GAO Observations of Some United States Foreign Affairs Operations

Middle East countries receive the major portion of the appropriations for security supporting assistance, which is not significantly greater than appropriations for development assistance. Egypt could not provide the necessary manpower, local currency support, and management resources to handle the volume and type of U.S. assistance that was planned. Rather than provide sorely needed raw material and commodity assistance, capital projects were programmed with consequent severe strains on Egyptian capabilities. Policy considerations relating to Middle East oil and peace are at the heart of the bilateral relation with Saudi Arabia. The enormous volume of sales is due largely to infrastructure programs, rather than lethal arms, which were relatively unsophisticated in Saudi Arabia. The executive branch is not organized to assure effective participation in U.N. organizations, having no sound policy objectives and needing improvement in program planning, budgeting, and evaluation. Food shortage problems are due in part to postharvest handling and storage. Study so far has indicated that providing family planning services alone may not be the universal answer to the population problem; people must first be motivated to want to limit their families. AID and the Export-Import Bank loans-to-foreign-countries programs should be reassessed, since there are a number of outstanding loans to countries with bad credit reputations. The Bank is working on solutions and AID could develop trade policy with these countries, who have fixed their economic growth prospects on the financial resources that expand trade. Despite recent initiatives to liberalize trade through tariff preferences and other mechanisms, the lesser developed countries have been unable to find sufficient outlets for their exports. (SS)