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 You are in: Bureaus/Offices Reporting Directly to the Secretary > Deputy Secretary of State > Bureau of Resource Management > Releases on Resource Management > Remarks on Resource Management - Budget, Planning, Performance > 2002 Remarks on Resource Management - Budget, Planning, Performance

Briefing on FY 2003 International Affairs Budget

Joseph W. Bowab and James L. Millette, Bureau of Resource Management
William Taylor, Coordinator of Assistance to Europe and Central Asia; and Curt Struble, Bureau of Western Hemisphere
On-the-Record Briefing on the President's FY 2002 International Affairs Budget
Washington, DC
February 4, 2002

[audio]

MR. HOLLIDAY: Good afternoon, I'm Stuart Holliday with the Bureau of Public Affairs. We have Deputy Assistant Secretaries Jim Millette and Joseph Bowab here today from the Bureau of Resource Management to brief you on the President's Fiscal Year '03 budget request.

Jim.

MR. BOWAB: Good afternoon. I know a lot of the regulars aren't here right now, and I guess they'll be filtering in. How many were here for last year's presentation? Okay. I won't go into the difference between the two books this year because you guys failed the test miserably last year, so I won't go into the two books. What I would ask you to do as I'm giving a brief overview is, in the smaller book, turn to page one, which basically has the complete breakout of the international affairs budget.

The budget this year for international affairs totals $25.4 billion. That is a $1.4 billion increase over the FY 2002 enacted. You can do the math down the sheet and see the puts and takes from '02 to '03. What I would like to do is hit some of the major significant highlights on the foreign ops side of the budget, and then have Jim Millette come up and hit the highlights of the State portion of the budget.

On the foreign ops side, on the development assistance account, there is an increase of $248 million in that account. That account is the primary account where our bilateral HIV/AIDS program will be funded out of. That dollar amount out of that account is $500 million, combined with $40 million out of some other accounts, bringing the bilateral level to 540; an additional $100 million for the global fund for HIV/AIDS, which is the multilateral portion of it, bringing the State total to $640 million in '03 for HIV/AIDS. That is an increase of $155 million over the '02 level.

The economic support fund. If you take into account the reductions, the scheduled reductions we have in funding in the Mideast for Egypt and Israel, there is a $226 million increase in that account. That funding mainly supports countries that we're referring to as the frontline states, and primarily that increase is for Pakistan and Jordan.

As I go through the briefing, I will refer to the frontline states often. The definition of the frontline states are not those states surrounding Afghanistan, as some people are looking at. The definition of frontline states would be those states that have committed to assisting the United States on its war on terrorism.

The foreign military financing account. Taking into account the scheduled increase that we have for Israel annually of $60 million, there is an increase of $457 million in that account for FY '03. The majority of that increase goes to do two things: one, to support the war on terrorism for our frontline states, and the funding is mainly for Jordan, Pakistan, India and Oman; the other component of that is a military assistance component for Colombia, infrastructure protection or pipeline protection of '$98 million.

The nonproliferation, anti-terrorism, de-mining and related programs account, typically referred to as NADR. There is a $58 million increase in that account in FY 2003 that takes into account consolidation of export control assistance and biological redirection assistance previously funded out of the Freedom Support Act. It also provides a $27 million increase for anti-terrorism assistance programs, mainly in support of the frontline states.

As you heard in the State of the Union, the President had indicated that he wanted to double the size of the Peace Corps in the next five years, so in our request we have a $42 million increase for the Peace Corps. That will allow us to add approximately 1,200 volunteers in FY 2003.

The multilateral development banks, sometimes referred to as the international financial institutions, the IFIs. There is a $262 million for the banks. That increase meets our scheduled payments that we have committed to the banks and also provides $178 million to meet arrears that we have to the banks. The $178 million equates to approximately one-third of the arrears that we owe to the banks, and we would hope to, over three years, pay off our arrears to the banks. So this would be the first installment of a three-year payoff on arrears to the banks.

One other noteworthy thing. In the request there is a new account. It's called the USAID Capital Investment Fund. And what that account does is it takes into account construction of facilities for USAID and also takes into account the information technology requirements of the Agency.

Let me cap it by saying maybe something I should have started with. If you want a theme for this year's budget, I think it's probably a three-part theme. One is the war on terrorism; two is supporting our allies with ongoing programs; and three, protecting Americans, both at home here and abroad.

One final thing that you will see, if you have a copy of the President's budget that was released this morning, you will notice in the President's budget it indicates that the international affairs budget has $5 billion in it '03 to support the war on terrorism. That $5 billion is broken down in, of course to protection of Americans abroad, and about $3.6 billion of the overall account is assistance to the frontline states.

Those are the highlights of the major increases on the foreign operations side of the House, and then Jim Millette will come up here and talk about some highlights on the State ops side of the House, and then we'll be available to take your questions. There's one other thing I want to mention that is neither in the foreign ops or the state ops side of the House, and that is in the agriculture appropriations bill. There is a $335 million increase for PL 480 food aid in the '03 budget.

That increase offsets a mandatory program in agriculture for export commodities, commonly referred to as 416(b), which is an export commodity program that is being reduced in '02 and '03, and this is an offset. The purpose of that is to consolidate all food aid programs that is administered by USAID through the World Food Program into one account and under one agency.

Okay, I'll go ahead and let Jim come up and discuss the State ops portion.

MR. MILLETTE: Good afternoon. As Joe mentioned, you have two different booklets there. The thicker one of the two essentially supports the operating resources we seek in the Commerce-Justice-State appropriations. The other one gives a summary of the full Function 150 and focuses on the foreign assistance resources, which is not in the thicker book.

Last year, the high priority of the Secretary was to start focusing on building up the operating infrastructure of the Department. That is continuing this year. The three major focal points, as last year, for this year are: people, security and technology. Last year, we were very successful in the appropriations process in getting the resources to increase our staffing. Again, we're seeking more this year to hire 399 regular staff employment to add to the 360 that was started last year; another 134 security professionals added to the number from last year, which was over 330; and then 98 consular positions, in addition to the 71 from last year. So it's really hiring an additional 631 employees this year.

The other key point is continuing our increased security. Again, there's a few major components. One is to continue the resources necessary to build secure facilities around the world and to protect the perimeter securities of our facilities, which we are seeking $755 million to do that. We are seeking $553 million for our Diplomatic Security operations to improve how we protect ourselves and the people to do that. And there's a new initiative for $52 million to create a Center for Anti-terrorism and Security Training, which is essentially a combined organization to train both our Diplomatic Security officers in how to do their business, as well as to bring foreign officials from around the world over to train them so we learn how to do anti-terrorism training together, and they can go back to their countries, and when we have to work with them in incidents around the world, there's a cooperative effort going on.

Information technology clearly has been a high priority. Last year, the Secretary's top priority was to get Internet at everyone's desktop and to build a classified backbone so that every embassy needed around the world has a way to communicate in a classified way. The resources here are continuing that, to build nearly $94 million for the classified component, which should complete that program. We have already the existing resources to complete the Internet at the desktop, and we'll also be seeking resources to make sure we're able to replace that equipment as necessary, as well as to support some of our core infrastructures.

Other major appropriations in the operating side are contributions to international organizations. There's enough resources being sought to meet our commitments for the contributions to international organizations, including the UN and other entities. A couple additions in there to the normal assessments. There are some resources in there for the beginning of a master plan for the UN itself to rebuild its building in New York. There's also resources in there for OECD to rebuild their facility in Paris.

Peacekeeping, you'll notice, is probably the one area where there's a decrease. There's a decrease of about $118 million for our contributions to international peacekeeping, and that is based on the assumptions that there will be no major starts, that we’ll be pulling out of Bosnia, and there will be reduced efforts in Sierra Leone and East Timor.

I think that's probably the major things to focus on, and from that we can go to questions.

QUESTION: Can I ask you or Joe, you mentioned a decrease there as your last contribution. There must have been other decreases along the line. The emphasis in your presentation was on increases. Could you go over what the major accounts that were decreased?

MR. BOWAB: On the foreign ops side, I'll go over the major decreases first on the foreign ops side. Remember last year we talked about Ex-Im, and we talked about a decrease then. I talked about a change in the way the US Government does risk ratings. Okay, that has now been completed, so you will notice in the budget request there's $166 million decrease for Ex-Im. That change, of course, is based on the new risk rating that the US Government does. In the past, we had used criteria much like the private sector, like Moody uses and stuff like that, that has a number of measurements that they do. We in the government choose to strictly concentrate on default risk, rather than a bunch of other criteria that the private sector used.

So this allows us, based on this, to completely redo the way the government does risk ratings for sovereign countries. The $166 million decrease that is in the budget, let me try to equate that for you to the amount of lending that OPIC can do with that. In FY '03, the amount of lending with the loan subsidy that's provided in the budget will be about $11.5 billion in lending. That equates to a $1 billion -- approximately a $1 billion increase over what can be done in '02.

Another account where we had some reductions is what we commonly refer to as the SEED account, or Support for East European Democracy. There's $126 million decrease in that account. We have long indicated that in this account that we would have some type of graduation strategy for the countries of Eastern Europe, for a number of reasons. Based on greater responsibility by the Europeans, greater responsibility by other donors, the US will remain engaged, but we feel like our assistance levels can be reduced without affecting ongoing programs in the region.

There is a reduction if you look on the debt restructuring, you'll notice that there's a $229 million reduction in debt restructuring. That is based on fulfilling our $600 million HIPC, Highly Indebted Poor Countries, commitment by the White House. And in FY 2003 there are no requirements to provide loans in FY 2003.

Now, there is a portion -- there is a piece to that, and the piece is there was always a tropical forest conservation piece to the debt relief. And what is provided in the President's budget is there is $50 million in the development assistance line, of which $40 million can be used to provide debt pursuant to the Tropical Forest Conservation Act, debt swap type things for tropical forest conservation.


The voluntary peacekeeping account. There is a $27 million decrease in the voluntary peacekeeping account in '03. That is based on increased stability in the Balkans and in West Africa. The preponderance of the voluntary peacekeeping account was, of course, going to the Balkans region and to West Africa. So we see less of a need in '03 in both those areas due to what is happening on the ground, so we have reduced that account accordingly.

QUESTION: Two things. Why is there such a large increase for aid to Jordan this year? And also, when you say that there is an extra amount of funding for programs in Russia and the Newly Independent States to reduce availability of terrorists to weapons of mass destruction, what does that mean? Is that securing facilities there or is that kind of helping them rid themselves of that kind of material? What does that mean?

MR. BOWAB: Let me talk about -- I'll address Jordan first. There are some significant increases in '03 for Jordan, both in the economic side of the house and the military side of the house. There is a $123 million increase on the military side of the house and there is a $100 million increase on the economic side of the house. As I said at the beginning, this budget is predicated in many ways on support for countries that are assisting the United States in its global war on terrorism. Jordan happens to be one of those countries that are not only helping us in the region on their end, but also in other regions of the world.

QUESTION: (Inaudible) Yemen?

MR. BOWAB: Yes, Yemen got a slight increase, but not one like Jordan, of course. Let me finish the second part. On the Russia thing, Bill, do you want to cover the Russia portion?

AMBASSADOR TAYLOR: Sure. The question on what kinds of work we're doing with the Russians and the other Independent States of the former Soviet Union on security, we have funds in there for nonproliferation work; that is, working on both the institutional side as well as providing training and equipment to allow these countries to increase the control of their borders. So this is focused on movement of weapons, movement of people, movement of other illegal substances, drugs and that kind of work we have done for some years.

You also asked about the scientists, and there is funding requested here to help ensure that scientists in these countries that formerly were working on weapons are not tempted to go to other places around the world.

QUESTION: A new program?

AMBASSADOR TAYLOR: It's not a new program. It's an ongoing program.

QUESTION: Is there a significant increase this year?

AMBASSADOR TAYLOR: There's not a significant increase, but it's a pretty well funded program that we are continuing at this level.

MR. MILLETTE: Before we go back to the additional questions, I want to go over the decreases on operating side, if you want. On page 6 in the larger booklet, there are a few. There aren't many. One is there is a $26 million reduction in the capital investment fund. That's a fund that we pay for our information technology buildup, and all it is is a smaller buildup than in the prior year. There is what looks to be a reduction in the capital construction account, which is under the embassy security, construction and maintenance, but actually it's not because this year, as opposed to seeking funding for AID facilities in the operating accounts of CJS, we're seeking them in the foreign assistance side. And that is a bracketed number of 82 million, so when you add that to what we're seeking, it's actually an increase, so that's not a decrease you're seeing there.

We talked about the reduction to peacekeeping, and that's primarily really it.

QUESTION: I have a question on the ops side. If you could explain the profusion of "to be determined" when it comes to Afghanistan. And I can imagine what the reason is myself, but maybe you can give us some thought as to what your thinking is down the road, say come June.

MR. MILLETTE: Okay. When we put the budget together, as you know, we have a time frame to put the budget together. It's a massive undertaking. When we put the budget together, it was unclear on the ground what was going to happen in Afghanistan, so when we put the budget together, outside of the programs that we would have normally funded for Afghanistan, such as refugees and displaced persons and some ongoing programs such as the de-mining program, we didn't have a clear indication of what the total program was going to be in Afghanistan.

So what you're going to see, both in the President's budget and in the budget documents you have in front of you, you'll find TBD in each place you find Afghanistan. The reason we put that in there is because at this point in time we are working with the Office of Management and Budget to now identify those requirements and the funding sources in order to fund them. We would hope that in the next three to four weeks, and in anticipation of publication of our large budget that comes out normally about a month after the rollout of the President's budget, that those numbers will be identified and in the larger budget submission.

QUESTION: Do you expect those funds to be in the FY 2003 budget or in a supplemental? And I also noticed that you don't have numbers for the United Nations Fund for Population Activities. Can you explain that?

MR. MILLETTE: The first question is we would work with OMB to identify a source of funding. We have not ruled out any sources of funding.

On the second issue, if you go to the international organization and programs chart, the next to the last chart in the small book, you will see that by UNFPA for '02 and '03, as in the President's budget, there are no numbers next to it. But you will see a line item directly below it that basically says reserved to be determined that has a similar number as the UNFPA.

QUESTION: The decision has not been reached on that?

MR. MILLETTE: A decision has not been reached on this.

QUESTION: I am a little puzzled by the apparent decrease in the projected spending on security upgrades for embassies and so on, which actually declines by a substantial amount from 2002. Can you explain why that comes about, since you highlight --

MR. MILLETTE: That's what I explained. It's really not because in the '02 number of 665, there was $50 million for AID facilities. We are taking -- in '03 we are actually seeking that bracketed 82 in the -- we're seeking the 82 out of the foreign assistance appropriations, plus the 608, so it's really an increase. It's just a question of whether AID operating costs are funded in the foreign ops appropriations bill. So we're seeking the resources there in that component.

QUESTION: So it would really be 700 million if you added those two together?

MR. MILLETTE: Correct.

QUESTION: I know you mentioned the (inaudible) in Colombia, and that's the reason why your budget increases $98 million for a new (inaudible). Could you be more specific about that new dimension on the war on drugs in Colombia?

MR. STRUBLE: My name is Curt Struble and I'm from the Bureau of Western Hemisphere Affairs. I will take that question. We have a long-term, broad-based approach to Colombia that emphasizes helping the Government of Colombia to establish rule of law, administration of justice, protect human rights, to develop economically and socially, and then to combat narcotics and terrorism.

The $98 million in foreign military financing is not for counter-narcotics. That's the reason why it's separate from the counter-narcotics budget item that goes through our Bureau for International Narcotics Affairs. Instead, this money is to assist units of the Colombian armed forces that are responsible for protecting a critical piece of infrastructure, the Cano Limon pipeline. The Cano Limon pipeline last year was attacked 166 times, shutting it down for 243 days. This has had a very significant impact on Colombian exports, on the ability of the Government of Colombia to generate the funds and resources that is needed for economic growth and social development.

QUESTION: According with this, it means that the US Government is going to support the Colombian Government to fight against the guerillas?

MR. STRUBEL: No. What it means is that the US Government is going to support Colombian military units for a specific mission and objective. We do that now. We have, for example, through our anti-terrorism assistance program assistance that goes to both the Colombian police and the Colombian armed forces directed against kidnapping. And most kidnappings in Colombia are done by the FARC and the ELN. So we also have counter-narcotics brigades that operate in areas where the FARC and the AUC are active.

QUESTION: Is this equipment or training, or can you specify what the --

MR. STRUBEL: Right. It's for equipment and training.

QUESTION: Was that amount separate from the 731?

MR. STRUBEL: That's correct.

QUESTION: Okay.

QUESTION: Can you address this? Some of your critics are saying that this is crossing over a line; it's moving from being involved in a war on drugs which directly involves the United States, and being involved in a counter-insurgency effort that really has to do with the civil war.

MR. STRUBEL: Well, I think those critics perhaps haven't been fully attentive to the broad range of objectives that we have had in Colombia, and I have outlined those for you. And I see this as being entirely consistent with that.

QUESTION: Just to follow up on that, is this in line with last year's renaming of it an Andean Initiative? Is this a sign that there's going to be fuller engagement now in the overall problem?

MR. STRUBEL: No, I mean, last year's renaming -- last year's establishment of an Andean Initiative was intended to recognize that the counter-narcotics problem requires a regional approach. But as I said, this is not part of our counter-narcotics program. So I wouldn't associate the two.

QUESTION: Can I change the subject? This is probably very easy to answer. I'm looking at page 35 of the big book, and I notice that between the State Department and the Department of Commerce you guys are both asking for $40 million to complete the requirements of the Pacific Salmon Treaty. Why is a treaty about fish so expensive? What does that do?

MR. MILLETTE: That has been, actually, a multi-year initiative that started out totally in the Commerce appropriations bill as a request. Because of certain politics on the Hill, they split and had State pay half and they paid half. These are funds that go to the states, as well as there is something called a Northern and Southern Fund and it's just -- there's been a negotiated treaty and this just funds the treaty as to how the United States and Canada will deal with salmon.

QUESTION: So the State Department pays money to states, the Northwest, presumably the Northwest states?

MR. MILLETTE: Right. Technically, we give it to the -- we seek in our appropriation -- we transfer it over to the Commerce Department and they make the distributions.

QUESTION: And this is -- okay. What's it for?

MR. MILLETTE: I don't know the details. It fulfills the obligations of the treaty.

QUESTION: Someone knows?

MR. MILLETTE: Yeah, we can get --

QUESTION: Can you explain affirmatively what economic support funds are in India and Pakistan? What exactly are they for?

MR. BOWAB: The economic support funds for Pakistan --

QUESTION: Also India.

MR. BOWAB: Right. But the economic support funds for Pakistan will be a combination of balance of payment support and project type assistance. And the increase in India is basically to continue with project types assistance, both for the economy and programs to protect women and children. Those types of programs.

QUESTION: The Center for Anti-Terrorism Training, is that something that is being built from scratch, or does it piggy-back on some other State Department program?

MR. BOWAB: Right now we train two different ways. The domestic side of the house, which is our Diplomatic Security people, train; and then on the international side of the house, on the anti-terrorism side of the house on the international side, also do training. Right now, the training is kind of scattered out throughout the United States. This is an attempt to consolidate that into one center in one place so that we can train both our domestic requirements with our Diplomatic Security and our international requirements that currently right now are doing training nationwide in the United States. So it's a consolidation of that into one location.

QUESTION: Back to the multilateral banks issue, I wasn't clear on, number one, of the -- back to the tropical forest and the debt restructuring. You're reducing it by $229 million because you say the negotiations with HIPC, that wasn't clear to me. There are no requirements for doing those?

MR. BOWAB: We set a funding level to address the HIPC countries and we have met that through '02. We have met that level as far as debt restructuring for the Highly Indebted Poor Countries. There was one country in '03 that was being looked at, and that of course was the Democratic Republic of the Congo in '03, but it has been deemed by ourselves and Treasury that that won't be imminent in '03.

Now, part of the debt restructuring, if you would go back and look at the President's budget, there has always been a component for what we call the Tropical Forest Conservation Act. That is a debt swap program that we do with countries, and there is no money in the debt restructuring side, the Treasury side, for that. There is $50 million in AID, of which 40 million can be used to do these types of programs.

QUESTION: And a follow-up. For the Global Environment Facility under multilateral, what would be the -- of that total, what of what is the contribution? You were talking about arrears for many of them. Do you know what would be the -- or has that been determined?

MR. BOWAB: No, it's been determined. For the GAF, for the Global Environment Facility, 107.5 is for the annual requirement and 70.3 are for arrears.

QUESTION: It looks like the total for -- sorry, I have a cold. But the OECD's calculations in recent years has said that the US spends about $10 billion a year on development aid, which they say comes out to about 01 percentage point of gross domestic product in this country, which is the lowest level as a percentage of national income of the rich countries in the world. Why doesn't this budget change that direction significantly? There seems to be only about a half billion increase in foreign ops, and that's all on the military side.

MR. BOWAB: Well, there is actually -- the increase on the foreign ops side is actually 784, and it's not really all on the military side of the house.

QUESTION: It's still about 0.1 percent of gross national product?

MR. BOWAB: I don't think it probably has -- I don't think it probably, no, has changed that much. I mean, as you know, we are in a fiscally austere budget year in '03. As you know, discretionary funding did not go up that much in '03, and the vast majority of the discretionary funding went for defense and homeland security. I think if you looked at how we fared at the State Department, or international affairs, we fared much better than the other agencies.

QUESTION: Could you explain what the Emergency Response Fund is, and why those numbers over the three years are so divergent?

MR. BOWAB: Yes. The Emergency Response Fund is another name for the $40 billion supplemental that was passed by Congress post-9/11. Congress passed an emergency supplemental of $40 billion, $20 billion of which was provided, and then the additional 20 which required subsequent legislation by Congress.

So the amounts that you see in this request in '01 and '02 represent those amounts that the international affairs budget received out of that $40 billion supplemental. That supplemental was part of DOD, it was a part of New York City, it was a part of the Pentagon, it was part of Pennsylvania; it was part of both domestic and international funding that Congress provided post-9/11.

QUESTION: In a regional sense, it would seem, flipping through here, that obviously some states in Central Asia have prospered a bit, while states in Africa and in Latin America have lost out a bit. Have you done any sort of analysis along those lines?

MR. BOWAB: Yes. I think you'll probably find out, if you do the math that actually assistance in Africa is increasing in '03, by about $94 million. It's increasing. Assistance in Latin America is actually increasing in '03 also. What you need to do is, when you go through and look at the accounts, you need to look at all of the accounts. I realize we don't have an all-spigots table in this document. But because of the -- it was mentioned here a little while ago -- because of a number of initiatives, both in Africa and in Latin America, I think you're going to find out that they, in fact, did not decrease.

QUESTION: Like Latin America lost 30-some million when it comes to economic assistance, and then gained 98 million to protect a pipeline? So obviously that --

MR. BOWAB: Well, there's something else you need to look at, too. The first chart in that book is the development assistance chart. When we sat down and looked at programs in '03, you're going to find Africa had a reduction on the economic support fund. That's because we moved programs that we thought were more viable and better funded in the development assistance area, so there was actually not only a swap-over of those fundings into the development assistance account, but there was also an increase in certain programs in Africa.

The same thing happened in Latin America. There are a number of things that we moved over to the development assistance side of the house, and I think if you looked at the development assistance numbers, it would show that, in fact, the regions are not being decreased.

QUESTION: You had a $94 million increase for Africa.

MR. BOWAB: Right.

QUESTION: Do you have what the net increase is for Latin America, and for Central Asia?

MR. BOWAB: No, not right off the top of my head. I mean, I can get you that. But I don't have it right off the top of my head.

QUESTION: I noticed there wasn't any -- there wasn't a line for the military education and training for China. Is that because this administration doesn't want to do IMET training with China?

MR. BOWAB: We have not proposed an IMET program for China. That's correct.

QUESTION: Can we get into that? The Secretary of State, before he left for China in the summer, said he thought it was a good idea.

MR. BOWAB: To do IMET for China? I'd have to go check that statement. I'm not sure that he said it would be a good idea to do IMET in China.

QUESTION: And also along those lines, there is IMET training for Venezuela, and recently there have been some revelations in that country that senior officials in that government may be working with the FARC, where we're trying to protect against their sabotage of Colombia's pipeline. What's that all about?

MR. BOWAB: Well, you should understand that a lot of these programs -- and Venezuela's one of them, but there's programs in -- they're global programs where there is what we call the Expanded International Military Education and Training, commonly referred to as E-IMET. Okay. Those are programs that are concentrated in rule of law, democracy and human rights, and a lot of the programs that we do in these countries are based on those types of things, and I think you could argue that those are good things, rather than walking away.

QUESTION: So why wouldn't you want to do it with China?

MR. BOWAB: China has not been recommended for a military program in '03.

Let me say one thing also. Both Jim and I have to leave here in about probably seven minutes to go up and brief staff on the Hill about this budget, too. So let's try to push this along.

QUESTION: You have $50 million each for India and Pakistan for anti-terrorism. I was wondering, what exactly --

MR. BOWAB: The $50 million each for India and Pakistan is in foreign military financing --

QUESTION: No, this is terrorism, not foreign military financing. It is anti-terrorism on page 29, item number -- no, it says zero. Last (inaudible) paragraph --

MR. BOWAB: Page 29 is under foreign military financing, if you look at the top of the page --

QUESTION: Foreign military financing is a separate one, 50 million, somewhere else. This one is -- war on terrorism.

MR. BOWAB: It says "South Asia," right?

QUESTION: The war on terrorism is on page 29.

MR. BOWAB: Right, right. And it's funded out of the foreign military financing account.

For India, we have received requests from the Government of India to support them on certain defense articles. What the Indians are looking for is they would like some assistance in submarine rescue type operations, aircraft support, and support for radar equipment. The Pakistanis have asked for similar support, and that support for Pakistan would be aircraft support and spares -- spare parts for the aircraft -- radar support -- support for radars -- and nuclear, chemical and biological type equipment for the individual soldier.

QUESTION: The proposal for the IDA to add funding based on performance over the next three years, is that at all dependent on acceptance of the Bush Administration's preference for grants over loans?

MR. BOWAB: I would have to refer you to Treasury on that question. I mean, I don't want to -- I shouldn't talk about IDA because -- Treasury's not here, are they? No, I would refer you to Treasury on that. It is their program, and they should be the ones answering that specific question.

QUESTION: I have a question on the State side.

MR. BOWAB: Okay.

QUESTION: Concerning the border security program, there's a relatively large increase. The budget is small, anyway. But according to the President's budget, all of that increase is going to come from a 30 percent increase in the visa fees. I wonder if you could explain the rationale behind that?

MR. BOWAB: Well, our border security program, which essentially is the lion's share of our consular operations, is in fact supported by the machinery of the visa fees, the tourist visas paid by foreign people when they come to this country. We have, on a periodic basis, given this as a cost-for- service type entity. We are required by regulation to do a survey as to what those costs are. And, in fact, over the past couple of months, there has been legislation pending on the Hill to direct us to charge a certain amount for those MRVs, and that has not passed the Hill. We have done a study. We are in the process internally of briefing that to OMB, and then it would go through the regulatory process to say what those fees should be. In that process, the MRV fee would go up. So we would anticipate higher revenues coming from that.

QUESTION: Thank you.

[For additional information, see fact sheet on FY-2002 Budget Request -- International Affairs (Function 150)]



Released on February 4, 2002

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