International Affairs Budget: Framework for Assessing Relevance, Priority, and Efficiency

Published by the Government Accountability Office on 1997-10-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          United States General Accounting Office

GAO                       Testimony
                          Before the Committee on the Budget, U. S. Senate

For Release on Delivery
Expected at
2:00 p.m., EST
                          INTERNATIONAL AFFAIRS
October 30, 1997          BUDGET

                          Framework for Assessing
                          Relevance, Priority, and
                          Statement of Benjamin F. Nelson, Director, International
                          Relations and Trade Issues, National Security and
                          International Affairs Division

          Mr. Chairman and Members of the Committee:

          I am pleased to be here today to discuss the programs and activities
          funded by the international affairs budget—the “function 150” account of
          the federal budget. As you requested, my goal today is to help set the stage
          for a thoughtful examination of the issues that should be raised in
          assessing the current programs and activities on the books that support
          U.S. foreign policy and economic objectives. To date, no one has
          undertaken such a comprehensive review of 150 account activities. This
          examination appears to be warranted in light of the dramatically changed
          world environment and new budget realities and increased demand for
          accountability for results. GAO’s 1996 symposium involving leading
          academics and practitioners in the area of international affairs evidenced
          the broad and significant changes that are taking place in the world in
          terms of governance, finance, economics, and political-military affairs. I
          will establish the context for my statement and provide an overview of six
          categories into which we have placed the international affairs programs.
          Then I will outline a framework for assessing these activities and their
          funding. And finally, I will discuss some of the critical issues and questions
          that should be examined in each of our six categories.

          It has become almost a cliché to talk about the end of the Cold War and its
Summary   impact on U.S. foreign policy objectives, goals, and priorities. Clearly, this
          watershed event and its aftermath have changed the nature of U.S.
          international interests and priorities. We now face the challenges involved
          in North Atlantic Treaty Organization (NATO) expansion, assisting the
          transition of former Communist countries, integrating China into the
          world economic system, reforming the United Nations and the World
          Bank, building a credible World Trade Organization, and attacking the
          menace of illegal drugs and AIDS. These events necessitate a careful
          rethinking of the programs, approaches, and activities at the U.S.
          government’s disposal to advance its interests. Post-Cold War
          complexities make such a task extremely difficult, particularly in view of
          the transnational, and seemingly intractable, nature of some of the present
          challenges. At the same time, the current environment also affords the
          chance to reassess programs and activities on their merits and determine
          if they are relevant in today’s world.

          Page 1                              GAO/T-NSIAD-98-18 International Affairs Budget
                                            Funding in the 150 account, which totaled $18.1 billion1 in fiscal
                                            year 1997, constitutes only 1 percent of the federal budget and just 3 to
                                            4 percent of discretionary funding. Nonetheless, these expenditures fund
                                            activities that are designed to influence world political and economic
                                            agendas. To support its interests in such agendas, the U.S. government
                                            maintains a worldwide infrastructure of embassies, missions, consulates,
                                            and trade offices, with an overseas staff of more than 35,000. The 150
                                            account funds a wide range of programs and activities—upwards of 70
                                            separate line items ranging from food aid to antiterrorism assistance, to
                                            U.S. contributions to multilateral financial institutions, to financing by the
                                            U.S. Export-Import Bank (Eximbank). A large percentage of funds in the
                                            account is directed by the Congress or the President for specific countries
                                            and purposes, such as child survival and population programs.

Overview of International                   To facilitate the examination of 150 account funding, we have grouped
Affairs Programs and                        these various programs and activities into six categories (see fig. 1).

Figure 1: Distribution of 150 Account Funding for International Affairs Programs, Fiscal Years 1992-97

      Foreign affairsaffairs
           Foreign    management    13.5%
                             Mgmt 13.5%                                   Bilateral assistance 29.7%

Multilateral assistance
         ateral          13.5%
                assista 13.5%

                                                                                       Trade and investment 3.9%
                                                                                       Trade and investment

           Public diplomacy 6.4%

                                                                       Security and peacekeeping 33.0%
                                                               Security and peaceke 33.0%

                                             Dollar figures cited in this statement represent Office of Management and Budget (OMB) budget
                                            authority data in fiscal year 1997 dollars, unless otherwise noted.

                                            Page 2                                        GAO/T-NSIAD-98-18 International Affairs Budget
•   Security and peacekeeping operations. This category includes funds to
    support international peacekeeping efforts, foreign military financing, and
    budget and economic assistance to countries critical to U.S. political and
    security objectives.2 Between fiscal year 1992 and 1997, this component
    has represented 33 percent of total 150 account funding.3 Funding for
    security and peacekeeping has decreased in real terms by an average of
    about 6 percent per year to its 1997 level of $6.3 billion.
•   Bilateral assistance. This category includes development assistance,
    assistance to economies in transition, humanitarian aid, and the operating
    expenses of the U.S. Agency for International Development (USAID). During
    the last 5 years, this component has represented about 30 percent of total
    150 account funding. Funding for bilateral assistance has decreased in real
    terms by an average of about 6 percent per year to its 1997 level of
    $5.2 billion.
•   Foreign affairs management. This category essentially funds the domestic
    and overseas operations of the State Department for conducting foreign
    relations, including coordinating and supporting various U.S. programs
    and activities overseas. The State Department is the U.S. government’s
    overseas landlord, providing space, equipment, and communications for
    most agencies operating abroad, including the growing cadre of
    nondiplomatic staff. Over the past 5 years, the Foreign Affairs
    Management component has represented almost 14 percent of total 150
    account funding. Funding for foreign affairs management has decreased in
    real terms by an average of about 4 percent per year to its 1997 level of
    $2.6 billion.
•   Public diplomacy. This category comprises the domestic and overseas
    operations and cultural and educational exchange programs of the U.S.
    Information Agency (USIA). The USIA’s mission is to explain and advocate
    U.S. policy to foreign publics, provide them with information about the
    United States, and advise U.S. decisionmakers on foreign public opinion
    and its implications for the United States. During the last 5 years, this
    component has represented about 6 percent of total 150 account funding.
    Funding for public diplomacy has decreased in real terms by an average of
    about 6 percent per year to its 1997 level of $1.1 billion.
•   Multilateral assistance. This category consists of funding for the U.N.
    agencies and for multilateral financial institutions such as the World Bank.
    During the last 5 years, this component has represented almost 14 percent
    of total 150 account funding. Funding to support U.S. participation in
    multilateral institutions has decreased in real terms by an average of about
    6 percent per year to its 1997 level of $2.2 billion.

     This assistance is provided through the Economic Support Fund.
     Throughout this statement, the term “funding” refers to discretionary budget authority.

    Page 3                                          GAO/T-NSIAD-98-18 International Affairs Budget
•   Trade and investment. This category principally includes the activities of
    the Overseas Private Investment Corporation (OPIC), the Eximbank, and
    the Trade Development Agency. This component has represented almost
    4 percent of total 150 account funding during the last 5 years. Funding for
    trade and investment has decreased in real terms by an average of
    4 percent per year to its 1997 level of about $700 million.

    Between fiscal year 1992 and 1997, funding for the international affairs
    account has declined in real terms an average of about 6 percent annually.
    Funding in fiscal year 1997 was about $18.1 billion—23 percent lower than
    it was in 1992 (see fig. 2). Under the recently concluded budget agreement,
    international affairs funding was designated a priority and set at a level of
    $19 billion for fiscal year 1998 (excluding payment of U.S. arrears to the
    United Nations and other multilateral organizations and development
    banks).4 The 150 account is slated to experience cuts of over 13 percent in
    real terms by the year 2002.

     See H.R. Conf. Rep. 105-116, at 58 (1997) for 150 account discretionary totals (fiscal
    years 1997-2002) in 1998 Budget Resolution.

    Page 4                                           GAO/T-NSIAD-98-18 International Affairs Budget
Figure 2: Trends in 150 Account
Funding for International Affairs
Programs, Fiscal Years 1992-97 (1997   25,000
dollars in millions)





                                              1992            1993              1994                  1995         1996              1997
                                                                                       Fiscal years

                                       A large portion of the funds in the international affairs account supports
                                       foreign policy and national security imperatives, which limits budget
                                       options. Of the $19.5 billion5 the executive branch sought in fiscal
                                       year 1998, fully one-third, or $6.4 billion, is devoted to supporting
                                       international security objectives, including security assistance to Egypt
                                       and Israel and U.S. peacekeeping contributions.

                                       One of the more significant developments in the U.S. foreign aid program
                                       is the participation of new recipients—the countries of Eastern Europe
                                       and the former Soviet Union. Aid to these countries accounts for
                                       18 percent of all assistance since 1992 and is consuming a greater share of
                                       a decreasing aid pie—from 8 percent of bilateral assistance in 1992 to
                                       20 percent in 1997. Aid for these countries includes grants for training and
                                       technical assistance to facilitate development of democratic institutions

                                        This excludes $3.5 billion in requested budget authority for the International Monetary Fund’s New
                                       Arrangements to Borrow, an activity that does not result in an outlay of U.S. funds or increase the

                                       Page 5                                           GAO/T-NSIAD-98-18 International Affairs Budget
                         and market economies. Assistance to Bosnia is now the single largest
                         program of U.S. aid in this region—$240 million in fiscal year 1997. Of
                         course, this does not include $2.5 billion in incremental costs for
                         military-related operations.

                         Another noteworthy observation, we believe, is the amount of aid that has
                         gone to alleviate problems associated with localized conflicts—“hot spots”
                         such as Somalia, Bosnia, and Haiti. Since 1993, more than $1 billion has
                         been spent on such conflicts, including funds for humanitarian assistance
                         and food aid. Typically, USAID has been required to meet part of these
                         requirements by shifting funds from other ongoing bilateral assistance

                         Only a portion of total international affairs activities is funded through the
                         150 account. We have identified at least $7.6 billion outside the 150
                         account that seem to support internationally related initiatives and
                         programs. Appendix I of this testimony contains a list of these activities
                         and their funding levels. Neither the activities of the Commerce
                         Department’s International Trade Administration, including its overseas
                         offices, nor the Foreign Agricultural Service’s trade promotion programs
                         and overseas offices, nor the Defense Department’s security-related
                         assistance programs in former Communist countries are funded under the
                         150 account. These are just a few of the more visible activities I can
                         mention. Coming to an accurate understanding of just how much money
                         goes to international activities outside the 150 account is difficult because
                         of (1) the absence of broadly accepted criteria about what constitutes a
                         foreign affairs program or activity; (2) the lack of transparency over the
                         full range of international affairs-related activities and programs managed
                         by U.S. government agencies—that is, budget line item descriptions do not
                         clearly link to international programs or activities; and (3) the
                         interrelatedness of domestic and international activities. As I discuss
                         funding for specific categories of the 150 account later in this statement, I
                         will, where possible, also highlight examples of complementary funding
                         outside the 150 account.

How to Assess            In assessing 150 account activities, I would like to suggest using the
International Programs   following analytical framework or series of questions: First, how relevant
and Funding              are current programs and activities in today’s world? Second, how high a
                         priority do they deserve? And third, can those that meet these first two
                         tests be done more efficiently and effectively?

                         Page 6                              GAO/T-NSIAD-98-18 International Affairs Budget
                      By relevance, I mean whether there have been changes in the underlying
                      assumptions or conditions that led to funding a program in the first place.
                      If a program does meet the relevance test, the Congress and the President
                      must also question how important it is relative to other programs from a
                      cost/benefit standpoint. Finally, the efficiency questions: Can program
                      goals be achieved more efficiently by taking advantage of technology
                      improvements or best practices?

                      The 150 account covers a wide range of activities. Because the range is so
                      broad, it is important that a regular reexamination of the results of each
                      program occurs to assess whether the program is successful. None of this
                      is easy. The Government Performance and Results Act process, with its
                      emphasis on setting priorities and measuring outcomes, should help in this

                      GAO  has completed a broad range of work related to efficiency and
                      effectiveness of international programs. This work, as well as recent
                      studies by other well-respected organizations, has identified opportunities
                      to reengineer foreign affairs structures and functions to eliminate overlap
                      and duplication and to bring them in line with best practices. For example,
                      a recent, widely distributed Council on Foreign Relations/Brookings
                      Institution study, which recommended additional funding for foreign
                      affairs, also suggested that over $1 billion could be saved through such

                      The Congress and the executive branch are best suited to address the
                      issues of relevance and priority I have raised. The suggested framework, I
                      believe, is an appropriate starting point.

                      With this framework in mind, I will now return to the six categories of the
Critical Issues and   foreign affairs budget that I established earlier. I will note funding levels
Questions             and trends for activities in each category and then discuss the particular
                      set of issues and questions that could be raised with respect to relevance,
                      priority, and efficiency.

                       The Government Performance and Results Act of 1993, also know as the Results Act or GPRA, is the
                      primary legislative framework through which agencies will be required to set strategic goals, measure
                      performance, and report on the degree to which goals were met. The act requires agencies to
                      eventually develop and submit strategic plans, annual performance plans, and annual reports on
                      program performance.

                      Page 7                                         GAO/T-NSIAD-98-18 International Affairs Budget
Security and Peacekeeping                 Security and peacekeeping activities represented 33 percent of the
Operations                                international affairs’ fiscal years 1992-97 budget—the single largest
                                          component of this account. Foreign military financing programs7
                                          consumed the largest portion of this component—about
                                          50 percent—followed by about 37 percent for economic support provided
                                          primarily to Israel and Egypt (Economic Support Fund); about 9 percent
                                          for multilateral peacekeeping operations; and about 3 percent for
                                          programs to provide training and equipment to foreign governments to
                                          combat crime, illegal narcotics, terrorism, and nuclear proliferation8 (see
                                          fig. 3).

Figure 3: Distribution of Security and Peacekeeping Funding, Fiscal Years 1992-97

                                                   Economic support 37.3%

                                                                           Anti-crime,   Terroris narcotics
                                                                           and proliferation 2.9%

                                                                            Peacekeeping 8.9%
                                                                           Peacekeeping 8.9%

                                                                            Militaryprograms  0.7 %
                                                                                     Progr 0.7%
Foreign military finance 50.2%
     Foreign Military Fin 50.2%

                                          Note: Totals may not add due to rounding.

                                          Funding for the security and peacekeeping component of the international
                                          affairs budget has declined in real terms an average of about 6 percent
                                          during fiscal years 1992-97. The funding level for fiscal year 1997 of

                                          These programs provide grants, loans, and loan guaranties to foreign governments to purchase U.S.
                                          military equipment.
                                           Totals may not add due to rounding.

                                          Page 8                                        GAO/T-NSIAD-98-18 International Affairs Budget
                                     $6.3 billion is almost 30 percent lower than in fiscal year 1992 (see fig. 4),
                                     with the most significant reductions occurring in the Economic Support
                                     Fund. This fund has been cut by over 33 percent, while foreign military
                                     financing programs have shrunk by about 26 percent. Funding levels for
                                     assistance to Israel and Egypt, the largest recipients, have remained
                                     relatively constant during this period. The executive branch has proposed
                                     a further real decrease of about 1 percent in funding for this component in
                                     fiscal year 1998.

Figure 4: Trends in Security and
Peacekeeping Funding, Fiscal Years
1992-97 (1997 dollars in millions)   9,000









                                        1992         1993          1994                  1995      1996           1997
                                                                          Fiscal years

                                     Trends in funding for this category have reflected shifting U.S. priorities to
                                     some extent, but a large core of this component serves fundamental
                                     security interests that have not changed significantly in many years.

                                     Page 9                                 GAO/T-NSIAD-98-18 International Affairs Budget
•   Are there opportunities to reduce security-related costs?

    As of fiscal year 1997, support for long-standing commitments to achieve
    lasting peace in the Middle East through financial assistance to Israel and
    Egypt represents 85 percent of the security-related costs. This includes
    Economic Support Fund grants and foreign military financing. The
    Economic Support Fund was established to allow the United States to
    promote economic and political stability in areas where the United States
    has special security interests. It has been justified to the Congress on the
    basis of its role in (1) strengthening the security of friendly and allied
    countries and (2) benefiting the U.S. economy because funds are generally
    spent on U.S. goods, services, and training. Since 1992, the Economic
    Support Fund has been reduced by about one-third, with aid to countries
    outside of the Middle East absorbing nearly all of these cuts. Decreases in
    foreign military financing to specific countries outside the Middle East
    have resulted from the end of the Cold War and the decline in regional
    conflicts, primarily in Central America. Currently, the vast majority of
    foreign military financing is devoted to Israel and Egypt, with most of the
    remainder supporting partners in Central and Eastern Europe and the
    Newly Independent States (NIS) of the former Soviet Union,9 Greece, and
    Turkey. Further cuts in these security-related components of the budget
    would appear to be difficult without a major change to the U.S. policies
    supporting the Middle East peace process and European security.

•   Are there opportunities to reduce peacekeeping costs?

    The United States currently contributes 25 percent of the costs of U.N.
    peacekeeping operations and also supports, on a voluntary basis,
    peacekeeping activities by other multinational organizations in Africa,
    Latin America and the Caribbean, Europe, and the Middle East.

    Considerable attention has been focused on the cost and effectiveness of
    high-profile U.N. peacekeeping operations such as those in Bosnia, Haiti,
    and Somalia. Less attention has been devoted to the costs and
    effectiveness of long-standing but less visible U.N. peace missions, such as
    those in India/Pakistan, Cyprus, and Angola. These eight long-standing
     Significant security-related assistance being provided to the countries of Central and Eastern Europe
    and the former Soviet Union is not included in the international affairs programs account. For
    example, much of the U.S. funding for the Partnership for Peace program is included in the
    Department of Defense budget request. Defense has programmed at least $160 million to help former
    Soviet republics or former members of the now-defunct Warsaw Pact, including funding for
    development of regional air traffic control systems, support for joint military exercises, and exchanges
    of information concerning methodologies to manage defense resources. Defense has also programmed
    about $1.9 billion to help Russia, Ukraine, Belarus, and Kazakstan reduce and control weapons of mass
    destruction under the Cooperative Threat Reduction Program, generally referred to as the Nunn-Lugar

    Page 10                                         GAO/T-NSIAD-98-18 International Affairs Budget
                           missions cost the United States about $148 million annually, have been in
                           existence from 6 to nearly 50 years, and so far have cost over $6 billion.
                           They have evolved into open-ended commitments; diplomatic efforts to
                           resolve the underlying conflicts have stalled in nearly all of the operations,
                           and the situations have proven intractable. We recently recommended that
                           the Secretary of State develop plans and strategies to bring these missions
                           to closure.10 I want to emphasize that we do not mean these missions
                           should be ended immediately, but rather that concrete actions to address
                           the underlying conflicts should be developed. Success along these lines
                           could have budgetary implications, given the cost of these operations.

                           Funding in the 150 account by no means represents the sum total of U.S.
                           contributions to peacekeeping activities or U.S. support for international
                           security interests. From fiscal year 1992 to 1995, U.S. government agencies
                           spent over $6.6 billion to support U.N. peace operations in Haiti, the
                           former Yugoslavia, Rwanda, and Somalia; this figure includes $3.4 billion
                           in incremental costs incurred by the Department of Defense and funded
                           outside of the 150 account.

Bilateral Assistance       Between fiscal year 1992 and 1997, about 30 percent of the international
                           affairs budget was spent on bilateral assistance programs. During this

                       •   about 37 percent supported traditional development programs
                           administered primarily by USAID;
                       •   about 21 percent funded food aid programs;
                       •   about 18 percent was allocated for aid to Eastern Europe and the NIS;
                       •   about 15 percent went for humanitarian aid, such as disaster relief; and
                       •   about 9 percent funded USAID’s administrative costs (see fig. 5).

                            U.N. Peacekeeping: Status of Long-standing Operations and U.S. Interests in Supporting Them
                           (GAO/NSIAD-97-59, Apr. 9, 1997).

                           Page 11                                       GAO/T-NSIAD-98-18 International Affairs Budget
Figure 5: Distribution of Bilateral Assistance Funding, Fiscal Years 1992-97

                                                            Eastern Europe/NIS 18.1%
            Food aid 21.1%

                                                                             Administration   9.0%

Humanitarian aid 14.5%

manitarian Aid   14.5%

                                                                     Sustainable development 37.4%

                                                           Sustainable Developm 37.4%

                                            Note: Totals may not add due to rounding.

                                            Funding for the bilateral assistance component has declined in real terms
                                            an average of 6 percent per year during fiscal years 1992-97 (see fig. 6). It
                                            peaked in fiscal year 1993, but by fiscal year 1997 had returned to about
                                            $5.2 billion—a level 17 percent lower than in fiscal year 1992. The
                                            President has requested an increase of about 5 percent in funding for this
                                            component for fiscal year 1998.

                                            Page 12                                     GAO/T-NSIAD-98-18 International Affairs Budget
Figure 6: Trends in Bilateral
Assistance Funding, Fiscal Years
1992-97 (1997 dollars in millions)   9,000









                                        1992         1993          1994                  1995      1996           1997
                                                                          Fiscal years

                                     One of the more significant developments in the U.S. foreign aid program
                                     is the participation of new recipients—the countries of Eastern Europe
                                     and the former Soviet Union. Aid to these countries accounts for
                                     18 percent of all assistance since 1992 and is consuming a greater share of
                                     a decreasing aid pie—from 8 percent of bilateral assistance in 1992 to
                                     20 percent in 1997. Aid for these countries includes grants for training and
                                     technical assistance to facilitate development of democratic institutions
                                     and market economies. Assistance to Bosnia is now the single largest
                                     program of U.S. aid in this region—about $240 million in fiscal year 1997.

                                     Also of note is the amount of aid that has gone to alleviate problems
                                     associated with localized conflicts—“hot spots” such as Somalia, Bosnia,
                                     and Haiti. Since 1993, more than $1 billion has been spent on these three
                                     conflicts, including funds for humanitarian assistance and food aid.
                                     Typically, USAID has had to meet part of these requirements by shifting
                                     funds from other ongoing bilateral assistance programs.

                                     Page 13                                GAO/T-NSIAD-98-18 International Affairs Budget
    The one-third of bilateral assistance that supports sustainable
    development efforts includes programs in health and population growth,
    economic growth and agricultural development, democracy, education
    and training, and the environment. As I said earlier, a large percentage of
    sustainable development funding is directed by the Congress or the
    President for specific purposes, such as child survival and population
    programs. In 1997, about 70 percent of sustainable development assistance
    was earmarked or directed in this way, up from about 60 percent in 1995.

    The central issues surrounding bilateral assistance are, first, whether
    economic development assistance either has had or can have a positive
    impact on development and, second, how efficiently and effectively can
    aid be delivered.

•   How relevant are our foreign aid programs in the current environment?

    Despite USAID’s attempt to better target its assistance, fundamental
    questions remain about the effectiveness and relevance of U.S.
    development assistance for purposes other than humanitarian relief.
    Critics of foreign aid point to the end of Cold War imperatives, the absence
    of conclusive evidence that aid makes a difference to countries’ economic
    progress, the shift to a new development model that relies more on the
    private sector, and the rapid growth in the flow of private capital to the
    developing world as reasons to end traditional foreign aid. Proponents
    stress the large number of outstanding needs and the value of assistance to
    achieve certain foreign policy objectives; they generally call for reform and
    revitalization—not elimination.

    Our work on USAID’s Housing Guaranty Program11 highlights the
    complexities in assisting development by using foreign aid. This program,
    in place for over 30 years, has guaranteed about $5 billion in loans to
    developing countries with the goal of stimulating increased private sector
    investment in housing for the poor. The program’s original premise,
    however, did not adequately take into account the real world limitations to
    achieving this objective. In fact, it was not clear at the time of our work
    that USAID was even pursuing the original goal anymore, but rather had
    established new ones throughout the years in the face of a lack of
    demonstrated progress in meeting program goals. Based on GAO’s work,
    the Congress has dramatically reduced funding for this program.

     See Foreign Housing Guaranty Program: Financial Condition Is Poor and Goals Are Not Achieved
    (GAO/NSIAD-95-108, June 2, 1995).

    Page 14                                      GAO/T-NSIAD-98-18 International Affairs Budget
    A consensus is emerging, however, regarding what seems to work and
    what does not. Recent examinations by respected institutions have
    concluded that the impact of economic assistance is modest and possible
    only in countries with good fiscal, monetary, and trade policies and
    effective governing institutions.

•   Have clear priorities been established for foreign assistance programs?

    In its 1997 strategic plan, developed in accordance with the Government
    Performance and Results Act, USAID appears to have established as a
    priority the importance of influencing domestic policy in the recipient
    countries. Many of the strategies it has described for achieving its major
    development goals involve persuading recipient countries to reform their
    economic, judicial, health care, and education policies and regulations.

    While USAID has attempted to incorporate consideration of whether a
    recipient country has changed its policy environment into the process of
    deciding how much further aid to give to that country, the quality of a
    country’s reform efforts is not yet a guiding factor in this process. Our
    analysis of USAID resource allocations for fiscal year 1996 does not show
    any significant difference between the proportion of aid allocated between
    the top performing countries in policy reform and the poorer performing
    countries. USAID acknowledges that political and foreign policy
    considerations continue to strongly influence USAID’s budgeting process.
    Allocating foreign aid based only on policy performance would limit
    flexibility and would require consensus—which would be very difficult to
    achieve—that aid is only for the purposes of economic development and
    not for achieving other foreign policy objectives.

    The next critical question that needs to be asked in this regard is whether
    USAID can continue to operate and be effective in a large number of
    countries, given the diminishing amount of foreign aid funds available.
    Despite having closed missions in 24 countries since 1993, USAID still has
    programs in over 80 countries. Many of these countries have relatively
    small programs. For example, in fiscal year 1996, 10 countries received
    over 50 percent of all sustainable development assistance allocated to
    specific countries, with the remainder spread among 42 countries. In
    about half of these 42 countries, the United States is a relatively minor
    donor, not even among the top three bilateral aid donors. USAID has made
    some efforts to “graduate” its more successful aid recipients. Indeed, it has
    discontinued programs in some countries, such as Chile and Thailand,
    whose level of development no longer justifies foreign aid. However, USAID

    Page 15                             GAO/T-NSIAD-98-18 International Affairs Budget
                      has not established formal criteria for determining which countries should
                      continue to receive development assistance.

                  •   Can we deliver foreign assistance at lower cost?

                      Despite the domestic skepticism attached to U.S. foreign aid in general,
                      there still remains broad support for some specific programs—child
                      survival and population programs are only two examples. For those
                      programs that the U.S. government continues to support—and that meet
                      the tests of relevance and priority—the next two questions should be
                      (1) how can they be delivered most efficiently and (2) what level of
                      accountability are we going to insist upon?

                      Four years of reform under the leadership of the USAID Administrator have
                      resulted in a smaller, more streamlined aid bureaucracy that has achieved
                      some operational efficiencies. USAID reengineering efforts have included
                      reorganizing missions and eliminating unnecessary administrative
                      requirements. USAID has also sought to focus its activities on a more
                      manageable set of strategic objectives. This process has been further
                      refined in USAID’s strategic plan.

                      Nevertheless, some continue to question the USAID structure in light of the
                      declining levels of U.S. aid and have suggested that other ways of
                      delivering bilateral assistance should be considered. The ratio of USAID’s
                      operating expenses—about $500 million—to the costs of the programs it
                      administers—about $4.9 billion—has been steadily increasing, with more
                      USAID dollars going to manage a smaller aid program. One of the many
                      options that have been discussed is the re-creation of USAID as a
                      foundation—providing aid through nongovernmental organizations and
                      without the hands-on implementation responsibilities and attendant
                      infrastructure it now has. Of course it is not clear what implications the
                      planned consolidation of some USAID and State Department administrative
                      functions will have on USAID’s operating expenses. The trade-off of this
                      approach, of course, is the risk of misuse of U.S. aid dollars and a loss of
                      accountability for program results, as well as perhaps more limited
                      opportunities to use U.S. assistance to support new or emerging foreign
                      policy objectives.

Foreign Affairs       In recent years, about 14 percent of the international affairs budget has
Management            been spent to fund activities related to the management of foreign affairs.
                      Nearly all of this funding goes to support State Department operations

                      Page 16                            GAO/T-NSIAD-98-18 International Affairs Budget
                                     (see fig. 7), including its headquarters, passport offices and other domestic
                                     offices across the United States, over 250 embassies and consulates
                                     overseas, and salaries for roughly 23,000 direct-hire employees worldwide.
                                     The remainder—about 3 percent—supports the Arms Control and
                                     Disarmament Agency (ACDA) and a variety of commissions and funds.

Figure 7: Distribution of Foreign
Affairs Management Funding, Fiscal
                                           Arms control and 1.7% Commissions/Funds 1.0%
                                      Arms Control and Dis
Years 1992-97
                                           disarmament 1.7% Commissions/funds 1.0%

                                                                                    State Department 97.3%
                                                                   State Dept.   97.3%

                                     Funding appropriated to State for foreign affairs management has declined
                                     in real terms by an average of 4 percent per year during fiscal
                                     years 1992-97 (see fig. 8). The fiscal year 1997 funding level of $2.8 billion
                                     was about 15 percent lower than in fiscal year 1992. This decline has been
                                     ameliorated somewhat by visa fees that State has been allowed to retain
                                     since fiscal year 1995 to offset the cost of its operations—averaging about
                                     $140 million per year.12 The administration has requested a 4.9 percent real
                                     increase in appropriations for foreign affairs management in 1998. Under
                                     the Illegal Immigration Reform and Immigrant Responsibility Act of 1996,
                                     State’s work load will increase starting in April 1998. State will assume
                                     responsibility for adjudicating all applications for border crossing cards
                                     for Mexican nonresident aliens entering the United States, a responsibility

                                       When these funds are included, the real average annual decline is about 3 percent, and the real
                                     funding level in fiscal year 1997 was 10 percent lower than in fiscal year 1992.

                                     Page 17                                         GAO/T-NSIAD-98-18 International Affairs Budget
                                      it had previously shared with the Immigration and Naturalization Service.
                                      State estimates that it will need about 70 additional employees to handle
                                      the increased workload.

Figure 8: Trends in Foreign Affairs
Management Funding, Fiscal Years
1992-97 (1997 dollars in millions)









                                         1992         1993          1994                  1995      1996           1997
                                                                           Fiscal years

                                      Over the last several years, State has closed 30 overseas posts, reduced the
                                      general work force by about 2,200 positions, lowered overseas allowances,
                                      and cut operating budgets. A recent joint Brookings Institution/Council on
                                      Foreign Relations study concluded that State’s ability to function
                                      effectively has been eroded, citing the existence of shabby, unsafe, and
                                      ill-equipped posts; obsolete information technology; and uneven staffing.

                                      At the same time, GAO and others have raised concerns about the relevance
                                      and priority of some of State’s activities and the efficiency with which it
                                      operates. Although the State Department has reduced staff and
                                      implemented some cost reduction measures, it has not undertaken a
                                      fundamental rethinking of its foreign affairs and diplomatic structure or

                                      Page 18                               GAO/T-NSIAD-98-18 International Affairs Budget
    significantly changed its business practices. This would involve
    reassessing the rationale for the current overseas structure and staffing,
    reviewing both the approach and the level of State’s involvement in some
    functions and activities, and adopting better business practices.

    Thus, some tough questions need to be asked:

•   Does the United States need and can it afford all overseas posts as
    currently staffed and structured?

    Given the cost of our overseas infrastructure, the Congress and the
    President need to make sure that State’s post and staff structure is
    consistent with current U.S. foreign policy needs and that it makes the
    best use of U.S. resources and staff. About $2 billion, or over 80 percent, of
    the amount spent on the administration of foreign affairs is tied to the
    operation of overseas posts. The current structure is based on State’s
    policy of universality—a diplomatic presence in almost every country of
    the world, even those that by State’s own admission are not critical to U.S.
    interests. The costs of a U.S. overseas presence vary widely. For example,
    in 1995 the post in Western Samoa cost $2.5 million to operate and the U.S.
    mission in Germany cost over $90 million.

    Changing U.S. interests—and the mutable nature of the world problems
    the U.S. government faces—mean that we need to scrutinize U.S. presence
    and staffing on a mission-by-mission basis. Closing posts would meet
    opposition from various interests groups, and the savings from the closure
    of small individual posts would not be substantial. Greater regionalization
    of the U.S. diplomatic presence by having one ambassador accredited to
    serve in multiple countries is an option that could be explored to increase
    efficiency and lower costs. Taking advantage of modern
    telecommunications technology may make it feasible for State to
    consolidate a limited number of overseas posts. For example, the U.S.
    embassy in Bridgetown, Barbados, has full diplomatic responsibilities for
    7 countries and partial diplomatic responsibility for 14 others in the
    eastern Caribbean; likewise, British ambassadors are accredited to 3 to
    4 countries each in Africa. These could serve as models for a U.S.
    diplomatic reorganization in other regions beyond the Caribbean. We
    calculated that if State closed 20 small embassies and employed the above
    approach, State could reduce its costs by up to $40 million annually, after
    closing costs were paid and U.S. direct-hire positions were eliminated.

    Page 19                             GAO/T-NSIAD-98-18 International Affairs Budget
•   Can the State Department operate more efficiently?

    The State Department is entering the 21st century with outdated and
    costly-to-maintain communications systems and weak and outdated
    management processes. State has not made the necessary investments to
    modernize its information technology and is only now beginning a serious
    attempt to improve its capabilities in this area. The success of those
    efforts is critical to achieving long-term savings in information
    management costs and to streamlining its business practices.

    Our work has shown that State’s business processes could be made more
    cost-effective. Just this month we reported13 that the introduction of
    prevailing best management practices from the private sector into State’s
    staff relocation process could save millions.

    We have previously identified weaknesses in State’s management of its
    overseas real estate portfolio and recommended a panel to review
    properties. At the Congress’ direction, State has established such a panel,
    including real estate experts from outside the Department. The panel has
    begun its work, recommending properties for sale as well as those where
    local conditions preclude a sale at fair price to the U.S. government. The
    Congressional Budget Office estimated that State could generate
    $150 million over the next 5 years by selling 100 properties that it has
    identified for potential sale. According to State, last fiscal year the
    Department executed final sales of over $60 million worth of properties
    and reinvested those proceeds in needed facilities, which will also reduce
    future rental costs.

•   Is State efficiently structured, and are all of State’s functions and activities

    Our work suggests that the answer to the first part of this question is “no,”
    and the answer to the second is “not clear.” State maintains a headquarters
    with 6 geographic and 15 functional bureaus, including a bureau for
    international organizations. Some programs and administrative functions
    overlap between geographic and functional bureaus. For example,
    although State has a functional bureau with responsibility for
    political-military issues, it also has 24 political-military positions in other
    bureaus, including each geographic bureau. In a way, the geographic
    bureaus operate as six micro-State Departments. Add to this mix the work
    and policy interests of the bureau dedicated to working with international
     See State Department: Using Best Practices to Relocate Employees Could Reduce Costs and Improve
    Service (GAO/NSIAD-98-19, Oct. 17, 1997).

    Page 20                                     GAO/T-NSIAD-98-18 International Affairs Budget
organizations, and you have a complicated structure in which to develop

In addition to overlap within its own structure, State has bureaus, offices,
and activities that mirror those of many other parts of the federal
government, including agencies with primary responsibility for trade,
agriculture, labor, and environmental issues. While State has a critical role
in advancing U.S. interests in these increasingly international issues, it is
not clear if the current approach and level of staffing to support its
involvement are necessary.

As an illustration, although the Department of Labor is the lead U.S.
representative in multilateral forums on labor issues, several State bureaus
address these issues. To support work on labor issues, the State
Department has 45 labor attachés overseas that gather detailed
information on workers’ rights outside the United States and prepare
congressionally required reports. Work we completed in 199614 suggests
that the 45 attaché positions and their corresponding headquarters
complement may not be necessary because, according to several officials
at overseas posts, labor issues could be adequately covered by the State
Department’s political and/or economic officers as they are in countries
without attachés. The Congressional Budget Office estimated that
eliminating these positions through attrition over 5 years would produce
savings of $30 million. State has proposed abolishing or lowering the rank
of some labor attaché positions in the past but has encountered resistance
from the Department of Labor and organized labor.

There seems to be room to rethink State’s involvement in such functions
or at least its approach. The process specified in the Government
Performance and Results Act is a good vehicle to address this issue by
encouraging government agencies to improve coordination of
cross-cutting functions.15 However, we have examined the State
Department’s strategic plan and noted, among other concerns, that State
does not clearly indicate how it plans to provide leadership and coordinate
the programs of other agencies. In some cases, changing State’s
involvement may require congressional approval or interagency

 See State Department: Options for Addressing Possible Budget Reductions (GAO/NSIAD-96-124,
Aug. 29, 1996).
 See Managing for Results: Using the Results Act to Address Mission Fragmentation and Program
Overlap (GAO/AIMD-97-146, Aug. 29, 1997).

Page 21                                      GAO/T-NSIAD-98-18 International Affairs Budget
                       The problems with State’s organizational structure are widely recognized
                       within the Department, and the Secretary of State has expressed her
                       commitment to crafting a Department that functions better, faster, and
                       more flexibly as she consolidates State, USIA, and ACDA. To accomplish this,
                       the Secretary has established 15 employee task forces to examine all
                       aspects of State’s operations with the goal of reducing potential overlap
                       and improving the agency’s decision-making process. According to a
                       member of State’s Reorganization Secretariat, the objective of the
                       consolidation is to let the State Department spend less time negotiating
                       with itself and more time engaged with foreign governments.

                   •   How well is the consolidation of foreign affairs agencies being managed?

                       The April 1997 decision to consolidate the State Department, the USIA, and
                       the ACDA and to integrate certain administrative functions of State and
                       USAID presents a major management challenge, but it also creates an
                       opportunity to achieve cost savings. Among the more straightforward
                       tasks will be consolidating the organizations’ similar administrative
                       functions, such as travel and payroll. However, the consolidation also
                       offers State a major opportunity to address potential overlaps and
                       duplication not only in the areas of public diplomacy and arms control but
                       also in all of the Department’s activities and functions. Creativity will be
                       needed to find a way of incorporating these functions into State’s
                       organization without taking the traditional approach of establishing
                       positions for public diplomacy and arms control positions within both the
                       functional and regional bureaus. If managed carefully and creatively, the
                       consolidation should produce efficiencies and cost reductions over the
                       long term.

Public Diplomacy       Let me turn now to the public diplomacy category—essentially the
                       programs and activities of the USIA—which represents about 6 percent of
                       the funding for international affairs programs. USIA salaries and expenses
                       account for the bulk of public diplomacy funding; in fiscal years 1992-97,
                       40 percent was allocated for USIA personnel and operations at over 200
                       overseas locations and headquarters; about 38 percent for international
                       broadcasting operations including the Voice of America; and about
                       22 percent for exchange programs such as Fulbright scholarships (see
                       fig. 9).

                       Page 22                            GAO/T-NSIAD-98-18 International Affairs Budget
Figure 9: Distribution of Public
Diplomacy Funding, Fiscal Years
                                                                                             Exchanges   21.9%
                                   Broadcasting 38.1%

                                                                 USIA operations   40.0%

                                   Funding for public diplomacy has declined in real terms an average of
                                   about 6 percent annually during fiscal years 1992-97 (see fig. 10). Funding
                                   peaked in fiscal year 1994 due primarily to increased funding for
                                   educational and cultural exchange programs for the NIS and has declined
                                   since. The fiscal year 1997 funding level of $1.1 billion was 25 percent
                                   lower than it was in fiscal year 1992. The largest decrease, between fiscal
                                   year 1995 and 1996, resulted from reductions in funding for exchanges,
                                   salaries, and expenses and the consolidation of international broadcasting
                                   activities. The executive branch has proposed a further 3.5 percent real
                                   decrease in funding for public diplomacy for fiscal year 1998. Over the
                                   years, the USIA’s programs have shifted in emphasis from one part of the
                                   world to another in response to foreign policy initiatives and direction
                                   from the executive branch as well as to congressional mandates.

                                   Page 23                            GAO/T-NSIAD-98-18 International Affairs Budget
Figure 10: Trends in Public Diplomacy
Funding, Fiscal Years 1992-1997 (1997
dollars in millions)                    9,000









                                           1992         1993         1994                  1995      1996           1997
                                                                            Fiscal years

                                        Even before the announcement of its consolidation with the State
                                        Department, the USIA had cut staff, consolidated all nonmilitary
                                        international broadcasting, and developed a strategy to downsize its
                                        operations and reduce costs. However, difficult questions about the
                                        continuing relevance of some public diplomacy programs remain. Many
                                        USIA programs and the agency’s overseas structure and infrastructure were
                                        established after World War II as the United States sought to counter the
                                        Soviet bloc and encourage the development of democracy. Legislative
                                        requirements have earmarked much of the USIA’s budget for specific
                                        exchanges, broadcasting programs, and grantees. More radical changes in
                                        USIA activities and programs would be needed to generate significant
                                        additional cost reductions and would require the Congress to revisit some
                                        of these legislative requirements. They would also require the USIA and the
                                        State Department to change their traditional operating philosophy that the
                                        USIA should be located wherever the State Department has a presence.

                                        Page 24                               GAO/T-NSIAD-98-18 International Affairs Budget
    Regarding public diplomacy funding, the key questions are whether we
    can continue to fund all USIA facilities abroad and whether we can achieve
    greater efficiencies in USIA broadcasting.

•   Do we need and can we afford all USIA facilities overseas?

    The USIA spends about 30 percent of its budget on salaries, infrastructure,
    and operating expenses for overseas installations—many in flourishing
    democracies. For example, the USIA spent $9 million in 1995 for operations
    in Germany, including six outreach centers. The 77 staff at these centers,
    called “America Houses,” provide information on U.S. policy and business
    and study opportunities and host cultural events. Much of the information
    the USIA provides is also generated by the private sector, is available
    electronically, and could be distributed by a private entity.

    The USIA’s efforts to reform and relocate outreach centers (of which it
    operates about 70) have reduced costs in some cases. The USIA estimated
    that the 1995 decision to close an America House in Germany in favor of a
    local government and business-supported German/American Cultural
    Center saved about a million dollars per year. Also, in Singapore, the USIA
    terminated a $455,000 yearly lease for a cultural center and moved into
    embassy facilities. While the USIA should continue to explore such
    opportunities, eliminating posts altogether in up to 67 countries that by
    USIA’s own criteria are relatively less important to U.S. interests would
    achieve more significant cost savings. The traditional belief that the USIA
    should be located where the State Department has a presence has made
    this difficult.

•   Are all exchange programs essential, and are they targeted to meet U.S.

    The USIA manages a variety of exchange programs to foster mutual
    understanding between the people of the United States and other
    countries. In 1950, shortly after the U.S. government began funding
    scholarships, it was the primary source of funding for 7.7 percent of
    foreign students in the United States. In 1994, only 1.2 percent, or about
    5,400, of the 453,000 foreign students attending U.S. high schools, colleges,
    and universities received U.S. government funding as their primary source
    of support. During this period other federal agencies, as well as state and
    local governments and the private sector, have increased their roles in
    funding exchanges. The USIA currently accounts for only one-fourth of the
    funding for U.S. government exchange programs.

    Page 25                             GAO/T-NSIAD-98-18 International Affairs Budget
                              In 1996, the USIA acknowledged that non-USIA exchange opportunities were
                              plentiful in some regions such as Western Europe and that therefore it was
                              shifting exchange resources to regions that are not as fully represented by
                              other U.S. government agencies or the private sector. Since the end of the
                              Cold War, the Congress has appropriated funds to establish new exchange
                              programs, particularly in countries of Central and Eastern Europe and the
                              former Soviet Union.

                              Other agencies, including the Departments of Education and Defense, also
                              engage in exchanges and other educational efforts with funding outside
                              the 150 account. For example, the Department of Education funds a
                              program to help improve civics and economics education in Central and
                              Eastern Europe and the former Soviet Union. I would like to note that the
                              House of Representatives’ foreign affairs reform bill calls for the
                              establishment of a working group to improve the coordination and
                              effectiveness of U.S. government-supported exchanges.16

                          •   Are there opportunities to achieve further efficiencies in international

                              In the U.S. International Broadcasting Act of 1994, the Congress reaffirmed
                              the importance of continued U.S. broadcasts to further U.S. interests.
                              However, the Congress has reduced funding for most nonmilitary
                              international broadcasting activities and mandated their consolidation. In
                              1996, the United States broadcasted over 1,600 hours of radio
                              programming in 53 languages and over 400 hours of television in several
                              languages worldwide each week to support U.S. foreign policy objectives.
                              Only modest economies are possible by eliminating overlap and lessening
                              duplication among broadcasters. Achieving significant cost savings would
                              require a major reduction in the number of language services and
                              broadcast hours. However, past experience has shown that eliminating
                              even one language is a difficult process, due to the interest of the
                              Congress, the National Security Council, and others and could impinge on
                              the USIA’s readiness in a crisis situation.

Multilateral Assistance       U.S. contributions to a variety of international organizations and programs
                              consumed about 14 percent of the international affairs budget from fiscal
                              year 1992 to 1997. Contributions to international organizations, including
                              the United Nations, represented about 44 percent; about 39 percent funded

                               See Foreign Relations Authorization Act, Fiscal Years 1998 and 1999, H.R. 1757, 105th Cong.,
                              section 1406.

                              Page 26                                        GAO/T-NSIAD-98-18 International Affairs Budget
                                                   our participation in the World Bank group, primarily for concessional
                                                   (below-market interest rate) lending programs; and contributions to other
                                                   international financial institutions (including the African, Asian, and
                                                   Inter-American Development Banks and the European Bank for
                                                   Reconstruction and Development) accounted for the remaining
                                                   17 percent. (See fig. 11.) The vast majority of funds the United States
                                                   provides to the World Bank is used to finance interest-free loans to the
                                                   poorest developing countries through the Bank’s International
                                                   Development Association (IDA). The two largest recipients are India and
                                                   China, which together received almost 30 percent of these loan funds—or
                                                   $2.4 billion each—in fiscal years 1994-96. As China continues to develop,
                                                   IDA lending to that country is being phased out and is slated to end in 1999.

Figure 11: Distribution of Multilateral Assistance Funding, Fiscal Years 1992-97
                                                                              World Bank Group 39.1%

Other international financial institutions 16.7%
                        Intl. Financia 16.7%

                                                                            International organizations and programs 44.2%
                                                                             Intl. Organizations 44.2%

                                                   Funding for multilateral assistance has declined in real terms an average
                                                   of about 6 percent per year during fiscal years 1992-97, as shown in figure
                                                   12. Funding peaked in fiscal year 1995, with larger than average
                                                   contributions to the World Bank. Since then, contributions to the World
                                                   Bank and other international financial institutions and the United Nations
                                                   have declined to almost $2.2 billion in fiscal year 1997—a level about
                                                   27 percent lower than in fiscal year 1992. For fiscal year 1998, the

                                                   Page 27                              GAO/T-NSIAD-98-18 International Affairs Budget
                                         executive branch has requested a real increase of 32.5 percent for
                                         multilateral assistance, largely to return annual funding of multilateral
                                         organizations to traditional levels.17

Figure 12: Trends in Multilateral
Assistance Funding, Fiscal Years
1992-97 (1997 dollars in millions)       9,000









                                              1992              1993               1994                  1995           1996               1997
                                                                                          Fiscal years

                                         Concerning multilateral assistance, the key questions are whether such
                                         assistance continues to serve U.S. interests and can be delivered more

                                     •   Are all of the multilateral organizations that we participate in still

                                         Reviewing multilateral assistance involves taking a hard look at the
                                         continuing relevance of many international organizations and the extent to

                                           This does not include a requested advance appropriation of $921 million to clear U.S. arrears to the
                                         United Nations and other multilateral organizations, which, if approved, would not be available until
                                         fiscal year 1999. It also does not include $3.52 billion in budget authority for the International
                                         Monetary Fund’s New Arrangements to Borrow (which would not result in budget outlays).

                                         Page 28                                          GAO/T-NSIAD-98-18 International Affairs Budget
    which they serve U.S. interests. The State Department believes that
    ongoing U.S. membership in these organizations is important to the United
    States because their activities contribute in varied ways to U.S. security,
    prosperity, health, and safety. Our review of the operations of several of
    these organizations indicates that their policies and agendas are consistent
    with U.S. national security and foreign policy objectives and provide
    significant benefits in such areas as development, global health, and
    scientific research.18

    The U.S. government participates in dozens of other international
    organizations established to serve specialized but limited functions, such
    as the World Road Association and the International Copper Study Group.
    The United States provided about $11 million in 1995 to organizations that
    the State Department viewed as making only limited contributions to U.S.
    interests.19 In recent years, the United States has withdrawn from two
    such organizations. State’s attempt to withdraw from at least one other
    organization, the International Cotton Advisory Committee, met with
    congressional opposition. A State official told us that other attempts
    would likely meet the same type of resistance.

    Support for the World Bank has been the subject of periodic controversy
    in the United States. The purpose of the World Bank is to promote
    economic growth and the development of market economies by providing
    finance on reasonable terms to countries that have difficulty obtaining
    capital. Critics of the Bank often cite the end of the Cold War, the recent
    rapid increase in private investment in developing countries, and
    weaknesses in project effectiveness and management reforms. In
    September 1996, we reported that participation in the World Bank
    furthered U.S. interests because it generally leverages other donors’ funds
    for programs and geographical areas that the U.S. government wants to

•   Can the efficiency and effectiveness of these organizations be improved?

    The State Department acknowledges that some U.N. organizations are not
    operating efficiently and effectively and that some of them have functions

     United Nations: U.S. Participation in Five Affiliated International Organizations (GAO/NSIAD-97-2,
    Feb. 27, 1997) and International Organizations: U.S. Participation in the United Nations Development
    Program (GAO/NSIAD-97-8, Apr. 17, 1997).
     State Department: U.S. Participation in Special-Purpose International Organizations
    (GAO/NSIAD-97-35, Mar. 6, 1997).
     World Bank: U.S. Interests Supported, but Oversight Needed to Help Ensure Improved Performance
    (GAO/NSIAD-96-212, Sept. 26, 1996).

    Page 29                                        GAO/T-NSIAD-98-18 International Affairs Budget
                       that overlap. However, the organizations have begun to address
                       weaknesses in the management and administration of their operations and
                       programs that have been the subject of frequent criticism by the Congress
                       and others. The United States and other member states are continuing to
                       call for reforms in the belief that greater efficiency in these agencies could
                       reduce their cost. With U.S. encouragement and assistance, the United
                       Nations has embarked on a program of reform. Reforms could reduce
                       costs; however, their fate is uncertain, and they cannot be expected to be
                       completed anytime soon.

                       Regarding the World Bank, U.S. interests could be better served by the
                       World Bank if it could improve its record of effectiveness. Reforms have
                       been implemented and show some early signs of progress, but in some
                       areas major impediments still remain and improvements do not seem to
                       have taken hold. Through its leadership, the United States is positioned to
                       ensure that Bank reforms continue to progress and to have a positive
                       impact on development effectiveness. To this end, we recommended that
                       the Secretary of the Treasury monitor and periodically report to the
                       Congress measurable indicators of progress, such as the extent to which
                       the Bank allocates financing to those countries that make Bank-advocated
                       market and policy reforms.

Trade and Investment   International trade and investment funding represented about 4 percent of
                       the international affairs budget in fiscal years 1992-97. Trade and
                       investment funding supported primarily the Eximbank, the Trade and
                       Development Agency, and the International Trade Commission. (See
                       fig. 13). Figure 13 excludes OPIC because it returned net revenue to the U.S.
                       Treasury during this period. Related—and large—expenditures for trade
                       and investment activities and programs outside the 150 account include
                       the activities of the Commerce Department’s International Trade
                       Administration, the Office of the U.S. Trade Representative, the various
                       agricultural trade promotion and credit guaranty programs, and the
                       programs of the Small Business Administration.

                       Page 30                             GAO/T-NSIAD-98-18 International Affairs Budget
Figure 13: Distribution of Trade and Investment Funding, Fiscal Years 1992-97

                                                                       Internat'l Trade
                                                                       International    ComCommission
                                                                                      Trade  4.9%     4.9%

                                                                          TradeDevelopment Agency 5.5%
                                                                                and Developme

  ort-Import Bank 89.6%
Export-Import Bank 89.6%

                                          The largest increase in international trade and investment funding,
                                          between fiscal year 1993 and 1994, was due primarily to higher funding for
                                          programs in the NIS. Funding has continuously declined since reaching its
                                          highest level in 1994, with the fiscal year 1998 request representing a
                                          decrease of almost 20 percent in real terms over the preceding year. (See
                                          fig. 14.)

                                          Page 31                                GAO/T-NSIAD-98-18 International Affairs Budget
Figure 14: Trends in Trade and
Investment Funding, Fiscal Years
1992-97 (1997 dollars in millions)       9,000









                                            1992         1993         1994                  1995      1996           1997
                                                                             Fiscal years

                                         Eximbank and OPIC programs have become increasingly controversial in
                                         recent years, generating questions about whether they continue to be
                                         relevant and whether government costs and taxpayer risk can be reduced.
                                         Both organizations provide loans, guarantees, and insurance to support
                                         U.S. exports or market-oriented private investment. In some risky markets
                                         where the Eximbank operates, some borrowers miss payments or default
                                         on entire loans; such losses must be covered by the Eximbank, resulting in
                                         subsidy costs to the federal government.

                                     •   Are the programs of the Eximbank and OPIC relevant in today’s

                                         OPIC was created in 1969 to help mobilize U.S. capital and skills for the
                                         economic and social advancement of developing countries—a major U.S.
                                         foreign policy objective. The Eximbank’s creation was spurred by the
                                         economic conditions of the 1930s, when exports were viewed as a
                                         stimulus to economic activity and employment. The Congress continues to
                                         debate the relevance of export promotion and investment programs, most

                                         Page 32                              GAO/T-NSIAD-98-18 International Affairs Budget
recently as it considered whether to reauthorize the Eximbank and OPIC.
The debate has centered on the need for government support and the
organizations’ costs and benefits. Critics question whether the U.S.
government should provide direct assistance to private exporters and
investors. They charge that expenditures to subsidize the transactions of
the Eximbank and OPIC amount to “corporate welfare.” In the case of the
Eximbank, critics claim that a substantial portion of its subsidy
expenditures and financing commitments is used to support the
operations of large exporting multinational firms that are experienced
exporters and have their own resources to export their products.
Moreover, the economic benefits of the programs are uncertain. Some
economists argue that the market is a much more efficient allocator of
resources than the government and that these programs cannot produce a
substantial change in employment levels. The nearly fivefold increase in
private investment flows to the developing world since 1990 may also raise
questions concerning the continued need for the Eximbank and OPIC, given
the private sector’s growing willingness to support trade and investment
transactions in some emerging markets.

Conversely, proponents of continued U.S. government support argue that
there is still a niche for the Eximbank and OPIC. Risky markets still exist
where the private sector is reluctant to operate or invest without public
financing. Concerning the Eximbank, our recent work indicated that
although definitive evidence about the economic impact of U.S.
government trade programs is lacking,21 perhaps the most compelling
argument in defense of the Eximbank is its role in helping to “level the
international playing field” for U.S. exporters. All major industrialized
countries operate similar programs and thus are primarily countered
through U.S. programs. Our recent work on OPIC suggests that, despite
increasing private capital flows to the developing world, there are still
markets where U.S. private firms are unwilling to participate without some

  We recently reported that, because of the continued expansion of U.S. exports, the share of exports
supported by the Eximbank has been decreasing over the years. It fell to less than 2 percent in 1995,
the lowest level of support provided by major industrial nations’ export credit agencies. The major
users of Eximbank financing include several large, well-known firms such as Boeing, Raytheon,
General Electric, Bechtel, and Asea Brown Boveri. During fiscal years 1994 through 1996, these and the
other top 15 users of Eximbank financing accounted for about $14.4 billion, or 38 percent, of the
Eximbank’s total export-financing commitments and about 27 percent of its total program budget, or
subsidies. Meanwhile, a growing level of support has been directed to small business—during fiscal
years 1994 to 1996, about 20 percent of the Eximbank’s total financing commitments went to support
small business. During fiscal years 1992 to 1996, subsidy costs averaged $750 million annually. See
Export-Import Bank: Key Factors in Considering Eximbank Reauthorization (GAO/T-NSIAD-97-215,
July 17, 1997) and Export-Import Bank: Options for Achieving Possible Budget Reductions
(GAO/NSIAD-97-7, Dec. 20, 1996).

Page 33                                        GAO/T-NSIAD-98-18 International Affairs Budget
    form of public support, be it from OPIC, the Eximbank, foreign
    governments, or multilateral organizations.22

    Turning to OPIC, historically its combined finance and insurance programs
    have been self-sustaining. OPIC’s net income from transactions with the
    private sector amounted to about $43 million in fiscal year 1996.23 During
    fiscal year 1996, approximately 18 percent of OPIC’s financing
    commitments supported small businesses and cooperatives; the remaining
    82 percent supported large businesses. The U.S. foreign policy objective of
    promoting private investment in developing countries encourages OPIC to
    underwrite risks that the private sector may not assume without public
    support. OPIC, the State Department, and other U.S. government officials
    consider OPIC to be a major tool for pursuing U.S. foreign policy goals,
    such as assisting Russia in its transition toward achieving a free market

•   Are there opportunities to support U.S. exports and investments while
    reducing costs and risks?

    If legislation is enacted reauthorizing Eximbank and OPIC, the question
    becomes whether there are opportunities to reduce the costs of their
    programs. The Eximbank and OPIC could undertake actions such as better
    leveraging resources, decreasing portfolio risk, and lowering costs by
    raising their fees, changing their portfolio mix, or changing the structure of
    their transactions. For example, work we completed in 1996 identified two
    options that would allow the Eximbank to reduce subsidies while
    remaining competitive with foreign export credit agencies: (1) raising fees
    for services and (2) reducing the risks of its programs; that is, limiting
    program availability in certain high-risk markets. The Congressional
    Budget Office estimated that increasing fees could save the Eximbank up
    to $450 million over 5 years, and reducing program risks could save up to
    $1.2 billion over 5 years. Some progress has been made: the Organization
    for Economic Cooperation and Development, with U.S. leadership, has
    now set a minimum fee for services effective in April 1999. This should
    provide the Eximbank with the opportunity to further reduce the costs of
    its operations.

     Overseas Investment: Issues Related to the Overseas Private Investment Corporation’s
    Reauthorization (GAO/NSIAD-97-230, Sept. 8, 1997).
     OPIC’s net income was $209 million in fiscal year 1996 when $166 million in interest earned on
    Treasury securities is included.

    Page 34                                        GAO/T-NSIAD-98-18 International Affairs Budget
Our recent work suggests that OPIC could further reduce the risk in its
portfolio, given the private sector’s willingness to have greater
involvement in some emerging markets. For instance, OPIC could lower the
risks associated with its portfolio through increased use of reinsurance
and coinsurance and by decreasing project coverage or terms. However, if
OPIC is to continue pursuing its mission of promoting investment in risky
markets, its portfolio will always be considered more risky than the
portfolios of private sector insurers.

Mr. Chairman, this concludes my prepared remarks. I would be happy to
respond to any questions you or other Committee members may have. See
the end of this statement for a list of related products that GAO has recently

Page 35                             GAO/T-NSIAD-98-18 International Affairs Budget
Appendix I

Examples of Discretionary International
Activities Related to the 150 Account

                                           This appendix contains two tables. Table I.1 shows international-related
                                           programs with identified funding. Table I.2 shows international-related
                                           programs where specific funding is not identified. These tables are
                                           intended to illustrate the broad range of activities that support U.S.
                                           international policy objectives and are funded outside the 150 account.

Table I.1: International Programs With Identified Funding
                                                                                                                            FY 1998
Program                                    International role                                                              (millions)
Executive Office of the President
National Security Council                  Advises the President on the integration of domestic, foreign, and military            $7
                                           policies relating to national security. Coordinates U.S. policy issues on
                                           combating terrorism for federal efforts to respond to terrorist incidents
                                           abroad or domestic incidents with foreign involvement.
Office of Management and Budget: National Examines programs, budget requests, and management activities;                           7
Security and International Affairs        proposes changes; and participates in counterterrorism efforts.
Office of the U.S. Trade Representative    Develops, coordinates, and advises the President on U.S. international                 22
                                           trade policy; conducts international trade negotiations; and conducts U.S.
                                           affairs related to the World Trade Organization.
Department of Agriculture
Commodity Credit Corporation: Export       Administrative expenses only. Bulk of funding is mandatory. In order to                 4
Loans Program                              increase U.S. agricultural exports, the Corporation guarantees payments
                                           due from foreign banks and buyers.
Foreign Agricultural Service               Opens, expands, and maintains global market opportunities through                     147
                                           international trade, cooperation, and sustainable development.
Public Law 480 Title I Program             Encourages export of agricultural commodities by financing sales to                    90
                                           developing countries and promotes foreign policy by enhancing the food
                                           security of developing countries. Through the program, U.S. agricultural
                                           commodities are sold to developing countries on long-term credit at
                                           below-market interest rates.
Department of Commerce
Export Administration                      Enforces U.S. export trade laws consistent with national security, foreign             43
                                           policy, and short supply objectives.
International Trade Administration         Develops the export potential of U.S. firms in a manner consistent with               272
                                           national security and foreign and economic policy and promotes an
                                           improved trade posture for U.S. industry.
National Telecommunications and            Serves as principal adviser to the President on domestic and international              5
Information Administration                 communications policy. Develops and advocates U.S. interests in
                                           international telecommunications regulation and policy and helps oversee
                                           the Communications Satellite Corporation (COMSAT), the U.S. signatory to
                                           international satellite organizations.
Technology Administration                  Serves as the focal point for civilian technology and competitiveness in the            9
                                           administration, improves U.S. industrial competitiveness and exercises
                                           leadership as the private sector’s advocate, participates in international
                                           science and technology groups and agreements.

                                           Page 36                                   GAO/T-NSIAD-98-18 International Affairs Budget
                                              Appendix I
                                              Examples of Discretionary International
                                              Activities Related to the 150 Account

                                                                                                                                  FY 1998
Program                                       International role                                                                 (millions)
Department of Defense
Defense Export Loan Guarantee Program         Established in FY 1996 to issue guarantees for sale or long-term lease of                  1
Account                                       defense articles, services, or design and construction services to a NATO
                                              member, non-NATO ally, and certain countries in Central Europe and Asia.
Drug Interdiction and Counter-drug Activities Assists U.S. and foreign government law enforcement agencies by                          653
                                              providing detection, monitoring, and tracking support; intelligence support;
                                              planning assistance; and communications, logistics, and training support.
Former Soviet Union Threat Reduction          Facilitates elimination, transportation, and storage of nuclear, chemical, and           382
                                              other weapons; establishes programs to prevent proliferation; and trains
                                              and supports defense personnel for demilitarization and protection of
NATO Security Investment Program              Acquires and constructs military facilities and installations and funds related          176
                                              expenses for the collective defense of the North Atlantic Treaty Area.
National Security Education Trust Fund        Funds international-related studies of U.S. students.                                      2
On-site Inspection Agency                     Supports international arms control treaty implementation, including                     109
                                              inspections of foreign facilities, territories, or events.
Overseas Contingency Operations Transfer      Funds Bosnia Peace Operation. Assumes June 1998 U.S./NATO military                     1,468
Fund                                          pullout.
Support of Other Nations (Army)               Provides U.S. financial contributions for the operation of the NATO                      305
                                              international military commands and facilities, the NATO Airborne Early
                                              Warning and Control System, and the Central European Operating Agency
                                              Pipeline System; supports U.S. personnel assigned to international
                                              organizations; funds programs that further Army-to-Army cooperation with
                                              allied and friendly nations; supports Latin American Cooperation activities
                                              and the School of the Americas; and funds the Marshall Center (Institute for
                                              Eurasian Studies), nonsecurity assistance of military groups, and
                                              unreimbursed costs of foreign military sales activities.
Overseas humanitarian, disaster, and civic    Funds two programs: general Humanitarian Assistance and Foreign                           80
aid                                           Disaster Relief Program and Humanitarian Demining Program.
Department of Education
International Education Exchange              Helps improve civics and economics education in Central and Eastern                        5
                                              Europe, the former Soviet Union, and the United States.
Department of Energy
Falcon and Amistad Hydroelectric Facilities: Most of funds given to International Boundary and Water Commission,                         1
operation, maintenance, and emergency        which assists in operating the facilities, through a reimbursable agreement
expenses.                                    with EPA.
International clean coal technology           Introduces U.S. clean coal technology in China for electricity production.                50
                                              Electricity demand in China represents a significant market for U.S.
                                              vendors. $50 million available October 1998.
International Nuclear Safety and Security     Supports safety improvements; encourages development and continuation                     81
                                              of a U.S. equivalent nuclear safety culture at select Soviet-designed reactor
                                              sites; addresses safety and nonproliferation concerns in the former Soviet
                                              Union; supports closure of Chernobyl; and continues efforts at Argonne
                                              National Laboratory regarding spent fuel.

                                              Page 37                                    GAO/T-NSIAD-98-18 International Affairs Budget
                                            Appendix I
                                            Examples of Discretionary International
                                            Activities Related to the 150 Account

                                                                                                                                FY 1998
Program                                     International role                                                                 (millions)
Nonproliferation and National Security      Provides policy, direction, technology development and implementation,                   671
                                            and leadership in national and international efforts to reduce the danger to
                                            national security posed by weapons of mass destruction.
Large Hadron Collider Project               Supports international agreement in physics. $394 million advance                         35
                                            appropriation requested for fiscal years 1999-2004.
Department of Health and Human Services
Fogarty International Center for Advanced   Hosts symposiums, organizes cooperative research between the National                     17
Study in the Health Sciences                Institutes of Health and foreign scientists, provides fellowships to foreign
                                            scientists in the United States, supports foreign research by U.S. fellows,
                                            and hosts foreign visitors to the NIH.
Refugee Resettlement Assistance             Provides assistance in order to help refugees achieve economic                           396
                                            self-sufficiency and social adjustment within the shortest time possible
                                            following their arrival in the United States.
Department of the Interior
Compact of Free Association                 Funds economic assistance and necessary expenses for the Republics of                      8
                                            the Marshall Islands and Palau and the Federated States of Micronesia.
National Park Service - international       Cooperates through training and technical assistance programs with                         2
                                            foreign park service and conservation personnel, participates in studies of
                                            coastal resource management, and assists in protecting and managing
                                            internationally significant sites.
North American Wetlands                     Fulfills obligations under the North American Waterfowl Management Plan                   15
                                            with Canada and Mexico. May fund projects in Canada or Mexico.
Department of Justice
Federal Bureau of Investigation (FBI)       Total costs of international activities will be higher. Continues legal attaché           34
                                            expansion plan, assigns additional agents overseas to fight drug trafficking,
                                            and continues investigative efforts against drug trafficking and public
                                            corruption along the Southwest border.
Interpol-U.S. National Central Bureau       Serves as U.S. liaison to International Criminal Police Organization and                   7
                                            facilitates international law enforcement cooperation.
Department of Labor
International Labor Affairs                 Supports U.S. foreign policy objectives through relationships with                        11
                                            international organizations and foreign governments; provides analysis on
                                            the labor market and economic impact of trade proposals and legislation,
                                            and immigration-related initiatives; and does assessments of compliance
                                            with worker rights provisions in U.S. trade law.
Department of State
International Boundary and Water            Negotiates and supervises joint projects with Mexico to solve international               18
Commission                                  problems and operate and maintain facilities.
International Boundary and Water            Constructs projects to solve international problems of water supply and                    6
Commission: construction                    quality, sewage treatment, and flood-damage reduction. EPA reimburses.

                                            Page 38                                    GAO/T-NSIAD-98-18 International Affairs Budget
                                          Appendix I
                                          Examples of Discretionary International
                                          Activities Related to the 150 Account

                                                                                                                              FY 1998
Program                                   International role                                                                 (millions)
International commissions                 International Boundary Commission maintains boundary between the                           6
                                          United States and Canada. International Joint Commission approves,
                                          regulates, and monitors structures in boundary waters and investigates
                                          matters referred by the United States and Canada, mainly transboundary
                                          environmental issues. Border Environment Cooperation Commission works
                                          with states and local communities to develop solutions to environmental
                                          problems in border regions.
International Fisheries Commissions       Funds U.S. share of expenses for eight international fisheries commissions,               15
                                          three international marine science sea organizations, one international
                                          council, and the expenses of the commissioners.
Department of Transportation
Maritime Administration: Maritime         Promotes growth of U.S. merchant marine and shipyards. Extended to                        39
Guaranteed Loan (title XI) Program        foreign purchasers and for conversion from military to international
Maritime Security Program                 Replaces operating-differential subsidies. Maintains a U.S.-flag merchant                 54
                                          fleet crewed by U.S. citizens to serve U.S. commercial and national security
                                          needs. Pays U.S. shippers engaged in U.S.-foreign trade.
Maritime Administration: operations and   Increases competitiveness and productivity of U.S. maritime industries and                70
training                                  provides manpower for emergencies. Funds administration and direction,
                                          officer training, coordination of U.S. maritime industry activities under
                                          emergency conditions; promotes port and intermodal development; and
                                          undertakes technology assessment projects.
Department of the Treasury
Secretary - international activities      Recommends and implements U.S. international tax, financial, fiscal, and                  29
                                          economic policies; maintains foreign assets control; manages development
                                          financial policy; represents the United States on international monetary,
                                          trade, and investment issues and treaties; oversees operations abroad; and
                                          oversees law enforcement bureaus.
The Judiciary
U.S. Court of International Trade         Exercises original and exclusive jurisdiction of civil actions against the                10
                                          United States, and certain civil actions brought by the United States, arising
                                          out of import transactions and federal statutes affecting international trade.
Intelligence Community Management         Supports intelligence community.                                                          96
NASA: Space Station                       Participates in international research project.                                        2,114
NASA: U.S./Russia Program                 Participates in joint space missions, including Mir.                                       7
Total funding request                                                                                                           $7,579


                                          EPA = Environmental Protection Agency
                                          NASA = National Air and Space Administration
                                          NATO = North Atlantic Treaty Organization
                                          NIH = National Institutes of Health

                                          Page 39                                        GAO/T-NSIAD-98-18 International Affairs Budget
                                           Appendix I
                                           Examples of Discretionary International
                                           Activities Related to the 150 Account

Table I.2: International-Related Programs Where Specific Funding Is Not Identified
Program                                    International role
Executive Office of the President
National Economic Council                  Participates in setting and carrying out all international affairs goals.
Office of National Drug Control Policy     Oversees international drug control programs. Develops U.S. national drug control
                                           strategy and oversees and coordinates the drug control efforts of about 50 different U.S.
                                           federal agencies engaged in implementing the strategy. Supports protection of U.S. air,
                                           sea, and land borders from the importation of illegal narcotics.
Office of Science and Technology Policy    Coordinates implementation of international science and technology agreements.
Unanticipated needs                        Furthers national interest, security, or defense at home or abroad.
Department of Agriculture
Alternative agricultural research          Helps improve U.S. competitiveness abroad.
Animal and Plant Health Inspection         Participates in foreign cooperative programs, inspections, and international trade in
                                           certain endangered species.
Commodity Credit Corporation: supply and   Procures goods from foreign and domestic sources for foreign and domestic use.
foreign purchases
Farm Service Agency                        Supports Foreign Agricultural Service.
Food Safety and Inspection                 Inspects domestic plants involved in foreign trade and reviews foreign inspection
Grain inspection, packers, and stockyard   Regulates weighing of grain and registers buyers in foreign commerce, briefs foreign
                                           buyers, assesses foreign inspection and weighing techniques, and responds to foreign
Office of the Chief Economist              Collects and analyzes data on international food and agriculture.
Department of Commerce
Bureau of Economic Analysis                Prepares international economic accounts that provide information on international
                                           transactions in goods, services, investment income, and government and private
                                           financial flows and are used to formulate and evaluate international economic policy.
Bureau of the Census                       Collects and publishes foreign trade statistics.
Minority Business Development Agency       Expands international markets for minority-owned businesses.
National Institute of Standards and        Assists with international standardization certification.
National Oceanic and Atmospheric           Monitors compliance with select fisheries acts, monitors and predicts global
Administration                             environments, and supports global environmental programs.
Patent and Trademark Office                Develops and implements intellectual property policies and proposals abroad.
Department of Defense
Counterterrorism                           Combats terrorism; with the FBI, trains and equips former Soviet Union and Eastern
                                           European law enforcement officials, judges, and prosecutors to counter nuclear material
                                           smuggling and trafficking and chemical and biological weapons proliferation.
Other countries’ participation in joint    Supports foreign partners’ participation in joint exercises and projects, including the
exercises                                  Warsaw Initiative, Army’s Developing Countries Combined Exercise Program, and Joint
                                           Contact Team.
Department of Education
Bilingual and immigrant education          Assists local educators in providing high-quality instructional programs to children and
                                           youth with limited English proficiency.

                                           Page 40                                     GAO/T-NSIAD-98-18 International Affairs Budget
                                             Appendix I
                                             Examples of Discretionary International
                                             Activities Related to the 150 Account

Program                                      International role
International language and study             Supports international education and foreign language study programs.
Department of Energy
Counterterrorism                             With others, trains personnel from six countries in the former Soviet Union on
                                             investigating and prosecuting nuclear-related crimes; and reduces the opportunity for
                                             terrorists to acquire nuclear materials.
Defense Environmental Restoration            Receives and manages foreign research reactor spent nuclear fuel.
Energy Efficiency and Pollution Prevention   Increases national security and creates jobs and global opportunities for U.S. firms.
Energy Information Administration            Prepares reports on international matters.
Energy Supply Research and Development       Improves prediction of global change, including climate; provides scientific contribution
                                             to international activities and negotiations; enhances global sales of U.S. energy
                                             products, and provides technical assistance.
International agreements                     Participates in the development and implementation of international agreements, such as
                                             the Nuclear Safety Convention, the U.S./North Korean Agreed Framework on Nuclear
                                             Issues, and the Agreement for Cooperation Between the United States and the European
                                             Atomic Energy Community Concerning Peaceful Uses of Atomic Energy.
Nuclear Materials Management and             Tracks civilian-use nuclear materials imported by the United States and exported to
Safeguards System                            foreign countries. Relies largely on data required to be reported under international
                                             agreements for peaceful nuclear cooperation.
Office of Policy                             Formulates international energy policy, analyzes and assesses current world energy
                                             situation, and participates in international efforts.
Strategic Petroleum Reserve                  Enables the United States to meet International Energy Agency’s emergency response
U.S. Bilateral Physical Protection Program   Evaluates foreign countries’ physical protection systems, addresses emerging nuclear
                                             proliferation threats and problems, promotes technical exchanges and cooperation for
                                             physical protection, strengthens international cooperation and implementation of treaties
                                             and agreements.
Western Area Power Administration            Markets power from federally owned power plants, including the International Boundary
                                             and Water Commission.
Department of Health and Human Services
Office of International and Refugee Health   Promotes achievement of U.S. and international goals through participation in multilateral
                                             health organizations, promotes cooperative health programs with other countries,
                                             provides humanitarian and developmental assistance in health, and helps assure
                                             appropriate policies and support on refugee health issues internationally.
Department of the Interior
Assistance to territories                    Supports operations and provides assistance to territories and freely associated states.
Fish and Wildlife Service: international     Provides technical assistance, training, joint research, and personnel exchanges in
                                             international fisheries and wildlife management efforts, including the protection of
                                             biological diversity.
Fish and Wildlife Service: Rhinoceros and    Enhances compliance with international agreement on trade in endangered species.
Tiger Conservation Fund
Department of Justice
Counterterrorism Fund                        Supports efforts to counter, investigate, or prosecute domestic or international terrorism.

                                             Page 41                                   GAO/T-NSIAD-98-18 International Affairs Budget
                                           Appendix I
                                           Examples of Discretionary International
                                           Activities Related to the 150 Account

Program                                    International role
Criminal Division                          Supports the formulation and execution of international criminal justice enforcement
                                           policies; participates in the negotiation of international agreements and treaties relating
                                           to criminal law enforcement, extradition, and mutual legal assistance; posts attorneys
                                           abroad; enforces U.S. laws against importing goods made with prison labor by
                                           prosecuting criminal cases; and prosecutes cases against international drug traffickers
                                           and money launderers and seizes and forfeits their illicit proceeds and laundered assets
Drug Enforcement Administration            Conducts international investigations, posts staff overseas, coordinates drug
                                           enforcement intelligence gathering overseas, conducts law enforcement operations, and
                                           provides training to foreign government law enforcement personnel.
Drug Enforcement Administration: Violent   Participates in foreign cooperative investigations.
Crime Reduction Program
FBI                                        Protects the United States from foreign hostile intelligence efforts. Assist international law
                                           enforcement agencies. Combat terrorism; with others, train and equip former Soviet
                                           Union and Eastern European law enforcement officials, judges, and prosecutors to
                                           counter nuclear material smuggling and trafficking and chemical and biological
                                           weapons proliferation.
Federal prison system                      Provides technical assistance and advice on corrections-related issues to foreign
Immigration and Naturalization Service     Administers laws relating to the admission, exclusion, deportation, and naturalization of
                                           aliens; posts staff abroad; and conducts investigations.
Legal activities                           Enforces U.S. laws against importing goods made with prison labor by prosecuting
                                           criminal cases and defending Customs’ determinations; prosecutes cases against
                                           international drug traffickers and money launderers and seizes and forfeits their illicit
                                           proceeds and laundered assets domestically and abroad.
Department of Transportation
Coast Guard                                Conducts safety programs; supports international investigations; posts staff abroad;
                                           eliminates maritime routes as a significant trafficking mode for the supply of illegal drugs
                                           to the United States; and enforces treaties.
Federal Aviation Administration            Conducts safety programs, supports international investigations, posts staff abroad,
                                           provides technical assistance, oversees foreign carriers, and supports efforts to combat
                                           terrorism domestically and abroad.
Federal Highway Administration             Promotes U.S. businesses abroad and provides technical assistance to foreign
                                           governments (reimbursed).
National Transportation Safety Board       Helps to develop worldwide safety standards and practices in civil aviation,
                                           disseminates accident and incident information, and helps foreign countries investigate
                                           transportation accidents.
Office of International Aviation           Negotiates bilateral aviation accords and addresses problems U.S. airlines face in doing
                                           business abroad.
Transportation policy and planning         Provides departmental leadership on aviation economic policy and international
                                           transportation issues.
Department of the Treasury
Bureau of Alcohol, Tobacco, and Firearms   Supports international law enforcement, posts staff abroad, and trains foreign law
                                           enforcement officials.
Comptroller of the Currency                Coordinates with foreign counterparts, participates in international banking agreements,
                                           and charters and supervises foreign banks.
Debt Collection Improvement Account        Settles international claims.

                                           Page 42                                    GAO/T-NSIAD-98-18 International Affairs Budget
                                                Appendix I
                                                Examples of Discretionary International
                                                Activities Related to the 150 Account

Program                                         International role
Federal Law Enforcement Training Center         Trains foreign law enforcement officials (reimbursable).
Financial Crimes Enforcement Network            Identifies underlying criminal financial activity and emerging trends and patterns of
                                                international money laundering investigations; empowers international law enforcement
                                                to take action against financial criminals through the transfer of information and
                                                expertise; and helps other countries meet international anti-money laundering standards.
Internal Revenue Service                        Assists international investigations, posts staff abroad, trains foreign law officials,
                                                provides technical assistance to foreign governments, manages tax treaties, and
                                                monitors compliance of foreign-controlled companies with relevant U.S. income tax laws.
U.S. Customs Service                            Processes persons and cargo entering the United States; enforces import and export
                                                laws; collects and reports trade statistics; supports international investigations; enforces
                                                international agreements; supports counterterrorism efforts; with others, trains personnel
                                                from six former Soviet Union countries on investigating and prosecuting nuclear-related
                                                crimes; and interdicts illegal drugs and investigates drug-smuggling organizations.
U.S. Secret Service                             Assists international investigations; posts staff abroad; provides technical assistance to
                                                foreign governments; and protects select foreign visitors, foreign diplomatic missions in
                                                the United States, and select U.S. officials abroad.
The Judiciary
U.S. Court of Appeals for the Federal Circuit   Exercises jurisdiction over international trade cases.
Defender Services                               Compensates and reimburses travel expenses of guardians acting on behalf of
                                                financially eligible minor or incompetent offenders in connection with transfers from the
                                                United States to foreign countries.
Legislative branch boards and commissions       Participates in Commission on Security and Cooperation in Europe and House and
                                                Senate international meetings.
Library of Congress: International Copyright    Trains nationals of developing countries in intellectual property laws and policies.
Library of Congress                             Operates overseas centers.
U.S. General Accounting Office                  Provides information on national security and international affairs and gives training to
                                                foreign audit organizations.
Central Intelligence Agency                     Gathers intelligence abroad.
Commodity Futures Trading Commission            Coordinates with international regulators.
Environmental Protection Agency                 Participates in international negotiations, provides technical assistance, opens
                                                commercial opportunities for U.S. firms, supports international research, and supports
                                                U.S.-Mexico Border Environmental Plan.
Federal Communications Commission               Helps oversee COMSAT. Promotes competition in international telecommunications.
Federal Labor Relations Authority               Resolves labor negotiation impasses, including those involving Panama Canal workers.
Federal Reserve System                          Self-financing entity but revenues contribute to total U.S. government revenues.
                                                Conducts monetary policy (including helping to stabilize financial markets internationally
                                                and to detect and combat counterfeiting of U.S. currency abroad), supervises and
                                                regulates banks (including the foreign activities of member banks, U.S. operations of
                                                foreign banks, and international banking agreements), and coordinates with international
Marine Mammal Commission                        Recommends international policies on marine mammals.
NASA: Commercial Technology Program             Strengthens international competitiveness of key industry sectors.

                                                Page 43                                      GAO/T-NSIAD-98-18 International Affairs Budget
                                          Appendix I
                                          Examples of Discretionary International
                                          Activities Related to the 150 Account

Program                                   International role
NASA: life and microgravity science       Refines the experiment hardware planned for use on the International Space Station.
NASA: mission communication services      Supports international space-faring agencies on a reimbursable basis.
NASA: Mission to Planet Earth             Participates in global change research.
National Science Foundation: research     Facilitates international scientific cooperation.
National Science Foundation: U.S. polar   Studies polar regions, which have a major influence on world weather and climate and
research                                  are considered as likely bellwethers of global climate change. Participates in
                                          international cooperative efforts among nations with Arctic regions, or with Antarctic
Nuclear Regulatory Commission             Renders services to foreign governments and international organizations; participates in
                                          development and implementation of the Nuclear Safety Convention; and reviews
                                          licenses to export nuclear materials. Some costs reimbursed.
Securities and Exchange Commission        Coordinates with international counterparts to discuss securities developments,
                                          development and implementation of cooperation agreements concerning securities, and
                                          provision of technical assistance for the development of foreign securities markets.
                                          Supervises and regulates securities markets to ensure fairness and competition and
                                          meet changing international conditions.
Small Business Administration             Encourages small business exports and improves access to capital for trade finance.
Smithsonian Institution                   Supports U.S. overseas research centers.

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Page 47   GAO/T-NSIAD-98-18 International Affairs Budget
Related GAO Products

              NATO Enlargement: Cost Implications for the United States Remain Unclear
Security      (GAO/T-NSIAD-98-50, Oct. 23, 1997).

              Combating Terrorism: Federal Agencies’ Efforts to Implement National
              Policy and Strategy (GAO/NSIAD-97-254, Sept. 26, 1997).

              Cooperative Threat Reduction: Review of DOD’s June 1997 Report on
              Assistance Provided (GAO/NSIAD-97-218, Sept. 5, 1997).

              NATO Enlargement: Cost Estimates Developed to Date Are Notional
              (GAO/NSIAD-97-209, Aug. 18, 1997).

              Military Offsets: Regulations Needed to Implement Prohibition on
              Incentive Payments (GAO/NSIAD-97-189, Aug. 12, 1997).

                 Enlargement: U.S. and International Efforts to Assist Potential New
              Members (GAO/NSIAD-97-164, June 27, 1997).

              Nuclear Nonproliferation: Implementation of the U.S./North Korean
              Agreed Framework on Nuclear Issues (GAO/RCED/NSIAD-97-165, June 2, 1997).

              Hong Kong’s Reversion to China: Effective Monitoring Critical to Assess
              U.S. Nonproliferation Risks (GAO/NSIAD-97-149, May 22, 1997.)

              Export Controls: Sales of High Performance Computers to Russia’s
              Nuclear Weapons Laboratories (GAO-T-NSIAD-97-128, Apr. 15, 1997).

              Cooperative Threat Reduction: Status of Defense Conversion Efforts in the
              Former Soviet Union (GAO/NSIAD-97-101, Apr. 11, 1997).

              Nuclear Safety: International Atomic Energy Agency’s Nuclear Technical
              Assistance for Cuba (GAO/RCED-97-72, Mar. 24, 1997).

              Weapons of Mass Destruction: DOD Reporting on Cooperative Threat
              Reduction Assistance Has Improved (GAO/NSIAD-97-84, Feb. 27, 1997).

              Nuclear Safety: Uncertainties About the Implementation and Costs of the
              Nuclear Safety Convention (GAO/RCED-97-39, Jan. 2, 1997).

              Nuclear Safety: Status of U.S. Assistance to Improve the Safety of
              Soviet-Designed Reactors (GAO/RCED-97-5, Oct. 29, 1996).

              Page 48                            GAO/T-NSIAD-98-18 International Affairs Budget
Related GAO Products

Nuclear Weapons: Russia’s Request for the Export of U.S. Computers for
Stockpile Maintenance (GAO/T-NSIAD-96-245, Sept. 30, 1996).

Weapons of Mass Destruction: Status of the Cooperative Threat Reduction
Program (GAO/NSIAD-96-222, Sept. 27, 1996).

School of the Americas: U.S. Military Training for Latin American
Countries (GAO/NSIAD-96-178, Aug. 22, 1996).

Nuclear Nonproliferation: Status of U.S. Efforts to Improve Nuclear
Material Controls in Newly Independent States (GAO/NSIAD-96-89, Mar. 8,

Foreign Assistance: Controls Over U.S. Funds Provided for the Benefit of
the Palestinian Authority (GAO/NSIAD-96-18, Jan. 8, 1996).

Military Exports: Offset Demands Continue to Grow (GAO/NSIAD-96-65,
Apr. 12, 1996).

Foreign Military Sales (GAO/NSIAD-96-50R, Dec. 12, 1995).

Military Exports: A Comparison of Government Support in the United
States and Three Major Competitors (GAO/NSIAD-95-86, May 18, 1995).

Greece and Turkey: U.S. Assistance Programs and Other Activities
(GAO/NSIAD-95-100, Apr. 17, 1995).

Cost of Assistance and Sales Programs (GAO/NSIAD-95-110R, Mar. 2, 1995).

DOD Budget: Selected Categories of Planned Funding for Fiscal
Years 1995-99 (GAO/NSIAD-95-92, Feb. 17, 1995).

Military Exports: Concerns Over Offsets Generated With U.S. Foreign
Military Financing Program Funds (GAO/NSIAD-94-127, June 22, 1994).

Foreign Military Sales: Use of FMS in Proposed Commercial Sale of
Airborne Self-Protection Jammer (GAO/NSIAD-94-202, June 16, 1994).

Military Sales’ Cash Flow Financing (GAO/NSIAD-94-102R, Feb. 8, 1994).

Security Assistance: Need for Improved Reporting on Excess Defense
Article Transfers (GAO/NSIAD-94-27, Jan. 18, 1994).

Page 49                             GAO/T-NSIAD-98-18 International Affairs Budget
               Related GAO Products

               Foreign Military Aid to Israel: Diversion of U.S. Funds and Circumvention
               of U.S. Program Restrictions (GAO/T-OSI-94-9, Oct. 27, 1993).

               Military Aid to Egypt: Tank Coproduction Raised Costs and May Not Meet
               Many Program Goals (GAO/NSIAD-93-203, July 27, 1993).

               Military Sales to Israel and Egypt: DOD Needs Stronger Controls Over
               U.S.-Financed Procurements (GAO/NSIAD-93-184, July 7, 1993).

               Security Assistance: Excess Defense Articles for Foreign Countries
               (GAO/NSIAD-93-164FS, Mar. 23, 1993).

               Bosnia: Cost Estimating Has Improved but Operational Changes Will
Peacekeeping   Affect Current Estimates (GAO/NSIAD-97-183, July 28, 1997).

               Bosnia Peace Operation: Progress Toward the Dayton Agreement’s
               Goals—An Update (GAO/T-NSIAD-97-216, July 17, 1997).

               Bosnia Peace Operation: Progress Toward Achieving the Dayton
               Agreement’s Goals (GAO/NSIAD-97-132, May 5, 1997).

               U.N. Peacekeeping: Issues Related to Effectiveness, Cost, and Reform
               (GAO/T-NSIAD-97-139, Apr. 9, 1997).

               United Nations: Limitations in Leading Missions Requiring Force to
               Restore Peace (GAO/NSIAD-97-34, Mar. 27, 1997).

               U.N. Peacekeeping: Status of Long-standing Operations and U.S. Interests
               in Supporting Them (GAO/NSIAD-97-59, Apr. 9, 1997).

               Peace Operations: U.S. Costs in Support of Haiti, former Yugoslavia,
               Somalia, and Rwanda (GAO/NSIAD-96-38, Mar. 6, 1996).

               Peacekeeping: Assessment of U.S. Participation in the Multinational Force
               and Observers (GAO/NSIAD-95-113, Aug. 15, 1995).

               Peace Operations: DOD’s Incremental Costs and Funding for Fiscal
               Year 1994 (GAO/NSIAD-95-119BR, Apr. 18, 1995).

               Page 50                           GAO/T-NSIAD-98-18 International Affairs Budget
                       Related GAO Products

                       Drug Control: U.S. Heroin Control Efforts in Southwest Asia and the
Drug Control           Former Soviet Union (GAO/NSIAD-97-148BR, May 9, 1997).

                       Drug Control: Long-standing Problems Hinder U.S. International Efforts
                       (GAO/NSIAD-97-75, Feb. 27, 1997).

                       Drug Control: U.S. Heroin Control Efforts in Southeast Asia
                       (GAO/T-NSIAD-96-240, Sept. 19, 1996).

                       Drug Control: Observations on Counternarcotics Activities in Mexico
                       (GAO/T-NSIAD-96-239, Sept. 12, 1996).

                       Foreign Assistance: USAID’s Reengineering at Overseas Missions
Bilateral Assistance   (GAO/NSIAD-97-194, Sept. 12, 1997).

                       The Results Act: Observations on USAID’s November 1996 Draft Strategic
                       Plan (GAO/NSIAD-97-197R, July 11, 1997).

                       Foreign Assistance: Impact of Funding Restrictions on USAID’s Voluntary
                       Family Planning Program (GAO/NSIAD-97-123, Apr. 25, 1997).

                       Foreign Assistance: Harvard Institute for International Development’s
                       Work in Russia and Ukraine (GAO/NSIAD-97-27, Nov. 27, 1996).

                       USAID   Democracy Contracts (GAO/NSIAD-97-19R, Nov. 27, 1996).

                       Foreign Assistance: Contributions to Child Survival Are Significant, but
                       Challenges Remain (GAO/NSIAD-97-9, Nov. 8, 1996).

                       Foreign Assistance: Status of USAID’s Reforms (GAO/NSIAD-96-241BR, Sept. 24,

                       International Relations: Food Security in Africa (GAO/T-NSIAD-96-217, July 31,

                       Former Soviet Union: Information on U.S. Bilateral Program Funding
                       (GAO/NSIAD-96-37, Dec. 15, 1995).

                       Foreign Housing Guaranty Program: Financial Condition Is Poor and
                       Goals Are Not Achieved (GAO/NSIAD-95-108, June 2, 1995).

                       Page 51                              GAO/T-NSIAD-98-18 International Affairs Budget
                   Related GAO Products

                   Promoting Democracy: Foreign Affairs and Defense Agencies’ Funds and
                   Activities—1991 to 1993 (GAO/NSIAD-94-83, Jan. 4, 1994).

                   State Department: Using Best Practices to Relocate Employees Could
Foreign Affairs    Reduce Costs and Improve Service (GAO/NSIAD-98-19, Oct. 17, 1997).
                   The Results Act: Observations on the Department of State’s May 1997
                   Draft Strategic Plan (GAO/NSIAD-97-198R, July 18, 1997).

                   State Department: Efforts to Reduce Visa Fraud (GAO/T-NSIAD-97-167, May 20,

                   Vietnamese Asylum Seekers: A Review of Selected Cases in Four
                   Southeast Asia Countries (GAO/NSIAD-97-51, Dec. 31, 1996).

                   Foreign Affairs: Perspectives on Foreign Affairs Programs and Structures
                   (GAO/NSIAD-97-6, Nov. 8, 1996).

                   State Department: Options for Addressing Possible Budget Reductions
                   (GAO/NSIAD-96-124, Aug. 29, 1996).

                   Overseas Real Estate: Millions of Dollars Could Be Generated by Selling
                   Unneeded Real Estate (GAO/NSIAD-96-36, Apr. 23, 1996).

                   Overseas Presence: Staffing at U.S. Diplomatic Posts (GAO/NSIAD-95-50FS,
                   Dec. 28, 1994).

                   State Department: Overseas Staffing Process Not Linked to Policy
                   Priorities (GAO/NSIAD-94-228, Sept. 20, 1994).

                   U.S. Information Agency: Options for Addressing Possible Budget
Public Diplomacy   Reductions (GAO/NSIAD-96-179, Sept. 23, 1996).

                   Exchange Programs: Inventory of International Educational, Cultural, and
                   Training Programs (GAO/NSIAD-93-157BR, June 23, 1993).

                   Multilateral Organizations: U.S. Contributions to International
Multilateral       Organizations for Fiscal Year 1993-95 (GAO/NSIAD-97-42, May 1, 1997).

                   Page 52                             GAO/T-NSIAD-98-18 International Affairs Budget
                       Related GAO Products

                       International Organizations: U.S. Participation in the United Nations
                       Development Program (GAO/NSIAD-97-8, April 17, 1997).

                       Nuclear Safety: International Atomic Energy Agency’s Nuclear Technical
                       Assistance for Cuba (GAO/RCED-97-72, Mar. 24, 1997).

                       State Department: U.S. Participation in Special-Purpose International
                       Organizations (GAO/NSIAD-97-35, Mar. 6, 1997).

                       United Nations: U.S. Participation in Five Affiliated International
                       Organizations (GAO/NSIAD-97-2, Feb. 27, 1997).

                       United Nations: Status of Alternative Revenue Raising Proposals
                       (GAO/NSIAD-97-31, Nov. 8, 1996).

                       World Bank: U.S. Interests Supported, but Oversight Needed to Help
                       Ensure Improved Performance (GAO/NSIAD-96-212, Sep. 26, 1996).

                       Export Finance: Federal Efforts to Support Working Capital Needs of
Export Promotion and   Small Business (GAO/NSIAD-97-20, Feb. 13, 1997).
Strategy and           National Export Strategy (GAO/NSIAD-96-132R, Mar. 26, 1996).

Coordination           Government Reorganization: Observations About Creating a U.S. Trade
                       Administration (GAO/T-GGD-95-234, Sep. 6, 1995).

                       Government Reorganization: Issues Relating to International Trade
                       Responsibilities (GAO/T-GGD-95-218, July 25, 1995).

                       U.S. & Foreign Commercial Service: Comments on Proposed Transfer to
                       the Department of State (GAO/T-GGD-95-141, Mar. 21,1995).

                       Export Finance: Comparative Analysis of U.S. and European Union Export
                       Credit Agencies (GAO/GGD-96-1, Oct. 24, 1995).

                       Export Promotion: Rationales for and Against Government Programs and
                       Expenditures (GAO/T-GGD-95-169, May 23, 1995).

                       International Trade: U.S. Efforts to Counter Competitors’ Tied Aid
                       Practices (GAO/T-GGD-95-128, Mar. 28, 1995).

                       Page 53                             GAO/T-NSIAD-98-18 International Affairs Budget
                      Related GAO Products

                      International Trade: Combating U.S. Competitors’ Tied Aid Practices
                      (GAO/T-GGD-94-156, May 25, 1994).

                      Export-Import Bank: Key Factors in Considering Eximbank
Export-Import Bank    Reauthorization (GAO/T-NSIAD-97-215, July 17, 1997).

                      U.S. Export-Import Bank: Process in Place to Ensure Compliance with
                      Dual-Use Export Requirements (GAO/NSIAD-97-211, July 17, 1997).

                      Export-Import Bank: Reauthorization Issues (GAO/T-NSIAD-97-147, Apr. 29,

                      Ex-Im Bank’s Retention Allowance Program (GAO/GGD-97-37R, Feb. 19, 1997).

                      Export Finance: Federal Efforts to Support Working Capital Needs of
                      Small Business (GAO/NSIAD-97-20, Feb. 13, 1997).

                      Export-Import Bank: Options for Achieving Possible Budget Reductions
                      (GAO/NSIAD-97-7, Dec. 20, 1996).

                      Retention Allowances: Usage and Compliance Vary Among Federal
                      Agencies (GAO/GGD-96-32, Dec. 11, 1995).

                      Export Finance: Challenges Facing the U.S. Export-Import Bank
                      (GAO/T-GGD-94-46, Nov. 3, 1993).

                      Food Aid: Competing Goals and Requirements Hinder Title I Program
Food Aid and Cargo    Results (GAO/GGD-95-68, June 26, 1995).
                      Cargo Preference Requirements: Objectives Not Significantly Advanced
                      When Used in U.S. Food Aid Programs (GAO/GGD-94-215, Sept. 29, 1994).

                      U.S. Agricultural Exports: Strong Growth Likely but U.S. Export
Other Trade Related   Assistance Programs’ Contribution Uncertain (GAO/NSIAD-97-260, Sept. 30,

                      Overseas Investment: Issues Related to the Overseas Private Investment
                      Corporation’s Reauthorization (GAO/NSIAD-97-230, Sept. 8, 1997).

                      Page 54                            GAO/T-NSIAD-98-18 International Affairs Budget
                     Related GAO Products

                     Trade Liberalization: Western Hemisphere Trade Issues Confronting the
                     United States (GAO/NSIAD-97-119, July 21, 1997).

                     The Results Act: Observations on USTR’s September 1996 Draft Strategic
                     Plan (GAO/NSIAD-97-199R, July 18, 1997).

                     Customs Service: Office of International Affairs (GAO/NSIAD-97-146R, Apr. 25,

                     World Trade Organization: Observations on the Ministerial Meeting in
                     Singapore (GAO/T-NSIAD-97-92, Feb. 26, 1997).

                     U.S.-Japan Trade: U.S. Company Views on the Implementation of the 1994
                     Insurance Agreement (GAO/NSIAD-97-64BR, Dec. 20, 1996).

                     International Trade: Challenges and Opportunities for U.S. Businesses in
                     China (GAO/T-NSIAD-96-214, July 29, 1996).

                     U.S. Trade and Development Agency: Limitations Exist in Its Ability to
                     Help Generate U.S. Exports (GAO/GGD-94-9, Oct. 20, 1993).

                     International Trade Commission: Administrative Authority Is Ambiguous
                     (GAO/NSIAD-92-45, Feb. 25, 1992).

                     International Aviation: Competition in the U.S.-U.K. Market
Transportation and   (GAO/T-RCED-97-103, June 4, 1997).
                     International Aviation: DOT’s Efforts to Promote U.S. Air Cargo Carriers’
                     Interests (GAO/RCED-97-13, Oct. 18, 1996).

                     Telecommunications: Competition Issues in International Satellite
                     Communications (GAO/RCED-97-1, Oct. 11, 1996).

                     International Aviation: DOT Needs More Information to Address U.S.
                     Airlines’ Problems in Doing Business Abroad (GAO/RCED-95-24, Nov. 29,

                     Agricultural Inspection: Improvements Needed to Minimize Threat of
Food Safety          Foreign Pests and Diseases (GAO/RCED-97-102, May 5, 1997).

                     Page 55                             GAO/T-NSIAD-98-18 International Affairs Budget
                      Related GAO Products

                      Food Safety: Procedures for Inspecting Canadian Meat Imports
                      (GAO/T-RCED-97-21, Apr. 2, 1997).

                      International Financial Crises: Efforts to Anticipate, Avoid, and Resolve
Finance               Sovereign Crises (GAO/GGD/NSIAD-97-16, July 7, 1997).

                      Financial Crisis Management: Four Financial Crises in the 1980s
                      (GAO/GGD-97-96, May 1, 1997).

                      Foreign Banks: Opportunities Exist to Enhance Supervision Program as
                      Implementation Proceeds (GAO/GGD-97-80, May 9, 1997).

                      Foreign Banks: Implementation of the Foreign Bank Supervision
                      Enhancement Act of 1991 (GAO/GGD-96-187, Sept. 30, 1996).

                      International Environment: Operations of the Montreal Protocol
Environment           Multilateral Fund (GAO/T-RCED-97-218, July 30, 1997).

                      International Environment: U.S. Funding of Environmental Programs and
                      Activities (GAO/RCED-96-234, Sept. 30, 1996).

                      Global Warming: Difficulties Assessing Countries’ Progress Stabilizing
                      Emissions of Greenhouse Gases (GAO/RCED-96-188, Sept. 4, 1996).

                      International Environment: Environmental Infrastructure Needs in the
                      U.S.-Mexican Border Region Remain Unmet (GAO/RCED-96-179, July 22, 1996).

                      Space Station: Cost Control Problems Continue to Worsen
Other International   (GAO/T-NSIAD-97-177, July 18, 1997).

                      Managing for Results: Using the Results Act to Address Mission
Overall Management    Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug. 29, 1997).
and Budget
                      Budget Issues: Fiscal Year 1996 Agency Spending by Budget Function
                      (GAO/AIMD-97-95, May 13, 1997).

                      Addressing the Deficit: Budgetary Implications of Selected GAO Work for
                      Fiscal Year 1998 (GAO/OCG-97-2, Mar. 14, 1997).

(711293)              Page 56                            GAO/T-NSIAD-98-18 International Affairs Budget
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