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Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).

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DEMOCRATIC REPUBLIC OF THE CONGO

	FY 1997	FY 1998	FY 1999
	Actuals	Estimate	Request
Child Survival and Disease..........	---	$6,000,000	$9,000,000
Development Assistance..............	---	$14,000,000	$11,000,000
Economic Support Funds.............	---	---	$8,000,000

Introduction

Since its inception, the Democratic Republic of the Congo has been of strategic importance to U.S. national interests. Its vast natural resources and the third largest population in Africa (45 million people) make it a significant trading partner with the potential to become far more important. Its economic growth would translate into a significant expansion of trade in Central Africa. Politically, a stable Congo is imperative to the fragile security situation throughout the Great Lakes region. After providing only humanitarian assistance for the past several years, opportunities now exist for increased USAID engagement. The next few years will be critical in determining if the nation can make a successful transition from destitution and authoritarianism to sustained economic growth, civic participation, improved social services, and democracy.

The Development Challenge

After 32 years of rule by Mobutu Sese Seko, a new government assumed power in May 1997, led by Laurent Kabila. Mobutu's rule left the country worse off, in many ways, than it was at the time of independence. Congo ranks 142 out of 175 on the United Nations Human Development Index; per capita income is $154. With empty coffers, this government must incorporate democratic practices, revitalize a moribund economy where corruption was a way of life, and replace public education and health services that are defunct in most areas of the country. In the eight months that the Kabila government has been in power, several positive changes have occurred: corruption has begun to drop dramatically; elections are scheduled for 1999; and a national consensus on the draft constitution will be achieved through a public nation-wide dialogue. These developments are but a small beginning. The challenges are enormous and the constraints are many. The immediate ability of the government to generate revenue to meet even its most basic needs is inadequate. Salaries cannot be paid regularly, increasing pressure on the government to turn to quick fix solutions which may not be in Congo's long-term interests. Mechanisms to promote ongoing dialogues with opposition parties and leaders are needed. Insecurity and ethnic tension could worsen if access to the rule of law, resources, and opportunities are not broadened in all parts of Congo.

The current Government inherited approximately $2 billion in debt and arrears owed to the U.S. government. Since arrears have been outstanding for more than a year, the Brooke provision of the Foreign Assistance Act applies and restricts USAID assistance. The Government of the Democratic Republic of the Congo (GDROC) has formed a committee to address its crushing debt arrears, approximately $14 billion to the entire donor community. Since the Government has a vital role to play in addressing these needs and is in need of significant assistance, present restrictions could hamper progress toward USAID's program objectives.

USAID would like to continue to support the Congolese nation and people in their effort toward democracy, a strong private sector and a healthy population. Effective Congolese leadership and close donor cooperation could, over time, eliminate the need for donor assistance and make Congo a success story for the continent.

Other Donors

In 1996, USAID did not provide development assistance to DROC; the largest donors were Germany, the European Union, Belgium, France, and UNICEF. The United States has now reengaged and is providing assistance through NGOs to immunize children, and solve problems identified by communities in addition to playing a major role in donor coordination.

FY 1999 Program

USAID has reopened its office in Kinshasa and is recruiting staff. The FY 1999 program will refine the current program as more information becomes available. Four goals will be addressed: Building Democracy, Stabilizing World Population Growth and Protecting Human Health, Encouraging Broad-based Economic Growth, and Protecting the Environment.

Sustainable economic and political development calls for a sound foundation based on the rule of law. The current justice picture is bleak: there is no constitution or parliament; all law is by presidential decree; the judicial system is barely functioning and child soldiers patrol the streets. President Kabila has reiterated his pledge to hold 1999 elections. USAID is uniquely positioned to assist the democratic transition in Congo. FY 1999 assistance will fund election-related activities to ensure that the process is politically inclusive with a key activity in educating voters. While a major focus of FY 1999 will be on the constitution and elections, other governance issues will remain an important part of USAID's program, especially constructive and substantive dialogue between civil society and the Government. USAID-sponsored activities already provide important opportunities for collaboration among local and regional governments, civil society and the private sector to address priority concerns.

The almost complete lack of social services has been an appalling legacy of the Mobutu government. The revitalization and strengthening of a sustainable health care system is a high priority. A 1995 UNICEF study found 148 of every 1000 children die before their first birthday and about 220 of 1000 die before the age of five. Immunizing children can reduce these mortality rates. USAID will provide technical assistance to the Congo's Expanded Program of Immunization staff in planning, organizing and implementing immunization activities to increase vaccination coverage for major childhood diseases and to eradicate polio in Congo. The movement of refugees and soldiers is expected to cause an increase in the already large number of Congolese affected by HIV/AIDS. USAID is planning activities to support education and testing programs targeted toward high risk groups.

Trying to put the wrecked economy back on track is one of the most daunting problems GDROC's faces. Translating the nation's proven potential wealth into an improving Congolese standard of living will take time and donor resources. Deep suspicion is a major stumbling block between the government and private sector. While GDROC has stated that it sees private sector investment and growth as key to Congo's economic recovery, the private sector is still skeptical of the GDROC's commitment to private sector development. A private sector assessment will be undertaken in FY 1998 to identify the most effective ways to encourage private sector/government dialogue and collaboration. USAID intends to work with key actors to improve the legal and regulatory framework that hinders expansion of established businesses and deters new domestic and foreign investment. USAID also plans to investigate potential areas of growth for Congo's domestic informal private sector. Obstacles such as corruption, and access to credit and technology will be examined.

As GDROC focusses on economic and social development, the risk is substantial that environmental concerns will be overlooked. Great wealth of natural resources combined with the overwhelming need for funds invite unsustainable or destructive resource extraction behavior. Similarly, the spread of infectious disease is often traceable to the pressure placed on inadequate water and waste systems. These conditions are often exacerbated by initial increases in production activity. In terms of economic development, the Congo has significant possibilities for tourist industry development that could simultaneously address protection of biological resources, and community security. USAID will focus environmental assistance on activities necessary for the sustainability of its strategic objective and within the context of private sector as well as community economic and social development initiatives.

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DEMOCRATIC REPUBLIC OF THE CONGO
FY 1999 PROGRAM STATEMENT
(in thousands of dollars)

S.O.1
The successful transition to a stable nation experiencing increasingly broad benefits from improving social and economic conditions
- CHS
- DA
- ESF  

USAID Strategic and Special Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	Totals
	--- 3,000 4,000	9,000 --- ---	--- 3,500 ---	--- 4,500 4,000	--- --- ---	--- --- ---	9,000 11,000 8,000
Totals - CHS - DA - ESF	--- 3,000 4,000	9,000 --- ---	--- 3,500 ---	--- 4,500 4,000	--- --- ---	--- --- ---	9,000 11,000 8,000

USAID Representative, John Grayzel

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ACTIVITY DATA SHEET

PROGRAM: Democratic Republic of the Congo
TITLE AND NUMBER: The Successful Transition to a Stable Nation Experiencing Increasingly Broad Benefits from Improving Social and Economic Conditions 660-SOO1
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999 $9,000,000 CSD, $11,000,000 DA,
$8,000,000 ESF
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: FY 2005

Purpose: USAID's program assists the Congo's transition to a more stable democratic and market-based society. USAID's efforts are focused on democratic, economic, and social transition. In the democracy/governance sector, the key goals USAID will support are the restoration of rule of law and a transparent judicial system through the adoption of a new constitution and national elections scheduled for 1999. For the most part, the economy regressed instead of flourishing after independence and needs assistance in a number of areas. The ability of the government to provide social services is nonexistent. Even with the network of private entities that currently provide services, improving the lives of Congolese will continue to be difficult.

USAID Role and Achievements to Date: Activities for this objective are in the initial stages. USAID has supported the immunization of over 700,000 children in Kinshasa. Outside of Kinshasa, immunization programs are being developed. USAID's Office of Transition Initiatives (OTI) is supporting regional conferences to identify and prioritize reconstruction needs as well as the national constitution buiilding conference. OTI will assist appropriate priority needs identified by those conferences and already has assisted several local interventions such as garbage collection, school rehabilitation, and removal of transportation bottlenecks.

Description: Immunization activities are continuing and expansion into other health areas such as AIDS is being considered. OTI community assistance will continue. Justice sector efforts with human rights non-governmental organizations (NGOs) and other actors will also work with OTI teams. Activities to help improve the macroeconomic environment are under consideration, in addition to specific interventions to aid private sector businesses. Several activities with local and regional governments and civil society groups to support good governance and to prepare for the elections are planned.

Host Country and Other Donors: UNICEF and the World Health Organization/African Regional Office (WHO/AFRO) have been USAID's major partners in the immunization effort. As USAID begins to undertake macroeconomic/private sector activities, close collaboration with other donors such as the United Nations Development Program, the World Bank, Belgium and Canada is expected. USAID's implementation with the Government of the Democratic Republic of the Congo has been limited because of Brooke sanctions.

Beneficiaries: Children under five, vulnerable to communicable diseases such as measles and polio, have been USAID's main beneficiaries. As activities expand, the private sector will also benefit. Commercial enterprises and the entire population will directly benefit from a reestablished rule of law.

Principal Contractors or Agencies: Implementing parties are UNICEF and WHO/AFRO. USAID technical contractors include BASICS and DAI. As more activities are developed, additional partners will be selected. A combination of local and international NGOs in addition to private firms are expected to be used.

Major Results Indicators: Baseline indicators and targets will be identified during the design and refinement of the activities.

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