sistance Authorization; H.R. 4995], 93 Stat. 843, approved November 13, 1979; Public Law 96-257 [Special Central American Assistance Act of 1979], 94 Stat. 422, approved May 31, 1980; Public Law 96-327 [S. 1916], 94 Stat. 1026, approved August 8, 1980; Public Law 96-450 [Intelligence Authorization Act for Fiscal Year 1981; S. 2597], 94 Stat. 1975 at 1981, approved October 14, 1980; Public Law 96-465 [Foreign Service Act of 1980; H.R. 6790], 94 Stat. 2071 at 2158; Public Law 96-525 [H.R. 8388], 94 Stat. 3043, approved December 12, 1980; Public Law 96-533 [International Security and Development Cooperation Act of 1980; H.R. 6942], 94 Stat. 3131, approved December 16, 1980; Public Law 97-65 [OPIC Amendments Act of 1981; H.R. 3136], 95 Stat. 1021, approved October 16, 1981; Public Law 97-113 [International Security and Development Cooperation Act of 1981; S. 1196], 95 Stat. 1519, approved December 29, 1981; Public Law 97-164 [Federal Courts Improvement Act; H.R. 4482], 96 Stat. 25 at 48, approved April 2, 1982; Public Law 97-208 [Humanitarian Assistance for the People of Lebanon; H.R. 6631], 96 Stat. 138, approved June 30, 1982; Public Law 97-377 [Further Continuing Appropriations Act, 1983; H.J. Res. 631], 96 Stat. 1830 at 1831, approved December 21, 1982; Public Law 97-438 [H.R. 7143], 96 Stat. 2286, approved January 8, 1983; Public Law 98-151 [Further Continuing Appropriations, 1984; H.J. Res. 413], 97 Stat. 964, approved November 14, 1983; Public Law 98164 [Department of State Authorization Act, Fiscal Years 1984 and 1985; H.R. 2915], 97 Stat. 1017, approved November 22, 1983; and by Public Law 98-473 [Continuing Appropriations, 1985; H.J. Res. 648], 98 Stat. 1837 at 1884, approved October 12, 1984.

AN ACT To promote the foreign policy, security, and general welfare of the United States by assisting peoples of the world in their efforts toward economic development and internal and external security, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as "The Foreign Assistance Act of 1961." 1

PART I

Chapter 1-Policy; Development Assistance Authorizations 2 Sec. 101.3 General Policy. (a) The Congress finds that fundamental political, economic, and technological changes have resulted in the interdependence of nations. The Congress declares that the individual liberties, economic prosperity, and security of the people of the United States are best sustained and enhanced in a community of nations which respect individual civil and economic rights and freedoms and which work together to use wisely the world's limited resources in an open and equitable international economic system. Furthermore, the Congress reaffirms the traditional humanitarian ideals of the American people and renews its commitment to assist people in developing countries to eliminate hunger, poverty, illness, and ignorance.

Therefore, the Congress declares that a principal objective of the foreign policy of the United States is the encouragement and sustained support of the people of developing countries in their efforts

'The short title was added by sec. 111 of the FA Appropriation Act, 1962.

2 Sec. 101(a) of the FA Act of 1963 struck out the words "SHORT TITLE AND" in the chapter heading, which formerly read "SHORT TITLE AND POLICY". Sec. 2(1) of the FA Act of 1973 added the following words to the chapter heading: "DEVELOPMENT ASSISTANCE AUTHORIZATIONS".

3

22 U.S.C. 2151. Sec. 101 was added by sec. 101 of the International Development and Food Assistance Act of 1978 (92 Stat. 937). Previously, sec. 101 had related to the short title before being repealed by the FA Act of 1963. This general policy statement was formerly contained in sec. 102 before 1978.

to acquire the knowledge and resources essential to development and to build the economic, political, and social institutions which will improve the quality of their lives.

United States development cooperation policy should emphasize four principal goals:

(1) the alleviation of the worst physical manifestations of poverty among the world's poor majority;

(2) the promotion of conditions enabling developing countries to achieve self-sustaining economic growth with equitable distribution of benefits;

(3) the encouragement of development process in which individual civil and economic rights are respected and enhanced; and

(4) the integration of the developing countries into an open and equitable international economic system.

The Congress declares that pursuit of these goals requires that development concerns be fully reflected in United States foreign policy and that United States development resources be effectively and efficiently utilized.

(b) Under the policy guidance of the Secretary of State, the agency primarily responsible for administering this part should have the responsibility for coordinating all United States development-related activities."

Sec. 102.5 Development Assistance Policy.-(a) The Congress finds that the efforts of developing countries to build and maintain the social and economic institutions necessary to achieve self-sustaining growth and to provide opportunities to improve the quality of life for their people depend primarily upon successfully marshalling their own economic and human resources. The Congress recognizes that the magnitude of these efforts exceeds the resources of developing countries and therefore accepts that there will be a long-term need for wealthy countries to contribute additional resources for development purposes. The United States should take the lead in concert with other nations to mobilize such resources from public and private sources.

Provision of development resources must be adapted to the needs and capabilities of specific developing countries. United States assistance to countries with low per capita incomes which have limited access to private external resources should primarily be provided on concessional terms. Assistance to other developing countries should generally consist of programs which facilitate their access to private capital markets, investment, and technical skills, whether directly through guarantee or reimbursable programs by the United States Government or indirectly through callable capital provided to the international financial institutions.

Bilateral assistance and United States participation in multilateral institutions shall emphasize programs in support of countries

The responsibilities of the Agency mentioned in this subsection were transferred to the Director of IDCA, pursuant to sec. 6 of Reorganization Plan No. 2 of 1979 (establishing IDCA). The responsibilities of the Secretary of State, insofar as they relate to policy guidance other than foreign policy guidance, were also transferred to the Director.

* 22 U.S.C. 2151-1. Sec. 101 of the International Development and Food Assistance Act of 1978 (92 Stat. 927) struck out sec. 102, which concerned a statement of policy, and added a new sec.

which pursue development strategies designed to meet basic human needs and achieve self-sustaining growth with equity.

The Congress declares that the principal purpose of United States bilateral development assistance is to help the poor majority of people in developing countries to participate in a process of equitable growth through productive work and to influence decisions that shape their lives, with the goal of increasing their incomes and their access to public services which will enable them to satisfy their basic needs and lead lives of decency, dignity, and hope. Activities shall be emphasized that effectively involve the poor in development by expanding their access to the economy through services and institutions at the local level, increasing their participation in the making of decisions that affect their lives, increasing labor-intensive production and the use of appropriate technology, expanding productive investment and services out from major cities to small towns and rural areas, and otherwise providing opportunities for the poor to improve their lives through their own efforts. Participation of the United States in multilateral institutions shall also place appropriate emphasis on these principles.

(b) Assistance under this chapter should be used not only for the purpose of transferring financial resources to developing countries, but also to help countries solve development problems in accordance with a strategy that aims to insure wide participation of the poor in the benefits of development on a sustained basis. Moreover, assistance shall be provided in a prompt and effective manner, using appropriate United States institutions for carrying out this strategy. In order to achieve these objectives and the broad objectives set forth in section 101 and in subsection (a) of this section, bilateral development assistance authorized by this Act shall be carried out in accordance with the following principles:

(1) Development is primarily the responsibility of the people of the developing countries themselves. Assistance from the United States shall be used in support of, rather than substitution for, the self-help efforts that are essential to successful development programs and shall be concentrated in those countries that take positive steps to help themselves. Maximum effort shall be made, in the administration of this part, to stimulate the involvement of the people in the development process through the encouragement of democratic participation in private and local governmental activities and institution building appropriate to the requirements of the recipient countries.

(2) Development planning must be the responsibility of each sovereign country. United States assistance should be administered in a collaborative style to support the development goals chosen by each country receiving assistance.

(3) United States bilateral development assistance should give high priority to undertakings submitted by host governments which directly improve the lives of the poorest of their people and their capacity to participate in the development of their countries, while also helping such governments enhance their planning, technical, and administrative capabilities needed to insure the success of such undertakings.

(4) Development assistance provided under this chapter shall be concentrated in countries which will make the most effec

tive use of such assistance to help satisfy basic human needs of poor people through equitable growth, especially in those countries having the greatest need for outside assistance. In order to make possible consistent and informed judgments in this respect, the President shall assess the commitment and progress of countries in moving toward the objectives and purposes of this chapter by utilizing criteria, including but not limited to the following:

(A) increase in agricultural productivity per unit of land through small-farm, labor-intensive agriculture;

(B) reduction of infant mortality;

(C) control of population growth;

(D) promotion of greater equality of income distribution, including measures such as more progressive taxation and more equitable returns to small farmers;

(E) reduction of rates of unemployment and underemployment; and

(F) increase in literacy.

(5) United States development assistance should focus on critical problems in those functional sectors which affect the lives of the majority of the people in the developing countries; food production and nutrition; rural development and generation of gainful employment; population pla.ining and health; environment and natural resources; education, development administration, and human resources development; and energy development and production."

(6) United States assistance shall encourage and promote the participation of women in the national economies of developing countries and the improvement of women's status as an important means of promoting the total development effort.

(7) United States bilateral assistance shall recognize that the prosperity of developing countries and effective development efforts require the adoption of an overall strategy that promotes the development, production, and efficient utilization of energy and, therefore, consideration shall be given to the full implications of such assistance on the price, availability, and consumption of energy in recipient countries.

(8) United States cooperation in development should be carried out to the maximum extent possible through the private sector, including those institutions which already have ties in the developing areas, such as educational institutions, cooperatives, credit unions, free labor unions, and private and voluntary agencies.

(9) To the maximum extent practicable, United States private investment should be encouraged in economic and social development programs to which the United States lends support.

(10) Assistance shall be planned and utilized to encourage regional cooperation by developing countries in the solution of common problems and the development of shared resources.

The reference to energy development and production was added by sec. 104(a) of the International Development Cooperation Act of 1979 (Public Law 96-53; 93 Stat. 360).

(11) Assistance efforts of the United States shall be planned and furnished to the maximum extent practicable in coordination and cooperation with assistance efforts of other countries, including the planning and implementation of programs and projects on a multilateral and multidonor basis.

(12) United States bilateral development assistance should be concentrated on projects which do not involve large-scale capital transfers. However, to the extent that such assistance does involve large-scale capital transfers, it should be furnished in association with contributions from other countries working together in a multilateral framework.

(c) The Congress, recognizing the desirability of overcoming the worst aspects of absolute poverty by the end of this century by, among other measures, substantially lowering infant mortality and birth rates, and increasing life expectancy, food production, literacy, and employment, encourages the President to explore with other countries, through all appropriate channels, the feasibility of a worldwide cooperative effort to overcome the worst aspects of absolute poverty and to assure self-reliant growth in the developing countries by the year 2000.

NOTE.-The Foreign Assistance Appropriations Act, 1985 (sec. 101 of the Continuing Appropriations Act, 1985; Public Law 98-473; 98 Stat. 1884) provides the following:

"Loan allocation, Development Assistance: In order to carry out the provisions of part I, the Administrator of the Agency responsible for administering such part may furnish loan assistance pursuant to existing law and on such terms and conditions as he may determine: Provided, That to the maximum extent practicable, loans to private sector institutions, from funds made available to carry out the provisions of sections 103 through 106, shall be provided at or near the prevailing interest rate paid on Treasury obligations of similar maturity at the time of obligating such funds: Provided further, That loans made to countries whose annual per capita gross national product is greater than $805 but less than $1,301 shall be repayable within twenty-five years following the date on which funds are initially made available under such loans and loans to countries whose annual per capita gross national product is greater than or equal to $1,301 shall be repayable within twenty years following the date on which funds are initially made available under such loans."