[Senate Hearing 111-164]
[From the U.S. Government Printing Office]
S. Hrg. 111-164
THE CASE FOR REFORM: FOREIGN AID AND DEVELOPMENT IN A NEW ERA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
JULY 22, 2009
__________
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COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin BOB CORKER, Tennessee
BARBARA BOXER, California JOHNNY ISAKSON, Georgia
ROBERT MENENDEZ, New Jersey JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland JIM DeMINT, South Carolina
ROBERT P. CASEY, Jr., Pennsylvania JOHN BARRASSO, Wyoming
JIM WEBB, Virginia ROGER F. WICKER, Mississippi
JEANNE SHAHEEN, New Hampshire JAMES M. INHOFE, Oklahoma
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
David McKean, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
(ii)
?
C O N T E N T S
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Page
Beckmann, Reverend David, president, Bread for the World, co-
chair, Modernizing Foreign Assistance Network, Washington, DC.. 16
Prepared statement......................................... 18
Kerry, Hon. John F., U.S. Senator From Massachusetts............. 1
Lugar, Hon. Richard G., U.S. Senator From Indiana................ 3
McPherson, Peter, president, the Association of Public and Land
Grant Universities, former administrator of USAID, Washington,
DC............................................................. 5
Prepared statement......................................... 7
Sachs, Dr. Jeffrey D., director, The Earth Institute, Columbia
University, New York, NY....................................... 9
Prepared statement......................................... 12
(iii)
THE CASE FOR REFORM: FOREIGN AID AND DEVELOPMENT IN A NEW ERA
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WEDNESDAY, JULY 22, 2009
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 2:38 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. John F. Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Menendez, Cardin, Shaheen,
Kaufman, Lugar, Corker, and Wicker.
OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
The Chairman. The hearing will come to order. I apologize
for being a little bit late.
We are here today to continue an ongoing conversation on
foreign aid reform. For the past 6 months, the administration
has been busy laying the groundwork for a new development
agenda.
First, the President issued a bold 2010 international
affairs budget that significantly increases funding for vital
programs in Pakistan and Afghanistan, begins to rebuild our
diplomatic and development capacity, and renews our commitment
to essential programs from education to HIV/AIDS efforts and
hunger.
Then, earlier this month, President Obama and other G8
leaders announced a $20 billion food security partnership to
provide small farmers in poor countries with the seeds,
fertilizers, and equipment they need to break a decades-long
cycle of hunger, malnutrition, and dependency.
Finally, the State Department unveiled plans for a
Quadrennial Diplomacy and Development Review, a comprehensive
assessment designed to improve policy, strategy, and planning
at the State Department.
And while we are still awaiting a nominee to head the U.S.
Agency for International Development, I am confident that a
name will be forthcoming soon.
These are all welcome changes that demonstrate the
administration's commitment to a vigorous reform process and a
bold development plan. Congress intends to be a strong partner
in those efforts--to provide the resources, to legislate and
ensure that our development programs are funded and designed to
meet our priorities.
We look forward to actively working with the administration
to shape the Quadrennial Diplomacy and Development Review and
other important priorities. And while there is some debate as
to what form foreign aid reform ought to take, there is a broad
consensus in the development community as to why reform
matters.
Experts agree that the strength of our development programs
is directly linked to success or failure in frontline states
like Afghanistan and Pakistan. They agree that USAID is more
critical to achieving our foreign policy objectives than ever
before, yet it lacks the fundamental tools, capacity, and
expertise to fulfill its mission.
They agree that too often decisionmakers lack basic
information about the actual impact of our development
programs, and they also agree that excessive bureaucracy and
regulations and fragmented coordination are hampering our
efforts to swiftly and effectively deliver assistance. And they
agree that even as we plan for broad fundamental reform, there
are many steps we can take in the interim to dramatically
improve the effectiveness of our foreign aid efforts.
I might add I don't know how many folks here--and I have
recommended this book to a number of people recently, but
``Three Cups of Tea'' by Greg Mortenson is an exquisite example
of the disparity sometimes in how to deliver aid and how
effective we are. And all you have to do is read that book and
look at the efforts that he has made to open over 300 schools
in Pakistan and Afghanistan, probably each of them built at
about 20 percent of, and certainly a quarter of, the cost of
schools formerly built under USAID or other programs and with
much greater impact because of the way in which local
communities and leaders were invested in those efforts.
I don't want to go on and on about it, but I have to tell
you it is just a dramatic example of the way in which creative
efforts could be so much more effective at doing the kinds of
things that we try to do.
We assembled a small bipartisan Senate working group to
formulate legislation that makes short-term improvements while
setting the stage for longer term reform, which we understand
we need.
Senators Lugar, Menendez, and Corker, and I have been
developing initial reform legislation that we believe goes a
long way toward improving our short-term capacity to deliver
foreign aid in a more accountable, thoughtful, and strategic
manner. One provision in the bill that we believe is
particularly important establishes an independent evaluation
group based in the executive branch to measure and evaluate the
impact and results of all U.S. foreign aid programs across all
departments and agencies.
This new institution can address a fundamental knowledge
gap in our foreign aid programs, and quite simply, it will help
us to understand which programs work and which do not and why.
I want to emphasize that this legislation really only
represents the first step in a longer reform process, but we
believe it sends an important bipartisan signal that foreign
aid reform will be a priority for the committee in the years
ahead.
I am delighted to welcome our three witnesses to this
hearing, three of America's top development professionals. The
Hon. Peter McPherson is a former USAID administrator, who has
served as president of Michigan State University and chairman
of Dow Jones. His understanding of how foreign aid works in the
developing world has been shaped by years of service, beginning
with the 2 years he spent right out of college as a Peace Corps
Volunteer running a food distribution program in a Peruvian
village.
Dr. Jeffrey Sachs heads The Earth Institute at Columbia
University and is a special adviser to the U.N. Secretary
General Ban Ki-moon on the Millennium Development Goals and a
friend of mine from Massachusetts days. At age 29, Dr. Sachs
became one of the youngest economic professors in the history
of Harvard, where he taught for over 20 years. So he is not
only one of the world's leading voices on sustainable
development, he has got the virtues of being a longtime
constituent.
Reverend David Beckmann is president of Bread for the World
and a cochair of the Modernizing Foreign Assistance Network.
And Reverend Beckmann is a clergyman as well as an economist,
brings a religious and moral perspective to this, and I have
worked with him and have great respect for his significant
policy expertise. And we are grateful for your efforts to help
the world's poorest.
I look forward to an important and engaging dialogue here
today.
Senator Lugar.
STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA
Senator Lugar. Mr. Chairman, I thank you for calling the
hearing, bringing together such distinguished witnesses and
very dear friends, and we appreciate your coming.
The State Department, as you have pointed out, is currently
engaged in the Quadrennial Review of Diplomacy and Development.
This review is likely to have far-reaching implications for
foreign assistance policy and organization. The basic question
with regard to development is how we can best strengthen the
capacity of USAID to run effective foreign assistance programs.
Earlier this month, Secretary Clinton stated, ``I want
USAID to be seen as the premier development agency in the
world, both governmental and NGO. I want people coming here to
consult with us about the best ways to do anything having to do
with development.''
I share her sentiments, and I have confidence in the
extraordinary development expertise housed at USAID. But during
the past two decades, decisionmakers have not made it easy for
USAID to perform its vital functions. Development resources
declined precipitously in the 1990s, and decisions to
reorganize in pursuit of better coordination between the
Department of State and USAID resulted in the latter's loss of
evaluation, budget, and policy capacity.
Events since 2001 have spurred greater investments in
foreign assistance, but many of these resources have been
located outside USAID. Roughly two dozen departments and
agencies have taken over some aspects of the foreign
assistance, including the Department of Defense.
I believe the starting point for any future design of our
assistance programs and organizations should not be the status
quo, but rather the period in which we had a well-functioning
and well-resourced aid agency. To be a full partner in support
of foreign policy objectives, USAID must have the capacity to
participate in policy, planning, and budgeting. These functions
have migrated to the State Department, feeding the impression
that an independent aid agency no longer exists.
The President has advocated doubling foreign assistance
over time. If the administration pursues this goal, it is
crucial that Congress has confidence that these funds will be
used efficiently. USAID, the Agency housing most of our
Government's development experience, must have the capacity to
evaluate programs and disseminate information about the best
practices and methods, and it must have a central role in
development policy decisions.
With these objectives in mind, it has been a pleasure to
work with the chairman, Senator Kerry, with Senator Corker,
with Senator Menendez, and others on a bill that will
strengthen USAID. We will introduce this bill soon. The draft
bill has received strong initial support from outside groups,
led by the Modernizing Foreign Assistance Network. Our
witnesses today have all received a draft of the bill, and we
look forward to their comments on it.
The legislation that we have developed promotes capacity,
accountability, and transparency in U.S. foreign assistance
programs. There are three deficiencies we are trying to
address.
First, the evaluation of assistance programs and the
dissemination of knowledge have deteriorated in the last couple
of decades. While USAID was a respected voice in this regard
during the 1980s, an evaluation capacity has been allowed to
wither.
The bill strengthens USAID's monitoring and evaluation
capacity with the creation of an internal evaluation and
knowledge center. The bill also reestablishes a policy and
planning bureau, a function that has migrated to the State
Department. It is crucial that USAID be able to fully partner
with the State Department in decisions relating to development.
Second, U.S. foreign assistance programs are littered among
some two dozen agencies with little or no coordination. We do
not have adequate knowledge of whether programs are
complementary or working at cross-purposes.
The bill requires all Government agencies with a foreign
assistance role to make information about its activities
publicly available in a timely fashion. It designates the USAID
mission director as responsible for coordinating all
development and humanitarian assistance in country, and it
creates an independent evaluation and research organization
that can analyze and evaluate foreign assistance programs
across Government.
Third, staffing and expertise at USAID have declined since
the early 1990s, even as the funding for foreign assistance
programs has increased. This decline in capacity has resulted
in other agencies stepping in to fill the gap. While Congress
has begun to provide the necessary resources to rebuild this
capacity, the Agency does not have a human resources strategy
to guide hiring and deployment decisions.
The bill would require such a strategy and a high-level
task force to advise on critical personnel issues. The bill
also encourages increased training and interagency rotations to
build expertise and effectiveness.
It is especially important that Congress weigh in on this
issue because the administration has yet to appoint a USAID
administrator or to fill any confirmable positions in the
Agency. Without an administrator in place, USAID is likely to
have less of a role in the current State Department review than
it should have. The State Department review process should
include strong voices advocating for an independent aid agency,
and it is not clear that this is happening.
Both Congress and the State Department should be offering
proposals on how to improve development assistance. Our
legislation does not rule out any options that the State
Department may propose as a result of its review.
But ultimately, Congress will have to make decisions on
resources for development programs. And given budget
constraints, it is essential that Congress have confidence in
how development resources are spent. Building capacity at USAID
will be an important part of this calculation.
The issues that we face today--from chronic poverty and
hunger to violent acts of terrorism--require that we work
seamlessly toward identifiable goals. I look forward to working
with colleagues on this committee to advance this bill and to
support the development mission that benefits our long-term
security.
I thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Lugar.
I would just say to my colleagues that Senator Levin has
asked me to come to the floor to introduce an amendment, which
I need to do at some point here in the near term. But I will
leave the gavel in the hands of our good ranking member, and we
have terrific bipartisan support for this. I thank Senator
Corker and Senator Menendez and others for their input on it.
Mr. McPherson, if you would lead off, and then we will just
run down the table and then open it up for a period of
questions. If you could do a summary of your total statement, I
think it is helpful to the committee. And then we will put your
full statement in the record as if read in full. And that way,
we can have more time for a little give and take.
Mr. McPherson. I will do exactly that, Senator.
The Chairman. Would you push your mike button there?
STATEMENT OF PETER McPHERSON, PRESIDENT, THE ASSOCIATION OF
PUBLIC AND LAND GRANT UNIVERSITIES, FORMER ADMINISTRATOR OF
USAID, WASHINGTON, DC
Mr. McPherson. I will do just that, Senator. It is good to
be before this committee again. I compliment the committee for
this process. I do hope, as you proceed, that the committee
will act on this bill because I think it is such an important
topic.
A few comments about the structure of the foreign aid
program itself. I applaud your provisions concerning personnel.
We need to have senior technical and career leadership in the
Agency to be able to do what we wish to achieve.
I urge that the Agency look at some retirees. I spoke to
the AID retirees just last week. I know there is some real
interest there. There is some outstanding leadership I believe
available. Look at some senior faculty at some of the
universities around the country who have managed projects,
people that could do an outstanding job. And my organization,
which is Public and Land Grant Universities, would be happy to
help.
I would urge that the committee in some fashion discuss
with the Agency their use of so-called administrative-
determined ``AD'' authority. This authority has been on the
books for decades. I remember using it extensively. It is
specifically for the purpose of bringing in mid-career or above
people for the Agency. All you have to do is get the security
clearances. Otherwise, you can bring in people a lot more
quickly.
It has been used historically, sometimes, for political
appointees, but often for the technical and leadership
capacity. I can think of a number of people that I brought in
for exactly that purpose.
I believe, as you have mentioned, that AID having its own
policy capacity is critical. I believe it needs a budget
capacity as well, and that a budget capacity doesn't preclude
State having an oversight role engagement on the budget.
Frankly, an agency without budget and policy is sort of a super
contractor and not really an agency at all. You won't keep the
coherence that you absolutely need.
I think the focus of this bill on evaluation is very
important. It was too bad, really most unfortunate, this was
substantially cut out of AID because of budget concerns and
other issues. An agency that can't learn from its mistakes
inevitably becomes sterile and ineffective. The lessons learned
provision, Senator, that is in the bill is complementary. And
by the way, I think those two offices should be under the same
substructure.
The bill also has, as was mentioned, a cross-agency
evaluation function. My thought is that you might think about
that becoming kind of a ``think tank'' function. That, outside
the academy, doesn't have a great name, I suppose. But a cross-
agency board, which you have in here, to keep it vital and
focus on some key issues I think would--might well do a very
good job. And you need some way to tie these places together in
terms of policy.
I worry a little bit the cross-agency evaluation function
could fairly quickly morph into another IG or GAO, and I know
there is some thought about this. But a think tank function,
and perhaps a better word, can really help drive places,
particularly if it is outside, but not totally.
I agree with the bill's proposal that someone in a country
needs to be responsible for all of the development activity of
the U.S. Government reporting to the ambassador. Logically,
that would often be the USAID mission director. In days past,
that was fundamentally the way it worked.
As I go around the world, these days I find so often that
the people in a country, the ministries are confused as to who
is in charge of what. It is almost embarrassing, but more
importantly, it is ineffective.
I think the Quadrennial Diplomatic and Development Review
is a very good idea, long overdue. I agree with you, Senator,
that we need to have an AID administrator in place and we need
to have that review, have senior development people. Otherwise,
it will simply not accomplish what was expected.
Let me compliment you, Senator Lugar and this committee, on
the Lugar-Casey bill, which has passed the committee and I hope
gains substantial more sponsors and ultimately becomes law.
There is a companion bill in the House. This is very important.
It really reflects our beginning to right the balance that over
the last 20 years or so where AID has become more and more of a
humanitarian, immediate relief agency and not a long-term
development agency.
These short-term needs are critical. If you are one of the
parties benefiting from them, you surely think they are
critical----
The Chairman. Mr. McPherson, could you just bring the mike
a little toward you? Pull it toward you. Just pull it toward
you. There you go.
Mr. McPherson. You surely think it is critical. But the
requirement is that you have long-term development so to
achieve the goals that you wish.
One last point, and then I am through, Senator. I believe
that there is huge merit in the U.S. Government having a means
to listen to what the country wants to have done. When you look
at countries that have made the most progress over the last
generation, it is largely countries that have had leadership
that wish to make progress for their people and which had taken
their own destiny in their own hands.
There was outside help, but they drove it. And the central
idea, which was a very good one in the MCC, was this concept of
what do the countries need and want?
I would recommend, and I choose this word carefully, that
our AID programs, our development programs there be a
presumption, a ``presumption'' that what a country's agenda is
should be our agenda. It has to be a presumption because there
are a lot of other factors, including within the country.
But somehow or the other, we need a way to structurally--
structure in listening to what a country needs. It is not just
kind of a politically correct thing to say. It has, in fact,
been where we have made real progress.
Again, I congratulate this committee on legislation, the
Lugar-Casey bill, the convening of this meeting for this bill,
and I urge you to take action, as you obviously are deeply
inclined to do.
And I thank you.
[The prepared statement of Mr. McPherson follows:]
Prepared Statement of Peter McPherson
I am pleased to appear before this committee again and I appreciate
the attention the committee is giving to foreign aid reform.
Let me start by urging the committee to pass out of committee the
legislation you now are considering that would increase accountability;
strengthen and coordinate U.S. foreign assistance in the field; and
augment the technical capacity and human resources of the U.S. Agency
for International Development (USAID). I have some specific suggestions
and I think it is important the committee act on these matters.
the organization of usaid and related matters
Former USAID administrators Brian Atwood, Andrew Natsios, and I
provided our view in detail in the November 2008 edition of Foreign
Affairs. We argued that a strong independent USAID is important for
development to play its appropriate role in the three ``Ds'' of
Defense, Diplomacy and Development. I think our views are widely held
in the development community, with many believing that the head of
USAID should be a member of the cabinet.
I personally feel it is practical for the USAID administrator to
report to the Secretary of State but otherwise be separate from the U.S
State Department. That was the structure when I was administrator for
almost seven years in the 1980s. I worked hard to respond to the needs
of the Secretary of State but also led the development work. I had
strong support from both Secretaries of State under whom I served. I
know there were times when my greater freedom of action and
independence was appreciated, e.g., some of our approaches to famine
issues, etc.
The Obama administration has apparently decided a somewhat
different approach to the State Department-USAID relationship and, of
course, I respect their right and responsibility to do so. However, I
feel there are a number of steps that can be taken, many of them
reflected in the bill before this committee, that can greatly
strengthen USAID and benefit the State Department in leading U.S.
foreign policy.
It is important that the technical and senior career leadership of
USAID be augmented with additional people. Not enough can happen
without these people. In fact, if USAID had the sizeable technical and
senior leadership workforce today that it did 20 years ago there would
be less need for the legislation you are considering here. I believe
the committee, appropriators and the State Department support USAID's
Development Leadership Initiative, as do I. This is a major step toward
rebuilding USAID's technical capacity. I applaud these provisions in
the bill.
Augmenting staff must be more than adding junior people. USAID
needs to bring in senior staff while a new, younger workforce gains
experience. A priority should be placed on recruiting excellent
retirees for senior staff positions during the next few years. For
example, USAID should look to senior university faculty with long
experience working on agricultural issues in the developing world. I
know this is easier to suggest than actually do, but our universities
are populated with many experienced faculty willing to serve. My
organization of the large public and land-grant universities would be
happy to help USAID identify appropriate university people. USAID
should consider using its administrative determination authority
positions to make these appointments. This is a decades old authority
for the explicit purpose of bringing in senior technical staff. The
legislative authority is, however, fairly broad and has been used to
recruit political appointees as well as technical people and senior
leadership. It is a flexible tool that is faster and more certain than
the usual process and should be helpful for immediately building senior
technical and leadership strength.
It is critical that USAID have its own budget and policy
capability, preferably in the same USAID office. USAID needs to be able
to argue a coherent overall budget to the State Department in order for
there to be a full voice for development. Budget and policy drive each
other and are inextricably linked. I have both a management and finance
background and know that USAID/development must have a role in creating
their budget in order to sustain a coherent and sustained structure. A
USAID budget function will not detract from the State Department's
ability to consider those proposals for the whole foreign affairs
budget.
USAID must have a strong policy office to be a creditable
organization, as your bill recognizes. The development agency has to be
able to provide well-reasoned analysis and recommendations for the
State Department to consider. I support the bill's provision to
reestablish a Bureau of Policy and Strategic Planning at USAID.
The fear of a merger/closer integration of USAID into the State
Department has always been that the immediate foreign policy concerns
of the more powerful State Department would generally undermine the
long-term development goals of USAID. Without budget and policy
strength at USAID that scenario is more likely to happen. While foreign
assistance is part of overall U.S. foreign policy, development must
have a strong voice to articulate how a development strategy
strengthens foreign policy goals.
I applaud the bill's focus on evaluation. The function should never
have been cut back at USAID. An organization that does not learn from
its mistakes is bound to become sterile and ineffective. I suggest that
the strong evaluation function be within USAID itself. It takes senior
level attention but I think appropriate staffing can avoid some of the
institutional bias and engender much genuine independent and
constructive analysis. The evaluations, as suggested in the bill,
should focus on a few key outcomes as recommended in the bill, not
process and inputs.
I support reestablishing the lessons learned center suggested in
the bill, probably associated with the evaluation office.
I also suggest that additional reflection be given on the bill's
cross-agency evaluation function. Even given the bill's safeguards, I
think it could easily evolve into overlapping its functions with the
Inspector Generals and Government Accountability Office (GAO). Instead,
I recommend that the cross-agency office undertake major studies of
issues and problems. I believe there is some thinking along these lines
in the committee. This office could be something of a ``think tank''
that is kept vibrant and relevant by a board from several agencies.
This certainly is not full agency coordination, but it could contribute
to that goal. A National Academy model could be considered, for
example.
Overall, I support the bill's recommendation of coordination in the
field. There needs to be someone in the field, frequently the USAID
mission director, who is responsible for the overall coordination of
U.S. assistance programs, and in turn, reports to the ambassador. The
lack of this person is a major problem in many countries. I realize
this gets complicated in individual countries but the problem must be
dealt with.
I applaud Secretary of State Hillary Clinton for the decision to
undertake a Quadrennial Diplomacy and Development Review. This is a
long overdue. It is important for development to have a senior voice in
that review to achieve its goals.
the development agenda
I applaud the committee's leadership earlier this year in passing
S. 384, The Global Food Security Act, authored by Senators Richard
Lugar and Bob Casey. While a number of factors were responsible for the
acute global food crisis last year, one of the major causes was
agricultural productivity in many developing countries. S. 384 will
commit the U.S. to increase investment in agriculture, in part by
engaging U.S. colleges and universities in collaboration with higher
education institutions in developing countries to build their research,
training and outreach capacities. The President's and the Secretary of
State's leadership on this issue is wise and also deeply appreciated.
In general, I believe that during the last 20 years USAID has moved
away from long-term development and more toward transferring goods and
services. The issue is not easy because the immediate needs are so
great. But it is important that long-term development not be crowded
out and that is why I am pleased by the support for agriculture.
Sustained progress usually comes by building human resources; creating
and distributing technology; and building institutions, stable
governments and reasonable economic policies. Often infrastructure
plays a key role. There clearly needs to be a balance between programs
for addressing urgent short-term human needs and longer term
development activities to sustain progress. That is why the food
security legislation passed earlier this year is so important.
I note that much of the progress around the world in the last
several decades has been in countries where leadership wanted to see
better lives for their people and where the country has taken control
of their own future. We need to do a better job of listening to these
countries and how they define their needs to the extent practical as we
plan our development program. This is the real strength of the
Millennium Challenge Corporation (MCC). But we should not limit giving
full consideration to needs as set forth by only MCC countries. There
should be a ``presumption'' that we will support a country as it sees
its needs. Note that this is a ``presumption'' only because there may
be other factors that are critical.
I close by again congratulating the committee for considering
foreign aid reform legislation and for its earlier passage of S. 384.
The Chairman. Thank you very much, Mr. McPherson.
Professor Sachs.
STATEMENT OF JEFFREY D. SACHS, DIRECTOR, THE EARTH INSTITUTE,
COLUMBIA UNIVERSITY, NEW YORK, NY
Dr. Sachs. Mr. Chairman, Senators, thank you for the
opportunity to be here, and I am, indeed, a longstanding and
delighted constituent of yours and a great fan also.
And I thank all of you for taking on this issue, which
sometimes seems a little bit beside the point or out of the
mainstream or esoteric. But it is my feeling, after 30 years of
work in the international arena and in development, that this
is absolutely vital to successful foreign policy. And a lot of
our greatest difficulties and challenges are going to remain
unsolved unless we dramatically increase and improve the extent
and quality of our development programs.
It is striking that the big picture in today's New York
Times, which, if you haven't seen it yet, runs the headline
``Radical Islamists Slipping Easily Into Kenya.''
We are working, as part of a project that I direct for the
U.N., exactly in this area, in Garissa district in northeast
Kenya. It is an extreme drylands area. It has a baseline where
90 percent of the children are not in school. There is no
water. There is no viable livelihoods.
There is absolutely no way to maintain law and order, to
guard against Islamist extremists slipping into an area like
this, to avoid recruiting of violence and so forth, if these
places remain in the path of deterioration that they are in
now.
Now in the project that we are involved in, for a very,
very small amount of funding, by putting in bore wells,
clinics, schools, the situation can be dramatically changed. We
have done that in a community of about 15,000 people, and the
school attendance has gone from about 10 percent to about 90
percent, including the girls. This is a matter of what directed
effort can mean.
We face these problems over a large part of the world right
now. We are there because of private philanthropy, not because
of a U.S. program right now. But this is the kind of effort
that absolutely is central to our most core needs, whether it
is Afghanistan, Somalia, Sudan, Kenya, or Haiti, where I was
last week, and many, many other parts of the world.
Let me quickly summarize 10 specific recommendations, if I
might? First, I believe that the focus of U.S. official
development assistance--ODA, as it is called--should be
sustainable economic development, meaning the integration of
environmental and economic development objectives. If we do not
integrate the climate and environment with the development, as,
Chairman, you have so eloquently led on and advised our country
on for so many years, we will fail.
So I think we should be explicit because this is not a
traditional way of thinking of USAID--that climate, water,
environmental, sustenance, biodiversity are a core part of the
development agenda. And if you look at the inside picture of
this story, these dust storms, this is the reality of the world
where we face the greatest challenges right now. So all of
these issues are interconnected. I would like to see the
legislation make sustainable economic development an explicit
cornerstone of our legislation.
Second, I believe that the United States should explicitly
embrace the globally agreed development goals, starting with
the Millennium Development Goals and the goals of the U.N.
Framework Convention on Climate Change. I would add the U.N.
Convention to Combat Desertification and several U.N. and G8
commitments on global health.
For some reason, our country has steered away from
championing the very goals as they are described by the whole
world community, starting with the Millennium Development
Goals. To my mind, this has put the United States outside of
the potential for our leadership and our leveraging, and I
think it is something that we could--it is waiting desperately
for the United States to pick up. The world wants the U.S.
leadership on the Millennium Development Goals, also on climate
change.
And I believe that the legislation would be strengthened by
making it clear that as we have signed on, and as we have said
in summit after summit, meeting after meeting, general assembly
resolution after general assembly resolution, that we are part
of the world's shared objectives in these goals.
Third, focus development assistance on low-income regions
in greatest need, including sub-Saharan Africa, Central Asia,
Haiti, and the Andean region. This may seem obvious, but
development aid often gets diverted by the short-term emergency
rather than the long-term development need. And I hope that we
can keep our focus on these critically important impoverished
areas that are stuck right now.
Four, launch a specific sustainable development initiative
for the drylands, and the New York Times picture and story is
exactly in line with this. Across the Sahel, the Horn of
Africa, the Arabian Peninsula, Western Asia, and Central Asia,
addressing the intersecting challenges of hunger, disease,
livelihoods, energy, and water scarcity. We have a swath of
about 10,000 miles from roughly Mali to Afghanistan, which is
all in a shared ecological zone where livelihoods have crumbled
and where extremism and violence and terrorism and local
conflict are pervasive.
My experience working in this region for 20 years is that
this is no coincidence. This is a region under greater stress
than any other part of the planet, and we need a development
focus that understands the ecological underpinnings of this
crisis.
This is not primarily starting as an ideological crisis. It
may be ending there. It is starting as an ecological disaster.
Hungry people, collapsed livelihoods, water scarcity, bulging
populations, and we are not there, I know it, in development
terms almost anywhere in that whole region. And that is where
our troops are, and we need to understand better the underlying
ecological and developmental challenges of the drylands.
Fifth, rebuild the analytical capacity of USAID to diagnose
the obstacles to sustainable economic development, including
the cross-disciplinary expertise in agriculture, climatology,
hydrology, disease control, ecology, physical infrastructure,
economics, and other areas.
We have dropped the ball by focusing too much on my
profession, economics, and not enough on the ecological, the
disease control, the agricultural, the other underpinnings of a
health society and a healthy economy.
Sixth, reorganize the aid programs to put official
development assistance under one programmatic roof, and that is
the leadership of USAID. This, of course, is the purpose of the
legislation. As strongly as you can do it, I would urge you to
do it. This absolutely dispersed and nonstrategic orientation
now produces far less than the sum of the parts in terms of
U.S. leverage, leadership, consistency, coherence, and, of
course, results.
Seven, in my very strong view not shared by everybody,
place the USAID administrator at Cabinet rank and with a direct
report to the President.
About half of the donor countries in the world have a
Cabinet rank for this position. In my view, we would do well to
have a Cabinet member leading the world effort. It would give
confidence, leveraging of U.S. political substantive
development, knowledge, influence, authority to have the USAID
administrator be of Cabinet rank.
Eight, focus activities on a few strategic objectives,
including sustainable agriculture, health, education,
infrastructure, climate change, and business development. The
list is not long, but we leave out many items on that list,
unfortunately.
Nine, certainly not a favorite in this country, adopt a
target of 0.7 percent of gross national product in official
development assistance by 2015, in line with the timetable
adopted by the European Union. The current goal is to reach
approximately 0.35 percent of GNP.
The official goal adopted now 39 years ago by the United
Nations and agreed to, though not with much fanfare, by the
United States in the Monterrey Consensus in March 2002 is that
the international target is 0.7 percent of GNI, gross national
income, or GNP, and that countries should ``make concrete
efforts to achieve the international target.''
We signed on to that. Of course, no one ever mentioned it
again, but we did sign on to that in a thoroughly negotiated
document in 2002.
Europe has set a timetable by 2015. This is a few parts of
1 percent of GNP. I believe that we should move part of our 5
percent of GNP of the military budget, a small fraction of 1
percent, to official development assistance to recognize the
centrality of this category for national security, and that we
would get huge benefits--political, geopolitical,
developmental, and national security--by adopting this goal.
Finally, leverage U.S. leadership in finance through
increased use of multilateral institutions that pool donor
finances in support of country-led plans of action that are
bolstered by independent technical review, monitoring, and
evaluation. And I have two such programs in mind as models.
One is the Global Fund to Fight AIDS, TB, and Malaria,
which, in my view, is a model of how development assistance can
be delivered. And the second is the Global Alliance on Vaccines
and Immunizations. Both of them pool donor resources. Both of
them invite country plans. Both of them review country plans
for their technical merit, and then both of them monitor and
evaluate the actual delivery in quantitative terms so the money
doesn't go missing.
And I think it is a very good model that could, again,
leverage U.S. finances 3 to 1 if we did more through the
multilateral mechanisms.
Thank you very much, Senators.
[The prepared statement of Dr. Sachs follows:]
Prepared Statement of Professor Jeffrey D. Sachs
Mr. Chairman and members of the Committee, thank you for the honor
of allowing me to testify today, and for your leadership in addressing
the reform and upgrading of U.S. official development assistance (ODA).
ODA is an integral part of U.S. foreign policy. Yet it is currently too
poorly directed, too small in scale, and too fragmented to play the
role that it should. I make several specific recommendations to correct
these problems.\1\
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\1\ Please note that I use the term ODA in the technical sense
agreed on by the Development Assistance Committee (DAC) of the
Organization for Economic Cooperation and Development (OECD). It
overlaps closely with the Government 150 account and some other
aggregate measures often referred to as ``US foreign assistance,'' but
is limited to grants and low-interest loans with a development
objective, as opposed, for example, to military support programs, aid
to middle-income countries, and loans at market interest rates.
---------------------------------------------------------------------------
direction of official development assistance
The core purpose of ODA should be to help low-income countries to
overcome obstacles to Sustainable Economic Development. Sustainable
economic development means the long-term process of economic
advancement consistent with environmental and social sustainability.
Obstacles to sustainable economic development may include: low levels
of agricultural productivity, absence of infrastructure, vulnerability
to natural conditions (climate, water, disease), excessive fertility
rates and population growth, extreme deprivation of girls, women, or
ethnic minorities, and poor public policies.
Development assistance is highly effective when it is focused on
these specific objectives. It is much less effective when it is diffuse
and lacking in clear and quantified goals. There are countless
development aid successes in recent years, including disease control
(malaria, measles, leprosy, guinea worm, and others), improved school
enrolment and completion, increased agricultural output, and deployment
of community health workers. The key to success is to combine good
science, cutting-edge technology, and solid management of aid efforts
at country level. The new $20 billion G8 initiative to promote
smallholder agriculture could become another great success story,
producing an African Green Revolution with the same significance as
Asia's Green Revolution of the 1960s and 1970s.
Part of the job of a good foreign assistance program is to diagnose
the obstacles facing countries in achieving sustainable economic
development. Diagnoses in the past have been simplistic, ideological,
and narrowly focused on market reforms, rather than holistic, evidence
based, and focused on environment, infrastructure, disease control, and
science and technology, in addition to market reforms.
Priority regions in need of U.S. ODA include:
Sub-Saharan Africa
Central Asia
Haiti
The Andean Region
A special focus should be given to the Dry Land regions stretching
across the Sahel of Africa (Senegal, Mali, Chad, Niger, Sudan,
Ethiopia), the Horn of Africa, the Arabian Peninsula, Western Asia
(Iran, Iraq), and Central Asia. The Dry Land region suffers multiple
assaults of poverty, hunger, drought, and disease that lead to
instability, conflict, human suffering, and vulnerability to terrorism.
The conflicts in Darfur, the Ogaden desert, Somalia, Yemen, Iraq,
Afghanistan, and the Northwest Frontier Provinces of Pakistan, are all
examples of dry land crises. The overlap of global crisis and the dry
lands is illustrated in Figure 1, taken from my recent book Common
Wealth: Economics for a Crowded Planet.
In order to maximize effectiveness, global leadership, and
leveraging of U.S. taxpayer dollars, the U.S. foreign assistance
program should specifically embrace major global development objectives
to which the U.S. is a signatory. Most importantly, these include:
The Millennium Development Goals, adopted in 2000 to be achieved by
2015
The UN Framework Convention on Climate Change,
The UN Convention to Combat Desertification
Various G8 and UN General Assembly commitments on hunger, disease,
environmental sustainability, and poverty alleviation By taking
the lead on global goals, especially the Millennium Development
Goals and climate change, the U.S. would achieve remarkable
leverage in promoting rapid improvements in living standards
and environmental sustainability. The world is hungering for
that kind of U.S. renewed leadership and engagement.
scale of u.s. official development assistance
The scale of official development assistance, currently at around
0.20 percent of GDP and around 0.7 percent of U.S. budget spending, is
far too low. Doubling ODA by 2015 is a very worthy and politically
challenging goal, but is unlikely to be sufficient to meet U.S. foreign
policy objectives. A part of the current military outlays, at roughly 5
percent of GNP, should be redirected to ODA, since effectively deployed
ODA will give the U.S. much more security than the marginal budget
dollar spent on the military.
The U.S. is committed, as a signatory to the Monterrey Consensus
(March 2002) to ``make concrete efforts towards the international
target of 0.7 percent of GNP as official development assistance.''
(Paragraph 42). This target is almost unknown in the Congress and the
American public, but is deeply embedded in international commitments,
at the UN, G8, and other forums. 16 of the 22 donor countries in the
OECD have set a timetable to reach 0.7 by 2015. America's failure to
date to acknowledge this international target is a point of continuing
weakness of American global leadership.
The 0.7 percent of GNP, which stretches back to 1970, and has been
repeatedly confirmed in international gatherings, is not taken out of
the air. Several comprehensive studies, including the UN Millennium
Project report on Investing in Development: A Practical Plan to Achieve
the Millennium Development Goals, have shown that 0.7 percent of GNP
from all major donors is the magnitude of assistance needed to achieve
the Millennium Development Goals and to address global emergencies
requiring urgent foreign assistance.
The global need for official development assistance in future years
will rise, not fall, as climate shocks, rising population pressures,
environmental degradation, and needs to adopt sustainable energy and
water systems gain urgency. The U.S. should be preparing now for this
inevitable scaling up of needs.
I strongly urge that the U.S. adopt a strategy of meeting the 0.7
target by 2015, along side the European Union, which has set a specific
timetable for accomplishing this target.
overcoming fragmentation of aid efforts
The current ODA efforts are divided among a dozen or so departments
and agencies. There is a lack of strategy in directing our funds to
foreign governments, multilateral agencies, and non-governmental
organizations. The result is that the U.S. development assistance
programs achieve less than the sum of the parts in terms of U.S.
leadership, leveraging of taxpayer dollars, and efficacy of development
programs.
I recommend the following corrective steps:
First, official development assistance programs should be
reconstituted within a single agency, presumably the U.S. Agency for
International Development (USAID). The Administrator of USAID should be
of cabinet rank, with a direct report to the President, as are at least
half of the development ministers in the rest of the DAC donor
countries. Of course, the Secretary of State would have final authority
on foreign policy on behalf of the President, so that in practical
terms the USAID Administrator would be subordinate to the Secretary of
State in the implementation of ODA.
Second, the U.S. should recognize that it achieves maximum
leverage, leadership, legitimacy, and efficacy when it operates its aid
programs through multilateral institutions, as long as the U.S. voice
in those institutions is adequate. Great ODA successes in recent years
include the Global Fund to Fight AIDS, TB, and Malaria (GFATM) and the
Global Alliance for Vaccines and Immunizations (GAVI). Both GFATM and
GAVI are donor pools, in which the U.S. plays an important funding,
steering, and leadership role. The new G20 initiative on smallholder
farming is perfectly suited to such a multilateral approach.
Successful multilateral initiatives, like GFATM and GAVI, have the
following characteristics:
Donors pool their financial resources
Low-income countries submit National Action Plans (NAPs) for
funding
An Independent Technical Review Panel vets the NAPs for scientific,
financial, and managerial coherence
Cutting-edge and appropriate technologies are deployed (for
example, medicines, high-yield seeds, innovative irrigation
systems, renewable energy sources)
Private-sector companies and NGOs are invited as participants in
the national action plans
The NAPs are specific, detailed, quantitative, and subject to
review and audit
All programs are monitored and evaluated
Third, the U.S. should reorganize a considerable amount of its
development efforts around a few strategic programs linked to
sustainable economic development, including:
Agricultural productivity in low-income, food-deficit countries
Primary health care and disease control
Education for all
Sustainable energy
Sustainable water
Basic infrastructure (roads, power grid, ports, airports, rail,
connectivity)
Integrated rural development
Promotion of sustainable businesses
Climate change adaptation
In each of these areas, the U.S. should champion a rigorous,
scaled, multilateral effort consistent with achieving the Millennium
Development Goals, the Climate Change objectives, and the other
globally agreed development objectives.
Ten Specific Recommendations
1. Focus U.S. official development assistance on sustainable
economic development, and make this goal explicit in U.S.
legislation
2. Embrace the globally agreed development goals, including the
Millennium Development Goals, the UN Framework Convention
on Climate Change, the UN Convention to Combat
Desertification, and several UN and G8 commitments on
global health
3. Focus development assistance on low-income regions in greatest
need, including sub-Saharan Africa, Central Asia, Haiti,
and the Andean region.
4. Launch a specific sustainable development initiative for the dry
lands stretching across the Sahel, Horn of Africa, Arabian
Peninsula, Western Asia, and Central Asia, addressing the
intersecting challenges of hunger, disease, livelihoods,
energy, and water scarcity.
5. Rebuild the analytical capacity of USAID to diagnose the
obstacles to sustainable economic development, including
cross-disciplinary expertise in agriculture, climate,
hydrology, disease control, ecology, infrastructure,
economics and other relevant areas.
6. Reorganize the aid programs to put ODA under one programmatic
roof, under the leadership of USAID
7. Place the USAID Administrator at cabinet rank with a direct
report to the President
8. Focus aid activities on a few strategic objectives, including
sustainable agriculture, health, education, infrastructure,
climate change, and business development.
9. Adopt the target of 0.7 percent of GNP in official development
assistance by 2015, in line with the timetable adopted by
the European Union. Reallocate part of the military budget
(currently around 5 percent of GNP) for this purpose.
10. Leverage U.S. leadership and finance through the increased use of
multilateral institutions to pool donor finances in support
of country-led plans of action, bolstered by independent
technical review committees, audits, and monitoring and
evaluation of programs.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Senator Lugar [presiding]. Mr. Beckmann.
STATEMENT OF DAVID BECKMANN, PRESIDENT, BREAD FOR THE WORLD,
COCHAIR, MODERNIZING FOREIGN ASSISTANCE NETWORK, WASHINGTON, DC
Reverend Beckmann. Ranking Member Lugar, members of the
committee, I am David Beckmann. I am the president of Bread for
the World. I am also cochair of the Modernizing Foreign
Assistance Network.
Thank you for the work that you are doing on foreign
assistance reform, for this hearing, and for the legislation
that Senators Kerry, Lugar, Menendez, and Corker have
developed.
I especially appreciate the fact that you are working on
this in a bipartisan way. Whether people are liberal or
conservative, we want to use our money well. And this
committee, by working on this in a bipartisan way, is helping
us get a good result and a result that will be long lasting.
I think now is the time. Under President Bush's leadership
and now under Obama's leadership, we are expanding U.S. foreign
assistance. It is the right thing to do. It is the smart thing
to do. Even in this economy, voters favor--a large majority of
voters favor increased funding for effective programs that
reduce hunger, poverty, and disease.
But all of us know that U.S. foreign aid could be made more
effective. And if this Congress and this administration can
work together to make it more effective, we will use our
dollars better for decades to come, and voters for decades to
come will be more supportive of further increases in
assistance.
I really applaud the Obama administration and this Congress
for the attention that you have shown to international
development. We have got lots of problems, and you could have
given it a pass--it would have been wrong--but this Congress
and the Obama administration have done a lot on international
development.
When I last testified before the committee, you were
considering the surge in world hunger that we have suffered and
the Global Food Security Act. And now, President Obama and
Secretary Clinton have launched a global food security
initiative. As the chairman mentioned, they have also put
forward a budget that provides for increased funding for
international affairs, foreign assistance, and notably
increased funding for the capacity in the State Department and
AID.
I think the administration and both houses of Congress have
started work on foreign assistance. The Secretary has called
for a Quadrennial Diplomacy and Development Review. In the
House, the House has passed its State Department
reauthorization bill and a Pakistan bill. Chairman Berman says
that foreign assistance reform is his top priority for this
Congress. The Initiating Foreign Assistance Reform Act that he
and Mark Kirk introduced now has 83 House Members, members of
both parties, as cosponsors.
On the Senate side, I wish Chairman Kerry were here to tell
him how much I liked his speech at the Brookings Institution. I
think it really laid out an exciting vision for what needs to
happen in strengthening diplomacy and development for the
United States. And the bill that he and Senator Lugar and
Senator Menendez and Senator Corker have developed is really an
important step forward and along the lines of the chairman's
vision.
In the bill itself, I especially love the statement of
purpose. It says that as we go into foreign assistance reform,
we should really be driven by trying to make our foreign
assistance more effective in support of global development and
the reduction of hunger and poverty. That is right.
Most of the bill is about strengthening AID. And Senator
Lugar, in his opening remarks, made it clear why that is so
important. Secretary Clinton has said that one reason why we
don't have an administrator so far is that several qualified
candidates didn't want to take the job because the Agency is so
weak. So that strengthening of AID, it makes sense.
I think the transparency section of the bill is also really
good. We don't want to go back to the AID of the 1980s.
President Obama has called for a 21st century development
agency, and one of the hallmarks of a 21st century agency is
transparency and responsiveness.
A much more transparent foreign assistance program will
involve the American people. It is one way to facilitate
public-private collaboration and to facilitate the involvement
of people in the developing countries in the programs that we
help to finance. And as Senator Kerry mentioned, that
involvement by the local people is the best way to assure the
effectiveness of what we are trying to do to help them.
My main request is that you introduce this bill just as
soon as possible. There are a lot of organizations--Bread for
the World, Oxfam, the ONE Campaign, InterAction, Women Thrive
Worldwide--several of the major think tanks, lots of other
organizations have been engaging their nationwide networks in
understanding why foreign assistance reform is important.
And so, tens of thousands of concerned Americans are eager
to have a chance to weigh in and have their say in this debate.
And once this bill is introduced, they can speak to their
Members of the Senate, whether they are on the committee or
not, and say, ``We want you to cosponsor this bill.'' So that
gives them a chance to help build broad support in the Senate
for the important and very difficult work that this committee
is doing.
I do think now is the time. And one reason that now is the
time is because of you, actually. I think you and the other
people in place in the key leadership roles on this issue are
the right people to do the job. We have a President and a
Secretary of State who are really committed to reducing global
poverty. They are both committed to foreign assistance reform.
The House has shown that they can move this issue through
the House. This committee is extraordinary in your ability to
work across the aisle on complex issues that are important for
our Nation and the world.
So I thank God for the leadership we have got, including
you, and I pray that God will continue to guide and bless your
steps as you work on this really important issue.
[The prepared statement of Mr. Beckmann follows:]
Prepared Statement of Rev. David Beckmann
Chairman Kerry, Ranking Member Lugar, and members of the Committee,
thank you for inviting me to testify. I am David Beckmann, president of
Bread for the World, a collective Christian voice urging our nation's
decision makers to end hunger at home and abroad. I also serve as co-
chair of the Modernizing Foreign Assistance Network, a broad coalition
of groups and individuals working to make U.S. foreign aid more
effective in support of global development and the reduction of
poverty.
I am grateful for this hearing and for the draft legislation that
Senators Kerry, Lugar, Menendez, and Corker have developed. I
especially appreciate the fact that you are working in a bipartisan way
on this issue. The institutional changes you legislate will be better
and more long-lasting if members of both parties, conservatives and
liberals, contribute their points of view.
Now is the time for foreign aid reform. President Bush led a major
expansion of foreign aid, and President Obama proposes to double
foreign aid. A substantial majority of U.S. voters favor spending more
on effective programs to reduce hunger, poverty, and disease in
developing countries. It's the right thing to do and the smart thing to
do. But we all know that foreign aid could be spent more effectively.
If this administration and Congress manage to improve the effectiveness
of U.S. assistance, our dollars will do more good for decades to come,
and voters will continue to support increases in funding.
In a recent survey, 85 percent of registered voters agreed that we
``need to modernize how foreign assistance is currently organized and
implemented.'' In a poll last November--in the depths of the economic
crisis--87 percent agreed that ``in a time like this, we need to make
foreign assistance more efficient and get more of our aid to people who
really need it.''
I applaud the Obama administration and this Congress for the
attention you have already devoted to international development,
including foreign assistance reform. When I testified before this
Committee in March, you were considering the terrible setback in
progress against world hunger that has taken place over the last
several years. You passed the Global Food Security Act. In his
inaugural address, President Obama promised people in poor countries to
``help make your farms flourish,'' and the administration--led by
Secretary Clinton--has now launched a global food security initiative.
The President was able to convince the other G8 nations to work with
the United States to help farmers in poor countries increase their
production.
The administration's 2010 budget request puts us on the path to
doubling foreign assistance by 2015, including a major investment in
global health and increased investment in agriculture. The
administration's budget also proposes to bolster the capacity of USAID
and the State Department to carry out their development and diplomatic
missions.
Secretary Clinton recently announced that the State Department and
USAID are undertaking a quadrennial diplomacy and development review
(QDDR). It will provide a short-, medium-, and long-term blueprint for
our country's diplomatic and development efforts. This process will
articulate a clear statement of foreign policy and development
objectives, recommend management and organizational reforms, and
propose performance measures. The QDDR process will incorporate
perspectives from across the government, from Congress, and from
nongovernmental experts.
The House of Representatives has already passed a State Department
Reauthorization Bill and a Pakistan bill. Chairman Howard Berman's
stated priority for this Congress is foreign assistance reform, and, as
of today, a bipartisan group of 83 members of the House have signed on
as cosponsors of the Initiating Foreign Assistance Reform Act, H.R.
2139. Mr. Berman's staff are already working on a rewrite of the
Foreign Assistance Act.
Chairman Kerry, in your foreign policy address at the Brookings
Institution in May you articulated the case for strengthening U.S.
diplomacy and development assistance. With regard to foreign assistance
reform, you called for clear goals, improved coordination, stronger
development expertise and capacity, streamlined laws to untie the hands
of aid professionals, and the empowerment of country teams to shape
programs based on local needs.
The draft legislation you have now developed with Senators Lugar,
Menendez, and Corker is a major step forward. I love the statement of
policy. It calls for a reform of USAID and related agencies in order to
better serve the U.S. commitment to global development and the
reduction of poverty and hunger.
Much of your bill is focused on building the capacity of USAID,
which is urgently required. USAID's operational capacity has decayed.
It no longer has budgeting or planning authority. It is not currently
represented on the National Security Council. The Administrator
position is still vacant, partly because several candidates have
declined to take charge of such a weak agency.
Under this administration, the State Department has demonstrated a
deep commitment to global development and poverty reduction. But it is
crucial that some funding be dedicated single-mindedly to development.
When we try to achieve defense and diplomatic goals with the same
dollars, aid is usually much less effective in reducing poverty. In my
mind, that's the basic reason we need a strong development agency, with
its own capacity to plan and carry out programs. These programs should
be coordinated with other foreign policy purposes, but distinct from
them.
Your bill's section on transparency is especially important.
President Obama has called for an ``elevated, streamlined, and
empowered 21st century U.S. development agency'' that will be
``accountable, flexible, and transparent.'' The reform of U.S. foreign
assistance gives us a chance to create a development agency that will
be transparent to all Americans--to encourage public support and
involvement in global poverty reduction and to facilitate public-
private partnerships. Even more importantly, the transparency section
of the bill will help people in developing countries know about U.S.
assistance programs. If local people are more aware and involved, our
aid programs will be more effective.
My main request is that you introduce this bill as soon as
possible. Quite a few organizations have helped their networks across
the country understand that foreign assistance reform is important to
future gains against hunger, poverty, and disease. These organizations
include Bread for the World and many religious groups, InterAction,
Oxfam, the ONE Campaign, Save the Children, Women Thrive Worldwide,
Mercy Corps, CARE, the U.S. Global Leadership Coalition, World Wildlife
Fund, the Centre for Development and Population Activities (CEDPA), the
Center for Health and Gender Equity (CHANGE), the International Center
for Research on Women, the International Women's Health Coalition, the
Global AIDS Alliance, and RESULTS. Our coalition also includes opinion
leaders at the Center for Global Development, the Center for American
Progress, and Brookings. Thus, tens of thousands of people around the
country are now informed and eager for a chance to have their say. Once
your bill is introduced, they can ask their senators to cosponsor, thus
building broad support for this Committee's work on foreign assistance
reform.
As I said at the outset, now is the time for foreign assistance
reform, and the main reason is leadership. We have a President and
Secretary of State who are committed to reducing hunger and poverty in
the world and to making our programs of assistance more effective. Your
counterparts in the House have demonstrated their leadership on this
issue. And this Committee has demonstrated exceptional ability to work
together across the aisle on complex issues that are important to our
nation and the world.
May God continue to bless your leadership.
Senator Lugar. Well, thank you very much.
We will proceed now with questions. The chairman suggested
a 7-minute time limit, if that is preferable for all. And I
will commence the questions.
Secretary Clinton recently announced the start of a
Quadrennial Diplomacy and Development Review, which we have
talked about today, a process similar to the QDR at the
Pentagon. I believe that most members of our committee are
supportive of this initiative. But as this is a new process for
the State Department, I would ask any of you what elements do
you believe are important for its success? What should we be
looking for, as members of this committee?
Yes, Mr. Beckmann.
Reverend Beckmann. I think it is an important process, a
positive step, and the memo in which the Secretary laid out
what they are going to do lays out a number of steps that can
make it effective. So it is particularly important that AID and
MCC have an important role in the process, that they plan to
reach out to other Cabinet departments, that they plan to reach
out to Congress, nongovernmental actors, and that this review
is supposed to be followed by a whole of Government review
because, clearly, trade policy, agriculture policy, all of
these things interact.
It seems to me, as you, Senator Lugar, and Mr. McPherson
both said, what is going to be important is that they figure
out a way to get a strong voice for development in the review
because AID is so crippled. If they just invite a few AID staff
to the meetings--in the recent meetings where I have been
together with State Department and AID, the AID staff are
clearly there to speak when spoken to. They are not strong
actors in the discussion. And so, Deputy Secretary Lew will
have to figure out some way to get a strong voice for
development in the process.
One way to do that--I mean, one way to do it is to get the
administrator in place. But even then, the administrator will
just be getting oriented as this thing gets underway. So one
possibility would be to bring in some strong nongovernmental
voices into the process, people who are trusted, people who
will be team players but can speak from the perspective of
people who are primarily concerned about development.
Because it is clear that in some situations, our other
foreign policy objectives are intermingled with what is good
for development. And so, we need some people in this process
who speak up and talk about how do we set up structures so that
we do a good job on development as well as on our other foreign
policy objectives.
Senator Lugar. Having heard your statements today and the
chairman's statement, it appears to me that we should lend
these statements to the review process, with the hope that this
kind of core function might be restored.
Let me just ask a second question along these lines. USAID
used to have robust evaluation programs, according to many
observers. And they conducted evaluation and widely
disseminated the findings. And now the development community
seems to be missing these findings presently.
You have all touched upon this in a way, but how can a
restored USAID be influential throughout the development
community, which goes well beyond the State Department, the
Government, even private groups such as some you have been
with? Can you give us some thoughts about that?
Yes, Mr. McPherson.
Mr. McPherson. It is necessary to reestablish with an
adequate budget the structure, but you also need to have very
senior field operational staff run it, really. A mission
director in a couple of countries who had been at this business
for 20 years can see things that an academic interest would not
be able to see. So, the proper leadership is important.
And when the evaluation has worked well over the years, and
it hasn't always--the administrator has to pay attention to
this, has to ask, has to direct it to do some areas. It is
almost like when I have been chair of a major board with the
internal audit. That audit had to report regularly.
Senator Lugar. As you could testify from your own
experience.
Mr. McPherson. Absolutely. Absolutely. I mean, this has to
be seen by the leadership of the Agency as an important tool.
You have to be willing to admit mistakes, learn some lessons,
and that is a mindset of a whole place. And it isn't a cookie
cutter way to do it, but to start with, somebody that is
respected by the field to run it.
Now I think today, as opposed to not many years ago at all,
there is a method to communicate lessons. I mean, the Web site
that pulls up the work you have done, that pulls back into
projects so you can really work it through. The World Bank has
some of this. There needs to be some linkages between--this is
an area where these agencies can work together, the MCC, AID,
other agencies.
I think with technology, it will take a little resources.
But frankly, this cross-agency board think tank could kind of
force that issue, I think.
Senator Lugar. Dr. Sachs, let me just ask, as my time is
coming to an end, in your testimony, you suggested that
assistance should be reorganized around a few strategic
objectives. One of these might be the food security objective
of our bill, the Global Food Security Act of 2009, that has
been reported out of committee. But touch upon again those
objectives that you would start with as we reorganize this
process.
Dr. Sachs. Thank you, Senator.
I think both on evaluation and on the substance, we lack
clear goals right now of almost all of the foreign assistance.
We have a couple of programs like PEPFAR and the President's
Malaria Initiative, which have clear goals. Most of the rest is
very scattered, very difficult to evaluate because we don't
even have a clear idea of what we are doing.
And I would like to emphasize that we are so marginal in so
many areas right now because of lack of scale, lack of clarity,
that ambassadors all over the world routinely pull me aside and
say, ``Can you help us get any kind of program going in this
country because we don't have anything really happening.''
So I have identified in my own testimony five areas that I
think--or six areas that I think are central--agriculture,
health, education, infrastructure, business development, and
climate change. These are the core of the Millennium
Development Goals. They are the core of our climate and energy
challenge worldwide.
They go to the crux of the extreme deprivation, poverty
that leads to the instability and violence that the New York
Times refers to today. And I think that they constitute a kind
of framing.
Now they also come with clear international goals that have
been put forward that the United States could be party to and
then evaluate our programs against.
Senator Lugar. Thank you.
Senator Menendez.
Senator Menendez. Thank you, Senator Lugar.
Let me say I am really pleased that we are having this
hearing today. This is a topic that I have worked on for
several years, and I am encouraged by the progress that we are
making in the legislation.
As the chair of the subcommittee on all of our foreign
assistance, it has been great to work with Senator Corker and
with you, Senator Lugar, and with the chairman on this. And I
really think we are moving in the right direction here.
I also appreciate the broader community that is out there
that has been engaged on this issue, from organizations that
have for their existence been out there promoting the
importance of our development and foreign assistance, as well
as citizens who have really engaged in this. It is critical
because this is not--for many people in our country, the nexus
between what we do and our foreign assistance and development
assistance to their lives is not clear to them. Therefore, the
advocacy for this is incredibly important, and this is where
citizens make a difference.
To me, this isn't just an issue of morality or an issue
that is driven by a sense of doing what is right for the most
disenfranchised around the world, although those, in and of
itself, they are both moral and correct and desirable. But they
are also issues that are directly in the national interests and
the national security of the United States. I think we have
every reason in the world to understand that every time we
provide credit to a farmer who is displaced or training to a
woman who wants to run a business out of her home that we are
creating stability and security throughout the world, and that
is in the national interest of the United States.
When we provide an effective alternative to illicit
economic activity, we are making a blow against drugs coming
into this country from others who have no alternatives in terms
of poor coca farmers to decide whether I will do that to
sustain my family or I will have a sustainable development
alternative.
So I think all of these issues are incredibly important,
and I think they come right back to many of the issues we are
debating here in the United States Senate and the Congress,
whether it is about undocumented immigration. People leave
their countries for only two reasons--civil unrest or dire
economic necessity. Change those dynamics, you won't have that
pressure.
If you, in fact, want to ensure that we do not face the
challenges of terrorism in the hemisphere, create stability
because terrorism works best under the cover of chaos. If you
want to ensure that there are more American goods and services
to be sold throughout the world, create an economic class that,
in fact, has the goods--has the wherewithal to purchase those
goods and services, and therefore, it is in our economic
interests. If we want to meet the challenges of global health,
where diseases know no boundaries or borders, then, in fact,
this is a critical issue.
So I really think that this is one of the most important
things we can do, and reforming it so that, in fact, the
American people can see the results is incredibly important.
That is why I have suggested the idea of some of our
independent monitoring mechanisms for evaluating the impact of
our foreign assistance program.
I think there is a great difference between saying that we
handed out 500 textbooks or trained 200 teachers. But it is far
different to say that we have improved the aptitude of
schoolchildren and that these improvements helped connect them
to meaningful employment, which raise their household incomes,
allow them to eat better, access medical services, and on and
on.
Finally, I really do think that AID, we need the
institutional ability to deliver these services. In my personal
view, AID has been decimated over the last several years in a
way that that is very difficult. I have focused on building
USAID from the inside out, and I think this bill does that in a
coherent and strategic manner as well.
So for all those reasons and many more, I think we are
headed on the right course. And I really appreciate the
bipartisan spirit here because that is going to be necessary to
make this happen.
With that, I do have one or two questions. I mentioned this
independent evaluation and research innovation group for
foreign assistance appears to be a step toward establishing a
consistent evaluation scheme across the Government foreign
assistance programs. What are your views in terms of having
such an independent group that can look across the spectrum of
U.S. Government programs?
Is that a good thing? Are there problems with it? How would
you structure it? I would be interested in hearing your views.
Mr. McPherson. I think that there needs to be a strong
evaluation office led by a strong field-oriented person at AID.
This bill was overwhelmingly, in my view, correct, and I
congratulate you for its work.
I would tinker a little bit with the wording, at least as I
understand it, for this cross-agency evaluation or at least
think carefully about how to make sure it doesn't become
another IG or GAO. Those organizations play important
functions, but I suspect the Agency heads--MCC, AID, and so
forth--will feel like it is another outside group to issue its
reports and so forth.
I think, as mentioned a moment ago, the internal auditor
ultimately needs to be somebody management uses to drive
improvements. Evaluation is something that needs to be a tool
to drive improvement.
I think the cross-agency--I called it a think tank a moment
ago. I think you need some cross-thinking. You need some
independence. There are some great issues here that people
haven't really dug into, and I don't know that they should be
associated with evaluation, but they don't need to be
primarily.
So I would make the cross-agency function or organization
have a somewhat different focus and a very strong, probably
reporting to the administrator, evaluation function within the
agency. We are getting into the weeds in all these things, and
I probably have almost too many views, having worked and
worried about these issues for decades. But I want to be clear
that the focus on a much--on a very strong evaluation.
I like to say an organization that can't learn from itself
is inevitably a sterile and, in due course, dysfunctional
structure.
Senator Menendez. Dr. Sachs.
Dr. Sachs. Yes, I would like to start by stressing that the
biggest problem in our development assistance has been the lack
of scale and the lack of clear goals and the lack of ambition.
So unless we solve those problems by adopting a view that we
are going to scale up significantly, take on bold objectives,
pursue them assiduously, evaluation won't solve the problem.
It is not that we have been doing a huge amount, but doing
it poorly. We have doing relatively little and scattershot
without clear objectives, except in a couple of programs, and
not knowing what we are doing.
I think the idea of an independent evaluation office is a
good one. I think the experience of the World Bank with such an
office has been a very good one because it has helped to
correct directions that that institution has taken over the
years and help get them back on course. So you might look at
the World Bank experience as a kind of a model of how that can
function.
But I do want to emphasize that our biggest need is a
scaled-up program that adopts bold objectives, and I would
urge, once again, that we start with the Millennium Development
Goals because those are the globally agreed objectives. The
United States has signed on. If USAID would champion those, we
would find that there are 191 other U.N. member governments and
21 other donor governments that would be natural--at least the
21 other donors, let me put it that way, that would be natural
partners because we are all signed on to the same objectives.
And USAID needs to be a more goal-based, goal-focused
institution. From there, we can evaluate how we are doing
toward explicitly set objectives.
Senator Menendez. Mr. Chairman, my time is up. I just
appreciate your answer, and I understand your advocacy for
greater financial engagement, and I am an advocate of that
myself.
I would just say that we based our independent evaluation
model on the World Bank's view. So I am glad to hear that that
is something that you think is important.
I will wait to see if we have a second round, Mr. Chairman.
Senator Lugar. Thank you, Senator Menendez.
Senator Corker.
Senator Corker. I, too, want to thank you for your
testimony and certainly what you do on a daily basis and all
the many experiences we have to draw on here.
I am very excited about this legislation and certainly
appreciate the opportunity to work with the other three
Senators and many others and want to say that I know much has
been said about the bipartisanship. It truly has been that. I
mean, it has been a great piece of work so far.
I am sure there will be amendments when it actually goes to
the floor. Well, actually, someone mentioned about moving it
along. We actually haven't introduced the bill yet, and yet we
are having a hearing. So I can tell you we certainly are
anxious to get it to the floor and get it done in a proper way.
Because each of you are supportive and have very positive
comments about the bill, I am going to wander off the script
just a little bit and ask some other questions. I was just in
Darfur and Kenya, Mr. Sachs, and saw some of the
destabilization that is occurring there with many people coming
in across the border and the concerns that exist. And
obviously, I am very supportive of foreign aid efforts being
focused and efficient and being goal driven. So me asking this
question is not an indication of my own attitude.
But while I was visiting, and we went to several other
countries, there was a Wall Street story Dambisa Moyo wrote
about our aid efforts. And she--I will just use a quote from
her. ``It enables corrupt governments, grow debt, discourage
foreign direct investment, and ultimately makes the countries
poorer.''
While I was there, it was interesting. One of the leaders
of one of the countries acted like they embraced this view. I
will say simultaneously was asking us for more aid, just for
what it is worth. [Laughter.]
But I wonder if you all might just weigh in? I know you
have to, because of what you have done, read some of the things
that she has said and done. And she focuses on tax incentives
and other kinds of things that should be done internally, and I
think all of us know that economic growth has to occur in these
countries. But just wondering if you might say a few words
about some of her views and some of the response in Africa
itself?
Dr. Sachs. I think that the key to success is that the aid
is well targeted, well monitored, specific, and quantitative.
There are many kinds of aid programs that have failed, and
there are many kinds of aid programs that have succeeded
splendidly. And so, any broad brush is asking the wrong
question.
The right question is how can aid succeed to achieve the
outcomes that we are looking for? It is never to hand over
money. That is the worst. It is never just general trust. It is
targeted efforts in the core areas of agriculture support; the
health system; education; infrastructure, meaning roads, power,
safe drinking water, sanitation; business development in ways
that you can follow the money.
And when that is done, the results are extraordinarily
powerful for very little money. Measles deaths have come down
by more than 90 percent in this decade because of a targeted
immunization effort. Leprosy is nearly eliminated.
Schistosomiasis is under dramatic control in many places.
Malaria, because of the President's Malaria Initiative, being
well targeted--bed nets, erythromycin and combination drugs,
community health workers, rapid diagnostic tests--is plummeting
in places like Ethiopia.
If you were in Rwanda, I don't know if--that was a country
that where we have had this interesting colloquy----
Senator Corker. I just happened to be in that country.
Dr. Sachs. I know President Kagame very well. And while he
might say one thing or another, half his budget is aid-
dependent right now. And I have followed the aid there. I have
worked to help him get support for the successes he is
achieving.
Senator Corker. Which are amazing. He has done an
incredible job there.
Dr. Sachs. Yes. That is an aid success story. The idea that
it has been turned around in the public mind as something else
shows how peculiar the atmospherics around this issue are.
President Kagame should be explaining to the world aid works.
``Look at my country. I got help. It supports half my budget.
It helped me build roads. It helped me build water.''
But instead, he went off on attack, which confuses the
public in a very unhelpful way, and I have said it to him, and
I will say it again to him. Tell the truth of what happened,
and then we can all understand why this is a good thing. Nobody
is after creating dependency. We are trying to break dependency
by solving the poverty problem so countries can graduate.
Nobody wants long-term aid. We want graduation from aid, as
has been done with Korea, with Taiwan, with many, many other
countries. And the whole episode of this Moyo and President
Kagame and so forth is a confusion.
There is no simple generalization. You have to do the aid
right. And to say I am against aid when half your budget
depends on it and it has allowed your country to reestablish
growth after a genocide is only to confuse our public with what
is going on. I don't get it.
The fact of the matter is when you press President Kagame,
whom I know very well for many, many years, he says, ``No, no,
no. Don't cut it off. Don't cut it off. Just let us do it
right.'' And that, I think, is the true answer of this issue.
Senator Corker. That was such a comprehensive answer that
maybe we will be brief. But thank you, go ahead.
Mr. McPherson. Yes, I think Rwanda clearly has made great
success.
Senator Corker. Absolutely.
Mr. McPherson. And it needs to be recognized here and
there. I think, however, that those who--some of those who are
concerned about AID at least have some argument. I am not
talking about this particular writer. But frankly, when you
look at long-term success in countries, it is because human
resources were built. It is because institutions within those
countries in which those human resources could work. It is the
creation and distribution of technology. It is reasonably
stable, engaged governments, and it is reasonably sound
economic policies.
I am not talking about a cookie-cutter set of policies.
Human resources, technology, and infrastructure, as we have
found from our own country. And frankly, over the last near
generation, we have forgotten about the human resource
component.
In the mid 1980s, when I used to testify in front of
Senator Lugar, we were educating--we had long-term education in
this country of 15,000 to 18,000 a year. The last figures I
saw, and they were about a year old, we had about 1,000.
In the end, you look at your own communities. It is people
with education and skills that drive what happens in your
state, and it is technology. It is institutions. And I think
that too often we have been worried about the transfer goods
and services, and that helps immediately, but it doesn't help
long term.
Now I do believe that sometimes quite targeted campaigns
can have a huge impact. I concur with what has been just said.
And Senator Lugar, you remember my being up here, working on
oral rehydration therapy, which had a huge impact of saving
lives. And we were able to somewhat more or less quantify that.
But I think we can never forget that ultimately
development, as my old president John Hanna, president of
Michigan State who was administrator before I was, came to see
me that early day and sort of tapped me on the knee and said,
``Peter, just don't forget it is about people.''
So I think that the criticism we sometimes get is that we
don't do enough on these long-term economic growth components.
We need growth, and we need economic growth.
Senator Corker. Mr. Chairman, I know I asked one question,
and I am already 2 minutes over my time. I had several others,
but I do want to say I thank you very much for your testimony.
And I know that there are people listening in places we
don't know right now. I think both of us would hold President
Kagame up as a role model as far as what he has done, and we
are only referring to a comment made that was confusing. What
they have done in Rwanda is remarkable, and I think we all
respect and admire that. And I know you do, too.
Dr. Sachs. Absolutely, Senator.
Senator Lugar. Thank you very much, Senator Corker.
Senator Shaheen.
Senator Shaheen. Thank you very much, Mr. Chairman. And
thank you to you and Chairman Kerry for holding this hearing
today and to all of our panelists for appearing.
As everyone has pointed out, foreign assistance is critical
in promoting U.S. interests across the globe. It is one of our
best and most important nonmilitary instruments of power, and
it is an investment in our country's national security and
economic prosperity.
But as everyone has pointed out, like every investment, we
need to make sure that we are getting the most for our money.
We need to do it in a way that makes sense.
I want to commend Senators Lugar, Corker, Menendez, and
Kerry for your efforts to deal with USAID reform and certainly
applaud Secretary Clinton's initiative to establish the
Quadrennial Diplomacy and Development Review initiative. And I
think that her efforts and the leadership that Secretary Gates
have shown to talk about the importance of revitalizing our
foreign assistance efforts gives us an opportunity that we have
not had in a very long time to really address how we look at
foreign assistance. So thank you for all of your efforts in
this regard.
But let me ask because there have been countless reports
and commissions and attempts to overhaul U.S. foreign
assistance policies over the years. So what have been and what
do you see as the major impediments to reform this time? And
what are the most urgent priorities that this committee and
Congress should look at as we are trying to be supportive in
the effort to reform our foreign assistance efforts?
Reverend Beckmann. I think partly what has happened is that
President Bush wanted to put more money into development, but
was deeply--he and the administration were deeply suspicious
about whether AID could do it. And so, he proposed a bold AIDS
initiative, an excellent Millennium Challenge Account
initiative: Bread for the World campaigned to help get that
established because he wanted to do more to reduce disease and
poverty around the world but didn't think AID could do the job.
So, in effect, we set up two major new agencies to do those
two purposes. And I think, on balance, they have done a great
job. It was a good step.
But now, moving forward, AID was sort of left to decay. And
then we have this transition between the administrations. We
have no administrator. They are in some kind of limbo at the
moment. So the decay has accelerated.
So it is just clear now that the next step forward needs to
be to get some consolidation, some coordination, and I think a
strong development agency. It can't just be mushed into the
State Department. It needs to be coordinated with the other
things that our Government is doing. But we need a separate and
strong development function for the reasons that many people
have mentioned.
So I think the impediments, it is just history. It is the
way it worked out. But now maybe the main impediment to reform
is just it is a little bit complicated. There are maybe some
bureaucratic toes that need to be stepped on in order to pull
things together.
I think it is remarkable to me how much consensus there is
among the members of the committee who have spoken also. It is
to be noted that Jeff Sachs and Peter McPherson are pretty much
on the same page on this issue. [Laughter.]
Reverend Beckmann. So there is a lot of agreement about
what needs to be done. There is a lot of agreement about what
needs----
Senator Shaheen. I agree with that.
Reverend Beckmann. There is a lot of agreement about what
needs to be done, and I think it is mainly just what we need is
what you are doing right now, the political will to tackle very
complicated issues and change institutions in ways that will
pay off for the next 10, 20 years.
Senator Shaheen. Go ahead, Dr. Sachs.
Dr. Sachs. Thank you.
Just in a little bit of perspective that I think is
helpful. By the end of the 1990s, our aid program had shrunk to
almost nothing. As it started to recover in this decade, it was
one main program that started it off, which was PEPFAR. The
President's Malaria Initiative, which is much smaller scale,
was also targeted and very important and leveraged a lot of
international resources.
My own view is that the Millennium Challenge Corporation
never got off the ground, and I would fold it back into USAID.
Frankly, I don't believe that it serves a purpose as an
independent organization anymore, just to be on the record.
I believe we have lacked adequate financing, first of all.
And this is my experience, which I mentioned a moment ago, in
80 or 100 countries around the world is an incredibly
frustrated U.S. diplomatic service, Ambassadors constantly
pulling me aside, every mission, every trip that I take. ``We
don't have any resources here. Can you help us in Washington?''
That is the actual truth today, still today. We do not have
an effective aid program other than in a couple of war zones or
AIDS as a disease. Other than that, the budgets are tiny.
Second, we have lacked a strategy. The Bush administration
was not too keen on harnessing the global effort around the
Millennium Development Goals. This was a loss of opportunity to
leverage our authority, power, and money. We lost the
leveraging because they didn't want to be associated with U.N.
goals, as it were.
We lost the ability to lead on climate and infrastructure
because the administration, the past one, didn't want to touch
that. So we have lacked a strategy. Any clear goals other than
in AIDS and malaria, I would say, two important contributions
of the last 8 years, but other than that, pretty much aimless.
And the third thing is implicit in that. We have lacked the
leveraging. There is a desperate hunger for the United States
to lead conceptually. We are inherently the largest donor
because we are the largest economy in the world. And others
will join in. When we said agriculture a month ago, everyone
jumped in and said, okay, we are in agriculture also. That is
the authority of the United States to lead.
So if we finance, strategize, and leverage, we are going to
have a completely new capacity in this country.
Senator Shaheen. Thank you.
Mr. McPherson. I would say, Senator, that we have got to be
very careful AID doesn't go the way of USIA. And I think that
just didn't work, and we are sliding that way.
I don't think that Secretary Clinton would want that, but
we have a very--we have a situation that began actually when
Russia and the new republics were taken out of AID. You
remember that, Senator, and that was the first major weakening.
It went downhill over the years.
I mean, this is--you ask a wonderful question, and I agree
there clearly needs to be vision and a number of things. But I
would keep my eye on are we going to get new senior technical
and leadership people into the Agency? I am not talking about
the political appointments, and that is important. But look at
that AD authority. You remember? That was an authority that was
really very important, and it is still there.
So I say, first, people. Second, if AID doesn't have its
own policy and budget office that is well staffed and strong,
it will be USIA as it now is. It is just that you cannot have
an operation with muscle without budget and policy.
So I have got a lot of ideas, but I would look at senior
people. I am not talking 10 of them. I am talking a few of
hundred. And the budget and policy.
There are a lot of other things I would like to do. Atwood
and Natsios, two former administrators, and I had an article in
Foreign Affairs in November, where we laid out our views, which
absolutely I think would be consistent with this committee's
expectations.
That is what I think.
Senator Shaheen. Thank you.
Mr. Beckmann.
Reverend Beckmann. If I can just--I should have said also
as an obstacle, I think there is this historical, just the
bureaucratic process. But the other thing is that there is a
real issue about a temptation to sort of suck up development
money and also use it for other purposes.
So many of the dollars in USAID are supposed to serve some
other foreign policy interest and also help poor people. So if
you look at what countries the money goes to, if you are just
trying to reduce poverty and hunger or promote development, you
would invest primarily in low-income countries, especially
those with good governments. But AID money is going mainly to
other countries that really are serving our interests.
Now some of the money, some foreign aid money can go to
those countries to serve our interests, but if it is, in fact,
the policy of the United States to promote global development,
reduce hunger and poverty, which I think it is, we need some
money that is single-mindedly focused on development and
reducing hunger and poverty. Because if you try to hit two
birds with one stone, poor people will get the short end of the
stick, to mix my metaphors.
Senator Shaheen. Thank you. [Laughter.]
Senator Lugar. Thank you very much, Senator.
I gather that at least two of our Senators perhaps have
additional questions, Senator Menendez and Senator Corker.
I wanted to recognize Senator Corker and, at the same time,
pass the gavel on to Senator Menendez because I need to go to
another destination at this point.
Senator Corker, would you proceed?
Senator Corker. In a show of our great bipartisanship, I am
going to let Senator Menendez go first.
Senator Lugar. Very well.
Senator Corker. I have to stay anyway. [Laughter.]
You know, one of the things that one can't help but notice
real quickly out in the field is people are entrepreneurial
within USAID, as they need to be. And you look at the PEPFAR
program, which is where the money is. All of a sudden, almost
every issue that exists has to do with HIV, right?
I mean, so all of a sudden, PEPFAR moneys are used in
microfinance. They are used in all kinds of other things
because if there is not poverty, then there is not this. I
mean, just wondering with you all's experiences, what is the
best way to keep us from having mission creep?
Again, all the things that are being attempted are good
things, OK? But they do take away from I think what each of you
have talked about, and that is having a very focused goal for
each of these efforts. But you have worked inside or served
today caring for people. What is the best way to make sure that
these dollars actually continue to go for their intended
purpose and are not subsumed into other things where there is
not enough money?
Mr. McPherson. Well, you probably need--you need to be
rigorous in looking at that. On the other hand, it is also true
that some things are critical to feed into it.
For example, if you are going to deliver health care, the
HIV/AIDS care, you probably have to train some people to do it.
Hence, the work with some universities for doctors, for nurses,
for health care providers. If people don't--they may have the
AIDS in abeyance, but if they are near starvation, it is a real
problem.
I do believe, as Jeff has so often said and said here again
today, that there is great merit to a driving set of goals--
tuberculosis, polio--that you can measure success. On the other
hand, such driving goals tend to suck up everything else, too.
I mean, we find the HIV/AIDS program hires all the doctors
or other care deliverers so there isn't somebody to take care
of the delivery of children. I am overstating perhaps, but you
ask a question for which I don't think there is a clear answer,
but which is important to be diligent about.
I hope that is not so fuzzy it is unresponsive, but----
Senator Corker. No, I don't think there is a concrete
answer. I just want to raise it as an issue because out in the
field, you see it constantly. And actually, you kind of admire
the folks who are figuring out ways of that is what happens
inside government or inside budgets.
But on the other hand, it does take away from the targeted
goal that the moneys are allocated for. And by the way, does
away with some degree of discipline, let us face it. Yes?
Mr. McPherson. And measurable results.
Dr. Sachs. I think one of the great strengths of PEPFAR has
been that we can count the number of people on treatment, and
we can assign targets. And that is a tremendous plus.
Most things that are needed in development are actually of
that kind, in my view--accountable, measurable. And
establishing clear targets can really work and make a big
difference.
Now within those targets, it may be, as Peter just said,
you can't take the medicines if people can't eat, if they don't
have enough to eat. That is actually just biological. So there
may be an added component that is intrinsic to the program.
You are talking about something even beyond that, though.
There is money. Let us do something good. I think the real
answer to that, frankly, Senator, is that we funded well one
initiative in the last 8 years. We did not fund well
microfinance or children's education or safe drinking water or
agriculture. Now agriculture is being added. That is extremely
important.
A true success in development by nature will involve a
holistic approach. It doesn't mean that everything is in it,
but it does mean a focus on infrastructure, health, education,
and a few components. We have not gotten that balanced program
yet in USAID mainly because of budget and assignment of targets
so far.
So your problem that you observed will be reduced certainly
if we have a stepped up and better designed overall aid
strategy. Then PEPFAR can get on with doing what PEPFAR is
supposed to do. And I would say that the subcomponents of our
program should have clear targets, measurable, monitorable,
verifiable, subject to audit.
The taxpayers deserve it. The programs work better that
way.
Mr. McPherson. I want to take this on just a little bit. We
have the Millennium Challenge Goals, which I endorse, have this
measurable goal--count the outcomes. But it has been part of
why--and I support them. But it has been part of why we have
moved away from long-term development.
If you can't--when you educate somebody to be a scientist,
if you work on agriculture policy, if you do a number of these
critical kind of structural things, mostly human resources,
technology, when you put money into new technology, which only
part of the time pays off, all those things are harder to
measure than how many people didn't get polio.
And the counting approach, which I believe in, I mean, I
mentioned this oral rehydration a moment ago, which we--it was
to deal with diarrhea in kids, and it was tremendous. But I
think that we too often are so focused on outcome numbers we
miss the long-term investments, and those long-term investments
tend to be what make--create the long-term growth, as it does
in our own country. And I think we have gotten too much into
short-term counting without the balance.
Reverend Beckmann. Just going back to your question, I
think partly that when I observe that, I do give credit to the
local people for figuring out what really needs to be done. And
part of the way to--part of the problem is here, that Congress
and the President and Washington generally, including a lot of
NGOs, are giving mandates to people in the field that we want
you to do $30 million of biodiversity. And whatever is
necessary in the country, the guy has got a mandate to do $30
million of biodiversity.
Or, we want you to do AIDS. Now maybe when you get to the
community--I know a program in Kenya. It is an AIDS program,
but it was clear that people didn't have enough food to eat.
The AIDS patients didn't. So they got into community gardening
and agriculture because they were responding to the real needs
of the community.
So part of the problem is that our aid programs are
excessively stovepiped, restricted with mandates from
Washington so that by the time our people get to Mozambique,
they have got to do AIDS. They have got to do all these other
sectoral mandates.
So part of the reform needs to be to focus on broader
goals, fewer goals, and make the aid programs responsive to
local needs. If it is a decent government, what does that
government want at the community level? What does the community
really need?
So part of the answer to your question, part of the
conundrum is--part of the answer to your question is for
Congress and the President and NGOs to quit being so specific
and trust local people to do what is really needed locally.
Senator Corker. Thank you for your testimony.
Mr. Chairman, I am going to turn it over to you. I have not
done well. I have asked two questions, but I have had some
great responses, and I thank you for your testimony.
Senator Menendez [presiding]. You have had very full
responses.
Senator Corker. Thank you all.
Senator Menendez. We are going to keep this record open, I
am sure, for some other questions to be submitted.
Let me just ask you, Mr. McPherson, you said something that
I think is very important here. We need a strong AID, and one
of the things we need is an AID administrator sooner rather
than later. It is already late.
And I really hope the administration--I know they are in
the midst of their vetting process. We need an AID
administrator because here is my concern. I applaud Secretary
Clinton on her quadrennial review, but isn't it true in this
quadrennial review, we want development sitting alongside of
diplomacy, but not subservient to diplomacy. They go hand in
hand. Is that a fair statement?
Mr. McPherson. Absolutely.
Senator Menendez. Is that a fair statement? Anybody
disagree with that?
So, in order for that to happen, then we have the diplomacy
part of this pretty well down in terms of its leadership. We
need the development leadership to be sitting alongside so that
we can have the type of advocacy we need. So that is incredibly
important.
The other thing is, Dr. Sachs, did you have this session
listed as one of your classroom opportunities at Columbia?
Because I see a lot of young people in the audience, so I was
just wondering whether this was a must----
Dr. Sachs. They are all welcome to class. [Laughter.]
Senator Menendez. You mentioned the Millennium Challenge
Account several times, and I think I understood you--I just
want to make sure for the record. If I heard you correctly, you
say the goals of the Millennium Challenge Account are
desirable. But my concern is obviously not every country, at
least as the Millennium Challenge Account procedure is
presently written, is eligible for the MCC.
And my concern is, is that there will be plenty of
countries for which we will have legitimate development
assistance desires to be helpful that would not otherwise
qualify for the MCC. We would like to all see them graduate to
an MCC level.
But you are not promoting that the eligibility for MCC be
the standard that we should achieve? I am trying to nail down
exactly what you mean.
Dr. Sachs. Actually, this is a very important question and
a good opportunity for me to clarify. I am referring to the
Millennium Development Goals, which are the internationally
agreed objectives.
Senator Menendez. OK.
Dr. Sachs. So that is what I think we should subscribe to.
If you look around the world, almost all governments, the
United Nations, the World Bank, the IMF, the other donor
agencies have organized around these eight Millennium
Development Goals. If the U.S. would do so as well to a much
greater extent, we would be able to leverage our influence far
greater than we do.
Now, in addition, and this is the point of confusion, we
have something called the Millennium Challenge Corporation,
which actually is not based on the Millennium Development
Goals. It uses the same word in front. The Millennium Challenge
Corporation was a good idea to try to give more funding to
qualifying countries.
In my view, and it is a complicated subject, lots of
opinions, I do not believe it has succeeded, and I do not
believe it is worthy of continuing in its current form. Most
people disagree with me, I have to say. But I think that is
inertia.
It never found a strategy. Simply asking countries let us
work on something, in my view, is not good enough for what we
spend our development assistance dollars on.
I would wrap up that money into the USAID budget, expand
the general USAID portfolio, have clear objectives of USAID, as
I have mentioned many times, around the Millennium Development
Goals, around the climate change goals, and so forth. But I
would not keep a separate corporation. I don't see any logic of
separating that or of holding it at bay.
And in practice, these qualifying scores, for a lot of
reasons, turn out to be arbitrary in practice. But worse than
that, if you actually look at an MCC program--there are a dozen
or so at this point--there are often 500 pages of legal
boilerplate. It became an incredibly burdensome, poorly
targeted effort, and I think that it is a clear case of
fragmentation that should be eliminated to bring back the
budget within a USAID context.
Senator Menendez. If you can answer briefly, then I think
we are going to have a vote, and I still want to give Senator
Shaheen--she stayed. So I assume she has some questions here.
So----
Reverend Beckmann. I do disagree strongly with Dr. Sachs on
the Millennium Challenge Account. It is an important--what is
distinctive about it, it is responsive to the local government,
and there are clear development criteria and there is a
decisionmaking process so that we don't end up just giving
money to strategically important countries, whether they are
middle income, whether they have got prodevelopment governments
or not. I think it is working very effectively.
So there needs to be some kind of coordination or
connection between the MCA and AID. But if anything, AID ought
to be more like the MCA, not MCA merged into AID.
I agree that as we--the United States would do well to be
part of the international development goals. And with 2015,
2015 is when the goals--they were targeted as 2015 goals. The
world has changed. So there is an opportunity right now for the
United States to provide leadership and rearticulate those
goals for the next 10 or 15 years in a way that will--they are
good goals. The world is on one track, but that would put us as
part of the world family.
That would be a good----
Senator Menendez. On the first part of your answer, though,
let me just say can we not create country ownership, without
necessarily--and create, as Jack Lew has talked about, giving
the partners more of a say on how the resources are targeted by
either building capacity so that they have the ability to do
that themselves and/or by focusing on projects that are aligned
with the recipient countries' needs and interests as they see
them.
But if we hold everybody up to the Millennium Challenge
standards to get in, there are few countries that are going to
be able to achieve it, at least in the first instance. And that
would leave many of the very people you are concerned about,
some of the poorest people in the world who won't be able----
Reverend Beckmann. Sure.
Senator Menendez [continuing]. Because they live in
countries, the happenstance of which they won't be able to meet
that standard.
Reverend Beckmann. Sure, not every country can qualify for
the Millennium Challenge Account--for those criteria. But
establishing the criteria, and then they have this transition
country program to help countries who don't quite qualify get
into the program. But what it does is focuses on the policies
of the government so you get prodevelopment policies. I think
it has been effective in encouraging prodevelopment policies in
poor countries. And in some of those countries, then it is
providing important funding for programs that the governments
asked for.
So it is interesting. I think half the MCA compacts include
major investments in agriculture. Our Government is just now
finally saying, hey, we ought to be doing more in agriculture.
But the Government of Ghana, the Government of Honduras, the
Government of Cape Verde 3 or 4 years ago, when they finally
got a chance to tell the United States what they wanted, said
help us with agriculture.
Senator Menendez. All right.
Reverend Beckmann. So I think there is a lot there to be
preserved.
Mr. McPherson. I associate myself with David's views.
Senator Menendez. I appreciate you doing that. [Laughter.]
We have a vote that is going on.
Senator Shaheen.
Senator Shaheen. I will be very quick. We had a hearing
yesterday here on the connection between climate change and
national security, and our panelists testified that those
countries most affected by climate change also tend to be the
poorest, most conflict-ridden. And so, as we are thinking about
how we look at our foreign aid efforts and revise them for the
future, how should we be factoring climate change in and
coordinating with what we need to do in that area?
Mr. McPherson. I think one of the things that we need is to
have capacity in countries. It is not just us telling them how
to do it. We need to have the intellectual structural capacity
to be able to diagnose their own problems, and that takes
effort. But it can be done.
Dr. Sachs. Senator, I think, indeed, it is important to
define our objectives in this area as sustainable economic
development, which includes the environmental and the climate
component because development will be profoundly undermined by
these trends. That is the picture today. These are drylands.
Incidentally, it is going to deeply affect our own
development in this country if we don't get on top of this
because we are not so effective at responding to the climate
change either. So this is a global threat to development in a
fundamental way, and USAID ought to have in its agenda that
integrated assignment of linking the global climate adaptation
and resiliency to the other development challenges.
Senator Shaheen. Thank you.
Anything you want to add, Mr. Beckmann?
Reverend Beckmann. I associate with Jeff Sachs.
Senator Shaheen. OK. Thank you all very much. We have to go
vote.
Senator Menendez. OK. With that, let me thank you all on
behalf of the chairman for your testimony.
The record will remain open an additional day for members
who may want to submit questions for the record. If you do
receive them, we would ask you to answer them as soon as
possible.
And with the thanks of the chairman, the committee is
adjourned.
[Whereupon, at 4:20 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses to Additional Questions Submitted for the Record
responses to additional questions submitted for the record
by senator lugar to peter mcpherson
Question. Quadrennial Review. Secretary Clinton recently announced
the start of a Quadrennial Diplomacy and Development Review (QDDR)
process similar to the QDR process at the Pentagon. As this is a new
process for the State Department, what elements do you believe are
important for its success?
Answer. Former USAID administrators Brian Atwood, Andrew Natsios
and I recommended in the November 2008 edition of Foreign Affairs that
the administrator chair an interagency foreign assistance committee to
coordinate policies among agencies that have other foreign assistance
programs, and produce a Quadrennial International Development Review.
Clearly the State Department and the National Security Council should
have an important role in the review but we recommended that it be lead
by the administrator. We wrote that the review present a government-
wide strategy for addressing international development including trade,
finance, the environment, and agriculture policies. It should identify
the major development challenges that will need to be addressed and
discuss a variety of potential scenarios depending on global
conditions. It should provide analyses on how the United States will
need to change its foreign assistance policies and programs to address
the problems identified.
Question. Evaluation. Many observers note that USAID used to have a
robust evaluation program. The agency conducted impact evaluations and
widely disseminated its findings among the development community. What
are your recommendations for restoring this capacity?
Answer. I applaud the bipartisan bill's focus on evaluation. The
function should never have been cut back at USAID. An organization that
does not learn from its mistakes is bound to become sterile and
ineffective. I suggest that the strong evaluation function be within
USAID itself. It takes senior level attention but I think appropriate
staffing can avoid some of the institutional bias and engender a
genuine independent and constructive analysis. The evaluations should
focus on a few key outcomes as recommended in the bill, not process and
inputs.
Similarly, I support reestablishing the lessons learned center
suggested in the bill, probably associated with the evaluation office.
We need to look at what does work and what does not work. However,
reasonable risk taking should not be discouraged. We need to ensure
creative and innovative efforts are encouraged.
I also suggest creating a ``think tank'' for cross-agency
evaluation that would undertake major studies of issues and problems
and would be kept vibrant and relevant by a board from several
agencies. A National Academy model could be considered, for example.
Question. Doubling U.S. Foreign Assistance. President Obama has
pledged to double U.S. foreign assistance. Given the current state of
affairs--programs spread among some two dozen agencies and less than
optimal capacity at the State Department and USAID--do you believe the
current structure can handle this level of increase?
Answer. Doubling foreign assistance would be appropriate if
properly allocated and managed. The administration should be commended
for making the case publicly. It must, however, be well thought
through. Increased foreign assistance levels must happen in conjunction
with rebuilding USAID's technical and management capacity. Putting more
money into the system without increasing technical capacity will simply
result in the continuation of USAID implementing development programs
through mega-contractors, which has been found wanting. Programs and
policies are only as good as the people implementing them. USAID is a
shadow of its former structure and is circumvented when a new challenge
arises. Rather than creating workaround solutions, we must confront the
core problem and recognize that we need to build our core development
capability with more and better trained personnel. I applaud the
request from the administration and your support for additional
technical and management staff at USAID.
Question. Aid Objectives. Some observers, including Dr. Sachs, urge
that U.S. assistance should be reorganized around a few strategic
objectives. I have drafted legislation with Senator Casey--the Global
Food Security Act--in which we advocate that development assistance be
reoriented toward hunger and poverty alleviation. In some countries,
this would mean focusing more on agriculture, in others on nutrition,
and in still others on education, but the goal of poverty and hunger
reduction would be the overarching objective. Do you believe that this
type of focus would be effective?
Answer. I applaud the leadership you and Senator Casey have shown
in introducing S. 384 and getting it passed through the Committee. The
university community is strongly behind your legislation. Focusing on
hunger and poverty alleviation through increasing agricultural
productivity is essential. It is a critical element in economic growth,
which will lift people out of poverty. A key feature of the bill is to
create partnerships between U.S. and host country colleges and
universities for the human and institutional capacity building, which
is critical to long-term development. This legislation is particularly
timely in light of the President's efforts to double funding for
international agriculture development with a major role for land-grant
universities. S. 384 will implement most of the President's priorities
for international agricultural development and improved global food
security. I think a refocus on agriculture can work well. However, I am
uneasy about a massive reorganization beyond that because it usually
takes a couple of years for a major reorganization to shake out.
Strengthening budget and policy capabilities plus bringing in many
senior technical and management people must be done.
Institutions of higher education in the United States have
historically played a key role in international development,
particularly in agriculture. Universities are essential in building the
human and institutional capacity in developing countries necessary for
sustained economic growth. Unfortunately, during the past 20 years, the
U.S. foreign assistance strategy has underinvested in agriculture and
under-leveraged the resources of colleges and universities to help
address critical global development problems. While a number of factors
were responsible for the acute global food crisis last year, one of the
major causes was a flattening out of agricultural productivity in many
developing countries especially Africa. Your bill goes a long way in
reversing the underinvestment and will help avert major food shortages
in the long-term.
Question. Independence of USAID. Some observers have suggested that
USAID is on the verge of being turned into an implementing agency,
rather than a full partner with the State Department in achieving U.S.
foreign policy objectives. Would you please speak to the value of an
independent aid agency? What role do you believe the State Department
should play with regard to foreign assistance policy?
Answer. Defense, diplomacy, and development must work together,
with each providing an appropriate role for our foreign policy and
international relations. Although this doctrine assumes some balance
among the three ``D's,'' in practice this has not been the case, and
development has been the weakest link. Most foreign policy observers
acknowledge that balance must be restored. There is substantial
evidence that poverty contributes to conflict, the breakdown of order
and even the likelihood of state failure. Advancing development in
other countries is in-and-of-itself a core national interest of the
United States.
The pursuit of that interest requires a separate, vigorous and
restructured U.S. development agency--the U.S. Agency for International
Development (USAID)--along with a strong State Department, and a clear
division of responsibilities between civilian agencies and the
Department of Defense. It is appropriate for the administrator of USAID
to report to the Secretary of State but it should not otherwise be
subordinated into the Department. Over many years, USAID has been
essentially neutered by staff cuts and the allocation of functions to
other parts of the government thereby weakening the coordination and
coherence of foreign assistance. Recent administrative actions have
essentially folded USAID into the State Department, which has
diminished the development role of USAID and proved otherwise
unsuccessful.
In brief, the status quo does not work. Reinvigorating our
development capabilities and providing a more robust and coherent
foreign assistance program will require action by both Congress and the
Executive Branch.
There needs to be consistency, clarity, and coherence between the
State Department and USAID. U.S. foreign assistance policies and
programs should remain within the U.S. foreign policy and national
security strategy, as determined by the President and the Secretary of
State, and the development activities in a country will fit under the
oversight of the ambassador as the president's representative. The big
organization issue cannot crowd out the subordinate matters.
The division of responsibilities between the State Department and
USAID are complicated, but I have a number of suggestions based on my
experiences. I believe we need a strong separate agency reporting
directly to the Secretary of State. The Secretary needs to have some
policy involvement and oversight with the largest source of program
monies traditionally available to him or her. U.S. foreign assistance
activities must, to the fullest extent possible, be consistent with and
supportive of overall foreign policy goals. Moreover, the Secretary of
State is almost always going to be more powerful within the Executive
Branch and with Congress than a development administrator or cabinet
member. USAID often needs the active support of the Secretary of State.
Question. Policy Capacity. Some have argued that USAID does not
need a separate policy and planning bureau since this function is being
carried out by the State Department's F Bureau. Others believe that
diplomacy and development are two distinct and different missions and
require their own policy approaches. What is your opinion on how the
State Department and USAID can work together to ensure that the
development and diplomacy pillars support U.S. foreign policy
objectives?
Answer. It is critical that USAID have its own budget and policy
capability, preferably in the same USAID office. USAID needs to be able
to argue a coherent overall budget to the State Department in order for
there to be a full voice for development. Budget and policy are
inextricably linked. USAID must have a role in creating their budget in
order to sustain a coherent structure. A USAID budget function will not
detract from the State Department's ability to consider those proposals
for the whole foreign affairs budget.
USAID must have a strong policy office to be a creditable
organization, as the bipartisan draft bill recognizes. The development
agency has to be able to provide well-reasoned analysis and
recommendations for the State Department. I support the draft bill's
provision to reestablish a Bureau of Policy and Strategic Planning at
USAID.
__________
responses to additional questions submitted for the record
by senator lugar to david beckmann
Question. Quadrennial Review. Secretary Clinton recently announced
the start of a Quadrennial Diplomacy and Development Review (QDDR)
process similar to the QDR process at the Pentagon. As this is a new
process for the State Department, what elements do you believe are
important for its success?
Answer. I am hopeful that the QDDR will consider development not
just as a tool, but also as a goal, of U.S. foreign policy. There are
important relationships and synergies between our diplomatic and
development efforts, and in order for both to be most effective, they
must operate in a coordinated manner. However, because they are
distinct in nature and in how they are executed, they also need to be
viewed and approached as distinct elements of U.S. foreign policy that
must be individually strong and separate when considering U.S.
engagement with the world. With respect to foreign assistance designed
to achieve poverty alleviation and other long-term development goals, I
hope that the QDDR will explore ways to ensure this funding is walled
off from funds devoted to achieving more short-term, diplomatic
objectives. Our global development efforts will only succeed if they
are supported with consistent and predictable funding over time.
Answer. Poverty, disease, and a lack of opportunity anywhere in the
world present challenges to U.S. national interests as well as U.S.
national security. President Obama has acknowledged the centrality of
achieving global development goals to the U.S. in pledging to make the
Millennium Development Goals America's goals. While we certainly
believe supporting sustainable development in hot-button countries
should be a priority of the U.S., we also believe that, even in
countries that are not at the top of the list of strategic threats and
partners, the U.S. should join host governments and other donors in
doggedly pursuing global development goals. We are hopeful that the
QDDR's assessment of the range of global threats, challenges, and
opportunities will acknowledge that global poverty--in and of itself
and quite apart from any diplomatic considerations--is a primary
concern of the U.S.
Question. Evaluation. Many observers note that USAID used to have a
robust evaluation program. The agency conducted impact evaluations and
widely disseminated its findings among the development community. What
are your recommendations for restoring this capacity?
Answer. As with any significant investment of taxpayer funds, we
need to know that dollars devoted to global development are well spent
and are achieving the intended objectives in both the short and long
terms. Efforts by the United States to evaluate the impact of our
development programs have been spotty at best. Recent trends-including
the F process, PEPFAR implementation, and the Defense Department's
increased involvement in development and reconstruction efforts-have
focused significant attention on creating and reporting on short-term
outputs for monitoring purposes (i.e., how many people are being fed/
treated/attending school), rather than evaluating the longer-term
impact of these efforts. By disregarding longer-term impact evaluation,
we have lost the opportunity to learn what kinds of programs are
effective or wasteful and what programs are successful enough to be
expanded and replicated. Financial and staff resources devoted to
impact evaluation generates huge returns: identifying best, and worst,
practices can leverage spending by other agencies and by developing
countries themselves, making each dollar spent more effective at
helping those who need it most around the world.
An effective evaluation system generates different kinds of
information for different purposes. Operations and process evaluation
involves in-house experts engaged with practitioners and provides
managers with efficiency information. Output evaluation--counting
numbers of schools built, vaccines given, etc.--helps with managerial
decisions and resource accountability and is best done with a
combination of in-house staff and external review. Impact evaluations,
which consist of broader targets -better educated students, lower child
mortality rates, etc.--are not needed for every program but should
focus on new interventions and popular existing approaches that have no
evidence of effectiveness.
The U.S. can improve evaluation of global development programs and
make these programs more effective by: (1) Creating an independent
office for evaluating the impact of foreign aid programs across federal
agencies; (2) Identifying strategic programs for evaluation, focusing
on the costly or controversial; (3) Appointing an independent external
advisory group to provide oversight; (4) Creating a help desk to
support foreign aid programs that wish to undergo impact evaluations;
(5) Requiring that all impact evaluations undergo external peer review;
(6) Joining the International Initiative for Impact Evaluation (3ie)
and using it as a source of technical expertise and independent
technical review; and (7) Appointing head officials in development
agencies who are committed to learning and will modify approaches based
on evaluation results. Legislation that you helped craft and recently
introduced, the Foreign Assistance Revitalization and Accountability
Act of 2009 (S. 1524), goes a long towards achieving these goals by
calling for the creation of an independent Council On Research and
Evaluation of Foreign Assistance that would reside in the Executive
Branch and be responsible for objectively evaluating the impact and
results of all development and foreign aid programs undertaken by the
U.S. Government. In addition, the bill would create an Office for
Learning, Evaluation, and Analysis in Development in USAID's
reestablished Bureau for Policy and Strategic Planning (as called for
in the legislation) that would link evaluation and research results to
strategic planning and policy options, coordinate the evaluation
processes of USAID bureaus and missions, develop a clearinghouse
capacity for dissemination of knowledge and lessons learned to the
wider community, and closely consult with the Council. These are very
strong steps for restoring USAID's evaluation capacity.
Question. Doubling U.S. Foreign Assistance. President Obama has
pledged to double U.S. foreign assistance. Given the current state of
affairs--programs spread among some two dozen agencies and less than
optimal capacity at the State Department and USAID--do you believe the
current structure can handle this level of increase?
Answer. U.S. global development efforts have yielded successes and
continue to be successful in several areas. However, we can always do
better, and our global development efforts are no exception. Good
intentions have led to fragmented management of our foreign assistance,
policies that don't quite match up, and a maze of rules, regulations,
and objectives. Now is the time to streamline how we approach these
programs to maximize effectiveness and ensure that U.S. taxpayers are
getting the most for their money and that recipients of aid are getting
what they need to lift themselves up out of poverty and build their
communities.
We can appropriate more funds without any reform at all and
programs will continue to help people around the world, but we'd be
remiss not to take the opportunity that has presented itself--intense
interest in development from both chambers of Congress and the new
administration--to make things work better. One way to achieve that is
a wholesale rewrite of the outdated and unwieldy Foreign Assistance Act
(FAA) of 1961, which serves as the current legislative authority for
U.S. foreign assistance. The Act simply does not reflect current
challenges confronting the United States. Hundreds of amendments have
added multiple objectives and priorities that in some cases conflict
with one another, rendering the FAA irrational from a policy
perspective, administratively burdensome, and wholly lacking in
strategic vision. Multiple foreign aid laws, separate from the FAA,
have been enacted, sometimes intended to achieve work-arounds of the
core 1961 Act, but resulting in a enormous body of fragmented and
disconnected statutes directing policy.
The Obama administration should work with Congress to plan, design
and enact a new FAA. The new Act should clearly outline the objectives
of U.S. foreign assistance programs; consolidate decision making and
implementation functions; specify the roles and responsibilities of
other Cabinet agencies where appropriate; clarify the coordination of
oversight responsibilities and functions; adjust regulatory
requirements to fit the reality of implementing assistance programs;
and discourage political and bureaucratic constraints (such as earmarks
and presidential initiatives).
Question. Aid Objectives. Some observers, including Dr. Sachs, urge
that U.S. assistance should be reorganized around a few strategic
objectives. I have drafted legislation with Senator Casey--the Global
Food Security Act--in which we advocate that development assistance be
reoriented toward hunger and poverty alleviation. In some countries,
this would mean focusing more on agriculture, in others on nutrition,
and in still others on education, but the goal of poverty and hunger
reduction would be the overarching objective. Do you believe that this
type of focus would be effective?
One of the primary problems with our current global development
system is the lack of clear objectives and goals which is one of the
reasons the Modernizing Foreign Assistance Network is calling for a
National Strategy for Global Development. In recent years, the goals of
our assistance, whether they are humanitarian, political, development
or military, have become conflated, making it impossible to properly
measure or hold accountable programs for specific results. I agree that
development assistance should be focused on alleviating hunger and
poverty with a firewall between these longer-term funds and those meant
to achieve shorter-term political objectives. By involving the
developing countries themselves in the determining of development
priorities, we can assure that this overarching goal is tailored to
meet different countries' needs. I believe this would go a long way to
making our country's development assistance both more effective and
accountable. More closely aligning U.S. efforts with internationally
agreed goals, such as the Millennium Development Goals, would be one
way to do this.
On June 10, 2009, the State Department issued a Fact Sheet on the
Obama administration's whole-of-government approach to their new food
security strategy. While the strategy is still being drafted, they have
identified six principles to guide them, which is an example of how we
can apply certain universal principles in carrying out U.S. development
assistance across all sectors.
1. Support sustainable solutions to hunger.
2. Invest in country-led plans.
3. Strengthen coordination.
4. Adopt a comprehensive approach.
5. Work together through multilateral institutions and mechanism.
6. Long-term commitment to achieve our goals.
Question. Independence of USAID. Some observers have suggested that
USAID is on the verge of being turned into an implementing agency,
rather than a full partner with the State Department in achieving U.S.
foreign policy objectives. Would you please speak to the value of an
independent aid agency? What role do you believe the State Department
should play with regard to foreign assistance policy?
Answer. Addressing today's global challenges requires that all
three pillars of our foreign policy strategy--defense, diplomacy, and
development--can operate at optimum capacity and effectiveness. We must
ensure that all three pillars are equally strong, independent, and
effective, and that the differing perspectives they bring to the table
are given equal voice. Development is distinct from diplomacy--it
provides longer-term strategic investments in economic stability and
social welfare rather than tending to the shorter-term requirements of
diplomacy, security, and commercial interests.
The State Department should continue to take the lead on U.S.
diplomatic policy--its core competency--including determining the
strategy for and implementation of foreign assistance for political,
diplomatic and security purposes. State's strength, however, is as a
policy, negotiating and reporting agency--not as an implementing agency
managing programs in the field--and its mission is to serve immediate
political needs rather than longer-term development objectives. We will
only realize the full impact of global development if our development
agencies are empowered to think and act strategically about how
development can contribute to our national interest and best help those
in need.
Question. Policy Capacity Some have argued that USAID does not need
a separate policy and planning bureau since this function is being
carried out by the State Department's F Bureau. Others believe that
diplomacy and development are two distinct and different missions and
require their own policy approaches. What is your opinion on how the
State Department and USAID can work together to ensure that the
development and diplomacy pillars support U.S. foreign policy
objectives?
Answer. Overall, despite some achievements in the framing and
reporting of foreign aid, the addition of the F Bureau has contributed
to: the weakening of USAID and country-driven development;
counterproductive, Washington-based micromanagement of field-level
strategy and budgeting; and the fragmentation of responsibility for
development programs.
Given the appointment of Jack Lew as Deputy Secretary of State for
Management and Resources, and the need to reestablish the USAID
administrator as the key development policy advisor in the U.S.
Government with direct reporting to the Secretary of State, the
position of Director of Foreign Assistance should be eliminated. The F
Bureau's staff and responsibilities should be split appropriately
between the Office of the Deputy Secretary and USAID.
Creating a strong development agency requires restoring
responsibility for overall development policy strategy and authority to
an empowered USAID. In particular, development assistance strategies,
sectoral strategies and country strategies should be under USAID's
authority. The policy function (formerly PPC) currently resident in the
F Bureau should be transferred back to USAID to facilitate long-term
thinking and planning on development policy, and USAID should regain
the capacity to design its programs in-house. Legislation that you
helped craft and recently introduced, the Foreign Assistance
Revitalization and Accountability Act of 2009 (S. 1524), would do just
that by reestablishing the Bureau for Policy and Strategic Planning at
USAID.
Thank you, Senator Lugar, for your support.
__________
responses to additional questions submitted for the record
by senator corker to peter mcpherson
Question. Do you believe that the number of agencies that we have
working in development, particularly where there is a mission overlap,
enhances or detracts from our ability to effectively coordinate a
development strategy? Would it make sense reduce the number of agencies
or to ``divvy'' up the responsibilities so that each of our agencies
can establish an expertise in their function rather than being jacks-
of-all-trades? For instance, the MCC and USAID perform many overlapping
functions, particularly in the MCC Threshold Program, creating
competition among agencies. Should this overlap in program function be
deconflicted?
Answer. As practical there should be a central place in the U.S.
government that has the responsibility for driving an overall foreign
assistance program to provide coherence and maximize efficiencies. I
feel that this should be USAID. For example, I think there needs to be
greater coordination of USAID and the Millennium Challenge Corporation
(MCC). If the MCC is to be kept separate then I think that the USAID
administrator should be the chair of the board of MCC rather than the
Secretary of State. We have to be careful not to further build up mini
USAID-like programs throughout the government because domestic
expertise does not automatically translate into international expertise
and the management problems are compounded. The reality is that some
programs are already established and some are making important
contributions and will not be disbanded. I suspect that coordination by
the State Department and USAID alone of these separate programs is not
possible, especially with DOD. Therefore I feel that consideration
should be given to a White House Development Council co-chaired by a
NSC senior staff person and the USAID administrator. The Council would
be made up of departments and agencies with foreign assistance programs
and interests. At the country level there must be someone with broad
powers, reporting to the Ambassador in the field and to the appropriate
USAID staff in Washington, who coordinates U.S. assistance work in the
country. Usually this would be the USAID mission director. This is a
pressing need. These ideas and needs underline the requirement that
management and technical staff of USAID need to be rebuilt and that
USAID must have its own budget and policy capability.
Question. Reporting to Congress has been the traditional way of
ensuring accountability but can be overly burdensome: a 2007 SFRC
report found that staff and consultants working for USAID in Mozambique
spent over 600 work days planning their work and reporting to
Washington that year. When asked about U.S. aid to Africa at a hearing
in March Secretary Clinton said, ``I don't know where a lot of it ends
up. And our transparency and our accountability measures are not
adequate.'' Can we increase transparency without increasing reporting?
How do we reduce duplicative reporting that doesn't tell us whether our
aid is working, and focus on the results that matter most?
Answer. Most experts acknowledge that USAID spends an inordinate
amount of time responding to requests from Washington. However, part of
the problem stems from the declining technical expertise in the Agency.
As more field work has become performed by large contractors, and as
confidence in USAID has declined, there has been a requirement for more
detailed oversight of the agency. ``More is better'' has often been
self-defeating. We needs to strengthen the agency and then have sound
oversight. The Agency's Development Leadership Initiative is certainly
a step in the right direction to rebuild the technical expertise of the
Agency. USAID should also use the administrative determination
authority positions to make senior technical staff appointments. It is
a flexible tool that is faster and more certain than the usual process
and should be helpful for immediately building senior technical and
leadership strength. In addition, a more streamlined administrative
foreign assistance structure, with USAID as the lead foreign assistance
agency (partly discussed in the previous question) would help. As the
foreign aid apparatus becomes less confusing and more streamlined,
greater accountability will follow. Finally, greater collaboration
between the administration and Congress is ultimately necessary to
ensure Congress gets the information it needs, while weeding out
unnecessarily oversight.
Question. In Giles Bolton recent book, ``Africa Doesn't Matter: How
the West Has Failed the Poorest Countries and What We Can Do About
It,'' he offers the DFID (UK Department for International Development)
model of greater budget support where the government receives more
money to provide basic services for its people and fewer project-
specific dollars as one formula for making foreign assistance more
effective. In your evaluation, would greater budget support provide
more tangible, long-term results?
Answer. Critical for development in the long-term is the building
human resources. Building human capacity in developing countries serves
as the foundation of economic growth and sustainable societies. Also
important is creating and disseminating technology. Sometimes budget
support can be appropriate but it is generally not the best use of
outside money.
Question. What is your assessment of the F Bureau? Is it
functioning in such a way as to promote effectiveness and efficiency in
our foreign assistance or does it create an unnecessary bureaucratic
layer to the process?
Answer. The ``F'' budget in the State Department in the last
administration was the classic case of how to do it wrong. They had so
many inputs and outcomes to report that everything and nothing ended up
to be important. By one measure ``F'' was asking for information on 400
inputs and outcomes. There apparently is some rollback of all this but
I suspect not enough. There is lots of experience and much written
about this type of problem in government and non-profits. The key is to
think hard about what is critical to measure and fight off doing more.
__________
responses to additional questions submitted for the record
by senator corker to david beckmann
Question. Do you believe that the number of agencies that we have
working in development, particularly where there is a mission overlap,
enhances or detracts from our ability to effectively coordinate a
development strategy? Would it make sense reduce the number of agencies
or to ``divvy'' up the responsibilities so that each of our agencies
can establish an expertise in their function rather than being jacks-
of-all-trades? For instance, the MCC and USAID perform many overlapping
functions, particularly in the MCC Threshold Program, creating
competition among agencies. Should this overlap in program function be
deconflicted?
Answer. Consolidation of U.S. foreign assistance programs would
improve organizational capacity, streamline bureaucracy, and strengthen
the contribution that U.S. global development initiatives make to our
foreign policy. One of the consequences of having such an outdated U.S.
development system is that it has been easier to add more and more
layers than address underlying inefficiencies. The proliferation of
programs and agencies is compounded by the lack of an overarching
strategy with no single person being truly accountable for the U.S.
government's efforts in global development.
Foreign assistance today is administered by over 50 governmental
offices, through more than 20 agencies and 12 departments, and lacks a
coherent National Strategy for Global Development (NSGD). A NSGD is
needed to set priorities for the selection of development initiatives
and to coordinate the development activities of relevant government
agencies. Given the limited resources available for foreign assistance
worldwide and the variety of problems to address, it is essential that
the United States think systematically about the most effective ways to
reduce global poverty while advancing its national interests.
MCC is currently undertaking a review of the Threshold Program to
evaluate what the future of the program should be, and I look forward
to seeing their results.
Question. Reporting to Congress has been the traditional way of
ensuring accountability but can be overly burdensome: a 2007 SFRC
report found that staff and consultants working for USAID in Mozambique
spent over 600 work days planning their work and reporting to
Washington that year. When asked about U.S. aid to Africa at a hearing
in March Secretary Clinton said, ``I don't know where a lot of it ends
up. And our transparency and our accountability measures are not
adequate.'' Can we increase transparency without increasing reporting?
How do we reduce duplicative reporting that doesn't tell us whether our
aid is working, and focus on the results that matter most?
Answer. To be effective and sustainable, U.S. foreign assistance
must be transparent and available to all parties. This is important to
ensuring sustained political support, proper oversight, and overall
accountability. Making U.S. foreign aid transparent is not just
important to U.S. taxpayers; it's fundamental to smart development.
Unless recipient countries receive comprehensive, timely and comparable
information from donors, intended recipients can't hold their
governments accountable, and those governments can't plan, prioritize
or explain what they are doing to their populations.
Reports are certainly one way to disseminate information. However,
years of reporting requirements have led to a system that is frequently
overlapping and increasingly burdensome. Any reform should include
simplified and streamlined reporting requirements with a determination
of what information and analysis would truly be useful and do away with
those that are not.
One of the reasons so many reporting requirements exist is the lack
of overall transparency of our programs. Using newly available
technology tools, we can make a great deal of information publicly
available through websites and other means, decreasing the need for
superfluous and time-intensive reports on basic program attributes and
activities.
Question. In Giles Bolton's recent book, ``Africa Doesn't Matter:
How the West Has Failed the Poorest Countries and What We Can Do About
It,'' he offers the DFID (UK Department for International Development)
model of greater budget support where the government receives more
money to provide basic services for its people and fewer project-
specific dollars as one formula for making foreign assistance more
effective. In your evaluation, would greater budget support provide
more tangible, long-term results?
Answer. There are cases where budget support has been used very
effectively. However, it is not a panacea and can't be used responsibly
in many circumstances. However, the U.S. should look creatively at how
our development programs can help build institutional capacity in
developing countries while still ensuring accountability to the U.S.
taxpayer through effective programming. The Millennium Challenge
Account has sought to achieve this while also determining best
practices. Other donors, such as the International Fund for
Agricultural Development (IFAD), use a different model to work through
country systems while maintaining fiscal control. These are tools that
the U.S. development program should take advantage of depending on each
country's context.
Question. What is your assessment of the F Bureau? Is it
functioning in such a way as to promote effectiveness and efficiency in
our foreign assistance or does it create an unnecessary bureaucratic
layer to the process?
Answer. Overall, despite some achievements in the framing and
reporting of foreign aid, the addition of the F Bureau has contributed
to: the weakening of USAID and country-driven development;
counterproductive, Washington-based micromanagement of field-level
strategy and budgeting; and the fragmentation of responsibility for
development programs.
Given the appointment of Jack Lew as Deputy Secretary of State for
Management and Resources, and the need to reestablish the USAID
Administrator as the key development policy advisor in the U.S.
Government with direct reporting to the Secretary of State, the
position of Director of Foreign Assistance should be eliminated. The F
Bureau's staff and responsibilities should be split appropriately
between the Office of the Deputy Secretary and USAID.
Creating a strong development agency requires restoring
responsibility for overall development policy strategy and authority to
an empowered USAID. In particular, development assistance strategies,
sectoral strategies and country strategies should be under USAID's
authority. The policy function (formerly PPC) currently resident in the
F Bureau should be transferred back to USAID to facilitate long-term
thinking and planning on development policy, and USAID should regain
the capacity to design its programs in-house. The legislation that you
helped craft and recently introduced, the Foreign Assistance
Revitalization and Accountability Act of 2009 (S. 1524), would do just
that by reestablishing the Bureau for Policy and Strategic Planning at
USAID. Thank you, Senator Corker, for your support.
__________
responses to additional questions submitted for the record
by senator corker to jeffrey sachs
Question. Do you believe that the number of agencies that we have
working in development, particularly where there is a mission overlap,
enhances or detracts from our ability to effectively coordinate a
development strategy? Would it make sense reduce the number of agencies
or to ``divvy'' up the responsibilities so that each of our agencies
can establish an expertise in their function rather than being jacks-
of-all-trades? For instance, the MCC and USAID perform many overlapping
functions, particularly in the MCC Threshold Program, creating
competition among agencies. Should this overlap in program function be
deconflicted?
Answer. We should reduce sharply the number of separate programs,
and put them under the USAID umbrella. MCC should be folded into USAID,
ending it as a separate program (though of course continuing the
existing MCC programs under USAID management).
Question. Reporting to Congress has been the traditional way of
ensuring accountability but can be overly burdensome: a 2007 SFRC
report found that staff and consultants working for USAID in Mozambique
spent over 600 work days planning their work and reporting to
Washington that year. When asked about U.S. aid to Africa at a hearing
in March Secretary Clinton said, ``I don't know where a lot of it ends
up. And our transparency and our accountability measures are not
adequate.'' Can we increase transparency without increasing reporting?
How do we reduce duplicative reporting that doesn't tell us whether our
aid is working, and focus on the results that matter most?
Answer. We would increase transparency by have a few large,
significant, and well-targeted programs. The key sectors should
include: agriculture, health, education, infrastructure, and business
development. In many more cases than now, we should be pooling U.S.
funding with that of other donor countries, as we do in the Global Fund
to Fight AIDS, TB, and Malaria.
Question. In Giles Bolton's recent book, ``Africa Doesn't Matter:
How the West Has Failed the Poorest Countries and What We Can Do About
It,'' he offers the DFID (UK Department for International Development)
model of greater budget support where the government receives more
money to provide basic services for its people and fewer project-
specific dollars as one formula for making foreign assistance more
effective. In your evaluation, would greater budget support provide
more tangible, long-term results?
Answer. Budget support makes sense in one condition--that we have a
clear agreement with the recipient government about what the budget
support will actually support (and we monitor and audit the results).
It is not good--politically, managerially, or developmentally--to hand
over money as a blank check, even to a ``trusted'' government. Our aid
should be accountable, part of a bargain with the recipient country.
Question. What is your assessment of the F Bureau? Is it
functioning in such a way as to promote effectiveness and efficiency in
our foreign assistance or does it create an unnecessary bureaucratic
layer to the process?
Answer. I believe that a strengthened USAID should be an
independent agency, working with the State Department (and of course
ultimately subordinate to it when core foreign policy issues are at
stake). The USAID Administrator, in my view, should have cabinet rank.
I do not believe in housing USAID in the State Department, so I'm not a
great fan of the F Bureau approach.
__________
responses to additional questions submitted for the record
by senator feingold to peter mcpherson
Question. In your testimony, you highlighted the possibility for
greater collaboration between USAID and Public and Land Grant
Universities, primarily with regards to recruitment of experts for
senior staff positions. What obstacles exist to this collaboration and
what can the administration and Congress do to better facilitate it?
Aside from staff recruitment, in what other areas do you think Public
and Land Grant Universities can play a greater role in a revitalized
and reformed foreign assistance agency and agenda?
Answer. One of the obstacles to greater collaboration between U.S.
land-grant universities and USAID has been the general decline of
agriculture among the Agency's priorities. Another has been the
tendency for the Agency to award large, mega-contracts to independent
firms, a reflection of the loss of technical personnel within USAID.
Additionally, the strengths of universities has been problem solving,
analysis, training, and building long-term human and institutional
capacity, not the delivery of goods and services, which has
increasingly preoccupied the agency in recent years. All of those
obstacles are interrelated, but could be addressed by USAID by some of
the efforts under consideration, such as the Lugar-Casey bill and
proposals by the Administration. I urge the committee to act on the
Lugar-Casey proposal.
In addition to recruitment, the university community can help
provide the critical scientific analysis for monitoring and evaluation,
and help develop metrics to measure impacts necessary for
accountability. Universities provide the research networks to develop
the innovations and technologies for dramatic increases in sustainable
agricultural production. Universities also build the institutional
capacity in host countries, which is necessary for long-term problem
solving. Finally, universities develop the human intellectual capital
that is the core of any prosperous society. Over the past 20 years,
USAID's long-term training (higher education degree training) has
declined from 18,000 trainees in the United States per year to less
than 1,000 last year. These trainees of the past have become government
ministers, scientists, administrators and national leaders--the human
capital that is critical for a developing country to move forward
economically, socially and politically. These individuals have also
formed important diplomatic and business links that facilitated
productive interactions with the United States. Exposure to the United
States and its social and academic environment is critical to this
process. Such long-term degree training, coupled with the experience of
living in the United States, has shown that these trainees carry a
positive lifelong image of our country.
Question. The Association of Public and Land Grant Universities has
worked to partner U.S. and African universities in order to empower
institutions of higher education in Africa to contribute more
effectively to development on the continent. What progress has been
made thus far, and what lessons learned that could help inform attempts
to reform U.S. foreign assistance, specifically related to capacity
building and impact evaluations of the initiatives?
Answer. The progress to date has been very good. Twenty awards have
been issued and ten more are pending. There is a conference in Accra,
Ghana in August for awardees and donors, and we are looking to develop
the next phase. One of the major lessons we learned is that the
interest among the African countries is huge. We received 300 proposals
for 20 awards of $50,000 each. We need to bring more resources to the
table to respond to this great demand. Another lesson learned is that
the program could benefit from being premised on a strategic plan for a
nation or region. A third lesson is the need to focus more on
development outcomes with a clearer articulation by Africans on
specific development priorities. As we move forward we will be building
a robust monitoring and evaluation component, and also establishing
Centers of Excellence with universities that identify technical, policy
and organizational solutions to pressing regional and national
development constraints. I strongly emphasize enough the importance of
increased U.S. investment in building higher education capacity in
Africa. This is the key to less dependency and to sustained economic
growth as we have found in our own country.
__________
responses to additional questions submitted for the record
by senator feingold to david beckmann
Question. I have long been supportive of certain programs that
address specific issues such as PEPFAR or the Malaria Initiative, and
such issue-based programs often draw the widest support from the
general public. At the same time, it is clear that if U.S. foreign
assistance relies too heavily on issue-specific programs, new obstacles
develop such as overlooking certain populations or deprioritizing long
term, sustainable development programs. How could U.S. foreign
assistance be restructured to better balance the needs of both issue-
based programs and broader programs that are strategic in nature?
Answer. Thank you for your continued support of vital programs such
as PEPFAR and the President's Malaria Initiative. Development
assistance is a crucial tool of American foreign policy. It is the
means by which our government fights poverty, supports good governance,
and promotes human welfare in developing countries around the world.
Though the United States gives more in Official Development Assistance
(ODA) than any other country, it does not have an explicit strategy to
guide the type of investments it makes across the breadth of the
government. Without a strategy, the U.S. cannot achieve the best
outcomes from its development programs or ensure that they support
American foreign policy objectives in a coherent manner.
A National Strategy for Global Development is needed to set
priorities for the selection of development initiatives and to
coordinate the development activities of relevant government agencies.
Given the multitude of global challenges and the limited resources
available for foreign assistance worldwide, it is essential that the
U.S. Government think systematically about the most effective ways to
reduce global poverty while advancing its national interests. It is not
enough simply to spend money on certain sectors (such as health care or
agriculture) and to fund the foreign assistance programs of disparate
government agencies (from USAID to the Department of Justice) without
articulating how those initiatives work together. To be effective on
the ground and to maintain the support of the American people, the
collective outcome of our disparate development programs must be
greater than the sum of its parts. This can only happen with a clear,
credible and authoritative plan that guides the development activities
of the entire U.S. government. A National Strategy for Global
Development--emanating from the White House (ideally the interagency
National Security Council) but developed in consultation with Congress
and non-governmental stakeholders--would ensure a holistic approach to
how the U.S. administers foreign assistance.
__________
responses to additional questions submitted for the record
by senator feingold to jeffrey sachs
Question. In your testimony, you named six categories, including
agriculture and education, which align with the Millennium Development
Goals. How are these categories currently being identified and
addressed by U.S. foreign assistance, successfully or otherwise? Could
you elaborate on how they might be used to develop a new framework for
foreign assistance?
Answer. USAID does not have a good balance among agriculture,
education, health, infrastructure, climate change, and business
development. Indeed, there is no overarching framework or measurement
of the sector allocations. There is no conceptual approach that makes
sense. By starting with our goals--the Millennium Development Goals--it
would be possible to work ``backward'' to the methods to achieve the
goals. Alas, USAID did not even try to do this during the Bush
administration.
Question. I have long been supportive of certain programs that
address specific issues such as PEPFAR or the Malaria Initiative, and
such issue-based programs often draw the widest support from the
general public. At the same time, it is clear that if U.S. foreign
assistance relies too heavily on issue-specific programs, new obstacles
develop such as overlooking certain populations or deprioritizing long
term, sustainable development programs. How could U.S. foreign
assistance be restructured to better balance the needs of both issue-
based programs and broader programs that are strategic in nature?
Answer. The issue-specific programs are very good. They lend
themselves to measurement, accountability, and results-based aid. The
key is to have enough of these targeted programs (in the six main
categories) that the breadth of development needs is really being
addressed. We don't need fifty categories, or even fifteen. Ten or
fewer major categories will suffice. Each should be driven by metrics,
operational systems, and a way to explain to the taxpayers what we are
getting for our money--in the form of lower hunger, reduced malaria,
more solar power, less illiteracy, lower population growth, etc.
__________
responses to additional questions submitted for the record
by senator demint to peter mcpherson
Foreign Assistance
Question. President-elect Obama made commitments to ``elevate,
empower, consolidate and streamline'' U.S. development programs. With
foreign assistance programs scattered across more than 20 different
federal agencies, how should the government address inefficiencies and
incoherence within the current structure in order to help maximize the
impact of U.S. assistance and instability that threaten prosperity and
security globally and at home?
Answer. USAID should be a strong separate agency with the
Administrator reporting to the Secretary of State (but not the State
Department). Some would like the Agency to be a Cabinet-level position
but I do not think that is practical. In any case, agreement on
principles on the Hill should focus on several key elements, and USAID
reauthorizing legislation should put these changes in place and provide
the appropriate delegations of authority for USAID. The Administrator
should be the government's Chief International Development Officer and
represent the United States at international development conferences,
donor coordination meetings etc.
The implementation of this would entail:
Placing under the Administrator several foreign assistance programs
and activities related to development, e.g., PEPFAR and
refugees budgets and staff;
Maintaining and implementing and advisory role for USAID for
related foreign assistance programs, such as ESF;
The Administrator chairing boards of related U.S. government
agencies (MCC);
The Administrator chairing the interagency foreign assistance
committee to coordinate policies among agencies that impact or
have other foreign assistance programs (Deputy NSC should co-
chair), and produce a Quadrennial International Development
Review, which creates a government-wide strategy for addressing
international development including trade, finance, the
environment, and agriculture policies; and
The Administrator having a seat by law on the National Security
Council and other intergovernmental entities that deliberate on
policies related to development and foreign assistance:
USAID and DOD should jointly plan strategies on an
ongoing basis. Such planning would include field
operations in countries where U.S. troops are engaged
in combat or peacekeeping operations that require the
capabilities and resources of DOD and where U.S.
civilian agencies have or will expand their role.
USAID should have a separate budget relationship
with OMB, not through the State Department.
Question. What metrics should the U.S. government use to gauge the
success of U.S. foreign assistance programs? If the metrics are not met
would you advocate for the elimination of a program?
Answer. Metrics should be focused on outcomes and impacts, not
simply inputs. To be effective, assistance activities must be designed
and managed to produce clearly identifiable and measurable results.
What must be avoided is letting this worthy objective interfere with
long-term mission and impact. Development takes time but it is true
that managers need to show results ``now.'' The imperative to ``show
results'' and the U.S.-centric, bean-counting approach can lead to
activities that show quick outcomes and can be quantified and make nice
photo-ops but do not contribute to sustainable development. Selective
and critical long-term outcome can and should be put in place.
Foreign Aid Reform
Question. Senator Clinton committed President Obama to ``enhancing
our foreign assistance architecture to make it more nimble, innovative,
and effective.'' What specific ideas and actions do you believe are
necessary to achieve these goals?
Answer. To be effective and relevant, U.S. assistance policies and
programs must be flexible and adjust to the needs of each community and
country and to changing dynamics. While the basic areas of development
need to stay relatively constant-human resources, creation and
dissemination of new technology, agriculture and enterprise
development, etc.-the needs and requirements of each country is at
least somewhat different and changes over time. A new law should set
forth the key objectives and priorities for U.S. assistance policies
and programs, but how those programs are implemented in each country
can best be determined by those in the field responsible for
implementation. There should, when practical, be a ``presumption'' in
favor of a country own priorities. Note, this is a ``presumption'' of a
bottoms up approach, not an absolute requirement.
Question. In addition to what metrics we should use to gauge
success, what criteria should the government use to determine
elimination or reduction of foreign assistance programs?
Answer. There are a number of steps that can be taken to evaluate
the success of programs and to weed out those that have proven to be
ineffective. An organization that does not learn from its mistakes is
bound to become sterile and ineffective. I suggest a strong evaluation
function be within USAID itself. It takes senior-level attention but I
think appropriate staffing can avoid some of the institutional bias and
engender a genuine independent and constructive analysis. The
evaluations should focus on a few key outcomes not process and inputs.
I also support reestablishing a lessons learned center, probably
associated with the evaluation office. I think cross-agency evaluation
and analysis can be undertaken through something of a ``think tank''
that is kept vibrant and relevant by a board from several agencies.
This certainly is not full agency coordination, but it could contribute
to that goal. A National Academy model could be considered, for
example.
We need to learn lessons though a good evaluation system and
learning center and act on them in terminating activities and making
new allocations.
Also critical to improving foreign assistance management is for
USAID to have its own budget and policy capability, preferably in the
same USAID office. USAID needs to be able to argue a coherent overall
budget to the State Department in order for there to be a full voice
for development. Budget and policy drive each other and are
inextricably linked. USAID must have a strong policy office to be a
creditable organization. The development agency has to be able to
provide well-reasoned analysis and recommendations for the State
Department to consider. I support the bill's provision to reestablish a
Bureau of Policy and Strategic Planning at USAID.
Question. Some of the largest criticism of foreign aid regards
distribution monitoring and management. What do you believe is the
proper balance between rapid delivery of aid and accountability and
oversight to ensure aid does not find its way to terrorist
organizations? How can we build a monitoring-and-evaluation capability
at USAID that is independent, rigorous and reliable across U.S. foreign
assistance activities, that will contribute to restoring the United
States as a credible partner, and that will ensure U.S. taxpayer funds
are invested well? Is there any way to leverage low-cost technology to
track aid distribution, such as an online, searchable database?
Answer. In general, I believe that during the last 20 years USAID
has moved away from long-term development and more toward transferring
goods and services. The issue is not easy because the immediate needs
are so great. But it is important that long-term development not be
crowded out and that is why I am pleased by the support for
agriculture. Sustained progress usually comes by building human
resources; creating and distributing technology; and building
institutions, stable governments and reasonable economic policies.
Often infrastructure plays a key role. There clearly needs to be a
balance between programs for addressing urgent short-term human needs
and long-term development activities to sustain progress.
I note that much of the progress around the world in the last
several decades has been in countries where leadership wanted to see
better lives for their people and where the country has taken control
of their own future. We need to do a better job of listening to these
countries and how they define their needs to the extent practical as we
plan our development program. This is the real strength of the
Millennium Challenge Corporation (MCC). But we should not limit giving
full consideration to needs as set forth by only MCC countries. As I
noted in response to an earlier question, there should be a
``presumption'' that we will support a country as it sees its needs.
Note that this is a ``presumption'' only because there may be other
factors that are critical.
Low-cost technologies are being used more frequently. U.S. land-
grant universities have increasingly engaged host country institutions
through online venues, and professional journals are accessed in
digital format. The World Bank is undertaking a multi-billion dollar
effort to increase bandwidth and improve connectivity in many
developing countries. We are only at the early stages in realizing the
almost unlimited potential of ICT, and this should continue to be a
very important component of our foreign assistance effort
Donors and recipients must be accountable for their actions. The
best path to accountability is transparency in budgets, decision
making, and implementation. Implementation cannot be too complicated
and constrained by red tape or else formal accountability and well as
project success is likely to be defeated. Only rigorous, objective
monitoring and evaluation will produce the information and knowledge
necessary to know whether assistance activities are effective and to
inform whether and how they should be continued or modified. Careful
planning must go into what really is important to measure because too
many measurements will be self-defeating. Development activities and
their evaluation must be based on realistic goals and should be
designed to be of benefit not just to donor organizations but also to
the intended beneficiaries and indigenous institutions.
__________
responses to additional questions submitted for the record
by senator demint to david beckmann
Foreign Assistance
Question. President-elect Obama made commitments to ``elevate,
empower, consolidate and streamline'' U.S. development programs. With
foreign assistance programs scattered across more than 20 different
federal agencies, how should the government address inefficiencies and
incoherence within the current structure in order to help maximize the
impact of U.S. assistance and instability that threaten prosperity and
security globally and at home?
Answer. One of the consequences of having a U.S. development system
so outdated is that it has been easier to add more and more layers than
to address the underlying inefficiencies.. The proliferation of
programs and agencies has been compounded by the lack of an overarching
strategy and of any single person being truly accountable for the U.S.
government's efforts in global development. Consolidation of U.S.
foreign assistance programs would improve organizational capacity,
streamline bureaucracy, and strengthen the contribution that U.S.
global development initiatives make to our foreign policy.
Question. What metrics should the U.S. government use to gauge the
success of U.S. foreign assistance programs? If the metrics are not met
would you advocate for the elimination of a program? In addition to
what metrics we should use to gauge success, what criteria should the
government use to determine elimination or reduction of foreign
assistance programs?
Answer. The focus on metrics as a way to communicate successes in a
measurable way must be balanced with more nuanced and analytic methods
to illuminate realities that statistics cannot easily capture or
convey. Education policy is a good example of the adverse impacts that
can occur when testing and metrics supplant informed judgment and
attention to important individual/subgroup needs, when statistics
become more important than stories. On the other hand, stories are
certainly never the ``whole story.'' The key is to balance statistics
and stories to produce a genuine understanding that will inform both
policymakers and taxpayers.
Building a monitoring and evaluation capability that is
independent, rigorous and reliable across U.S. foreign assistance
activities will contribute to restoring the United States as a credible
partner and ensure that U.S. taxpayer funds are invested well.
Monitoring and evaluation (M&E) informs program and policy decision
makers about whether a desired result is or is not being achieved, as
well as for whom and why. Monitoring and evaluation serves multiple
purposes at different levels of foreign assistance decision making,
requiring M&E systems that are both disciplined enough to ensure high-
quality work and flexible enough to cope with the requirements of a
complex and decentralized foreign assistance structure.
Quality monitoring and evaluation are critical components of
effective governance-including development assistance. USAID, once a
leader in project design, monitoring, and evaluation, has lost much of
that capacity due to changes in priorities and lost technical
expertise. As with any significant investment of taxpayer funds, we
need to know that dollars devoted to global development are well spent
and are achieving the intended objectives in both the short and long
terms. Efforts by the United States to evaluate the impact of our
development programs have been spotty at best. Recent trends--including
the F process, PEPFAR implementation, and the Defense Department's
increased involvement in development and reconstruction efforts--have
focused significant attention on creating and reporting on short-term
outputs for monitoring purposes (i.e., how many people are being fed/
treated/attending school), rather than evaluating the longer-term
impact of these efforts. By disregarding longer-term impact evaluation,
we have lost the opportunity to learn what kinds of programs are
effective or wasteful and what programs are successful enough to be
expanded and replicated. Financial and staff resources devoted to
impact evaluation generates huge returns: identifying best, and worst,
practices can leverage spending by other agencies and by developing
countries themselves, making each dollar spent more effective at
helping those who need it most around the world.
An effective evaluation system generates different kinds of
information for different purposes. Operations and process evaluation
involves in-house experts engaged with practitioners and provides
managers with efficiency information. Output evaluation--counting
numbers of schools built, vaccines given, etc.--helps with managerial
decisions and resource accountability and is best done with a
combination of in-house staff and external review. Impact evaluations,
which consist of broader targets -better educated students, lower child
mortality rates, etc.--are not needed for every program but should
focus on new interventions and popular existing approaches that have no
evidence of effectiveness.
Through a more comprehensive and independent monitoring-and-
evaluation system for U.S. foreign assistance programs, we can begin to
assess their true impact and better weigh resource-allocation decisions
based on those measures.
Foreign Aid Reform
Question. Senator Clinton committed President Obama to ``enhancing
our foreign assistance architecture to make it more nimble, innovative,
and effective.'' What specific ideas and actions do you believe are
necessary to achieve these goals?
Answer. There is broad agreement on the need to strengthen the
impact of U.S. foreign assistance and to improve the coherence of
foreign assistance programs. The current bureaucratic architecture is
based on the Foreign Assistance Act of 1961, an outdated piece of
legislation which was drafted in response to Cold War threats and which
does not effectively address 21st century challenges such as extreme
poverty and climate change. Well-executed investments in development
align closely with American values and can help create security and
prosperity at home and abroad as well as bolster the U.S.'s image
globally. But the way in which these programs are managed must be
modernized if they are to achieve their full potential impact.
Foreign assistance today is administered by over 50 governmental
offices, through more than 20 agencies and 12 departments, and lacks a
coherent National Strategy for Global Development (NSGD). A NSGD is
needed to set priorities for the selection of development initiatives
and to coordinate the development activities of relevant government
agencies. Given the limited resources available for foreign assistance
worldwide and the variety of problems to address, it is essential that
the United States think systematically about the most effective ways to
reduce global poverty while advancing its national interests. The
following actions--both immediate and longer-term--are essential to
making U.S. global development efforts more strategic, efficient, and
effective. Taken together, they will:
Elevate development as a critical component of U.S. national
security;
Empower USAID to become a strong and strategic contributor to U.S.
foreign policy interests, with a level of independence and
authority necessary to serve as the development policy lead
promoting long-term development and poverty reduction efforts
coordinated with, but distinct from, shorter-term diplomacy
efforts; and
Better coordinate U.S. foreign assistance activities across the
government.
Elevate
Appoint Development Leadership as Soon as Possible: To exert strong
leadership on development policy, allocate development resources more
effectively in pursuit of U.S. development objectives, and transform
USAID into a 21st-century development agency, a high-profile individual
who will be respected in the interagency and development communities
should be appointed as quickly as possible as USAID Administrator. A
strong leader should also be appointed to the MCC, and the trajectories
of both the MCC and PEPFAR in the foreign assistance landscape made
clear.
Give Development Its Own Seat at the National Security Table: The
USAID Administrator should be made a member of the National Security
Council and of other high-level interagency deliberative bodies. At a
minimum, the USAID Administrator should be invited to all NSC
Principals Committee meetings dealing with international issues that
have a significant development impact.
Craft a Development Strategy: The National Security Council should
prepare a National Strategy for Global Development, distinct from but
consistent and coordinated with the National Security Strategy. This
strategy is essential for clarifying goals and objectives,
strengthening coordination of development-related activities spread
across the government, and increasing the efficiency and effectiveness
of key programs.
Rewrite the Foreign Assistance Act: The FAA is unwieldy and
outdated, and adds significantly to the costs and inefficiencies of
many of our foreign assistance programs. While using the authorities in
the current Act more strategically is a good first step, it is no
substitute for reaching a new understanding on the goals, objectives,
and modalities of foreign assistance programs.
Empower
Continue to Re-professionalize USAID: Rebuilding USAID into a
strong and professional development agency with sufficient
independence, capacity and flexibility is essential for strengthening
our development programs and for restoring USAID as a lead development
agency internationally. This would include: ensuring that net increases
in personnel at field posts are significant; resolving Operating
Expenses (OE) constraints; re-staffing the Agency with technical
expertise, including experienced mid-level managers; and bolstering
training.
Bolster USAID's Capacity and Authority for Policy, Planning, and
Program Design and Management: Creating a strong development agency
requires restoring responsibility for overall development policy
strategy and authority to an empowered USAID. In particular,
development assistance strategies, sectoral strategies, and country
strategies should be under USAID's authority. The policy function
(formerly PPC) currently resident in the F Bureau should be transferred
back to USAID to facilitate long-term thinking and planning on
development policy and USAID should regain the capacity to design its
programs in-house.
Restore and Strengthen Budget Expertise at USAID: USAID budget
expertise should be restored and strengthened to enable the Agency to
provide a meaningful voice for development (and contribute field
perspectives) during the budget preparation and interagency budget
negotiations. USAID should have staff responsible for strategic
budgeting.
Strengthen USAID's Ability to Partner with NGOs and the Private
Sector: Any reassessment of U.S. development efforts must take into
consideration how U.S. resources can leverage the corporate and NGO
sectors. A restored and empowered policy planning function at USAID
should develop an approach to engaging the corporate and NGO sectors as
true partners in achieving global development objectives.
Coordinate
Eliminate the Position of Director of Foreign Assistance: Given the
appointment of Jack Lew as Deputy Secretary of State for Management and
Resources, and the need to reestablish the USAID Administrator as the
key development policy advisor in the U.S. Government, with direct
reporting to the Secretary of State, the position of DFA should be
eliminated. The F Bureau's staff and responsibilities should be split
appropriately between the Office of the Deputy Secretary and USAID.
Despite some achievements in the framing and reporting of foreign aid,
the addition of the F Bureau has contributed to: the weakening of USAID
and country-driven development; counterproductive, Washington-based
micromanagement of field-level strategy and budgeting; declining
morale; and the fragmentation of responsibility for development
programs.
Transfer Responsibilities for Overall Budget Coordination to the
Office of the Deputy Secretary: Responsibilities for reviewing and
coordinating budgets across all foreign affairs agencies, reviewing
proposals for reducing inefficiencies and non-performing programs,
consulting with Congress on the need to rationalize earmarks, and
mobilizing financial resources should all be assumed by the Office of
the Deputy Secretary. An empowered USAID would work closely with the
Office of the Deputy Secretary on all development assistance-related
issues and would have authority over its own budget, including control
over the final allocation of development resources across countries and
programs based on input from country teams. The Office of the Deputy
Secretary would continue to have authority over diplomacy and State-
managed foreign assistance. The budgets for State-managed foreign
assistance, USAID, MCC, PEPFAR and others could be presented jointly in
order to show the full force and application of U.S. foreign
assistance. Efforts to officially consolidate the budgets, however,
should be avoided.
Transfer Resource Tracking Responsibilities to the Office of the
Deputy Secretary; Establish Top-Line Objectives for Foreign Aid with
Performance Tracking Responsibilities Transferred to the Lead Agency:
The Deputy Secretary should absorb the resource tracking function
currently housed at the F Bureau, including FACTS, and expand its
coverage to be able to report on the MCC and PEPFAR. At the performance
level, a monitoring and evaluation system should be designed in close
coordination with State, USAID, MCC and PEPFAR to aggregate to top-line
objectives and standardize indicators across foreign aid agencies
(regardless of any restructuring or consolidation plans) to both
effectively report on the impact of foreign aid and to reduce
unnecessary data collection and reporting requirements from the field.
Tracking and reporting would be the responsibility of the lead
implementing agency, and each agency would have its own monitoring and
evaluation capacity. Data and evaluations should be made public,
including budget process data at every stage, from request, to pass-
back, to Congressional submission, to final appropriation, to 653(a)
allocations.
Metrics and Transparency
Question. Some of the largest criticism of foreign aid regards
distribution monitoring and management. What do you believe is the
proper balance between rapid delivery of aid and accountability and
oversight to ensure aid does not find its way to terrorist
organizations? How can we build a monitoring-and-evaluation capability
at USAID that is independent, rigorous and reliable across U.S. foreign
assistance activities, that will contribute to restoring the United
States as a credible partner, and that will ensure U.S. taxpayer funds
are invested well? Is there any way to leverage low-cost technology to
track aid distribution, such as an online, searchable database?
Answer. While I support the goal of ensuring that no taxpayer funds
(or any other funds) are diverted to suspected terrorists or terrorist
organizations, U.S NGOs already have systems in place to ensure that no
funds are misappropriated for any reason. Moreover, U.S. NGOs that
implement official humanitarian and development assistance are required
to certify that they will not knowingly provide funds or material
support to any individual or organization that advocates or commits
terrorism.
Recently introduced legislation by Senators Kerry, Lugar, Menendez,
Corker, Cardin, and Risch--the Foreign Assistance Revitalization and
Accountability Act of 2009 (S. 1524)--goes a long towards achieving
these goals by calling for the creation of an independent Council On
Research and Evaluation of Foreign Assistance that would reside in the
Executive Branch and be responsible for objectively evaluating the
impact and results of all development and foreign aid programs
undertaken by the U.S. Government. In addition, the bill would create
an Office for Learning, Evaluation, and Analysis in Development in
USAID's reestablished Bureau for Policy and Strategic Planning (as
called for in the legislation) that would link evaluation and research
results to strategic planning and policy options, coordinate the
evaluation processes of USAID bureaus and missions, develop a
clearinghouse capacity for dissemination of knowledge and lessons
learned to the wider community, and closely consult with the Council.
The bill also calls for the President to make publicly available
all information on U.S. foreign assistance on a program-by-program and
country-by-country basis. These are all very strong steps for both
improving accountability and transparency for U.S. foreign aid
programs. As a point of reference, the Office of the Director of
Foreign Assistance began development of the Foreign Assistance
Coordination and Tracking System (FACTS) in FY 2006. FACTS is a
database that aims to combine USAID and Department of State foreign
assistance budget and performance planning and activity reporting data
into one central system. Though it is not a public database, it may
serve to inform the advent of such a public searchable database.
__________
responses to additional questions submitted for the record
by senator demint to jeffery sachs
Foreign Assistance
Question. President-elect Obama made commitments to ``elevate,
empower, consolidate and streamline'' U.S. development programs. With
foreign assistance programs scattered across more than 20 different
federal agencies, how should the government address inefficiencies and
incoherence within the current structure in order to help maximize the
impact of U.S. assistance and instability that threaten prosperity and
security globally and at home?
What metrics should the U.S. government use to gauge the success of
U.S. foreign assistance programs? If the metrics are not met would you
advocate for the elimination of a program?
Answer. It makes sense to bring the aid programs back under one
roof, USAID. I believe that USAID should be an independent agency with
an Administrator at cabinet rank (as is the Administrator's counterpart
in around a dozen other donor governments). We should focus the aid
effort on a few categories. I've mentioned six: agriculture, health,
education, infrastructure, climate change (including environment and
hazards), and business development. Each of these needs metrics. It
would be wise to base these metrics on the Millennium Development Goals
(MDGs), since these are the ambitious but sensible objectives that have
been internationally agreed by 192 governments, including the U.S.
Foreign Aid Reform
Question. Senator Clinton committed President Obama to ``enhancing
our foreign assistance architecture to make it more nimble, innovative,
and effective.'' What specific ideas and actions do you believe are
necessary to achieve these goals?
Answer. I believe that our aid program should be targeted, based on
explicit and quantitative goals, and with an explicit goal of enabling
countries to break the poverty trap and thereby end their dependence on
aid. The targets should fall in the six categories referred to above.
Success should be measured against the Millennium Development Goals,
which are the world's agreed goals for reducing extreme poverty and
breaking the poverty trap.
Metrics and Transparency
Question. In addition to what metrics we should use to gauge
success, what criteria should the government use to determine
elimination or reduction of foreign assistance programs?
Answer. There are rather obvious, professionally deployed metrics
in each area of concern. Public health specialists, for example, talk
about disease burdens (e.g. for AIDS and malaria), child mortality,
maternal mortality, immunization coverage, etc. We should be working
with recipient countries and global agencies (e.g. the Global Fund to
Fight AIDS, TB, and Malaria) to establish quantified goals together
with the aid programs. Our aid programs would then be evaluated
relative to specific targets.
Question. Some of the largest criticism of foreign aid regards
distribution monitoring and management. What do you believe is the
proper balance between rapid delivery of aid and accountability and
oversight to ensure aid does not find its way to terrorist
organizations? How can we build a monitoring-and-evaluation capability
at USAID that is independent, rigorous and reliable across U.S. foreign
assistance activities, that will contribute to restoring the United
States as a credible partner, and that will ensure U.S. taxpayer funds
are invested well? Is there any way to leverage low-cost technology to
track aid distribution, such as an online, searchable database?
Answer. By establishing well-targeted programs (e.g. for food
production, AIDS control, malaria control, road construction, potable
water, etc.) we can track the outlays and measure the implementation
relative to goals. This is very important. It is not a good idea, in
general, to transfer money to other governments as a blank check, or a
matter of trust. Our aid programs should be specific, monitored,
quantified, and subject to audit.
It makes most sense for the U.S. to pool its money with other
donors, as a matter of leverage and a matter of simplification of the
monitoring, goal-setting, and evaluation processes. By pooling our
money with other donors, U.S. leadership is leveraged two-or-three to
one, and we maintain the ability to help shape and monitor the
assistance programs.
__________
responses to additional questions submitted for the record
by senator casey to peter mcpherson
The Administration's Foreign Aid Reform Policies
Question. In April, the Government Accountability Office (GAO)
released a report with seven recommendations on how to improve the
United States foreign assistance structure. A key phrase that caught my
attention in the report was: ``once the incoming Administration has
defined its overarching goals for foreign assistance, we recommend that
the Secretary of State work with all U.S. government entities involved
in the delivery of foreign assistance.'' Although many of us recognize
the need for foreign assistance reform here in Congress, it strikes me
that the Administration has yet to present its comprehensive foreign
assistance strategy.
Mr. McPherson, do you believe that Congress should wait to consider
any foreign assistance reform legislation until a USAID Administrator
has been confirmed and an Administration policy articulated? If so,
why?
Answer. Congress should not wait for the Administration. It should
pass legislation in the nature of the bipartisan draft bill being
considered by the Committee. In fact, moving forward with the
Committee's bill will draw attention within the Administration to
foreign aid reform as a priority. Clearly, the Administration's views
will be critical and a new USAID Administrator will help advance a
foreign assistance reform agenda. But, I believe there is a growing
sense of urgency by some members in both the Senate and House on this
matter and moving a bill will underline the concern. Let me
congratulate you on your leadership on international agriculture. Your
bill with Senator Lugar is very much needed.
__________
responses to additional questions submitted for the record
by senator casey to david beckmann
The Administration's Foreign Aid Reform Policies
Question. In April, the Government Accountability Office (GAO)
released a report with seven recommendations on how to improve the
United States foreign assistance structure. A key phrase that caught my
attention in the report was: ``once the incoming Administration has
defined its overarching goals for foreign assistance, we recommend that
the Secretary of State work with all U.S. government entities involved
in the delivery of foreign assistance.'' Although many of us recognize
the need for foreign assistance reform here in Congress, it strikes me
that the Administration has yet to present its comprehensive foreign
assistance strategy.
Several of the GAO recommendations are based upon the assumption
that the current Administration will continue the foreign assistance
reform efforts as laid out in the 2006 announcement of the State/F
organizational reforms. Mr. Beckmann, do you believe that the current
Administration should continue to carry out the State/F reform process?
Answer. Given the appointment of Jack Lew as Deputy Secretary of
State for Management and Resources, and the need to reestablish the
USAID Administrator as the key development policy advisor in the U.S.
Government with direct reporting to the Secretary of State, the
position of Director of Foreign Assistance should be eliminated. The F
Bureau's staff and responsibilities should be split appropriately
between the Office of the Deputy Secretary and USAID.
Creating a strong development agency requires restoring
responsibility for overall development policy strategy and authority to
an empowered USAID. In particular, development assistance strategies,
sectoral strategies and country strategies should be under USAID's
authority. The policy function (formerly PPC) currently resident in the
F Bureau should be transferred back to USAID to facilitate long-term
thinking and planning on development policy, and USAID should regain
the capacity to design its programs in-house. Recently introduced
legislation--the Foreign Assistance Revitalization and Accountability
Act of 2009 (S.1524) sponsored by Senators Kerry, Lugar, Menendez,
Corker, Cardin, and Risch--would do just that by reestablishing the
Bureau for Policy and Strategic Planning at USAID. I hope you will join
them in supporting this important bill.
__________
responses to additional questions submitted for the record
by senator casey to jeffery sachs
Foreign Assistance & External Contributions
Question. According to the Organization for Cooperation and
Development, private aid accounts for approximately 65% of the total
flow of foreign assistance from the United States to developing
nations. Private aid includes contributions from corporations and non-
governmental organizations. This influx of resources from private U.S.
entities, coupled with the large number of international organizations
working in the same countries, means whatever reforms are instituted
that the United States government should account for these other
actors.
Dr. Sachs, as the Senate continues to debate foreign aid reform,
what recommendations would you give for adapting how the U.S.
government provides foreign assistance to include the work done by
these external entities?
Last September, many donors who give aid to developing countries
launched the International Aid Transparency Initiative--an effort
through which donors commit to work together to make comprehensive and
timely information on aid flows publicly available. Do you agree that
clear and publicly available information on U.S. spending would be a
useful tool--both for Congressional oversight and planning at USAID?
Would you recommend that the U.S. join the International Aid
Transparency Initiative?
Answer. Official development assistance accounts from around 0.20
percent of U.S. GNP, and according to best recent estimates, private
development aid accounts for perhaps 0.08 percent of GNP. Of course, it
depends what is counted. Some researchers and institutions try to count
remittance flows as ``private aid,'' but I certainly do not regard
remittances as ``aid.'' Remittance income is the hard-earned money of
individual families. In-kind contributions of pharmaceutical companies
are also counted as private aid, but probably at quite inflated levels
(by recording the wholesale drug prices of donated medicines rather
than their true costs of production).
Note that official development aid address large-scale societal
needs--such as the control of AIDS and malaria or the construction of
roads and power systems--much more readily than private flows, which
tend to be for much smaller and disjointed projects, for instance
community-based projects for an individual school or clinic. There is
definitely a need for both public and private flows. Both the public
and private flows are far below what they should be given the need and
size of our economy. The international target (to which the U.S.
subscribed in the 2002 Monterrey Consensus) is 0.7 percent of GNP in
official aid. Private aid should be on the order of 0.2 percent of GNP.
USAID should be able to do a much better job of partnering with
private flows to help direct the private flows to more effective uses
(and vice versa, since private flows can sometimes help to re-channel
official aid as well). Many of America's leading companies are eager to
play a larger societal role in development, in partnership with the
USG. With more effective USAID strategies and public-private
partnerships, more private flows could be raised and could be far more
effective in their developmental impact.
The main ``scorekeeper'' for aid flows is the OECD's Development
Assistance Committee (DAC). We ought to strengthen the DAC's mandate
and capacity to produce authoritative aid data for all donor countries.
Within a DAC-led process, the IATI can be a useful initiative.
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