-Increased integration with other development programs, particularly health and nutrition initiatives in rural and poor urban

areas;

-Increased collaboration with other bilateral donors, the World Bank, UNFPA, and WHO; and

-Stimulation of increased support of other donors to help meet the rapidly increasing demands for contraceptive supplies which our program is now no longer able to provide.

Reasonable access to safe and effective family planning services and information is essential and remains a primary purpose of AID population program funding. AID is working to help develop a variety of effective types of family planning services, investigating opportunities for distributing services through commercial channels (for example, Jamaica, Bangladesh, Indonesia) as well as through public health systems. Increased attention is also going to developing innovative information and education programs relying on both modern and traditional media.

But people may be content with fewer children only if changes in economic structure remove the advantages many parents now see in large families and as changes in society open new options for women. In this context, a radical reduction in infant death rates as well as improvements in personal nutrition, health, education and so forth will be required if substantial improvements in living standards are to become realistically feasible. Increased attention in the population program is being given to exploring how currently operating policy measures and socioeconomic conditions influence attitude on family size, and what policies might work in conjunction with family planning services and information to encourage smaller families. The cost of such research and pilot programs is low but the long-term benefits may be substantial. In our population program as a whole increased attention is going to determining the most cost effective means of reducing fertility on both the "supply" and "demand” sides of the question.

3. SECTION 105-EDUCATION AND HUMAN RESOURCES DEVELOPMENT

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In a world of plenty, "education" may connote literacy and wide learning, truth for its own sake as well as a means to progress. In a world of want, education must unfortunately of necessity be something far more restrictive and practical-as means to improving living standards rather than an end in itself. AID defines "minimum practical education" to be that body of knowledge, attitudes, and skills necessary to effectively contribute to and participate in a developing society and economy. Education should help equip LDC citizens to cope with their most pressing problems-hunger, ill health, and a lack of more productive employment.

Minimum practical education varies with the situations people face. What is essential to effective participation differs dramatically among and within countries. We seek to identify learning needs, and select and try out the most promising alternative means for meeting those needs, including both formal and nonformal programs.

See appendix 3, ((3) section 105), p. 53 for a summary statement of AID's program in this account.

Where resources are very short, where lifestyles severely limit access to formal education, or under other circumstances, programs to increase literacy may or may not be the most effective means of enabling more people to contribute to and participate in development. Even the U.N.'s worldwide target of "universal primary education" may be an inappropriate target, at least in some countries' present circumstances.

The proper form and channel for education assistance will vary depending upon the circumstances. While we believe most traditional methods are too expensive to meet the mass needs outlined above, there may be exceptions; universities play an importnt role in many countries, and can be more closely linked to development needs than they often are, most of AID's assistance will, however, be concentrated on work at a lower level closer to the immediate needs of the poor majority. As is clear from our view that a minimum practical education should relate closely to the learning needs of other sectors and from the illustrations in the congressional presentation the channels of assistance may well be farmers organizations, health groups, the school system, or others.

Thus, we support new approaches, including nonformal learning programs that do not rely upon literacy for providing important information to rural people, and the use of communications media (with existing teachers serving as monitors) to extend incomplete, two or three grade primary schools in the rural areas to the full five or six grades.

Experimentation must go forward on all fronts in human resources development. National budgets in LDC's commit as much as one-fifth of their resources to the formal schools, and cannot easily be stretched to permit further expansion as school-age populations increase, particularly in the rural areas of the poorest countries. Nonformal education approaches, to which AID turned its attention in 1970, are being closely studied and trial operations are being supported in a number of countries.

The nonformal education thrust of section 105 shows up in all three of the main functional appropriations. Farmer training is included in section 103 projects in several countries, among them Tanzania, Philippines, Nicaragua, Peru, and the Sahel. A community approach to health and family planning education is included in a number of sec tion 104 projects. Such training programs are no less important to the achievement of mandate objectives than projects funded under this section.

Activities funded under section 105 include the use of radio as a way of reaching rural populations in Nepal, Paraguay and several Central American countries; a practical approach in vocational skills training in Ghana, Kenya, the Sahel countries, Nepal, Nicaragua, Panama, Afghanistan, and Swaziland; a new correspondence curricu lum at the secondary level in the Dominican Republic; and decentralized school administration in Bolivia, Panama, and Peru.

It is absolutely clear that we must enhance our efforts to improve the administrative capacity of Government and development institutions at all levels (a task force report on this topic is now being completed). This is especially true as we move more deeply and rapidly in attempting to strengthen developing country programs in support

of the poor majority. The provision of training opportunities and technical advice in public administration, project design and appraisal, planning, management and so forth strengthen the vital human resource base on which national development programs must build. No easy, quick or inexpensive systems now exist or are likely to be developed, although experimental approaches are being tested. Much of our current support in this area is part of specific projects funded under other functional categories, but the 1976 congressional presentation does contain a number of projects primarily focused on administration, particularly in Africa.

AID's participant training program is an important tool in helping LDC's improve the technical and general capabilities of their manpower. (About 7,500 participants will be programed in fiscal year 1976.) Selection of participants and courses of study must be consistent with AID development priorities and/or AID-financed projects in agricultural/rural development, population/health, and the education/human resources area itself. Training to improve the competence of Government administrators in such areas as development administration is, as we have noted, often a prerequisite to further LDC growth. AID policy encourages the training of women, especially in nontraditional fields, and urges the use of training generally to support greater popular participation in LDC development.

4. SECTION 106-SELECTED DEVELOPMENT PROBLEMS

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As the committee is aware, the Agency has made major strides in focusing our programs on the three highest priority categories. This is particularly reflected in this account which in the fiscal year 1976 request amounts to $47 million as compared with $220 million in 1973. The list attached at appendix 2, page 41 suggests how many projects which would fit into this category have been turned away in the past couple of years. We reiterate, however, that AID will wish on occasion to provide support to essential infrastructure projects after careful examination of all alternatives. They will be few in number and judged individually in terms of their importance in reaching the poor majority.

There are in our 1976 presentation important activities which deserve support but are somewhat outside the principal categories— post-disaster reconstruction; transportation; industry, energy, science and technology; urban development and housing; program development; and the stimulation of reimbursable technical assistance. Each of these is detailed in the 1976 congressional presentation but it is worth examining in slightly more detail the growing importance of urban development.

While much of AID's emphasis-and that of the Congress is on the rural poor, there should be no assumption that we disregard the large and increasingly important problems of the urban poor. The largest and poorest majority of people in developing countries still resides in rural areas; nevertheless, an ever-increasing proportion is located in urban areas. [In Latin America, for example, the percentage of the urban population is equal to or greater than that of the rural

in

See appendix 3 ((4) section 106), p. 56 for a summary statement of AID's programs this account.

population.] Adding to the natural population increase in cities-an increase which is even more pronounced in rural areas is the ruralurban migration flow which is fed by real and imaginary differences in opportunity. The dichotomy between "rural" and "urban" is fuzzy at best, given the dynamics of the ebb and flow of poor people between rural and urban areas and the more-rural-than-urban character of many of the nonmetropolitan urban centers in developing countries.

As indicated above, section 103 permits a wide latitude of programs in the rural area, including the development of small-scale industry and services at the small market town level. Beyond this, there is clearly a great deal of AID support ongoing in health, population, and education areas that affects the urban poor, and this will continue. The bulk of our efforts, however, will remain in the rural agricultural

areas.

With our urban development policy determination several years ago, we decided not to make the urban sector an area of program concentration, although a small AID/W office was established to develop an agency capacity to take account of the urban aspects of development and to respond as appropriate. This policy determination is being reviewed, and it is evident that a broadened agency mandate on the urban poor and on the areas of overlap between rural development and urban development will be forthcoming.

A closely related area is the housing guarantee program. AID's goal in the shelter sector is to assist LDC's to develop the institutional, technological and financial capabilities to provide shelter under reasonable conditions, particularly for the poor majority. While in the past, housing projects have more often than not resulted in improved housing for somewhat better off economic groups, the program's emphasis is now on meeting needs of the lower income groups. Housing guaranty funds are considered most appropriate for more advanced LDC's or for those whose balance of payments prospects permit repayment of such financing. Where consistent with LDC and AID priorities, development loans or grants may also be used selectively, usually in conjunction with housing guarantee funds, to finance LDC housing which will permit AID to achieve a more direct impact on the housing needs of lower income groups, facilitate the borrower's acceptance of the concept of nonsubsidized low income housing, or assist in the design and implementation of low income housing.

5. SECTION 107-SELECTED COUNTRIES AND ORGANIZATIONS 5

While this category represents but a small portion of AID's fiscal year 1976 request-$32 million or 3 percent of the functional accountsit is a very important one as three-fourths of it supports centrally funded private and voluntary organization (PVO) activities. (While the category is intended to include "assistance in support of the general economy of recipient countries," no program loans were made in fiscal year 1975 and none are proposed for fiscal year 1976.)

The PVO's, long active overseas in relief programs, are now eager to apply their experience to a broad range of development activities. To support this evolving emphasis, a growing number of private and vol

5 See appendix 3 ((5) section 107), p. 59 for a summary statement of AID's programs in this account.

untary organizations are adding specialized technical skills to existing staff capabilities for long-term development efforts.

AID accordingly has:

-Assisted private and voluntary organizations in expanding the size and scope of their overseas programs;

-Involved additional private and voluntary organizations in development assistance programs;

-Enhanced the capacity of private and voluntary organizations to plan, implement, and evaluate development assistance activities in developing countries; and

-Encouraged cooperation among private and voluntary organizations in program planning and execution.

As AID has moved into a new era of expanded cooperation with the PVO community during the past year, channels of communication have been widened with increased dialog and consultation. Since April 1974, in concert with the Advisory Committee on Voluntary Foreign Aid (ACVFA), AID has sponsored several workshops on policy, administrative and procedural questions associated with planning and execution of voluntary agency development activities. A similar workshop on Public Law 480 title II programs was also held. Other new approaches, such as consortia arrangements among PVO's, are being encouraged to achieve more innovative use of financial and manpower resources. Other current efforts to assure PVO support in the participation style of development include admission of PVO program administrators and other staff in AID training courses on project design, management and evaluation. Special training courses for PVO executive program and field staff are now in the planning stages. In fiscal year 1975, another initiative using two new grant mechanisms was launched to strengthen the development role of PVO's. These grants the development program grant (DPG) and the operational program grant (OPG) respond to congressional intent to help PVO's function independently in development programs. Approximately $10.5 million of fiscal year 1975 funds was allocated for such grants as part of a concerted AID effort to tap this great source of skilled overseas experience. $15 million is reserved for similar purposes in fiscal year 1976.

The DPG concept is intended to help AID draw upon the growing desire of PVO's to function independently by enhancing PVO ability to plan, manage and evaluate development activities consistent with the new foreign assistance legislation. These grants will expand PVO capabilities at their headquarters and ultimately in their field programs over a 3- to 5-year period. Twenty-four PVO's are receiving such grants in fiscal year 1975.

The OPG concept was created to stimulate greater direct PVO involvement in planning and implementing their own innovative projects which concentrate on the basic development problems affecting the poor majority. An important hypothesis will be tested through these field programs: That successful private organization programs can be extended under varying conditions without sacrificing the independent character of private programs and their responsiveness to the needs of poor people. Thirty-six PVO's received such grants in fiscal year 1975.

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