Testimony Before U.S. House of Representatives on FY 2004 Foreign Assistance Appropriations, April 2, 2003

on behalf of
The United States Conference of Catholic Bishops
and
Catholic Relief Services

Subcommittee on Foreign Operations, Export Financing, and Related Programs
House Appropriations Committee
April 2, 2003

 

I. Introduction

The United States Conference of Catholic Bishops (USCCB) and Catholic Relief Services (CRS), the relief and development agency of the U.S. Catholic Bishops, thank the Subcommittee for the opportunity to present testimony on the FY 2004 Foreign Operations Appropriations process. A commitment to and support for increasing our nation's funding to meet critical development and humanitarian needs are particularly important at this time. We are grateful for the opportunity to share the values of Catholic social teaching, and the practical experience of our relief and development work in over 80 countries throughout the world, and to discuss their implications for the foreign aid priorities and development policies of the United States.

Our specific priorities for foreign operations appropriations in fiscal year 2004 will advance human dignity, promote development of poor nations, strengthen our overall foreign policy and improve our national security. They include:

• funding of at least $1.3 billion for the Millennium Challenge Account in FY04;
• increases of at least $1 billion above current levels for FY04 development assistance to poor countries in Africa that do not qualify for the MCA, but have critical development needs;
• increases in global health funding—bringing total funding to at least $3 billion in FY04—for morally and culturally responsible programs combating HIV/AIDS and other life-threatening infectious diseases, with particular attention to Africa;
• substantial funding for humanitarian needs, reconstruction and peace-building efforts in Iraq;
• increased funds for reconstruction and peace-building efforts in Afghanistan ($675 million, focused on humanitarian and reconstruction needs, for FY04); Sudan ($100 million total for FY04); Democratic Republic of Congo ($100 million total for FY04—channeled through proven partners in the PVO community); and East Timor ($25 million total in both FY04 and FY05);
• an increased proportion of U.S. aid dedicated to the root causes of the conflict and to victim assistance in Colombia, and strict human rights conditions on all U.S. military aid to Colombia;
• increased funding for the Migration and Refugee Assistance and Emergency Refugee and Migration Assistance accounts to bring total funding to $927 million and $50 million, respectively to meet the needs of an ever-increasing global refugee population;
• additional funding for debt relief for heavily-indebted poor countries, sufficient to reduce annual debt payments to no more than 10% of government revenues, and, for countries suffering public health crises, to no more than 5% of government revenues;
• reauthorization and increased funding for the International Development Association (IDA) -- $950 million for FY04 and $1,050 million for FY05 – including appropriate implementation and funding of the proposal to finance up to half of IDA's assistance in the form of grants; and
• a decreased emphasis on population planning programs, and continued safeguards against funding organizations that perform and promote abortion.

The bishops believe that meeting these objectives are not only wise investments in our national priorities, but are matters of moral responsibility that will contribute to a safer, more just and peaceful world. Our nation needs to be more creative, effective and generous in our aid programs.

II. Foreign Aid and Human Development

Severe poverty assaults the human dignity of men, women, and children in many regions and nations. The moral obligation to overcome poverty is grounded in the fundamental dignity of every human life and in the concept of solidarity. The human dignity inherent in each person is the basis for a complex fabric of human rights that creates rights and responsibilities for individuals, and relationships across national borders. The bond of solidarity is both an attitude toward others and a sense of duty – which makes it impossible to consider part of the human community beyond our care and compassion. A principal objective of U.S. foreign policy should be sustainable human development, grounded in respect for human dignity, structured by a commitment to human rights, and carried out by our nation as a sign of leadership in the international community—with specific priority given to the basic needs of the poorest and most vulnerable sectors of the human community.

Sustainable human development is also an essential requirement for a more just and peaceful world. Among the multiple sources of conflict is an international order where the benefits of science, technology and trade are well known, but available only to a small fraction of the globe. Existing inequities, especially the growing gap between rich and poor, are threats not only to our human decency, but to our hopes for peace and security. After September 11, we have learned that hate and hopelessness can threaten us, no matter how powerful our military, economic or political influence. Investing in building a world of greater justice, opportunity, hope and dignity is not only the right thing to do; it is the wise thing to do. Pope Paul VI's declaration —"Development is the new name for peace"— is still wise counsel.

Catholic Relief Services (CRS), the relief and development agency of the U.S. Catholic Bishops, serves the needs of the poor and vulnerable in over 80 countries, 37 of which are in Africa. Through programs that include agriculture, education, peace-building and community health, and in providing emergency relief in humanitarian crises, CRS works to enhance human dignity and strengthen the bonds of solidarity with the poorest in our world. For example, through CRS' "Food-for-Work" program in Rwanda, people of the Nyangazi rural sector have been able to earn food and seeds for planting in return for work on agricultural soil and water conservation activities. This program is improving food security for small farmers and enabling them to produce extra crops. Through a concerted commitment to empower the poorest in our world, we can achieve sustainable human development, and build a better world—a more just and peaceful world.

Substantial increases in the amounts of U.S. foreign assistance dedicated to poverty reduction are needed to achieve these goals. U.S. levels of foreign assistance are very low as a percentage of the country's wealth, even when adding foreign operations funding for strategic interests to poverty-focused funding. Our country's development assistance as a percentage of gross national product (GNP) has been approximately one-tenth of one percent in each of the last several years. In terms of the absolute level of assistance, the European Union, with a slightly lower combined GNP than the United States, gives 2-1/2 times as much aid by volume.

It is often asserted that Americans do not support development aid or increases in foreign aid spending. A survey1 by CareUSA, however, like others before and after it, provides strong evidence to the contrary. When asked what are effective ways to assist people in poor countries, 91% of Americans surveyed responded with basic education and 88% with health care, both out of long-term self-interest and on moral grounds. Moreover, a strong majority, 72% of respondents, agreed that it is the responsibility of the United States government with other governments, as well as charities, to help poor people around the world.

III. Development Aid

In March 2002, President Bush pledged new resources to fight poverty through a Millennium Challenge Account (MCA). This program represents a new and much needed commitment to the poor and has the potential to refocus U.S. foreign assistance on poverty reduction and sustainable human development, reversing a decade of decline in U.S. development aid and of shifts in funding towards strategic interests and military spending. This is a significant step forward and a positive sign of U.S leadership. It deserves to be fully funded.

A. The MCA

The Bush Administration rightly has focused on improving the effectiveness of foreign assistance, avoiding waste, and demonstrating positive returns from MCA investments to ensure strong support from the American public. In order to secure these results, the Administration has developed three eligibility criteria—that a government rule justly, invest in its people, and encourage economic freedom. While these broad criteria have merit, the Catholic Church has several concerns with respect to these. For example, the "economic freedom" criterion should be applied in a way which recognizes the right and responsibility of governments to adopt measures to promote and protect the well-being of their people, especially the poor and vulnerable.

We have a number of particular concerns with respect to the Administration's 16 indicators for judging whether a country meets the criteria for eligibility. While broadly objective, they contain many subjective elements, suffer from some gaps in data and do not adequately reflect improving trends. Thus, they cannot be a precise guide to the relative ability of individual countries, with widely varying circumstances, to use aid effectively.

Moreover, a tension exists between the objective of limiting eligibility to the best performing countries and the poverty reduction objective, as severe poverty is commonly associated with weak political, economic and social structures. A recent analysis by the Center for Global Development (CGD) concluded that application of the indicators developed by the Administration for judging whether a country met the three criteria would probably result in qualifying only 13 countries in the first year of the MCA program. (The Under Secretary of State, in recent testimony before Congress, estimated that 10 to 12 countries would qualify in the first year). The CGD analysis indicated that this total included five African countries, representing less than five percent of the population of sub-Saharan Africa.

It would be most unfortunate if these five, mostly small countries were the only African countries to qualify, as this would make the MCA almost totally marginal to millions of needy people in a continent which has the largest number of poor countries in the world. We are not persuaded that the development performance of the governments of these five countries is so clearly superior to that of all other sub-Saharan African countries that we should conclude that these countries are likely to use MCA funds effectively while the rest are not.

Although the Administration has pointed out that countries ineligible for the MCA have recourse to funding from existing programs, USAID should be adequately funded for this to be a satisfactory solution. We note that the Administration's funding request of $1.3 billion for the MCA in FY04 is roughly equal to the entire USAID budget for poor country development (excluding health). Thus half of U.S. development aid funds available to poor countries in FY04 would go to a dozen, mostly small countries while the other half would have to be shared by approximately 75 or more low-income countries (below $1,435 per capita income), including some with very large populations. Unless USAID funds are sharply increased in the years ahead, this concentration of development aid on too few countries is likely be greatly intensified as the Administration plans to increase MCA funding to $5 billion by FY06.

As funding levels rise in the coming years, the Administration plans to extend MCA eligibility to lower middle-income countries. The Catholic Church believes, however, that the MCA should be reserved for countries with the greatest need and the fewest options. Lower middle-income countries have more options for addressing the needs of their people, through local savings and access to a variety of external finance sources. We urge limiting MCA eligibility to countries qualifying for assistance from the International Development Association (IDA), the concessionary financing facility of the World Bank.

We propose extending access to the MCA in a different manner. We would eliminate the sharp distinction drawn by the Administration—between poor countries which fully satisfy the Administration's criteria and poor countries which will be entirely excluded. We support the idea of a system that would allow access to MCA funds for countries which fall short of the Administration's eligibility criteria but are nonetheless able to use foreign aid effectively. These are countries with governments which have demonstrated:

• a capability to enforce human rights standards, even though they may be years away from the more difficult task of creating viable democratic institutions;
• a commitment to poverty reduction as demonstrated by the adoption of poverty reduction strategies with the participation of broad sectors of their society, including civil society groups which give voice to the needs of the poor;
• an ability to use aid funds effectively in one or more major sectors, such as basic education, clean water, primary health care, rural development, or the like; and
• a commitment to enforcing accountability standards designed to ensure that funds are expended for the agreed purposes.

B. Non-MCA countries and other development assistance

Even with the adoption of the system we suggest for extending access to MCA funds, there would be poor countries in Africa and elsewhere that still would not qualify for the MCA. Many of these countries' governance problems are so serious that aid to the government would be ineffective or lead to unjust results. In these cases, creative use of development assistance funds (i.e. working through non-governmental organizations) is necessary to assist people who have an equal claim to full human development despite the quality of their government. The MCA should be only a partial approach to U.S. assistance to poor countries, and it would prove particularly deficient if it is limited to the easiest cases – the dozen or so "best" performers.

A more holistic approach would include addressing the critical development needs in non-MCA poor countries, particularly in Africa. Therefore, the Catholic Church urges that funding for established development aid programs not only be maintained, but be increased above current levels by at least $1 billion in FY04.

C. A comprehensive development approach

Providing increased funding to both MCA and non-MCA poor countries is a step toward a more complete foreign assistance strategy, but by itself it does not deal with issues of quality which must be addressed if U.S. foreign assistance overall is to become more effective. The U.S. approach to developing nations must be coherent, ensuring that political, commercial and trade policies do not conflict with agreed-upon development goals. Foreign assistance resources could indeed be wasted if other U.S. policies and programs work at cross-purposes with poverty reduction goals. The purposes of all programs should be well-defined, with an established operational context and a mutually reinforcing approach.

Many domestic and internationally focused federal agencies conduct various foreign assistance programs in developing countries, and the United States also has major influence on the policies and programs of the most important international financial institutions, such as the World Bank and the International Monetary Fund. The president has now announced his intention to create another development agency – the Millennium Challenge Corporation – in addition to three new initiatives on HIV/AIDS, complex emergencies and famines. The Catholic Church applauds the increased resources proposed by the president for these new initiatives, but is concerned by the lack of clarity among the approaches. Parallel agencies and a dispersal of programs across numerous agencies can weaken policy coherence, render communication more difficult, duplicate efforts, increase bureaucracy and foster competing goals. Such incoherence and lack of coordination can also leave foreign assistance resources prone to politicization. Moreover, despite promises to the contrary, the establishment of separate programs and agencies could facilitate a siphoning off of resources from worthy existing programs in favor of more visible new initiatives. Thus, while we have no specific organizational proposal to make, we ask that a strong high-level coordinating mechanism be established to ensure a comprehensive approach to development assistance.

D. Program effectiveness

As a comprehensive approach is developed, it will be important to incorporate the lessons of past development experience. This experience shows that the most effective programs are those which are locally designed by the very people they are intended to help. Enlisting participatory methods, empowering people and building bridges between civil society and governments have the most far-reaching effects. These impacts are best sustained where the donor's own political and economic policies support development goals, and where donors make a concerted effort to coordinate activities around locally defined priorities. These principles–local ownership, participation, policy coherence and donor coordination–should guide the implementation of all development assistance programs–even those targeted to the highest performers. MCA funding without the application of these principles may fail to enhance impact.

Our development experience also shapes the following more specific recommendations aimed at increased aid effectiveness:

• Civil society participation and strengthening: Despite many problems, the Poverty Reduction Strategy Paper process launched by the World Bank and IMF has generated very positive results in terms of linking civil society and government for more effective decision-making. This process served to mobilize many civil society organizations and to bring governments closer to the realities of their poor citizens2. American private voluntary organizations have long worked to build the capacities of local civil society, and can support further advancement in these areas. Poverty Reduction Strategy Papers or other participatory national strategies should form the basis for MCA and other funding decisions, with technical and financial support to identify and redress weaknesses. Civil society participation should be proactively promoted through specified mechanisms and directly supported through inclusive processes.
   
• Improved coordination among donors: Recipient countries can be overwhelmed by the variety of procedural and reporting requirements as well as policies and program conditions that individual countries and international donors require. Also, uncoordinated assistance from donors can lead to a scattering of already limited resources of poor countries in the negotiation and implementation of many development projects. Aid effectiveness would be greatly enhanced if the U.S. joined with other major donors in coordinating their efforts to overcome poverty.
   
• Fewer earmarks: Current U.S. development programs are too often burdened with overly prescriptive earmarks. This approach can run counter to the objective of ensuring country ownership. Unless programs are developed less by congressional earmarking and more by recipient countries, they will be unable to respond to the felt needs for overcoming poverty and building on the capacities of local communities.
   
• Decrease in the requirement for tied aid: The Development Assistance Committee of the Organization of Economic Cooperation and Development (OECD) recommended that donor countries procure specified goods and services used in foreign assistance from worldwide sources, rather than limiting or "tying" procurement to domestic sources. USAID is implementing this recommendation and eliminating tied aid for procurement of capital goods. However, technical assistance continues to be tied to domestic sources. This practice, if continued and extended to the MCA, has the potential to increase costs substantially and create an artificial market for U.S. services in particular.
   
• Realistic Timeframes, Economic Growth and Poverty Reduction: The Administration has indicated that the objective of the MCA is to reduce poverty through economic growth. It has also indicated the desire to achieve results in relatively short time periods. However, studies have shown that economic growth must be sustained over many years in order to have a major impact on average per capita incomes in poor countries. It is thus important to set realistic timetables for achieving results and to avoid cutting funding levels prematurely. Moreover, while it is correct to highlight the importance of economic growth to poverty reduction, it is also clear that economic growth by itself does not guarantee poverty reduction. To combat poverty effectively, one must not only promote economic growth but also ensure that the opportunity to share in the benefits of that growth are spread widely among the population. This will require, inter alia, efforts to increase the access of the poor to productive assets and to build human capacity through investments in basic education and health.
   
• Oversight and Transparency: The Administration intends to ensure that the MCA has strong monitoring and evaluation to improve results and accountability. One important approach to improving accountability is to ensure transparent access to information and facilitate citizen involvement in expenditure monitoring. In recent years, there have been a number of citizen watchdog efforts that have helped to root out corruption and compel governments and private service providers alike to improve service delivery3. Just as the MCA and other aid programs should involve citizens in the design and implementation of development activities, they should include mechanisms to facilitate the establishment of watchdog groups, complaint mechanisms and democratic processes to build bridges between ordinary citizens and government decision-makers.

IV. Specific Foreign Assistance Needs

A. Global Health

Communicable diseases such as malaria, tuberculosis, and HIV/AIDS are devastating the populations of the poorest countries, particularly in sub-Saharan Africa. The means and medicines are available to treat HIV/AIDS and to prevent malaria and tuberculosis, but funds and health infrastructure are lacking. We welcome and applaud the President for his commitment contribute $15 billion over the next five years to stem the scourge of HIV/AIDS, $10 billion of which would be new money.

The Administration has proposed $2 billion in funding for HIV/AIDS programs for FY04, which includes $400 million for research and $200 million for the Global Fund to Fight AIDS, Tuberculosis and Malaria. This proposed increase is commendable, but given the extensive and urgent need, we support an increase that would bring total funding to at least $3 billion in FY04 for morally and culturally responsible programs combating HIV/AIDS and other infectious diseases. In addition, funding for health initiatives should be made through grants in preference to bilateral or multilateral loans, to prevent the international response to the global health crisis from adding to Africa's already heavy debt burden. In summary, we urge that Congress and the Administration support:

• an increase that would bring total funding to at least $3 billion in FY04 for morally and culturally responsible programs to combat HIV/AIDS, malaria and tuberculosis, with particular attention to Africa; and
• the inclusion of the following key elements as part of a comprehensive and morally appropriate approach to health crises in poor countries:
  • Funding for basic healthcare delivery systems, medicines, treatment, and research.
  • Care for those living with communicable diseases and for children orphaned as a result.
  • Programs to address not only HIV/AIDS but other life-threatening communicable diseases such as malaria and tuberculosis.
  • Morally responsible HIV/AIDS prevention programs providing accurate information about HIV/AIDS transmission; promoting responsible and mutually respectful relationships; and respecting cultural norms which promote the dignity of human persons, religious values and other key factors.
  • Activities that strengthen the economic and social viability of affected communities.
  • Priority consideration for countries in sub-Saharan Africa.

B. Reconstruction and Peace-Building

In war-torn regions and countries, peace-building assistance is essential. Until there is peace, there can be no stability, and without stability, development assistance has little chance to succeed.

• Iraq: The United States, working with the United Nations, private voluntary organizations, and all interested parties, bears a heavy burden, now and after the war, of providing for POWs and the civilian population, especially refugees and displaced persons (see page 11). The U.S. and other partners should assume a major role in the provision of humanitarian assistance and facilitation of access to neutral providers. Planning and funding of these activities should occur in a transparent process with other actors, especially the UN. The United States will also need broad international support and should accept the long-term responsibility to help Iraqis build a just and enduring peace in their country, while also addressing the many serious unresolved issues in the Middle East, especially the Israeli-Palestinian conflict. War and reconstruction in Iraq should be in addition to ongoing requirements for reconstruction in Afghanistan, food aid for chronic hunger and emergency food needs in Africa, and must not divert resources from other humanitarian emergencies throughout the world.
   
• Afghanistan: The U.S. government can not forget the people of Afghanistan. The Administration's FY04 budgetary request does not include funding for reconstruction or peace-building in Afghanistan. Though the President announced the release of $165 million to Jordan and Afghanistan in February, most of this funding is earmarked for military training and equipment. Our experience over the past year and a half has shown that peace-building challenges remain formidable and require continued and substantial funding.
   
• Africa: The United States should continue to exercise leadership in supporting peace efforts in areas of conflict in sub-Saharan Africa. Sustained peace in Sierra Leone and the rapid progress achieved thus far in negotiations between the Government of Sudan and the Sudan People's Liberation Movement (SPLM) provide ample testimony to the effectiveness of a concerted, well-coordinated, multilateral, and sustained commitment to peace-building. A strengthening of the United Nations' mandate in the Democratic Republic of Congo (MONUC), together with appropriate diplomatic pressure on all parties to the conflict, could provide the necessary incentive for brokering a sustainable peace, one that simultaneously would address the security concerns of neighboring countries. Greater support also must be given to peace and reconciliation processes in the Central African Republic and Ivory Coast, and in northern Uganda and Liberia.
   
• Colombia: The decades-long Colombian conflict, by all indications, is growing more critical each year. Together with the Church in Colombia, we insist on the need for conditioning all military aid to strict human rights criteria, on the essential priority of addressing root causes of the conflict, providing aid to the victims and displaced, ending the ineffective and harmful aerial spraying of coca fields, promoting alternative development programs, reforming the judicial system, and committing firmly to a political resolution of the several internal insurgencies. Without a bold commitment to the now stalled peace process, there seems no end to the chaos.
   
• East Timor: East Timor, the first new nation of this century, may become an example for other countries emerging from external domination and civil conflict. We urge the Administration to increase significantly its present budgetary request to aid this fledgling democracy and friend of the United States to prevent East Timor from falling into debt.

Reconstruction and peace-building should be complemented by appropriate and meaningful responses to the needs those forced to leave their families, communities and countries as a result of conflict and other humanitarian crises.

C. U.S. Refugee Programs

Through the Church's Migration and Refugee Services (MRS), Catholic diocesan agencies resettle close to one-quarter of the refugees who are admitted to the United States each year. MRS works with more than 100 Catholic dioceses in 43 states to resettle refugees from all over the globe.

Since the enactment of the Refugee Act of 1980, MRS, working with our government and diocesan resettlement programs throughout the country, has resettled more than three-quarters of a million refugees. Since September 11, 2001, however, the number of refugees who have been permitted to find protection in the United States has plummeted while conflicts and threats of future conflicts persist. In FY02, MRS helped to resettle to the United States the lowest number of refugees ever—just 5,911 refugees, as compared to 16,789 refugees in FY01. This low number of arrivals is troublesome when compared to previous years when arrivals could easily average over 100,000 refugees and MRS would help to resettle between 25% and 30% of the refugees. Although there remains a total worldwide population of over 14 million refugees, the current management of the U.S. refugee program will mean that FY03 refugee arrivals will not be any better than the total FY02 arrival of 27,075 refugees.

The Catholic Church would like to thank this Subcommittee for its work on refugee issues during the 107th Congress. As a result of this Subcommittee's leadership, the House and Senate agreed to a figure of $781 million for the Migration and Refugee Assistance Account (MRA) and $25 million for the Emergency Refugee and Migration Assistance (ERMA) account, significant increases above the Administration"s original request.

However, because of the increasing number of refugees in the world and increased need, we recommend that the Subcommittee appropriate no less than $927 million for the MRA, and $50 million for ERMA. An appropriation of $927 million for MRA would allow for the admission of up to 90,000 refugees next year and provide approximately $591 million in direct assistance to close to 14 million refugees and internally displaced persons worldwide. The 90,000 refugee admission number is consistent with the Administration's goal for FY 2004, as reported in its 2001 report to Congress on the refugee admissions program.

We also recommend an appropriation of $50 million for ERMA as a precaution against emergency migration or refugee situations which may occur in such areas as the Far East, Near East, South Asia, and Africa. More than $50 million was drawn from ERMA during FY02 and we fear that the $25 million appropriated in FY03 will be insufficient to cover emerging crisis situations.

Potential Iraqi refugee crisis

The United States has special responsibility to respond to the potential refugee crisis resulting from the war with Iraq. The U.S. should provide sufficient resources for the international community to meet the needs of Iraqi refugees. The Catholic Church recommends the following to meet the needs of refugees:

• The United States should collaborate with nations bordering Iraq to ensure that they keep their borders open for refugee outflows, pursuant to the 1951 Convention and 1967 Protocol relating to the Status of Refugees;
   
• The United States should collaborate with countries of first asylum, and could do so by augmenting their resources, offering protection to fleeing Iraqi refugees on their territory, and considering other durable solutions for refugees unable to return to Iraq, including resettlement; and
   
• The United States should make resettlement an option for Iraqi refugees in other Middle Eastern countries who deserve and need this durable solution.

Increasing the U.S Capacity to Accept Refugees

With respect to the United States' refugee overseas assistance and refugee admissions programs, which this Subcommittee's appropriations bill funds, we recommend that:

• The Department of State and the Department of Homeland Security take immediate steps to ensure that they can identify and admit enough refugees to meet the ceiling that is established each year by the President, including 70,000 for FY03;
   
• The Department of State and the Department of Homeland Security engage in long-term planning to admit 90,000 refugees in FY04;
   
• The Department of State undertake a number of steps to ensure that the United States offer admission to especially vulnerable populations of refugees, including unaccompanied refugee children, unaccompanied elderly refugees, refugees with serious medical conditions, at risk women, and refugees who have languished in camps in first countries of asylum for eight years or more; and
   
• The Department of State and Department of Homeland Security collaborate with non-governmental organizations (PVOs) with direct ties to domestic constituencies for overseas refugee processing.

Unless the U.S. government makes operational the peace-building goals of refugee protection, by extending protection to more refugees and working with other governments as they also meet their own obligations to refugees, regional conflicts will worsen with destabilizing consequences that are felt worldwide.

D. International debt relief

The Catholic Church worked closely with and commended legislators in providing major funding for the U.S. commitment to international debt relief under the Cologne debt accord. However, even with the progress that has been made through the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, a number of countries will continue to pay debt service that consumes a substantial portion of government revenues. For these countries, the immediate benefits of debt relief are likely to be too small to have a significant impact on poverty.

We therefore strongly support the introduction of bills and/or amendments that include debt-relief provisions. These would adjust the enhanced HIPC program to reduce the external debt service obligation of a qualifying HIPC country to a maximum of 10% of government revenues. In the case of countries ravaged by severe health crises, including HIV/AIDS, we urge limiting debt service payments to 5% of government revenues to maximize resources available to address this worldwide crisis. The cost associated with this adjustment to multilateral and bilateral creditors should be relatively modest, and it could have an enormous human impact.

E. IDA

We support increasing U.S. funding for the International Development Association (IDA) to $950 million for FY04 and $1,050 million for FY05. In authorizing these contributions Congress should take the opportunity to promote greater transparency at the World Bank, especially with respect to the proceedings of the Board of Executive Directors. We also support the proposal for IDA to provide financing in the form of grants for up to half its assistance to low income countries. This initiative would further the goal of preventing future debt crises in poor countries. Nevertheless, it is important that the grants not be subject to new conditions and that IDA's financing capacity not be undercut by the loss of loan repayments resulting from the grants proposal. The IDA 13 funding proposed by the Administration, therefore, should be increased in order to begin off-setting the loss of repayments. According to a recent GAO report, the amount of the necessary increase would be modest.

F. Decreased emphasis on population planning

Appropriations for the current year show that the United States continues to give significant weight to population planning programs as a part of development assistance and global health programs. The United States dedicates more than 15 percent of the combined funds identified for development assistance and child survival programs to population planning (nearly three percent of the total international assistance budget). Most other donor countries, by contrast, give less than one percent of their foreign aid budgets to population planning. While appropriate population planning can be a positive part of a broader policy calculated to support and strengthen family life, significant elements of U.S. population programs are inconsistent with Catholic moral teaching. We support morally acceptable and appropriate education for women so they can make responsible decisions about family size, free of government coercion.

We also emphasize the longstanding international consensus that rejects the use of abortion as a method of family planning, and the use of coercion in population programs. The "Mexico City" policy reinstated by President Bush must be retained, so our foreign aid program is not misused to subsidize organizations that perform and promote abortion in developing nations under the guise of family planning. The Kemp-Kasten appropriations rider preventing support of organizations involved in coercive population programs should also be retained. Under this provision, the President has the obligation to determine whether the UN Population Fund (UNFPA) is ineligible for U.S. funding due to its support of the coercive program in the People's Republic of China. To enable the President to fulfill this obligation, Congress should not earmark funds to this agency.

V. Conclusion

The Catholic Church seeks not just a safer world, but a better world—a more just and peaceful world. The United States, in its capacity as a leader in the international community, can indeed be more creative, effective and generous in promoting sustainable human development. Investing in the lives and dignity of the poorest people and strengthening our solidarity with the most vulnerable among us are steps towards a better world.

Footnotes

1. Americans Back Funding to Reduce Global Poverty, CareUSA, March 27, 2002.
2. See "Social Accountability Mechanisms: Citizen Engagement for Pro-Poor Policies and Reduced Corruption," Catholic Relief Services, January 9, 2003.
3. Ibid.