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	Statement of the Administrator Summary of FY 2005 Budget Request Program Highlights Management Improvements USAID Support Budget
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Program Highlights

The Bush Administration's National Security Strategy identifies development, diplomacy, and defense as the core, interdependent components of U.S. foreign policy. In the current complex national security environment, economic and political development plays a critical and pivotal role. Over the past two years, the War on Terrorism and the reconstruction of Iraq and Afghanistan have highlighted the importance of foreign assistance in U.S. national security policy.

The U.S. Agency for International Development (USAID) is moving in new directions to meet the evolving foreign assistance challenges. For the first time, the State Department and USAID have coordinated and integrated their foreign policy and development goals in a joint State/USAID five-year strategic plan. USAID is focused on performance-based management. Furthermore, the Agency developed a generalized strategic budgeting model that takes into account country need, program performance and country commitment in key areas such as economic freedom, investment in people and ruling justly. The Agency integrated the results of the Performance Assessment Rating Tool (PART) and strategic budgeting to develop country allocations. To continue these and other management improvements and to sustain improvements in implementation of its priority programs, USAID's first management priority is the rebuilding of its foreign service through the Development Readiness Initiative, a program which builds on Secretary Powell's Diplomatic Readiness Initiative and whose goal is to make the Agency more agile and better able to respond to foreign policy priorities. Management improvements that are led by a world-class foreign service and a dedicated civil service will lay the foundation for a strengthened U.S. role in international development

The FY 2005 budget request is the first under the joint State/USAID strategic plan and reflects the Administration's integrated approach to foreign policy and national security. Using a formal strategic budgeting model, the FY 2005 budget request takes into account foreign policy considerations, the developmental needs of the country, the commitment of the host government, and the performance of the USAID program. The FY 2005 budget will enable USAID fulfill its mandate to:

• Promote transformational development to bring far-reaching, fundamental changes to institutions of governance, human capacity, and economic structure that help countries to sustain further economic and social progress without continued dependence on foreign aid.
• Strengthen fragile states through stabilization, reform, and recovery programming in selected failing, failed, and recovering states.
• Provide humanitarian relief to meet immediate human needs in countries afflicted by violent conflict, crisis, natural disaster, or persistent dire poverty.
• Support geostrategic interests to achieve specific U.S. foreign policy goals in countries of high priority from a strategic standpoint.
• Address global and transnational issues including HIV/AIDS, other infectious diseases, biodiversity, climate change, direct support for international trade agreements, trafficking in persons, and counter-narcotics.

By providing advisory services, training, and commodity support to more than 70 developing and transition countries around the world, USAID strengthens our country's leadership in the provision of hope and opportunity for people in the developing world

USAID has structured its programs around four "pillars": (1) the Economic Growth, Agriculture, and Trade (EGAT) pillar focuses on building stronger economies that are soundly-governed, broadly-based, and integrated into the global trading system; (2) the Global Health pillar includes child survival and maternal health, HIV/AIDS, infectious diseases, family planning and reproductive health; (3) the Democracy, Conflict, and Humanitarian Assistance pillar responds to crises and promotes good governance; and (4) the Global Development Alliance promotes public-private alliances to address all sectors of development, i.e., poverty, disease, and hunger. The GDA model allows USAID to leverage the resources of non-governmental organizations, the private sector, and other donors to achieve a much greater impact that is possible with USAID's limited resources alone. The FY 2005 budget request is organized around the three sectoral pillars; the Global Development Alliance is incorporated in all three.

USAID's budget request supports programs directed at key development priorities in the President's FY 2005 budget. The budget request reflects the Administration's new focus and impetus on the role of foreign assistance in enchanting our national security and promoting a sound economic development agenda. The total FY 2005 request is $8.823 billion. Of this amount, $3.709 billion is requested for programs to be implemented by USAID from accounts that are jointly managed with the Department of State: Economic Support Fund, Assistance for Eastern Europe and the Baltic States, Assistance for the Independent States of the Former Soviet Union, and the Andean Counterdrug Initiative. $3.197 billion is requested for program accounts which are directly managed by USAID: Development Assistance, Child Survival and Health Programs Fund, International Disaster and Famine Assistance, Transition Initiatives. Administrative costs total $731 million for Operating Expenses, the Capital Investment Fund, IG Operating Expenses, and the Development Credit Program's administrative expenses. Also included is $1.185 billion in P.L. 480 Title II food aid (which falls under the Subcommittee on Agriculture and is appropriated through the U.S. Department of Agriculture and managed by USAID).

Economic Growth, Agriculture, and Trade Pillar

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

Development Assistance (DA) resources will be largely allocated to countries in sub-Saharan Africa, Latin America, and Southeast Asia. OFDA and OTI resources will enable countries emerging from conflict or disaster to regain an economic growth path, initially by focusing on the basics of agriculture, microenterprise, education, and good governance. FSA and AEEB resources will continue the difficult task of building democratic market economies in Eastern Europe and the former Soviet Union. ESF resources support economic growth programs in countries that have special priority for the U.S. from a foreign policy perspective. Title II food aid resources both ensure safety nets when external shocks (drought, high oil prices, market crises, or civil strife) occur and highly-focused resources that enable the poorest groups to find or maintain their places in national economies. The Development Credit Authority (DCA) permits USAID to expand the impact of all appropriated resources by facilitating our partnership with private sector financial institutions willing to work with USAID in providing needed credit to targeted sectors or borrowers.

Given U.S. Government (USG) commitments made at the WTO Ministerial Meeting in Doha to support increased integration of developing countries in the global trading system and at the U.N. Financing for Development Conference in Monterrey to support increased private sector investments in economic development, USAID's FY 2005 proposes to sustain a significant level of investment in trade capacity-building. With USG commitments made at the World Food Summit: six years later and USAID's role in the interagency effort dedicated to cutting hunger in half by the year 2105, the Agency is continuing to rebuild agricultural programs worldwide. We recognize that expanded economic opportunities for the vast majority of the poor in developing and transition countries rely on increasing productivity in this sector. Investments in science and the development of agricultural technologies (including those using biotechnology) will be complemented by investments that sustain the productivity and quality of the natural resources on which agricultural production depends.

The USG's decision to rejoin UNESCO strengthens USAID collaboration and leadership in the education sector and the implementation of the Education for All initiative. Without the training and skills to access the rapidly-growing knowledge base that underpins economic growth, children and adults in developing and transition countries will be unable to seize economic opportunities and realize the benefits of economic freedom that USAID promotes.

Finally, the USG commitments at the World Summit on Sustainable Development - and the Presidential Signature Initiatives announced at that Summit in Johannesburg - are reflected in the USAID requests for resources to support environmental protection and conservation of biodiversity (especially in Central Africa), extending access to modern energy (including renewable energy and other clean technologies), extending access to information technologies and the internet, and addressing increasingly critical issues associated with water: access to potable water and sanitation, more productive use of the world's fresh water for agriculture, and improved management of this scarce resource.

Increasing Trade and Investment for Economic Growth and Reducing Poverty

Economic growth is driven largely by increased trade and investment. Effective economic governance makes trade and investment possible by establishing an environment which provides the necessary legal framework, security, and skilled and healthy human resource base. Sound policies - and programs geared toward the microentrepreneur, community development, and small business -- ensure that the poor as well as the rich can participate in and benefit from trade and investment. Over the long term, a growing economy is required to reduce poverty.

USAID has built an impressive track record in its programs to build trade capacity in developing and transition countries since FY 1999. As the USG pursues an increasing number of bilateral trade agreements, the hemispheric agreement known as the Free Trade Area of the Americas (FTAA), and a number of historic changes in the global trading agreements negotiated through the World Trade Organization (WTO), USAID finds itself increasingly called upon to respond to needs for assistance in economic analysis, trade facilitation, and building both government and local business capacity to understand and respond to the opportunities that global trade presents. USAID's trade and investment proposals will, therefore, support regional, sub-regional, national, and local (private sector) initiatives.

In Africa, USAID promotes harmonization of trade and customs policies, more transparent and efficient finance and investment environments, and business linkages through both regional and sub-regional efforts. The regional Trade for African Development and Enterprise (TRADE) Initiative seeks to: (1) promote U.S.-Africa business linkages; (2) enhance competitiveness of African products (especially in response to opportunities presented by the popular Africa Growth and Opportunity Act (AGOA); (3) expand the role of trade in African poverty reduction strategies; (4) improve the delivery of public services supporting trade (e.g. customs procedures); (5) build African capacity for trade policy analysis; and (6) strengthen the enabling environment for African businesses. At the President's request, USAID established three regional "hubs" for increasing trade competitiveness in Africa in 2002/2003. These hubs energize sub-regional collaboration and, in southern Africa, will support the bilateral trade negotiations with the Southern Africa Customs Union as well as follow up to ensure that countries are able to respond to this new opportunity. The Africa Bureau's initiative to Cut Hunger in Africa will also include an element of trade capacity-building, focusing both on linking farmers to global markets and on increasing the efficiency of local and regional markets.

In Asia and the Near East, USAID's trade capacity building efforts will build on the success of the U.S.-Jordan Free Trade Agreement and U.S. support for Jordan's accession to the WTO, expand engagement with Morocco in the context of the U.S.-Moroccan Free Trade Agreement, and extend the impact and lessons of experience in work with private sector competitiveness in Sri Lanka. Opportunities to link the clean energy objectives with industrial growth and to link clean water objectives with better municipal management in support of economic growth will be seized to the extent that funds and private sector interests permit. In general, national programs will continue to liberalize international trade, improve economic governance, increase competition, eliminate restraints on foreign and domestic investment, improve financial sector performance, and privatize infrastructure.

In Europe and Eurasia, USAID continues to support countries' aspirations to become full members of the World Trade Organization. Some countries have gone further than others in making the transition to free market economies; USAID is emphasizing increasing competitiveness as a means of linking local markets to both macroeconomic reforms and microeconomic foundations for business growth. Good governance issues are also at the core of both regional and national programs. USAID is fighting corruption (including money laundering), promoting business ethics, and mitigating adverse impacts of transition through social insurance reform, employment generation and education reform.

In Latin America and the Caribbean, USAID supports the Opportunity Alliance for Central America (formerly the Partnership for Prosperity) as a means for integrating the relatively small economies in the region and promoting the recovery from market declines and job loss, exacerbated by drought. Assistance to the Alliance will also contribute to successful negotiation and implementation of the U.S.-Central American Free Trade Agreement (CAFTA) as well as the Free Trade Area of the Americas (FTAA) agreement. Priority bilateral activities include building capacity for analysis and policy development to underpin negotiations, promoting competitiveness in the private sector (being mindful of the gender impact of alternative approaches), developing market linkages (especially with the demanding U.S. market), and providing assistance for business development. Programs help countries comply with the "rules of trade," such as sanitary/phytosanitary measures, fair and efficient customs systems, and intellectual property rights. USAID's support for legal, policy, and regulatory reforms also will improve the climate for trade and investment. Given the importance of remittances to Central American economies, USAID is strengthening remittance mechanisms while lowering transfer costs.

To support these regional and country efforts to build trade capacity, the EGAT Bureau provides leadership and technical support to USAID economic growth programs around the world. In FY 2005, EGAT Bureau programs will identify and disseminate new approaches for creating sound commercial laws, increasing competition in key service sectors, and accelerating the response of private firms to global market opportunities. EGAT expertise will also complement and support mission staff capability worldwide. The EGAT Bureau will also provide support for interagency efforts to extend information and communication technologies more widely, working with governments on regulatory reforms, the private sector on needed infrastructural investments, and with a host of partners on applications relevant to development challenges.

Developing Agriculture and Reducing Hunger

To reduce hunger over the next 20 years, both men and women farmers in developing countries will have to more than double the productivity of their land, labor, and water resources without further encroaching on concentrations of biodiversity, degrading soil and water quality, or bringing marginal land into production. At the same time, to realize the benefits of trade and meet the standards of international markets, farmers will have to become more competitive in marketing what they produce. The need to double productivity and compete globally will require countries to institute market-based policies as well as develop the institutions, infrastructure, and rural finance systems needed to ensure that farmers both have access to the necessary technologies and the incentive to use them.

To meet this huge challenge, USAID is revitalizing its agricultural programs and encouraging public and private donors and development partners to do the same. Agency-wide agricultural programs are aimed at four strategic themes:

• Mobilizing science and technology to reduce poverty and hunger
• Developing global and local trade opportunities for farmers and rural industries
• Increasing knowledge at the local level through training, outreach, and adaptive research
• Promoting sustainable agriculture and sound environmental management

Africa's challenges are the greatest: It is the only region of the world in which, if current trends prevail, hunger will increase rather than decrease in the coming decades. Recognizing that the agriculture sector is the most cost-effective engine of growth for Africa, USAID has launched the regional Initiative to Cut Hunger in Africa, with the intent of fulfilling the U.S. pledge towards a global effort to reduce hunger in the region in half by 2015. USAID initially partnered with three countries experiencing significant food insecurity (Uganda, Mali, and Mozambique) but whose governments are most committed to promoting broad-based and equitable growth in the agricultural sector. With these three programs as "regional anchors", the Initiative has grown to include neighboring countries and promote the use of modern technologies, expand credit to farmers, strengthen producer associations, provide better market information to farmers and traders, and enhance the economic incentives for farmers and small-scale entrepreneurs. It will target crops, livestock, and environmental goods and services where African farmers have a competitive advantage. Related efforts will be made to promote private sector-led diversification of the economy, such as agro-processing, and to increase agricultural exports.

In Latin America and the Caribbean, USAID will more continue its agriculture programs, including those with non-traditional agricultural exports and access to specialty coffee markets. Business development and marketing services will help small and medium farmers and rural enterprises improve productivity and tap new markets. In Central America and Mexico, the Opportunity Alliance in which USAID participates actively will emphasize trade-led rural competitiveness through diversification, promoting access to agricultural niche markets and expansion into non-agricultural products.

In Europe and Eurasia, much of USAID's work in the agricultural sector has focused on land reform; this has improved the incentives for farmers to invest in and manage their land. Lessons learned in one country are being shared with others, such as between Moldova and Ukraine. Where countries have a comparative advantage in agriculture, such as Albania and Kazakhstan, USAID is increasing its support for agribusiness development.

The FY 2005 budget request for the EGAT Bureau will enable the Bureau to sustain global leadership in international agricultural research and development through its management of the global Collaborative Research and Development Program (CRSP) with the U.S. land grant universities as well as its participation in the Consultative Group for International Agricultural Research (CGIAR). In addition, the Bureau will provide technical leadership and field support in a wide range of areas: sanitary/phytosanitary standards, environmentally-sound sustainable agriculture, mitigation of and adaptation to climate change, training and outreach, and rural finance.

Increasing Access to Efficient, High Quality Education

President Bush has repeatedly underscored his commitment to education both at home and abroad. "The task of development is urgent and difficult, yet the way is clear. As we plan and act, we must remember the true source of economic progress is the creativity of human beings. Nations' most vital natural resources are found in the minds and skills and enterprise of their citizens. The greatness of a society is achieved by unleashing the greatness of its people."

Education - an important investment in people -- is the foundation for higher living standards and democratic societies. It is an important long-term investment in sustaining democracies, improving health, increasing per capita income and conserving the environment. Economic growth in developing countries requires creating a skilled workforce. Full educational participation by girls leads to improved family health and child survival, along with stronger family support for the education of future generations. Conversely, uneducated young men, without prospects of productive employment, are especially vulnerable to recruitment by groups supporting terrorism or contributing to civil and international conflict.

USAID's basic education programs help and encourage countries to improve their educational policies and institutions and to adopt improved educational practices in the classroom. The involvement of families and communities in educational decision-making is crucial. In many developing countries, where girls face barriers to educational participation, USAID devotes special efforts to reducing these barriers and thereby promoting educational opportunity for girls. These efforts, along with the Agency's strong field presence, have given USAID a reputation as a technical leader and innovator in basic education. The Agency is well-known, for example, for investing in pilot programs that are later funded on a large scale by the World Bank and regional development banks. In FY 2005, the USG, through USAID, is requesting funds for two Presidential Initiatives in Africa and Latin America as well as increased education funding for South Asia, Southeast Asia, and Eurasia. USAID also proposes to continue targeted support for higher education, including fostering of partnerships between U.S. institutions and counterpart institutions in developing and transition countries. Workforce development will also play a role in linking economic growth and education strategies in countries experiencing high unemployment.

The multi-year initiative, Strengthening Basic Education in Africa, challenges African education professionals to find new ways to quickly provide children with opportunities to learn and become productive members of society. To address the devastation of the HIV/AIDS epidemic, this initiative will assure that 400,000 teachers are trained, and will increase the African Education Ministries' capacity to address the impact of HIV/AIDS on education systems. With the assistance of U.S. Historically Black Colleges and Universities, African students will be provided with 4.5 million textbooks in their local languages. Local organizations will receive funding to help communities create parent teacher associations to ensure that parents and communities have a school they can be proud to send their children to. An important result will be an increase in the number of girls graduating with the life skills they need.

The Centers of Excellence in Teacher Training (CETT) Initiative in Latin America and the Caribbean is supporting the development of three teacher training centers to serve Central America, the Caribbean, and the Andean region of South America. This multi-year education initiative is focused on increasing teacher and administrator quality, improving the reading instruction and pedagogical skills of poorly qualified teachers, and advancing education reform in key countries. A clearinghouse of teacher training materials will be created and disseminated using information technology. The centers will disseminate best practices and lessons learned from teacher training institutions, think tanks, schools, and universities, as well as provide virtual training.

In South and Southeast Asia (Afghanistan, Pakistan, Bangladesh, India, and Indonesia), FY 2005 funding for basic education will foster continued progress in training of very large populations. In Afghanistan and Pakistan, the emphasis will be on expanding opportunities for girls as well as boys who have had their education disrupted by war.

In Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan), USAID is initiating a major effort to prevent basic education services from deteriorating. This initiative is focused on nurturing critical thinking and indigenous values required both to reform successfully and to reduce the appeal of Islamic radicalism.

USAID'S basic education programs strongly emphasize the need to ensure equitable access for girls, especially in Africa and the Near East. In contrast, educational gender gaps tend to be small in most countries in Latin America and the Caribbean. In such countries, USAID concentrates more on improving classroom practices and other aspects of educational quality, to reduce grade repetition and school drop-outs among girls and boys alike.

In the EGAT Bureau, support for higher education partnerships, a program of research pointing to best practices, management of the USAID training system, and support for the development of fact-based management information systems will contribute to more effective education and training programs worldwide.

Managing Natural Resources and Protecting the Global Environment

In addition to improving management of natural resources for increased agricultural productivity, USAID invests in five key areas that affect environmental quality and the sustainable access of people to resources vital for life:

• Conservation of biological diversity
• Improved management of land, water, and forests
• Environmentally-sound urbanization
• Enhancing the access of underserved populations to modern energy and promoting clean and efficient energy production and use
• Measures to reduce the threat of and facilitate adaptation to Global Climate Change while simultaneously promoting sustainable economic growth.

In FY 2005, USAID is requesting funds to implement five Presidential Initiatives.

The Water for the Poor 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 focus will be in Africa, and Asia and the Near East.

The Clean Energy Initiative: Powering Sustainable Development from the Village to Metropolis seeks to provide millions of people with new access to energy services, increase the efficiency of energy use, and significantly reduce readily preventable deaths associated with indoor and outdoor air pollution. It will accomplish these goals by changing vehicle and domestic energy use patterns. Under this initiative, USAID funds will leverage an estimated $400 million in other funds through the Global Village Energy Partnership. The Partnership includes other governments, the private sector, civil society, and development organizations.

The Congo Basin Forest Partnership Initiative will promote economic development, alleviate poverty, improve governance, and conserve 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.

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 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 regional bureaus: Africa, Asia and the Near East, Latin America and the Caribbean, and Europe and Eurasia.

Global Health Pillar

The FY 2005 request for the Global Health pillar is $1.42 billion in Child Survival and Health Programs Funds, and an estimated $184 million in other USAID-administered program accounts. Investing in the health of the world's population contributes to global economic growth, reduction of poverty, a sustainable environment, and regional security. In addition, protecting human health and nutrition in developing and transitional countries directly affects public health in the U.S. by preventing the spread of infectious diseases. USAID is recognized as a world leader in global health, including child survival and maternal health, HIV/AIDS, infectious diseases and family planning/reproductive health. As HIV/AIDS and other infectious diseases continue to threaten the health of families and children in developing countries worldwide, USAID works to eliminate these threats and improve the health and livelihoods of people across the globe. USAID's technical leadership and field presence give it a comparative advantage over other donors in designing effective programs and influencing global and national policies to combat these health threats. USAID, through its Bureau for Global Health, is well positioned to use its expertise, experience and presence in global health to advance the President's agenda in fighting HIV/AIDS and other infectious diseases, and to revitalize child survival and reproductive health programs.

New opportunities in the health sector are a direct result of the changing demographics, epidemiology, and diversity in developing-country populations. The Global Health Bureau has responded to these opportunities by redirecting funding to be more in line with new Presidential initiatives and Agency priorities as outlined in the Foreign Assistance in the National Interest report. In addition, USAID works with a range of private, public and international partners to implement its programs. USAID's greatest investment in the private sector has been in commercial market development; health technologies, social marketing services, products, and materials; and workplace delivery of basic health services. The role of the U.S. private sector has grown dramatically in recent years, with the top 10 private U.S. foundations now exceeding USG spending in the area of international health. USAID has actively sought new ways of doing business with nongovernmental organizations (NGOs) and private sector organizations, and reaching out to faith-based organizations (FBOs).

The Global Health pillar will focus on the five main program areas of child survival, maternal health, nutrition, HIV/AIDS, other infectious diseases, family planning and reproductive health. Within these program areas, USAID's objectives are to:

• Reduce infant and child mortality
• Improve maternal health
• Address the HIV/AIDS epidemic
• Reduce the threat of other infectious diseases
• Reduce unintended pregnancies

For decades, USAID has led the worldwide effort to improve child and maternal health and nutrition in developing and transition countries. In recent years, USAID has intensified and expanded efforts to combat HIV/AIDS, tuberculosis, and malaria. USAID's technical leadership and field presence give it a comparative advantage over other donors in designing effective programs and influencing global and national policies to combat these health threats USAID uses these advantages to catalyze the efforts of the international community through technical leadership and support to partnerships including the Global Fund to Fight AIDS, Tuberculosis, and Malaria; the Global Alliance for Vaccines and Immunization; and the Global Alliance for Improved Nutrition. These partnerships complement worldwide coalitions to implement technical and programmatic strategies, such as Stop TB and Roll Back Malaria.

Addressing the HIV/AIDS Epidemic

The HIV/AIDS pandemic is a major and growing threat to both health and overall development, especially in poor countries. HIV primarily strikes people in their peak productive years, with devastating effects on citizens, communities, economies, and national security. Under the leadership of the State Global AIDS Coordinator's Office, USAID will focus on implementation of President's Emergency Plan for AIDS Relief (PEPFAR) in FY 2004 and FY 2005. The goals of this five-year emergency relief program are to prevent seven million new HIV/AIDS infections, treat two million people with life-extending drugs and provide humane care for the millions of people suffering from, and children orphaned by, AIDS. The FY 2005 request for HIV/AIDS is $621 million, which includes $100 million for the Global Fund. In addition, $1.45 billion is requested for the Global HIV/AIDS Initiative managed by the State Department Coordinator in partnership with USAID.

The guiding principle of USAID's HIV/AIDS strategy is to support programs that save and extend lives. This strategy is both geographic and programmatic. Geographically, USAID directs resources to priority countries and regions selected on the basis of the severity of the epidemic, the risk of rapid increase of infection, and the commitment to deal aggressively with the pandemic. Programmatically, USAID implements activities in a "prevention-to-care" continuum to fight the pandemic. This includes a balanced ABC prevention approach: abstinence (including delaying sexual debut); being faithful in relationships and condom provision; supporting care and treatment including provision of drugs; assisting orphans and children affected by HIV/AIDS; and supporting efforts by the Global Fund to Fight AIDS, Tuberculosis, and Malaria. USAID programs are integrated within the overall policy and strategic direction of the President's Emergency Plan for AIDS Relief.

USAID will provide both financial and technical assistance to the Global Fund to Fight AIDS, Tuberculosis, and Malaria. The Global Fund is a financing mechanism intended to mobilize additional resources for scaling up proven interventions. USAID's bilateral programming provides the foundation, e.g., human capacity and systems development, upon which the Global Fund can build and expand. At the country level, USAID's missions support the Global Fund by providing technical assistance to the Country Coordinating Mechanism (CCMs) in analyses or assessments required to strengthen proposals, as well as assistance in proposal development; and by improving the capacity of CCMs to implement successful programs. Additionally, in FY 2003, USAID staff provided technical support to develop policy and operational guidelines for the Fund, and continue to be members of the technical committees.

At the program level, USAID implements activities in support of the President's Emergency Plan for AIDS Relief encompassing a "prevention-to-care continuum" by:

• Using a balanced "ABC" prevention approach focusing on promoting Abstinence, Being faithful/fidelity and using Condoms
• Increasing voluntary counseling and HIV testing (VCT)
• Expanding programs to prevent mother and child HIV transmission
• Supporting care for those infected and affected by HIV/AIDS including orphans and other vulnerable children
• Supporting treatment for people living with HIV/AIDS including antiretroviral therapy
• Building capacity for strategic information

Since 1999, USAID has more than quadrupled its resources for combating HIV/AIDS. These efforts have resulted in a slowing of the pandemic in Uganda and Zambia and among population groups in other countries; the development of new voluntary counseling and testing procedures, which have increased preventive behaviors; and improved surveillance of the disease and its progression worldwide.

The Agency is committed to improving the capacity of developing countries to protect populations not yet infected by HIV and those already affected. In FY 2004 and FY 2005, USAID will continue to work closely with host-country governments, citizen groups and other donors. It will also expand partnerships with the community and faith-based organizations to help achieve ambitious international goals. Within the HIV/AIDS program, the Agency will also continue to fund programs that address the critical needs of children affected by HIV/AIDS, including orphans.

Reducing the Threat of Other Infectious Diseases

USAID's FY 2004 and FY 2005 programs will reduce deaths and sickness from infectious diseases. They will support the prevention and control of tuberculosis and malaria as well as programs designed to combat anti-microbial resistance and improve disease surveillance and response capabilities. USAID will strengthen global and regional initiatives, such as Roll Back Malaria, the Global Partnership to Stop TB, and its related effort, the Global TB Drug Facility. The Agency will continue to advance the sharing and use of the most recent technical knowledge by using electronic networks to convene key international health experts to share technical information, program developments, and research findings.

The Agency's TB strategy will support programs in high-prevalence countries, including those training TB experts on the Directly Observed Treatment Short-Care (DOTS) strategy, as well as others supporting local efforts of global and regional partnerships. USAID's plan is to achieve cure rates of 85% and case-detection rates of 70% in targeted countries and to continue to support drug-resistance surveillance. The Agency will also expand the availability and appropriate use of new diagnostics for tuberculosis.

USAID's malaria strategy focuses on preventing infection, promoting effective treatment, protecting pregnant women, responding aggressively to drug-resistant malaria, and developing new tools and approaches for prevention, diagnosis, and control. USAID and its partners will contribute to achieving by 2010 the goals of the 2000 Abuja Declaration on Malaria:

• At least 60% of those suffering from malaria will receive appropriate cost-effective treatment within 24 hours of the onset of symptoms
• At least 60% of those at risk of malaria will benefit from protective measures such as insecticide-treated mosquito nets
• At least 60% of all pregnant women who are at risk of malaria will have access to presumptive treatment

Reducing Infant and Child Mortality and Improving Maternal Health

USAID has been a global leader in child survival since the 1980s. Using proven tools, many of them developed with Agency support, child survival programs have saved tens of millions of children's lives, even in the poorest countries. As a result, mortality of children under five in developing countries (excluding China) declined from 105 per 1,000 births in 1985 to 70 per 1,000 in the year 2000. In other words, 4.4 million fewer children under five died in 2000 than would have died under child mortality rates that prevailed 15 years ago. Nevertheless, a new analysis by WHO the World Bank and other international partners concludes that about seven million of the nearly eleven million annual child deaths can be prevented just by extending coverage of proven interventions such as immunizations, vitamin A supplementation and oral rehydration.

In FY 2005, USAID will continue activities that reduce the incidence of the major childhood killers: acute respiratory infections (primarily pneumonia), diarrheal disease, measles, malaria and factors that occur in the first 28 days of life (neonatal period). Combating childhood malnutrition and preventing micronutrient deficiencies will also be part of USAID's programs, as will safe-birthing and effective prenatal, postpartum, and neonatal care. Critical environmental health activities will continue, such as promoting good hygiene, controlling vector-borne diseases, and improving access to safe water and sanitation services. Additionally, USAID will continue to develop low-cost, feasible, effective interventions that address the major causes of infant and child malnutrition, morbidity, and mortality and support their widest possible implementation in developing countries.

USAID will work with its partners to continue reducing the mortality rate for infants and children under five. In addition, in countries where it has a field presence, the Agency will help reduce by 25% between 1998 and 2007 the number of underweight children under five. The Agency expects to meet this goal, although the mounting HIV/AIDS pandemic and deterioration of the economic and health systems in some countries may slow progress.

Child health and the overall welfare of families are powerfully dependent on maternal health. In recent years, USAID has increased its efforts to reduce maternal deaths and disabilities. Approximately 500,000 mothers die every year, leaving behind two million orphans. Newborns whose mothers die in childbirth are ten times more likely to die by age two. The estimated annual worldwide economic impact in lost productivity due to maternal mortality and subsequent child mortality is $15 billion. However, 95% of these maternal deaths are preventable. Therefore, the Agency has identified and begun promoting a set of feasible, low-cost programs and best practices that will significantly reduce mortality among mothers and newborns. These successful and cost-effective interventions include improving maternal nutrition and birth preparedness, promoting attendance of medically trained personnel at delivery, managing obstetrical complications, and providing postpartum and pregnancy-related hemorrhage care services (emergency treatment, family planning services, and referral for infection treatment and follow-up).

USAID aims to reduce the maternal mortality ratio by 10% between 1998 and 2007 in countries where it works. To achieve this goal, USAID will continue its successful maternal health programs at the national level and its advocacy programs at the community level. The Agency will also continue to work toward better national policies for maternal health and nutrition. USAID's maternal health programs are relatively new, but initial reports indicate that they have already contributed to significant declines in maternal mortality ratios (e.g. Egypt, Indonesia, Honduras, Bangladesh and Morocco) and increases in skilled attendance at delivery (e.g. Bolivia).

Protecting Vulnerable Children

In FY 2005, USAID will continue to support the Displaced Children and Orphans Fund (DCOF) by establishing effective approaches to working with local communities and nongovernmental organizations to provide care and support for vulnerable children. Activities will assist children affected by war, street children, and children with disabilities. These programs will seek to avoid institutional care solutions, working instead to meet children's needs within their communities. Additionally, USAID will continue programs that assist orphans in Russia and Eastern Europe by focusing on the medical and basic needs of orphans and reducing the number of children entering state orphanages.

Stabilizing Population

For 35 years, USAID has been a world leader in supporting voluntary family planning and reproductive health programs, helping families achieve their desired family size while protecting the health of women and children. The Agency's programs have had a significant impact, contributing to a decrease in the average number of children per family in developing countries (excluding China) from more than six in the 1960s to the 2001 level of less than four. By helping women and families have only the children they want, and when they want them, family planning programs have significantly contributed to a 25% reduction in maternal and infant deaths and decreased the demand for abortions. USAID's population programs will continue to be implemented and monitored in accordance with the requirements of the Mexico City Policy, which was restored by the President in January 2001. The policy requires that foreign non-governmental organizations agree, as a condition of receiving U.S. Government funds for family planning activities, not to perform or actively promote abortion as a method of family planning, regardless of funding source.

The long-term aim of the Agency's family planning and reproductive health programs is to increase availability and use of family planning services by using client-centered approaches, maximizing quality and emphasizing informed choice. By reducing the number of unintended and mistimed pregnancies, these efforts contribute directly to the Agency goal of stabilizing world population, while extensively improving the health and status of women.

In FY 2005, USAID will maintain its current level of support for family planning and reproductive health activities. The Agency will focus on the special needs of youth, protection against unintended pregnancy and sexually transmitted infections (including HIV/AIDS), and pregnancy-related hemorrhage care services (emergency treatment, family planning services, and referral for infection treatment and follow-up).

In summary, USAID believes that expanding basic health services and strengthening health systems significantly improves all peoples' health, especially that of women, children, and vulnerable populations. The linkage between good health and improved productivity and reduced poverty is very strong. In some low-income areas, such as sub-Saharan Africa, high levels of disease have slowed or stopped economic growth. The AIDS pandemic alone stands to reverse decades of hard-won economic achievements in Africa and, like malaria, will have significant effects on the economic well-being of many other low-income countries. Control of infectious diseases, good nutrition, and access to information and family planning services are not only interdependent but also essential to development and long-term growth. When people are well nourished, free from the ravages of disease, and able to make informed decisions about planning their family size, they can more fully contribute to social and economic progress.

Democracy, Conflict and Humanitarian Assistance Pillar

The request of $2.7 billion for the Democracy, Conflict and Humanitarian Assistance Pillar will improve coordination of democracy and governance, transitions, and humanitarian assistance; it will also create a cross-cutting approach to conflict mitigation and management. The overarching goal of the DCHA Pillar is promoting peace within a democratic framework.

USAID's programs will integrate efforts in conflict prevention, mitigation, and management, as well as post-conflict transitions and reconstruction. USAID will strengthen the performance and accountability of democratic governance, which in turn will improve stability, expand economic prosperity, and combat the corruption that undermines economic development prospects. The Agency will also develop a more integrated response to assist the increasing numbers of failing and failed states. These states help breed violent conflict and support for international terrorism; tackling these two problems is a major U.S. foreign policy priority.

Stabilizing fragile states, supporting countries in conflict or transition, promoting democratic governance, and responding to humanitarian crises remain foremost priorities in U.S. foreign assistance. U.S. leadership in foreign disaster relief, emergency food aid and other humanitarian assistance is unparalleled. The U.S. remains the largest worldwide contributor to international food aid, and USAID remains the lead-responder and coordinator in USG assistance for foreign disasters. The DCHA Bureau is the principal entity charged with managing and delivering this life-saving assistance to developing and vulnerable countries. The Bureau is a leading contributor to the Agency's integrated strategic plan to provide support in fragile and failing states. This step in enhancing comprehensive responses to support vulnerable nations is essential in an era where weak states can become homes for terrorist forces, international criminal activity and man-made crises, such as famine and violent conflicts.

The DCHA Pillar programs save lives, alleviate suffering, support democracy and promote opportunities for people adversely affected by poverty, conflict, natural disasters and a breakdown in good governance. Accordingly, USAID programs integrate building state institutions and conflict or crisis management capacity with responses to the most pressing humanitarian needs in transitional or vulnerable states, as well as those nations in the process of recovery or reconstruction. The FY 2005 budget request will support USAID's renowned capability to respond quickly to emergency situations, crises and natural disasters, whether through the provision of relief supplies or food aid, or the short-tem interventions of the Office of Transition Initiatives (OTI). The request will also support USAID's longer-term assistance to strengthen capable states that are democratic, accountable and able to provide sound public administration, manage and prevent violent conflict, and prepare for or avert crisis situations, thereby providing the stability and good governance necessary to sustain and foster development investments in all sectors.

• Democracy and Governance programs and Conflict Mitigation efforts will continue to strengthen democratic systems of governance and help address the causes and consequences of violent conflict. Democracy development programs will help encourage credible political processes, supporting proactive civic organizations, engendering respect for the rule of law, promoting security, fighting corruption, and fostering human rights. USAID will also promote conflict management and mitigation by addressing the longer-term root causes of conflict and mitigating the conditions that can lead to violent conflict.
• Transition Initiatives (TI) programming will respond to immediate and pressing crisis, helping to support governments that are shifting away from authoritarian rule or emerging from violent conflict. Efforts will promote reconciliation in post-conflict situations, and helping citizens realize the benefits of peace through fast, flexible programs that deliver tangible benefits. Illustrative programs are found in Iraq, Afghanistan, Angola, Sudan, and Venezuela.
• International Disaster and Famine Assistance (IDFA) programs will continue to provide relief, rehabilitation, and reconstruction assistance to victims of natural and man-made disasters, and funds for preventing and mitigating famines and providing urgent relief to victims of natural disasters and complex emergencies where natural disasters are compounded by ongoing civil strife. The new IDFA account was created by combining the former International Disaster Assistance (IDA) account and the previously proposed Famine Fund. IDFA programs support health interventions, agriculture and food security, nutrition, and water and sanitation. In addition, they target drought-affected populations and help to avert famine in places such as Ethiopia. IDFA funds complement DA funds in fragile states emerging from complex emergencies, including Afghanistan, Iraq, Liberia, Sudan, and the Democratic Republic of Congo. The requested funding will enable USAID to maintain its unique capability to respond rapidly when international emergencies occur, and will increase the Administration's ability to address famine prevention and relief.
• USAID's Title II-PL 480 Food Aid programs, the largest such programs in the world totaling $1.185 billion annually, will provide U.S. food assistance in response to emergencies and disasters around the world, in conjunction with IDFA-funded efforts. USAID will ensure continued effectiveness in meeting to these urgent needs by enhancing early warning systems and the Agency's logistical flexibility to rapidly move commodities to priority areas. The FY 2005 request will also support non-emergency food assistance programs that focus on decreasing chronic food insecurity by improving household nutrition, agricultural productivity, and the capacity of poor and marginal populations to cope with disasters and shocks, especially in sub-Saharan Africa, Southeast Asia and Central America.

In the last 50 years, the world has experienced extraordinary development gains: caloric intake has increased, people are healthier and living longer, more nations have electoral democracies and more people are living in free and independent countries. However, extremism and violent conflict now regularly transcend national boundaries, and in regions with weak respect for the rule of law, new opportunities for violence and terrorism are increasing. In other areas, the combined threats of HIV/AIDS, food insecurity and state fragility, especially in Africa, create conditions for continuing complex emergencies and related population displacement and humanitarian needs.

The United States has an overriding economic and political interest in helping shape a world where stable states and societies resolve problems peacefully. USAID will remain committed to nurturing fragile democracies and supporting developing countries to improve the quality of governance. Strong nations will engender a better ability worldwide to meet people's security, economic and political needs, and will create conditions that decrease the probability of violence and humanitarian crisis.

Developing and Consolidating Democracy and Governance

USAID implements democracy and governance activities in nearly 70 country and regional programs that help nations develop and consolidate effective, authoritative, and legitimate democratic governance. The Agency's work to promote democratic governance involves undertaking a variety of often-difficult political and institutional reforms and capacity-building by promoting respect for the rule of law and for human rights, encouraging credible and competitive political processes, helping develop politically active civil societies, and supporting more transparent and accountable governmental institutions, including local government support and anticorruption efforts. Priority focus remains on Iraq, Sudan, Indonesia, Pakistan, the Middle East Partnership Initiative, and Afghanistan, where USAID recently completed an extensive public outreach and civic education program to support the Constitutional Loyal Jirga.

Despite real progress over the past decade, three general governance problems continue to contribute to the fragile state of democracy in an increasing numbers of countries. First, economic reforms, where they have even been implemented, have at times failed to substantially mitigate widespread poverty and inequality. Second, the rule of law is pervasively weak, as evidenced by growing levels of corruption, increases in domestic and international crime, impunity before the law, and abuse of human rights. Finally, the inability to manage ethnic, political, and religious differences peacefully and inclusively remains a challenge. These three problem areas create political instability and form the basis for grievances that can breed alienation, hatred, and despair, which in turn fuels violent conflict and undermines the effectiveness and legitimacy of state institutions.

In response, USAID is devising rapid-response mechanisms to support democratic development needs in the areas of justice sector reform and dispute resolution, good governance, and anti-corruption. The Agency also supports the promotion of democratic values and reinforcement of democratic behavior, and helps foster civic skills, values and involvement, especially in Muslim societies and other nations with a limited history of broad-based citizen participation. State fragility and failure often result from weak or illegitimate governance, and USAID's long-term democracy development programs support foreign policy priorities that encourage the promotion of strong, accountable governments and provide ongoing assistance to help open and expand democratic processes in previously closed, authoritarian or ineffective systems.

Managing and Mitigating Conflict

Widespread violence, extremism, corruption and irresponsible leadership pose a serious challenge to development assistance and to U.S. national security interests. At present, deadly conflict affects 60 percent of countries in which USAID operates, and the costs of conflict undermine nearly every aspect of those nations' development. Consequently, the Agency has launched a Conflict Management Initiative that is designed to better link programs in areas such as democracy and governance, natural resource management, economic growth, and humanitarian relief to the causes and consequences of widespread conflict. This initiative will help focus U.S. foreign assistance on problem countries so that their capacity for the peaceful resolution of conflict is strengthened. Priority technical support is focused on Sudan, Burundi, Nepal, Nigeria, Pakistan and Sri Lanka.

The Conflict Management Initiative centers around five essential priorities:

• Supporting the development of USAID strategies that are more explicitly focused on the causes and consequences of violent conflict. These strategies will build on conflict assessments and will integrate a sensitivity to conflict into existing development and humanitarian assistance activities.
• Strengthening programs that support the efforts of local institutions to prevent, mitigate, and resolve conflict before it escalates, or to reconcile fractured societies in the aftermath of violence.
• Learning from the successes of civil society groups, including faith-based organizations and those that are based at the grassroots level, to develop capacities for maintaining peace.
• Providing parties to conflict with the opportunities, methods, and tools that they need to acknowledge and act effectively on their responsibilities to resolve issues peacefully.
• Developing a Global Development Cooperation Partnership to address future threats to U.S. interests and security and the challenges of globalization

Creating the capability to achieve a sustainable peace in fragile states will not be easy. Together with the State Department, USAID is developing an early warning system to focus attention on those countries at greatest risk of violence. USAID also continues to report and map destabilizing trends and patterns in order to help refine long-term development efforts to address these root causes of conflict. Establishing and reinforcing the sustainable indigenous institutions and systems needed to avert and manage violent conflict will require international resolve, a multidisciplinary approach, a long-term commitment, and integrated planning within the U.S. Government and the donor community.

Using Transition Initiatives to Advance Political Transitions

USAID's Office of Transition Initiatives (OTI) advances political transitions and enhances peace and stability in priority, conflict-prone countries. USAID created OTI in 1994 as a tool for post-cold war transitional settings to address those environments where the nature of governance shifted from authoritarian rule to more open societies. In recent years, "transition" has become a broader concept, referring to countries moving from war to peace, those making the turn from civil conflict to national reconciliation, or those where political strife has not yet erupted into violence and it may be possible to prevent or mitigate the conflict and broaden democratic participation. Presently, OTI has active or planned transition programs in Afghanistan, Angola, Bolivia, Burundi, Democratic Republic of Congo (DRC), Iraq, Liberia, Sri Lanka, Sudan, Venezuela, and Zimbabwe. Over the next five years, USG foreign policy priorities and the need for flexible responses to large, complex emergencies, similar to OTI's current involvement in Afghanistan and Iraq and earlier engagements in Kosovo and East Timor, will shape program priorities and directions.

OTI programs work on the ground with local partners to provide short-term, rapid and flexible assistance targeted at key transition needs. Working closely with local, national, international, and nongovernmental partners, OTI carries out visible high-impact projects that increase momentum for peace and reconciliation and reconstruction, and that help create a strong foundation for new or re-targeted longer-term development programs. Strategies are tailored to meet the unique needs of each transition country and support longer-term interventions aimed at building capable states and addressing root causes of conflict. Because OTI programs have special programming flexibility, the Agency can put staff on the ground swiftly to identify and act on what are often fleeting opportunities for initiating or sustaining positive change.

Recently, OTI has established a new Abuse Prevention and Protection Team (APPT) that focuses on protecting the human rights and fundamental freedoms of civilians in complex emergencies and situations of armed conflict. Currently in the start-up phase, the APPT will offer flexible and immediate assistance to address urgent issues such as politically- or ethnically-motivated violence (e.g. reprisal killings, assaults or rapes, forced disappearances), tensions caused by former-regime crimes such as massive forced displacement, and the needs of internally displaced persons, women, children, minorities and other vulnerable groups. OTI has already supported some new abuse prevention and protection activities in Iraq, Liberia and DRC.

Using Humanitarian Assistance to Respond to Disasters and Emergencies

International Disaster and Famine Assistance (IDFA) funds humanitarian programs that provide relief, rehabilitation, and reconstruction assistance to victims of natural and man-made disasters.

Programs help meet the critical needs of targeted vulnerable groups in emergency situations, including famine; increase adoption of disaster prevention and mitigation measures in countries at risk of natural disasters; reduce the economic impact of disasters on individual livelihoods by supporting and enhancing local capacity and coping mechanisms; and enhance follow-on development prospects in priority, post-conflict countries. To accomplish these objectives, USAID has a well-established management structure and is staffed with disaster relief experts who draw on public and private sector resources to respond within hours following a disaster declaration. USAID deploys assessment teams to identify needs and disaster assistance response teams to coordinate emergency responses and facilitate information flows. USAID also provides search and rescue teams, ground operations teams, medical assistance, shelter, potable water, sanitation assistance, and emergency and therapeutic feeding.

Demands on resources have increased steadily for a number of years. In FY 2003, USAID responded to 63 disasters in 53 countries targeting an estimated 44.5 million beneficiaries. Complex emergencies involving civil conflict account for a significant share of the IDFA budget. Although these conflicts fluctuate in intensity, their resolution is difficult and relief assistance may be necessary for long periods. Increasing emphasis is being placed on applying preparedness and mitigation lessons learned to deal with these emergencies. While it is not possible to predict which countries will need humanitarian assistance in the future, countries such as Afghanistan and Sudan continue to be a cause for concern.

USAID works closely with the Departments of State and Defense to coordinate American relief efforts. In many disaster situations, 24-hour, daily coverage is provided to ensure a speedy and appropriate response and the transmission of accurate information between the disaster site and participating USG agencies. Satellite communication equipment augments USAID's ability to target emergency assistance accurately and to coordinate with U.S. private voluntary organizations, non-governmental organizations, other USG agencies, and other donors, all of which play an essential role in raising resources, providing assistance and implementing programs in the field.

USAID's disaster assistance funds the following types of activities:

• Search and rescue for victims of floods and earthquakes
• Emergency health and nutrition
• Water and sanitation
• Shelter and survival kits
• Food security and agricultural production
• Emergency infrastructure rehabilitation
• Resettlement and reintegration of internally displaced persons
• Disaster preparedness and mitigation
• General relief, administration, and logistics
• Restocking of health clinics and hospitals with essential drugs and equipment
• Training for local health care workers in primary health care
• Support for nutritional and epidemiological surveillance to increase early warning of epidemics or other deterioration in health status
• Training of traditional birth attendants, which reduces infant and maternal mortality
• Emergency immunization campaigns to vaccinate children against preventable diseases

Combating Food Insecurity through Food for Peace

Almost a billion people worldwide are chronically undernourished. Addressing this crisis worldwide is not only a humanitarian concern of the U.S. Government, but also a strategic concern, as food insecurity fuels political instability. As of July 2003, 36 countries in the world faced serious food emergencies requiring international food aid.

P.L. 480 Title II food aid is the primary USG resource to respond expeditiously to the critical food needs of populations in emergency situations. Through its Office of Food for Peace, USAID seeks to ensure that food aid is provided vulnerable groups who require food assistance to survive and recover from an emergency, whether natural or man-made disasters, including prolonged civil strife. Beneficiaries include internally displaced people, refugees, resettled or new returnees, and vulnerable resident populations. USAID frequently targets assistance toward especially vulnerable groups such as children, pregnant and lactating women, malnourished people, and the elderly. Title II food aid programs are implemented primarily by U.S. private voluntary organizations and through the UN's World Food Program.

The FY 2005 request will help the Agency meet the continued critical needs of people in emergency and non-emergency situations. Food for Peace will focus on strengthening the institutional capacity of private voluntary organizations and community organizations to better analyze risk, target food insecure and vulnerable groups, and strengthen communities' response and resiliency to food emergencies. Support for the Famine Early Warning System, considered the leading network in early warning and food security assessment, will continue to enable efficient targeting of emergency assistance toward both incipient and chronic food insecurity worldwide.

Non-emergency food aid will continue to be targeted toward addressing the root causes of food insecurity, with the primary emphasis on household nutrition and agricultural productivity. A recent assessment of food and nutrition programs that benefited an estimated 6.6 million children over the last five years indicated that 80% of the programs showed notable reductions in the prevalence of under-nutrition, with significant decreases in child stunting and the proportion of underweight children. Such programs make significant contributions not only to food security, health and nutrition, but also improvements in those factors that enable food security, including water and sanitation, agricultural production, increased income, agro-forestry, natural resource management, and basic education.

Future efforts will focus on preventing and responding to malnutrition and potential famine by directly addressing immediate consumption needs and protecting lives, while also addressing longer-term impacts related to community resilience to shocks, helping people build more durable and diverse livelihoods, and improving health, nutrition and education. Partnerships with the U.S. Department of Agriculture, Department of State and private organizations continue to be paramount, particularly as USAID turns attention to the specialized food security, emergency and developmental needs in fragile, failing and failed states.

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