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Nearly $9 Billion in Foreign Aid Remains Unspent

June 27, 1991

WASHINGTON (AP) _ Nearly $9 billion in U.S. aid to other countries, some of it made available as long as 10 years ago, has gone unclaimed.

There are several reasons, but sentiment is growing in Congress to limit the number of years that funds can sit untouched in the so-called foreign aid pipeline.

″At a time when programs for Americans are being cut back, like Medicare and housing, the foreign aid pipeline is an insult to the people we are here to serve,″ said Rep. Toby Roth, R-Wis., who recently got the House to approve taking back to the Treasury any of the money idle for three years or more. He estimated that would be about $2 billion.

The Senate is due to act by July 8.

The figures on unused aid were compiled for Roth, the ranking Republican on the House Foreign Affairs economic policy subcommittee, by the congressional General Accounting Office, which submitted them last week.

They showed the unspent amount rising from about $6 billion in 1981 to $8.8 billion last Sept. 30. The total increased by $226 million over the year before, partly because new aid to Panama and Nicaragua had not been spent. More than $90 million dated back to 1980 or earlier.

Here’s how the money gets stuck.

Once Congress approves aid to a country, the money goes into an account. Sometimes the U.S. Agency for International Development spends it promptly.

But sometimes it doesn’t. The receiving country may have to provide matching funds that it cannot raise right away, or the U.S. aid agency decides to hold up the funds for a country until the next election there.

″Sometimes we have to come up with the same amount in our own currency to match the U.S. funds for a project, or money to pay the fare of a Filipino going to the United States for training, and we can’t find the money in our budget,″ said Diosdado R. Oracio Jr., minister-counselor in the Philippines Embassy here. Aid worth $433 million has been promised his country but not spent.

In other cases, funds for an entire long-term project may be put in the pipeline, even though they won’t be spent for years, according to an AID official who spoke on condition of anonymity. On a major sewer installation in Cairo, for example, money was provided to fill in the sewer pipe trenches long before they were dug, a process the official expected to take five years.

The GAO report said that while some of the accumulation is beyond the control of U.S. authorities, much was due to unrealistic or overstated planning.

Those plans are made jointly by AID and the country it helps. In some cases, agreements provide that the local government can prevent the U.S. agency from reclaiming the money.

Last year, Congress passed a law to cancel an unclaimed $420 million made available seven years back or more. But President Bush ordered a delay until next Sept. 30, saying U.S. foreign policy could suffer if the aid were canceled sooner.

Egypt, which gets more U.S. aid than any country but Israel, has the largest amount of unspent money: $2.04 billion.

Pakistan has the second-largest reserve, which rose by more than $16 million to $756.7 million in 1990.

The GAO said the money was for a big roadbuilding project that should have started this year. Now it is being held up because Congress has cut off aid to Pakistan on grounds that it is developing nuclear weapons.

U.S. officials decided to hold back aid to Guatemala until a newly elected government was in place and new policies could be negotiated.