would want to make sure that I.A.F.'s overall budget remains fairly constant. What are your plans in the future as the SPTF runs out? PETER BELL: Over the years the Foundation has received strong support both from the Congress and the Executive Branch to help maintain and increase our level of activity in Latin America. We believe our problem related to the decline in availability in SPTF monies will be resolved if the Administration and our authorizing and appropriating Committees in Congress are kept apprised of our SPTF funding situation. As the loan reflows begin to diminish, the Inter-American Development Bank, which administers this fund, will inform us of the balances remaining for each country from which we may be able to draw. We would report to Congress and OMB about our funding situation and the increased amounts of appropriated funds we will need to compensate for the dwindling SPTF monies and to maintain a suitable level of grant activity. SENATOR KASTEN: In dollar terms, what are the three countries which have the highest level of activity by I.A.F.? PETER BELL: The IAF has made grants in some 35 countries in its 12 years of operation. The three countries where the Foundation's support has been the largest are Chile, Peru and Mexico. QUESTIONS SUBMITTED BY SENATOR INOUYE SENATOR INOUYE: Mr. Bell. In Fiscal Year 1981, the Congress appropriated $15,826,000 in support of the Inter-American Foundation. Your budget request for Fiscal Year 1984 is $5,121,000 less than was appropriated in Fiscal Year 1981. Does this reduction reflect a lack of interest on the part of the Administration? PETER BELL: We have no reason to believe that there is a lack of interest on the part of the Administration. SENATOR INOUYE: How would this reduction be accomplished? PETER BELL: The reduction from $15,826,000 to $10,705,000 would result in a significant cutback in program activity conducted with appropriated funds. In FY 1981, we used $3,335,000 for operating expenses and $11,805,000 for appropriated program activities. In FY 1984 we are projecting the use of $4,610,000 for operating expenses, leaving $6,095,000 for appropriated program funding. This represents a 48% reduction in appropriated funds available for program since 1981. Wherever possible, we will use SPTF funds, but our grant making will decline from approximately 300 grants per year to about 220. Moreover, the lack of flexibility in the use of SPTF funds leaves us with a significant reduction in our ability to respond to proposals in certain countries and program areas. We will, for example, have to reduce sharply our funding in Caribbean countries because SPTF funds are not available in most of those countries. We will also have to reduce our support for income-generating and employment projects in urban areas and to cut back our funding of research and evaluations. SENATOR INOUYE: In constant dollars, what would the reduction from the FY 1981 level amount to? PETER BELL: In 1981 dollars, the FY 1984 level of $10,705,000 would equal approximately $9,099,000, or a 43% reduction from our FY 1981 appropriation of $15,826,000. SENATOR INOUYE: Mr. Bell. The Reagan Administration has announced that the Caribbean Basin Initiative is a keystone of American foreign policy. Large increases in economic assistance have been proposed for the region. Have any of the funds appropriated under the CBI been made available to the Inter-American Foundation? PETER BELL: The Foundation received $2,000,000 in FY 1983 under the CBI. The funds are being used for the Foundation's grant-making program in the Caribbean. The funds are especially valuable because of the limited availablility of SPTF funds in most of the islands of the region. SENATOR INOUYE: Since this Administration has proposed increases in overall assistance to Latin America and the Caribbean, while reducing funding requests for the Inter-American Foundation, is it reasonable to assume that the Reagan Administration would like to phase out the Inter-American Foundation? PETER BELL: We are not aware of any intention to phase out the Foundation. SENATOR INOUYE: Mr. Bell. In which countries is the Inter PETER BELL: The Foundation is currently supporting activities SENATOR INOUYE: How would this listing differ from a similar list had one been prepared in 1980? PETER BELL: In 1980, the Foundation had active grants in each of the countries listed above except Anguilla, Netherland Antilles, St. Lucia and Suriname. In addition, we had active grants in El Salvador. SENATOR INOUYE: Please explain, on an individual country basis, the underlying reasons for the differences between these two lists. PETER BELL: Anguilla, Netherland Antilles, St. Lucia and Suriname are all located in the Caribbean. It has only been in the past few years that we have allocated sufficient staff resources to cover all of the countries in the region. Concerns about safety of the Foundation's Field Representatives has caused our curtailment of activity in El Salvador. SENATOR INOUYE: Mr. Bell. How much of your budget is used for operating expenses of the Inter-American Foundation? PETER BELL: In FY 1982, operating expenses accounted for 14 percent of our total budget. SENATOR INOUYE: As your program has declined, has the size of your staff also diminished? PETER BELL: The Foundation's FTE personnel ceiling in FY 1980 was 64. This was reduced in FY 1981 to 63, and further reduced in FY 1982 to 62. However, the Office of Management and Budget raised the FTE ceiling in FY 1983 to 63 and in FY 1984 to 65. SENATOR INOUYE: What was the size of the Foundation's staff (Professional and Clerical) in Fiscal Year 1981? What is it now? PETER BELL: The Foundation's staff numbered 64 at the end of FY 1981. We now have 40 professional and 20 support staff on board and are in the process of filling four vacancies, three professional and one support. SENATOR INOUYE: How much of your budget is expended on entertainment or representation? PETER BELL: The Foundation's authorizing legislation allows for the use of up to $10,000 for representation expenses. In FY 1982, $3,000 was budgeted for this purpose. SENATOR INOUYE: Was the amount provided for these purposes in Fiscal Year 1982 fully expended? PETER BELL: No. In FY 1982 only $2,000 of the $3,000 budgeted was used. SENATOR INOUYE: Please provide a listing of all receptions, dinners, or similar functions funded by the Inter-American Foundation in Fiscal Year 1982 and in the first quarter of Fiscal Year 1983. In this listing, please provide the total cost associated with each function and a list of those attending. PETER BELL: The Foundation has not funded any receptions or dinners in FY 1982 or the first quarter of FY 1983. SUBCOMMITTEE RECESS The subcommittee stands in recess until 10 a.m. tomorrow, at which time we will receive testimony from Peter McPherson. [Whereupon, at 2:45 p.m., Wednesday, March 2, the subcommittee was recessed, to reconvene at 10 a.m., Thursday, March 3, 1983.] |