The US Agency for International Development will unveil early next year a comprehensive strategy for improving American democracy and governance in developing countries. In an interview with the Financial Times, Andrew Natsios, the USAID administrator who steps down at the beginning of next year, said the democracy strategy was a key milestone in the re-orientation of US aid programmes to focus on issues of effective governance alongside traditional development projects Mr Natsios also confirmed that the administration was drawing up proposals for a broader overhaul of the organisation of US foreign aid, but would not discuss details, saying some of the final decisions had yet to be made. He said there were structural issues that needed to be addressed, in particular the fragmentation of responsibility for development programmes across different departments and agencies in the US government. ”There are problems that need to be addressed for the protection of the president`s legacy on foreign aid.” With the Bush administration`s commitment to spreading democracy and repairing failed states that might harbour terrorists, foreign aid has become an increasingly critical part of the overall US national security strategy. Since 2000, the US aid budget has doubled from $10bn to more than $20bn this year. But Mr Natsios said aid programmes could still be making a much greater contribution to US security. A senior US general recently told him that in Baghdad`s Sadr City – a poor, Shia-dominated neighbourhood – ”in the areas you have programmes, I have almost no casualties. In the areas you have no programmes, I have very high casualty rates”. He said the general told him ”there`s a direct connection between your programming and how people feel about the US presence in Iraq”. Mr Natsios said domestic political pressures had made it difficult to re-orient US aid to support democracy-building. ”American foreign aid is driven to some degree by domestic constituencies and domestic interests in a way which is not necessarily responsive to the problems of the developing world, which is the purpose of the programme. It responds to our culture wars and our issues here domestically.”