“This is a major step toward building a 21st-century approach and apparatus for promoting development, which President Obama’s first National Security Strategy (NSS) called a “moral, strategic, and economic imperative” for the U.S. It is also a long overdue step, as U.S. foreign assistance legislation has not been overhauled since President Kennedy signed the Foreign Assistance Act of 1961.”

“A fourth noteworthy strength of the draft bill is that it sets clear goals to guide the U.S. approach to development and the allocation of development assistance funds. Without doubt, these goals and principles will be subject to debate and modification, but the draft does a huge service by outlining a set of thoughtful concepts for discussion. Having a set of agreed upon principles to guide our assistance programs would provide a level of understanding and transparency that has long been missing from U.S. assistance programs.”

“Let’s be clear. This is a working draft that will be subject to considerable discussion and modification. There are questions about various provisions. Why create a new, separate funding pot “development support funds” and will that really ease the current funding allocation morass? Is it smart to require an MCC-type 100% upfront funding of projects? How can the important provision on monitoring and evaluation be formulated in a way that does not detract from the innovation and risk taking that the draft seeks to promote? Some will want the draft to go into more detail on specific provisions; the administration and others are likely to prefer less detail.”

MFAN Principal, GMF Senior Transatlantic Fellow and former U.S. Representative Jim Kolbe kicked off the session with remarks about how the U.S. has lacked a real development strategy since the Marshall Plan, which helped to rebuild Europe following World War II.  With recent renewed attention to U.S. development policy – the ongoing Presidential Study Directive on development (PSD), the Quadrennial Diplomacy and Development Review (QDDR), House Foreign Affairs Committee Chairman Howard Berman’s rewrite of the 1961 Foreign Assistance Act, and President Obama’s recent statement at the G8 Summit on “A New Approach to Advancing Development” – Kolbe said it’s critical that these studies and drafts lead to a unified outcomes-based approach.

In a brief presentation on the paper, Kunder said the U.S. must ask itself, “What would success look like?”  He said the U.S. government currently lacks a coherent vision of the role of development in U.S. foreign policy.  He also added that there is no real quantitative basis for funding requests made for aid programs, nor does a strong monitoring-and-evaluation system currently exist to measure progress and results.  By defining the so-called endgame, a U.S. development strategy should:

• Have a clear mission
• Be able to measure impact
• Create a systematic focus on development (as opposed to one based on security or emergency assistance)
• Provide for greater flexibility and partnership on the ground
• Set nations on a sustainable path

Focusing a U.S. development strategy on outcomes will also demonstrate foreign aid’s impact on a global scale, making it more communicable to American taxpayers.

The model uses the existing State Department’s “F” Bureau country ranks – Rebuilding, Developing, Transforming, and Sustaining – and USAID spider graphs (pictured) to formulate a gap analysis.  The authors argue that having a clear metric for a sector where a country is falling behind can serve as justifiable evidence for funding when it comes time to make the case to Congress.  And funding in a specific sector will help the country advance to the next country rank.  However, there was also concern expressed during the discussion of the paper about the need for qualitative analysis to measure long-term development impact, not just short-term outputs.

Kunder acknowledged that the model is not perfect, but that it is a starting point for policy planning and budget allocation – all the more necessary given the limited resources we currently have.  MFAN Principal Sam Worthington, President and CEO of InterAction, was the lead respondent in the discussion, arguing that while the model reconciles allocation of resources with the political resonance of social change, it does not adequately address the principle of country ownership and could continue the top-down distribution of aid.

The paper is timely given the yet-to-be-released reviews on development and the Obama Administration’s Feed the Future food security initiative and the Global Health Initiative, which are now being operationalized.

Read about MFAN’s call to action urging the President to show leadership on creating such a global development strategy as well as on engaging with Congress on comprehensive foreign assistance reform.

To join MFAN’s effort to urge President Obama to show leadership on foreign assistance reform and strengthen the U.S. commitment to development, please sign our Open Letter to the President, which has already been endorsed by more than 70 organizations and prominent individuals.

CQ WEEKLY – IN FOCUS
July 19, 2010

Backers Say Time Is Ripe For Foreign Aid Overhaul

By Emily Cadei, CQ Staff

The earthquake that slammed Haiti in January also rocked the U.S. Agency for International Development and its brand-new administrator, Rajiv Shah, who were promptly assigned to head up the civilian U.S. response to the disaster. The experience of the next several months afterward was eye-opening and “helped me shape my agenda for reform for the agency writ large,” Shah said in a speech last month.

That agenda is packed, given the multitude of challenges facing USAID, an agency once viewed as the country’s lead repository for expertise on international development. But its role has declined over the past decade into what the chairman of the House Foreign Affairs Committee, Democrat Howard L. Berman of California, describes as “somewhat of a contracting agency where money passes through without a creative and well-staffed process.”

Shah says the rapid mobilization of USAID after the quake demonstrated that much of that expertise, although often dormant, still exists. The Haiti response, he said in an interview, shows there are “so many different ways where this agency could be nimble, it could move quickly, it could be focused on results,” as opposed to “just getting money out the door.”

Development experts say that while Shah is moving ahead with a package of operational changes at USAID, both President Obama and Congress will ultimately need to weigh in to better delineate both the over-arching strategy and the chain of command for U.S. international development operations in the 21st century. While there is a broad consensus about the general changes that need to be made, many of the more controversial details still need to be decided, including how the authority gets divvied up among the government agencies involved.

Congress is driving the reassessment of development policy already under way with a series of legislative initiatives from Berman and the two leaders of the Senate Foreign Relations Committee: Chairman John Kerry, a Massachusetts Democrat, and top Republican Richard G. Lugar of Indiana. But before progressing further, these lawmakers and development officials are waiting for the White House to deliver its vision for development as a pillar of its foreign policy, as well as demonstrate the political leadership to implement that vision.

Backers of a foreign aid overhaul say they will need buy-in across parties, congressional chambers and branches of government. These development boosters say that Obama elevating the role of foreign aid in places such as Afghanistan, combined with a group of allies in important positions — including Defense Secretary Robert M. Gates and top Senate and House leaders — makes the next 18 months a rare window of opportunity to reconfigure the architecture for international development to an extent not seen in half a century, since Cold War foreign aid policies were set by the Foreign Assistance Act of 1961. If they don’t succeed, backers of an overhaul worry that it could be another 50 years before they get as good a shot.

Beyond the Crisis

A disaster like the quake in Haiti “plays to AID’s strength, because it has a very strong, positive history in responding to humanitarian emergencies,” says George Ingram, a former deputy assistant administrator at the agency who’s now co-chairman of the Modernizing Foreign Assistance Network, a coalition put together two years ago to advocate for aid changes.

“What doesn’t get attention is those 50 to 60 countries that are relatively stable, not-so-well- or moderately well-performing, and are really the countries that are struggling for how to do development better,” Ingram says. “That’s sort of the day-to-day meat and potatoes of USAID.” The challenge, he says, is to put in place a structure that lifts some of the stifling bureaucracy and allows USAID “to do what Shah wants to do — be more creative, be more responsive, be more analytical, engage your local stakeholders more.”

Shah, who before joining the Obama administration spent seven years working on global economic development for the Bill and Melinda Gates Foundation, expressed the desire to introduce “some of the flexibility we have in our humanitarian relief operations,” such as in Haiti, more broadly across the organization. “I would like to replicate that capability throughout our agency,” he says.

Flexibility is exactly what Berman is hoping to achieve with a rewrite of foreign aid policy that he and his committee staff have been working on for the past two years. After a series of meetings and discussions with lawmakers, government officials and representatives of nonprofit aid organizations, Berman unveiled an initial draft this month. If Democrats hold the House this fall, he hopes to win passage of the legislation next year.

Drafters are hoping to write a bill that, in the words of one Berman committee aide not authorized to speak about the matter, would embody “a new grand bargain” of “accountability in exchange for flexibility.” The president would have to provide more detailed information about his international development plans and set ways to measure their results, the aide says, and in exchange Congress would “lighten up on the very specific directives and earmarks.”

The trick will be in getting all involved — lawmakers, the White House, the State Department and the non-governmental organizations — to endorse that system. Of course, the legislation would have some specific mechanisms for limiting congressional earmarks for specific projects — by creating, for example, accounts that would be reserved for certain countries or types of aid, such as for farmers or HIV/AIDS eradication.

But mostly, the drafters are hoping an overhaul of the system will by itself reduce the inclination to earmark. “When you have a coherent, intelligent process, where there is a rational examination by the agency, a rational process of determining some national priorities and a built-in flexibility to allow a significant amount of resources to be shaped by the mission and the country,” says Berman, “I think the temptation to do this becomes less.”

Forging Consensus

Such a grand bargain would also require an unprecedented level of coordination between the executive branch and Congress. “The biggest thing that needs fixing is to get the Congress and the administration maybe not on the same page but on the same playing field,” instead of everybody “going at it in their own little way,” says Ingram.

The Obama administration is in the midst of two major policy reviews — the Quadrennial Diplomacy and Development Review being run by the State Department, and a National Security Council review of foreign aid, both of which have dragged on longer than initially intended.

The administration kick-started the reviews last year after Berman wrote language into the State Department reauthorization bill that would mandate the processes. The bill quickly stalled in the Senate after passing in the House, but it’s clear that “Congress got this process going,” says David Beckmann, president of the anti-hunger advocacy group Bread for the World, and Ingram’s co-chairman at MFAN.

Until both policy reviews are complete — likely by early fall — the administration has declined to provide any formal feedback to Congress’ activities to overhaul the foreign aid process. But development experts are starting to get restive, with several former USAID administrators issuing calls in the past few days for faster action.

One thing they would like to see the president outline is an over-arching rationale for American foreign assistance programs. “Only the president can clarify the mission,” says Gregory Adams, aid effectiveness director at the global humanitarian group Oxfam. Obama, he says, needs “to define what we are going to do and what we’re not going to do and how we make choices about that.” The legislation from Congress, Adams says, can then provide “the statutory framework to support that.”

The same groups of people are also looking for the president to take a stand on the long-running debate over the relationship between the State Department and USAID. During George W. Bush’s presidency, the aid agency was effectively subsumed more deeply under State. But for years, there has been a debate over how much autonomy USAID should have — something that has played out most recently over Caribbean earthquake relief.

“The Haiti response has made clear a lot of the divisions going on between State and USAID over who should be in charge and what should happen,” one senior congressional aide says. This split in authority was evident in something as simple as the State Department’s briefing last week on the six-month anniversary of the quake. Cheryl Mills, Secretary of State Hillary Rodham Clinton’s chief of staff and lead counselor on issues surrounding Haiti, fielded questions while Shah played backup.

The Senate Foreign Relations Committee was so concerned about the lack of a clear government head of the Haiti rebuilding effort that it proposed, as part of a relief measure it approved in May, establishing a new coordinator position under Clinton to oversee the government’s policies.

Clinton’s involvement in development, as well as that of some of her key deputies — including Jacob J. Lew, her deputy secretary for management who was tapped last week to become White House budget director — is lauded by many development boosters, but it has added heat to the turf battle still playing out.

State has already signaled its displeasure with part of Berman’s plan. An internal department e-mail, sent earlier this month to solicit comments on the chairman’s draft, noted it would create a development policy committee that included the secretary of State “only as a co-equal member as opposed to placing her as the lead, as had been earlier requested.” Other provisions “do not vest authorities in the secretary, as had been requested for comparable provisions.”

Berman has held off taking an explicit position on just how the relationship between State and USAID should break down. But, he says, “As a general principle I want to elevate the role of development, and therefore I want to elevate the role of AID.”

Clinton, he acknowledged, is “a big friend and big booster of development,” but to make the changes enduring, “you can’t make decisions based on any one person that is in any one position at a given time.”

FOR FURTHER READING (Note: a subscription to CQ is require to access additional reading.): Lew, p. 1759; fiscal 2011 foreign aid spending, CQ Weekly, pp. 1629, 1274; State Department reauthorization (HR 2410), p. 44; fiscal 2010 foreign aid spending (PL 111-117), p. 28; background, 2009 CQ Weekly, p. 1303; Foreign Assistance Act (PL 87-195), 1961 Almanac, p. 293. The Senate Foreign relations’ Haiti relief bill is S 3317 .

U.S. Global Leadership Coalition – “USGLC Disappointed with House Cuts to International Affairs Budget” (Andy Amsler): USGLC released the following statement from Executive Director and MFAN Principal Liz Schrayer saying, “The U.S. Global Leadership Coalition (USGLC) is greatly disappointed that House Appropriators have cut funding for the International Affairs Budget and is concerned about the impact this will have on our national and economic security.  Now is not the time to shortchange our non-military tools of development and diplomacy given today’s global challenges.”

Center For Global Development – “House Cuts President’s FY2011 Development Budget” (Sarah Jane Staats): “House appropriators marked up the FY2011 foreign affairs spending bill at $52.656  billion yesterday. The subcommittee mark up is roughly $4 billion above last year’s enacted levels, but also $4 billion below the president’s request for FY2011. My takeaway: this budget looks like more of the same and is a long way from a new approach to global development.”

ONE – “Taking a Step Back on America’s Commitments” (Sheila Nix): “Congress has decided to step back on America’s commitments to a global food security initiative — a decision that will have a ripple effect on budgets to come… ONE hopes that Congress will continue America’s world leadership in difficult times, restore the International Affairs budget, and keep its commitments to the most vulnerable people in the world.”

What do you think about the House decision to cut the International Affairs Budget?  Leave your thoughts in the comments section below.

June 28, 2010 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs David Beckmann and George Ingram:

MFAN commends President Obama for showing leadership on development with his statement at the G8 Summit in Muskoko.  We continue to strongly support the Administration’s efforts to elevate and institutionalize the idea, most recently articulated in the National Security Strategy, that fighting global poverty is a “moral, strategic, and economic imperative for the United States,” as well as a key component of our “comprehensive, integrated” foreign policy in a world of complex challenges.

We eagerly await the impending release of the development policy directive highlighted in the G8 statement, and we support the general themes of growth, innovation, partnership, and accountability that were affirmed in the document.  We are particularly hopeful that the directive will answer a critical question that has not yet been addressed by the Administration: How will the U.S. foreign assistance system be modernized to institutionalize the importance of development, make U.S. assistance more responsive to local priorities, and deliver transformative results for the poor people we are trying to help?

In conjunction with the release of the directive, we call on the Administration to take three important steps to catalyze and strengthen the reform process:

• Fill the senior leadership void at the United States Agency for International Development (USAID), which currently lacks the full complement of Deputy Administrators and Assistant Administrators needed to effectively execute the Administration’s new approach;

• Prepare America’s first-ever Global Development Strategy ahead of the Millennium Development Goals (MDG) Summit in September, in order to set a strategic foundation for U.S. development efforts and deliver on the President’s pledge to announce “a plan” for how the U.S. will contribute to eradicating extreme poverty by the MDG deadline in 2015; and

• Announce now that the Administration will work with Congress to modernize foreign assistance in a durable way, including by rewriting the antiquated Foreign Assistance Act of 1961.

We look forward to continuing to work with the Administration and Congress to make U.S. foreign assistance more effective in support of global development and poverty reduction.

In a new report – “Capacity for Change: Reforming U.S. Assistance Efforts in Poor and Fragile Countries” – by co-authors Noam Unger (Fellow, Global Economy and Development, Brookings Institution and MFAN Principal), Margaret Taylor (Council on Foreign Relations International Affairs Fellow with the Center for Strategic and International Studies Post-Conflict Reconstruction Project), and Frederick Barton (former co-director of the CSIS Post-Conflict Reconstruction Project), policymakers are presented with key recommendations to inform a coherent and effective national approach to both stabilization and broader development.

As the Obama administration moves through two strategic reviews – the Presidential Study Directive on U.S. Global Development Policy and the State Department’s first-ever Quadrennial Diplomacy and Development Review – the report concludes that “there is a stunningly broad consensus that improvement is needed across the board” on how the U.S. government provides foreign aid.  The report also predicts that “new presidential decisions and policies are expected” from the administration this spring on key questions around foreign assistance and the elevation of development as a strong pillar of U.S. foreign policy.

The authors go on to argue that “it is a critical national security priority to develop effective strategies and strengthen the civilian capacity of the U.S. government to better assist poor and fragile countries.”  This includes high-priority conflict zones such as Afghanistan, Pakistan, Iraq, and Yemen, as well as nations ranging from Haiti to Sudan, and Chad to Vietnam.

The report is also critical of the return on investment of donor efforts, including the U.S., in poor and fragile countries.  In particular, it highlights the lack of a National Strategy for Global Development and how “this nonstrategic approach has resulted in a lack of capabilities to effectively direct and implement assistance.”

First, on developing an effective strategy, the report recommends that the U.S. government:

• Pursue selective bilateral engagement, balanced with leveraged multilateral engagement;
• Pursue specialization and a division of labor among partners in development; and
• Establish a National Strategy for Global Development and ensure close alignment between its recommendations and successive Quadrennial Diplomacy and Development Reviews.

Second, on interagency balance and structural changes, it recommends that the U.S. government:

• Adopt a unified security budgeting process and increase funding for the State Department and the U.S. Agency for International Development (USAID);
• Elevate and empower USAID, beginning with the amendment of PPD-1;
• Divide up and reassign the functions of the Office of the Coordinator for Reconstruction and Stabilization, with interagency coordination responsibilities housed at the National Security Council; and
• Craft a civilian-military road map for transferring assistance authorities and responsibilities to civilian agency control.

Finally, on institutional changes, it recommends that the U.S. government:

• Build up the cadre of technical experts in partnerships and the design, management, monitoring, and evaluation of projects and programs;
• Develop robust policy planning capacities at both the State Department and USAID;
• Prioritize training on assistance issues and preparation to perform assistance functions; and
• Transform the executive branch’s congressional relations and public communication on assistance issues.

To read the full report, click here.

• Strengthening democratic institutions
• Promoting economic growth, development, and reform
• Improving health, including combating HIV/AIDS and other epidemics
• Preventing and resolving conflicts
• Working to resolve transnational challenges
• Supporting a strategic dialogue with Angola, Nigeria, and South Africa
• Striving for greater diplomatic presence
• Improving public affairs outreach through American centers

See excerpts from his testimony below that use reform language to shape policy:

“The Obama Administration is committed to a positive and forward-looking policy in Africa, but we know that additional assistance will not automatically produce success across the continent. Instead, success will be defined by how well we work together as partners to build Africa’s capacity for long-term change and ultimately eliminate the continued need for such assistance.”

“The United States is committed to supporting a new Global Hunger and Food Security Initiative, which builds upon the model of the African-led Comprehensive African Agriculture Development Program (CAADP) to partner with countries and other development partners to reduce hunger, poverty and undernourishment. The President’s commitment of at least $3.5 billion over three years to agricultural development will help us work with African farmers to employ new agricultural methods and technologies, and help them deliver their production to markets.”

“The United States also wants to strengthen its trading relationship with Africa…We also continue to explore ways to promote African private sector growth and investment, especially for small and medium-sized businesses…In the midst of these efforts, we cannot forget the critical role African women play as producers and agricultural traders – they must take part in this economic growth. We must ensure that African women are an equal part of Africa’s economic future and success.”

“Since GHI aims to maximize the sustainable health impact the United States achieves for every dollar invested, we will work in partnership with African governments and civil society, supporting their efforts to ensure that high-quality treatment, prevention, and care are accessible to communities throughout Africa. We will also engage in dialogue with partner countries, multilateral organizations, and other donors to ensure that there is a shared global response to global health needs.”

Last Thursday, the Center for American Progress (CAP) hosted House Foreign Affairs Committee Chairman Howard Berman (D-CA) and a group of experts as part of the Center’s Sustainable Security series.  Berman headlined the event titled, “U.S. Global Development Policy in the 21^st Century: Implications for Reform.” Just last year, Berman was leading the reform charge on the Hill by introducing the Initiating Foreign Assistance Reform Act (H.R.2139) alongside Rep. Mark Kirk (R-IL).  The bill, which calls for a National Strategy for Global Development, now has 125 bipartisan cosponsors. Since then, Berman has begun the process of rewriting the outdated Foreign Assistance Act of 1961 – set to be released in the coming months.  MFAN Principal Peter McPherson, former Administrator of the U.S. Agency for International Development (USAID), sat on a panel alongside:  John Norris, Executive Director, Enough; Eli Adashi, Former Dean of Medicine and Biological Sciences and the Frank L. Day Professor of Biology, Brown University; and Ambassador Wendy Chamberlin, President, Middle East Institute.  See excerpts from Berman’s keynote speech and Peter McPherson’s remarks after the jump:

“National security, human security, and collective security must be reflected in U.S. foreign policy and global development policy.”-Chairman Berman

“There is also a coordinated effort among NGOs, corporations, [and] foundations to keep foreign assistance reform on the national agenda and to make sure those of us in Congress are focusing on this issue.” -Chairman Berman

“Many Republicans are talking about foreign assistance reform…there is nothing partisan about making foreign assistance more efficient and effective.” -Chairman Berman

“We want to determine a clear definition with the new bill, but also take into account the Administration’s reviews [PSD, QDDR].” -Chairman Berman

“USAID also needs policy capacity, and people…We all know how to make USAID better, how to get it right.” -Peter McPherson

“We have an iron triangle: advocacy orgs, Administration and congressional earmarks…no place for developing countries.” -Peter McPherson

The President’s FY11 International Affairs Budget request represents only 1.4% of the entire federal budget and less than 7% of national security funding.    Knowing the great need that exists for more funding for development and diplomacy, the military leaders close their letter saying, “we urge you to support no less than the Administration’s request of $58.5 billion for the International Affairs Budget.”

The Modernizing Foreign Assistance Network, of which USGLC is a member, identifies increased funding and accountability of foreign assistance as a priority action in “New Day, New Way: U.S. Foreign Assistance for the 21st Century.”

Click here to view the letter.

In an effort to address the many global challenges the U.S. faces today through increased partnership and multilateral engagement, Congressman Russ Carnahan (D-MO) and Congressman Anh “Joe” Cao (R-LA) created the American Engagement Caucus.  The new caucus establishes a forum for Members to discuss best practices and lessons learned from international bodies like the United Nations and the African Union and partnerships made between countries to overcome threats.  A statement from the caucus reads “America’s security, economic, environmental, and moral interests are inextricably linked with those of the international community.  The United States must find creative new approaches for working with other nations to create a safer, more peaceful, prosperous, and just world.”

MFAN Principal and President and CEO of InterAction Sam Worthington noted, “We are pleased to have the opportunity to work with the new American Engagement Caucus and Representatives Carnahan and Cao as we draw on our common goal of an American foreign policy that demonstrates in word and deed the desire of the American people to work in a bipartisan manner with all of our partners and with multilateral institutions to build a more just and sustainable world.”

The American Engagement Caucus is guided by the following principles:

• Smart Power: To achieve its security objectives, America must project smart power—a blend of military strength and creative diplomacy. America always reserves the right to act in service of its national interests, but prefers and prioritizes international cooperation to address common concerns and shared objectives
• Don’t Go It Alone: In today’s interconnected world, America can’t go it alone. International cooperation is a better way of addressing some of the world’s key problems, whether they are economic problems, environmental problems, or problems of peace and war.
• Cooperation and global partnerships are essential for security: Given threats from terrorist groups ad unstable foreign regimes with nuclear capabilities, working with other countries around the world is essential to our security. Other nations can help shoulder the burden of counterterrorism efforts, especially in regions where the U.S. may lack access and leverage. And America must balance our military might with diplomacy in order to successfully address global security challenges like nuclear proliferation and terrorism.
• International engagement expands trade opportunities: By creating new international markets, we cancapitalize on the power of American innovation to spur economic development and job growth here at home.
• A srong relationship between the U.S. and the United Nations is key to rebuilding alliances and keeping us safe: Our standing in the world is in large ways shaped by and representative of our engagement with the United Nations. It is in America’s economic, environmental and security interest to work with the UN to solve global challenges.
• America’s economic and environmental interests are irrefutably connected: Addressing climate change through new, clean energy strategies will reduce our dependence on oil, revitalize the American heartland and give developing countries a chance to meet their own energy needs and alleviate poverty.

Current membership for the American Engagement Caucus includes:

• Russ Carnahan (D-MO)
• Anh “Joseph” Cao (R-LA)
• Brad Miller (D-NC)
• Laura Richardson (D-CA)
• Bill Delahunt (D-MA)
• Joe Sestak (D-PA)
• Dave Loebsack (D-IA)
• Eddie Bernice Johnson (D-TX)
• Mike Honda (D-CA)

Click here to read an op-ed from The Hill on the American Engagement Caucus