Foreign Aid

Problems and Issues Affecting Economic Assistance Gao ID: NSIAD-89-61BR December 30, 1988

In response to a congressional request, GAO identified key issues and problems relating to the U.S. foreign economic assistance program.

GAO found that U.S. bilateral assistance programs had been undermined due to: (1) recipients' inability to provide agreed-upon funding and recurrent cost financing; (2) U.S. failure to effectively use Economic Support Fund and food aid to achieve economic development and policy reforms overseas; (3) recipients' inability to service existing debt and borrow new funds; (4) unsuccessful efforts by the Agency for International Development (AID) to reduce narcotics cultivation through crop substitution and area development; (5) the impact of Acquired Immune Deficiency Syndrome on recipients, which would likely increase their demands for assistance; and (6) recipients' inadequate financial management and accounting procedures over cash transfers and local currency to ensure that assistance is used for intended purposes.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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