Shah used the visit as an opportunity to rethink U.S. aid to Pakistan, announcing that some of the funds from the five-year, $7.5 billion aid package will be redirected to assist in flood-related relief and recovery.  Shah showed great flexibility, saying “I fully envision some of the priorities will have to shift, and shift so that there’s more of a recovery and reconstruction focus.”

Since Congress passed the Kerry Lugar bill for aid to Pakistan last year, the Agency has spent time determining where the aid can be most impactful.  Secretary Clinton recently announced the aid would be geared toward large-scale water and energy projects.  And Ambassador Holbrooke has stressed that the aid will go directly to the Pakistani government and organizations.  While Shah noted $50 million of the funds will be immediately redirected to emergency relief, he also said “we will need to reassess the full extent of our commitment to the people of Pakistan and do whatever is most appropriate and most effective to really help people recover.”

Though top ranking officials lament the country won’t see significant progress on reconstruction for years, Shah pressed that this is an opportunity to build more sustainable systems and services.  The new Administrator exercised innovation – assisting in the launch of an information-sharing system using Pakistan’s Humari Awaz cell phone network.  In describing the tool for an interview on Pakistan Radio, Shah said, “We are pleased that Pakistan has a forum for information sharing that people everywhere can use to engage each other in the flood relief effort.  Information sharing can help connect people to resources to aid in disaster recovery and to engage one another in problem-solving.”

Apart from the flexibility – on the ground and in Washington – and the innovation already being exercised as part of the relief effort, Administrator Shah touched upon principles of effective aid he hopes to see as reconstruction moves forward.  As part of a piece on PBS News Hour, Shah said, “I am thankful that Minister Qureshi and others…have also indicated their full commitment to making sure that relief efforts are transparent, resources that go in are accounted for, and there’s real verification, so that we can all continue to stand by the people of Pakistan during this hour of humanitarian need.”

Text FLOOD to 27722 to give $10 or go to www.state.gov to learn more about how you can help in the relief effort through the Pakistan Relief Fund.

Coverage of Shah’s visit by the Associated Press cites Shah alluding to a report on foreign assistance programs — presumably the Presidential Study Directive or PSD-7 — coming out next month.  Referencing the aid programs spread across the U.S. government, AP reporter Donna Gordon Blankinship writes, “There are no plans to consolidate that work, Shah said, but the administration is concerned about efficiency and transparency and growing the reach and effectiveness of foreign aid. A report on these efforts is due out within the next month.”

Other speakers at the Global Washington event included Prema Arasu, associate vice president for international programs at Washington State University; Akhtar Badshah, senior director of global community affairs at Microsoft; Sylvia Mathews Burwell, president of the Bill & Melinda Gates Foundation’s global development program; and PATH CEO and President Christopher Elias.

Read more on the event here.

“To date, only one official — USAID Administrator Raj Shah — has been confirmed. While Shah has skilled and capable leaders in his front office and throughout the agency, several of whom have been doing yeoman’s work in acting positions, it is unconscionable that all remaining management seats remain unfilled 18 months into this administration. Shah cannot captain the USAID ship without a crew.”

“USAID cannot be the premier development agency everyone envisions without appointed and confirmed leaders at the helm of its regional and functional bureaus. Nor can it elevate development across the U.S. government — as Obama, Secretary of State Hillary Clinton and even Secretary of Defense Robert Gates have called for — without a full cadre of assistant administrators to inform major development policy reviews taking place right now and congressional efforts to rewrite foreign assistance legislation.”

Josh Rogin later reported on The Cable that President Obama intends to nominate Nancy Lindborg — current President of Mercy Corps and MFAN Principal — to be Assistant Administrator for USAID’s Democracy, Conflict, and Humanitarian Affairs Bureau, as well as nominate Donald K. Steinberg to be Deputy Administrator of USAID.  The other names working their way through the nomination process are: Mark Feierstein to be Assistant Administrator of Latin America and Nisha Desai Biswal to be Assistant Administrator of Asia; both were approved by the Senate Foreign Relations Committee last week.  The Obama Administration is now batting 5 out of 12 for Senate-confirmed leadership positions at USAID.

Obama Administration Starts Delivering on Aid Transparency

18 months in, the Obama administration is starting to deliver on its commitment to transparency within U.S. foreign assistance programs and policy.  On July 30, USAID Administrator Rajiv Shah unveiled the new U.S. strategy for meeting the Millennium Development Goals “Celebrate, Innovate, and Sustain: Toward 2015 and Beyond”.  We applaud the announcement, which includes launching an ‘aid transparency initiative,’  and look forward to seeing concrete timelines, detailed plans and robust policy that will ensure the potential of this initiative is brought to life.

The Strategy commits to “improving the transparency of aid flows”[i] to address “data shortages, comparability problems [as] large lag times weaken [U.S.] ability to measure progress toward the Goals”[ii]:

“We will start by launching a major aid transparency initiative. In collaboration with U.S. agencies, other donors, and partner governments, we will identify the most appropriate timelines and channels to disseminate country‐level information about aid flows. After undertaking country pilots, the approach may then be scaled up. We will also seek to establish common reporting frameworks and develop an Aid Dashboard that allows stakeholders to visualize U.S. foreign assistance investments by geographic area or sector, see the details of specific projects, and track trends over time.”[iii]

We greatly welcome the focus on working with other donors on practical pilots and comparability to other stakeholders’ efforts. Without comparable aid information, the U.S. will continue to face serious challenges to minimizing duplication as well as complimenting and leveraging other donor and recipient countries’ resources.  Comparability is critical to maximizing the impact of U.S. money.  The most effective way for this to happen is for the U.S. to invest in and coordinate with emerging international standards (see the International Aid Transparency Initiative for more detail).  It is essential that this focus on comparability is extended to the design of the Aid Dashboard and pilots.

To get the most from this important U.S. investment in aid transparency, the U.S. must work with other donors. This means working with them both in the field pilots and to extend the visualisation to include non-U.S. aid flows and with time the ability to map it to recipients’ own resources.

U.S. global leadership in aid transparency is needed to turn the promise of this strategy into reality.  At this pivotal moment we need to see:

• concrete timelines for delivering the policy paper to implement the Strategy as well as the pilots by December 2010; and
• details on the piloting process including which countries, what elements of donor transparency will be tested, which other donors they will work with.

With these elements in place to support the strategy the U.S. will truly begin fulfilling President Obama’s commitment to transparency made on his first day in office and lay the foundation for delivering on the potential of U.S. foreign assistance.

[1] Celebrate, innovate and sustain: Toward 2015 and beyond. The United States’ strategy for meeting the Millennium development goals

July 2010. P. 3

[1] Ibid. 13

[1] Ibid. 27

• Senior Deputy Assistant Administrator for Management Drew Luten will testify before the Commission on Wartime Contracting on Subcontracting in Iraq and Afghanistan.

• Administrator Shah and Ambassador Richard Holbrooke will appear before the House Appropriations Subcommittee on State, Foreign Operations for an oversight hearing on corruption in Afghanistan.

• Chief Innovation Officer Maura O’Neill will participate in a briefing entitled: Innovation to Catalyze Development: Leveraging Research in Foreign Assistance, which is organized by the Global Health Technologies Coalition and the Modernizing Foreign Assistance Network.

• Administrator Shah will testify before the House Foreign Affairs Subcommittee on the Western Hemisphere about: The Crisis in Haiti: Are We Moving Fast Enough? He will also brief the Congressional Black Caucus about efforts in Haiti.

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.

Staats applauds three aspects of the working draft:

1) it appropriately defines the scope of “development” as being far broader than foreign assistance, to include debt relief, trade, agriculture, migration, environmental protection, arms sales, and all other U.S. policies that affect development;

2) it restores authority to the administrator of the U.S. Government’s lead development agency, the U.S. Agency for International Development (USAID), and calls for the administrator to serve at a minimum as vice-chair of a new interagency Development Policy Committee (the chair is left at the President’s discretion); and

3) it puts a premium on transparency, calling for information – ranging from funding amounts to country strategies to impact evaluations – to be made publicly available.

Despite the good, she raises a few key questions along the way:

• If development is more than foreign assistance, how do we deal with committee turf battles for those development-related issues that fall outside the purview of the foreign affairs/authorizing committee?
• How do we marry funds for both country-specific strategies and global (non-country specific) sector strategies effectively without making an already messy system even more complicated?
• How do we limit adding another layer (or two) of bureaucracy – read: more paperwork – with these plans?
• How can we be less prescriptive by finding that equilibrium of greater flexibility for the Executive Branch in exchange for heightened accountability to Congress?

Finally, Staats points out that the success of the reform effort ultimately hinges on the still-unresolved Presidential Study Directive on development policy at the NSC and the Quadrennial Diplomacy and Development Review (QDDR) being undertaken by the State Department and USAID. She writes, “More concerning is that State and USAID have had little interaction to date with staff writing the new bill. This doesn’t bode well for striking a grand bargain between the administration and Congress on either a new development direction (which will likely require some legislation) or passing a new global partnership act (which will require support from the administration, including State and USAID).”

Speaking of the QDDR, Staats’ colleague at CGD, Todd Moss, provides a sobering perspective on Secretary of State Hillary Clinton’s attempt at elevating development within the U.S. foreign policy prism.  In his piece, he comments on: the one-man show at USAID – namely, Administrator Raj Shah – as there appears to be no sense of urgency around staffing him with a team of development experts to truly provide a development voice; the Secretary’s reluctance to empower the USAID administrator to really own the development agenda and portfolio; the importance of development practice as a distinct discipline and doing development for development’s sake (versus as a tool for security or diplomatic or other objectives); and the shortsightedness of not institutionalizing an elevated development function for the long term, i.e., after the Secretary departs.

Moss writes, “The staffing gap seems to be particularly acute since Raj Shah is now more than 6 months into the job (and it’s 18 months into the administration) yet still has zero of his top twelve managers in place.  Disgracefully, only two have even been named yet.  I can find only two ways to interpret this.  Either (a) no one really cares about filling these positions so it is just taking an embarrassing amount of time or (b) these mid-level spots are deadlocked in petty personnel battles between the White House and State.  It’s not good when “no one cares” may be the preferable answer.”

To read more, click here.

• To provide strategic recommendations to strengthen transatlantic cooperation in development
• To support the creation of conditions for reform.

The taskforce recently launched a blog series to explore what it identifies as a major challenge to development: coordination among the three Ds.  The series is jointly written by former USAID Administrator Andrew Natsios and former chair of the OECD Development Assistance Committee (DAC) Richard Manning.

In a new post, Natsios notes the “policy paralysis” in the development debate and argues for what will need to happen in Washington in order for development to be elevated alongside diplomacy and defense in a blog titled, “Development and Security: Can the United States overcome beltway disputes and elevate Development alongside Defense and Diplomacy?” He lists three decisions made by the Obama Administration that have weakened USAID, as well as Secretary Clinton’s decision to build on the architecture put in place by Secretary Rice at the State Department during the Bush Administration.  Most importantly, Natsios echoes MFAN’s Reform Within Reach call to action when he specifically urges the President to show leadership and create a strategy for U.S. development that will ensure the U.S. is an effective partner and leader in foreign assistance.  See excerpts from Natsios’ post below:

“In the absence of a clear, unified vision for U.S. foreign assistance – particularly long-term economic development – the United States will continue to be limited in its ability to lead and partner with Europe, other donors, and host-countries in addressing major global challenges – from global health to fragile states.”

“Absent direct, personal intervention by President Obama to define his own vision of aid reform and to take the actions needed to enforce the reforms, the stalemate will continue, and plans to strengthen the third D will suffer.  In the absence of a robust and institutionally independent foreign aid program underpinned by a strategy for U.S. foreign assistance, the United States will be unable to lead and strengthen global and transatlantic development partnerships, which are so critical to our success in spurring economic growth and poverty alleviation.”

Also see Richard Manning’s post for a European perspective on the issue.

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 .