Introduction Statement of the Administrator USAID Organization Chart Assisted Countries - World Map Summary of FY 2003 Budget Request Program Highlights Management Improvements Operating & Administrative Expenses Capital Investment Fund Working Capital Fund Operation Expenses of the Inspector General Foreign Service Retirement and Disability Fund Summary Tables Regions     Africa     Asia & the Near East     Europe & Eurasia     Latin America & the      Caribbean Central Programs Glossary Abbreviations and Acronyms Wednesday, 29-May-2002 18:53:12 EDT

This chapter provides an overview of USAID's plans, summarizing the impact of the FY 2003 budget request on particular sectors and subsectors with an emphasis on USAID's new priorities and initiatives. This chapter addresses the four Agency pillars of:

• Economic Growth, Agriculture and Trade (EGAT);
• Global Health (GH);
• Democracy, Conflict and Humanitarian Assistance (DCHA); and
• The Global Development Alliance (GDA).

The following shows the Agency's proposed budget request from all accounts by pillar.

For a full text description, click here.

* EGAT pillar includes $600 million cash transfer to Israel.
** DCHA pillar includes $1.185 billion P.L. 480 Title II.
*** Budget request for Global Development Alliance is $30 million.

Economic Growth, Agriculture and Trade

The EGAT pillar supports the goals of reducing poverty and promoting prosperity in developing and transitional countries. EGAT's programs target five priorities:

• Developing agriculture and reducing hunger;
• Increasing trade and investment and providing for small and micro-enterprises;
• Promoting sustainable management of the world's natural resource base;
• Increasing access to efficient, high quality basic education, particularly for girls;
• Increasing opportunities for higher education and training.

Trade and Investment and ANE include $600 million ESF cash transfer for Israel.

Developing Agriculture and Reducing Hunger

To meaningfully reduce hunger over the next 20 years, farmers, both men and women, in developing countries will have to more than double the productivity of their land, labor, and water resources without further encroaching on marginal land. At the same time, trade globalization will require these same farmers 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 while developing the institutions, infrastructure, and rural finance systems to ensure that their farmers will 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. Increased agricultural funding will also help offset the reduction in food monetization. Agency-wide agricultural programs are aimed at four strategic themes:

• Accelerating the use of biotechnology to reduce poverty and hunger;
• Developing science-based agricultural solutions, particularly global and local trade opportunities for farmers and rural industries;
• Increasing knowledge at the local level through training, outreach, and adaptive research; and
• Promoting sustainable agriculture and sound environmental management.

Two regional initiatives, one in Africa and one in Central America, exemplify the Agency's new direction in agriculture programming:

• Recognizing that the agriculture sector is the most cost-effective engine of growth for Africa, USAID is launching the "Cut Hunger in Africa" initiative and is increasing agriculture funding by about 25%. The Agency will direct funding to countries with the greatest food insecurity and whose governments are most committed to increasing growth and reducing poverty. Programs will focus on expanding use of modern technologies, increasing credit to farmers, strengthening agricultural cooperative associations, streamlining policy and market functions, and promoting agroprocessing and intraregional exports. Some of the increased agriculture funding will support partner activities previously supported with food monitization.
• In Latin America and the Caribbean, USAID will more than double its agriculture program funding. USAID will use some funds to increase its support for the Partnership for Prosperity (PfP), a trade-led, rural economic growth strategy for Central America and Mexico launched in FY 2002. The PfP reduces rural poverty by providing market development, business services, and credit to small farmers, both men and women; building trade capacity and competitiveness; supporting applied agricultural technology and biotechnology; enhancing educational programs; and improving disaster preparedness. The PfP will be implemented in part through new programming alliances with the U.S. Hispanic community, corporations, private foundations, U.S. state governments, and international financial institutions.

The FY 2003 budget request increases agriculture funding to enable the new EGAT Bureau to provide global leadership in developing country applications that target these strategic themes with a focus on the new biological and geospatial technologies.

Increasing Trade and Investment

USAID's trade and investment programs strengthen policies and institutions and improve the business and investment climate in recipient countries. Countries that do not avail themselves of the enormous economic opportunities afforded by globalization will miss out on economic and social progress and be increasingly vulnerable to conflict, international crime, infectious diseases, and other problems that flow readily across borders in an increasingly globalized world. Because trade is central in addressing globalization issues, USAID is increasing its budget request and will allocate most of these resources directly to field programs..

• In Africa, USAID is contributing to increased trade and investment by promoting harmonization of trade and customs policies, more transparent and efficient finance and investment environments, and business linkages. Under its Trade for African Development and Enterprise (TRADE) initiative, USAID will mobilize a coalition of U.S. and host-country partners-from both public and private sectors-to build trade capacity in the recipient countries. Moreover, this initiative will be a formidable source of technical assistance in support of the Africa Growth and Opportunities Act.
• In the Near East, USAID will increase attention to legal and regulatory reform programs that foster competition and business investment.
• In East Asia, the Agency will continue its work to liberalize international trade, improve economic governance, increase competition, eliminate restraints on foreign and domestic investment, improve financial sector performance, and privatize infrastructure.
• In Latin America and the Caribbean, USAID is improving trade capacity through several cross-cutting initiatives, including the Partnership for Peace, the Andean Regional Initiative, and the Third Border Initiative aimed at the Eastern Caribbean. These and other activities support establishment of a Free Trade Area of the Americas by January 2005.

To support these regional and country efforts to build trade capacity, the EGAT Bureau is expanding its FY 2003 programs to increase the ability of developing-country producers to meet international quality and safety standards. Other programs will help disseminate new approaches to formulating sound commercial laws, increasing competition in key service sectors, and accelerating the response of private firms to global market opportunities.

Promoting Sustainable Management of the World's Natural Resource Base

Environmental degradation is an increasing threat to long-term development in developing and transitional countries, with especially severe effects on health, poverty, trade, food security, and political stability. The effects are also felt directly in the United States, through global impacts such as climate change and conflict, and indirectly through interconnections with the U.S. economy.

• Biological diversity'
• Natural resources management and forestry;
• Environmentally sound urbanization;
• Sustainable energy production and use; and
• Global climate change.

USAID will increase its activities in these key areas, expanding its programs to reduce illegal and destructive logging, understand the role of environment in conflict and in trade, expand partnerships with nongovernmental organizations and industry, and (within the framework of the President's climate change plan) enable countries to mitigate the effects of climate change and simultaneously promote sustainable economic growth.

The FY 2003 budget request for environmental programs is $525.6 million, of which $308 million is in Development Assistance, $123.4 million in Economic Support Funds, $83.2 million in FREEDOM Support Act funds, and $11 million in Support for East European Democracy Act funds. Of the total amount, $155 million is budgeted for climate change and $50 million for the President's Forest initiative.

Increasing Access to Efficient, High Quality Basic Education

Basic education supports all aspects of development; it is especially important to reach children and young adults. Better-educated workers enjoy growing incomes and stable employment; better-educated citizens demonstrate stronger support for democratic processes and respect for civil liberties. 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 into support for terrorism or civil and international conflict. Likewise, countries that fail to ensure access to decent schooling create a vacuum that can be filled by organizations that promise educational opportunity, but deliver indoctrination in hatred and violence.

USAID's basic education programs help and encourage countries to improve their educational policies and institutions, to adopt improved educational practices in the classroom, and to families and communities a stronger role in educational decision-making. In the 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 or regional development banks.

• In South and Southeast Asia (Afghanistan, Pakistan, Bangladesh, India, and Indonesia), increased FY 2003 funding for basic education will help USAID launch or expand basic education programs.
• In its 12 country programs in sub-Saharan Africa, USAID will emphasize improved teacher training, the use of scholarships for girls, more community participation in the education process, and more effective application of information technology. Most of these efforts will be integrated with programs aimed at blunting the impact of HIV/AIDS on basic education systems.
• In its seven country programs in Latin America and the Caribbean, USAID is supporting the development of three teacher training centers to serve Central America, the Caribbean, and the Andean region of South America. Here again, information technology will help these centers provide more effective support for teacher training by disseminating best practices and current research to a broader audience.

Especially in sub-Saharan Africa and the Near East, USAID basic education programs strongly emphasize the need to ensure equitable access for girls. 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, in order to reduce grade repetition and school drop-out among girls and boys alike.

Global Health

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

• Promote prevention of HIV/AIDS transmission and mitigate its impact;
• Reduce deaths from infectious diseases of major public health importance;
• Improve child health and nutrition, and reduce infant and child mortality;
• Reduce maternal mortality and improve women's health; and
• Reduce unintended and mistimed pregnancies and improve reproductive health.

For decades USAID has led the worldwide effort to improve maternal and child health and nutrition in developing countries. And in recent years, USAID has intensified efforts to combat HIV/AIDS and other infectious diseases like tuberculosis and malaria. USAID's technical leadership and field presence give it comparative advantage over other donors in designing effective programs and influencing global and national policies to combat these health threats.

*Central funding includes $226 million for International Partnerships.

Promote Prevention of HIV/AIDS Transmission and Mitigate Its Impact

The HIV/AIDS pandemic is a major and growing threat to health and development, especially in poor countries. HIV primarily strikes people in their peak productive years, with devastating effects on citizens, communities, economies, and national security. The guiding principle of USAID's HIV/AIDS strategy is to support programs that save the most 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. At the program level, USAID pursues a "prevention-to-care continuum" for fighting the pandemic with the following elements:

• Promoting prevention;
• Supporting care and treatment;
• Assisting orphans and vulnerable children;
• Building capacity for surveillance;
• Encouraging greater financial commitments from stakeholders; and
• Galvanizing support from national leaders in all sectors.

In FY 2002 and FY 2003, USAID will implement a global HIV/AIDS program that will use our expanding resources most effectively by:

• Concentrating resources on priority countries and regions;
• Strengthening regional programs to meet the needs of other countries and regions;
• Supporting the scaling up of prevention, care, and treatment programs for families and children affected by AIDS;
• Increasing resources for Africa, which remains USAID's highest HIV/AIDS priority;
• Increasing staffing levels in priority countries and regional programs; and
• Improving managers' ability to plan, monitor, implement, and evaluate programs for maximum impact and to disseminate effective approaches to others.

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 counseling and testing procedures that increase 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 2002 and FY 2003, USAID will continue to work closely with host-country governments, citizen groups, and other donors to help achieve ambitious international goals. Within the HIV/AIDS program, the Agency will also fund a set of programs that address the critical needs of children affected by HIV/AIDS, including orphans.

Reduce Deaths from Infectious Diseases

USAID's FY 2003 programs will reduce deaths and sickness from other infectious diseases. It will support the prevention and control of tuberculosis and malaria, programs designed to combat anti-microbial resistance, and disease surveillance and response capabilities. USAID will play an important role in convening key international health experts, using electronic networks, to share technical information, program developments, and research findings.

The Agency's tuberculosis strategy will support programs in high-prevalence countries, training for tuberculosis experts, and continue support for 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 increase the number of countries that have implemented 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.

Improve Child and Maternal Health and Nutrition and Reduce Infant and Child Mortality

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 last year than would have died under child mortality rates that prevailed 15 years ago.

In FY 2003, USAID will continue these efforts by funding activities to reduce the incidence of the major childhood killers. 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. USAID will continue critical environmental health activities, such as promoting good hygiene, controlling vector-borne diseases, and improving access to safe water and sanitation services.

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 10 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. The interventions include improving maternal nutrition and birth preparedness, promoting attendance at delivery by medically trained personnel, managing obstetrical complications, and providing postpartum and post-abortion care.

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 and Indonesia) and increases in skilled attendance at delivery (e.g., Bolivia).

Protect Vulnerable Children

USAID will continue support of the Displaced Children and Orphans Fund (DCOF) and blind children 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. Beginning in FY 2002, support for children affected by HIV/AIDS is funded under the HIV/AIDS budget rather than under the Vulnerable Children budget.

Reduce Unintended and Mistimed Pregnancies and Improve Reproductive Health

For 35 years, USAID has been a world leader in supporting voluntary family planning programs, helping families achieve their desired family size. 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 have only the children they want and space their children at least two years apart, family planning programs have significantly reduced maternal and infant deaths and the demand for abortions.

The long-term aim of the Agency's family planning and reproductive health programs is to reduce the number of unintended and mistimed pregnancies. This contributes directly to the Agency goal of stabilizing world population, and significantly improves the health and status of women.

In FY 2003, USAID will maintain its current levels 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 postabortion care for women suffering complications of unsafe abortions. New programs will be launched to improve data collection, monitoring and evaluation, and health communications.

USAID's population programs will continue to be implemented and monitored in accordance with the requirements of the Mexico City policy, which were restored by the President in January 2001. The policy requires that foreign nongovernmental organizations agree, as a condition of receiving U.S. Government funds for family planning activities, not to perform or actively promote, using funds from any source, abortion as a method of family planning.

In summary, USAID believes that immunizations, family planning and reproductive health, health education, correction of micronutrient deficiencies, and investments in basic health services and effective national health systems significantly improve people's health, especially that of women, children, and vulnerable populations. Improved health is both an important end as well as a means of achieving economic development. The linkage between good health and improved productivity and reduced poverty are very strong. In some low-income areas-in sub-Saharan Africa-for example, 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 will have huge effects on the economic well-being of many other low-income countries. Control of infectious diseases, good nutrition, and stabilization of population growth rates are not only interdependent but 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 the size of their families, they can more fully contribute to social and economic progress.

Democracy, Conflict and Humanitarian Assistance

*The request level includes an increase of approximately $300 million that will help offset critical coverage previously provided by section 416(b) resources.

USAID's newly established DCHA Bureau will improve coordination of well-established pillar programs in democracy and governance, transitions, and humanitarian assistance; it will also create a cross-cutting approach to conflict prevention and management. The overarching goal of the DCHA Bureau is promoting peace within a democratic framework.

The Agency's programs will integrate efforts in preconflict prevention, resolution and management of ongoing conflicts, postconflict 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 assisting the increasing numbers of failing and failed states. These states help breed violent conflict and support for international terrorism, a major U.S. foreign policy priority.

*Central funding includes $1.185 billion in PL 480 Title II.

In addition to funding democracy and governance programs and the new cross-Agency Conflict Management initiative, the FY 2003 budget request will enable USAID to maintain its renowned capability to quickly respond to man-made crisis and natural disasters, whether with rapid provision of emergency food aid and other relief material or with innovative and effective medium-term efforts of the Office of Transition Initiatives.

Over the past three decades, democracy, liberty and freedom have spread globally at an unprecedented rate. USAID's democracy and governance programs have played an important role in these historic accomplishments. Recent notable examples include transitions to democracy in Nigeria, and Indonesia, and significant elections in Peru, Senegal, and Ghana.

Nevertheless, troubling signs have been on the horizon for several years. The terrorist attacks on the United States marked a shift in how the United States defines its national interests and priorities, requiring a concomitant change in how it strategically uses its foreign assistance. The United States has an overriding economic and political interest in helping shape a world where stable states and societies resolve problems peacefully. Success will result in less terrorism and violent conflict and a better ability worldwide to meet people's security, economic, and political needs. USAID will reorient and increase its efforts to deal effectively with the changing international environment, especially related to the crisis in political and economic governance and the related loss of faith in democracy, markets, and other attributes of modernism.

Mitigating Conflict and Improving Governance

Corruption, extremism, and the absence of responsible governments in many countries present the United States with emerging challenges to its development assistance efforts and overall national security interests. An effective response must be comprehensive and sustained over an extended period of time. Consequently, USAID is developing a strategy that better links and sequences programs for security, rule of law, democracy, economic growth, and humanitarian relief. Under its Conflict Management initiative, USAID will devote $50 million to integrating its tools and programs among each of its regional and functional bureaus. This initiative will better direct U.S. foreign assistance to problem countries so that their capacity for self-governance and peaceful resolution of their conflicts will be strengthened.

The Conflict Management initiative centers around the five essential priorities of:

• Supporting the development of more integrated, focused USAID and U.S. Government strategies. These strategies will result from conflict-vulnerability analyses and will address prevention, management, and reignition (during postconflict transition) of violent conflict.
• Expanding democratic governance programs that create institutions at all levels of society as mechanisms to prevent, mitigate, and resolve conflict before it escalates, or to reconcile fractured societies in its aftermath.
• Learning from the successes and relying more on the initiatives of the United States and in-country civil society groups-including those that are faith-based or based at the local grassroots level -to develop local capacities for maintaining peace.
• Providing the parties to the conflict with more opportunities, methods, and tools to acknowledge and act effectively on their responsibilities to resolve root-cause issues peacefully.
• Developing a Global Development Cooperation Partnership to address the future threats to U.S. interests and security and attendant globalization challenges.

Creating the capability to achieve a sustainable peace in fragile states will not be easy. It will require international resolve, a multidisciplinary approach, and a long-term commitment and integrated planning within the U.S. Government and the donor community.

Developing and Consolidating Democracy and Governance

USAID implements democracy and governance activities in nearly 80 country and regional programs that help nations develop and consolidate effective, authoritative, and legitimate democratic governance. The highest funding allocations have recently been directed to Serbia, Indonesia, Egypt, Gaza and the West Bank, Ukraine, Russia, Haiti, Nigeria, and Armenia. The work involves undertaking a variety of often difficult political and institutional reforms and capacity building in the areas of:

• Promoting the rule of law and respect for human rights;
• Encouraging credible and competitive political processes;
• Helping develop politically active civil societies; and
• Promoting more transparent and accountable governmental institutions, including local government support and anticorruption efforts.

Despite real progress over the past decade, there are three general governance problems that are responsible for the fragile democracies of 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 support for terrorism.

USAID believes the critical need is to improve the quality of political and economic governance in the increasing number of semidemocratic states and to sharply reduce the corruption that undermines development prospects across all sectors.

Using Transition Initiatives to Advance Peace and Stability

USAID's Office of Transition Initiatives advances peace and stability by conducting fast and flexible interventions in priority, conflict-prone countries. The Transition Initiative programs were created originally to address those situations 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.

Transition Initiative programs work on the ground with local partners to provide short-term assistance targeted at key transition needs. Working closely with local, national, international, and nongovernmental partners, USAID carries out high-impact projects that increase momentum for peace, reconciliation, and reconstruction. Strategies are tailored to meet the unique needs of each transition country. Because Transition Initiative 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 systemic change.

There are now active or planned programs in Afghanistan, East Timor, Indonesia, Kosovo, Macedonia, Nigeria, Peru, Serbia and Montenegro, Sierra Leone, and Zimbabwe. These programs will become a key mechanism under the conflict-prevention initiative, because they provide immediate, flexible solutions in conflict-prone situations. In providing this assistance Transition Initiative programs support longer-term interventions aimed at building capable states and addressing root causes of conflict.

Using Humanitarian Assistance to Respond to Disasters and Emergencies

In FY 2000, USAID's Office of Foreign Disaster Assistance (OFDA) responded to 66 declared disasters in 63 countries. Forty-six of these were natural disasters that affected 154 million people. The Agency obligated $231.7 million for disasters in FY 2000, of which $128.2 million was used for complex emergencies and $50.1 million for natural and man-made disasters. Complex emergencies in Angola, Burundi, Rwanda, Sierra Leone, Somalia, and Sudan are protracted humanitarian crises that continue to require significant resources. USAID estimates that this assistance reached 64 million people worldwide, primarily severely and moderately malnourished children, nursing and pregnant women, and the elderly and disabled.

USAID's disaster assistance included:

• 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 (instrumental in reducing infant and maternal mortality); and
• Emergency immunization campaigns to vaccinate children against preventable diseases such as measles.

International Disaster Assistance funding for FY2003 is expected to finance activities similar to these in countries affected by complex emergencies, man-made and natural disasters.

Combating Food Insecurity through Food for Peace

Almost a billion people worldwide are chronically undernourished. Reducing these numbers worldwide is not only a humanitarian concern of the U.S. Government, but a strategic concern as well, as food insecurity fuels political instability.

P.L. 480 Title II food aid is the primary resource of the United States for responding 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 to the right people, in the right places, at the right times, and in the right ways. Vulnerable groups receiving food aid are those who, because of natural or man-made disasters-including prolonged civil strife-require food assistance to survive and begin recovering from the emergency. 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 United Nations World Food Program.

In order to improve effectiveness, the Administration is proposing to adjust the delivery of international food programs. USAID's budget request incorporates these adjustments including the reduction of food monitization and the support of such programs through USAID's new Agriculture and Food Security initiative and environmental programs. The Agency will continue to channel resources through its partner implementers, and will consult with them in this process.

In FY 2001, USAID reached over 33 million beneficiaries, with $440.5 million allocated to support P.L. 480 Title II emergency programs. In FY 2001, most of the emergency food aid went to sub-Saharan Africa for protracted complex emergencies in Ethiopia, Sudan, Kenya, Angola, Tanzania, and the Democratic Republic of Congo. Over $29 million of emergency food aid was provided to help meet critical needs in Afghanistan.

The FY 2003 request will help the Agency meet the continued critical needs of people in emergency situations. It includes an increase of approximately $300 million to help offset the loss of the Section 416(b) surplus commodities program of the U.S. Department of Agriculture (USDA). From 1999 through 2001, USAID and USDA had a strategic alliance to send available Section 416(b) surplus commodities to meet food aid needs around the world. As a result, the United States contributed 65% of the emergency food resources received by the UN World Food Program in 2001-with an estimated value of over $1 billion. During FY 2002, food aid resources were reduced. Although supplemental funds facilitated increased deliveries to Afghanistan, the 50% reduction in availability of Section 416(b) commodities could curtail the ability of the United States to respond to new disasters. Should emergency food aid requirements develop beyond the available Title II resources, the Administration may need to draw on resources from the Emerson Trust.

The P.L. 480 Title II nonemergency food aid program constitutes the single largest source of USAID funding focused on food security. The objective of these funds is to increase the effectiveness of USAID partners carrying out Title II development activities. These activities support measurable increases in food security, with the primary emphasis on household nutrition and agricultural productivity. In addition, a portion of the Title II biennial pledge to the UN World Food Program is directed to multiyear development projects.

Title II development food aid programs make significant contributions in several areas: health and nutrition, water and sanitation, agricultural production, food security, increased income, agroforestry, natural resource management, and basic education. For example, Title II programs improved the nutritional status of children in Benin, Guinea, Haiti, Bolivia, Peru, Guatemala, and India. As just one illustration, a food security program initiated by a private voluntary organization in 1997 in an area of Guinea with extreme food insecurity has significantly improved the nutritional status of children. After three years of project activities, the percentage of underweight children decreased from 31% to 22%, while the percentage of acutely malnourished children decreased from 13% to 7%. These improvements were accompanied by improvements in critical health and nutrition behaviors. For example, exclusive breastfeeding of infants under five months increased from 1% to 51%, and measles immunization rates increased from 25% to 63%.

Since the mid-1990s, USAID and its partners have learned much about improving food security using Title II nonemergency resources, and nonemergency food aid programs have grown from 53 countries in 1997 to 84 in 2001. Much of this growth was in small activities in food-insecure sub-Saharan Africa. The Agency's FY 2003 request will maintain this level of nonemergency Title II activities and continue to reinforce results-oriented improvements (such as those in Guinea). The level also includes an increase in Section 202(e) funding from $28 million to $34 million, to reflect a shift of $6 million to Title II from the State Department's International Organizations and Programs account for the UN World Food Program. The request further includes about $29 million of additional resources to offset the elimination of reimbursements from the Department of Transportation's Maritime Administration for cargo preference.

The Global Development Alliance

The Global Development Alliance (GDA) reflects USAID's commitment to improve how it implements its foreign assistance mandate. Today it is not only governments, international organizations, and multilateral development banks that provide development assistance. These organizations have been joined by a plethora of nongovernmental organizations, private voluntary organizations, cooperatives, foundations, corporations, universities, and even individuals. In the past, official development assistance comprised 70% of all U.S. financial flows to developing countries, while today it is only 20%. USAID recognizes that its niche is as a catalyst for change, and that it must collaborate with other public and private entities that provide technical assistance and humanitarian resources to the developing world.

To accelerate its leadership in this process, it created the GDA and appointed a secretariat to get it started. The Alliance signals a new era of cooperation in which USAID joins its resources with those of its partners to execute projects on a much larger scale than was possible with its own resources. USAID has developed strategic partnerships in the past, and the formation of the GDA expresses its commitment to developing alliances that mobilize significant resources, expertise, creative approaches, and new technologies to address international development issues.

In the past, USAID has brokered alliances that pooled resources with matching grants. For example, the Children International program collaborated with Smith-Klein Beecham in nine Latin American and Asian countries in integrated health and nutrition programs. An alliance now under consideration would engage U.S. coffee buyers in stabilizing local economies, while supporting improvements in the quality of the product. Other new alliances, with funding from other program pillars, are being planned under the leadership of the GDA.

The GDA Secretariat was established on January 1, 2002 and will initially operate with a separate staff and budget until it can be fully integrated into Agency operations and phased out.