What Real Foreign Aid Reform Means

U.S. foreign assistance has helped drive some of the greatest human progress in the last 50 years. The impact of America’s generosity and leadership can be measured in millions of lives saved and transformed. For example, the Marshall Plan rebuilt Europe’s economy after World War II, and the Green Revolution in agriculture helped put Asia on a path to long-term growth in the 1960s and ’70s. The Campaign for Child Survival raised immunization rates from 15 percent to nearly 80 percent in the 1980s, and efforts to increase access to HIV/AIDS drugs in Africa helped millions of people over the last decade.

Led by President Obama and Secretary of State Hillary Clinton, the current administration has strengthened America’s commitment to development by calling it a “moral, strategic, and economic imperative,” building on the campaign pledge Obama made to ensure that “development is established and endures as a key pillar of U.S. foreign policy.”

But the rhetorical rubber meets the road when we look at the current system we use to deliver foreign aid. The Foreign Assistance Act of 1961 (FAA), written during the Cold War era, is outdated and does not address the challenges of the modern world. Nearly 500 pages long, it includes hundreds of overlapping and uncoordinated goals, provisions, and directives. The programs it authorizes are executed by at least 12 departments, 25 different agencies, and almost 60 government offices.

According to Oxfam America field research, this lack of strategic order and coordination has real on-the-ground consequences:

In Afghanistan, where a “civilian surge” is under way, two separate U.S. Agency for International Development (USAID) contractors recently discovered by chance that they were doing virtually the same project in the same town.

In Bangladesh, the United States collects several times the amount in tariffs that it provides in assistance, essentially taxing the very trade U.S. leaders tout as a solution to poverty.

In Cambodia, government officials typically find it easier to get information on aid resources from the Chinese government than from the U.S. government.

The people we are trying to help, and the generous U.S. taxpayers who support our efforts to improve their lives, cannot afford this inefficiency when budgets are tight and effective development is such a critical element of our foreign policy and national security. The time has come for the president to lead the way in reforming U.S. foreign assistance:

First, the president should use his “New Approach to Advancing Development” paper, released at the recent G8 summit in Muskoka, Canada, as a basis for creating America’s first-ever Global Development Strategy. The paper makes a strong case for reorienting and strengthening U.S. development efforts, but it does not answer crucial questions: Is achieving broad-based development a distinct goal of U.S. global engagement, or is it merely a tool to serve diplomatic or defense objectives? And will USAID experts in the field have the authority to implement foreign aid programs, or will diplomats and soldiers? A new strategy must resolve these issues.

Second, the president should signal publicly that he is ready to work with Congress on foreign aid reform, particularly by overhauling the FAA. House Foreign Affairs Committee Chairman Howard Berman (D-CA) has already released a working draft of a new FAA, and last year, 126 representatives and 23 senators from both sides of the aisle supported foreign assistance reform legislation.

At stake is America’s ability to effectively address the global challenges of the 21st century. And the timing is important. In just two months, the eyes of the world will be on the Millennium Development Goals Summit, where committed nations must pledge new energy and resolve in the fight against global poverty. By showing leadership on foreign assistance reform, President Obama will attach actions to his words on development — and hopefully lead others to commit to more effectively empowering the world’s poorest people to realize a brighter future.

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.

Today, MFAN is proud to announce the launch of its Reform Within Reach campaign aimed at getting President Obama to show leadership on foreign assistance reform and strengthen America’s commitment to development.

To serve as the rallying cry for the campaign, MFAN created the “Open Letter to President Obama on the U.S. Commitment to Global Development.”  This letter, which has already been signed by 50 organizations, calls for President Obama to create America’s first-ever Global Development Strategy and partner with Congress to rewrite the Foreign Assistance Act of 1961.

We need your help in getting the message out and letting President Obama know that his leadership on reform is critical to achieving U.S. foreign policy goals.  This issue is even more important with the Millennium Development Goals Summit fast approaching in New York in September, when the eyes of the world will be on the fight against global poverty and the U.S. role in that fight.  As you’ll remember, one year ago, President Obama made a promise at the UN General Assembly to return to the MDGs Summit with a plan for how the U.S. will strengthen its contribution on development.  We must hold him accountable to that pledge.

Action is needed now.  You can take the following steps to join us in this important call to action:

• Join individuals from across the country and sign the Open Letter
• Download a badge for your Facebook, MySpace, or other profile page to show you support more effective foreign aid
• Read about how reform will make even more U.S. aid success stories possible
• Tweet:  “I signed a letter urging Pres Obama to increase U.S. foreign aid’s impact.  YOUR TURN! http://bit.ly/12FBms #ReformWithinReach” and follow us @ModernizeAid to see how momentum for reform is building

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.

“Two major reviews on U.S. development policy—the Presidential Study Directive on U.S. Global Development Policy (PSD) and the Quadrennial Diplomacy and Development Review (QDDR)—intend to make sense out of the confusing array of agencies and actors involved in U.S. global development policy; both appear to be suffering delays rooted in the very bureaucratic confusion they aim to resolve.”

“Nearly one year out, it’s hard to see whether we’re any closer to agreement. Eighteen months into this administration, the delay means President Obama and his team are running out of time not just to issue strategies, but to implement any reforms. The less time there is for the reforms to get traction, the less likely they’ll create any lasting legacy.”

Shah used the speech as an opportunity to outline reforms at USAID saying, “My job as administrator is to make good on the President’s promise to revitalize USAID by modernizing the agency” through a “comprehensive set of operational reforms designed to partner and deliver high impact, cost efficient development.”  Below are excerpts from the speech that describe Shah’s reform agenda for the agency:

• “…we will rebuild USAID’s budget accountability with a strong focus on getting better results for U.S. taxpayers. We will pursue a development strategy that is based on focus, scale, and impact. We will focus in fewer sectors in each of the countries that we work.”
• “Second, to achieve greater returns from our investments we are readying a package of procurement reforms… We are redoubling our efforts to support local institutions and build local capacity.”
• “Third, to get the best out of each employee we are reforming our personnel policies. A development entrepreneur needs real flexibility and the ability to take risks.”
• “Fourth, we need to do a much better job at monitoring and evaluation so we can easily identify what works, what doesn’t work, and why, and implement changes quickly in our programs to optimize against that information.”
• “Finally, our agency will embrace the concept of extreme transparency. We will meet President Obama’s open government directive and seek to set a standard on transparency for the field of development…We owe American taxpayers hard evidence of the impact their money is making.”

Shah also reinforced the administration’s commitment to reform, despite what the community sees as tension between the State Department and USAID, saying “I actually see all of this coming together as really elevating development, elevating all of the different parts of development policy, and certainly elevating in a very significant and fundamental way USAID.” Shah closed with an urgent call to action: “I think it’s incumbent upon us to get this reform agenda enacted and to make USAID the most effective and strategically significant development enterprise anywhere in the world.”  Watch the speech below.

“I believe the next 12 to 18 months is a unique point in time. I don’t think the window will last much longer than that. And I think we have to do this in this moment.  Part of this opportunity is driven by political opportunity. This is a president who deeply believes in development. And in his Nobel Peace Prize acceptance speech and more recently in the administration’s national security strategy, very clearly outlined how development is the common basis – shared prosperity is the common basis of our long-term security and our deep partnerships with populations all around the world.”

“These are the types of insights that we need to do a very effective job of learning and building into all of our practices across USAID.  And so I would ask this community to focus more aggressively on evidence-based development, on country-owned planning and alignment, on creating the incentives for good and accountable governance and on building real local capacity in the institutions where we want to work.”

“The reform agenda starts with building out real policy and budget capability at the agency. We absolutely have to have the ability to speak with one voice and communicate a strong development perspective not just in the interagency or not just at the NSC but, frankly, all around the world where development partners and development practitioners look to this agency and this community of leaders to offer thoughts and insights that will take our field forward and take the practice of this discipline forward.”

“We need you to do some things differently. We need you to be transparent about getting more money out of the Beltway and into the countries and into the communities where we’re trying to serve. We need you to make the decision to invest in training local resources, instead of choosing to fly in American experts, wherever you’re given that choice. And we frankly need to ask your governing boards to do something different and brave.”

MFAN member Todd Shelton, senior director of policy and communications at InterAction, was quoted in the National Journal about the forum.  On restoring autonomy to USAID, Shelton said, “Development and humanitarian relief should be seen as a distinct discipline with its own thinking and budgeting capacity.  For our policy decisions regarding developing countries to be effective, there has to be a stronger, clearer empowered voice at the interagency table than there currently is or has been in recent years.”

Stay tuned for more coverage of the InterAction forum!

]]> http://www.modernizingforeignassistance.org/blog/2010/06/07/usaid-administrator-shah-opens-annual-interaction-forum/feed/ 1 http://www.modernizingforeignassistance.org/blog/2010/06/02/mfan-partner-weighs-in-on-national-security-strategy/ http://www.modernizingforeignassistance.org/blog/2010/06/02/mfan-partner-weighs-in-on-national-security-strategy/#comments Wed, 02 Jun 2010 20:12:28 +0000 admin http://www.modernizingforeignassistance.org/blog/?p=1973 In a new post on CGD’s Rethinking U.S. Foreign Assistance blog, MFAN member Sarah Jane Staats reviews the Obama Administration’s first-ever National Security Strategy, released last week.  She notes the focus on being strong at home — through education, health care, and technology and innovation — in order to lead abroad, as well as the importance of leveraging partners and multilateral institutions.  Staats also calls attention to the need to work with Congress, a factor that very much plays into the foreign assistance reform debate.  Read the full blog post here or see an excerpt after the jump:

The challenge is how to put the national security strategy’s priorities and principles into practice. My colleagues have a few ideas on climate, trade, migration, and the U.S. role in the international institutions that identify the synergies in U.S. and global development interests. The bigger question is how to craft what the strategy calls a “whole of government approach” that can coordinate planning and policymaking and create “a deliberate and inclusive interagency process” to “balance and integrate all elements of American power and update our national security capacity for the 21st century.”

Global Development in the U.S. National Security Strategy

Noam Unger, Fellow, Global Economy and Development

The Brookings Institution

President Obama’s national security strategy sets the stage for his administration to put a premium on global development cooperation. But, will the administration follow through?

The unveiling of the full strategy makes clear that U.S. global development policies will factor into each of the strategy’s four major pillars: security, prosperity, values and international order. Secretary of State Hillary Clinton spoke at Brookings yesterday about the strategy and despite talking about development at times during her remarks, the degree to which development is infused in the strategy was not particularly underscored. Given her track record of speaking passionately and extensively on development, I was surprised that she did not explicitly emphasize its importance.

The point in the national security strategy on being strong at home in order to lead globally is understandably a separate but important pillar for U.S. security and global leadership. Nevertheless, aspects from all the other key points in the strategy connect to America’s ability to promote global development and effectively assist people around the world. In the security section, development features primarily through the lens of stabilization, reconstruction and conflict prevention. In the prosperity section, the focus is on global public goods and investments in sustainable and long-term development. The values section references a slew of development principles and actions – as Clinton noted in her speech that “democracy, human rights and development are mutually reinforcing.” Lastly, the section on international order highlights the administration’s intent to renew U.S. multilateral development cooperation.

In recent months, the administration has publicly said favorable things on a broad range of development topics, such as the linking of climate change adaptation and development aid, of health threats and health systems, of sustainable results and a reasonable time horizon for investment, of programming decisions and evidence-based research, of capacity building and local ownership of development projects. Obama and his team have also demonstrated a high level of commitment to development issues on the international stage. However, the problem is not in the administration’s rhetoric.

The problem is that the U.S. needs to fundamentally reform its internal systems for managing and implementing its global development policies. This includes foreign assistance, but it also includes areas such as trade, agriculture, international finance and migration. As USAID Administrator Rajiv Shah has expressed, development is a discipline, but it is presently a discipline that is marred by U.S. policy incoherence largely because it is organizationally fragmented and structurally weak in lacking its own distinct clout in policy deliberations. The U.S. needs to put itself in a better position to support the broad range of development imperatives, including post-conflict reconstruction, the alleviation of poverty and human suffering, and the promotion of good governance and equitable economic growth. Only by doing this can the U.S. government effectively promote its values and security interests.

It is quite possible that the 2010 national security strategy will help open the door for the systemic elevation and reform of U.S. global development policies and operations. If Obama chooses to seriously head in that direction, the path is already somewhat illuminated:

At a strategic level, the development policy review ordered by the president last summer is rumored to be finished and its conclusions captured in a document. A draft of the document was leaked and then published earlier this month. Let’s hope the final version retains an approach to development that includes a deliberate policy, a more effective and partnership-oriented operation, and a new architecture that truly elevates development and coalesces development resources around a more focused set of objectives. The leaked draft called for a routine U.S. Global Development Strategy. As others and I have noted in the past, such a strategy could substantively expand on the national security strategy. It could do so in much the same way as the national military strategy. Having just completed consultative government-wide reviews of national security and development, the White House should aim to deliver the first U.S. Global Development Strategy in time for Obama’s much-anticipated speech on development at September’s United Nations summit.

At the operational level, many more changes are already underway, including a broader global health initiative, a forward-looking global hunger and food security initiative, the re-establishment and revitalization of USAID’s policy planning bureau and further reforms to improve the agency’s procurement, human resources and transparency.

Since day one, this administration has needed to redefine America’s global development cooperation. While its efforts in 2009 were detrimentally sluggish, the new national security strategy could breathe new life into the effort.

Feed the Future demonstrates adherence to key foreign assistance reform principles in accelerating progress toward the Millennium Development Goal (MDG) of halving the proportion of people living in extreme poverty and hunger by 2015. Administrator Shah said that agricultural development is a springboard for economic development and stated that “through this Feed the Future initiative, we are investing the talents of experts throughout our government, working closely with the State Department, the Millennium Challenge Corporation, the USTR and the Peace Corps in this effort.”  He noted that this initiative will be country-led and that we can expect 15 African country investment plans by the end of 2010 with the potential to help 650 million people.

Shah asked that Congress to fully fund the initiative and said their support was needed now more than ever. He thanked Senators Richard Lugar (R-IN), Bob Casey (D-PA), and John Kerry (D-MA) for their leadership on food security. Shah also pointed to the leadership of Ambassador Bill Garvelink , Deputy Coordinator for Development, who will oversee the execution of Feed the Future within USAID and Ambassador Pat Haslach, Deputy Coordinator for Diplomacy, housed at the State Department,  who will “make sure this partnership remains a global priority because we simply won’t eliminate hunger without that.”

Feed the Future has a strong focus on women as they need equal access to services and support. Shah said that “when women control gains in income, they’re far more likely to spend those gains improving their families’ access to health, education and nutrition.” In talking about country-led development, Shah said, “If you’re here representing a partner country, we will follow your lead. Once you commit to a comprehensive plan, we will commit to helping bring the global community together to support you in its execution. We will have a single point of contact in your country to coordinate U.S. government efforts and engage with your leaders.”

On the panel that followed Shah, Cheryl Mills, State Dept. Counselor, said, “We are still determining who the food security coordinator will be, but there will be a single point of contact for the USG.” MFAN believes that in order for Feed the Future to succeed as part of a whole-of-government approach, the United States Agency for International Development (USAID) – the U.S. government’s lead development agency – needs to be put in charge of the food security initiative and oversee its implementation process.  Feed the Future’s two key objectives for addressing global food insecurity are accelerating agricultural growth and production in developing countries and improving nutritional status, in particular of women and children – both of which are inherently poverty-focused development goals.

In addition to Shah, Thomas Vilsack, U.S. secretary of agriculture; Namanga Ngongi, president of the Alliance for a Green Revolution in Africa; and Ellen Johnson Sirleaf, president of the Republic of Liberia, delivered remarks at the event. Catherine Bertini and Dan Glickman, cochairs of The Chicago Council’s Global Agricultural Development Initiative, moderated panels.