L. Foreign Operations Administration

The Foreign Operations Administration is an operating agency with responsibility for programs which are wholly economic and almost wholly overseas. Its Director is responsible for supervision, general direction, and coordination of all foreign assistance operations, including military and economic aid, under policy guidance from the Secretaries of State, Defense, and Treasury. The agency operates and conducts almost all of the foreign assistance programs (as authorized by the Mutual Security Act of 1954, 68 Stat. 832).

These programs fall into seven major descriptive categories.1 (1) Mutual defense assistance.-Covers programs of military equipment and training administered primarily by the Department of Defense and coordinated with other aid activities by the Director of the Foreign Operations Administration.

(2) Direct forces support.-Encompasses programs designed to make possible the creation or maintenance of a certain level of military forces by providing or paying for goods or services that physically reach or benefit the forces concerned. These programs are now administered by FOA.

(3) Defense support.-Includes programs administered by FOA designed to sustain and increase military effort by helping to create economic strength and stability in the recipient country. The term is synonymous with "development assistance" in countries not having a military program.

(4) Technical assistance.-A prime responsibility of FOA, involves sharing of American knowledge, experience, techniques, and skills with the people of the less developed areas of the world in order to help them to further their economic development and raise their standards of living. Technical assistance (also includes technical cooperation, point 4, etc.) consists largely of teaching, training, exchange of information, and technical guidance on specific programs. According to FOA definition, few supplies or equipment are needed in this program other than those required for effective teaching and demonstration purposes.

(5) Development assistance.-Includes programs and projects designed to assist and promote economic development or to create and maintain economic and political stability. These activities often supplement technical assistance programs by providing supplies, commodities, or funds for accelerated economic development.

1 See United States Government Organization Manual. 1954-55.

(6) Relief, rehabilitation, and other multilateral programs.-FOA administers such programs as relief and rehabilitation in Korea and payment of ocean freight subsidies. It coordinates operating aspects of international programs dealing with refugees and migration, including the United Nations Children's Welfare Funds and others. It assists NATO activities, gives support to the Organization for European Economic Cooperation, participates in the European Payments Union, and in joint control arrangements like Austria and Berlin, and administers Irish counterpart funds, as well as administering provisions of the Mutual Defense Assistance Control (Battle) Act (65 Stat. 644; 22 U. S. C. 1611-1613c).

(7) Emergency programs.-FOA has also undertaken fiscal and other responsibilities for certain emergency programs as directed by the President. These have included wheat to Pakistan, emergency aid to Bolivia, food parcels to residents of East Germany, evacuation of North Vietnam and the Tachen Islands, etc.

FOA administers certain other programs, sometimes involving several of the above categories, in connection with its principal activities. These programs include: Assistance to small business, encouragement of free enterprise and private investment, investment guaranties, programs to strengthen free labor unions overseas, export and sale of surplus agricultural commodities, and plans for use of counterpart funds generated by any phase of the aid program.

Organization at Home

To administer these diversified programs, the agency is organized on a regional basis with supporting technical and management staffs, closely paralleling the organization of the Department of State. The specialist knowledge in fields such as commodities, trade and investment, transportation, industrial resources, public services, etc., is provided within FOA by various offices under the Deputy Director of Technical Services. Officers on the country desks and in the regional offices provide the specialized knowledge of the individual countries and areas.

The FOA uses a number of techniques, both in Washington and overseas, for advancing its programs, particularly in respect to technical assistance and economic development. Chief of these is the contract between FOA and private firms, Government agencies, American universities, or other groups. These contracts are intended to simplify administration, ease recruiting problems, extend the person to person relationship underlying technical assistance, and encourage the eventual continuation of the programs on a nongovernmental basis.

Through the use of contracts (or interagency agreements in the case of other Government agencies) FOA advances both its domestic and its overseas activities. Its domestic contracts involve technical "backstopping" of its overseas activities and also the training of foreign nationals in this country. Overseas, contract personnel carry out many of the foreign aid projects and often extend a kind of on-the-job training for foreign nationals in connection with the projects.

Organization Abroad

Overseas, the Foreign Operations Administration maintains in about 50 countries its own personel system which parallels that of the Department of State, although its duties may be described as primarily operational rather than policymaking or diplomatic in nature. In only a very few scattered cases is the FOA mission staff fully integrated with the economic staff of the embassy, although the work of the two groups is coordinated, to a greater or lesser degree, in many countries. The relations between the FOA mission and the embassy vary greatly from country to country depending more on the personality of the chiefs of each group than on the organization. In many cases, FOA's overseas arrangements include separate provisions for administrative support, such as communications, personnel, pay, etc., which duplicate similar functions performed by the overseas missions of the Department of State.

Multiplication and duplication of overseas staffing and administrative arrangements has been brought to the attention of the task force and its staff on many occasions and in connection with many countries.

Discussion

The functions of the Foreign Operations Administration cut across the domestic functions of many other agencies. To prevent duplications in these areas, the President has directed FOA to utilize advice, assistance, and support from the qualified agencies of the Government on a reimbursable basis. In following this directive, FOA has entered into agreements with Departments like Agriculture, Interior, Labor, and Health, Education, and Welfare, for the provision of technical personnel and assistance. However, FOA has also sought to expand its own staffs in many of these fields and has often insisted that personnel sent overseas be placed on FOA personnel rolls rather than left on a department's roster.

FOA programs in connection with small business and trade and investment involve direct dealing with American firms and individuals on a domestic basis, which duplicates domestic functions which are

the statutory responsibility of other agencies, such as Commerce or the Small Business Administration.

In the case of direct forces support, FOA is operating programs which have direct military objectives and are closely allied with the military programs administered by the Department of Defense, though direct forces support may include many economic facets. Since this type of program has clear military objectives, its administration and operation could more effectively be handled by the Department of Defense in connection with its responsibilities for military assistance, except where it involves common-use items which have more economic than military impact.

The regional staffs of FOA in Washington have functions which are closely parallel to those of the regional bureaus of the Department of State. Likewise, the FOA Office of the Deputy Director for Technical Services has functions which in many respects are the same as those of the Bureau of Economic Affairs of the State Department. FOA administers a broad technical exchange program, as an adjunct of its aid programs, which closely parallels the international education activities of the Department of State. Unified operation of the administrative phases of these programs would result in increased effectiveness and economy.

Overseas, more economical and effective operations would result from an integration of the staffs of FOA, the Department of State, and other agencies in each country, permitting the elimination of duplicate administrative services. Such an integration would strengthen the relations of the United States in each country by eliminating multiple voices. Provisions for a strengthened foreign officers' corps would also improve the overseas organization and effectiveness of the foreign aid program.

Improvements in these areas would be facilitated by a transfer of the major functions of FOA to the Department of State.

Certain programs of FOA appear to have advanced to the stage where the recipient countries can continue them without United States aid and other programs have achieved their objectives to the extent that seems feasible. These include the productivity and economic aid programs in almost all of Europe which can be completely terminated without impairing the strength of our European allies, and should be. Programs for payment of ocean freight on the shipments of voluntary relief agencies, while effectively administered, may encourage too much Government dependence on the part of private groups and extend beyond the usual scope of Government activity. They too should be eliminated.

II. Department of State

The Department of State has primary responsibility, under the President, for the formulation, execution, and continual review of United States foreign policy, and for guiding and coordinating its execution by other agencies. Its responsibilities are almost wholly overseas in nature, but only partly economic. In carrying out these responsibilities, the department represents the United States in international organizations, conducts negotiations with other governments, and collects, analyzes, and disseminates data used in developing foreign policies and programs.

The broad responsibilities of the State Department noted above include many specific functions bearing of foreign aid programs. Some of these include:

1. Development, guidance, coordination, and execution of aid policy. The Department of State looks over the shoulder of FOA at each stage of development and operation, having, in effect, a veto over program operations when they impair policy objectives. General guidelines for development of the FOA program for each country are worked out by both agencies. State also joins FOA in a twoplatoon presentation of the program before the Bureau of the Budget and the Congress. The department is also represented on the board of directors of the Institute of Inter-American Affairs, FOA agency for Latin America.

State's policymaking duties extend to lending activities of the Export-Import Bank, release of counterpart funds generated by foreign aid grants, foreign exchange rates or restrictions which may affect the amount of counterpart, and use of foreign currencies acquired by the United States Government. The programs for disposal of surplus agricultural commodities abroad are subject to policy guidance and coordination from State, as are programs for disposal of other surplus property abroad, or for the purchase of raw materials or commodities for stockpiling.

2. Negotiations with other governments. These policy decisions, as well as all foreign aid programs, are put into effect by means of various international agreements, all of which are negotiated by the Department of State. Treaties and agreements on reciprocal trade; double taxation; friendship, commerce, and navigation, also negotiated by State, are important in overseas economic operations.

3. Representation in international organizations and in foreign countries.-State Department responsibilities in connection with United States membership in international organizations also involve