
microenterprise, child survival, vitamin A and micronutrient 
grants; strengthens cooperative development efforts; and 
administers the PL 480-funded Farmer-to-Farmer program.
    As AID exits countries, PVOs and cooperatives can help to 
promote lasting impacts from the investment by U.S. taxpayers 
from development programs. The Committee directs PVC to help 
AID missions in the preparation of exit strategies for closeout 
countries to fully utilize the people-to-people partnerships 
between PVOs and cooperatives with local organizations to 
assure on-going and sustainable impacts. The office should be 
able to maintain highly targeted and modest programs in 
closeout countries to maintain these relationships and share 
lessons--learned with nearby AID recipient countries.

                                 energy

    The Committee urges that the Office of Energy, Environment, 
and Technology be funded at an adequate level, no less than its 
fiscal year 1998 budget. The Office promotes United States 
industrial leadership in the areas of power sector 
privatization, innovative technologies to reduce pollutants 
from fossil fuels, and renewable energy. The Committee 
reaffirms its support for improved efficiency in energy 
production and use, especially in fossil fuels, recognizing 
that growing economies will require additional capacity for 
power generation from a wide range of sources.
    The Committee again recommends AID continue funding for 
projects which promote power sector efficiency, energy 
efficiency, and renewable energy, recognizing U.S. industrial 
leadership in these areas.
    The projects should be developed and carried out in 
collaboration with U.S. industry and should be located in 
countries with the greatest potential for early success, 
without regard for the presence or absence of an AID field 
mission. Included in these efforts should be host country 
institutional capacity building, legal or regulatory reform, 
project preparation, innovative project financing, trade and 
reverse trade missions, training, and technology transfer and 
collaboration.
    Although energy programs in India have been suspended, the 
Committee requests that AID not make a final decision on the 
status of such activities until Congress has addressed the 
issue of sanctions later this session.
    The Committee is also concerned about the impact on the 
United States of energy activities in other countries. In that 
regard, the Committee reiterates its concern about particle 
emissions being generated by Mexican power plants that are 
contributing to decreasing visibility in the Big Bend region of 
Texas. The Committee urges the Department of State to obtain 
the consent of the Mexican government for the use of taggants 
in order to begin the Big Bend Aerosol and Visibility 
Observational (BRAVO) study during fiscal year 1999.

                              biodiversity

    Despite consistent urging by the Committee to make 
biodiversity a priority, AID funding for this activity has 
declined relative to climate change and urban environment 
programs. This decline should be reversed. The Committee 
strongly supports continued AID funding for biodiversity 
conservation in developing countries. The protection of global 
biodiversity is critical to our security and economic 
prosperity, and is particularly vital for American agricultural 
and pharmaceutical industries. Such conservation activities 
should continue to emphasize the use of non-government 
organizations (NGOs) as a cost-effective means of delivering 
development assistance through cooperative agreements and 
grants. The Agency for International Development, through NGO 
partnerships, should remain active in regions and countries 
that are significant for global biodiversity.
    The Committee also supports the work of the International 
Cooperative Biodiversity Program (ICBP), a joint effort of the 
National Institutes of Health, the National Science Foundation, 
and the Agency for International Development. The Committee 
recommends that AID provide support for this program during 
fiscal year 1999.

                       Human rights and democracy

    The Committee is concerned that AID give adequate weight to 
the human rights and governance practices of recipient 
countries, including as reported in the Department of State's 
annual Country Reports on Human Rights Practices. Although the 
Committee believes that need and U.S. foreign policy goals 
should be the primary criteria for determining whether or not a 
country should receive assistance, the Committee also believes 
that the assistance will have a far greater change of truly 
helping the citizens of those countries which respect the rule 
of law and the rights of their people. To this end, AID should 
continue to give weight to the record of human rights and 
democratic development of proposed recipient countries in the 
distribution of assistance provided under this act.

                          women in development

    The Committee recommends that $15,000,000 be provided for 
AID's Office of Women in Development (WID). Studies show that 
investing in poor women and their daughters yields important 
benefits for the entire family and is crucial to reducing 
hunger and poverty worldwide. Educating girls has been shown to 
have a positive effect on family earnings as well as farm 
productivity, and in the long term, educating girls can help 
reduce child and maternal mortality. Child survival rates 
increase when income is in the hands of the mother.
    The Committee requests a report from AID, no later than 
January 15, 1999, on the plan of action initiated two years ago 
to ensure that women were not overlooked in determining the 
allocation of foreign aid funds. The report should include, 
among other things, information on whether and how women may be 
gaining better access to AID's credit, health and education 
programs and the extent to which the agency has implemented 
recommendations to collect field data on women.
    The Committee supports the vital work of training women to 
be empowered in the political process, especially in emerging 
democracies. The Committee requests USAID to use Women's 
Campaign International's expertise in this area.

                            microenterprise

    The Committee recommends that microenterprise funding be 
provided at least at a program level of $135,000,000, the 1998 
level, and urges additional funding to the maximum extent 
possible. In this regard, the Committee supports the use of 
additional local currency funds beyond the approximately 
$20,000,000 provided in each of the past several years.
    This program has proven its effectiveness in promoting 
economic growth in the poorest countries. Of these funds, at 
least fifty percent shall be devoted to poverty lending 
programs, and a significant portion should be channeled through 
central mechanisms such as nongovernmental organizations. For 
purposes of implementing this program, poverty lending programs 
are defined as loans of under $300 made to the poorest fifty 
percent of those living below the poverty line, or the 
institutional development of organizations primarily engaged in 
making such loans. The Committee also directs that AID 
establish a monitoring system in order to ensure that the 
poverty lending goals of the program are met.

              american schools and hospitals abroad (asha)

    The Committee recommends, and expects AID to provide, 
$15,000,000 from the funds provided in this Act for the 
American Schools and Hospitals Abroad (ASHA) program in fiscal 
year 1999. The Committee directs that none of these funds be 
reserved for programming in any future fiscal year. All funds 
are to be allocated and obligated in fiscal year 1999. The 
Committee further expects that support will be continued for 
traditional recipients of funding in countries such as Lebanon, 
Israel, and Egypt. In addition, funds should be made available 
for other deserving institutions as part of a competitive 
process.
    In addition, the Committee recommends that AID continue 
involving community colleges and Hispanic Serving Institutions 
(HSI's) in the delivery of vocational and occupational 
education and training elements of development assistance 
projects.
    The Committee urges that AID carefully review the needs of 
American educational institutions in Lebanon. These 
institutions support our foreign policy goals by enhancing 
U.S.-Lebanon ties, promoting American exports, encouraging a 
unified Lebanese identity, promoting free Western thought, and 
contributing to Lebanon's economic development by strengthening 
Lebanon's human resources. The Committee urges AID to commit 
additional resources to American educational institutions in 
Lebanon.
    The Committee also requests that AID review a proposal by 
University College, Dublin, for an American studies center.

                        cass scholarship program

    The Committee supports scholarship programs known as the 
Cooperative Association of States for Scholarships (CASS), and 
recommends that AID continue funding for CASS at the level 
proposed for fiscal year 1999.

                              Agriculture

    As noted in last year's report, the Committee continues to 
be concerned about the decline in funding for international 
agriculture. The Committee believes that agricultural 
development is one of the keys to overall economic development. 
Significantly more than half of the developing world's 
population is engaged in agricultural production. Any 
assistance that can be provided in this area will have a 
tremendous impact. If agricultural production is improved and 
increased, not only is there a positive economic impact, but 
many more rural poor are able to overcome the rampant hunger 
and malnutrition experienced by many children, women and men in 
developing countries. International agricultural development is 
also supported by many important members of the U.S. 
agricultural industry, including agribusiness, farmers, and 
universities, because of the long-term benefits of developing 
and expanding export markets for U.S. goods and services.
    The Committee notes that AID has included agricultural 
development as one of its major goals for the coming year, and 
strongly supports increasing the allocation for agricultural 
programs in ``Development assistance'' and in the other 
accounts administered by AID. Prior to the submission of the 
report required by section 653 of the Foreign Assistance Act, 
AID is directed to consult with the Committee regarding the 
proposed allocation of sectoral resources, including those 
intended for agriculture.

                Collaborative research support programs

    The Committee supports the continuation, at least at the 
fiscal year 1998 level of $18,050,000, of the nine existing 
collaborative research support programs (CRSPs). This amount 
should exclude the funds allocated for title XII management 
support, allowing for an effective increase in funding of 
$1,000,000. The Committee notes that funding for CRSPs was 
reduced during fiscal year 1998, and expects this decline to be 
reversed. The Committee recognizes the importance of the CRSP 
programs for: (a) their impact on food security in some of the 
poorest areas of the world; (b) their contribution to preparing 
new markets for U.S. technology and agribusiness; (c) their 
effectiveness in training students from development countries 
and the U.S. to be credible participants in global issues; (d) 
the contributions of their research in the U.S. as well as 
abroad; and (e) their unique attribute of involving the private 
sector in research and development activities world-wide.
    The Committee also supports the continuation of related 
agricultural research through ABSP, the Food Security 
Initiative, and the Post-Harvest Collaborative Agribusiness 
Support Program.

                    U.S./Israel Cooperative Programs

    The Committee expresses its disappointment over the decline 
in funding for the US/Israel Cooperative Development Program 
(CDP) and Cooperative Research Program (CDR). These are 
important programs but program levels have been declining since 
1995. The Committee urges the Administration to restore funding 
for CDR/CDP to the previous level, with the same split in 
funding between the two accounts.

              international fertilizer development center

    The Committee strongly supports the fertilizer-related 
research and development being conducted by the International 
Fertilizer Development Center (IFDC), and directs the 
Administrator of AID to make at least $2,000,000 available for 
the core grant to IFDC.

                           dairy development

    The Committee continues to support dairy development, and 
recommends that the Agency for International Development fund 
this program at a level of $8,000,000. The Committee intends 
that AID should implement projects under this program that help 
U.S. dairy producers and companies to prepare for a more 
competitive international market as GATT provisions continue to 
lower domestic U.S. and European subsidies for dairy products.
    Through directly engaging the U.S. dairy industry the 
program has prepared American companies to enter new markets 
while providing technical assistance to potential U.S. dairy 
partners overseas. The program has successfully increased 
family nutrition and cash income and strengthened linkages 
between processors and producers through cooperatives and 
farmer organizations. At the same time, the program has 
generated major investments by the U.S. dairy industry in 
animal feeds, cheese production and improved forage seeds. It 
has helped promote U.S. brand dairy products in emerging 
markets especially in Central Europe where competition from 
European companies is very strong.

             development of credit unions and cooperatives

    The Committee strongly supports maintaining central 
funding, at least at the current level, from the Office of 
Private and Voluntary Cooperation to enable United States 
cooperatives and credit unions to share their self-help 
business approaches with developing and market transition 
countries. This office should better utilize cooperative 
approaches to strengthen the ability of NGOs to become self-
sustainable through carrying out income generating activities.
    In the highly atomized societies of Central Europe and the 
NIS, cooperative and credit union approaches are particularly 
important to achieve better association forms of behavior. They 
provide a means for those left out of market transitions or 
faced with newly privatized state monopolies to work together 
in group-based businesses. Farmer-to-farmer and similar 
programs by U.S. credit unions and cooperatives have been 
particularly helpful in providing hands-on assistance.
    Credit unions and cooperatives provide more microenterprise 
loans worldwide than all other types of financial institutions. 
They are a means to mobilize savings and equity, and to provide 
small business loans without the need to be capitalized by 
outside donors. The Committee directs the Office of 
Microenterprise Development to better utilize U.S. cooperative 
development and credit union organizations in achieving more 
sustainable microenterprise approaches.
    The Committee requests that AID review the proposal of 
Opportunities Industrialization Centers, International (OIC) 
for a continuation of its cooperative agreement to enable the 
organization to make the transition to private sector support.

                            fellows programs

    The Committee is aware that AID provides funding for a 
number of fellows programs. None of these fellows are AID 
direct hires; all receive a salary and benefits for up to two 
years for the activities they are conducting abroad. In many 
cases, the fellows are not placed with AID offices or missions. 
In addition, of the 42 individuals funded through the current 
population fellows programs, 16 have been placed in the 
developed world in such places as Washington, New York, Geneva, 
and London.
    The Committee does not support the use of scarce 
development assistance funds for the support of fellows in the 
developed world. Further, the Committee directs the agency to 
conduct a review of all fellows programs to determine, among 
other things, whether the current level of funding for such 
fellows programs is appropriate, and whether the fellows 
programs contribute directly to AID's mission and strategic 
objectives.
    The agency is requested to report on its findings in this 
regard no later than February 1, 1999.

                 international executive service corps

    The Committee supports the work of the International 
Executive Service Corps (IESC), which utilizes volunteers to 
help developing countries in the areas of business development. 
For fiscal year 1999 the Committee strongly urges AID to 
provide IESC with the level allocated for fiscal year 1998 in 
order to ensure the continued availability of IESC services.

                           Victims of torture

    The Committee recommends that AID make best efforts to 
allocate $5,000,000 to support treatment centers for victims of 
torture. It is further requested that, no later than December 
1, 1998, AID report to the Committee on its implementation of 
this recommendation.

                       Economic Growth Initiative

    The committee encourages the Global Bureau's Economic 
Growth Center to increase its outreach services and promote 
additional links with state trade organizations in order to 
accelerate dissemination of business/trade opportunities from 
USAID-assisted emerging markets to U.S. firms, especially small 
and medium-size enterprises.

                   International Disaster Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $190,000,000
Fiscal year 1999 request..............................       205,000,000
Committee recommendation..............................       150,000,000
                                                                        

    The Committee has recommended $150,000,000 for the 
International Disaster Assistance account, $40,000,000 below 
the 1998 level and $55,000,000 below the request.
    Although the recommendation is $40,000,000 below the 1998 
level, it is only $10,000,000 below the level available 
directly for international disaster assistance activities. The 
Agency for International Development allocated the Office of 
Transition Initiatives $30,000,000 from this account in 1998, 
an increase of $5,000,000 over the 1997 level. This increase 
was absorbed by a reduction of $5,000,000 in international 
disaster activities, and the Committee was informed of this 
reduction only after it had occurred.
    The Committee also notes that appropriations for this 
account have varied widely over the past ten fiscal years, from 
a low of $25,000,000 to the current level. It is a contingency 
account, not a program account, but has been increasingly 
treated as a program account over the past several years.
    Section 492(b) of the Foreign Assistance Act provides the 
President with the authority to obligate up to $50,000,000 from 
other development assistance accounts in order to provide 
disaster assistance, if needed.

                                 kosovo

    The Committee strongly condemns the large-scale police and 
paramilitary attacks against the people of Kosovo carried out 
by the government of Serbia. The Committee strongly supports a 
peaceful resolution of the conflict and supports the efforts of 
the Administration to end hostilities. Given the brutal 
campaign against the people of Kosovo, the Committee recommends 
at least $10,000,000 be provided for disaster assistance 
activities. Additional resources for refugees from Kosovo are 
available in the ``Migration and Refugee Assistance'' account 
of the Department of State.
    The Committee notes that the Parliamentary Assembly of the 
Organization on Security and Cooperation in Europe, with 
unanimous support of the United States delegation, adopted a 
resolution condemning the actions in Kosovo and calling for, 
among other things: the immediate withdrawal of Serbian special 
police units and the end of operations against the civilian 
population of Kosovo, the Belgrade authorities to implement the 
commitments made in the Moscow Joint Statement of June 16, 
1998, negotiations by the parties involved, strong economic 
sanctions, appropriate action to stop the aggression and 
protect the people of Kosovo and neighboring countries, and 
investigation and prosecution by the International Criminal 
Tribunal for Former Yugoslavia of crimes against humanity 
committed in Kosovo.
    The Committee strongly urges United States support for the 
investigation and prosecution of war crimes and crimes against 
humanity in Kosovo by the International Criminal Tribunal in 
the Hague. The Committee also condemns attacks on innocent Serb 
civilians in Kosovo and urges the Albanian population in Kosovo 
to denounce and refrain from any form of violence in the 
protection and promotion of their rights.

                             northern iraq

    The Committee recommends that funds continue to be provided 
to refugees and internally displaced persons in Northern Iraq 
where the Kurdish population and other inhabitants continue to 
suffer shortages of food and medicine. Due to the tense 
situation in the area, nongovernmental organizations and 
private voluntary organizations remain unable to meet these 
serious needs.

             Micro and Small Enterprise Development Program

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 enacted..............................        $1,500,000
Fiscal year 1999 request..............................         1,500,000
Committee recommendation..............................         1,500,000
                                                                        

             estimated level of direct and guaranteed loans

                                                                        
                                                                        
                                                                        
Fiscal year 1998 enacted..............................     ($49,000,000)
Fiscal year 1999 request..............................      (49,000,000)
Committee recommendation..............................      (49,000,000)
                                                                        

                        administrative expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 enacted..............................          $500,000
Fiscal year 1999 budget request.......................           500,000
Committee recommendation..............................           500,000
                                                                        

    The Committee is recommending $1,500,000 in a subsidy 
appropriation for the micro and small enterprise program. This 
level is the same as the 1998 enacted level and the budget 
estimate.
    The proposed level of funding will provide $49,000,000 in 
direct loan and loan guarantee authority.
    In addition, the Committee is recommending $500,000 in 
administrative expenses, the same as the 1998 enacted level and 
the budget request.

             Urban and Environmental Credit Program Account

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................        $3,000,000
Fiscal year 1999 request..............................         6,000,000
Committee recommendation..............................  ................
                                                                        

                  estimated level of guaranteed loans

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................     ($46,000,000)
Fiscal year 1999 request..............................      (68,000,000)
Committee recommendation..............................  ................
                                                                        

                           operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................        $6,000,000
Fiscal year 1999 request..............................         6,053,000
Committee recommendation..............................         5,500,000
                                                                        

    The Committee has not recommended a subsidy appropriation 
for the urban and environmental program account for fiscal year 
1999. This is $6,000,000 below the budget request and 
$3,000,000 below the enacted level. An appropriation of 
$5,500,000 is recommended for operating expenses to maintain 
the current portfolio. The recommendation is $500,000 below the 
enacted level and $553,000 below the budget request.
    Due to budget constraints, the Committee is recommending 
the termination of this program in order to target scarce 
development resources on poorer nations. The Committee notes 
that most countries benefiting from this program have been 
those that have graduated from AID development assistance, or 
will soon graduate.

     Payment to the Foreign Service Retirement and Disability Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $44,208,000
Fiscal year 1999 request..............................        44,552,000
Committee recommendation..............................        44,552,000
                                                                        

    The Committee has provided the budget request for the 
mandatory payment to the Foreign Service Retirement and 
Disability Fund.

     Operating Expenses of the Agency for International Development

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $473,000,000
Fiscal year 1999 request..............................       483,858,000
Committee recommendation..............................       460,000,000
                                                                        

    The Committee has recommended funding for Agency for 
International Development operating expenses at a level of 
$460,000,000 which is $23,858,000 below the Administration's 
request and $13,000,000 below the amount provided for fiscal 
year 1998.
    The Committee recommendation continues prior year language 
limiting funding for publications.
    The Committee is recommending a reduction from the budget 
request in anticipation of higher than expected carryover 
balances. In the event such balances are not generated through 
administrative recoveries, the Committee will entertain a 
request for the reallocation of funds pursuant to the relevant 
provisions of the Foreign Assistance Act.

                         new management system

    The Committee remains very concerned about the status of 
the New Management System (NMS) at the Agency for International 
Development, including the AID-Worldwide Accounting and Control 
System (AWACS). The Committee requests that AID continue to 
report on a quarterly basis on the status of the New Management 
System, including the cumulative costs associated with 
designing, correcting, and implementing the system. Any costs 
for the NMS above those originally projected for fiscal year 
1999 should be subject to review by the Committees on 
Appropriations. In addition, the Committee requests that the 
fiscal year 2000 budget justification documents for the Agency 
for International Development clearly identify the amounts 
requested for the NMS and its subsystems.

Operating Expenses of the Agency for International Development, Office 
                        of the Inspector General

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $29,047,000
Fiscal year 1999 request..............................        33,000,000
Committee recommendation..............................        31,500,000
                                                                        

    The Committee has recommended $31,500,000 for the Office of 
the Inspector General of AID for fiscal year 1999, $1,500,000 
below the budget request but $2,453,000 above the fiscal year 
1998 level.
    The Committee expects the Office of the Inspector General 
(OIG) to give top priority to the Financial Audit Program, 
especially its financial statement audits. USAID's failure to 
fully comply with the Chief Financial Officers Act of 1990 is 
particularly disturbing, and the Committee commends the 
Inspector General for his efforts in this regard.
    The Inspector General is requested to consult with the 
Committee no less than four times a year on its activities with 
regard to the Government Performance and Results Act. The 
Committee has been informed that the cost of developing 
performance indicators may be excessive in terms of available 
USAID personnel and funds, and has delayed program 
implementation in some instances. The Committee suggests that 
the OIG review its own performance audit activities with regard 
to indicators to ensure that they are reasonable in cost and 
scope and do not detract from its other important activities.
    The efforts of the OIG to ensure the safety of USAID 
personnel in the new Ronald Reagan Building have been noted and 
appreciated by the Committee. Several possible security issues 
are not yet resolved, and the Administrator is encouraged to 
continue to work with the OIG and the General Services 
Administration to resolve them. Most of the increase in OIG 
operating expenses between fiscal year 1998 and 1999 is due to 
increased security costs associated with the move to the Ronald 
Reagan Building.

                         new management system

    The Committee appreciates the efforts of the Inspector 
General to maintain oversight of the New Management System, and 
encourages a continuation of these activities in fiscal year 
1999.

                  Other Bilateral Economic Assistance

                         Economic Support Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    $2,400,000,000
Fiscal year 1999 request..............................     2,513,600,000
Committee recommendation..............................     2,326,000,000
                                                                        

    The Committee has recommended a total of $2,326,000,000 for 
the Economic Support Fund, an amount that is $187,600,000 below 
the request and $74,000,000 below the 1998 enacted level.
    The Committee notes that funds for the Middle East continue 
to make up the largest portion of this account. Last year the 
Committee strongly urged the Administration to make every 
effort to reallocate these funds in a manner which recognized 
the fiscal responsibility required by balancing the budget, the 
many changes which have occurred in the Middle East over the 
past twenty years, and the new challenges and requirements 
which are constantly emerging in other parts of the world. The 
Administration's request for fiscal year 1999 however reflects 
the status quo, despite the fact that funding constraints on 
the foreign operations budget have increased over the past 
year. Nonetheless the Administration has subsequently discussed 
a number of funding options with the Committee and with the 
Governments of Israel and Egypt.

                                 israel

    The Committee wishes to commend the Government of Israel 
for putting forward a historic proposal to eliminate Israel's 
economic aid over the course of the next decade. Under the 
strong leadership of Israeli Prime Minister Binyamin Netanyahu, 
the Government of Israel in 1997 initiated a full review of 
Israel's future aid requirements. This review culminated in the 
visit of Israeli Minister of Finance Yaakov Neeman to 
Washington in February of this year. During his visit Minister 
Neeman presented on behalf of Prime Minister Netanyahu and the 
Government of Israel a detailed proposal to significantly 
reduce Israel's aid over the next decade. The Neeman proposal 
recognized Israel's remarkable economic growth, technological 
advances and financial progress, and assumed Israel's ability 
to finance its own economic requirements in the future. At the 
same time, the Government of Israel noted that the security 
situation in the Middle East remains of great concern, 
particularly with respect to the proliferation of weapons of 
mass destruction, and therefore defense requirements to meet 
these challenges will increase in the future. The Committee 
notes that media reports regarding the transfer of weapons of 
mass destruction from nations such as Russia, China and North 
Korea to countries in the region support Israel's concern that 
these transfers pose an ominous threat to Israel's future 
security.
    After extensive discussions with the Administration 
regarding all aspects of the Neeman proposal, the Committee 
recommends the following modalities for aid to Israel. The 
Committee believes that a phased reduction in Israel's economic 
assistance, implemented in equal increments of $120,000,000 per 
year, extended over a period of not more than ten years, should 
begin this fiscal year. This phased reduction will result in 
the eventual elimination of ``Economic Support Fund'' 
assistance for Israel.
    The Committee is also convinced that the emerging security 
threats in the Middle East are significant and warrant 
increasing military assistance to Israel by $60,000,000 in 
fiscal year 1999 with a strong presumption that similar annual 
increases will be required over the next decade. However, with 
respect to this recommended increase in military assistance, 
the Committee must be very clear that it cannot commit future 
Congresses to the future appropriation of funds. Therefore, 
future increases in military assistance will require the annual 
review of the Congress and will necessarily be based upon an 
assessment of the security situation at the time.
    The Committee therefore recommends that not to exceed 
$1,080,000,000 in Economic Support Funds shall be provided for 
Israel, which is $120,000,000 less than the fiscal year 1998 
level and the amount requested by the President. The Committee 
also requires in bill language that these funds be provided to 
Israel as a cash grant within thirty days of the signing of 
this act or by October 31, 1998, whichever is later.
    The Committee has retained an overall limit on Middle East 
spending (section 572) which remains capped at the fiscal year 
1997 level of $5,402,850,000. The Committee intends to initiate 
a phased reduction in the Middle East cap next year, a 
reduction which will correspond to the phased reductions in aid 
to Israel and Egypt which are described in the previous 
paragraphs. The Committee believes this will provide the 
Administration with increased flexibility in the allocation of 
funds in the foreign operations budget for priority activities 
in other areas of the world.

                                 egypt

    As part of the Committee's ongoing review of Middle East 
aid levels, and as a result of budget constraints affecting the 
international affairs budget, the Committee has engaged in 
extensive discussions with the Government of Egypt and the 
Administration regarding appropriate future aid levels for 
Egypt. As a key friend and ally in the region, Egypt's critical 
role in the Middle East and essential contribution to the peace 
process cannot be overstated. It is the Committee's view 
therefore that changes in aid to Egypt must be implemented in 
close consultation with the Government of Egypt and in a manner 
which does not inadvertently undermine the guiding principles 
of the Camp David Accords. Therefore, while Egypt's economic 
and security needs are unique and consequently distinctly 
different from other countries in the region, it is the 
Committee's view that any significant changes in the 
composition of Egypt's economic and military assistance should 
be initiated by the President in close consultation with the 
Government of Egypt and the Congress. However, the Committee is 
convinced that Egypt's overall aid levels must be reduced to 
meet current budget requirements.
    The Committee therefore recommends that not to exceed 
$775,000,000 in Economic Support Funds be provided for Egypt on 
a grant basis, which is $40,000,000 less than the fiscal year 
1998 level and the amount requested by the Administration. The 
Committee believes this forms the basis for similar annual 
decreases of $40,000,000 over a period of not more than ten 
years which will result in a 50% reduction in economic 
assistance to Egypt. Cash transfer may be provided with the 
understanding that Egypt will continue to implement significant 
economic reforms. The Committee also strongly recommends that 
not less than $200,000,000 of the funds allocated for Egypt be 
used for Commodity Import Program assistance. The Committee 
also strongly encourages the Administration to work with the 
Government of Egypt to develop mechanisms in the economic, 
trade and investment areas which will make our assistance to 
Egypt more flexible and effective. The Committee expects the 
Administration to consult with the Committees on Appropriations 
on the outcome of these discussions.

                                 jordan

    The Committee expresses its continued strong support for 
and appreciation of Jordan's constructive and critical role in 
the peace process and encourages the Administration, in close 
consultation and cooperation with the Congress, to continue its 
efforts to assist Jordan in both the economic and security 
areas. The Committee therefore recommends full funding for the 
Administration's request for Jordan. The Committee also 
encourages Jordan to continue its ongoing economic reform 
program which the Committee strongly supports.

                             Patent Rights

    The Committee recognizes the importance of United States-
Egyptian trade relations and encourages recent efforts by the 
Egyptian Government to address trade barriers. The Committee is 
concerned, however, by reports regarding the absence of 
meaningful patent protection. According to these reports, 
current Egyptian law governing patents excludes 
pharmaceuticals, medicines and foodstuffs. Moreover, the 
Committee is informed that the term of manufacturing process 
patents for pharmaceuticals in Egypt is only 10 years, a 
negligible period considering the length of time necessary to 
bring a product through the regulatory process and into the 
marketplace. These laws create a serious impediment for U.S. 
companies otherwise interested in serving the Egyptian 
marketplace and the Committee therefore urges the Egyptian 
Government to fully protect intellectual property rights.
    The Committee is also deeply concerned by reports that no 
Jordanian law governs patent protection of pharmaceuticals and, 
as a result, piracy by Jordanian companies is increasing. It is 
estimated that U.S. pharmaceutical companies lose between $25 
to $50 million annually due to these practices. Other 
industries, including software and entertainment, suffer 
monetary losses as well. The Committee has been informed that 
despite discussion with high-level American and European 
industry and diplomatic representatives, to date the Jordanian 
government has not undertaken significant marketplace reform in 
this area. The Committee urges the Jordanian government to 
remedy these problems as expeditiously as possible and provide 
full protection for U.S. patents and intellectual property 
rights.

                           camp david accords

    The Committee emphasizes once again that the recommended 
levels of assistance for Israel and Egypt are based in great 
measure upon their continued participation in the Camp David 
accords and the Egyptian-Israeli peace process.

                          non-military exports

    The Committee strongly urges the President to ensure, in 
providing cash transfer assistance to Egypt and Israel, that 
the level of such assistance does not cause an adverse impact 
on the total level of non-military exports from the United 
States to each such country.

                           west bank and gaza

    The Committee supports assistance to the West Bank and 
Gaza. The Committee continues to believe that support by the 
United States for the economic and social development of 
Palestinians is an important contribution to the peace process. 
However, the Committee is not convinced that the President's 
requested increase of $25,000,000 for fiscal year 1999 for the 
West Bank and Gaza is warranted at the present time. Therefore, 
the Committee believes strongly that funding for the West Bank 
and Gaza in fiscal year 1999 should not exceed the amount 
requested for fiscal year 1998.

                                lebanon

    The Committee believes support for the people of Lebanon 
continues to be in the United States national interest. The 
Committee supports continued funding for Lebanon from both the 
development assistance and Economic Support Fund accounts.

                       economic boycott of Israel

    The Committee has once again included language in the bill 
addressing the Arab League boycott of Israel under Sec. 539.

                          israel and the weog

    The Committee believes the Administration should do its 
utmost to end the persistent inequity experienced by Israel in 
the United Nations. Israel has been the only longstanding 
member of the organization to be denied acceptance into any of 
the United Nations regional blocs. The Committee urges the 
Secretary and the United States Ambassador to the United 
Nations to take all steps necessary to ensure Israel's 
acceptance in the Western Europe and Others Groups (WEOG) 
regional bloc. The Committee requests that the Secretary of 
State report to the Committees on Appropriations, no later than 
March 15, 1999, on actions taken by representatives of the 
United States to encourage Israel's acceptance into the WEOG 
and the diplomatic responses by other nations to this effort.

                      Christian Community in Egypt

    The Committee appreciates the strong friendship that has 
developed between the United States and Egypt and appreciates 
the leadership of President Mubarak in this critical region. It 
is the Committee's view that the United States should make 
effort to enhance this important relationship. Nevertheless, it 
is very concerned by continuing reports of discrimination, 
harassment and violence against the Coptic Christians in Egypt. 
It encourages the government of Egypt to take all steps 
possible to promote equal rights for the Coptic Christian 
community, religious tolerance and provide greater protection 
to vulnerable communities subject to attacks and exploitation 
by militant factions. The committee urges the U.S. Agency for 
International Development, working with the Egyptian 
government, to develop programs that will promote inter-
religious dialogue, tolerance and economic development in the 
Upper Nile region.

                      Middle east desertification

    The Committee continues to believe the proposed Middle East 
and Mediterranean Desert Development Program for Combating 
Desertification through Sustainable Desert Development offers 
an excellent opportunity to expand these successful efforts 
throughout the region and provide a framework for regional 
cooperation in the 21st century. By bringing together officials 
from countries in the region to discuss and share ideas and 
technology on ways to combat problems inherent in countries 
with desert environments, the Committee believes that 
significant progress can be made in stemming desertification in 
this threatened area. Therefore, the Committee recommends that 
up to $5,000,000 be made available for this activity from the 
Economic Support Fund, development assistance or any other 
appropriate funds made available by this act.

                israeli-palestinian cooperation program

    The Committee strongly supports efforts to promote better 
understanding and mutual respect between Israelis and 
Palestinians living in the West Bank and Gaza. The Committee 
also remains convinced that the United States should encourage 
a broad range of educational, cultural and humanitarian 
activities which bring Palestinians and Israelis together. The 
Committee believes these activities can be successfully carried 
out by Israeli and/or Palestinian private voluntary 
organizations. Therefore, despite tight budgetary constraints 
on the overall account, the Committee urges the Agency for 
International Development to provide up to $500,000 in fiscal 
year 1999 for such activities.

                                Algeria

    The committee is concerned about the civil conflict in 
Algeria which has resulted in the deaths of 70,000-80,000 
people since 1992. A political solution is needed and can be 
fostered by the promotion of pluralism, human rights, democracy 
and rule-of-law. To this end, the committee commends the 
following initiatives in Algeria: training of labor leaders and 
trade unionists, parliamentary training, management training 
for leaders of non-government organizations, technical 
assistance on development of a mortgage banking system and 
reform of the financial sector, promotion of private sector 
cooperation between the U.S. and North Africa, promotion of 
press freedom; training on international principles governing 
criminal justice and fair trial, and human rights training for 
police.

regarding the trial in the Netherlands of the suspects indicted in the 
                      bombing of pan am flight 103

    On December 21, 1998, 270 people, including 189 United 
States citizens, were killed in a terrorist bombing on Pan Am 
Flight 103 over Lockerbie, Scotland. In response to this 
tragedy, Britain and the United States indicted 2 Libyan 
intelligence agents--Abdel Basset Al-Megrahi and Lamen Khalifa 
Fhimah--in 1991 and sought their extradition from Libya to the 
United States or the United Kingdom to stand trial for this 
heinous terrorist act. The United Nations Security Council 
called for the extradition of the suspects in Security Council 
Resolution 731 and imposed sanctions on Libya in Security 
Council Resolutions 748 and 883 because Libyan leader, Colonel 
Muammar Qadaffi, refused to transfer the suspects to either the 
United States or the United Kingdom to stand trial. The 
sanctions in Security Council Resolutions 748 and 883 include a 
worldwide ban on Libya's national airline, a ban on flights 
into and out of Libya by other nations' airlines, a prohibition 
on supplying arms, airplane parts, and certain oil equipment to 
Libya, and a freeze on Libyan government funds in other 
countries.
    Colonel Qadaffi has continually refused to extradite the 
suspects to either the United States or the United Kingdom and 
has insisted that he will only transfer the suspects to a third 
and neutral country to stand trial. On August 24, 1998, the 
United States and the United Kingdom proposed that Colonel 
Qadaffi transfer the suspects to the Netherlands, where they 
would stand trial before a Scottish court, under Scottish law, 
and with a panel of Scottish judges. The United States-United 
Kingdom proposal is consistent with those previously endorsed 
by the Organization of African Unity, the League of Arab 
States, the Non-Aligned Movement, and the Islamic Conference.
    The United Nations Security Council endorsed the United 
States-United Kingdom proposal on August 27, 1998, in United 
Nations Security Council Resolution 1192. The United States 
Government has stated that this proposal is nonnegotiable and 
has called on Colonel Qadaffi to respond promptly, positively, 
and unequivocally to this proposal by ensuring the timely 
appearance of the two accused individuals in the Netherlands 
for trial before the Scottish court. The United States 
Government has called on Libya to ensure the production of 
evidence, including the presence of witnesses before the court, 
and to comply fully with all the requirements of the United 
Nations Security Council resolutions.
    Secretary of State Albright has said that the United States 
will urge a multilateral oil embargo against Libya in the 
United Nations Security Council if Colonel Muammar Qadaffi does 
not transfer the suspects to the Netherlands to stand trial. 
The United Nations Security Council will convene on October 30, 
1998, to review sanctions imposed on Libya. Colonel Qadaffi 
should promptly transfer the indicted suspects Abdel Basset Al-
Megrahi and Lamen Khalifa Fhimah to the Netherlands to stand 
trial before the Scottish court; the United States Government 
should remain firm in its commitment not to negotiate with 
Colonel Qadaffi on any of the details of the proposal approved 
by the United Nations in United Nations Security Council 
Resolution 1192; and if Colonel Qadaffi does not transfer the 
indicted suspects Abdel Basset Al-Megrahi and Lamen Khalifa 
Fhimah to the Netherlands by October 29, 1998, the United 
States Permanent Representative to the United Nations should--
introduce a resolution in the United Nations Security Council 
to impose a multilateral oil embargo against Libya; actively 
promote adoption of the resolution by the United Nations 
Security Council; and assure that a vote will occur in the 
United Nations Security Council on such a resolution.

                                 China

    The Committee is recommending a general provision (section 
527) which authorizes the use of funds from the Economic 
Support Fund to provide general support and grants for 
nongovernmental organizations located outside China that have 
as their primary purpose fostering democracy in that country. 
The Committee recommends $2,250,000 for this purpose. Funding 
could include general support for foundations and 
nongovernmental organizations, as well as support for specific 
democracy activities through NGOs such as the National 
Endowment for Democracy. In that regard, the Committee 
recommends that $250,000 be made available through an NGO, such 
as the National Endowment for Democracy, for the purpose of 
providing training and education of Tibetans in democracy 
activities, and monitoring the human rights situation in Tibet. 
The Committee has not provided funding for the China Rule of 
Law program proposed in the budget request.

                                 Burma

    The Committee recommends that not to exceed $5,000,000 be 
provided for democratic development and refugee assistance 
programs in the Burma border areas from funds available in this 
account and in ``Migration and refugee assistance''. Up to 
$3,000,000 of these funds should be available for democracy 
activities, and $2,000,000 should be available for refugee 
assistance.
    The Committee remains concerned about the unnecessary 
delays that have plagued administration of these activities 
during fiscal year 1998. As of May of 1998, no requests for 
proposals had been issued for the use of funds allocated for 
Burma for the current year. In order to expedite the obligation 
of the funds recommended herein, the Committee expects that the 
initial request for proposals or application process should 
begin no later than December 30, 1998.
    The Committee commends the efforts of the Government of 
Thailand to provide a safe haven for Burmese refugees and 
encourages it to continue to strengthen the protections 
provided to these vulnerable populations in light of recent 
attacks by Burmese armed forces. In addition, the Committee 
remains concerned about the growing problem of the traffic in 
women and girls between Thailand and Burma. The Committee 
encourages all relevant U.S. government agencies to focus 
resources on this issue and to provide all possible support for 
the efforts of the Thai government in this regard.
    The Committee is extremely concerned about the repression 
of peaceful democratic activists and others who are critical of 
the Burmese regime. The Committee strongly condemns this 
repression and the Committee expresses its strong support for 
the immediate release of all Burmese political prisoners and an 
end to the harassment, torture and abuse of the citizens of 
Burma.

                               Indonesia

    The Committee is concerned about the deteriorating economic 
situation in Indonesia. Because of the severity of the crisis, 
decades of economic progress are rapidly dissipating. The 
impacts of this crisis on political and social stability in 
Indonesia are profound, including rising unemployment, rising 
consumer prices, food shortages, malnutrition, and increasing 
ethnic violence. The Committee acknowledges U.S. government 
efforts to address food shortages in Indonesia and considers it 
a priority that the U.S. government continue to make available 
excess wheat, wheat products, and rice for distribution to the 
most needy citizens of Indonesia.
    The Government of Indonesia has taken some encouraging 
steps towards political reform. The Committee urges the U.S. 
government to actively support the development of democratic 
institutions and processes in Indonesia, but economic and 
financial reform is key to sustained recovery in Indonesia. It 
supports bilateral and multilateral activities to help the 
Government of Indonesia remove, to the maximum extent possible, 
barriers to trade and investment which impede economic recovery 
in Indonesia, including tariffs, quotas, export taxes, non-
tariff barriers and prohibitions against foreign ownership and 
investment.
    The Committee requests the Secretary of State to report, no 
later than 6 months after the date of enactment of this Act, on 
the steps taken by the Government of Indonesia to promote 
democratic and economic reform in that country. This report 
shall, at a minimum, contain a description of the actions taken 
by the United States to work with the Government of Indonesia 
in support of these reforms.
    The Committee believes that the urgent need to restore the 
confidence and security of the ethnic Chinese community in 
Indonesia must be central to any credible reform program there. 
The ethnic Chinese community was tragically and unfortunately 
targeted for the most violent attacks in the May riots, 
including the systematic rape and other sexual abuse of ethnic 
Chinese women. In some parts of Indonesia, these attacks or 
threats of such attacks continue. The Committee urges the 
Administration to make central to its policy toward Indonesia 
the need for effective action by the Indonesian government to 
end all official discrimination against ethnic Chinese, 
including repeal of discriminatory laws and regulations, 
prevent any further attacks, and to identify and prosecute 
those responsible for the abuses.

                                 cyprus

    The Committee recommends that every effort be made to 
provide $15,000,000 in Economic Support Funds for scholarships 
and bicommunal projects in Cyprus. These funds provide a basis 
for mutual cooperation and preparation for these two 
communities to live together harmoniously by increasing inter-
communal contacts. In this regard, the Committee urges the 
Administration to pursue activities which could support the 
development of indigenous institutions of higher learning where 
students from both communities could study together rather than 
being sent abroad individually. The Committee expresses grave 
concern over media reports that the Government of Cyprus 
intends to acquire sophisticated Russian-origin surface to air 
missiles and deploy them on Cyprus. The acquisition and 
deployment of these systems would be a severe setback to a 
peaceful settlement of the Cyprus situation. The Committee is 
also concerned by the large Turkish military presence on the 
island of Cyprus. The Committee continues to strongly support 
demilitarization of the island and efforts to reduce military 
tensions on the island and between Greece and Turkey. The 
Committee believes that a sustainable long-term solution to the 
Cyprus situation will require mutual restraint and a reliance 
on non-military measures by all parties. In this regard, the 
Committee notes that the Administration's efforts to facilitate 
a peaceful solution have been unproductive to date and 
therefore the Committee urges the Administration to redouble 
its diplomatic efforts.

                                mongolia

    The Committee believes that the Administration's request 
for Mongolia is inadequate to meet continued pressing needs. 
While the Administration is to be commended for renewing its 
efforts last year to facilitate Mongolia's ongoing free market 
transition, the Committee believes it is premature to 
drastically cut back on United States efforts and programs 
which support democratic development, free market reform, and 
environmental awareness in Mongolia. Therefore, the Committee 
recommends that funding for programs and activities in Mongolia 
be maintained at last year's level.

                                 africa

    The Committee commends the Administration for its full 
consultation with the Committee during its effort to develop a 
comprehensive policy toward economic growth and improved trade 
and investment in Africa. Although budget constraints preclude 
the Committee from providing funding for all of the initiatives 
proposed by the Administration, the Committee supports the 
goals of these programs. The Committee therefore has provided 
the State Department with the flexibility to allow for an 
increase of at least $10,000,000 over last year's level for 
programs in Africa.

                    latin America and the Caribbean

    With the exception of the Administration's request for 
Haiti, the Committee expects the Administration to fully fund 
the fiscal year 1999 Economic Support Fund request for Latin 
America. (Haiti is addressed separately below.) It remains the 
Committee's strong belief that given the importance of the 
region and the long history of United States support, it is 
essential that aid levels not be reduced further. In that 
regard, the Committee fully supports the budget request of 
$3,000,000 for the Cuba democracy program and its goal of 
promoting a peaceful transition to democracy in that country.
    The Committee is concerned about the resolution of the 
cases involving the terrorist bombings of the Israeli Embassy 
and the AMIA Jewish Community Center in Buenos Aires, 
Argentina. While the Committee is pleased by the recent 
movement that resulted in the announcement by Argentine 
officials that linked Iran to the unresolved bombings and led 
to a downgrading of Argentina's relationship with that country, 
the Committee urges the Secretary of State to work with the 
government of Argentina to ensure that progress is made in 
these cases, and to offer technical law enforcement assistance 
where appropriate to bring to justice the perpetrators of these 
terrorist acts.

                                 haiti

    The Committee is fully supportive of humanitarian 
assistance to the people of Haiti. It continues to insist that 
assistance to the Government of Haiti be implemented in a 
manner that significantly advances market-based economic 
reforms and respect for the rule of law. The privatization of 
parastatal companies is a core reform, which was promised, but 
not accomplished, in prior years. The Committee recommends in 
section 560 that assistance to the Government of Haiti provided 
in this Act be made contingent on the privatization of at least 
three parastatal enterprises. The Committee expects the 
Administration to abide by its written commitments to fully 
consult the relevant committees of Congress on the provision of 
aid to the Government of Haiti.
    The Administration request to double the amount of 
assistance provided to Haiti under this account from 
$70,000,000 in 1998 to $140,000,000 in 1999 has not been 
adequately justified, and is not supported by the Committee. 
The bill does not include a ceiling on the level of assistance 
in 1999, but the Committee notes that the actual dollar amount 
made available for Haiti is limited by section 556.

                               Guatemala

    The Committee congratulates the government of Guatemala and 
the URNG on the important steps that have been taken to 
implement the peace accords signed in December 1996, and 
applauds the significant decline in politically motivated 
violations of human rights and the notable increase in 
pluralism and political freedom in Guatemala.
    Realizing the full promises of the accords, however, will 
still require concerted action by the government of Guatemala 
and Guatemalan society. The Committee urges the Guatemalan 
government to ensure that the constitutional reforms mandated 
in the agreements are implemented expeditiously. The Committee 
also urges the government to: ensure that human right violators 
are kept out of the new National Civilian Police Force; to 
cooperate in fully implementing the recommendations of the 
Historical Clarification Commission; to meet targets for tax 
revenue as agreed in the accords; and, to work with opposition 
political parties, civil society organizations, the press, and 
other sectors of Guatemalan society to build an atmosphere of 
dialogue and trust within which consensus solutions can be 
found to the problems facing the country.
    The Committee also urges government agencies to review for 
declassification documents on human rights abuses in both 
Guatemala and Honduras and to release such documents with the 
minimum of redactions possible. The release of these documents 
would contribute to the process of peace and reconciliation in 
Guatemala.
    The Committee is aware that $2,577,000 in previously 
appropriated Foreign Military Financing funds remain available 
for Guatemala. The Committee expects that these funds will be 
used in support of the Peace Accords in a timely manner and in 
full consultation with the Committee.

                          Release of Documents

    The Committee urges a rapid and thorough response to the 
pending requests by the Guatemalan Clarification Commission and 
the human rights commissioner of Honduras. The Committee 
recognizes that the Administration has provided a partial 
response to these requests, but notes that the Clarification 
Commission's report is due to be published on November 30, 
1998, while some of the prosecutions in Honduras in which such 
declassified materials could be useful are drawing to a close, 
making a timely response essential. The Committee expects the 
Administration to respond fully and promptly to any followup 
requests by the Guatemalan Clarification Commission and to 
provide a more complete declassification of documents on 
Honduras and El Salvador, including those pertinent to the 
cases of American citizens.

                       global medical initiative

    The Committee has been made aware of an innovative 
healthcare information delivery system based upon global 
satellite technology. The Committee believes that such an 
undertaking which would have as its primary focus the 
advancement and dissemination of medical and health information 
and education, throughout the world offers great potential for 
improving the health and well-being of millions of people in 
dire need of high quality medical information. The Committee 
therefore urges the Administration to direct the heads of the 
U.S. Agency for International Development, the Department of 
State and the Department of Defense to review this concept and 
provide up to $4,000,000 in funds from development assistance, 
the Economic Support Fund, or foreign military financing as 
appropriate to support such an undertaking.

                         availability of funds

    The Committee has continued language that funds in this 
account are to remain available for obligation for two years.

                     International Fund for Ireland

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $19,600,000
Fiscal year 1999 request..............................      (19,600,000)
Committee recommendation..............................        19,600,000
                                                                        

    The Committee recommends $19,600,000 for the International 
Fund for Ireland in support of the Anglo-Irish Accord. Funding 
of this amount was requested for this activity through the 
Economic Support Fund, but the Committee recommendation would 
continue a separate account for assistance to Ireland. The 
amount is the same as the 1998 enacted level.
    The Committee strongly urges the International Fund for 
Ireland to take every step possible to ensure that all 
recipients of Fund support are promoting equality of 
opportunity and non-discrimination in employment. The Committee 
further urges the Fund to focus on those projects that hold the 
greatest potential for job creation and equal opportunity for 
the Irish people.

          Assistance for Eastern Europe and the Baltic States

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $485,000,000
Fiscal year 1999 request..............................       464,500,000
Committee recommendation..............................       450,000,000
                                                                        

    The Committee has recommended $450,000,000 for Assistance 
for Eastern Europe and the Baltic States for fiscal year 1999. 
This is $35,000,000 less than the enacted level and $14,500,000 
less than the budget request.
    The reduction below the budget request reflects a cut of 
$12,500,000 associated with the proposal to initiate a new 
foundation for central Europe. The Committee has taken this 
reduction in anticipation of first reviewing the pilot project 
for the Baltic American Partnership Fund which has only 
recently begun operations. In addition, the Committee is 
concerned about the operations of the AID office which 
administers grants, contracts, and cooperative agreements for 
democracy activities in central Europe, and urges the agency to 
obtain an independent assessment of the management and 
financial practices of this office. The results of this review 
should be submitted to the Committee no later than February 1, 
1999. In light of the need for this review, and the fact it 
will require a slowdown in activities, program funding for the 
democracy and media activities of the office is reduced by 
$2,000,000. As in fiscal year 1998, pursuant to section 632(a) 
of the Foreign Assistance Act the Administration is directed to 
transfer funds to the National Endowment for Democracy for 
activities in emerging democracies of the region. The funds 
provided this organization should not be less than the amount 
transferred in 1998.

                      role of the seed coordinator

    The Committee reaffirms the central role of the Coordinator 
for Eastern Europe Assistance in coordinating, and providing 
foreign policy direction for, assistance for Central Europe 
through this account. The Committee notes that section 601 of 
the Support for East European Democracy (SEED) Act of 1989 
(Public Law 101-179) states, ``The President shall designate, 
within the Department of State, a SEED Program coordinator who 
shall be directly responsible for overseeing and coordinating 
all programs described in this Act and all other activities 
that the United States Government conducts in furtherance of 
the purposes of this Act.'' (Emphasis added.) The most recent 
Coordinator is to be commended for his efforts to consult fully 
with the Committee on matters of concern, and the Committee 
urges that such consultation continue. The Committee also 
continues to support the bilateral nature of this assistance, 
and would resist any effort to ``regionalize'' the programs 
funded through this account.

                         bosnia and herzegovina

    The Committee recommendation includes not more than 
$225,000,000 for reconstruction assistance for Bosnia and 
Herzegovina, as proposed in the budget request. The Committee 
has recommended the same bill language as in the 1998 act that 
prohibits the use of funds for the construction or repair of 
housing or residences, unless directly related to the efforts 
of United States troops to promote peace in Bosnia and 
Herzegovina; requires the written approval of the Administrator 
of AID for loans and projects under the Economic Reconstruction 
Program; subjects such funds to the provisions of section 532 
of this act; and authorizes the President to withhold funds for 
economic revitalization for Bosnia if he determines that Bosnia 
is not in compliance with the Dayton Accord regarding the 
presence of foreign forces and has not terminated intelligence 
cooperation with Iranian officials.
    The Committee is concerned by the condition of orphaned 
children in the Federation of Bosnia and Herzegovina. While 
Bosnian families have been reluctant to adopt many of these 
children, American families have shown an interest in adopting 
Bosnian children. Unfortunately, legislative barriers within 
the Federation have prevented foreign adoptions. The Committee 
encourages the Government of the Federation of Bosnia and 
Herzegovina to enact legislation that will expedite the 
adoption of Bosnia children by foreign families.

                               Macedonia

    The Committee is concerned with the growing ethnic conflict 
in Kosovo and with the possibility that violence might heighten 
inter-ethnic tensions in neighboring Macedonia, where ethnic 
Albanians constitute at least 25 percent of the population.
    The Committee urges AID to work to expand its 
microenterprise program in Macedonia to try to provide more job 
opportunities for ethnic Albanians and other citizens of 
Macedonia. The Committee also urges AID to review other 
programs and proposals that might support economic growth and 
educational opportunities for all citizens of Macedonia. It 
notes that proposals for separate institutions of higher 
education for certain minority groups within Macedonia have 
proven to be politically divisive issues that serve to increase 
distrust on all sides. The Committee urges AID to review the 
possibility that an impartial institution of higher education 
might be established within Macedonia and administered by a 
recognized and accredited American institution of higher 
education. Such an institution would be best positioned to 
provide a curriculum taught in English, in the Macedonian 
language, or in the Albanian language, with degrees awarded 
that would be recognized both within Macedonia and outside of 
that country.

                           legal initiatives

    The Committee encourages the Agency for International 
Development to continue to provide financial support for the 
Central and Eastern European Law Initiative (CEELI), a project 
of the American Bar Association. CEELI has received grants to 
help Central and East Europe and the NIS create new legal 
frameworks based on the rule of law rather than through Party 
doctrine or caprice.
    Through a variety of program components, CEELI is making 
available legal expertise to assist countries that are in the 
process of modifying or restructuring their laws or legal 
systems. CEELI emphasizes long-term engagement country-by-
country and supports projects that facilitate extensive 
consultations with policy-makers, legal scholars, judges, and 
attorneys. CEELI has focused work in several critical priority 
areas: constitutional reform; judicial restructuring; bar 
reform; commercial law; criminal law and procedure; and legal 
education reform, and has helped develop and/or 
institutionalize self-sustaining indigenous non-governmental 
organizations (NGO's). To date, lawyers volunteering for CEELI 
have contributed over $45,000,000 of pro bono service, and the 
Committee encourages support for this type of private sector 
involvement.

                         Cross border programs

    The Committee directs AID to focus more of its training and 
technical assistance resources on cross border programs that 
share successful development efforts. Poland, Hungary and other 
countries have made the free market transition faster than 
countries in southern Europe and the NIS. Successful private 
business models in these countries are better suited as 
training venues than U.S.-based training. Because funding is 
usually country-specific, there are few programs that share 
successful development efforts across countries in the region.
    In particular, the Committee encourages AID to provide more 
cross border training and technical assistance in agribusiness, 
housing, credit union and community telephone systems between 
Western Ukraine and Poland. Local Polish leaders have overcome 
similar problems, often speak the same languages and can share 
successful AID-supported efforts with their colleagues in 
nearby countries. Similar cross border programs should be 
encouraged in small livestock enterprise development between 
Albania and Macedonia.
    The successful NGO sustainability project in Timisoara, 
Romania, should become a model for NGO projects in the NIS 
region. NGO leaders should learn from Romanian NGOs about fee 
for service and other income generating programs, in order not 
to be dependent on donor funding for viability and 
independence.
    In addition, the Committee strongly supports efforts to 
enhance cross border educational and exchange activities 
between Poland, Hungary, and the Czech Republic and the 
relevant countries of the NIS regarding the expansion of the 
North Atlantic Treaty Organization (NATO) and related issues. 
It is vital that such activities take place in order to reduce 
the level of misunderstanding and distrust about NATO expansion 
among opinion-leaders in the NIS. The Committee directs that 
the Administration report by February 1, 1999, on its plans in 
this area.

  training and exchanges in the former soviet union and central europe

    The Committee continues to support training, exchanges, and 
partnerships between the United States and the nations of 
Eurasia, Central Europe, and the southern tier of Europe. These 
programs are in the interest of the United States and important 
to sustaining democracies. The Committee recommends that the 
Administration provide funding for the Russian, Eurasian and 
East European Research and Training Program (title VIII) at 
least at the level provided in fiscal year 1998. Funding for 
this program should come from this account and from the account 
for the New Independent States of the Former Soviet Union.
    The Committee supports funding for partnership programs in 
all regions of the NIS and Central and Southern Europe. The 
Committee notes the success that AID has had in working with 
institutional partnerships and encourages further development 
of projects in this area.
    The Committee recommends the East Central European 
Scholarship Program (ECESP) be continued at the same level as 
fiscal year 1998 to allow the program to continue to address 
the needs of the countries in the southern tier of Central 
Europe. The Agency for International Development should also 
review the proposal of the University of Northern Iowa to 
establish an Office of Education for Democracy, based on its 
success with the Orava Project in Slovakia.

                     Participant training programs

    The Committee notes with concern the decrease in recent 
years in the number of individuals enrolled in AID's 
participant training programs. These programs benefit both the 
United States and other nations by promoting democratic and 
free-market principles. The Entrepreneurial Management and 
Executive Development (EMED) program in particular, which 
trains entrepreneurs in Eastern Europe, has helped create 
business relationships between U.S. and foreign firms. The 
Committee urges AID to give priority to participant training 
programs in all its programs, particularly those for 
entrepreneurs and women in Eastern Europe and the NIS.

  Assistance for the New Independent States of the Former Soviet Union

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $770,000,000
Fiscal year 1999 request..............................       925,000,000
Committee recommendation..............................       590,000,000
                                                                        

    The Committee has recommended $590,000,000 for the Southern 
Caucasus region, Russia, Ukraine and the other new independent 
republics of the former Soviet Union. This is $335,000,000 less 
than the request and $180,000,000 less than the enacted 1998 
level.
    The Committee has included in section 517 of this bill 
language included under this heading in prior year bills, 
providing the funds ``notwithstanding any other provision of 
law'' and applying the provisions of section 498B(j) of the 
Foreign Assistance Act. The new general provision also includes 
long-standing language on territorial integrity, human rights, 
and non-use of funds for enhancing military capacities, and 
providing all funds subject to notification.

                    justification for recommendation

    For the past eight years this Committee has been in the 
forefront of United States efforts to assist the hoped-for 
transition to democracy and free markets in the successor 
states of the former Soviet Union. This bill marks a pause and 
stocktaking in this effort. At this stage in the NIS 
transition, the Committee concludes that several ongoing 
programs are working, and should be continued: exchanges 
between young NIS entrepreneurs, including farmer and business 
leaders, and their American counterparts; regional initiatives; 
and health sector activities, including programs to promote 
alternatives to abortion. Much technical assistance to central 
governments has been less successful.
    Because of the overall budget situation and specific 
negative developments in several nations, the Committee is 
unable to recommend the 20 percent increase in this account 
requested by the President. To the contrary, negative 
congressional reaction to events in the region suggests that 
scarce foreign assistance funds can be better used elsewhere. 
The justification for the recommended reduction of $180,000,000 
includes: increased violence and instability in the Southern 
Caucasus region, the reluctance of the Russian Federation to 
effectively limit nuclear and missile technology transfers to 
Iran, and the deteriorating investment climates in Ukraine and 
Uzbekistan. As the limitations of unilateral sanctions and 
limitations on funding for foreign countries are becoming more 
evident, the Committee is recommending that Congress use its 
constitutional power of the purse by making a reduction in the 
level of assistance to the overall region.

          Caucasus conflicts: Armenia, Azerbaijan, and Georgia

    Foreign assistance, other than humanitarian aid to victims 
of war and disaster, should serve the national interests of the 
United States. The primary national interest of the United 
States in the Southern Caucasus is peace. After several visits 
to the region over the past year, the Committee concludes that 
few of the hopes and dreams of the people of Armenia, 
Azerbaijan, and Georgia can be realized until the conflicts 
over Abkhazia and Nagorno-Karabagh are settled and regional 
transport and communications links restored.
    Last year the Committee Report stated that:

          The extent and timing of United States and 
        multilateral assistance, other than humanitarian 
        assistance, to the government of any country in the 
        Caucasus region should be proportional to its 
        willingness to cooperate with the Minsk Group and other 
        efforts to resolve regional conflicts.

    This year the Committee recommends that this language be 
incorporated in the bill as policy guidance for the Executive 
branch in carrying out United States foreign policy in the 
Southern Caucasus region. Again this year, the Committee seeks 
to facilitate constructive engagement between Armenia and 
Azerbaijan to break the impasse that has halted progress 
towards settling the conflict over Karabagh. The Committee is 
prepared to work with the Executive branch to move from the 
current cease-fire in the region to a political settlement. It 
encourages the United States co-chairman of the Minsk Group to 
promote direct (or, if necessary initially, proximity) 
negotiations without preconditions among all of the parties to 
the Nagorno-Karabagh conflict, a practice that has already 
commenced with regard to the Abkhazia conflict.
    The Committee recommends continuing the practice initiated 
in the 1998 Act of reserving one-third of the NIS funds for the 
Southern Caucasus.
    The Committee recommends that 60 percent of the Southern 
Caucasus funds be allocated for the benefit of the people of 
Armenia, Azerbaijan and Georgia for ongoing activities and new 
regional projects. The Committee urges that non-humanitarian 
aid focus, where appropriate, on preparing the groundwork for 
regional cooperation. Although the Committee is aware that full 
regional cooperation cannot materialize until the conflicts 
centering on Abkhazia and Nagorno-Karabagh are settled, it 
urges the Coordinator and USAID to commence preparations for 
the restoration of transport and communication links with-in 
the region. Humanitarian aid for the victims of the regional 
conflicts currently residing in Armenia, Azerbaijan, and 
Georgia, including Nagorno-Karabagh and Abkhazia, could be 
provided from this part of the fund.
    The remaining 40 percent of the Southern Caucasus funds 
would be initially reserved for post-conflict assistance in the 
region. The Committee expects that the United States funds 
would become the seed money for a much larger international 
reconstruction effort. Other Western nations and the 
multilateral development banks are prepared to follow the 
example established in Bosnia after the Dayton Accords and 
provide several times the amount of the United States bilateral 
contribution for a regional reconstruction effort. Armenia and 
Nagorno-Karabagh would be the prime beneficiaries of peace. 
They and the Government of Azerbaijan would share the 
assistance contemplated by this provision of the bill.
    Prior to May 30, 1999, none of the remaining 40 percent of 
the Southern Caucasus fund can be made available for a party to 
the conflict in Nagorno--Karabagh unless it has agreed to 
participate in direct or proximity negotiations, without 
preconditions, to resolve the conflict.
    In the event that the Secretary of State determines that 
the prospects for settlement of the Nagorno-Karabagh and 
Abkhazia conflicts are not good, the Southern Caucasus fund 
could be reduced by the amount reserved for post-conflict 
assistance. The newly available money could be used elsewhere 
in the New Independent States or retained in the Southern 
Caucasus, subject to the limitation on the amount that can be 
allocated to any single nation.
    Although the Committee took the initiative last year to 
establish a Southern Caucasus fund, the situation in the region 
has deteriorated. Assassination attempts against the leaders of 
Georgia and Azerbaijan are alleged to have involved residents 
of the Russian Federation. Following an unscheduled change of 
leaders in Armenia, the successful candidate for President 
overcame overt Russian support for an unreformed former 
Communist party leader of Armenia. The sovereignty of all three 
countries is impaired or directly threatened, and two are 
increasingly dependent on trade through Iran as a result of 
blockades.
    Grand expectations that the Southern Caucasus will become a 
prosperous Eurasian Corridor, benefiting from oil and gas 
wealth in the Caspian Sea region, may be premature. Low oil 
prices and disappointing results from recent drilling 
operations will be overcome in time, but the continuation of 
armed conflict within and between Georgia, Armenia, and 
Azerbaijan, will surely end chances for the people of the first 
two nations, and, perhaps, Azerbaijan, to escape the grinding 
poverty of the 1990s.
    In the absence of peace, multiple pipelines through the 
region to the West may never be financed. Without swift and 
energetic action by the United States and its European allies, 
Russia, Iran, and China will control Caspian Sea region 
hydrocarbon assets.
    Last year, the Committee urged the President and the 
Secretary of State to facilitate the resettlement of the 
hundreds of thousands of refugees and displaced persons in the 
region who are unlikely to ever be in a position to return to 
their original homes. Since then private citizens have 
furnished the Committee with evidence that the situation of 
such refugees, especially in Azerbaijan, continues to 
deteriorate. To facilitate resettlement, the Committee has 
provided, for the second time, a one-year authority for the 
President to provide humanitarian assistance to the region, 
notwithstanding the restrictions of Section 907 of the FREEDOM 
Support Act. This exemption allows for direct assistance by 
American NGOs to refugees and displaced persons throughout the 
region, including those in Nagorno-Karabagh.
    It is the intent of the Committee that in the case of any 
assistance funded or otherwise provided pursuant to this Act, 
the direct beneficiaries of which are required by law to the 
United States entities (e.g., in which guaranties or insurance 
are provided to United States entities), such assistance shall 
not be considered assistance to a foreign country or government 
and therefore is not covered by restrictions on such 
assistance.
    The Committee reiterates the statement contained in last 
year's report on this bill that its actions regarding Armenia 
and Azerbaijan are not meant to express a view on the political 
status of Nagorno-Karabagh.
    The Committee recommends that $20,000,000 in humanitarian 
assistance be provided to victims of Nagorno-Karabagh conflict 
residing in Nagorno-Karabagh, all of which should be obligated 
during the period Janaury 1, 1998 through September 30, 2000. 
This funding is provided solely for the purpose of assisting 
the victims of Nagorno-Karabagh conflict residing in Nagorno-
Karabagh and is not to be utilized to provide assistance for 
the Governments of Armenia or Azerbaijan, which receive 
humanitarian assistance from other streams of funding. The 
Committee directs the Agency for International Development to 
issue all of its initial requests for application for proposals 
for funding provided by this Act (approximately $7,500,000) not 
later than March 30, 1999. It further requests that the Agency 
provide the Committee a detailed report not later than March 
30, 1999 on the implementation or proposed use of all funds 
obligated or notified to the Committee as of March 1, 1999.

                                Armenia

    Taking into account the overall reduction in the NIS 
account and the Committee's recommendation that a larger 
percentage of the Southern Caucasus fund be linked to post-
conflict reconstruction, the Committee directs that no less 
than twenty-five percent of the Southern Caucasus fund be 
provided for Armenia.
    The Committee expects that these funds will be used in 
Armenia for trade, investment, and regional economic 
development. It directs that priority be placed on ending 
Armenia's isolation and setting the groundwork for restoring 
and upgrading its road, rail, and telecommunication links with 
the outside world, especially Georgia. If the promising new 
investment climate is sustained in Armenia, the Committee 
encourages expanded assistance, where feasible, in the areas of 
export-led private sector development and revitalization of the 
agricultural and service sectors.
    The Committee strongly encourages the Agency for 
International Development to review United States Government 
support for the American University in Yerevan to determine the 
extent of financing that might be required to allow the 
University to become self-financing. The Committee notes the 
use of funds under the heading ``Assistance for Eastern Europe 
and the Baltic States'' to allow similar institutions to become 
self-sustaining. The Committee directs that any assistance used 
for such purposes in Armenia should count against directives 
regarding the level of assistance for Armenia in this Report 
and the Statement of Managers of the Committee of Conference.

                                Georgia

    The Committee congratulates the President of the Republic 
of Georgia for his courage in the face of attempts against his 
life. It commends him for his successful negotiation to recover 
national control over Georgia's sea and land borders.
    Taking account of the overall reduction in the NIS account 
and the Committee's recommendation that a larger percentage of 
the Southern Caucasus fund be linked to post-conflict 
reconstruction in the region, the Committee directs that no 
less than twenty-five percent of the Southern Caucasus fund be 
provided for Georgia. In addition to this amount, if a 
settlement of the conflict in Abkhazia is achieved during 
fiscal year 1999, part of the funds reserved for post-conflict 
reconstruction would be available for that region of Georgia.
    The Committee directs that a significant part of the 
assistance for Georgia continue to be provided for technical 
security assistance for border and export control.

                               Azerbaijan

    The Committee commends the Government of Azerbaijan for its 
cooperation with regard to halting transit of certain 
destabilizing exports from Russia to Iran. The Committee 
remains concerned about the plight of internally displaced 
persons within Azerbaijan and is structuring the bill to create 
incentives for a peace agreement among the parties to the 
Nagorno-Karabagh conflict, which would allow most of them to 
return to their homes. The Committee has been informed by the 
needs assessment team which was sent to the Caucasus by AID in 
January of this year and other assessment teams that a main 
cause of distress among these persons is the inability of the 
Government in Baku to meet their needs. The Committee is 
especially concerned about reports of diversion and theft of 
humanitarian assistance by some of the Azerbaijan officials who 
are charged with the distribution of this assistance. The 
Committee urges that the external assistance provided to 
displaced persons by the United States and other donor nations 
be accompanied by a stronger internal effort to address their 
needs.
    The Committee recommends renewing the one-year waiver of 
section 907 for activities in support of democracy in 
Azerbaijan and for activities in support of American business 
in Azerbaijan by the Trade and Development Agency and the U.S. 
Foreign Commercial and Agricultural Service.

                                Ukraine

    Last year, as an incentive for Ukraine to support necessary 
reform efforts and end harassment of American investors, the 
Committee recommended language that withheld one-half of 
Ukraine's assistance and made it available for obligation only 
when the Secretary of State had certified certain actions by 
the Government of Ukraine. Strenuous efforts by senior 
Administration officials to resolve the cases of primary 
concern to the Committee were unsuccessful, but the 
certification was made. This year the Committee makes no effort 
to link U.S. assistance to Ukraine to specific conditions in 
the face of the continuing decline in the political and 
economic situation in Ukraine. It continues to support 
humanitarian help for the suffering and neglected people of 
Ukraine, especially elderly residents of rural villages.
    The Committee directs the Coordinator to consult closely 
with the Committee before undertaking any programs of 
assistance to the central Government of Ukraine. It further 
directs the Administrator of the Agency for International 
Development to consult closely with the Committee regarding the 
utilization of operating expenses in Ukraine and to provide the 
Committee adequate documentation concerning proposed 
modifications of ``strategic objectives'' and the ``R4'' 
process (other than data regarding the FY 2000 budget).
    The advance of private agriculture in Ukraine, Russia, and 
Central Asia is fundamental to regional stability and future 
economic growth. Radical steps must be taken to identify and 
assist the next generation of farmers, as the average age of 
rural residents increases. The Committee directs USAID and the 
Peace Corps to expand technical exchanges in agriculture, 
making use of experienced private American farmers, land-grant 
colleges, and other agricultural experts. These exchanges 
should focus on helping individual private smallholders, 
fledgling commercial farmers, private village farmers' 
associations and agri-credit union institutions. The Committee 
strongly recommends that the technical exchanges be accompanied 
by well-organized arrangements for direct donations of seed, 
tools, and other useful items to the cooperating farmers and 
associations in the NIS.
    The Committee recognizes the importance of U.S. law 
enforcement officials sharing the techniques they use to 
conduct criminal investigations with their counterparts in the 
NIS. This is especially critical in today's global financial 
and commercial environment.
    Cooperation between American and Ukrainian law enforcement 
officials to combat international organized crime, white-collar 
financial crimes, and narcotics trafficking is essential. It 
urges the Department of State to assess the current situation 
in Ukraine and make recommendations within 9 months of 
enactment of this bill regarding the extension of U.S. criminal 
justice presence in Ukraine, as has occurred in Russia.
    The Committee recognizes that the resurgence of Hepatitis B 
in Ukraine requires an increased immunization effort. As many 
as 75,000 Ukrainians are being infected with Hepatitis B 
yearly, many of them infants, young children, and adolescents. 
The Committee recognizes the necessity of incorporating 
regional and private sector organizations in Ukraine's fight 
against the disease. A model Hepatitis B program in regions of 
Ukraine combines education, training, vaccine purchase, and 
diagnostic follow-up and brings together the public and private 
sectors in a joint effort. The Committee recommends that the 
Coordinator and AID allocate up to $10,000,000 to assist in the 
expansion of this program on a national basis, and consider the 
feasibility of promoting a system of immunization centers 
throughout Ukraine, through which a broad range of childhood 
immunizations can be administered.
    The Committee recommends that at least $2,000,000 be 
allocated for community-based telephone cooperatives in 
Ukraine. The cooperative method fosters community involvement 
and empowerment, and helps build civil society. Economic growth 
in the private sector must be encouraged, as it imposes 
challenges to the current government and will also generate 
income at the local level.
    In the difficult task of promoting private sector growth in 
Ukraine, lessons learned from industry-based study programs 
have proven successful in one region. Based on the models 
developed by the Marshall Plan, the Management Technology 
Marketing Program has benefited from the active participation 
of one of the last active Marshall Plan managers and the 
generosity of the citizens of Cincinnati, Ohio. The Committee 
recommends that this and similar programs continue to be funded 
by AID in Ukraine.

                        russia and proliferation

    The Committee continues language from last year's bill 
dealing with Russian nuclear and ballistic missile cooperation 
with Iran. The Committee remains extremely disturbed by 
reports, which indicate that Russian entities are extensively 
engaged with Iran in cooperative projects which significantly 
enhance Iran's ballistic missile capabilities. The ballistic 
missile cooperation, combined with Russian nuclear cooperation 
with Iran, represent a significant step in Iran's efforts to 
obtain a comprehensive, highly sophisticated weapons of mass 
destruction capability. The Committee therefore has also 
retained the ``vital to the national security interest'' 
threshold in this year's waiver provision, which may be 
utilized to obligate not more than fifty percent of the funds 
allocated for the Government of Russia in fiscal year 1999. The 
Committee does not intend that partnerships between United 
States hospitals and universities and counterpart institutions 
in Russia be affected by the language of this subsection.
    The Committee also expresses its strong concern that the 
People's Republic of China is also engaged in an extensive 
proliferation program, including reported nuclear and ballistic 
missile cooperation with Iran, which seriously jeopardizes 
peace in the region and poses a direct threat to United States 
troops deployed in the Middle East.

        U.S. Civilian Research and Development Foundation (CRDF)

    Over the past two and one-half years, the U.S. Civilian 
Research and Development Foundation (CRDF) has built an 
important capability to assist federal agencies with scientific 
and technical objectives in the NIS. Its work enables U.S./NIS 
collaborations in science and technology. Hundreds of American 
and thousands of Russian, Ukrainian, Armenian, and other NIS 
researchers are now participating in project selected for 
support via merit review. CRDF work in Armenia and Georgia is 
impressive, and should be expanded, and extended to Azerbaijan 
when feasible. However, the absence of an income-earning 
endowment envisioned by Congress for CRDF means it cannot 
accumulate the resources needed to sponsor periodic merit-based 
research completions. Such competitions, open to U.S./NIS teams 
of scientists in all disciplines and institutions and in most 
NIS countries, promote both structural changes in the NIS and 
the mutually beneficial collaborations envisioned by Congress. 
The Committee strongly urges the Administration to provide the 
coordination necessary among technical agencies, the Department 
of State and the Department of Defense to provide funding for 
the CRDF to be able to fully accomplish its purposes. The 
Committee expects the President's Special Advisor on Assistance 
to the NIS to play a key role in this coordination process.

   Iodine deficiency disorder in the former Soviet Union and eastern 
                                 Europe

    Iodine Deficiency Disorder (IDD) is the leading cause of 
mental retardation in children. Since the 1991 breakup of the 
Soviet Union, problems with IDD in the new states appear to be 
getting worse. For instance 73 percent of infants born in Gori, 
and 54 percent of children born in Tblisi, Georgia were found 
to have very high levels of iodine deficiency. In Eastern 
Europe it is estimated that more than 16 percent of children 
born in Bulgaria and Romania suffer from IDD. The Committee 
recommends that funds provided under the NIS and Central Europe 
regional accounts be provided on a matching basis to work with 
Kiwanis International and UNICEF in their effort to virtually 
eliminate iodine deficiency in the former Soviet bloc.

                               corruption

    After two public hearings on the subject and numerous 
private meetings, the Committee concludes that rampant 
corruption and lack of transparency are the major obstacles to 
economic growth in most NIS nations. Corruption appears at 
every level of government, impeding business and undermining 
economic reforms. The Committee strongly encourages the 
Secretary of State and the Coordinator to take immediate steps 
to ensure that U.S. assistance is not going to individuals 
reliably reported to be involved in corruption. The Secretary 
and the Coordinator are directed to submit a second annual 
report to the Committee no later than 120 days of enactment of 
this Act on the use of U.S. assistance to help combat 
corruption in the former Soviet Union. The report should 
include complete documentation of directives issued by all 
federal agencies (excluding intelligence agencies) to establish 
a firewall between American assistance and corrupt individuals.

                         Violence against women

    The Committee is very concerned about the increasing 
incidence of violence against women in Russia, Ukraine, and 
Central Asia and the indifference of many law enforcement 
officials to such crimes. Funds should be made available to 
improve the response of Russia's and Central Asia's law 
enforcement and judicial system to women victims of violence.
    In Ukraine, especially, a priority objective should be the 
implementation of programs that provide economic opportunities 
for young women. The Committee is disturbed by reports that 
jobless and underemployed young women are enticed by fraudulent 
job offers in Eastern Mediterranean countries, and then 
entrapped into lives as prostitutes. The Committee requests a 
report from the Coordinator of Assistance to the NIS, not later 
than 10 months after the enactment of this Act, on the 
obligation of such funds and the initial results of the 
program.

                      Religious Freedom in Russia

    The Committee continues to be concerned about the dire 
consequences to several religious groups resulting from 
regional enforcement of the new religious freedom statute in 
the Russian Federation. As the Secretary of State determined 
that section 577 of last year's Act should not be utilized, the 
Committee has not renewed that legislation. It expects that 
legislation dealing with global religious persecution issues 
that has already passed the House will be enacted into law in a 
form that will supersede this Committee's efforts last year.

                        russia's new generation

    The Committee believes that the forthcoming Russian 
elections to the Duma in 1999 and for the Presidency in 2000 
lend special urgency to the long-standing recommendations of 
the Congress that large numbers of Russia's new generation of 
leaders be brought to this country to experience our democratic 
and free-market institutions. The official reports of the bi-
partisan House leadership delegations to Russia in both 1993 
and 1994 strongly recommended a ``very substantial expansion'' 
of this kind of short but intensive exposure (recommending in 
1994 ``at least 20,000 Russian visits this year and 50,000 
visitors next year''). Nothing like those numbers has been 
achieved since, and only a small number of the emerging young 
generation of leaders has seen for themselves how our system 
actually works. In the period following World War II, this type 
of program was crucial in enabling the new, young German 
leadership to adapt free-market and democratic institutions to 
their own circumstances--and become effective advocates of 
these processes within their own societies.
    The Committee recommends that the Administration craft a 
more ambitious program of substantive, short-term visits to 
reinforce and strengthen the commitment to reform of the 
emerging young generation of leaders in post-Cold War Russia. 
This renewed emphasis will stimulate a far wider base of 
understanding of and advocacy for the institutions of freedom 
among the emerging new leaders in government and the private 
sector. The Committee strongly encourages the Administration to 
evaluate rapidly existing programs and to expand significantly 
both programs that have proven effective and to initiative new 
short-term U.S. government exchanges with young, emerging 
Russian leaders. There is also a critical need for fresh 
direction, coherence, and focus for longer-term exchange 
programs once this immediate need is accommodated.

             continued development of an independent media

    The Committee continues to support successful assistance 
programs for independent broadcast and print media throughout 
the former Soviet Union. The sustainability and political 
independence of media are necessary components on genuine 
economic and political reform. The Committee considers it a 
priority for grantees to work toward legal environments in 
which media can better encourage respect for the rule of law. 
Effective support for a free press also includes training in 
commercial management with emphasis on financial skills, basic 
and advanced journalism training, and development of an 
independent media infrastructure. New initiatives should 
include effective use of regional and national media for 
disseminating health care information and legal literacy for 
media professionals.

                     assistance for small business

    Increasing assistance to small manufacturers in Russia, 
Ukraine, and elsewhere in the region is viewed by the Committee 
as a promising aspect of the Partnership for Freedom. 
Successful small loan and microcredit programs need to be 
expanded into additional regions. The use of American business 
volunteers, both active and retired, has proved beneficial to 
counterparts in the region. Several U.S.-funded programs in the 
region have informed the Committee that training and consulting 
assignments in-country are most effective when a percentage of 
the assistance is provided on a ``cost-share'' basis, and the 
Committee supports this approach. Programs that combine in-
country assistance to small manufacturers with observation and 
training at U.S. production sites have reported greater 
effectiveness. This approach, pioneered by the Marshall Plan, 
should be expanded.

          health, child survival, and environmental pollution

    The Committee encourages AID to seriously consider funding 
cooperative efforts with private voluntary organizations and 
the U.S. medical community to assist with the transfer of 
surplus medical equipment and to facilitate cooperative 
programs with U.S. physicians who wish to volunteer their time 
and services to needy communities in Eastern Europe, the NIS 
and other areas in need throughout the developing world. AID 
should pay particular attention to eliminating bureaucratic 
barriers to these equipment transfers and for physicians who 
offer voluntary services.
    The Committee encourages the Agency for International 
Development (AID) to focus resources on non-governmental, 
private organizations in the Ukraine who seek to implement a 
comprehensive program of physicians' training, prenatal and 
infant care. A child survival program of this type can reduce 
the incidence of birth complications, immune deficiencies and 
infant mortality. The Committee is particularly concerned for 
women and children in all regions affected by radiation from 
the 1986 disaster at Chernobyl.
    The Committee encourages the Coordinator and implementing 
agencies to establish and fund a non-governmental organization 
to operate an office in Kiev, Ukraine, to better coordinate all 
U.S. medical support, related health equipment, and other 
medically-related donations being arranged from U.S. sources.

  RUSSIAN-U.S. SCIENCE, EDUCATION, AND ECONOMIC DEVELOPMENT CONSORTIUM

    The Committee has been made aware of the Russian-U.S. 
Science, Education and Economic Development Consortium, 
composed of United States universities from four states and 
scientific and educational institutions in Pushino, Russia. The 
consortium has been reported to have successfully carried out 
activities that promote Russian private sector development, 
protect and restore the environment, support food production 
and agribusiness, and utilize science to support social needs. 
The Committee has been aware for several years that the 
American members of the consortium seek a one-time extension to 
bring the project to conclusion. Therefore, the Committee 
requests that USAID report to the Committee not later than 60 
days after enactment of this bill on the following: the impact 
in Russia of past USAID funding of the consortium, the status 
of pending requests for extension or renewal, and USAID's 
anticipated date of response to any pending requests for 
extension or renewal.

                 Center of Business Skills Development

    The Committee notes the success of Centers of Business 
Skills Development in the New Independent States. To the extent 
that conditions in the Russian Federation are conducive to AID 
efforts to promote trade and investment in Russia, the 
Committee suggests that every consideration be given to the 
continuation of the Centers, and the possible combination with 
American Business Centers.

                          Independent Agencies

                       Inter-American Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................     ($22,000,000)
Fiscal year 1999 request..............................        22,000,000
Committee recommendation..............................        20,680,000
                                                                        

    The Committee recommendation provides $20,680,000 for the 
Inter-American Foundation, $1,320,000 below the level provided 
in fiscal year 1998 through the ``Development assistance'' 
account. The appropriation represents a reduction of 6 percent 
from the request. The Committee notes that the recommended 
appropriation is $680,000 over the fiscal year 1997 level.
    The Committee is recommending the establishment of a 
separate account for the Foundation, pursuant to the budget 
request.
    The Committee continues to encourage the Foundation to 
explore alternative sources of funding, both private and 
public.

                     African Development Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................     ($14,000,000)
Fiscal year 1999 request..............................        14,000,000
Committee recommendation..............................        13,160,000
                                                                        

    The Committee has recommended funding for the African 
Development Foundation at a level of $13,160,000, $840,000 
below the level provided in fiscal year 1998 through the 
``Development assistance'' account. The appropriation 
represents a reduction of 6 percent from the request. The 
Committee notes that the recommended appropriation is 
$1,660,000 over the fiscal year 1997 level, and that the 
Foundation carried forward $4,000,000 from 1997 to 1998.
    The Committee is recommending the establishment of a 
separate account for the Foundation, pursuant to the budget 
request.
    The Committee continues to encourage the Foundation to 
explore alternative sources of funding, both public and 
private.

                              Peace Corps

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $222,000,000
Fiscal year 1999 request..............................       270,335,000
Committee recommendation..............................       230,000,000
                                                                        

    The Committee recommends Peace Corps funding of 
$230,000,000. This is $40,335,00 less than the amount 
requested, but $8,000,000 above the 1998 enacted level. Prior 
year language addressing purchase of motor vehicles, abortion, 
and ability of funds has been continued in the bill.
    The Committee supports the work of the Peace Corps, and 
regrets that its restricted allocation precludes the provision 
of additional funds at this time. As the 1997 Balanced Budget 
Agreement does not provide for an increased allocation in 
future years, the Director is advised to plan future year 
recruitment and commitment of volunteers in a manner that does 
not assume significant increases in resources for the Peace 
Corps.
    The Committee continues to support the Peace Corps 
Volunteers currently at work in 82 countries, and commends the 
agency's ongoing management reforms and strategic planning, 
which have been undertaken in consultation with the Committee. 
In view of the agency's success at providing grass-roots 
development assistance, and in recognition of the professional 
and cross-cultural skills that returned volunteers bring home 
to benefit American society, the Committee remains open to 
eventually funding a volunteer corps of 10,000 persons.
    However, within the existing allocation, the Committee is 
unable to accommodate the request of $270,000,000, which 
assumes an increase to 10,000 volunteers over three years. 
Should there be an increase in the allocation for foreign 
operations in subsequent stages of the appropriations process, 
the Committee is prepared to approve a further increase in 
Peace Corps funding for fiscal year 1999.

                          Department of State

                    International Narcotics Control

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level (under fiscal year 1999 account                  
 structure)...........................................      $230,000,000
Fiscal year 1999 request..............................       275,000,000
Committee recommendation..............................       275,000,000
                                                                        

    The Committee has recommended $275,000,000 for 
``International Narcotics Control''. This is $45,000,000 above 
the appropriated level for 1998, and the same as the budget 
request.
    The Committee notes that section 520 applies to the use of 
narcotics control funds for countries such as Colombia and 
Peru.
    In order to accurately assess the allocation of United 
States overseas counternarcotics assistance and programs, the 
Committee requests the Department of State to provide a 
comprehensive accounting of all such activities as part of the 
fiscal year 2000 budget submission of the President. In 
addition, the Administration is directed to display eradication 
and alternative development activities as separate line items 
in the budget justification documents provided to the 
Committee.

            latin america law enforcement training facility

    The Committee continues to support establishment of a 
regional law enforcement training center for Latin America, 
modeled on the International Law Enforcement Academy (ILEA) in 
Hungary. Funds were included in the 1998 act to establish such 
a center. The Committee believes that, given the proximity of 
the United States to Latin America, it is appropriate for such 
a center to be located in the United States. An existing 
facility, the deBremmond Training Center in Roswell, New 
Mexico, is available for such a center. The Committee again 
urges the Department of State to establish the training center 
at this site if it has the capacity to handle the training 
needs projected by the Bureau of International Narcotics and 
Law Enforcement Affairs.

                                colombia

    The Committee supports a strong U.S. counternarcotics 
assistance program for Colombia in order to protect U.S. 
communities from the ravages of drugs. There is evidence that 
Colombia has become the leading supplier of heroin to the 
United States, and the Department of State should alter its 
counternarcotics strategy in Colombia in recognition of that 
fact. To date, the Department's strategy has largely ignored 
the control of opium poppies.
    However, the Committee is concerned that no assistance from 
funds provided in this Act be provided to any security forces 
units engaged in systematic human rights violations. For that 
reason, the Committee has retained a general provision (section 
565) that prohibits funds from being made available to any unit 
of the security forces of a foreign country if the Secretary of 
State has credible evidence that such unit has committed gross 
violations of human rights, unless the Secretary determines 
that the government of such country is taking effective 
measures to bring the responsible members of the security 
forces unit to justice. In the implementation of this section, 
the Administration should adopt clear, transparent, and timely 
monitoring mechanisms. This provision applies to 
counternarcotics assistance for any country, not just Colombia.
    The Committee notes that virtually all of the law 
enforcement assistance provided to Colombia through this 
account is directed through, or done in cooperation with, the 
Colombian National Police, which has an excellent human rights 
record.
    The Committee urges the Department of State to support the 
development of a peace process in Colombia, and further urges 
the government of Colombia to take steps to end human rights 
abuses by members of the government and/or armed forces, by 
paramilitary forces, and by the insurgents. The Committee also 
urges that steps be taken to protect human rights monitors, and 
that the Administration provide funding for the Human Rights 
Unit of the Colombia Attorney General's office (Fiscalia) 
through the Rule of Law Program.
    The Committee is also aware of proposals to use a new form 
of herbicide (tebuthiuron) on coca plants as part of aerial 
eradication activities in Colombia. Prior to any decision on 
its use, the State Department should thoroughly test and 
evaluate the health and environmental impacts of such herbicide 
under the conditions in which it would be used.

                                  Peru

    The Committee is concerned by reports that the Peruvian 
National Intelligence Service (SIN) may be involved in 
activities that are inconsistent with human rights, the rule of 
law and the development of democracy. The Committee directs the 
State Department to report to the Committee on the degree to 
which this organization has received counternarcotics funds 
from this account; the reasons for such assistance; and an 
explanation why such assistance would not be better utilized 
through collaboration with civilian law enforcement agencies, 
including the intelligence unit of the antinarcotics police.

                              Use of funds

    The Committee has provided the requested increase of 
$45,000,000, and fully supports the proposed funding 
allocations for Colombia, Bolivia, and Peru. As part of this 
general increase, the Committee directs the Department of State 
to ensure that the following priorities are addressed:
          1. an increase of $6,000,000 for support of the air 
        wing in Colombia;
          2. an increase of $2,000,000 for minigun systems for 
        the Colombian National Police (or the use of drawdown 
        authority);
          3. sufficient funds to provide for the transfer of a 
        DC-3 transport aircraft to the Colombian National 
        Police;
          4. an additional $5,000,000 for start-up costs for 
        alternative development activities in Colombia 
        (Guaniare, Putumayo, and Caqueta);
          5. an additional $5,000,000 to enhance alternative 
        development activities in Bolivia (Chapare and Yungas);
          6. an additional $3,000,000 for support of air and 
        riverine operations, and for enhanced coca eradication, 
        in Bolivia;
          7. an additional $28,000,000 to enhance alternative 
        development programs in Peru (Ucayali, Apurimac, and 
        Huallaga valleys);
          8. sufficient support for international law 
        enforcement training centers including Asia, Africa, & 
        Latin America, as well as exchanges for Mexican judges, 
        prosecutors, and police.

                          extradition treaties

    The Committee is very concerned about the frequency with 
which foreign nationals who commit crimes in the United States 
are able to avoid arrest and prosecution by fleeing to nations 
that do not have valid extradition treaties with the United 
States. In some of these cases, an extradition treaty is in 
effect between the United States and the nation harboring the 
fugitive, but it does not provide for the extradition of its 
own citizens.
    Recent reports have highlighted the lack of effective 
extradition with El Salvador. The District of Columbia has 24 
outstanding arrest warrants for homicide suspects who the 
authorities believe have returned to El Salvador.
    The Committee urges the President and the Secretary of 
State to take every possible step to conclude effective 
extradition treaties where such treaties do not exist and 
report back to the Committee on the status of such efforts.

                           Refugee Assistance

    The Committee has provided a total of $670,000,000 for the 
two refugee accounts of the Department of State, the same as 
the budget request. However, $10,000,000 has been shifted from 
``Migration and refugee assistance'' to ``United States 
Emergency Refugee and Migration Assistance Fund'' in order to 
provide more flexibility in the use of emergency refugee 
assistance funds.

                    Migration and Refugee Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $650,000,000
Fiscal year 1999 request..............................       650,000,000
Committee recommendation..............................       640,000,000
                                                                        

    The Committee has recommended $640,000,000 for ``Migration 
and Refugee Assistance'', $10,000,000 less than the amount 
requested by the President. A limitation of $12,000,000 is 
recommended for administrative expenses. The recommendation is 
based on the requested reduction of $10,000,000 for the 
resettlement of Soviet, Eastern European and other refugees 
resettling in Israel.

                            Tibetan refugees

    The Committee supports continued funding to assist Tibetan 
refugees, and expects that $2,000,000 will be provided for this 
purpose. The Committee requests that the Department of State 
coordinate with the Agency for International Development in 
determining the funding responsibility for long-term assistance 
for Tibetan refugees, including assistance to refugees residing 
in India.

                                 Israel

    The Committee endorses the budget request of $70,000,000 
for the resettlement of NIS, Eastern European and other 
refugees resettling in Israel, consistent with the anticipated 
reduction of funds for this program as described in House 
Report No. 105-401.

                         unaccompanied children

    The Committee supports continued funding for programs 
initiated through the United Nations High Commissioner for 
Refugees for unaccompanied and vulnerable refugee children. 
UNHCR has estimated that there are more than 1,000,000 refugee 
children who are orphaned, separated from their parents, or 
have other special needs as a result of armed conflict or other 
causes of forced migration. The Committee supports funding at 
last year's level to support the initiatives being taken by 
UNHCR to meet the needs of these children.

     United States Emergency Refugee and Migration Assistance Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $50,000,000
Fiscal year 1999 request..............................        20,000,000
Committee recommendation..............................        30,000,000
                                                                        

    The Committee has recommended $30,000,000 for the Emergency 
Refugee and Migration Assistance Fund. This is $20,000,000 
below the 1998 enacted level and $10,000,000 above the budget 
request.
    The Committee is very concerned the Department of State has 
not properly used the resources available in the emergency 
fund. Decisions to provide assistance from the fund for 
refugees in Africa were unnecessarily delayed during the 
current fiscal year, and the Department has been slow to 
respond to appeals from the United Nations High Commissioner on 
Refugees. The Committee requests the Department review the 
procedures for triggering drawdowns from the emergency fund, 
and report to the appropriate committees of the Congress on 
possible changes in law that may be necessary to expedite the 
delivery of needed refugee assistance.

                       anti-terrorism assistance

    Nonproliferation, Anti-terrorism, Demining and Related Programs

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $133,000,000
Fiscal year 1999 request..............................       215,900,000
Committee recommendation..............................       152,000,000
                                                                        

    The Committee fully funds the Administration request for 
the Nonproliferation and Disarmament Fund, Anti-terrorism 
Assistance, export control activities, and the IAEA, and 
increases demining funds by $6,000,000 over last year's level.

                       anti-terrorism assistance

    The Committee supports the Administration's request and 
recommends $21,000,000 for anti-terrorism assistance.

                 nonproliferation and disarmament fund

    The Committee supports the Administration's request and 
recommends $15,000,000 for the Nonproliferation and Disarmament 
Fund. The Committee strongly supports the core nonproliferation 
activities of the NDF which are designed to provide the 
Secretary of State with a flexible funding source to respond to 
urgent, unanticipated nonproliferation activities of immediate 
concern to the United States. Longer term programmatic 
activities should be funded separately and therefore subject to 
the normal conditions for legislative oversight and review.

                          demining activities

    The Committee recommends not less than $26,000,000 for 
demining activities, an increase of $6,000,000 over the fiscal 
year 1998 level. While $24,000,000 less than the request, the 
Committee recommended level represents a 30% increase over last 
year's level. The Committee also notes that the Emergency 
Supplemental Appropriations Act for Fiscal Year 1998 (P.L. 105-
174) provided an additional $28,000,000 for demining related 
activities in Bosnia and Herzegovina and other land mine-
affected countries in the region.

                                  CTBT

    The Committee has carefully reviewed the Administration's 
request for $28,900,000 for the Comprehensive Test Ban Treaty 
(CTBT) Preparatory Commission. The Committee notes that 
previously funding for this activity was provided by another 
subcommittee and the Administration did not consult with the 
Committee prior to requesting this change. As a result, the 
overall fiscal year 1999 funding request for this account is 
significantly higher than anticipated by the Committee. The 
Committee would also note that arms control implementation 
costs are currently funded through the budgets of the 
Department of Defense, Department of Energy, the Arms Control 
and Disarmament Agency and other relevant agencies. The cost of 
these activities would quickly dwarf the Nonproliferation 
account if other arms control implementation activities similar 
to the CTBT were also requested in this account. The Committee 
strongly opposes the transfer of the funding responsibility for 
arms control implementation and verification activities to this 
account.
    The Committee has also been informed by the Senate 
Committee on Foreign Relations that it does not intend to 
consider the CTBT this year. In addition, the Committee notes 
that the Administration is unable to offer a possible date for 
entry into force of the treaty (Article XIV of the treaty 
stipulates that entry into force will not occur until 44 
specific countries listed in Annex 2 of the treaty have 
formally ratified the treaty). In light of these uncertainties 
and the overall budget constraints on the bill, the Committee 
has not assumed full funding for the CTBT Preparatory 
Commission in this account in fiscal year 1999 although neither 
has it specifically prohibited the use of funds for this 
activity.

                          kedo burden sharing

    The Committee continues to strongly believe it is essential 
that other nations share the financial burden in responding to 
the North Korean nuclear threat. The United States stations 
37,000 uniformed Americans in South Korea and spends over 
$2,500,000,000 per year to ensure stability and peace on the 
Korean peninsula. The Committee fully expects other nations to 
do their share and fund the heavy fuel oil component of the 
Agreed Framework. The Committee remains extremely concerned 
that KEDO has assumed nearly $50,000,000 in unpaid obligations 
relating to the delivery of heavy fuel oil. The Committee views 
with the most serious concern any action by the U.S. government 
which assumes debts and obligations absent congressional 
authority and appropriation.

                       Department of the Treasury

                           Debt Restructuring

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $27,000,000
Fiscal year 1999 request..............................        72,000,000
Committee recommendation..............................        36,000,000
                                                                        

    The Committee has provided $36,000,000 for debt 
restructuring for fiscal year 1999. This is $9,000,000 above 
the 1998 level, but $36,000,000 below the request. The 
Committee has included new bill language to allow for the use 
of the authorities available under section 572 of Public Law 
100-461 for concessional debt relief for ``IDA-only'' countries 
in sub-Saharan Africa. Although not requested by the 
Administration, the Africa debt initiative could not be 
implemented absent this language. In addition, discretionary 
authority is provided to allow for the use of up to $2,900,000 
for implementation of improvements in the foreign credit 
reporting system of the United States Government; similar 
authority was provided for fiscal year 1998.
    Three debt restructuring programs are implemented by the 
Administration:
          1. Paris Club debt reduction for the poorest 
        countries, for which $37,000,000 has been requested for 
        fiscal year 1999;
          2. The Debt Buyback/Swap program under the Enterprise 
        for the Americas Initiative, which is operated at no 
        budget cost; and
          3. A new concessional debt forgiveness program for 
        sub-Saharan Africa, for which $35,000,000 has been 
        requested for fiscal year 1999.
    Due to changes implemented this year in the Interagency 
Country Risk Assessment System (ICRAS) regarding the credit 
status of countries eligible for debt restructuring, the 
current budget cost for debt relief for the poorest countries 
has fallen to only $1,400,000. Therefore the Committee is able 
to meet a substantial portion of the request of $35,000,000 for 
the sub-Saharan Africa debt initiative.
    It is the Committee's intention that $1,400,000 be provided 
for debt relief for the poorest, $31,700,000 be available for 
sub-Saharan Africa concessional debt relief, and that up to 
$2,900,000 be used for completing improvements in the foreign 
credit reporting system.
    The Committee requests quarterly reports on obligations 
made from this account, and on the purposes for which the funds 
are obligated. At the beginning of the fiscal year, the 
Administration should provide a report to the Committee 
pursuant to the regular notification procedures of the 
Committees on Appropriations on the intended use of the funds 
provided in this account. Such report should specify the 
countries which would receive debt restructuring during fiscal 
year 1999. The Committee understands that ICRAS credit ratings 
can fluctuate during the year, thus resulting in a change in 
the budget cost necessary to restructure debt. However, the 
allocation of funds suggested in the preceding paragraph is 
based on information provided to the Committee prior to markup. 
If the cost of debt relief for the poorest countries is 
recalculated upward, it will necessitate a decrease in the 
funds allocated for concessional debt relief.
    In addition, at least 30 days prior to the obligation of 
any funds for concessional debt relief for sub-Saharan Africa, 
the Committee directs that the Secretary of the Treasury submit 
a detailed financial plan regarding such debt relief, including 
the criteria used to determine countries that will be eligible 
for such debt restructuring.

                          Foreign credit data

    The Committee is concerned about the quality of credit data 
available to the Department of Treasury for the tracking of 
foreign debt owed to United States government agencies. For 
example, it took four days to document United States credit 
exposure in Indonesia as that country's economic crisis 
emerged. The use of incomplete or inaccurate data can impair 
the ability of the Administration to implement sound 
international financial policies.
    At the direction of the Congress, a program was begun in 
fiscal year 1998 to improve and automate foreign credit data. 
Up to $2,900,000 is available under the Committee's 
recommendation for fiscal year 1999 to complete this important 
project. The Committee expects and directs that all government 
credit agencies will cooperate in this effort, including the 
export financing agencies funded in title I of this Act. The 
inability to account accurately for the status of foreign debt 
owed to these agencies could be an important factor in 
determining the extent to which the Congress provides authority 
to incur further debt.
    In addition, the Committee expects the Administration to 
resume the practice of publishing an annual report on foreign 
loan and loan guarantee data, and encourages the Department of 
Treasury to consult with the Office of Management and Budget, 
the Congressional Budget Office, the appropriate committees of 
the Congress, and other interested parties in determining the 
scope of such annual reports. The Committee requests that the 
Department of Treasury report no later than March 31, 1999, on 
the progress made in resuming such an annual publication.

               International Affairs Technical Assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................  ................
Fiscal year 1999 request..............................        $5,000,000
Committee recommendation..............................  ................
                                                                        

    The Committee is not recommending the establishment of a 
new appropriations account for international technical 
assistance by the Department of Treasury. It is deferring 
consideration of this request, without prejudice. The Committee 
notes that the activities that would be funded through this 
account are available through the ``Development assistance'' 
account of the Agency for International Development.

       United States Community Adjustment and Investment Program

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................  ................
Fiscal year 1999 request..............................       $37,000,000
Committee recommendation..............................  ................
                                                                        

    The Committee is not recommending the establishment of a 
new program for community investment and adjustment within the 
United States. However, should there be an increase in the 
allocation for foreign operations in subsequent stages of the 
appropriations process, the Committee is prepared to approve an 
appropriation for the United States Community Adjustment and 
Investment Program.

                     TITLE III--MILITARY ASSISTANCE

                  Funds Appropriated to the President

             International Military Education and Training

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $50,000,000
Fiscal year 1999 request..............................        50,000,000
Committee recommendation..............................        50,000,000
                                                                        

    The Committee recommends the Administration request of 
$50,000,000 for the International Military Education and 
Training program which represents a freeze at the fiscal year 
1998 level. The Committee recommendation reflects its continued 
support for the IMET program, particularly those new programs 
initiated in the NIS and Central Europe since 1991.

              imet, human rights and economic development

    The Committee continues to support both the IMET program 
and its ``Expanded IMET'' component. The Committee supports a 
substantial human rights component in programs for all IMET 
countries, including information on international human rights 
conventions, human rights law in the recipient's country, 
American human rights law and policy, and appropriate behavior 
by military personnel. The Committee supports the holding of 
IMET field seminars that bring together elements of the 
military and indigenous human rights groups. The Committee also 
supports inclusion of a substantial number of civilian 
employees of foreign governments in IMET programs. The 
Committee believes that the IMET program and its expanded IMET 
component offer the military of other nations full exposure to 
how the United States military performs as a professional, 
highly respected institution in a civil, democratic society 
governed by the rule of law. It remains the Committee's view 
that the attainment of such a military must be a fundamental 
objective of any nation in its pursuit of economic growth and 
prosperity and that the IMET program plays an important role in 
supporting this objective.

                               indonesia

    The Committee includes prior year bill language limiting 
Indonesia to expanded IMET only. It is the Committee's hope 
that expanded IMET training will substantially improve the 
human rights performance of the Indonesian military, as well as 
provide an opportunity for civilians to develop the defense 
related skills necessary for effective civil-military 
relations. The Committee believes this aspect of the IMET 
program could be particularly valuable as the political process 
in Indonesia continues to evolve. Increasing pluralism, 
combined with promised elections, offer an excellent 
opportunity for the Administration to engage civilians, 
representatives of NGOs, parliamentarians, and other 
appropriate individuals in expanded IMET courses specifically 
designed to support civilian control of the military and 
improved civil-military relations in a democratic society. The 
Committee is very disturbed by recent reports that Indonesia 
has been receiving military training from the United States 
under the auspices of the Joint Combined Exchange Training 
(JCET) program. While this training may not have been 
incompatible with the ``letter of the law'' it was certainly 
inconsistent with the ``spirit'' of last year's statutory 
provisions limiting Indonesia to only expanded IMET. In an 
effort to clarify this matter, the Committee emphasizes that it 
remains the Committee's firm belief that at the present time 
all military training for Indonesia should be limited only to 
expanded IMET.

                  report on foreign military training

    The Committee is concerned by recent reports that the 
Administration is engaged in extensive military training of 
foreign military personnel without the benefit of full 
congressional oversight. The situation in Indonesia mentioned 
in the previous paragraph is a notable example of the 
difficulties which can occur when an Administration attempts to 
execute multiple foreign military training programs without 
adequate congressional or executive branch review and 
oversight.
    The Committee therefore includes a new general provision 
(sec. 577) requiring a detailed report on this issue. The bill 
language requires the Secretary of Defense and the Secretary of 
State to jointly provide to the Congress by January 31, 1999, a 
report on all overseas military training provided to foreign 
military personnel under programs administered by the 
Department of Defense and the Department of State during fiscal 
years 1998 and 1999, including those proposed for fiscal year 
1999. This report shall include, for each such military 
training activity, the foreign policy justification and purpose 
for the training activity, the cost of the training activity, 
the number of foreign students trained and their units of 
operation, and the location of the training. In addition, this 
report shall also include, with respect to Untied States 
personnel, the operational benefits to United States forces 
derived from each such training activity and the United States 
military units involved in each such training activity. This 
report may include a classified annex if deemed necessary and 
appropriate. However, the Committee emphasizes strongly that it 
expects this report to be unclassified and believes that the 
classified annex should be used only when necessary to protect 
intelligence sources or methods.

                               East Timor

    The Committee continues to support a peaceful resolution of 
the situation on East Timor. The Committee remains convinced 
that human rights and democratic pluralism in Indonesia must be 
awarded greater respect and protection by the Indonesia 
Government and every effort must be made by the Government to 
ensure that human rights abuses, torture, political 
intimidation and harassment are completely curtailed not only 
in East Timor, but throughout Indonesia. It is the Committee's 
view that the current economic and political changes in 
Indonesia offer a rare opportunity for the Government of 
Indonesia to take bold and innovative steps to deal with the 
East Timor issue. In this regard, the Committee supports an 
internationally supervised referendum to determine a 
comprehensive settlement of the political status of East Timor.

                         School of the Americas

    While funds in this act are not the primary funding source 
for the School of the Americas, the Committee continues to 
carefully review the activities of the School of the Americas 
to make certain that grant IMET funds used to support students 
at the School are being appropriately utilized to support 
United States national security objectives and to improve the 
professionalism of Latin American militaries. As a result, the 
Committee includes prior year bill language which makes clear 
the Committee's intent that the School not engage in any 
inappropriate training activities. To support this objective, 
the Committee withholds the obligation of IMET funds to support 
training at the School of the Americas until the Secretary of 
Defense certifies that the instruction and training provided by 
the School of the Americas is fully consistent with training 
and doctrine, particularly with respect to the observance of 
human rights, provided by the Department of Defense to United 
States military students at Department of Defense institutions 
whose primary purpose is to train United States military 
personnel. It is not the intent of the Committee that ``fully 
consistent'' be interpreted as identical to U.S. training. The 
Committee's concern is specifically with respect to human 
rights training, in which case the Committee believes training 
by the School of the Americas should be fully consistent with 
the United States government's statutory and executive order 
obligations and limitations in this area. In addition, the bill 
requires that the Secretary of Defense submit to the Committees 
on Appropriations by January 15, 1999 a report detailing the 
training activities of the School of the Americas and a general 
assessment regarding the performance of its graduates during 
1997.

                               Guatemala

    The Committee has retained prior year language limiting 
Guatemala to expanded IMET only. The Committee recognizes that 
the peace process is continuing to move forward successfully in 
Guatemala. However, despite this considerable progress, the 
Committee believes it is premature to provide Guatemala with 
full IMET.

                           imet availability

    The Committee has included new language which provides that 
of the funds made available for IMET, $1,000,000 may remain 
available until expended. The Administration requested two year 
availability for IMET, citing unanticipated last minute program 
and course cancellations which have resulted in up to 
$1,000,000 being returned to the Treasury annually. The 
Committee does not concur with the Administration that two year 
availability is necessary to remedy this programming problem.

                     IMET Training in Latin America

    The Committee continues to encourage the Administration to 
make every effort to ensure that approximately 30 percent of 
IMET funds for Latin America will be used to support enrollment 
in expanded IMET courses. In addition the Committee encourages 
the Administration to make every effort to identify sufficient 
numbers of qualified, non-military personnel from countries in 
Latin America so that approximately 25 percent of the total 
number of individuals from Latin American countries attending 
United States supported expanded IMET programs and the Center 
for Hemispheric Defense Studies at the National Defense 
University are civilians. The Committee emphasizes that 
increasing the percentage of civilians from Latin America 
participating in expanded IMET courses should be an 
Administration priority.

                           Global guidelines

    The Committee commends the Administration for developing 
and issuing uniform global guidelines for the screening and 
selection of all IMET candidates, as suggested by the Committee 
in last year's committee report.
    The Committee believes it is important for the 
Administration to implement these new guidelines in a manner 
which ensures embassy human rights officers are participants in 
the evaluation process for candidate screening and selection.

                   Foreign Military Financing Program

                                 grants

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    $3,296,550,000
Fiscal year 1999 request..............................     3,275,910,000
Committee recommendation..............................     3,335,910,000
                                                                        

                         subsidy appropriation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $60,000,000
Fiscal year 1999 request..............................        20,000,000
Committee recommendation..............................        20,000,000
                                                                        

                                 loans

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    ($657,000,000)
Fiscal year 1999 request..............................     (167,000,000)
Committee recommendation..............................     (167,000,000)
                                                                        

    The Committee has recommended $3,335,910,000 in Foreign 
Military Financing grants, and $20,000,000 as a subsidy 
appropriation for loans. The amount provided for the subsidy 
appropriation will support a loan program totaling 
$167,000,000. Thus, the total program level of foreign military 
grants and loans for fiscal year 1999 is $3,502,910,000. This 
program level is $60,000,000 more than the amount requested by 
the President for fiscal year 1999 and $450,640,000 below last 
year's program level for grants and loans.

                                 israel

    The Committee recommends a total Foreign Military Financing 
Program of not to exceed $1,860,000,000 in grants for Israel. 
The Committee expects the Administration to provide Israel the 
full amount included by the Committee in the bill. These funds 
are to be disbursed within thirty days of enactment of this act 
or by October 31, 1998, whichever is later.
    The Committee has included specific bill language 
increasing military assistance as a result of the broad 
dialogue on Israel's aid levels initiated by Israeli Prime 
Minister Netanyahu following his address to a joint session of 
the Congress on July 10, 1996. As noted in the section of the 
committee report entitled ``Israel'' under the heading 
``Economic Support Fund'', it is the Committee's view that 
while Israel's economy has improved significantly in recent 
years, the security situation in the Middle East, particularly 
with respect to weapons of mass destruction, has worsened. The 
Committee is extremely concerned that Israel's technological 
military edge could erode as a result of the unrestrained sales 
of advanced military equipment, including nuclear and ballistic 
missile technology, to Israel's potential adversaries by 
nations such as Russia, China and North Korea. Media reports as 
recently as the spring of this year suggest that Russia, China 
and North Korea were the sources of dangerous weapons of mass 
destruction transfers to the region.
    Therefore, the Committee is convinced the United States 
must make every effort to carry out its long-standing policy of 
ensuring that Israel's technological edge is maintained. As a 
result, the Committee has provided an increase of $60,000,000 
above the President's request for Israel in fiscal year 1999. 
The Committee also believes that a sustained military 
improvement program will be required over the next ten years, 
at an annual rate of approximately $60,000,000, to assist 
Israel in responding to these emerging security challenges. 
However, with respect to this recommended increase in military 
assistance, the Committee must be very clear that it cannot 
commit future Congresses to the future appropriation of funds. 
Therefore, future increases in military assistance will require 
the annual review of the Congress and will necessarily be based 
upon an assessment of the security situation at the time.
    The Committee also recommends that to the extent that the 
Government of Israel requests that FMF grant funds for Israel 
be used for such purposes, and as agreed by Israel and the 
United States, funds may be made available for advanced weapons 
systems of which not less than $490,000,000 shall be available 
for the procurement in Israel of defense articles and defense 
services, including research and development. This represents a 
$15,000,000 increase over prior year levels and reflects a 
recognition by the Committee of Israel's need for similar 
annual increases over the next decade in order to provide 
Israel with increased flexibility in meeting the emerging 
security challenges in the Middle East.

                                 egypt

    The Committee recommends a total Foreign Military Financing 
Program for Egypt of not to exceed $1,300,000,000 in Foreign 
Military Financing grants. The Committee fully appreciates 
Egypt's strategic location, its immediate proximity to Libya 
and Sudan both of which actively support international 
terrorism, its critical contribution during the Gulf War in 
resisting Iraqi aggression, and its essential role in the 
Middle East peace process. The Committee is convinced that 
continued military cooperation between Egypt and the United 
States remains in the national security interests of both 
countries. The Committee also strongly encourages the 
Administration to work with the Government of Egypt to develop 
mechanisms in the security assistance areas which will make our 
assistance to Egypt more flexible and effective. The Committee 
expects the Administration to consult with the Committees on 
Appropriations on the outcome of these discussions.
    The Committee strongly supports an Egyptian acquisition 
program that will improve the interoperability and 
standardization of the Egyptian military in a manner which 
enhances the ability of the United States military and the 
Egyptian military to operate together in a tactically 
compatible manner. This remains one of the most important 
reasons why the Committee continues to support a U.S. military 
assistance program for Egypt which is responsible for a 
significant portion of Egypt's new procurement budget. In this 
regard, the Committee is concerned by recent reports which 
indicate that Egypt is considering significant non-U.S. weapons 
acquisitions from other sources. The Committee believes this 
undercuts one of the main objectives of the U.S. military 
assistance program therefore the Committee intends to closely 
monitor the Egyptian procurement program. In addition, the 
Committee understands that the Government of Egypt is 
considering the acquisition of a tactical command and control 
system for its Army and is also in the process of acquiring a 
Forward Area Air Defense system and steel ribbon mobile pontoon 
bridges. The Committee strongly recommends that the Government 
of Egypt only purchase systems manufactured by a U.S. company 
that are currently fielded and in use by the U.S. Army and 
steel ribbon bridges developed and tested by a U.S. company 
specifically to meet the Egyptian Army's specifications.

                                 jordan

    The Committee strongly supports the Administration's 
efforts to improve Jordanian security and therefore recommends 
full funding of the President's request of $45,000,000 for 
Jordan. Under the able leadership of King Hussein, Jordan plays 
a critical role in supporting peace and security in the Middle 
East. The Committee is well aware that Jordan's security 
requirements are extensive, particularly in the areas of ground 
force modernization and border security. Therefore the 
Committee has included prior year language providing 
$25,000,000 in Department of Defense drawdown authority to 
assist Jordan in meeting these needs.

                                Tunisia

    The Committee notes the strong relationship which exists 
between Tunisia and the United States. Given Tunisia's 
important role in North Africa, the Committee urges the 
Administration to review the military assistance program for 
Tunisia to determine if it can be made more effective, 
particularly in the areas of excess defense articles, IMET and 
FMF funds.

                     partnership for peace nations

    The Committee continues to strongly support the Partnership 
for Peace (PFP) program. The Committee believes the 1999 
request will continue to enhance security and stability in 
Europe by promoting the standardization and interoperability, 
as well as the continued downsizing, of the armed forces of 
participating nations, particularly those of nations most 
likely to become new NATO members. The fiscal year 1999 request 
for $80,000,000 represents a $14,350,000 decrease from the 
amounts allocated for the PFP program in fiscal year 1998.

                   partnership for peace notification

    The Committee continues prior year language which requires 
that no FMF grant assistance shall be available for any non-
NATO country participating in the Partnership for Peace Program 
except through the regular notification procedures of the 
Committees on Appropriations.

                     Latin American Arms Transfers

    The Committee urges the Administration to carefully assess 
the security implications of last year's decision to lift the 
U.S. ban on high technology weapons sales to Latin America. The 
Committee further urges the Administration to discuss with 
Latin American nations broad arms transfer principles which 
would allow those nations to meet their security concerns 
without spending scarce economic resources or sparking an arms 
race in the region.

                        administrative expenses

    The Committee has continued a limitation on administrative 
expenses of $29,910,000, the level requested by the 
Administration. The Committee expects the Department of Defense 
to carefully review administrative expenses in an effort to 
reduce expenditures.

                  foreign military financing surcharge

    The Committee has continued a limitation on Foreign 
Military Financing operating costs of $340,000,000, unless 
notified through the Committee's fifteen day notification 
process. This is $10,000,000 less than last year .

                          excess subsidy costs

    The Committee continues prior year language allowing the 
subsidy costs of direct loans to be used to supplement funds 
available for grants under certain conditions and vice versa.

                          fmf expenditure rate

    The Committee continues prior year language that requires 
that Foreign Military Financing funds be expended at the 
minimum rate necessary to make timely payments for defense 
articles and services.

                                 loans

    The Committee has included a provision in the bill limiting 
loans to $167,000,000.

                           fmf loan criteria

    The Committee is providing the Administration's full 
request for the FMF loan program with the understanding that 
FMF loans will not be made available to countries with an ICRAS 
rating below C-.

                         procurement agreements

    The Committee has continued prior year language requiring 
recipients of Foreign Military Financing to sign agreements 
with the United States prior to using FMF funds to finance the 
procurement of any item not sold by the United States under the 
Arms Export Control Act.

                              prohibitions

    The Committee has included bill language prohibiting 
military assistance to Sudan and Liberia. The Administration 
did not request military assistance for these countries for 
fiscal year 1999. Although the Committee notes the continued 
implementation of the Guatemalan peace agreement, the Committee 
believes it is premature to remove the prohibition on military 
assistance for Guatemala in fiscal year 1999. The Committee is 
aware that $2,577,000 in previously appropriated Foreign 
Military Financing Funds remain available for Guatemala. The 
Committee expects that these funds will be used in support of 
the Peace Accords in a timely manner and in full consultation 
with the Committee.

                         peacekeeping training

    The Committee notes that the Administration is requesting 
$13,000,000 in FMF funds to support peacekeeping related 
training and other peacekeeping support activities. This in 
addition to funds requested for 1999 in the ``Peacekeeping 
Operations'' account.

                        Peacekeeping Operations

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $77,500,000
Fiscal year 1999 request..............................        83,000,000
Committee recommendation..............................        62,250,000
                                                                        

    The Committee recommends $62,250,000 for voluntary 
contributions for International Peacekeeping Operations. This 
amount is $15,250,000 below the level provided in fiscal year 
1998 and $20,750,000 below the President's request. The 
Committee notes that the Administration has also requested 
$13,000,000 in FMF funds for peacekeeping training and 
activities in Africa and to support the Enhanced Peacekeeping 
Initiative.

                   african crisis response initiative

    The Committee continues to support the Administration's 
African Crisis Response Initiative and recommends full funding 
for this activity at the President's request level. The 
Committee remains supportive of efforts to develop an African 
regional capability to respond to low-intensity peacekeeping 
activities either in lieu of United States troops or in 
cooperation with them. In the past the Committee has been 
assured by the Administration that the command arrangements 
will be sub-regional, regional, possibly with United States or 
West European participation depending on the situation, and 
when appropriate or requested by African states or 
organizations, UN sanctioned.

            voluntary contributions to war crimes tribunals

    The Committee strongly supports the efforts of the two war 
crimes tribunals in their work to ensure the impartial 
administration of justice regarding war crimes committed during 
the Bosnian and African Great Lakes conflicts. The Committee is 
encouraged the Administration has announced plans to provide 
$1,100,000 as a voluntary contribution for an investigation of 
recent events in Kosovo, as well as ``in kind'' contributions 
to enable the Yugoslav tribunal to build two new courtrooms in 
the Hague. To further this effort, $3,000,000 of the funds 
appropriated in this act should be provided to the tribunals as 
voluntary contributions. However, the Committee notes that most 
of the funds for these activities is provided through assessed 
contributions to the United Nations. In addition, the Committee 
is aware of a report issued on March 11, 1997, by the Secretary 
General of the United Nations on the 1997 resource requirements 
for the International Tribunal for the Former Yugoslavia. This 
report was prepared by the Under Secretary General for Internal 
Oversight Services, and recommended a number of steps to reduce 
costs and establish procedures for assessing resource needs. 
The Committee strongly supports additional funding for the 
tribunals, if such funding is justified consistent with 
established budgeting standards.

               TITLE IV--MULTILATERAL ECONOMIC ASSISTANCE

     Contribution to the International Bank for Reconstruction and 
                              Development

                  World bank and global AIDS epidemic

    The Committee commends the World Bank for increasing its 
attention to the world AIDS epidemic which is undermining 
economic growth in the developing world. The epidemic has 
already claimed 12 million lives and every day 16,000 people 
throughout the world are newly infected with the virus which 
causes AIDS. The Committee strongly urges the Administration to 
work with the World Bank on initiatives to address global AIDS, 
including consideration of the creation of an International 
Vaccine Purchase Fund.

                Energy and Environment at the World Bank

    The World Bank is reported as lending less than 2 percent 
of its portfolio to energy efficiency, demand-side management, 
and renewable energy development. It could be doing much more, 
based on demand and the importance of the energy sector to the 
global environment. The Committee urges the Secretary of the 
Treasury to work with the Bank management to substantially 
increase Bank energy sector lending in areas where private 
sector funding is not available.

                            Inspection panel

    The Committee believes that the current inspection panel 
should be extended to both the International Finance 
Corporation and the Multilateral Investment Guarantee Agency. 
The existing Bank Inspection Panel should maintain the 
authority to review claims for their merit and basis and decide 
whether or not to undertake a further investigation of a 
project.

                       loans to terrorist states

    The Committee continues to support the basic principles and 
objectives of the World Bank Group. This support would be 
gravely weakened if the World Bank made loans to Iran, a 
country that has openly supported international terrorism.

            Contribution to the Global Environment Facility

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $47,500,000
Fiscal year 1999 request..............................       300,000,000
Committee recommendation..............................        42,500,000
                                                                        

    The Committee recommends $42,500,000 for the Global 
Environment Facility (GEF), administered by the International 
Bank for Reconstruction and Development (IBRD). The 
recommendation is $7,500,000 above the 1997 and $5,000,000 
below the 1998 enacted levels. The Administration requested a 
sixfold increase in GEF for 1999, of which $107,500,000 is 
designated for the initial installment of a four-year 
replenishment of GEF.
    Funding for this relatively new international financial 
institution is complicated, in the Committee's view, by its 
identification as a prime funding mechanism of the United 
Nations Framework Convention on Climate Change. As a result, 
the Committee has been made aware of the concern that prior to 
Senate ratification or the submission of implementing 
legislation to the House of Representatives, the Administration 
may use the GEF to implement the Kyoto Protocol.
    There are other matters to consider. The Committee is also 
aware that all of GEF's field activity is carried out by other 
implementing agencies, which themselves rely on contractors and 
non-government organizations. At least one of the implementing 
agencies is plagued by management problems and does not rate 
well in GEF's own evaluations.
    The Committee recognizes that the GEF predates the Kyoto 
Protocol by six years and that it implements projects only in 
developing nations and several emerging economies in Eastern 
and Central Europe, whereas the Kyoto Protocol only applies to 
emissions reductions in the developed nations. Since 1991, the 
GEF has implemented over 500 projects in 119 countries, and 
nearly half of those are designed to conserve areas of high 
biological diversity, while about a third of its projects 
involve climate-change activities.
    The Committee's budget allocation makes it difficult to 
consider the request for a new replenishment of GEF without 
sacrificing important ongoing programs. Consideration of the 
request for past due payments of $192,500,00, which in effect 
do not count against the budget allocation, comes after two 
years of House approval of low GEF levels of $30,000,000 for 
fiscal year 1997 and of $35,000,000 for fiscal year 1998. In 
consideration of recent House action on GEF, its own structure, 
and the belief by some that the overall request of $300,000,000 
is an expensive and futile attempt to secure developing world 
participation in the emissions limitations of the Kyoto 
Protocol, the Committee recommends an appropriation of 
$42,500,000.
    It is the Committee's view that GEF resources for 
biodiversity conservation should be directed to countries where 
the highest levels of diversity and species can be found. The 
Committee urges the GEF Secretariat to redouble its efforts in 
Latin America, a region that possesses more than half of the 
world's remaining tropical rain forests. The Committee notes 
that in many developing countries, NGOs have superior capacity 
and expertise to implement biodiversity conservation projects, 
and the United States should continue to press for improved 
access for NGOs to GEF funding.

       Contribution to the International Development Association

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    $1,034,503,100
Fiscal year 1999 request..............................       800,000,000
Committee recommendation..............................       800,000,000
                                                                        

    The Committee is providing $800,000,000 toward the U.S. 
contribution to the Eleventh Replenishment of the International 
Development Association, a reduction of $234,505,100 below the 
1998 enacted level. This is the amount requested by the 
Administration.

                             ida and china

    The Committee strongly urges the Administration to oppose 
further IDA loans to the People's Republic of China in light of 
its current strong economic performance and its abysmal human 
rights record. China should be graduated from IDA, as 
recommended by the Department of Treasury, and this 
recommendation should be implemented as soon as possible.

                   International Finance Corporation

    The Committee is concerned that the Secretary of the 
Treasury has not convinced the International Finance 
Corporation (IFC) to implement policies consistent with the 
provisions of section 560(b) of P.L. 105-118, also known as the 
``Pelosi amendment'', and directs the Secretary of the Treasury 
to ensure its implementation. The Committee believes that the 
IFC should operate by the same policies as the other members of 
the World Bank Group. Specifically, the IFC should comply with 
the World Bank's environment and social policies, including 
policies on poverty reduction, gender, and energy efficiency. 
The IFC should also ensure that locally affected people are 
consulted about projects during the project design and should 
require that there be public consultation required for all 
category A and B projects that affect communities.

          Contribution to the Inter-American Development Bank

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $25,610,667
Fiscal year 1999 request..............................        25,610,667
Committee recommendation..............................        25,610,667
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal 1998 level.....................................  ($1,503,718,910)
Fiscal 1999 request...................................   (1,503,718,910)
Committee recommendation..............................   (1,503,718,910)
                                                                        

                      Fund for Special Operations

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $20,835,000
Fiscal year 1999 request..............................        21,152,000
Committee recommendation..............................        21,152,000
                                                                        

    The Committee has recommended funding for Inter-regional 
paid-in capital of $25,610,667 for fiscal year 1998, the same 
amount as the President's request for the Inter-American 
Development Bank. The Committee has recommended a limitation on 
callable capital of $1,503,718,910 for fiscal year 1999.
    The President of the Inter-American Development has kept 
the Committee fully informed of the Bank's activities in 
Washington and in Latin America, where members had the 
opportunity to visit with him in the field. The Committee 
appreciates his candor and responsiveness.
    The Committee welcomes the report that the Bank is 
supporting the early-stage development of a new Regional Fund 
for Agricultural Technology, FONTAGRO, which is to finance a 
Western Hemisphere program of competitive agricultural research 
grants, drawing on the earnings of an endowment, targeted at 
$200,000,000. More than a dozen countries in Latin America and 
the Caribbean have recently pledged over $100,000,000. FONTAGRO 
is now beginning to cooperatively engage the United States 
agricultural research community in aspects of its management, 
in individual projects of technology development, and 
eventually, in financing and cost-sharing. This initiative 
complements the Committee's efforts to restore the USAID's 
leadership role in global agricultural and rural development 
activity.

                      fund for special operations

    The Committee recommends $21,152,000 for fiscal year 1999 
for the soft-loan Fund for Special Operations, the same as the 
amount requested and $317,000 less than the fiscal year 1998 
level. The Committee notes that Inter-American Development Bank 
management is considering a plan to make the FSO self-
sustaining within a few years. Confirmation of this graduation 
policy will be of interest to the Committee.

                      Multilateral Investment Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $30,000,000
Fiscal year 1999 request..............................        50,000,000
Committee recommendation..............................        50,000,000
                                                                        

    The Committee recommends the requested level of 
$50,000,000, all of which is past due.

               Contribution to the Asian Development Bank

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $13,221,596
Fiscal year 1999 request..............................        13,221,596
Committee recommendation..............................        13,221,596
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    ($647,858,204)
Fiscal year 1999 request..............................     (647,858,204)
Committee recommendation..............................     (647,858,204)
                                                                        

               Contribution to the Asian Development Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $150,000,000
Fiscal year 1999 request..............................       250,000,000
Committee recommendation..............................       210,000,000
                                                                        

    The Administration is requesting $13,221,596 for paid-in 
capital and a limitation of $647,858,204 on callable capital 
subscriptions (which do not require appropriations) of the 
Asian Development Bank. The Committee recommends an amount that 
is the same as the request and the 1998 enacted level.
    The recommendation for the soft-loan Asian Development Fund 
is $210,000,000, $60,000,000 above the amount provided in 
fiscal year 1998, but $40,000,000 less than the amount 
requested. The reduction is made solely because of the limited 
budget allocation available.
    The Committee commends the United States Executive Director 
at the Asian Bank for her leadership in convincing her 
colleagues to act forcefully on two matters of concern to the 
Committee: (1) the establishment of thorough and effective 
anti-corruption mechanisms for the Bank and its members, and 
(2) its consideration of gender issues, especially the 
disproportionate loss of jobs by women in countries impacted by 
the East Asian crisis.

              Contribution to the African Development Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $45,000,000
Fiscal year 1999 Budget Estimate......................       155,000,000
Committee recommendation..............................       128,000,000
                                                                        

    The recommendation for the soft-loan African Development 
Fund is $128,000,000, $83,000,000 above the amount provided in 
fiscal year 1998, but $27,000,000 less than the amount 
requested. The percentage reductions from the requests for the 
Asian and African Development Funds are equal.

                            capital markets

    In order to attract private foreign and domestic capital, 
Africa must develop financial markets and systems that merit 
the trust and confidence of the international investment 
community. Such trust and confidence is built on capital 
markets that exhibit integrity, efficiency and openness. The 
Committee urges the African Development Fund, which is the 
recipient of a significant increase in funding, to designate a 
significant amount of resources for the development of modern 
capital markets in Africa.

                                Nigeria

    The Committee is encouraged by the release of political 
prisoners and the stated commitment to continue the transition 
to civilian democratic rule by the Nigerian military 
government, since the death of General Sani Abacha. Numerous 
problems remain and the substance of the commitments remains to 
be demonstrated, particularly in the areas of corruption, 
environmental degradation, lack of basic rights and freedoms, 
and impunity. The Committee is especially concerned about past 
and ongoing environmental degradation and human rights abuses 
in the Ogoni lands. The Committee urges the U.S. Executive 
Director at the African Development Fund and other 
international financial institutions to condition lending to 
Nigeria on the continuation of a genuine transition to 
democracy and civilian government.

  Contribution to the European Bank for Reconstruction and Development

                            paid-in capital

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................       $35,778,717
Fiscal year 1999 request..............................        35,778,717
Committee recommendation..............................        35,778,717
                                                                        

                    (Limitation on callable capital)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................    ($123,237,803)
Fiscal year 1999 request..............................     (123,237,803)
Committee recommendation..............................     (123,237,803)
                                                                        

    The Committee is recommending $35,778,717 for the European 
Bank for Reconstruction and Development. This amount is 
identical to the appropriation provided in fiscal year 1998 and 
the same as the President's request.
    The Committee intends to closely monitor the EBRD's role in 
financing nuclear power plants in Ukraine. The Bank's current 
sound financial status and good name is largely due to its 
outgoing president, who deserves the thanks of all member 
countries for his role in restoring the integrity and 
reputation of the EBRD under difficult circumstances.

                      International Monetary Fund

      Contribution to the Enhanced Structural Adjustment Facility

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................                 0
Fiscal year 1999 request..............................        $7,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee is unable to recommend any funding in fiscal 
1999 for the Enhanced Structural Adjustment Facility of the 
International Monetary Fund. The President requested $7,000,000 
for this purpose, less than 30 percent of the amount requested 
and denied in fiscal year 1996 and the same as the amount 
denied in fiscal years 1997 and 1998.

                International Organizations and Programs

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................      $192,000,000
Fiscal year 1999 request (under fiscal year 1998                        
 account structure)...................................       214,000,000
Committee recommendation..............................       157,250,000
                                                                        

    The Committee is recommending $157,250,000 for 
International Organizations and Programs. This is $34,750,000 
below the fiscal year 1998 level and $156,750,000 below the 
President's request. However, as in fiscal year 1998, the 
Committee has shifted $100,000,000 for a grant to UNICEF from 
this account to ``Child Survival and Disease Programs Fund'' 
under title II. Therefore, on a comparable basis, the 
recommendation is $56,750,000 below the President's request.
    The Committee recommendation prohibits funding for the 
United Nations Population Fund (UNFPA), resulting in a savings 
of $25,000,000. Despite the opposition of the United States, 
UNFPA has decided to reestablish programs in China. The 
Committee believes that such programs could indirectly 
subsidize the policies of forced abortion and involuntary 
sterilization that exist in portions of that country. The 
Committee strongly opposes these egregious violations of human 
rights, and therefore is recommending that no funding be 
provided for UNFPA.
    The Committee recommendation also includes bill language 
prohibiting the use of funds for the Korean Peninsula Energy 
Development Organization (KEDO) or the International Atomic 
Energy Agency (IAEA). Both organizations are funded under 
``Nonproliferation, anti-terrorism, demining and related 
programs''.
    The Committee supports the stated policy of the United 
States Government to support Taiwan's membership in 
international organizations accepting non-states as members, 
and to look for ways to have Taiwan's voice heard in 
organizations of states where Taiwan's membership is not 
possible.
    The Committee supports the implementation of international 
treaties through international commissions, such as the 
International Whaling Commission, based on science-based 
solutions. International conservation efforts should be 
premised on scientific principles.

                             funding levels

    With the exception of UNFPA, the Committee recommendation 
results in a reduction of $9,750,000 from the 1998 level for 
the activities funded through this account. The Committee 
supports funding for the World Food Program and the United 
Nations Voluntary Fund for Victims of Torture at least at the 
1998 final allocation levels. The Committee also supports the 
programs of the United Nations Development Program and the 
international conservation agencies funded through this 
account.

                 Government Performance and Results Act

    The Committee considers the full and effective 
implementation of the Government Performance and Results Act, 
P.L. 103-62, to be a priority for all agencies of government.
    Starting with fiscal year 1999, the Results Act requires 
each agency to ``prepare an annual performance plan covering 
each program activity set forth in the budget of such agency''. 
Specifically, for each program activity the agency is required 
to ``establish performance goals to define the level of 
performance to be achieved by a program activity'' and 
``performance indicators to be used in assessing the relevant 
outputs, service levels, and outcomes of each program 
activity''.
    The Committee takes this requirement of the Results Act 
seriously and plans to carefully examine agency performance 
goals and measures during the appropriations process. As a 
result, starting with the fiscal year 1999 appropriations 
cycle, the Committee considered agencies progress in 
articulating clear, cost-effective, and results-oriented 
(outcome) goals and measures as it reviewed requests for 
appropriations.
    The Committee suggests agencies examine their program 
activities in light of their strategic goals to determine 
whether any changes or realignments would facilitate a more 
accurate and informed presentation of budgetary information. 
Agencies are encouraged to consult with the Committee as they 
consider such revisions prior to finalizing any requests 
pursuant to 31 U.S.C. 1104. The Committee will consider any 
requests with a view toward ensuring that fiscal year 2000 and 
subsequent budget submissions display amounts requested against 
program activity structures for which annual performance goals 
and measures have been established.

                      TITLE V--GENERAL PROVISIONS

    The Committee recommends that several of the general 
provisions carried in the fiscal year 1998 act be deleted. 
These provisions are either addressed elsewhere in permanent 
law, have been considered by the appropriate authorizing 
committee, or are no longer necessary.
    The Committee has recommended the following new and revised 
general provisions.
    Sec. 512, ``Limitation on Assistance to Countries in 
Default'' is modified by making Brazil and the Democratic 
Republic of Congo waiver eligible countries.
    Sec. 517, ``New Independent States of the Former Soviet 
Union'' incorporates language included in the fiscal year 1988 
act as 7 subsections under the heading ``Assistance to the New 
Independent States of the Former Soviet Union'' from title II.
    Sec. 518A, ``Foreign Organizations that Perform or Promote 
Abortion Overseas; Forced Abortion in the People's Republic of 
China'', would amend the Foreign Assistance Act to prohibit 
funds for population planning organizations that perform 
abortions in foreign countries or engage in any activity to 
alter the laws or governmental policies of any foreign country 
regarding abortion; would permit the President to waiver the 
restriction on performance of abortion, but impose a limitation 
of $356,000,000 if such waiver is exercised; and would prohibit 
funds for the UN Population Fund unless certain certifications 
are made regarding activities in the People's Republic of 
China.
    Sec. 519, ``Excess Defense Articles for Central European 
Countries'' amends Section 105 of Public Law 104-164 to make 
Central European Countries eligible in fiscal year 1999 and 
fiscal year 2000 for receipt of excess defense articles.
    Sec. 520, ``Special Notification Requirements'' is modified 
to add Honduras.
    Sec. 522, ``Child Survival, AIDS, and other activities'' is 
modified by including authority to use funds provided under 
title II for the purposes of section 301 of the Foreign 
Assistance Act and by clarifying existing provisions relating 
to ``child survival'' to include ``child survival and disease 
programs''.
    Sec. 524, ``Reciprocal Leasing'' is modified by extending 
the authority through fiscal year 1999.
    Sec. 527, ``Democracy in China'' is a new section providing 
authority to utilize the Economic Support Fund to support 
nongovernmental organizations located outside China if their 
primary purpose is to foster democracy in China.
    Sec. 538, ``Special Authorities'' is modified to add 
Montenegro to the list of countries exempt from restrictions 
affecting assistance under titles I and II, and to remove 
tropical forestry and energy programs from the list of 
activities exempted from restrictions affecting assistance 
under sections 103 through 106 of the Foreign Assistance Act.
    Sec. 540, ``Anti-Narcotics Activities'' is modified to 
remove redundant language affecting section 534 of the Foreign 
Assistance Act, as proposed in the budget request.
    Sec. 544, ``Prohibition on Publicity or Propaganda'' 
increases the funding ceiling for activities authorized under 
section 316 of P.L. 96-533 from $500,000 to $950,000.
    Sec. 553, ``Landmines'' is modified by deleting a one-time 
reporting requirement.
    Sec. 560, ``Limitation on Assistance for Haiti'', also 
known as the Dole Amendment, is modified by: limiting the 
waiver, clarifying the term ``completed privitization'', 
establishing a benchmark for measuring Government of Haiti 
cooperation with the United States in investigating 
extrajudicial killings, and excepting support for political 
parties, urgent humanitarian needs, and law enforcement 
activities, from the limitation. Certain reporting requirements 
are also added.
    Sec. 567, ``Restrictions on Assistance to Countries 
Providing Sanctuary to Indicted War Criminals'' is modified by 
listing Montenegro and Serbia separately in lieu of ``Serbia-
Montenegro (Federal Republic of Yugoslavia)''.
    Sec. 568, ``Additional Requirements Relating to Stockpiling 
of Defense Articles for Foreign Countries'' is modified by 
amending the Foreign Assistance Act to provide that not more 
than $320,000,000 may be made available for stockpiles in the 
Republic of Korea and not more than $20,000,000 may be made 
available for stockpiles in Thailand.
    Sec. 573, ``Enterprise Fund Restrictions'' is a new section 
providing that prior to the distribution of any assets 
resulting from any liquidation, dissolution, or winding up of 
an Enterprise Fund, in whole or in part, the President shall 
submit to the Committees on Appropriations, in accordance with 
the regular notification procedures of the Committees on 
Appropriations, a plan for the distribution of the assets of 
the Enterprise Fund.
    Sec. 574, ``Cambodia'' combines an existing general 
provision relating to multilateral assistance for Cambodia with 
language from title II of the fiscal year 1998 act regarding 
restrictions on bilateral assistance to Cambodia.
    Sec. 576, ``Authorization for Population Planning'' retains 
a funding limitation of $385,000,000 for population planning 
activities that was included in the 1998 act, but deletes a 
provision that would have apportioned such funds on a monthly 
basis at a level of not to exceed 8.34 percent of the total 
available for such activities.
    Sec. 577, ``Report on Foreign Military Training'' is a new 
provision that requires a report on foreign military training 
funding for 1998 and 1999, and that specifies the scope of the 
report.
    Sec. 578, ``Korean Peninsula Energy Development 
Organization'', would prohibit funds for a voluntary 
contribution to, or assistance for, the Korean Peninsula Energy 
Development Organization (KEDO).
    Sec. 579, ``Repeal of Restrictions on Assistance'', would 
repeal section 907 of the FREEDOM Support Act.

               provisions retained from fiscal year 1998

    The following general provisions from the fiscal year 1998 
act are retained in the fiscal year 1999 act unchanged except 
for technical corrections and new section numbers where 
appropriate:
    Sec. 501. Obligations During Last Month of Availability.
    Sec. 502. Prohibition of Bilateral Funding for 
International Financial Institutions.
    Sec. 503. Limitation on Residence Expenses.
    Sec. 504. Limitation on Expenses.
    Sec. 505. Limitation on Representational Allowances.
    Sec. 506. Prohibition on Financing Nuclear Goods.
    Sec. 507. Prohibition Against Direct Funding of Certain 
Countries.
    Sec. 508. Military Coups.
    Sec. 509. Transfers Between Accounts.
    Sec. 510. Deobligation/Reobligation Authority.
    Sec. 511. Availability of Funds.
    Sec. 513. Commerce and Trade.
    Sec. 514. Surplus Commodities.
    Sec. 515. Notification Requirements.
    Sec. 516. Limitation on Availability of Funds for 
International Organizations and Programs.
    Sec. 518. Prohibition on Funding for Abortions and 
Involuntary Sterilization.
    Sec. 521. Definition of Program, Project, and Activity.
    Sec. 523. Prohibition Against Indirect Funding to Certain 
Countries.
    Sec. 525. Notification on Excess Defense Equipment.
    Sec. 526. Authorization Requirement.
    Sec. 528. Commercial Leasing of Defense Articles.
    Sec. 529. Competitive Insurance.
    Sec. 530. Stingers in the Persian Gulf Region.
    Sec. 531. Debt for Development.
    Sec. 532. Separate Accounts.
    Sec. 533. Compensation for U.S. Executive Directors to 
International Financial Institutions.
    Sec. 534. Compliance with United Nations Sanctions against 
Iraq.
    Sec. 535. Competitive Pricing for Sales of Defense 
Articles.
    Sec. 536. Authorities for the Peace Corps, The Inter-
American Foundation and the African Development Foundation.
    Sec. 537. Impact on Jobs in the United States.
    Sec. 539. Policy on Terminating the Arab League Boycott of 
Israel.
    Sec. 541. Eligibility for Assistance.
    Sec. 542. Earmarks.
    Sec. 543. Ceilings and Earmarks.
    Sec. 545. Purchase of American-made Equipment and Products.
    Sec. 546. Prohibition of Payments to UN Members.
    Sec. 547. Consulting Services.
    Sec. 548. Private Voluntary Organizations--Documentation.
    Sec. 549. Prohibition on Assistance to Foreign Countries 
that Export Lethal Military Equipment to Countries Supporting 
International Terrorism.
    Sec. 550. Withholding of Assistance for Parking Fines Owed 
by Foreign Countries.
    Sec. 551. Limitation on Assistance for the PLO for the West 
Bank and Gaza.
    Sec. 552. War Crimes Tribunal Drawdown.
    Sec. 554. Restrictions Concerning the Palestinian 
Authority.
    Sec. 555. Prohibition on Payment of Certain Expenses.
    Sec. 556. Equitable Allocation of Funds.
    Sec. 557. Special Debt Relief for the Poorest.
    Sec. 558. Authority to Engage in Debt Buybacks or Sales.
    Sec. 559. Sanctions Against Countries Harboring War 
Criminals.
    Sec. 561. Requirement for Disclosure of Foreign Aid in 
Report of Secretary of State.
    Sec. 562. Restrictions on Voluntary Contributions to United 
Nations Agencies.
    Sec. 563. Limitation on Assistance to the Palestinian 
Authority.
    Sec. 564. Limitation on Assistance to the Government of 
Croatia.
    Sec. 565. Limitation on Assistance to Security Forces.
    Sec. 566. Limitations on Transfer of Military Equipment to 
East Timor.
    Sec. 569. Requirements for the Reporting to Congress of the 
Costs to the Federal Government associated with the Proposed 
Agreement to reduce Greenhouse Gas Emissions.
    Sec. 570. Withholding Assistance to Countries Violating 
United Nations Sanctions Against Libya.
    Sec. 571. Aid to the Government of the Democratic Republic 
of the Congo.
    Sec. 572. Assistance for the Middle East.
    Sec. 575. Export Financing Transfer Authorities.

               TITLE VI--INTERNATIONAL MONETARY PROGRAMS

         United States Quota in the International Monetary Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................                 0
Fiscal year 1999 request..............................   $14,500,000,000
Committee recommendation..............................                 0
                                                                        

    The Committee defers without prejudice action at this time 
on the full appropriation of $14,500,000,000, as requested by 
the President for the International Monetary Fund.
    Having considered many constructive suggestions from 
Members of Congress, former senior officials in the Executive 
branch, and experts from the academic and business communities, 
the Committee concludes that American jobs and economic growth 
are at great risk from the international economic crisis in 
East Asia. The inert posture taken by Japan, which should be a 
catalyst for the region's recovery, is beyond comprehension. If 
Japan and Europe fail to take a more active role in the East 
Asian crisis, the global economy is facing its most difficult 
period since the 1930s. Neither Japan nor any major industrial 
nation of Europe will seek loans from the IMF; none has done so 
since 1978.
    However urgent the need for $17.9 billion in credit from 
the United States and a much greater amount from other nations, 
Western leadership and radical institutional reform is no less 
urgent. United States Treasury and Federal Reserve officials 
who represent the United States in the IMF and other 
international financial institutions can secure the additional 
funds requested. The necessary precondition is that they first 
convince a majority of their counterparts in other major 
industrial and developing nations that genuine reform, as 
suggested by this legislation, is the precondition for any 
additional United States appropriations
    Although the IMF may be able to meet its commitments in 
East Asia from existing resources, the Committee's 
recommendation is based upon global concerns. The Committee is 
aware of claims that the IMF may not have enough credit to 
backstop nations in the Western Hemisphere and elsewhere 
outside of East Asia that are currently implementing sound 
economic policies, but are, nonetheless, threatened by panic or 
speculation. Further, the Committee is aware of evidence that 
the IMF, in consultation with the United States Treasury, made 
serious errors and omissions in its surveillance of East Asia's 
``miracle economies'' in 1997 and 1998. The Committee suggests 
that the IMF must take its lessons to heart by accelerating its 
own reform process before it can prudently use the additional 
resources made available directly and indirectly by this 
legislation.

                 Measures to Protect American Industry

    The financial crisis in Asia over the past year has had a 
devastating effect on a number of American industries. 
Uncompetitive trade practices, such as tariffs, market 
targeting, subsidization, and non-tariff barriers, had already 
crippled many vital industries prior to development of the 
Asian financial crisis. The semiconductor, automobile, steel, 
shipbuilding, textile, apparel, and forest and paper product 
industries have been severely affected by these practices and 
could face ruin unless there is strict enforcement and 
oversight of stabilization programs promoted by international 
financial institutions.
    The Committee in its consideration of requests for the IMF 
and the NAB seeks to do its utmost to protect these American 
industries and workers from the unintended, adverse 
consequences of stabilization programs that tolerate the 
continuation of predatory practices of certain East Asian 
governments. The Committee has been informed that the IMF 
stabilization packages are designed to sever the link between 
the government, financial sector, and corporate conglomerates 
in a way that allows companies that do not conform to market 
mechanisms to fail. While not unaware of the social impact of 
this process on Asian workers, the Committee cannot support 
restoration of East Asian economies largely at the expense of 
American workers.
    The reports required by Section 602 and the commitments 
made by the Department of the Treasury regarding use of IMF 
funds to unfairly assist corporate conglomerates are an initial 
step toward resolving this problem. Codification of these 
commitments may be necessary at a subsequent stage in the 
legislative process should current undertakings fail. The 
Committee strongly encourages the Secretary of Commerce and the 
United States Trade Representative to monitor the effects of 
the Asian economic crisis on the semiconductor, shipbuilding, 
paper and forest products, steel, automobile, glassware, and 
textile industries. This analysis shall include the collection 
of data on the volume and prices of imports, industry data, and 
accounting information from Asian producers. Where imports have 
risen rapidly, on a volume or value basis, either absolutely or 
as a percentage of domestic consumption, the Secretary of 
Commerce shall work with the affected industry to determine 
whether United States trade laws should be invoked to offset 
injury or potential injury to the industry.

                        IMF Tax Allowance Policy

    The Committee finds that the International Monetary Fund's 
practice of issuing tax allowances to certain employees (of 
whatever nationality) to be undesirable. It finds no compelling 
reason why certain employees of the IMF, an institution with 
significant influence over the tax policies of nations 
worldwide, should be largely isolated from the tax policies of 
their home countries through the use of the Fund's tax 
allowance. Indeed, this is potentially harmful to the extent 
that it isolates employers from everyday economic realities. 
This policy also raises the question of why a certain class of 
U.S. taxpayers should have its tax burden deliberately and 
significantly lightened through the use of IMF resources, which 
derive in part from American taxpayers. While the Committee 
understands that the origin of this policy was to establish 
equity among IMF employees, any value in equalizing salaries is 
outweighed by the above-stated shortcomings. The Committee 
therefore strongly encourages the U.S. Executive Director of 
the Fund to work against this practice at the IMF. It is 
expected that this will be a vigorous effort by the 
Administration to strike this problematic practice.

                       New Arrangements to Borrow

                                                                        
                                                                        
                                                                        
Fiscal year 1998 level................................                 0
Fiscal year 1999 request..............................    $3,361,000,000
Committee recommendation..............................     3,361,000,000
                                                                        

    The Committee recommends an appropriation of 
$3,361,000,000, the same amount requested by the 
Administration. The New Arrangements to Borrow (NAB) is a 
contingent loan arrangement in support of the International 
Monetary Fund. The NAB is somewhat similar to the General 
Arrangements to Borrow (GAB) for which United States 
participation was approved on two previous occasions, under 
Presidents Kennedy and Reagan.

              House of Representatives Report Requirements

                        Constitutional Authority

    Clause 2(l)(4) of rule XI of the Rules of the House of 
Representatives states that:

          Each report of a committee on a bill or joint 
        resolution of a public character, shall include a 
        statement citing the specific powers granted to the 
        Congress in the Constitution to enact the law proposed 
        by the bill or joint resolution.

    The Committee on Appropriations bases its authority to 
report this legislation from Clause 7 of Section 9 of Article I 
of the Constitution of the United States of America which 
states:


          No money shall be drawn from the Treasury but in 
        consequence of Appropriations made by law . . .

    Appropriations contained in this Act are made pursuant to 
this specific power granted by the Constitution.

               Changes in the Application of Existing Law

    Pursuant to clause 3, rule XXI of the Rules of the House of 
Representatives, the following statements are submitted 
describing the effects of provisions in the accompanying bill, 
which may be considered, under certain circumstances, to change 
the application of existing law, either directly or indirectly. 
Most of the language has been provided in previous measures 
including supplementals for the departments and agencies 
carried in the accompanying bill.
    1. The bill contains appropriations for a number of items 
for which authorizations for fiscal year 1999 have not yet been 
enacted. The bill allows funds appropriated in the bill to be 
obligated in the absence of a prior authorization of 
appropriations.
    2. The bill provides that a few of the appropriations shall 
remain available for obligation beyond the current fiscal year. 
In all cases it is deemed desirable to carry such language in 
order to provide for orderly administration of such programs 
and effective use of funds.
    3. The bill contains a number of general provisions and 
other language which have been carried in the bill in past 
years.
    4. Under ``Export-Import Bank of the United States'', funds 
are prohibited for the export of nuclear equipment, fuel, or 
technology to any country other than a nuclear-weapon state as 
defined in Article IX of the Treaty on the Non-Proliferation of 
Nuclear Weapons eligible to receive economic or military 
assistance that has detonated a nuclear explosive after the 
date of enactment. In addition, funds are available 
notwithstanding section 2(b)(2) of the Export-Import Bank Act 
of 1945 for Eastern Europe.
    5. Under ``Overseas Private Investment Corporation'', the 
corporation is authorized to make expenditures, and it is 
stated that administrative expenses shall not include project-
specific costs and other related costs. In addition, funds are 
authorized to be derived by transfer from the noncredit 
account. Finally, funds are authorized for administrative 
expenses by transfer from the noncredit account.
    6. Funds are provided for the Trade and Development Agency, 
and the agency is authorized to receive reimbursements from 
corporations and other entities to cover the costs of grants 
for feasibility studies and other project planning services, to 
be deposited as an offsetting collection and to be available 
for obligation until September 30, 2000, for necessary 
expenses.
    7. Under ``Child Survival and Disease Programs Fund'' the 
bill contains authorities for the use of the fund that were 
contained in the 1998 act and are consistent with the Foreign 
Assistance Act.
    8. Under ``Development Assistance'' the bill contains 
provisions relating to abortion that were carried in the 1998 
act.
    In addition, a transfer from this account is authorized to 
``International Organizations and Programs'' for a contribution 
to the International Fund for Agricultural Development'', and 
subjects such a transfer to the notification procedures on the 
Committees on Appropriations. Finally, funds are prohibited for 
the central government of South Africa until the Secretary of 
State reports on steps the U.S. government is taking to 
negotiate the repeal, suspension, or termination of section 
15(c) of South Africa's Medicines and Related Substances 
Control Amendment Act No. 90 of 1997.
    9. Under ``Private and Voluntary Organizations'', the 
Committee includes a provision that funds appropriated under 
title II should be made available to PVOs at a level which is 
at least equivalent to the level provided in fiscal year 1995. 
It also continues provisions continued from last year on 
minimum funds from private sources.
    10. Under ``International Disaster Assistance'', funds are 
made available for rehabilitation and reconstruction 
assistance.
    11. Under ``Micro and Small Enterprise Development Program 
Account'', authority is provided to guarantee up to 70 percent 
of the principal amount of any loans notwithstanding existing 
law.
    12. Under ``Economic Support Fund'', funds are available as 
cash grants to Israel and Egypt, and the cash grant to Israel 
shall be disbursed within 30 days of enactment or by October 
31, 1998, whichever is later. In addition, the cash grant to 
Egypt is provided with the understanding that significant 
economic reforms will be undertaken, and the cash grant to 
Israel is provided with direction to the President that he 
ensure that the level of assistance does not cause an adverse 
impact on the level of non-military exports from the United 
States to such country.
    13. Under ``Debt restructuring'', funds are authorized for 
purposes consistent with existing law, except that funds 
appropriated for concessional debt relief are authorized for 
``IDA-only'' countries, and up to $2,900,000 is authorized for 
improvements to the foreign credit reporting system of the 
United States.
    14. In title II, funds are provided for micro and small 
enterprise direct loans and loan guarantees, and administrative 
expenses are appropriated which may be transferred to the 
operating expenses account of the Agency for International 
Development.
    15. In title II, funds are appropriated for the 
administrative costs of the urban and environmental credit 
program, and such funds may be transferred to the operating 
expenses account of the Agency for International Development.
    16. Under ``Operating Expenses of the United States Agency 
for International Development'', the Committee has placed a 
ceiling of $25,000 on the amount of such funds that can be used 
to pay printing costs of certain reports or studies.
    17. Under ``International Fund for Ireland'', $19,600,000 
is provided, which shall be expended at the minimum rate 
necessary to make timely payment for projects and activities.
    18. Under ``Assistance to Eastern Europe and the Baltic 
States'', funds are provided notwithstanding any other 
provision of law for economic assistance; funds are made 
available as if they were considered economic assistance under 
the Foreign Assistance Act; and funds for Bosnia are subject to 
certain conditions, including limitations on funds for housing. 
Funds available for an Enterprise Fund are authorized to be 
deposited in interest-bearing accounts, and shall be expended 
at the minimum rate necessary to make timely payments for 
projects and activities.
    19. Under ``Assistance for the New Independent States of 
the Former Soviet Union'', the Committee has included a 
limitation on the amount of assistance that may be made 
available for any one country in the region; it has also 
modified language concerning the uses of the Southern Caucasus 
fund. In addition, exceptions are made to the application of 
section 907 of the FREEDOM Support Act; funds are authorized 
for Mongolia; funds for the Government of Russia are subject to 
certain limitations; and certain authorities are granted for 
the use of funds appropriated for Enterprise Funds that were 
carried in the 1998 act.
    20. Under ``International Narcotics Control'', the 
Department of State is provided the authority to use section 
608 of the Foreign Assistance Act, without regard to its 
limitations, to receive excess property from an agency of the 
United States government for the purpose of providing it to a 
foreign country, subject to notification of the Committees on 
Appropriations.
    21. Funding is provided for ``Migration and Refugee 
Assistance'', and a limitation of $12,000,000 is provided for 
administrative expenses.
    22. Under ``United States Emergency Refugee and Migration 
Assistance Fund'', funds are provided notwithstanding the 
limitations contained in section 2(c)(2) of the Migration and 
Refugee Assistance Act of 1962.
    23. Under ``Nonproliferation, Anti-terrorism, Demining, and 
Related Programs'', funds are made available to countries other 
than the independent states of the former Soviet Union and 
international organizations when it is in the national security 
interest of the United States; funds are made available 
notwithstanding any other provision of law; and the use of 
funds is made subject to the notification procedures of the 
Committees on Appropriations. In addition, certain restrictions 
are placed on funds made available to the Korean Peninsula 
Energy Development Organization (KEDO).
    24. Under ``African Development Foundation'', certain 
authorities are provided for the use of funds appropriated to 
the Foundation notwithstanding existing law.
    25. Under ``International Military Education and 
Training'', the Committee provides IMET for Indonesia and 
Guatemala shall be only for expanded military education and 
training and limits obligation of funds for the School of the 
Americas pending a certification by the Secretary of Defense.
    26. Under ``Foreign Military Financing Program'', the 
Committee has provided that not to exceed $490,000,000 in FMF 
grants shall be available for the procurement in Israel of 
defense articles and defense services, and that FMF grants for 
any non-NATO country participating in the Partnership for Peace 
Program shall be subject to the Committee's regular 
notification procedures.
    27. Under ``Peacekeeping Operations'', funds are made 
available subject to the regular notification procedures of the 
Committees on Appropriations.
    28. Under title IV, funds for a number of international 
financial institutions are made available for contributions 
previously due, and funds are made available for the United 
States share of the paid-in portion of the increase in capital 
stock of certain institutions and limitations are placed on 
callable capital subscriptions.
    29. Funds are made available for the United States share of 
the paid-in portion of the increase in capital stock of the 
Asian Development Bank and a limitation is placed on callable 
capital subscriptions.
    30. Under ``Contribution to the European Bank for 
Reconstruction and Development'', the Committee has limited to 
$35,778,717 the amount appropriated that may be expended for 
the purchase of stock during fiscal year 1999 and placed a 
limit on callable capital.
    31. Under ``International Organizations and Programs'', the 
Committee has prohibited and conditioned the funding of certain 
organizations and programs.
    32. Under ``General Provisions'':
    Sec. 512. ``Limitation on Assistance to Countries in 
Default'' is modified by making Brazil and the Democratic 
Republic of the Congo waiver-eligible countries.
    Sec. 518A, ``Foreign Organizations that Perform or Promote 
Abortion Overseas; Forced Abortion in the People's Republic of 
China'', would amend the Foreign Assistance Act to prohibit 
funds for population planning organizations that perform 
abortions in foreign countries or engage in any activity to 
alter the laws or governmental policies of any foreign country 
regarding abortion; would permit the President to waive the 
restriction on performance of abortion, but impose a limitation 
of $356,000,000 if such waiver is exercised; and would prohibit 
funds for the UN Population Fund unless certain certifications 
are made regarding activities in the People's Republic of 
China.
    Sec. 519. ``Excess Defense Articles for Central European 
Countries'' updates Section 105 of Public Law 104-164 to make 
Central European Countries eligible in fiscal year 1999 and 
fiscal year 2000 for special treatment
    Sec. 520. ``Special Notification Requirements'' is modified 
to add Honduras.
    Sec. 522. ``Child Survival, AIDS, and other activities'' is 
modified by including authority to use funds provided under 
title II for the purposes of section 301 of the Foreign 
Assistance Act and by clarifying existing provisions relating 
to ``child survival'' to include ``child survival and disease 
programs''.
    Sec. 524. ``Reciprocal Leasing'' is updated by extending 
the authority through fiscal year 1999.
    Sec. 527. ``Democracy in China'' is a new section providing 
authority to utilize the Economic Support Fund to support 
nongovernmental organizations located outside China if their 
primary purpose is to foster democracy in China.
    Sec. 538. ``Special Authorities'' is modified to add 
Montenegro to the list of countries exempt from restrictions 
affecting assistance under titles I and II, and remove tropical 
forestry and energy programs from the list of activities 
exempted from restrictions affecting assistance under sections 
103 through 106, of the Foreign Assistance Act.
    Sec. 544. ``Prohibition on Publicity or Propaganda'' 
increases the funding ceiling for activities authorized under 
section 316 of P.L. 96-533 from $500,000 to $950,000.
    Sec. 560. ``Limitation on Assistance for Haiti'', also 
known as the Dole Amendment, is modified by: limiting the 
waiver; clarifying the term ``completed privitization'', 
establishing a benchmark for measuring Government of Haiti 
cooperation with the United States in investigating 
extrajudicial killings, and excepting support for political 
parties from the limitation. Certain reporting requirements are 
also added.
    Sec. 567. ``Restrictions on Assistance to Countries 
Providing Sanctuary to Indicted War Criminals'' is updated by 
listing Montenegro and Serbia in lieu of ``Serbia-Montenegro 
(Federal Republic of Yugoslavia)''.
    Sec. 568. ``Additional Requirements Relating to Stockpiling 
of Defense Articles for Foreign Countries'' is modified by 
amending the Foreign Assistance Act to provide that not more 
than $320,000,000 may be made available for stockpiles in the 
Republic of Korea and not more than $20,000,000 may be made 
available for stockpiles in Thailand.
    Sec. 573. ``Enterprise Fund Restrictions'' is a new 
restriction providing that funds derived from reflows of 
Enterprise Funds are subject to notification.
    Sec. 577. ``Report on Foreign Military Training'' is a new 
section requiring a report from the Secretary of Defense and 
Secretary of State on all overseas military training, and it 
specifies the scope of the report.
    Sec. 578. ``Korean Peninsula Energy Development 
Organization'', would prohibit funds for a voluntary 
contribution to, or assistance for, the Korean Peninsula Energy 
Development Organization (KEDO).
    Sec. 579. ``Repeal of Restrictions on Assistance'', would 
repeal section 907 of the FREEDOM Support Act.

            Compliance With Rule XIII, Cl. 3 (Ramseyer Rule)

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                SECTION 105 OF THE ACT OF JULY 21, 1996

                          (Public Law 104-164)

AN ACT to amend the Foreign Assistance Act of 1961 and the Arms Export 
   Control Act to make improvements to certain defense and security 
 assistance provisions under those Acts, to authorize the transfer of 
  naval vessels to certain foreign countries, and for other purposes.

SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EUROPEAN COUNTRIES.

  Notwithstanding section 516(e) of the Foreign Assistance Act 
of 1961, as added by this Act, during each of the fiscal years 
[1996 and 1997] 1999 and 2000, funds available to the 
Department of Defense may be expended for crating, packing, 
handling, and transportation of excess defense articles 
transferred under the authority of section 516 of such Act to 
countries that are eligible to participate in the Partnership 
for Peace and that are eligible for assistance under the 
Support for East European Democracy (SEED) Act of 1989.
                              ----------                              


               SECTION 61 OF THE ARMS EXPORT CONTROL ACT

  Sec. 61. Leasing Authority.--(a) The President may lease 
defense articles in the stocks of the Department of Defense to 
an eligible foreign country or international organization if--
          (1) * * *

           *       *       *       *       *       *       *

The requirement of paragraph (4) shall not apply to leases 
entered into for purposes of cooperative research or 
development, military exercises, or communication or 
electronics interface projects. The President may waive the 
requirement of paragraph (4) for reimbursement of depreciation 
for any defense article which has passed three-quarters of its 
normal service life if the President determines that to do so 
is important to the national security interest of the United 
States. The President may waive the requirement of paragraph 
(4) with respect to a lease which is made in exchange with the 
lessee for a lease on substantially reciprocal terms of defense 
articles for the Department of Defense, except that this waiver 
authority--
          (A)  * * *
          (B) may be exercised only during the fiscal year 
        [1998] 1999 and only with respect to one country, 
        unless the Congress hereafter provides otherwise.
The preceding sentence does not constitute authorization of 
appropriations for payments by the United States for leased 
articles.

           *       *       *       *       *       *       *

                              ----------                              


           SECTION 514 OF THE FOREIGN ASSISTANCE ACT OF 1961

  Sec. 514. Stockpiling of Defense Articles for Foreign 
Countries.--(a) * * *
  (b)(1) * * *
  (2)(A) The value of such additions to stockpiles of defense 
articles in foreign countries shall not exceed $50,000,000 for 
each of the fiscal years 1996 and 1997 and $60,000,000 for 
fiscal year 1998 and $340,000,000 for fiscal year 1999.
  (B) Of the amount specified in subparagraph (A) for each of 
the fiscal years 1996 and 1997, not more than $40,000,000 may 
be made available for stockpiles in the Republic of Korea and 
not more than $10,000,000 may be made available for stockpiles 
in Thailand. Of the amount specified in subparagraph (A) for 
fiscal year 1998, not more than $40,000,000 may be made 
available for stockpiles in the Republic of Korea and not more 
than $20,000,000 may be made available for stockpiles in 
Thailand. Of the amount specified in subparagraph (A) for 
fiscal year 1999, not more than $320,000,000 may be made 
available for stockpiles in the Republic of Korea and not more 
than $20,000,000 may be made available for stockpiles in 
Thailand.

           *       *       *       *       *       *       *


                 SECTION 907 OF THE FREEDOM SUPPORT ACT

[SEC. 907. RESTRICTION ON ASSISTANCE TO AZERBAIJAN.

    [United States assistance under this or any other Act 
(other than assistance under title V of this Act) may not be 
provided to the Government of Azerbaijan until the President 
determines, and so reports to the Congress, that the Government 
of Azerbaijan is taking demonstrable steps to cease all 
blockades and other offensive uses of force against Armenia and 
Nagorno-Karabakh.]

                     FOREIGN ASSISTANCE ACT OF 1961

                                 PART I

Chapter 1--Policy; Development Assistance Authorizations

           *       *       *       *       *       *       *


    Sec. 104. Population and Health.--(a) * * *

           *       *       *       *       *       *       *

    (h) Restriction on Assistance to Foreign Organizations That 
Perform or Actively Promote Abortions.--
          (1) Performance of abortions.--(A) Notwithstanding 
        section 614 of this Act or any other provision of law, 
        no funds appropriated for population planning 
        activities or other population assistance may be made 
        available for any foreign private, nongovernmental, or 
        multilateral organization until the organization 
        certifies that it will not, during the period for which 
        the funds are made available, perform abortions in any 
        foreign country, except where the life of the mother 
        would be endangered if the pregnancy were carried to 
        term or in cases of forcible rape or incest.
          (B) Subparagraph (A) may not be construed to apply to 
        the treatment of injuries or illnesses caused by legal 
        or illegal abortions or to assistance provided directly 
        to the government of a country.
          (2) Lobbying activities.--(A) Notwithstanding section 
        614 of this Act or any other provision of law, no funds 
        appropriated for population planning activities or 
        other population assistance may be made available for 
        any foreign private, nongovernmental, or multilateral 
        organization until the organization certifies that it 
        will not, during the period for which the funds are 
        made available, violate the laws of any foreign country 
        concerning the circumstances under which abortion is 
        permitted, regulated, or prohibited, or engage in any 
        activity or effort to alter the laws or governmental 
        policies of any foreign country concerning the 
        circumstances under which abortion is permitted, 
        regulated, or prohibited.
          (B) Subparagraph (A) shall not apply to activities in 
        opposition to coercive abortion or involuntary 
        sterilization.
          (3) Application to foreign organizations.--The 
        prohibition of this subsection apply to funds made 
        available to a foreign organization either directly or 
        as a subcontractor or subgrantee, and the 
        certifications required by paragraphs (1) and (2) apply 
        to activities in which the organization engages either 
        directly or through a subcontractor or subgrantee.
          (4) Definition.--As used in this section, the term 
        ``activity or effort to alter the laws or governmental 
        policies of any foreign country concerning the 
        circumstances under which abortion is permitted, 
        regulated, or prohibited'' includes not only overt 
        lobbying for such changes, but also such other 
        activities as sponsoring, rather than merely attending, 
        conferences and workshops on the alleged defects in the 
        abortion laws, as well as the drafting and distribution 
        of materials or public statements calling attention to 
        such alleged defects.

           *       *       *       *       *       *       *


          Chapter 3--International Organizations and Programs

    Sec. 301. General Authority.--(a) * * *

           *       *       *       *       *       *       *

    (i) Limitation Relating to Forced Abortions in the People's 
Republic of China.--Notwithstanding section 614 of this Act or 
any other provision of law, no funds may be made available for 
the United Nations Population Fund (UNFPA) in any fiscal year 
unless the President certifies that--
          (1) UNFPA has terminated all activities in the 
        People's Republic of China, and the United States has 
        received assurances that UNFPA will conduct no such 
        activities during the fiscal year for which the funds 
        are to be made available; or
          (2) during the 12 months preceding such certification 
        there have been no abortions as the result of coercion 
        associated with the family planning policies of the 
        national government or other governmental entities 
        within the People's Republic of China.
As used in this section, the term ``coercion'' includes 
physical duress or abuse, destruction or confiscation of 
property, loss of means of livelihood, or severe psychological 
pressure.

           *       *       *       *       *       *       *

                              ----------                              


                      BRETTON WOODS AGREEMENTS ACT

  Sec. 17. (a) In order to carry out the purposes of the 
decisions of January 5, 1962, [and February 24, 1983] February 
24, 1983, and January 27, 1997, as amended in accordance with 
their terms, of the Executive Directors of the International 
Monetary Fund, the Secretary of the Treasury is authorized to 
make loans, in an amount not to exceed the equivalent of 
[4,250,000,000] 6,712,000,000 Special Drawing Rights, limited 
to such amounts as are provided in advance in appropriations 
Acts, except that prior to activation, the Secretary of the 
Treasury shall certify that supplementary resources are needed 
to forestall or cope with an impairment of the international 
monetary system and that the Fund has fully explored other 
means of funding, to the Fund under article VII, section 1(i), 
of the Articles of Agreement of the Fund. Any loan under the 
authority granted in this subsection shall be made with due 
regard to the present and prospective balance of payments and 
reserve position of the United States.
  (b) For the purpose of making loans to the International 
Monetary Fund pursuant to this section, there is hereby 
authorized to be appropriated [4,250,000,000] 6,712,000,000 
Special Drawing Rights, except that prior to activation, the 
Secretary of the Treasury shall certify whether supplementary 
resources are needed to forestall or cope with an impairment of 
the international monetary system and that the Fund has fully 
explored other means of funding, to remain available until 
expended to meet calls by the International Monetary Fund. Any 
payments made to the United States by the International 
Monetary Fund as a repayment on account of the principal of a 
loan made under this section shall continue to be available for 
loans to the International Monetary Fund.

           *       *       *       *       *       *       *

  (d) Unless the Congress by law so authorizes, neither the 
President, the Secretary of the Treasury, nor any other person 
acting on behalf of the United States, may instruct the United 
States Executive Director to the Fund to consent to any 
amendment to the Decision of February 24, 1983, or the Decision 
of January 27, 1997, of the Executive Directors of the Fund, if 
the adoption of such amendment would significantly alter the 
amount, terms, or conditions of participation by the United 
States in the General Arrangements to Borrow or the New 
Arrangements to Borrow, as applicable.

           *       *       *       *       *       *       *


SEC. 61. QUOTA INCREASE.

  (a) In General.--The United States Governor of the Fund may 
consent to an increase in the quota of the United States in the 
Fund equivalent to 10,622,500,000 Special Drawing Rights.
  (b) Subject to Appropriations.--The authority provided by 
subsection (a) shall be effective only to such extent or in 
such amounts as are provided in advance in appropriations Acts.
                              ----------                              


INTERNATIONAL FINANCIAL INSTITUTIONS ACT

           *       *       *       *       *       *       *


TITLE XV--OTHER POLICIES

           *       *       *       *       *       *       *


SEC. 1503. ADVOCACY OF POLICIES TO ENHANCE THE GENERAL EFFECTIVENESS OF 
                    THE INTERNATIONAL MONETARY FUND.

  (a) In General.--The Secretary of the Treasury shall instruct 
the United States Executive Director of the International 
Monetary Fund to use aggressively the voice and vote of the 
Executive Director to do the following:
          (1) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund in 
        structuring programs and assistance so as to promote 
        policies and actions that will contribute to exchange 
        rate stability and avoid competitive devaluations that 
        will further destabilize the international financial 
        and trading systems.
          (2) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund in 
        promoting market-oriented reform, trade liberalization, 
        economic growth, democratic governance, and social 
        stability through--
                  (A) appropriate liberalization of pricing, 
                trade, investment, and exchange rate regimes of 
                countries to open countries to the competitive 
                forces of the global economy;
                  (B) opening domestic markets to fair and open 
                internal competition among domestic enterprises 
                by eliminating inappropriate favoritism for 
                small or large businesses, eliminating elite 
                monopolies, creating and effectively 
                implementing anti-trust and anti-monopoly laws 
                to protect free competition, and establishing 
                fair and accessible legal procedures for 
                dispute settlement among domestic enterprises;
                  (C) privatizing industry in a fair and 
                equitable manner that provides economic 
                opportunities to a broad spectrum of the 
                population, eliminating government and elite 
                monopolies, closing loss-making enterprises, 
                and reducing government control over the 
                factors of production;
                  (D) economic deregulation by eliminating 
                inefficient and overly burdensome regulations 
                and strengthening the legal framework 
                supporting private contract and intellectual 
                property rights;
                  (E) establishing or strengthening key 
                elements of a social safety net to cushion the 
                effects on workers of unemployment and 
                dislocation; and
                  (F) encouraging the opening of markets for 
                agricultural commodities and products by 
                requiring recipient countries to make efforts 
                to reduce trade barriers.
          (3) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund, in 
        concert with appropriate international authorities and 
        other international financial institutions (as defined 
        in section 1701(c)(2)), in strengthening financial 
        systems in developing countries, and encouraging the 
        adoption of sound banking principles and practices, 
        including the development of laws and regulations that 
        will help to ensure that domestic financial 
        institutions meet strong standards regarding capital 
        reserves, regulatory oversight, and transparency.
          (4) Vigorously promote policies to increase the 
        effectiveness of the International Monetary Fund, in 
        concert with appropriate international authorities and 
        other international financial institutions (as defined 
        in section 1701(c)(2)), in facilitating the development 
        and implementation of internationally acceptable 
        domestic bankruptcy laws and regulations in developing 
        countries, including the provision of technical 
        assistance as appropriate.
          (5) Vigorously promote policies that aim at 
        appropriate burden-sharing by the private sector so 
        that investors and creditors bear more fully the 
        consequences of their decisions, and accordingly 
        advocate policies which include--
                  (A) strengthening crisis prevention and early 
                warning signals through improved and more 
                effective surveillance of the national economic 
                policies and financial market development of 
                countries (including monitoring of the 
                structure and volume of capital flows to 
                identify problematic imbalances in the inflow 
                of short and medium term investment capital, 
                potentially destabilizing inflows of offshore 
                lending and foreign investment, or problems 
                with the maturity profiles of capital to 
                provide warnings of imminent economic 
                instability), and fuller disclosure of such 
                information to market participants;
                  (B) accelerating work on strengthening 
                financial systems in emerging market economies 
                so as to reduce the risk of financial crises;
                  (C) consideration of provisions in debt 
                contracts that would foster dialogue and 
                consultation between a sovereign debtor and its 
                private creditors, and among those creditors;
                  (D) consideration of extending the scope of 
                the International Monetary Fund's policy on 
                lending to members in arrears and of other 
                policies so as to foster the dialogue and 
                consultation referred to in subparagraph (C);
                  (E) intensified consideration of mechanisms 
                to facilitate orderly workout mechanisms for 
                countries experiencing debt or liquidity 
                crises;
                  (F) consideration of establishing ad hoc or 
                formal linkages between the provision of 
                official financing to countries experiencing a 
                financial crisis and the willingness of market 
                participants to meaningfully participate in any 
                stabilization effort led by the International 
                Monetary Fund;
                  (G) using the International Monetary Fund to 
                facilitate discussions between debtors and 
                private creditors to help ensure that financial 
                difficulties are resolved without inappropriate 
                resort to public resources; and
                  (H) the International Monetary Fund 
                accompanying the provision of funding to 
                countries experiencing a financial crisis 
                resulting from imprudent borrowing with efforts 
                to achieve a significant contribution by the 
                private creditors, investors, and banks which 
                had extended such credits.
          (6) Vigorously promote policies that would make the 
        International Monetary Fund a more effective mechanism, 
        in concert with appropriate international authorities 
        and other international financial institutions (as 
        defined in section 1701(c)(2)), for promoting good 
        governance principles within recipient countries by 
        fostering structural reforms, including procurement 
        reform, that reduce opportunities for corruption and 
        bribery, and drug-related money laundering.
          (7) Vigorously promote the design of International 
        Monetary Fund programs and assistance so that 
        governments that draw on the International Monetary 
        Fund channel public funds away from unproductive 
        purposes, including large ``show case'' projects and 
        excessive military spending, and toward investment in 
        human and physical capital as well as social programs 
        to protect the neediest and promote social equity.
          (8) Work with the International Monetary Fund to 
        foster economic prescriptions that are appropriate to 
        the individual economic circumstances of each recipient 
        country, recognizing that inappropriate stabilization 
        programs may only serve to further destabilize the 
        economy and create unnecessary economic, social, and 
        political dislocation.
          (9) Structure International Monetary Fund programs 
        and assistance so that the maintenance and improvement 
        of core labor standards are routinely incorporated as 
        an integral goal in the policy dialogue with recipient 
        countries, so that--
                  (A) recipient governments commit to affording 
                workers the right to exercise internationally 
                recognized core worker rights, including the 
                right of free association and collective 
                bargaining through unions of their own 
                choosing;
                  (B) measures designed to facilitate labor 
                market flexibility are consistent with such 
                core worker rights; and
                  (C) the staff of the International Monetary 
                Fund surveys the labor market policies and 
                practices of recipient countries and recommends 
                policy initiatives that will help to ensure the 
                maintenance or improvement of core labor 
                standards.
          (10) Vigorously promote International Monetary Fund 
        programs and assistance that are structured to the 
        maximum extent feasible to discourage practices which 
        may promote ethnic or social strife in a recipient 
        country.
          (11) Vigorously promote recognition by the 
        International Monetary Fund that macroeconomic 
        developments and policies can affect and be affected by 
        environmental conditions and policies, and urge the 
        International Monetary Fund to encourage member 
        countries to pursue macroeconomic stability while 
        promoting environmental protection.
          (12) Facilitate greater International Monetary Fund 
        transparency, including by enhancing accessibility of 
        the International Monetary Fund and its staff, 
        fostering a more open release policy toward working 
        papers, past evaluations, and other International 
        Monetary Fund documents, seeking to publish all Letters 
        of Intent to the International Monetary Fund and Policy 
        Framework Papers, and establishing a more open release 
        policy regarding Article IV consultations.
          (13) Facilitate greater International Monetary Fund 
        accountability and enhance International Monetary Fund 
        self-evaluation by vigorously promoting review of the 
        effectiveness of the Office of Internal Audit and 
        Inspection and the Executive Board's external 
        evaluation pilot program and, if necessary, the 
        establishment of an operations evaluation department 
        modeled on the experience of the International Bank for 
        Reconstruction and Development, guided by such key 
        principles as usefulness, credibility, transparency, 
        and independence.
          (14) Vigorously promote coordination with the 
        International Bank for Reconstruction and Development 
        and other international financial institutions (as 
        defined in section 1701(c)(2)) in promoting structural 
        reforms which facilitate the provision of credit to 
        small businesses, including microenterprise lending, 
        especially in the world's poorest, heavily indebted 
        countries.
  (b) Coordination With Other Executive Departments.--To the 
extent that it would assist in achieving the goals described in 
subsection (a), the Secretary of the Treasury shall pursue the 
goals in coordination with the Secretary of State, the 
Secretary of Labor, the Secretary of Commerce, the 
Administrator of the Environmental Protection Agency, the 
Administrator of the Agency for International Development, and 
the United States Trade Representative.

           *       *       *       *       *       *       *


            TITLE XVII--CONSOLIDATED REPORTING REQUIREMENTS

SEC. 1701. ANNUAL REPORT BY CHAIRMAN OF THE NATIONAL ADVISORY COUNCIL 
                    ON INTERNATIONAL MONETARY AND FINANCIAL POLICIES.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Advisory Committee on IMF Policy.--
          (1) In general.--The Secretary of the Treasury shall 
        establish an International Monetary Fund Advisory 
        Committee (in this subsection referred to as the 
        ``Advisory Committee'').
          (2) Membership.--The Advisory Committee shall consist 
        of 9 members appointed by the Secretary of the 
        Treasury, after appropriate consultations with the 
        relevant organizations, as follows:
                  (A) 1 member shall be a former Secretary or 
                Deputy Secretary of the Treasury, who shall 
                serve as the chairman of the Advisory 
                Committee.
                  (B) 2 members shall be representatives from 
                organized labor.
                  (C) 2 members shall be representatives from 
                banking and financial services.
                  (D) 2 members shall be representatives from 
                industry and agriculture.
                  (E) 2 members shall be representatives from 
                nongovernmental environmental and human rights 
                organizations.
          (3) Duties.--Not less frequently than every 6 months, 
        the Advisory Committee shall meet with the Secretary of 
        the Treasury or the Deputy Secretary of the Treasury to 
        review, and provide advice on, the extent to which 
        individual country International Monetary Fund programs 
        meet the policy goals set forth in this Act regarding 
        the International Monetary Fund.
          (4) Inapplicability of termination provision of the 
        federal advisory committee act.--Section 14(a)(2) of 
        the Federal Advisory Committee Act shall not apply to 
        the Advisory Committee.

           *       *       *       *       *       *       *


SEC. 1704. REPORTS ON FINANCIAL STABILIZATION PROGRAMS LED BY THE 
                    INTERNATIONAL MONETARY FUND IN CONNECTION WITH 
                    FINANCING FROM THE EXCHANGE STABILIZATION FUND.

  (a) In General.--The Secretary of the Treasury, in 
consultation with the Secretary of Commerce and other 
appropriate Federal agencies, shall prepare reports on the 
implementation of financial stabilization programs (and any 
material terms and conditions thereof) led by the International 
Monetary Fund in countries in connection with which the United 
States has made a commitment to provide, or has provided 
financing from the stabilization fund established under section 
5302 of title 31, United States Code. The reports shall include 
the following:
          (1) A description of the condition of the economies 
        of countries requiring the financial stabilization 
        programs, including the monetary, fiscal, and exchange 
        rate policies of the countries.
          (2) A description of the degree to which the 
        countries requiring the financial stabilization 
        programs have fully implemented financial sector 
        restructuring and reform measures required by the 
        International Monetary Fund, including--
                  (A) ensuring full respect for the commercial 
                orientation of commercial bank lending;
                  (B) ensuring that governments will not 
                intervene in bank management and lending 
                decisions (except in regard to prudential 
                supervision);
                  (C) the enactment and implementation of 
                appropriate financial reform legislation;
                  (D) strengthening the domestic financial 
                system and improving transparency and 
                supervision; and
                  (E) the opening of domestic capital markets.
          (3) A description of the degree to which the 
        countries requiring the financial stabilization 
        programs have fully implemented reforms required by the 
        International Monetary Fund that are directed at 
        corporate governance and corporate structure, 
        including--
                  (A) making nontransparent conglomerate 
                practices more transparent through the 
                application of internationally accepted 
                accounting practices, independent external 
                audits, full disclosure, and provision of 
                consolidated statements; and
                  (B) ensuring that no government subsidized 
                support or tax privileges will be provided to 
                bail out individual corporations, particularly 
                in the semiconductor, steel, and paper 
                industries.
          (4) A description of the implementation of reform 
        measures required by the International Monetary Fund to 
        deregulate and privatize economic activity by ending 
        domestic monopolies, undertaking trade liberalization, 
        and opening up restricted areas of the economy to 
        foreign investment and competition.
          (5) A detailed description of the trade policies of 
        the countries, including any unfair trade practices or 
        adverse effects of the trade policies on the United 
        States.
          (6) A description of the extent to which the 
        financial stabilization programs have resulted in 
        appropriate burden-sharing among private sector 
        creditors, including rescheduling of outstanding loans 
        by lengthening maturities, agreements on debt 
        reduction, and the extension of new credit.
          (7) A description of the extent to which the economic 
        adjustment policies of the International Monetary Fund 
        and the policies of the government of the country 
        adequately balance the need for financial 
        stabilization, economic growth, environmental 
        protection, social stability, and equity for all 
        elements of the society.
          (8) Whether International Monetary Fund involvement 
        in labor market flexibility measures has had a negative 
        effect on core worker rights, particularly the rights 
        of free association and collective bargaining.
          (9) A description of any pattern of abuses of core 
        worker rights in recipient countries.
          (10) The amount, rate of interest, and disbursement 
        and repayment schedules of any funds disbursed from the 
        stabilization fund established under section 5302 of 
        title 31, United States Code, in the form of loans, 
        credits, guarantees, or swaps, in support of the 
        financial stabilization programs.
          (11) The amount, rate of interest, and disbursement 
        and repayment schedules of any funds disbursed by the 
        International Monetary Fund to the countries in support 
        of the financial stabilization programs.
  (b) Timing.--Not later than October 1, 1998, and semiannually 
thereafter, the Secretary of the Treasury shall submit to the 
Committees on Banking and Financial Services and International 
Relations of the House of Representatives and the Committees on 
Foreign Relations, and Banking, Housing, and Urban Affairs of 
the Senate a report on the matters described in subsection (a).

SEC. 1705. ANNUAL REPORT AND TESTIMONY ON THE STATE OF THE 
                    INTERNATIONAL FINANCIAL SYSTEM, IMF REFORM, AND 
                    COMPLIANCE WITH IMF AGREEMENTS.

  (a) Reports.--Not later than October 1 of each year, the 
Secretary of the Treasury shall submit to the Committee on 
Banking and Financial Services of the House of Representatives 
and the Committee on Foreign Relations of the Senate a written 
report on the progress (if any) made by the United States 
Executive Director at the International Monetary Fund in 
influencing the International Monetary Fund to adopt the 
policies and reform its internal procedures in the manner 
described in section 1503.
  (b) Testimony.--After submitting the report required by 
subsection (a) but not later than October 31 of each year, the 
Secretary of the Treasury shall appear before the Committee on 
Banking and Financial Services of the House of Representatives 
and the Committee on Foreign Relations of the Senate and 
present testimony on--
          (1) any progress made in reforming the International 
        Monetary Fund;
          (2) the status of efforts to reform the international 
        financial system; and
          (3) the compliance of countries which have received 
        assistance from the International Monetary Fund with 
        agreements made as a condition of receiving the 
        assistance.

SEC. 1706. AUDITS OF THE INTERNATIONAL MONETARY FUND.

  (a) Access to Materials.--Not later than 30 days after the 
date of the enactment of this section, the Secretary of the 
Treasury shall certify to the Committee on Banking and 
Financial Services of the House of Representatives and the 
Committee on Foreign Relations of the Senate that the Secretary 
has instructed the United States Executive Director at the 
International Monetary Fund to facilitate timely access by the 
General Accounting Office to information and documents of the 
International Monetary Fund needed by the Office to perform 
financial reviews of the International Monetary Fund that will 
facilitate the conduct of United States policy with respect to 
the Fund.
  (b) Reports.--Not later than June 30, 1999, and annually 
thereafter, the Comptroller General of the United States shall 
prepare and submit to the committees specified in subsection 
(a) a report on the financial operations of the Fund during the 
preceding year, which shall include--
          (1) the current financial condition of the 
        International Monetary Fund;
          (2) the amount, rate of interest, disbursement 
        schedule, and repayment schedule for any loans that 
        were initiated or outstanding during the preceding 
        calendar year, and with respect to disbursement 
        schedules, the report shall identify and discuss in 
        detail any conditions required to be fulfilled by a 
        borrower country before a disbursement is made;
          (3) a detailed description of whether the trade 
        policies of borrower countries permit free and open 
        trade by the United States and other foreign countries 
        in the borrower countries;
          (4) a detailed description of the export policies of 
        borrower countries and whether the policies may result 
        in increased export of their products, goods, or 
        services to the United States which may have 
        significant adverse effects on, or result in unfair 
        trade practices against or affecting United States 
        companies, farmers, or communities;
          (5) a detailed description of any conditions of 
        International Monetary Fund loans which have not been 
        met by borrower countries, including a discussion of 
        the reasons why such conditions were not met, and the 
        actions taken by the International Monetary Fund due to 
        the borrower country's noncompliance;
          (6) an identification of any borrower country and 
        loan on which any loan terms or conditions were 
        renegotiated in the preceding calendar year, including 
        a discussion of the reasons for the renegotiation and 
        any new loan terms and conditions; and
          (7) a specification of the total number of loans made 
        by the International Monetary Fund from its inception 
        through the end of the period covered by the report, 
        the number and percentage (by number) of such loans 
        that are in default or arrears, and the identity of the 
        countries in default or arrears, and the number of such 
        loans that are outstanding as of the end of period 
        covered by the report and the aggregate amount of the 
        outstanding loans and the average yield (weighted by 
        loan principal) of the historical and outstanding loan 
        portfolios of the International Monetary Fund.

           *       *       *       *       *       *       *


                  Appropriations Not Authorized by Law

    Pursuant to clause 3 of rule XXI of the House of 
Representatives, the following table lists the appropriations 
in the accompanying bill which, in whole or in part, are not 
authorized by law:

                      Trade and Development Agency

                Child Survival and Disease Programs Fund

                         Development Assistance

                   International Disaster Assistance

         Micro and Small Enterprise Development Program Account

             Urban and Environmental Credit Program Account

                         AID Operating Expenses

          AID Operating Expenses, Office of Inspector General

                         Economic Support Fund

                     International Fund for Ireland

          Assistance for Eastern Europe and the Baltic States

  Assistance for the New Independent States of the Former Soviet Union

                       Inter-American Foundation

                     African Development Foundation

                              Peace Corps

                    International Narcotics Control

                    Migration and Refugee Assistance

    Nonproliferation, Anti-Terrorism, Demining and Related Programs

                           Debt Restructuring

             International Military Education and Training

                   Foreign Military Financing Program

                        Peacekeeping Operations

                International Organizations and Programs

                       New Arrangements to Borrow

                      International Monetary Fund

                   Comparison With Budget Resolution

    Section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344), requires 
that the report accompanying a bill providing new budget 
authority contain a statement detailing how the authority 
compares with the reports submitted under section 302(b) of the 
Act for the most recently agreed to concurrent resolution on 
the budget for the fiscal year. This information follows:

                     FISCAL YEAR 1999 APPROPRIATIONS                    
                          [Dollars in millions]                         
------------------------------------------------------------------------
                                             Budget                     
                                           authority         Outlays    
------------------------------------------------------------------------
Sec. 302(b):                                                            
    Discretionary.....................           12,475           12,525
    Mandatory.........................               45               45
                                       ---------------------------------
      Total...........................           12,520           12,570
This bill:                                                              
    Discretionary.....................           12,471           12,525
    Mandatory.........................               45               45
                                       ---------------------------------
      Total...........................           12,516           12,570
------------------------------------------------------------------------

                    Five-Year Projection of Outlays

    In compliance with section 308(a)(1)(B) of the 
Congressional Budget Act of 1974 (Public Law 93-344 as 
amended), the following table contains five-year projections 
associated with the budget authority provided in the 
accompanying bill.

                     Fiscal year 1999 appropriations                    
                                                                        
                                                            Millions    
                                                                        
Budget authority......................................           $12,520
Outlays...............................................            12,570
Fiscal Year:                                                            
    1999..............................................             4,896
    2000..............................................             3,065
    2001..............................................             2,319
    2002..............................................               914
    2003 and future years.............................             1,562
                                                                        
                                                                        

    Note.--The amounts in this bill are technically in excess of the 
subcommittee section 302(b) subdivision. However, pursuant to section 
314 of the Congressional Budget Act of 1974, increases to the 
Committee's section 302(a) allocation are authorized for funding in the 
reported bill for the New Arrangements to Borrow and arrearages for 
multilateral development banks. After the bill is reported to the 
House, the Chairman of the Committee on the Budget will provide an 
increased section 302(a) allocation consistent with the funding 
provided in the bill. That new allocation will eliminate the technical 
difference prior to floor consideration.
                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each rollcall 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                           Rollcall Number: 1

    Date: September 10, 1998.
    Measure: Foreign Operations Appropriations Bill, FY 1999.
    Motion by: Mr. Porter.
    Description of Motion: To amend the Livingston amendment to 
repeal section 907 of the FREEDOM Support Act by retaining 
section 907 (imposing restrictions on assistance to Azerbaijan) 
until the Government of Azerbaijan ceases all blockades against 
Armenia and Nagorno-Karabakh.
    Results: Rejected 19 yeas 30 nays.
        Members Voting Yea            Members Voting Nay
Ms. DeLauro                         Mr. Aderholt
Mr. Fazio                           Mr. Bonilla
Mr. Frelinghuysen                   Mr. Callahan
Mr. Hoyer                           Mr. Cramer
Mr. Knollenberg                     Mr. Cunningham
Mrs. Lowey                          Mr. Dickey
Mr. Obey                            Mr. Edwards
Mr. Olver                           Mr. Forbes
Mr. Pastor                          Mr. Hobson
Ms. Pelosi                          Mr. Istook
Mr. Porter                          Ms. Kaptur
Mr. Price                           Mr. Kolbe
Mr. Sabo                            Mr. Latham
Mr. Serrano                         Mr. Lewis
Mr. Skaggs                          Mr. Livingston
Mr. Visclosky                       Mrs. Meek
Mr. Walsh                           Mr. Miller
Mr. Wolf                            Mr. Mollohan
Mr. Yates                           Mr. Nethercutt
                                    Mr. Neumann
                                    Mrs. Northup
                                    Mr. Packard
                                    Mr. Parker
                                    Mr. Regula
                                    Mr. Rogers
                                    Mr. Skeen
                                    Mr. Tiahrt
                                    Mr. Wamp
                                    Mr. Wicker
                                    Mr. Young
                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each rollcall 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                           rollcall number: 2

    Date: September 10, 1998.
    Measure: Foreign Operations Appropriations Bill, FY 1999.
    Motion by: Ms. Pelosi.
    Description of Motion: To amend the Livingston amendment to 
prohibit funds for the Korean Peninsula Energy Development 
Organization (KEDO) by retaining existing restrictions on KEDO 
and by adding language requiring ``satisfactory access to 
facilities'' to ensure North Korean compliance with the 
Framework Agreement on energy facilities in that country prior 
to the obligation of funds for KEDO.
    Results: Rejected 16 yeas 29 nays.
        Members Voting Yea            Members Voting Nay
Mr. Edwards                         Mr. Aderholt
Mr. Hefner                          Mr. Bonilla
Mr. Hoyer                           Mr. Callahan
Ms. Kaptur                          Mr. Cunningham
Mrs. Lowey                          Mr. DeLay
Mr. Mollohan                        Mr. Dickey
Mr. Moran                           Mr. Frelinghuysen
Mr. Obey                            Mr. Hobson
Mr. Olver                           Mr. Kingston
Mr. Pastor                          Mr. Knollenberg
Ms. Pelosi                          Mr. Kolbe
Mr. Price                           Mr. Latham
Mr. Sabo                            Mr. Livingston
Mr. Serrano                         Mr. McDade
Mr. Visclosky                       Mr. Miller
Mr. Yates                           Mr. Nethercutt
                                    Mrs. Northup
                                    Mr. Packard
                                    Mr. Parker
                                    Mr. Porter
                                    Mr. Regula
                                    Mr. Rogers
                                    Mr. Skeen
                                    Mr. Taylor
                                    Mr. Tiahrt
                                    Mr. Walsh
                                    Mr. Wamp
                                    Mr. Wicker
                                    Mr. Wolf
                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each rollcall 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                           rollcall number: 3

    Date: September 10, 1998.
    Measure: Foreign Operations Appropriations Bill, FY 1999.
    Motion by: Ms. Pelosi.
    Description of Motion: To increase the appropriation for 
Global Environment Facility (GEF) from $42,500,000 to 
$92,500,000.
    Results: Rejected 19 yeas 27 nays.
        Members Voting Yea            Members Voting Nay
Ms. DeLauro                         Mr. Aderholt
Mr. Edwards                         Mr. Bonilla
Mr. Hefner                          Mr. Callahan
Mr. Hoyer                           Mr. Cunningham
Ms. Kaptur                          Mr. DeLay
Mrs. Lowey                          Mr. Dickey
Mr. Mollohan                        Mr. Forbes
Mr. Moran                           Mr. Frelinghuysen
Mr. Obey                            Mr. Hobson
Mr. Olver                           Mr. Istook
Mr. Pastor                          Mr. Kingston
Ms. Pelosi                          Mr. Knollenberg
Mr. Porter                          Mr. Kolbe
Mr. Price                           Mr. Latham
Mr. Sabo                            Mr. Livingston
Mr. Serrano                         Mr. Miller
Mr. Stokes                          Mr. Nethercutt
Mr. Visclosky                       Mr. Neumann
Mr. Yates                           Mrs. Northup
                                    Mr. Regula
                                    Mr. Rogers
                                    Mr. Skeen
                                    Mr. Taylor
                                    Mr. Tiahrt
                                    Mr. Walsh
                                    Mr. Wamp
                                    Mr. Wicker
                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each rollcall 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                           rollcall number: 4

    Date: September 10, 1998.
    Measure: Foreign Operations Appropriations Bill, FY 1999.
    Motion by: Ms. Pelosi.
    Description of Motion: To insert additional conditions 
regarding worker protection, environmental protection, 
transparency,and openness under which U.S. participation in the 
International Monetary Fund might be authorized.
    Results: Rejected 24 yeas, 28 nays.
        Members Voting Yea            Members Voting Nay
Mr. Cramer                          Mr. Aderholt
Ms. DeLauro                         Mr. Callahan
Mr. Dicks                           Mr. Cunningham
Mr. Dixon                           Mr. DeLay
Mr. Edwards                         Mr. Dickey
Mr. Hoyer                           Mr. Forbes
Ms. Kaptur                          Mr. Frelinghuysen
Mrs. Lowey                          Mr. Istook
Mrs. Meek                           Mr. Kingston
Mr. Mollohan                        Mr. Knollenberg
Mr. Moran                           Mr. Kolbe
Mr. Obey                            Mr. Latham
Mr. Olver                           Mr. Livingston
Mr. Pastor                          Mr. Miller
Ms. Pelosi                          Mr. Nethercutt
Mr. Porter                          Mr. Neumann
Mr. Price                           Mrs. Northup
Mr. Sabo                            Mr. Packard
Mr. Serrano                         Mr. Parker
Mr. Skaggs                          Mr. Regula
Mr. Stokes                          Mr. Rogers
Mr. Torres                          Mr. Skeen
Mr. Visclosky                       Mr. Taylor
Mr. Yates                           Mr. Tiahrt
                                    Mr. Walsh
                                    Mr. Wamp
                                    Mr. Wicker
                                    Mr. Wolf
                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each rollcall 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                           ROLLCALL NUMBER: 5

    Date: September 10, 1998.
    Measure: Foreign Operations Appropriations Bill, FY 1999.
    Motion By: Ms. Pelosi.
    Description of Motion: To increase the U.S. quota in the 
International Monetary Fund equal to the dollar equivalent of 
10,622,500,000 Special Drawing Rights (dollar value of 
$14,500,000,000) and insert new language authorizing U.S. 
participation in the Fund under a number of conditions.
    Results: Rejected 22 yeas 30 nays.
        Members Voting Yea            Members Voting Nay
Mr. Cramer                          Mr. Aderholt
Ms. Delauro                         Mr. Callahan
Mr. Dicks                           Mr. Cunningham
Mr. Dixon                           Mr. DeLay
Mr. Edwards                         Mr. Dickey
Mr. Hoyer                           Mr. Forbes
Mr. Kolbe                           Mr. Frelinghuysen
Mrs. Lowey                          Mr. Istook
Mrs. Meek                           Ms. Kaptur
Mr. Moran                           Mr. Kingston
Mr. Obey                            Mr. Knollenberg
Mr. Olver                           Mr. Latham
Mr. Pastor                          Mr. Livingston
Ms. Pelosi                          Mr. Miller
Mr. Porter                          Mr. Mollohan
Mr. Price                           Mr. Nethercutt
Mr. Sabo                            Mr. Neumann
Mr. Serrano                         Mrs. Northup
Mr. Skaggs                          Mr. Packard
Mr. Stokes                          Mr. Parker
Mr. Torres                          Mr. Regula
Mr. Yates                           Mr. Rogers
                                    Mr. Skeen
                                    Mr. Taylor
                                    Mr. Tiahrt
                                    Mr. Visclosky
                                    Mr. Walsh
                                    Mr. Wamp
                                    Mr. Wicker
                                    Mr. Wolf
               Assistance to State and Local Governments

    Section 308(a)(1)(C) of the Congressional Budget Act of 
1974 requires that the report accompanying any bill or 
resolution providing new budget authority (other than 
continuing appropriations shall contain a statement of the new 
budget authority and budget outlays provided by that bill or 
resolution for financial assistance to State and local 
governments.
    The amounts recommended in the accompanying bill contains 
no budget authority or budget outlays for State or local 
governments.





           ADDITIONAL VIEW OF DAVID R. OBEY, AND NANCY PELOSI

      inadequate resources to meet national security requirements

    The current 302(b) allocation for the fiscal year 1999 
Foreign Operations bill of $12.475 billion is simply not 
adequate to meet our national security requirements or to meet 
our obligations and responsibilities as the world's only 
superpower. In addition, the commitments by the Republican 
leadership to ``protect'' resources for International Affairs 
in the context of last year's budget agreement have been broken 
by this low allocation level.
    The total recommended in the bill of $12.471 billion for 
discretionary programs, excluding the funding for the 
International Monetary Fund, is $315 million below the fiscal 
year 1998 level, and $1.1 billion below the Administration's 
fiscal year 1999 request. In addition only $352 million of the 
$503 million requested for International Bank Arrears is 
included in the bill. The bill contains only $3.5 billion of 
the $18 billion requested for the International Monetary Fund 
replenishment. The administration has cited the ``serious 
under-funding, which raises issues of congressional support for 
an effective foreign policy, a strong national security policy, 
and continued economic prosperity''. If the bill were presented 
to the President in its current form, the President's advisors 
would recommend a veto.
    The changes that have come about in the world in the last 
decade have given the United States unprecedented opportunities 
to enhance our national and economic security by solidifying 
our global leadership and by bringing democracy to many 
countries. The budget allocation process should put our 
national security as the top priority. By constructing an 
allocation that shortchanges our foreign policy goals, the 
Committee has failed to meet its foremost responsibility.
    The programs which should be funded at a higher level 
include assistance for the New Independent States, the Peace 
Corps Demining programs, the Export Import Bank, the Protocols 
to implement the Comprehensive Test Ban Treaty, the Korean 
Peninsula Energy Development Organization, the Global 
Environment Facility, the International Organizations account, 
and the International Monetary Fund.
    The funding level of $590 million for programs in the New 
Independent States will severely disrupt efforts to accelerate 
reform and bring democracy in those countries. Many NIS 
countries are just now beginning to see benefits from economic 
reform and are struggling to adapt their economies to the 
global market. At this funding level, assistance to virtually 
all NIS countries will be reduced from last year's levels. With 
respect to Russia clearly events there warrant a reassessment 
of both our bilateral and multilateral aid programs. However, 
there should be no question that some level of bilateral 
engagement with Russia is necessary, and that efforts to help 
regional and local governments break away from central control 
should continue. In other countries these cuts will slow 
recovery efforts from years of war and take away from 
incentives for achieving peaceful solutions.
    While the bill does contain funding of $3.5 billion for the 
IMF's New Agreements to Borrow, it does not fund the $14.5 
billion necessary for the IMF quota increase. It also contains 
conditions for funding, which according to the Administration 
are unworkable in their current form, and would have the effect 
of indefinitely delaying the availability of resources to the 
IMF if enacted. The Congress has debated the IMF replenishment 
for a full year. In that time economic crisis has spread from 
Asia to Russia, and is now threatening to strike Latin America. 
The IMF now has only $7 to $12 billion in usable quota 
resources. It is time for Congress to act on this 
replenishment. The IMF should be held accountable for the 
success or failure of its programs in specific countries, and 
is badly in need of institutional reform. However, the fact 
remains that replenishment of the IMF will ultimately benefit 
American workers, businesses and farmers by protecting our 
economic strength.
    The bill also denies all funding for the Korean Peninsula 
Energy Development Organization. The Agreed Framework between 
the United States and North Korea provides the only basis for 
U.S. access to facilities in North Korea and is the best tool 
available to the United States to bring about a cessation of 
nuclear weapons and ballistic missile development programs in 
that country. By zeroing out this funding the Committee has 
taken an action that could seriously destabilize security on 
the Korean Peninsula and place U.S. Troops in great danger.
    The bill also contains language restricting organizations 
receiving AID family planning assistance from using their own 
funds to seek to change laws in their own country. This 
provision punishes organizations for engaging in legal 
activities in their own countries that would be protected by 
the First Amendment, if carried out in the United States. As 
currently structured the provision would even muzzle 
organizations from speaking out against abortions in their own 
countries. The President has indicated clearly that this 
language is unacceptable and that he will veto any bill 
containing it.
    The bill only contains $42.5 million of the $300 million 
requested for the Global Environment Facility (GEF) of the 
World Bank. The GEF was created in 1991 by the Bush 
Administration in response to the vast needs in developing 
countries for multilateral resources devoted to mitigating 
environmental problems. It is currently funding programs to 
address a variety of environmental problems including the 
promotion of a biodiversity, creating energy efficiency and 
cleaning up polluted water. The claim that it is directly 
linked to the Framework Convention on Climate Change or the 
Biodiversity Convention is false and misleading. The work being 
accomplished with these funds is necessary, with or without 
these international agreements. Without additional funding GEF 
will run out of money soon and this vital work will stop.
    There are many programs in the bill which are funded 
adequately and in many instances our views and priorities were 
accommodated. However, we remain opposed to the bill in its 
current form for the reasons indicated and will oppose its 
passage on the floor.

                                   Nancy Pelosi.
                                   David R. Obey.

                                
