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Summary of FY 2007 Budget and Program Overview

USAID BUDGET SUMMARY

($Thousands)

Table 1

BILATERAL ASSISTANCE-USAID	FY 2004 Appropriation with rescission	FY 2005 Appropriation with rescission	FY 2006 Appropriation with rescission	FY 2007 Request
FOREIGN OPERATIONS SUBCOMMITTEE
Child Survival and Health Programs (CSH) 1/	1,824,174	1,562,400	1,569,150	1,433,000
2006 Avian Flu Supplemental - CSH	-	-	75,200	-
Development Programs (DA)	1,364,329	1,448,320	1,508,760	1,282,000
Subtotal -Development Assistance	3,188,503	3,010,720	3,153,110	2,715,000
International Disaster & Famine Assistance (IDFA)	253,993	367,040	361,350	348,800
2004 Emergency Supplemental - IDFA	110,000	-	-	-
2004 Emergency Supplemental - IRRF transfer to IDFA	110,000	-	-	-
2004 Supplemental - IDFA	70,000	-	-	-
2005 Emergency Suppl  Caribbean hurricane - IDFA	-	100,000	-	-
2005 Emergency Suppl - Sudan IDFA	-	17,856	-	-
2005 Wartime & Tsunami Supplemental - IDFA	-	90,000	-	-
2006 Avian Flu Supplemental - IDFA	-	-	56,330	-
International Disaster & Famine Assistance Total	543,993	574,896	417,680	348,800
Transition Initiatives - (TI) 2/	54,676	48,608	39,600	50,000
Development Credit Program Subsidy - transfer	[20,876]	[20,832]	[20,790]	[21,000]
Development Credit Program Subsidy/AHIF - appropriation	-	-	-	5,000
Operating Expenses (OE)	613,036	613,056	623,700	678,826
2004 Emergency Supplemental  - OE	38,100	-	-	-
2005 Wartime & Tsunami Supplemental - OE	-	24,400	-	-
Capital Investment Fund (OE CIF)	81,715	58,528	69,300	131,800
2004 Emergency Supplemental - OE CIF	16,600	-	-	-
Development Credit Programs - Admin. Expense	7,953	7,936	7,920	8,400
IG Operating Expenses - IG OE	34,794	34,720	35,640	38,000
2004 Emergency Supplemental - IG OE	1,900	-	-	-
2005 Wartime & Tsunami Supplemental - IG OE	-	2,500	-	-
Foreign Service Retirement & Disability - [Mandatory]	[43,859]	[42,500]	[41,700]	[38,700]
Subtotal-USAID Directly Managed	4,581,270	4,375,364	4,346,950	3,975,826
Department of State & USAID Jointly Managed
Economic Support Fund (ESF)	2,144,772	2,462,640	2,607,660	3,214,470
2004 Emergency Response Fund - ESF	153,000	-	-	-
2004 Emergency Supplemental - IRRF transfer to ESF	100,000	-	-	-
2004 Emergency Supplemental - ESF	872,000	-	-	-
2005 Wartime & Tsunami Supplemental - ESF	-	1,433,600	-	-
International Fund for Ireland	18,391	18,352	13,365	-
Economic Support Fund Total	3,288,163	3,914,592	2,621,025	3,214,470
-of which direct to State Department	[81,020]	[86,792]	[44,550]	[88,500]
Int'l Narcotics Control/Andean Counterdrug [USAID-managed]	227,836	227,340	226,485	206,900
Assistance for Eastern Europe and the Baltic States (AEEB)	442,375	393,427	357,390	273,900
-of which AEEB transfers	[138,589]	[120,389]	[119,156]	[108,461]
Assistance for the Independent States of the Former Soviet Union (FSA)	584,537	555,520	508,860	441,000
2005 Wartime & Tsunami Supplemental - FSA	-	70,000	-	-
-of which FSA transfers	[146,749]	[183,526]	[169,607]	[147,648]
Millennium Challenge Account [transfer to USAID]	[20,000]	[60,000]	-	-
Global HIV/AIDS Initiative [transfer to USAID]	[229,600]	[741,622]	[834,627]	[834,627]
2005 Tsunami Relief and Reconstruction Fund Supplemental	-	656,000	-	-
2004 Iraq Relief & Reconstruction Fund (IRRF) Supplemental	2,336,233	996,808	-	-
Subtotal: Foreign Operations Subcommittee	11,460,414	11,189,051	8,060,710	8,112,096
AGRICULTURE SUBCOMMITTEE
PL 480 Title II (Agriculture Subcommittee)	1,184,967	1,173,041	1,138,500	1,218,500
2005 Wartime & Tsunami Supplemental - PL 480	-	240,000	-	-
Subtotal: Agriculture Subcommittee	1,184,967	1,413,041	1,138,500	1,218,500
TOTAL USAID	12,645,381	12,602,092	9,199,210	9,330,596
Of which Supplementals	3,807,833	3,631,164	131,530	-
Total USAID without Supplementals	8,837,548	8,970,928	9,067,680	9,330,596

1/  Beginning in FY 2005 all funding for PEPFAR focus countries is appropriated and requested in the Global HIV/AIDS Initiative account.
2/  The total 2004 supplemental appropriation for the IRRF is $18.649 billion. 

PROGRAM OVERVIEW

The FY 2007 program budget request for the U.S. Agency for International Development (USAID) proposes to implement transformational diplomacy through development. Transformational diplomacy's objective is "to work with our many partners around the world to build and sustain democratic, well-governed states that will respond to the needs of their people and conduct themselves responsibly in the international system."¹

The FY 2007 program budget supports key Administration priorities.

• It continues efforts to build democracy, good governance and economic growth in Iraq and Afghanistan, and requests funds in support of other frontline states in the Global War on Terror.
• It supports the President's Freedom Agenda through activities to strengthen effective democracies in programs that promote transformational development or address state fragility.
• To foster transformational development through economic growth, USAID proposes to sustain programs devoted to building trade capacity.
• It seeks authority in certain critical emergency situations to use P.L. 480 Title II funds for the local or regional purchase and distribution of food to assist people threatened by a food security crisis.
• It includes funds to robustly address the global issues of HIV/AIDS, malaria and the threat of avian influenza.

To implement transformational diplomacy through development, the FY 2007 budget request builds on previous years' evolution in the direction of better incorporating foreign policy and national security considerations with development in strategic resource allocation. In 2004, USAID began operating under the Joint State/USAID Strategic Plan for 2004-2009. In the past three years, USAID has incorporated the results of the Program Assessment Rating Tool into its strategic management. USAID's strategic management takes into account country need, program performance, foreign policy importance and country commitment to promoting economic freedom, ruling justly and investing in people. Taking account of all of these elements represents a major step forward in the strategic management of program resources. Complementing these programmatic improvements, USAID has embarked - with an interruption in FY 2006 due to the enacted level of Operating Expense funds - on human capital improvement and business systems modernization initiatives. These will ensure that USAID has the proper staffing to support program success and to enhance decision-making and enable fast and accountable transactions.

In January of 2006, USAID published the Policy Framework for Bilateral Foreign Aid, which identifies five core strategic goals. The goals are to:

• Promote transformational development
• Strengthen fragile states
• Provide humanitarian relief
• Support strategic states
• Address global issues and special concerns.

FY 2007
All Accounts USAID Core Strategic Goals

The FY 2007 budget request reflects USAID's progress in aligning program resources with these operational goals and anticipated results, taking performance into account. The proposal follows the principles of the U.S. approach to transformational development that President Bush outlined at the United Nations Financing for Development Conference, tying higher aid levels to countries that have made progress in building effective democracies, promoting economic freedom and investing in their own peoples. This budget proposal allocates part of the Development Assistance account based on these principles.

USAID's budget request supports programs directed at key assistance priorities in the President's FY 2007 budget. The total FY 2007 request is just under $8.5 billion. Of that amount, $5.4 billion is requested for programs to be implemented by USAID from accounts that are jointly managed with the Department of State (e.g., the Economic Support Fund [ESF], Assistance for Eastern Europe and the Baltic States, Assistance for the Independent States of the former Soviet Union, and the Andean Counter Drug Initiative). For accounts directly managed by USAID - Development Assistance (DA), Child Survival and Health Programs Fund (CSH), International Disaster and Famine Assistance, and Transition Initiatives - $3.1 billion is requested. The total for administrative costs is $857 million for Operating Expenses, the Capital Investment Fund, Inspector General Operating Expenses and the Development Credit Program's administrative expenses. Also included is $1.2 billion in P.L. 480 Title II food aid (which falls under the Subcommittee on Agriculture and is appropriated to the U.S. Department of Agriculture and managed by USAID).

USAID's five core strategic goals form the framework for the FY 2007 budget request.

Goal: Support Strategic States

The goal in strategic states is to support and help advance the U.S. foreign policy objective that drives assistance to the country. This may call for programs aimed at development progress; programs that address fragility; or other kinds of programs. For each country, broad program goals and objectives are developed in close consultation and cooperation between USAID and other parts of the Administration, as well as with the Congress. Considerations include identifying the sorts of program goals that will best serve the U.S. foreign policy interests in the country, and assessing the feasibility of achieving development results (or diminished fragility) in a particular country context, and the kinds of programs likely to be most effective.

Country strategies will vary from country to country depending on the broad program goals and objectives. Overall success is assessed in terms of the contribution of the USAID program to the foreign policy objectives that drive the assistance.

In FY 2007, USAID will support U.S. foreign policy goals with special emphasis on Iraq, Afghanistan, Pakistan and other front-line states in the War on Terror in the Asia and the Near East and Africa regions. The Agency's Iraq programs will be funded from the Economic Support Fund and other appropriations, while the Afghanistan, Pakistan and other front-line state programs will come from a mix of accounts. The programs in Iraq and Afghanistan will be aimed at consolidating democratic governance (ruling justly), recovering the capacity for economic growth (promoting economic freedom) and will continue modest investments in people. USAID's programs in other regions also carry out country-specific U.S. foreign policy objectives from Colombia and Haiti in Latin America to Nigeria in sub-Saharan Africa to Cyprus in the Europe and Eurasia region. In supporting region- or country-specific foreign policy goals in each strategic state, USAID employs its proven methods for promoting transformational development or reducing fragility, tailored to the country circumstances. Nearly two thirds of all resources planned in support of strategic states will be devoted to promoting economic freedom, while 20 per cent is allocated for investing in people and 15 per cent to enhance strategic states' capacity to rule justly via democratic governance.

FY 2007
All Accounts to Support Strategic States

Goal: Promoting Transformational Development

Transformational development does more than raise standards of living and reduce poverty. It transforms countries through far-reaching, fundamental changes in institutions of governance, human capacity, and economic structure that enable a country to sustain further economic and social progress without depending on foreign aid. The primary determinants of progress in transformational development are political will and commitment to promote economic freedom, rule justly, and make sound investments in people. USAID pursues transformational development in countries that are reasonably stable, have a significant need for concessional assistance and have demonstrated commitment. Hence, 84 per cent of DA and CSH resources in FY 2007 were allocated to countries that are eligible for MCA resources or are otherwise good performers. Needy countries with fair or weak performance will receive the balance of these resources which will be used to encourage those countries to get on a better development path. In determining program content and assistance levels, USAID looks for and promotes synergies with the Millennium Challenge Account in compact and threshold countries.

FY 2007
DA and CSH to Countries for Transformational Development

Investments and progress measurement in transformational development fall into three broad focal areas for both host countries and donors: ruling justly, promoting economic freedom and investing in people. In FY 2007, USAID proposes 22 per cent of all resources for allocation to ruling justly. The second-largest share, at 37.5 per cent, will go to promote economic freedom, and 40.5 per cent, the largest share, will go for programs that invest in people. Discussed below are selected areas in the FY 2007 budget proposal that USAID wishes to highlight among its programs in support of transformational development.

FY 2007
All Accounts to Support Transformational Development Countries
 
FY 2007
DA and CSH to Support Transformational Development Countries

Ruling Justly

Transformational diplomacy incorporates the goals of the President's Freedom Agenda, seeking to build and sustain democratic, well-governed states. The Freedom Agenda is predicated on the shared understanding that democracy promotion is both central to our national identity and directly in the national interest of the United States. Beyond principle and national security, USAID support for democracy and good governance is also grounded in the broader development agenda.

USAID is the world's largest democracy promotion donor and the primary U.S. Government implementer of the Freedom Agenda. In most transformational development situations, some democratic progress has been made. USAID's democracy assistance promotes consolidation and works to prevent backsliding. To do this, our assistance aims to be steady, long-term, and focused on strengthening the rule of law and institutions of democratic and accountable governance. Our programs support ministries and local governments to improve their effectiveness, transparency, and accountability. Training and technical assistance to the judiciary and police help them address crime and corruption fairly and impartially. Aggressive anticorruption measures are central to bolstering the prospects for democratic consolidation. We also help strengthen political parties to effectively aggregate and represent citizens' interests. Support for a vibrant, politically active civil society provides avenues for citizens to participate in oversight and advocacy and helps deepen democratic culture. Assistance provided to other sectors - economic policy reform, natural resources, property rights, health, and education - is important to demonstrate the effectiveness of democratic governance and increase individuals' stake in sustaining democracy.

Promoting Economic Freedom

Assistance provided for transformational development will broadly promote an expansion of economic opportunity by enabling business firms, cooperatives and other economic organizations to increase the efficiency and profitability of their efforts; farmers and rural entrepreneurs to access new technologies and markets for the production of food and incomes; nations to better participate in and benefit from world trade, and individuals to acquire the skills they need to succeed in life.

Trade is a powerful engine for growth and poverty reduction in developing countries. USAID programs are undertaken in response to the World Trade Organization (WTO) member countries' commitment to help developing countries build their capacity to take advantage of globalization and multilateral agreements on trade liberalization. Programs support developing countries to participate in trade negotiations, implement trade agreements and take advantage of the economic opportunities created by trade. This means building analytical and negotiating skills; strengthening key institutions charged with implementing agreements; reforming policies; removing trade barriers, strengthening legal, political and economic institutions and improving private sector operating practices and strategies.

In FY 2007, USAID proposes to continue its successful activities in trade capacity building. Funds will support trade facilitation activities that improve customs and other trade-related economic governance, enhance the private sector's ability to meet international standards and otherwise increase private sector investment and developing economies' responsiveness to new trade opportunities, as well as activities such as assistance to small and medium enterprises to link them to the global economy.

Investing in People

USAID's overall goal in education is to help the citizens of developing countries gain the skills and knowledge they need to build and live in free and prosperous societies. At the heart of USAID's strategy is basic education - the foundation for lifelong learning opportunities. USAID also undertakes other components of education that enhance productivity. These include selective investments in workforce development and higher education.

USAID defines basic education broadly to include all program efforts aimed at improving early childhood development, primary education, and secondary education - delivered in formal or informal settings - as well as training for teachers working in any of these contexts. USAID also counts training in literacy, numeracy, and other basic skills for adults or out-of-school youth. The common thread among these elements is that they help learners gain the general skills and basic knowledge needed to function effectively in all aspects of life.

Within the sphere of basic education, USAID's efforts will promote more equitable access and improved quality. Ensuring equitable access requires removing physical, economic, and social barriers to education, especially for children underserved because of their poverty, rural residence, ethnic background, disability, or gender. It is particularly through the education of girls that countries accrue a wide range of benefits, including improved health and survival rates of infants and children, reduced rates of fertility, and greater use of modern contraceptive methods. Investments in girls' education also pay off in higher rates of school attendance, attainment, and completion among their children as well as in improvements in the status of women within families, the local community, and the political arena. Hence, USAID pays particular attention to girls' education in our programs.

Today's global economy is being shaped by rapid advancements in technology. To be competitive, countries require workers with both the basic literacy and critical-thinking skills needed to be productive and to adapt to ongoing changes in the marketplace. Countries must produce more highly trained people, including teachers and administrators, to advance and sustain economic growth and other dimensions of development. To accomplish these things, USAID supports "workforce development" programmatic and policy efforts to help young people and adults gain the specific skills and attitudes they need to be productively employed. Colleges and universities in many developing countries have the potential to contribute more fully to the development of their own countries, both through better teaching and better-targeted applied research and by playing a more active role in solving local and national constraints to sustained development. USAID assistance supports them to do so.

In health for transformational development, the Agency is increasing its efforts to build adequate health systems by placing greater emphasis on improving quality assurance, cutting waste and inefficiency, strengthening strategic planning and management systems, and developing host-country capacities to sustain the gains in health made with USAID investments. Further, USAID is helping health service delivery organizations manage the finances, drugs and human resources needed to deliver increasingly complicated therapies, such as those for HIV/AIDS and chronic diseases.

USAID recognizes the continued importance of Child Survival and Maternal Health in addition to the emphasis on strengthening health systems. The Agency has identified immunization, prevention and treatment of pneumonia and diarrheal diseases, improved nutrition including vitamin A and other micro-nutrients, and breastfeeding as key child survival interventions.

USAID directs its Maternal Health resources to the most cost-effective strategies that deliver proven interventions to prevent and treat life-threatening complications and long-term disabilities as a result of pregnancy. To reduce mortality and disability, USAID will advance and support use of skilled birth attendants; transfer improved technologies and standards of care to reduce postpartum hemorrhage, the biggest maternal killer; increase our capacity to repair obstetric fistula; provide technical assistance to design effective country programs, particularly in sub-Saharan Africa; and participate in the global Initiative for Maternal Mortality Programme Assessment Alliance to document the most cost-effective strategies for achieving public health impact where geography, culture, political unrest, and HIV/AIDS present special challenges to maternal health.

Goal: Strengthening Fragile States

Fragile states are those that are vulnerable to or in crisis. Crisis can take different forms, such as conflict and insecurity, governance and economic crisis, or famine. Local conditions in fragile states can change quickly, requiring USAID to adapt to both challenges and opportunities as they arise. Given their distinct realities, USAID's objectives in these settings need to differ from those in more stable transformational development states. The objectives we pursue to lessen fragility include: enhancing stability and security, advancing opportunities for reform when they arise and developing capacity of essential institutions and infrastructure.

Each of these objectives is equally critical. To implement the objectives, USAID will support a range of political, economic, social and security initiatives aimed at overcoming the conditions that make countries vulnerable to crisis. This may include building the capacity of governance institutions, promoting economic growth and effective management of natural resources, improving the provision of key social services such as education and supporting civil society actors. This support may include advancing peace building, transitional governance and reconstruction initiatives. The specific mix of programs will vary from country to country, but the overall focus will be on reducing fragility and creating the basis for transformational development.

Support to these states requires close coordination with other U.S. Government agencies, as well as with partners such as non-governmental organizations and other donors. USAID and our partners have already moved to enhance coordination.

Since governance is central to reducing fragility, the largest share (42 per cent) of USAID's proposed FY 2007 budget for these programs will help rebuild the political, economic, and social fabric of countries damaged by conflict or failure, as well as to work in countries that are increasingly vulnerable to sliding into chaos or collapse. In fragile states, USAID democracy and governance programs support USAID's objectives of stabilization, reform, and recovery. In these environments, USAID responds rapidly and flexibly to critical vulnerabilities. The focus of programs is on developing-or rebuilding-institutions of democratic and accountable governance based on the rule of law, and promoting justice and human rights.

In post-conflict states, the first priority is to reestablish order and to work on constituting an effective and legitimate state by building consensus and defining the character of the state. USAID implements short-term, high-impact activities oriented to these objectives, while establishing the basis for long-term development. In FY 2007, USAID is requesting $50 million in Transition Initiative assistance for these activities. Along with helping to form a consensus and establish a minimum basis for the rule of law, elections may be an appropriate ingredient in post-conflict transitions.

Service delivery is another means by which USAID helps weak governments to improve their effectiveness and gain legitimacy. To the extent possible, USAID's education and health programs in fragile states are designed and implemented in ways that strengthen weak institutions and promote accountability, transparency and participation. USAID is proposing that 32 per cent of the assistance to address fragility be used for programs in education and health.

Economic activity, including job creation to re-integrate former combatants and displaced persons, is also important to reducing fragility. Many fragile states must lay the foundations for future growth by taking initial reform measures to improve economic management and building core competencies such as public financial management. Twenty-seven per cent of the FY 2007 request for programs addressing fragility will be allocated to economic growth programs.

Provide Humanitarian Relief

Humanitarian response is a longstanding foreign aid priority, and humanitarian assistance will continue to be provided on the criterion of urgent need. The goal is to help save lives and alleviate suffering of people in distress, regardless of the character of their governments. Humanitarian programs can be pursued - depending on need -- in transformational development countries, in fragile states, in strategic states, or in other states that do not normally receive foreign assistance.

Humanitarian assistance is often provided to countries where USAID has other core operational goals such as transformational development, reducing fragility, or combating HIV/AIDS and other communicable diseases. Humanitarian assistance will be provided in ways that reinforce our interests in these other goal areas. Similarly, USAID is guided by the "do no harm" principle that seeks to ensure that our humanitarian assistance does not have unintended negative consequences, such as instability or dependency. The concept of relief that promotes recovery will be integrated into the programming of humanitarian assistance. USAID will seek durable solutions to crises by emphasizing disaster prevention and building local capabilities to respond. This approach is being applied, for example, in addressing population displacement.

Just under 20 per cent of USAID's overall request is for purposes of humanitarian response. The FY 2007 budget request includes $349 million in IDFA and $1.2 billion in P.L. 480 funds. USAID will use the IDFA and a share of the P.L. 480 Title II funds to provide quality humanitarian assistance to disaster victims. The request includes authority to use up to 25 percent of the P.L. 480 Title II funds for the local or regional purchase and distribution of food to assist people threatened by a food security crisis. This will permit USAID to provide food assistance in the most timely and efficient manner in certain types of emergency food crises. This authority will only be used in those instances where the rapid use of cash assistance is critical to saving lives. USAID provides emergency assistance, targeting the most vulnerable groups: the malnourished, children, nursing and pregnant women, child- and women-headed households, the elderly and the disabled. In FY 2005, USAID responded to 84 declared disasters in 76 different countries. Emergency food assistance benefited 49 million people in 34 countries.

The request will also develop host country expertise and provide resources for planning, preparedness, mitigation and prevention activities in risk-prone areas. To reduce the need for humanitarian relief, USAID works to improve regional, national and local capacity to plan for, mitigate and respond to disaster events. USAID's training in Asia toward these ends includes incident command training, application of technological advancements such as flood forecasting and early warning and hazard mapping for vulnerable and affected communities.

Goal: Global Issues and Special Concerns

This goal area encompasses the many other objectives and priorities that USAID pursues as largely independent, self-standing concerns. Many of these concerns are very relevant to development. Nonetheless, they are typically pursued because they are important in their own right. Resources are allocated based on concern-specific need and commitment and results can be achieved irrespective of the country's general progress in development or reduction in fragility. Such concerns often call for a concerted response focused on a subset of countries where the issue or problem is most acute or immediate. USAID is proposing that about 18 per cent of all funds that are appropriated to or managed by USAID address global issues and special concerns. More than 90 per cent of the total for global issues and special concerns would come from the CSH and DA accounts.

Examples of global issues include HIV/AIDS and climate change. Special concerns might include programs directly aimed at countering narcotics or other illicit trade, other infectious diseases besides HIV/AIDS, family planning, programs aimed at reducing illegal logging, or direct support for U.S. trade agreements.

These concerns can be pursued in transformational development countries, fragile states, and/or strategic states. Some special, self-standing concerns may be country-specific, with little or no connection between progress in one country and progress in another. They are reflected in development programs that are fairly specifically defined and restricted and oriented more toward near term delivery of specific goods or services than towards broader institutional development. An example might be a partnership arrangement between a specific U.S. and specific developing country organization that is unrelated to the strategic objectives of the USAID program in the country but may nonetheless have some developmental effect.

Two of the most significant types of global issues and special concerns are discussed under this goal to illustrate USAID's request.

HIV/AIDS and Other Infectious Diseases

As HIV/AIDS and related infectious diseases remain a threat to the health of adults and children in developing countries worldwide. Thus, the fight against this pandemic remains a top priority for USAID, which has a lead role in implementing the President's Emergency Plan for AIDS Relief under the policy direction of the Global AIDS Coordinator at the Department of State. In FY 2007, USAID will coordinate closely with the Office of the Global AIDS Coordinator and the Department of Health and Human Services to fund and manage country and central programs.

In FY 2007, USAID will continue efforts in the prevention of mother-to-child HIV transmission, assistance to orphans and vulnerable children, the ABC (abstinence, be faithful, use condoms) approach to HIV/AIDS prevention, nutrition and HIV/AIDS, life-extending therapy, voluntary counseling and testing, improving injection safety and ensuring the safety of blood supplies, and provision of therapy for concurrent illnesses and opportunistic infections as well as palliative care. USAID's FY 2007 program will provide global leadership in the areas of capacity building, policy environment, monitoring and evaluation systems, public and private sector partnerships; and to the Global Fund to Fight AIDS, Tuberculosis and Malaria through its active participation on the U.S. delegation to the Global Fund's Board, and through technical support provided by USAID missions to Country Coordinating Mechanisms in developing and/or implementing Fund-supported country programs.

USAID's infectious diseases strategy will continue to focus primarily on strengthening prevention and control programs at the country level. Malaria efforts include the President's Malaria Initiative, and will focus on scaling up interventions to prevent and treat malaria infection in women and children in particular expanding access to insecticide treated bed nets, spraying with approved insecticides, intermittent treatment for pregnant women and prompt treatment with combination drug therapies. Efforts to address malaria will build on and expand current programs primarily in Africa, where $135 million in FY 2007 funds are requested for comprehensive coverage in seven countries. An estimated $88 million is requested for sub-regional efforts in South America and Southeast Asia and complex emergency settings. USAID will continue to support the expansion of partnerships, and will invest in malaria vaccine and drug development.

The rapid spread of the H5N1 avian influenza virus in several regions where USAID has development programs has added a new threat to human health. USAID requests $55 million for activities aimed at averting an avian influenza pandemic in human populations. Avian influenza programs will include communications campaigns to increase awareness of risks and appropriate behaviors to reduce transmission among human and animals, strengthened surveillance and diagnosis programs, more robust response capacity and effective planning and preparedness efforts so that countries are ready to respond to animal and/or human outbreaks.

Environment and Energy

A number of the President's initiatives are related to assisting developing countries to address aspects of global climate change, such as greenhouse gas emissions or carbon sequestration.

The Global Climate Change Initiative will transfer American energy and sequestration technologies to developing and transition countries to promote sustainable development and minimize their greenhouse gas emissions growth. Activities assist countries to better measure, reduce emissions, and invest in clean and renewable energy technologies. This initiative is implemented in the four regions: Africa, Asia and the Near East, Latin America and the Caribbean, and Europe and Eurasia.

USAID activities in support of the President's Initiative on Illegal Logging will complement the regional Congo Basin Forest Partnership Initiative. Recognizing the negative impact that illegal logging has on world markets in forest products, USAID will partner with producers and forest organizations worldwide to develop and implement new approaches to sustainable forestry management that respond to market incentives. The Congo Basin Forest Partnership promotes economic development, poverty alleviation, improved governance, and conservation of natural resources in six Central African countries: Cameroon, Central African Republic, Democratic Republic of Congo, Equatorial Guinea, Gabon, and the Republic of Congo. Through a network of national parks and protected areas, activities will support sustainable forest management, forestry concessions, sustainable agriculture, and assistance to local communities who depend upon conservation of the forest and wildlife resources. USAID funding will be leveraged by contributions from international environmental organizations, host governments, G-8 nations, the European Union, and the private sector.

The Clean Energy Initiative (CEI) has three components: The Global Village Energy Partnership works to increase access to modern and affordable energy services in un- and underserved areas; Efficient Energy for Sustainable Development works to delay the need for new generating capacity by improving the productivity, efficiency, and reliability of current operating systems; and Healthy Homes and Communities works to promote cleaner transportation fuels and indoor cooking and heating practices to reduce the estimated three million deaths that result from poor air quality each year. USAID support for the Global Village Energy Partnership will result in an estimated 5 million people per year receiving new or improved access to modern energy services. The CEI operates as a partnership, leveraging the funds of governments, the private sector, civil society, development organizations, and others.

Water for the Poor

This initiative expands access to clean water and sanitation services, improves watershed management, and increases the efficiency of water in industrial and agricultural activities. This initiative will help achieve the UN Millennium Declaration Goal of cutting in half by 2015 the proportion of people who lack safe drinking water. This initiative is multi-year and will leverage private resources to generate more than $1.6 billion for water-related activities globally. The regional foci are sub-Saharan Africa, and in Asia and the Near East.

Conclusion

The FY 2007 budget request fully supports U.S. foreign policy goals and national security interests. The request responds to President Bush's priorities, including support for the Global War on Terrorism, the President's Freedom Agenda, the President's Malaria Initiative and Emergency Program for AIDS Relief as well as other administration initiatives. To advance transformational diplomacy, USAID pursues five strategic goals: promoting transformational development, strengthening fragile states, supporting strategic states, providing humanitarian relief and addressing global issues and special concerns. To have the greatest impact toward these goals, USAID proposes to strategically manage the directly appropriated resources, and work with other U.S. Government departments to do the same with the resources appropriated to others but under USAID management.

This section has provided an overview of USAID's proposed FY 2007 budget. Full details are found in the accompanying tables and in the annexes.

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