Foreign Aid Reform: Why now?

The Millennium Development Goals were brought into the world during the United Nations Millennium Summit eleven years ago for one purpose: “to set our sights on the eradication of extreme poverty in our time”, as explained by President Barack Obama. The development sector stares down the eight lofty goals every day and each bit of progress improves the lives of citizens of the world. By 2015, the hope is that through effective foreign aid, the world will have eradicated extreme poverty and hunger; achieved universal primary education; promoted gender equality; reduced child mortality; improved maternal health; more efficiently combated HIV/AIDS, malaria, tuberculosis, and other diseases; ensured environmental sustainability; and created a partnership for global development. Describing these goals as “lofty” seems perhaps an understatement. In last year’s August Panel hosted by Global Washington, administrator for the United States Agency for International Development (USAID) Rajiv Shah said that it was vital to demonstrate that the big problems of the world are solvable. So now, four years from the set end date of the summit, we must ask ourselves: what progress have we made? Are these problems as solvable as we would like to believe?

Earlier this year, a Congressional Caucus for Effective Foreign Assistance (CCEFA) was formed by Representative Adam Smith (D-WA) and Representative Ander Crenshaw (R-FL) to address issues with foreign aid and the most effective means to reform. One of their first orders of business was to launch Oxfam America’s updated Foreign Aid 101 report, which was designed to provide a factual overview of U.S. foreign aid. The report designated three major changes to U.S. foreign aid that would lead to broad-based economic growth:

  • Fully implementing the U.S. Global Development Policy, which holds aid accountable for fighting poverty first and foremost, and designating more resources to initiatives that will produce sustainable change.
  • Modernize the outdated laws, strategies, and structures around U.S. foreign aid. Amendments to the 1961 Foreign Assistance Act have been the main changes to development policy in the intervening years, which leaves many in the community calling the laws cumbersome and ill fitted to 2011 realities.
  • Promote local ownership as the most effective path to economic growth.

These sentiments were echoed by USAID in the September 2010 US Strategy for Meeting the Millennium Development Goals. The strategy put forth calls for leveraging innovation, investing in sustainability, tracking development outcomes, and creating accountability on all sides.

The Presidential Policy Directive on Global Development was the first by any U.S. administration. Much of the sentiment previously endorsed by USAID and Oxfam’s report was echoed in the directive. It recognized that “development is vital to U.S. national security and is a strategic, economic, and moral imperative for the United States.” Its approach to global development rested on three main ideas: focusing on sustainable development outcomes, finding new operational models to make the United States a more effective partner, and harnessing development capabilities spread across government. The President too seeks to reform foreign aid into a more effective machine for combating global poverty. His administration’s revitalized operational model has stated the importance of country ownership and has pledged to work through national institutions rather than around them. They have also decided to reallocate resources in support of development initiatives that prove the most effective. It has also been decided that the Administrator of USAID will be included in relevant meetings of the National Security Council. The Presidential Policy Directive acknowledges the need for reform and cooperation within the development sector, with goals similar to those expressed by CCEFA through Oxfam’s revised report.

The Quadrennial Diplomacy and Development Review (QDDR) was launched by Secretary of State Hilary Clinton and modeled after the impressive Quadrennial Defense Review of the Defense Department. Clinton says the inspiration for the massive report began with a simple question:How can we do better?Under the bold-faced banner “Transforming Development to Deliver Results” the QDDR alongside Oxfam and the Presidential Policy Directive expresses similar needs for reform. The QDDR details changes being made to both State and USAID to make more of our development dollars: USAID will be made the lead agency for the Feed the Future and Global Health Initiative presidential missions. Aid will be made more transparent through the creation of a Web-based “dashboard” that publishes State and USAID foreign assistance data. A development lab will be created at USAID to establish an Innovation Fellowship to assist the best practices that come out of development. The White House, USAID, members of congress, and other massive forces in the development sector are beginning to knit themselves together to better cooperate with governments and nonprofits on the ground. The sector is committing to sustainable, transparent programs driven by recipients of aid themselves.

With such a fertile environment surrounding aid reform, what progress has actually been made towards the Millennium Goals? Between 1990 and 2005, the percentage of the world’s population living on less than $1/day dropped from 42% to 25%. Enrollment in primary education has reached 89% in the developing world. The total number of under-5 deaths decreased globally from 12.4 million/year to 8.1 million/year. UNICEF cites that the number of women dying due to complications during pregnancy and childbirth has decreased from 546,000 in 1990 to 358,000 in 2008. We still have a long way to go until the goals set to us have been achieved. But with the White House, USAID, and members of congress calling out for reformed aid that can demonstrate its own effectiveness and create solutions that sustain themselves, these numbers will continue to drop.

With the recession threatening to be the justification for cutting foreign aid projects, making aid as effective as possible is even more pertinent. Global Washington is providing a venue to discuss exactly this issue. From 3:30-5:30 on August 30th in Kane Hall of the University of Washington, U.S. Representative Adam Smith and Kent R. Hill of World Vision will be discussing effective foreign aid reform. Special Assistant to the President Gayle Smith has also been invited. Come and join us to talk about issues that shouldn’t be overlooked.