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 .

Yesterday, ForeignPolicy.com’s Josh Rogin published a draft version of the National Security Council’s Presidential Study Directive on Global Development Policy (PSD-7), which is a landmark review of the strategy and structure behind U.S. development and foreign assistance efforts.  Rogin’s article notes that the ambitious recommendations in the document set off one or possibly multiple rounds of dynamic debate in government about who should have authority over U.S. development efforts.  President Obama is said to be awaiting the final report on PSD-7 from the NSC.  See our review of Rogin’s other reporting on development here.

MFAN released the following statement on the publication of the document:

MFAN Statement: Draft National Security Council Development Vision Includes Strong Reform Elements

May 3, 2010 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs David Beckmann and George Ingram:

The National Security Council (NSC) vision for development that was published in the media today would help to meet President Obama’s campaign pledge to ensure “development is established and endures as a key pillar of U.S. foreign policy,” while making our foreign assistance more effective and accountable.  Enacting the changes recommended in the draft document would allow the U.S. to resume its historic leadership position of providing hope and opportunity for the world’s poorest citizens by strengthening our ability to save lives, empower people to take control of their own destinies, and stabilize communities that are vulnerable to poverty, disease, and extremism.

The most important features of the Presidential Study Directive-7 highlighted in the media report include:

• Creating and periodically reviewing a National Strategy for Global Development
• Returning policy, budget, and field authority to USAID
• Including the USAID Administrator at relevant NSC meetings
• Convening a Development Policy Committee to coordinate Executive Branch development activities
• Helping recipient countries assume ownership, responsibility, and accountability on development
• Bolstering measurement and accountability of U.S. foreign assistance investments and demanding more of both from implementers and recipients
• Forging a new partnership with Congress on development policy and practice

We believe the document could go further toward ensuring that the discipline of development is strong and distinct, specifically through elaborating in what ways and under what circumstances development and diplomacy need to be integrated and mutually reinforcing versus when development needs to stand alone, and hope the recommendations in the document will be firmly implemented across the U.S. government.  We also urge the Administration to engage with Congressional leaders now to translate this vision into an anticipated update of the antiquated Foreign Assistance Act of 1961.  President Obama’s leadership will be needed on both fronts in order to “reestablish the United States as the global leader on international development.”

CORRECTION: An earlier version of this post identified Patrick Cronin as a member of MFAN, which is incorrect.

Last week, the White House’s National Security Council convened its Deputies Committee, a gathering of high-level representatives from all the major agencies in government, to pave the way for the Presidential Study Directive on Global Development Policy (PSD) and the interim findings of the State Department’s Quadrennial Diplomacy and Development Review (QDDR) to be finalized.  As Foreign Policy’s Josh Rogin reported, key issues have stalled action on the reviews.  MFAN Member Paul O’Brien of Oxfam America was quoted on the importance of development:

“The Tuesday Deputies Committee meeting was supposed to resolve differences between State’s overall policy review, the Quadrennial Diplomacy and Development Review (QDDR), led by Deputy Secretary Jack Lew and USAID Administrator Rajiv Shah, with heavy input from Policy Planning chief Anne-Marie Slaughter, and the NSC’s Presidential Study Directive on Global Development Policy (PSD-7), led by top NSC aides Gayle Smith, Michael Froman, and Jeremy Weinstein. Following the meeting, there is still no firm schedule for releasing the QDDR interim report, which had been expected.

While it’s not clear what all the differences are right now between the QDDR and the PSD-7 –and the two reviews serve different functions — one issue in dispute is whether or not there should be an independent body to oversee and evaluate all development programs and policies established outside the State Department. Sources said President Obama has shown personal interest in the reviews and has had meetings to talk about foreign assistance reform, but it’s not clear at what level of detail.

Sources tell The Cable that State is adamant about retaining oversight of development policy and that Secretary of State Hillary Clinton may become personally involved in advocating for that position — motivated in part by a desire to amass as many budget resources under Foggy Bottom’s umbrella as possible. Ultimately, President Obama will have to decide whether to side with State or the NSC, according to these sources, who are not directly involved in the process.

Meanwhile, the question of how the State Department wants to implement its stated goal to “integrate” the diplomacy and development missions is crucial, as many observers worry that development could become subsumed by the State Department’s overall foreign-policy agenda.”

Ahead of the meeting, MFAN delivered a letter to the National Security Council laying out key principals for the Deputies debate and urging President Obama to show public leadership on development.  Key excerpts are below:

“We and our Network members call for President Obama to unveil a fresh, bold vision for U.S. development policy—one built on a clear and authoritative plan that will guide the development efforts of the entire U.S. government…We are troubled that, nearly 15 months since Inauguration Day, the Administration has not articulated a strategic vision for the U.S. role in development.

Lacking this, the new Presidential initiatives that have been announced – including the Global Health Initiative and the Global Hunger and Food Security Initiative – as well as the operational reforms currently being led by the State Department and USAID, are moving forward without clarity on what we are seeking to accomplish, why, and how.  We fear they will fall short of their potential as a result.

Our concern is that, without an overall strategic vision articulated by the President himself, the initiatives and trends we have seen over the last 15 months will worsen this fragmentation and render U.S. global development leadership and efforts less effective than they should be at a time when we face complex global challenges.

Tomorrow’s interagency meeting is an opportunity for the White House to take historic steps toward fulfilling the President’s pledges to make development a pillar of our foreign policy alongside diplomacy and defense.  However, to be a true pillar, the government needs institutional capacity that is focused primarily on development, and development must have a distinct voice in relevant interagency deliberations at all levels, from the field to the White House.  An overarching strategy should serve to stem the proliferation of programs and agencies that yield an uncoordinated and less effective approach to development, and it should also elevate and empower USAID as a 21^st-Century development agency.”

Let us know your thoughts in the comments section below.

The QDDR and Poverty Reduction

by Rev. David Beckmann

Bread for the World wants a reform of U.S. foreign assistance that will make it more effective in reducing poverty.

The Obama administration has already taken important steps towards reforming foreign assistance.  President Obama and Secretary Clinton have made development and global poverty reduction a higher priority in U.S. foreign policy.  They have achieved increased funding for development assistance and added staffing to the United States Agency for International Development (USAID).  They have also launched the Global Hunger and Food Security Initiative (which thrills us at Bread for the World) and announced a more integrated approach to global health.

We are now looking to the QDDR and the Presidential Study Directive to chart a course toward the “elevated, streamlined, and empowered 21st century U.S. development agency” that President Obama pledged to create during his campaign.

Over the last couple decades, USAID has become weaker than it once was. We need a strong government agency that is focused mainly on development and poverty reduction. Development assistance programs have been most effective in reducing hunger, poverty, and disease when they had a single-minded focus.  The program of debt reduction for highly indebted poor countries is a good example.  So are the President’s Emergency Plan for AIDS Relief (PEPFAR) and the Millennium Challenge Corporation (MCC).  When we have tried to achieve national security objectives and help poor people with the same dollars, the record of success has been mixed.

Development assistance will need to be coordinated with other foreign policy purposes.  But unless we have a strong development agency that can think clearly, in a focused way, about what’s good for poor people, our assistance is unlikely to be effective in reducing poverty.  Reducing poverty around the world is important to U.S. national security, but our government will not be as effective in reducing poverty if our self-interest motives are mixed into the planning at every step in the process.

Over time, some of the many foreign assistance programs that are now scattered across the U.S. government need to be better connected to – in some cases, merged into – the 21^st century development agency that the President has promised.  That will allow our nation’s lead development agency to coordinate our assistance programs and better respond to local needs and priorities.  We hope the initial findings of the QDDR will address these issues clearly and concretely.

As part of Foreign Affairs‘ featured Reading Lists, John Gershman rounds up a list of books, reports, journal publications, and websites for “What to Read on Foreign Aid. ”  Included in his list, Gershman cites MFAN as “the leading coalition of organizations in the United States working to reform U.S. foreign aid in line with a more strategic approach to development policy in general.”

A professor with New York University’s Robert F. Wagner Graduate School of Public Service, Gershman’s list includes the Commitment to Development Index, put out by MFAN partner the Center for Global Development, The End of Poverty by Jeffrey Sachs, The Bottom Billion by Paul Collier, and “Where Does the Money Go? Best and Worst Practices in Foreign Aid,” by William Easterly and Tobias Pfutze.

Click here to read Gershman’s full syllabus for foreign aid.

• The Advisors Obama Is Missing (ForeignPolicy.com-Ray Offenheiser, January) Despite his public commitments to elevate and strengthen U.S. global development efforts — those that alleviate poverty, fight disease, and create opportunity in developing nations while bolstering our security and prosperity at home — as a critical component of his foreign policy, he has yet to name even one senior official to be put in charge of bringing these critical changes to life.

• The U.S. Can (and Must) Do a Better Job Fighting Poverty, Disease, and Lack of Opportunity in the Developing World (Huffington Post-David Beckmann and Steve Radelet, March 17)  We support President Obama’s efforts to elevate development because the prosperity, health, and security of Americans are, now more than ever, inextricably linked to prosperity, health, and security of people in the developing world. We are urging foreign assistance reform because the economic and geopolitical realities of today, and the challenges of the future, demand that we use every dollar as effectively as possible to fight poverty and disease, increase prosperity, strengthen weak states, and further other U.S. strategic interests abroad.

• Reorganization of USAID Is Focus of Senate Bill (CQ, July 29)  “There is clear, bipartisan momentum behind efforts to modernize the U.S. foreign assistance system to meet the diverse geopolitical and economic challenges we face,” George Ingram and David Beckmann, co-chairs of the Modernizing Foreign Assistance Network, an umbrella group seeking a broad reorganization, said in a statement. “While there are many issues to be resolved, we are optimistic about success because both houses of Congress and the Obama Administration are making dynamic progress.”

• Committees Plan to Take Foreign Assistance Back to the Drawing Board (CQ, August 3)  “Reducing duplication, mandating reporting and accountability, being able to track resource flows, reducing double counting — those are things that I would anticipate that the appropriators would embrace,” said Todd Shelton, senior director for public policy at InterAction, an umbrella group of aid organizations that contributed to the paper. But rewriting the Foreign Assistance Act is the most important step in an overhaul, said Sheila Herrling, senior policy associate at the Center for Global Development.

• Leadership Vacancy Raises Fears About USAID’s Future (The Washington Post, August 5) “Both President Obama and Secretary Clinton have said how important development is. Increasingly, it’s a painful contrast between their rhetoric and the reality of having no leadership” at USAID, said Carol Lancaster, interim dean of the Walsh School of Foreign Service at Georgetown University, who served as deputy administrator of the aid agency under President Bill Clinton.  While development groups and experts have welcomed Obama’s boosting of the assistance budget, many are “very, very disappointed” with the lack of progress in reforming the aid system, said Brian Atwood, who headed USAID in the 1990s.

• Clinton Puts Spotlight On Women’s Issues (The Washington Post, August 18) Ritu Sharma, president of the anti-poverty group Women Thrive Worldwide, said she already sees the results of Clinton’s efforts in the bureaucracy. When Sharma’s staff recently attended a meeting about a new agricultural aid program, she said, one State Department official joked, “We have to integrate women — or we’re going to be fired.”  Still, Sharma questioned whether the program would succeed in reaching poor women, especially given the weaknesses in U.S. foreign assistance.

• Reform the right should embrace (The Washington Times-Mark Green, August 20) At a time when our national-security and foreign-policy priorities have become increasingly dependent on effective development, our political leaders must act swiftly and put partisan politics aside in order to enact reforms that will make our foreign-aid programs more efficient, more effective and therefore more capable of supporting and advancing our national interests around the globe.

• Experts Concerned by Leaderless USAID (NPR “All Things Considered”-Ray Offenheiser and J. Brian Atwood, August 27) Mr. OFFENHEISER: The State Department has advanced this quadrennial diplomacy and development review under Secretary Clinton that’s ambitious and potentially visionary, but there isn’t a development voice at the table presently, and that’s what we’re all concerned about.  Mr. ATWOOD: It’s a mess. It’s not fair to the taxpayer, but I think more importantly, it’s not fair to the poor of the world that we’re not doing our bit.

• It’s Time for Foreign Aid Reform (Huffington Post-David Beckmann, August 27) The Obama administration has now made ambitious pledges to increase foreign assistance and modernize the system. This is largely because of an unprecedented consensus around the need to make development a pillar of U.S. foreign policy amid the complex and interconnected challenges we face.

• Kerry and Lugar Push Obama on USAID (CQ, September 22) In an effort to expedite the process, the senators encouraged the president to appoint someone who has already been vetted by the Senate for another post or is well-known on Capitol Hill. Neither mentioned any names, but the Modernizing Foreign Assistance Network, a coalition of development advocates, has organized their own unofficial poll on who should lead the agency.

• Ex-Gates Foundation exec named foreign aid chief (AP, November 10) Given that speculation, and the delay in appointing an administrator, David Beckmann, co-chair of the Modernizing Foreign Assistance Network, said the administration needs to move quickly in defining Shah’s responsibilities.  “They’re going to need to give him some clear signals that he has real power,” he said.

• Administration Names Agriculture Official to Run U.S. Aid Agency, Ending Delays (The New York Times, November 11) “This administration has inherited a very weak and fragmented Usaid and aid infrastructure,” said David Beckmann, the president of Bread for the World, a Christian group that advocates for hunger relief. “By getting someone in that position, Mrs. Clinton has taken a step forward.”  Mr. Beckmann called for Mr. Obama to restore the agency’s profile by giving Dr. Shah a seat on the National Security Council, and for Mrs. Clinton to give back its independent budget and policy-making authority, which had been subsumed by the State Department.

• Shah meets with Kerry (Politico-Laura Rozen, November 19) ”The fact that we have a nominee with huge potential — finally — is a good thing,” O’Brien continued. “But he’s coming late to the conversation. And there’s a real question as to whether he is going to be given the face and authority going forward. The problem isn’t him. The problem is, is development going to be given a real seat at the table.”

• Raj Shah and America’s Development Future (Roll Call-Bill Frist, December 17) Dr. Shah has what is needed to carry on President Bush’s global health legacy and fulfill President Obama’s extraordinary development vision. The Senate should confirm him, and the Obama administration should give him the political support and resources he needs to succeed. Millions of lives will be affected by this choice.

Other notable stories from 2009 include: The Kojo Nnamdi Show with MFAN Principal Sheila Herrling, Center for Global Development, and member Paul O’Brien, Oxfam America; Huffington Post op-ed by MFAN Principal Noam Unger, Brookings Institute; USA Today with quotes by MFAN Principal Carol Lancaster,  Montara Center for International Studies, and member Paul O’Brien; All Africa op-ed by Ray Offenheiser, Oxfam America; Huffington Post op-ed by J. Brian Atwood, Hubert H. Humphrey Institute of Public Affairs; and Huffington Post op-ed by Ritu Sharma, Women Thrive Worldwide.

Click here for a recap of foreign assistance reform milestones that were reached in 2008 and 2009.

We must now turn our focus to the year ahead. Drawing attention to our agenda and moving it forward will be challenging in 2010 for many reasons, including a competitive policy and budget landscape and the coming pressures of mid-term Congressional elections.

As a community, we need new energy for our campaign, with several important developments on the horizon:

• The release of White House recommendations from the Presidential Study Directive on Global Development Policy, which aims to create a whole-of-government approach to development;
• Further progress on House and Senate foreign assistance reform bills, which have already drawn bipartisan support, and the anticipated unveiling of a rewrite of the Foreign Assistance Act of 1961;
• The delivery of initial findings from the State Department’s Quadrennial Diplomacy and Development Review, which will lay a foundation for more effective policymaking, budgeting, implementation, and coordination of State Department- and United States Agency for International Development-led development programs; and
• The beginning of Dr. Rajiv Shah’s tenure as Administrator of USAID, which faces dual challenges of rebuilding after years of neglect and supporting ongoing U.S. interventions in Iraq, Afghanistan, Pakistan, and other conflict zones.

MFAN will work aggressively to maintain momentum on reform. We ask for the support of the entire community of people and organizations that strongly believe in U.S. efforts to alleviate poverty, fight disease, and create economic opportunity for people in the developing world.

We are fortunate that highly-placed Obama Administration officials and Congressional leaders are aware of the challenges before us and resolved to drive reform to a successful conclusion. President Obama pledged during his campaign to double U.S. foreign assistance and modernize it, as well as “elevate, streamline and empower a 21st-Century US Development Agency” in order to ensure that “development is established and endures as a key pillar of U.S. foreign policy.” And more recently, newly-confirmed USAID Administrator Shah said, “Not since the founding of USAID in 1961 and the passage of the Foreign Assistance Act have we had such an opportunity to fundamentally re-imagine our nation’s development strategy and strengthen the organization that leads it.”

These words, the plight of the world’s poorest people, and the urgent need to craft a successful U.S. foreign assistance program to support our foreign policy call us to action. We look forward to working with you in 2010 to realize our shared goals.

David Beckmann and George Ingram, MFAN Co-Chairs

In their opening statements, the Committee’s two highest ranking members underscored the importance of reforming U.S. foreign assistance and the unique opportunity created by reform efforts already underway including SFRC’s bipartisan Foreign Assistance Revitalization and Accountability Act (S.1524).  Ranking Member Lugar said S.1524 is an “essential input into this [reform] process” and that it “has attracted the strong support of most development groups, led by the Modernizing Foreign Assistance Network.”  Chairman Kerry said, “This is a moment of significant challenge and change, fluidity, at USAID. But it’s also a moment when people across government recognize that empowering our development agencies and giving them the resources they need is absolutely essential to achieving our larger foreign-policy goals.”  Lugar (R-IN) followed by saying, “USAID must be a full participant in policy making and budgeting. It also must be able to independently evaluate the effectiveness of foreign assistance programs and provide coordination between agencies.”

Before Mr. Shah began his testimony, he was introduced by Senator Patty Murray (D-WA), who described him as a “strong, creative, and results-driven leader” whose “nomination sends a clear signal that development and humanitarian aid are core components of U.S. foreign policy.”  Mr. Shah’s testimony covered his experience at the Bill and Melinda Gates Foundation and his brief stint at the Department of Agriculture, as well as his vision for restoring capacity at USAID and making it responsive to 21st-century challenges.

Mr. Shah said, “It is an honor to appear before this Committee as the nominee for USAID Administrator at a time when there is such broad, bipartisan recognition of both the importance of development to our foreign policy and the critical need to improve the way we work to help achieve it. I would suggest that not since the founding of USAID in 1961 and the passage of the Foreign Assistance Act have we had such an opportunity to fundamentally re-imagine our nation’s development strategy and strengthen the organization that leads it.”

Many of the questions directed at Mr. Shah communicated a sense of frustration with the Administration over the lack of consultation with Congress regarding the QDDR and the PSD.  Mr. Shah was asked to describe not only his vision for restoring USAID, but list specific steps he could take immediately toward reforming U.S. foreign assistance.  In response to Chairman Kerry’s question about his vision for USAID, Mr. Shah said, “we need to give our mission directors and our staff in countries the flexibility and the tools to think long term. We need to reinvest in the planning and evaluation capacities at AID…And we need to look at our contracting system and how we work with our external implementing partners to benefit from the areas where we do that well with great efficiency but improve on areas where we can save money and achieve outcomes more efficiently.”

Senator Bob Menendez (D-NJ), who chairs the Subcommittee on International Development and Foreign Assistance, asked Mr. Shah directly about the line of reporting given the creation of the “F” Bureau at the State Department under the Bush Administration, which migrated many of USAID’s functions over to State and created the Director of Foreign Assistance title.  Mr. Shah responded that he would be “responsible for the development budget and the AID budget, and…engaged deeply with other key partners that are making those determinations, at OMB and elsewhere.”  More importantly, he will “absolutely” have a direct line of communication with Secretary of State Hillary Clinton.

Other questions focused on specific sectors of development, asking Mr. Shah how he plans to engage with respect to global food security, global health, education, and good governance.  At the conclusion of the hearing, Chairman John Kerry (D-MA) noted his confidence that Mr. Shah would be confirmed and that he would do everything he could to “expedite” the process.

Click here for Shah’s Responses to Kerry’s Questions for the Record.

Click here for a Full Transcript of the Shah Nomination Hearing .

Chairman Kerry:  “First, we must decide whether USAID will remain the principal US development agency, and whether the Administration is committed to streamlining the proliferation of departments and agencies handling foreign assistance programs today. Second, we need to strike the proper balance between the State Department and USAID…Third, we have to ask tough questions about whether USAID’s growing national security mission is compatible with its development aims.”

Ranking member Lugar:  ”There is a broad consensus among development experts that the loss of these functions at USAID is inhibiting the success of our development programs.  Our development efforts will never be as effective as they should be if the agency that houses most of our development expertise is cut out of our relevant policy and budgetary decisions.”

USAID Administrator Nominee Shah:  ”USAID must become a more agile, focused, flexible agency that is accountable to Congress and the American people.”

Shah:  ”If confirmed, I plan to work with this committee and consult with the broader development community and those it seeks to impact to help craft and implement a development strategy that delivers on the President’s and Secretary’s vision of USAID as the world’s premiere development agency.”

Senator Menendez:  ”I believe as many others do that USAID has been decimated” and that this is a “great disservice to our country.”  We need USAID to be a “full participant” in policymaking and budget decisions.

The Quotes:

“This bill arises from the conviction that our investments in foreign assistance require much more effective coordination and much more thorough evaluation.  In the absence of reform, we will continue to spend billions each year without confidence that these funds are achieving the greatest development impact possible.”

“This legislation demonstrates Congress’s commitment to strengthening the capacity, accountability and effectiveness of our foreign aid programs.  With the U.S. facing critical foreign policy and development priorities worldwide, it is vital that we update our foreign aid programs to reflect the new challenges of the 21^st century.  I look forward to working with the Administration to advance our shared goal of strengthening foreign aid.”

“I’ve been able to see our foreign assistance dollars in action and am proud of the role we are playing in producing positive change in the lives of millions around the world, but at the same time, I share the frustration of many Americans that our foreign assistance efforts have often lacked transparency, coordination, monitoring and evaluation.  This bill begins to reinvigorate USAID to improve the coordination, execution and efficiency of U.S. assistance so we can make each dollar go farther. The bill also establishes a body capable of evaluating the impact of our investments to make sure we are truly meeting our foreign policy objectives.”

“Reducing global poverty through development assistance is a moral imperative that also contributes to our national and economic security.  By providing greater resources to increase transparency and efficiency, the Foreign Assistance Revitalization and Accountability Act puts us on a glide path toward restoring this vital pillar of our foreign policy.”

“This legislation will position the State Department to make better programming and funding decisions by establishing more rigorous transparency mechanisms and authorizing an independent counsel to examine all of our foreign aid programs.  Accountability is critical to ensure our foreign aid programs are accomplishing the intended purposes for the benefit of the recipient country and U.S. taxpayers.”

“This is one of the most significant pieces of foreign assistance legislation that has passed out of the Senate Foreign Relations Committee in decades. I am proud that this is truly a bi-partisan bill, developed in a collaborative manner and that it includes input from a wide range of voices. These programs are critical to millions of people around the world, they contribute to our mutual economic health, and are in the direct national security interests of the United States. Furthermore, this legislation implements strong, new accountability and oversight provisions to ensure that foreign assistance is being used as intended and delivering a return on our investment. Today marks an important step, but it is just the beginning. I am committed to continue working with the Committee members and Administration to build up our foreign assistance programs, not just to where they used to be, but to where they need to be.”

The Senators:

1. Senate Foreign Relations Committee Chairman John Kerry (D-MA)

2. SFRC Ranking Minority Member Dick Lugar (R-IN)

3. Senator Bob Menendez (D-NJ)

4. Senator Bob Corker (R-TN)

5. Senator Ben Cardin (D-MD)

6. Senator Jim Risch (R-ID)

Tell us your answers in the comments section.  The winner will receive undying affection from supporters of foreign assistance reform.