Private Sector Involvement in the Agency for International Development's Programs

Pursuant to a congressional request, GAO reviewed the extent to which the United States, through the Agency for International Development (AID), promotes and works with both the U.S. and host-country private sectors in developing countries. Specifically, GAO examined those AID programs which are directed toward and implemented through the private sector, those AID funds which are spent to procure U.S. goods and services domestically and abroad, and the procurement of indigenous goods and services in host countries.

Since the early 1970's, the AID focus on basic human needs has limited its programs directed toward th U.S. private sector. GAO found that about 50 percent of AID net disbursements in the past 3 fiscal years can be identified as expenditures in the U.S. private sector. Of the remaining amounts, payments to the private sector cannot be isolated, because AID makes payments to various U.S. Government agencies for goods and services, and these agencies in turn spend some of these funds in the private sector. AID disbursements for indigenous goods and services in host countries cannot be quantified on an Agency-wide basis; however, there are figures available on a project basis. Some AID programs are directed toward host-country private sectors and numerous projects are directed toward diversifying agricultural production, generating rural income, and improving health and family planning. Some of these projects are directed toward development of the private sector abroad. Under the present administration, less emphasis will be placed on the transfer of U.S. Government assistance funds and more on the transfer of technology, skills knowledge, and capital of the U.S. private sector.