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8.2

Average salary, grades established by the For

13,075 228 12,170 12,154

Unobligated balance brought forward (—)----84,066-65,243 -22,423
Adjustment due to changes in exchange rates.
Unobligated balance carried forward...

Authorization to expend foreign currency
receipts: Permanent (68 Stat. 832)_

65,243 22,423 7,957

113,283 5,800 1,690

Through 1961, a portion of the mutual security dollar appropriations was used to purchase surplus agricultural commodities which were then sold to friendly countries for their currencies. Sales of these commodities are now being made through the Food for Peace program. Local currencies accruing from the sales through 1961 under the mutual security program are deposited in a special account and are used for economic and military activities in furtherance of objectives of the U.S. foreign assistance program. These activities include the local costs of projects, 4.0 budget support of the less-developed countries and procurement of supplies and equipment for third countries. Object Classification (in thousands of dollar equivalents)

9.5 $8,757

4,167

eign Service Act of 1946, as amended (22

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$12,545

$5,275 $5,557
$1,403 $1,455

$5,557

$1,469

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674

689

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30

26

26

26 Supplies and materials.

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162

Average number of all employees.

698

709

754

Number of employees at end of year.

31

Equipment...............

3,604 1,366

485

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33

Investments and loans.

Average GS grade..

7,668 2,732

969

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Grants, subsidies, and contributions..

Average GS salary..

109,820

39,179 13,894

$7,180

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Average grade, grades established by the Ad

ministrator, Agency for International Development (75 Stat. 450) .......

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LOAN AND GUARANTEE PROGRAMS

Alliance for Progress-Development Loans

Alliance for Progress [, development loans: For assistance authorized by section 252, $425,000,000, to remain available until expended.

Alliance for Progress, development grants: For expenses authorized by section 252, $100,000,000]: For assistance authorized by section 252, including not to exceed $100,000,000 for grants, $700,000,000, to remain available until expended. (Foreign Aid and Related Agencies Appropriation Act, 1963; authorizing legislation to be proposed.)

Note. Proposed appropriation language includes grants as well as loans. For grant activity, see 'Grants and other programs" above.

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Pursuant to authorization in section 252 of the Foreign Assistance Act of 1961, as amended, the Congress appropriated $425 million in 1963 to be used for development lending under the Alliance for Progress to remain available until expended.

In the Latin American region a dramatic change is taking place in the programs of assistance. A small bilateral program primarily emphasizing technical assistance has been changed to a major cooperative effort in which the United States is a partner with its free Latin American neighbors. This effort is a joint attack upon the economic and social problems of the hemisphere. A major aspect of United States participation in the Alliance for Progress is lending for economic development keyed to steady progress in making vital social and economic reforms. Var

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ious facets of this changed direction in giving assistance are reflected in (1) emphasis on specific reforms and "selfhelp" measures, (2) development of sound plans and programs, (3) elimination of numerous minor activities, (4) involvement of other industrialized nations, other financial institutions and U.S. land-grant universities, (5) orientation of the program towards major goals, such as economic integration, (6) relation of assistance programs to commodity and trade problems, and (7) reorientation of field missions. The development lending program has as its objective the rapid progress of the Latin American economies to the point of self-sustaining growth.

An Alliance for Progress development loan program of $602.2 million is proposed for 1964 compared with $426.4 million in 1963, and with $189.6 million financed from Development loans-revolving fund in 1962. The increase will enable the Agency to give greater emphasis to the use of development loans for such purposes as housing, agricultural development, industrial development, assistance to small business, and education.

Revenue, Expense, and Retained Earnings (in thousands of dollars)

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Total Government equity...

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mittee. The Committee is chaired by the of Agency for International Developme its members the President of the Expor of Washington, the Assistant Secretary of t International Affairs, the Assistant Secret: Economic Affairs and the Assistant Ad the Office of Development Finance and Priv A development loan program of $1,250.8 posed for 1964 compared with $991.8 milli $906.6 million in 1962. This increase growing need for development assistance as an increase in effective development pla countries, (2) the increasing ability of count receiving supporting assistance grants to repayable loans for long term economic purposes, and (3) an enlarged capacity a countries to utilize new development capite

Revenue, Expense, and Retained Earnings (in thousan

Budget expenditures...

Under the Foreign Assistance Act of 1961, a five-year long-range program for development loans of $7.2 billion was authorized to be administered by the new Agency for International Development. This program replaces the Development Loan Fund which was abolished November 3, 1961. $1,112.5 and $975 million have been appropriated under the new program for loans during 1962 and 1963, respectively.

Development loans are repayable in U.S. dollars on such terms and conditions as may be determined by the President. In view of the relative incapacity of most developing countries to service needed long-term loans repayable in foreign exchange, most development loans from this fund are very long term (30-40 years), carry a 4% credit fee in lieu of interest, and provide for a grace period up to 10 years prior to commencement of repayments. Loans to financially stronger countries may be on harder terms. A revolving fund was created into which all loan repayments and interest collections are deposited. These receipts, which are estimated to be $498 thousand in 1963 and $2,400 thousand in 1964, together with all funds appropriated, continue available until expended. Dollar and foreign currency receipts generated by loans entered into prior to 1962 by the Development Loan Fund are returned to the Treasury and are not available for this revolving fund.

Development loans are being made to promote the economic development of less-developed friendly countries and areas, with emphasis upon existing long-range plans and programs designed to develop their economic resources and to increase their productive capacities. Criteria for the development loans are delineated in the statutes. In making development loans, the Agency for International Development must take into account (1) whether free world financing is available on reasonable terms, (2) the economic and technical soundness of the activity to be financed, (3) whether the development of economic resources or the increase of productive capacities gives reasonable promise of being furthered, (4) consistency with other development activities or realizable long-range objectives, (5) the extent to which the recipient country is demonstrating its determination to take effective selfhelp measures and (6) possible effects upon the economy of the United States. Development loans will not be made unless there is a finding of a reasonable prospect of repayment. Additional loan criteria and standards are established by an inter-agency Development Loan Com

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