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The President’s Budget: What to Expect When We’re Expecting

Friday, February 28th, 2014
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See below for a guest post from Liz Schrayer, Executive Director of the U.S. Global Leadership Coalition and MFAN Executive Committee Member. Schrayer writes about her expectations for the President’s 2015 budget request. This original post can be found on USGLC’s blog.

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On Tuesday the President will unveil the Administration’s FY15 budget and begin yet another round of negotiations with Congress on funding priorities.  The decisions will ultimately have a real impact on the international stage, so here is what’s worth watching once the budget is announced:

  • Cut or Not Cut? The first item to watch is whether or not international affairs programs receives an overall cut, and if so how big will it be? Will it be a small “haircut” or disproportionately cut compared to other non-defense programs? Remember, the Murray-Ryan budget deal brokered last December left little room for increasing discretionary programs for this year — only about $600 million overall.  So no programs are getting much of an increase.  The good news is that Secretary Kerry is a tough negotiator, and the Administration is well aware of the important humanitarian and diplomatic security needs throughout the globe.
  • How Much for War Funding? Over the past three years, some funding for international programs has come from the Overseas Contingency Operations account (OCO) to cover the enormous cost of diplomatic and development efforts in Frontline States and some of the emergency and unanticipated security costs in other hotspots.  These additional funds (upwards of $10.5 billion last year) have been vital sources of funding but have to be absorbed into base funding as we withdraw from two wars.  Unfortunately, some years, the Administration limited their request for OCO resources to only Afghanistan, Pakistan, and Iraq despite consistent Congressional direction to expand the scope of OCO.

While we are strong advocates for increased base funding, we have encouraged the Administration to make a more realistic OCO request and maintain current levels ($6.5 billion) to deal with humanitarian crises in Syria and elsewhere.  So watch if the Administration’s OCO request includes some expansion beyond the Frontline States to deal with these crises.

  • Presidential Initiatives?  Budgets always provide roadmaps of priorities – both programmatic and country.  The Administration has several priority programs – food security, global health, climate change, Power Africa – and it will be interesting to see how the budgets of key agencies are affected.  Here are a few items to watch:
    • Presidential Initiatives – Will the Administration continue to ask for strong funding for key priorities such as Feed the Future, global health, and their most recent effort in Power Africa? How will a re-energized focus on climate change impact the international scene?
    • Given the crises in Syria, Central African Republic, and South Sudan, how will humanitarian crises, peacekeeping and continued security requirements be reflected in the budget?
    • As the U.S. and Europe try to shore up the Ukrainian economy with a rapid aid package, what pressures might that place on other spending?
    • Will the Administration attempt to build on partial gains made recently on reforming U.S. food assistance?
    • How will the budget reflect challenges in places like Egypt, Afghanistan and Pakistan?
  • Continued Commitment on Reform? A signature of this Administration has been to build on the reforms of the Bush era in bringing accountability and transparency to our foreign assistance programs.  Last year the MCC scored highest on the Aid Transparency Index, making the Corporation the most open aid agency in the world.  USAID Forward has led the way with a significant scale-up of its evaluation and learning capacity so we can better understand what impact our programs are making.  Will we see continued investments in operating funds at USAID, State Department and other smart power agencies and what will happen w­­ith new efforts in science, technology and innovation?

There are lots more questions to ask, and we will be up late into the night as soon as all the numbers come out to answer these and other questions about how we see the budget impacting international programs.

The spotlight will quickly shift to Capitol Hill, where Secretary Kerry and other Administration officials will defend the President’s request in hearings and where Chairman Ryan is expected to mark up a competing FY15 budget in March.

Expectations for the President’s 2015 Budget

Wednesday, February 26th, 2014
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See below for a guest post from Connie Veillette, Senior Fellow in global food security and aid effectiveness at The Lugar Center and MFAN Co-Chair. Veillette writes about what she expects to see in President Obama’s forthcoming 2015 budget request. The original post can be found on The Lugar Center’s blog.

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The President’s 2015 budget is scheduled for release on March 4.  This marks another year that its release has been delayed despite provisions in the Budget Impoundment and Control Act of 1974 that designates the first Monday in February for its submission to Congress.  This year’s delay largely reflects late congressional action in completing the 2014 budget and appropriations processes. Of course, late budget releases inevitably contribute to the end of the fiscal year deadline (September 30) also being ignored.

The President has signaled that he wants to move past our current period of austerity that has defined White House and Congressional budgets for a number of years. What will this mean for foreign assistance and development issues? Will foreign aid still comprise just 1% of the total budget? Will it include dedicated funding for the President’s new Power Africa initiative? Where do administration initiatives such as Feed the Future, the Global Health Initiative, and other new ventures fit? My crystal ball is notoriously cloudy, but here’s where I think some of this will go.

Feed the Future, the administration’s food security initiative that targets 19 countries with activities that stimulate agriculture and related sectors, will likely stay level funded at a little over $1 billion, give or take a couple hundred million for nutrition/health programs or climate change activities. Since these issues are so intertwined, some funding can be counted toward multiple objectives.

Speaking of which, Secretary Kerry’s interest in climate change may well be reflected in the budget with increased funding. Last year’s request for the Global Climate Change Initiative was a slight cut from previous years. Figuring out how much to spend in 2014 will be made more difficult by the fact that the two accounts (Development Assistance and Economic Support Fund) used to fund it took a hit in the omnibus spending bill. Given the administration’s interest in global agriculture, there could be much more done to help small holders adapt to changing growing conditions.

Momentum around food aid reform has been building for at least a couple of years. The administration’s far-reaching reform proposal in last year’s budget was watered down just enough to give hope to reformers while still providing comfort to status quo supporters. I expect that the original 2014 proposal will again find its way into the upcoming budget. I also expect little progress in calendar year 2014 given that the Farm Bill, in which the compromise was included, was signed into law just this month.

It was announced in January that the new Global HIV/AIDS Coordinator will be from the Centers for Disease Control and Prevention (CDC). This means that the largest portion of the Global Health Initiative will be run by a non-development agency. The CDC certainly knows its stuff, but using health as an economic growth springboard isn’t one of them. Nevertheless, global health programs remain popular on the Hill and within the administration. The administration might actually propose a slight cut in health programs knowing that Congress will add the money back in.

Power Africa is the latest administration initiative with the goal of doubling access to power in sub-Saharan Africa. The White House’s intent is to fund Power Africa at $7 billion over five years through a number of U.S. agencies (USAID, OPIC, Ex-Im Bank, MCC, and African Development Bank) and private companies. I would expect a $1 billion request as the first down payment.

Funding for the Millennium Challenge Corporation (MCC) has been maintained well below $1 billion for the last several years despite bipartisan support. With six country compacts in the pipeline, three of which are Power Africa countries, I would expect that the 2015 request will top the $1 billion mark.

Selectivity and focus became catchwords during austerity. Some of us even wrote tomes on how to get more value for our aid dollars. Even if austerity is a thing of the past, and I don’t believe it is or should be, making our aid dollars go further by paying greater attention to efficiencies and effectiveness is a good thing. Having said that, I don’t expect much selectivity and focus in the form of transitioning middle income countries off aid, closing and paring back U.S. aid missions, or getting out of sectors in which we have little comparative advantage.

Many of the administration’s initiatives are quite ambitious but none will achieve their objectives if U.S. agencies are not equipped to deliver results.  USAID Forward, a rebuilding framework to strengthen USAID, find efficiencies and reward innovation, will likely see a modest increase above FY2014 levels. Keep in mind that Congress cut these programs by 10.9% from the 2013 sequestration level so I’m not going out on a limb with this one.  The requested 2015 level will likely allow for a continuation of initiatives but not a robust expansion. The critical parts of USAID Forward, in my opinion, are the rebuilding of in-house expertise, the evaluation of the agency’s work, and learning to work with local aid groups and civil society in what USAID calls Local Solutions. (For analysis on the use of local systems to implement USAID programs, see this Center for American Progress report.)

There are many more accounts and programs that I haven’t the space to cover. We at TLC will be doing some deeper dives come March 4. Stay tuned.

 

The 2013 Aid Transparency Index: MCC Tops The List, But Room For Improvement In U.S. Government

Thursday, October 31st, 2013
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See below for a guest post from Melissa Kaplan, advocacy manager for aid reform and effectiveness at InterAction. Kaplan writes about the findings from the 2013 Aid Transparency Index, which was released last week. This post originally appeared on InterAction’s website.

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Aid Transparency Index-MCCThe 2013 Aid Transparency Index released this month by Publish What You Fund had good news for the Millennium Challenge Corporation (MCC), but not as rosy news for other U.S. agencies.

The MCC—a U.S. foreign assistance agency fighting global poverty—tops this year’s Aid Transparency Index. The index evaluates dozens of aid donors from around the globe on their transparency efforts. MCC snagged the no. 1 spot with an overall rating of 89 percent (out of 100), putting it at the top of the relatively small category of donors rated “very good” on aid transparency. The GAVI Alliance, the UK Department for International Development, and the United Nations Development Program were the other groups that landed in this category.

The report praised the MCC’s progress on transparency, and congratulated the agency for publishing high-quality information in line with the International Aid Transparency Initiative (IATI), an initiative working to make information about spending on development easier to access, understand, and use. It also pointed out that all of the MCC’s current Compacts and Threshold Programs are published in IATI XML on MCC’s website, and the information on the Foreign Assistance Dashboard includes planning, obligation, and spending data.

“(MCC) is amongst the biggest improvers in the 2013 Index and is the first U.S. agency to enter the top three,” the report states.

Other U.S. agencies that handle foreign assistance did not fare quite as well in the index. USAID earned a “fair” score of 44 percent, coming in at number 22 out of 67 agencies, while the Department of Defense fell into the “poor” category, with a number 27 ranking and a score of 33 percent. The State Department ranked even worse than DOD with a number 40 ranking and a score of 22 percent. However, it is worth noting that these U.S. agencies have all improved from the 2012 Aid Transparency Index in their overall rankings on the list.

At an event co-hosted by the Brookings Institution and Oxfam launching the Aid Transparency Index Report, David Hall-Matthews, Managing Director of Publish What You Fund, noted that there is still plenty of room for improvement overall among aid donors in terms of transparency, given that the average agency score in the index was only 32.6 percent. He emphasized that it’s not just the quantity but also the quality of data being published that is important.

The broad indicators Publish What You Fund used in its 2013 report methodology were:

  • Commitment to aid transparency—10 percent weight: This measures the extent to which organizations have shown overall commitment to making their aid transparent.
  • Publication at organization level—25 percent weight: This category reflects the availability of general planning and financial information.
  • Publication at activity level—65 percent weight: This category captures the extent to which organizations make available aid information pertaining to specific in-country project activities.

Within these categories, there were 39 more specific indicators used to assess donors’ success, or lack thereof, in sharing data in a transparent manner. Agencies got higher scores for timely information available in an easily usable format (in other words, more credit was given for data published in IATI XML format than for Excel spreadsheets, which in turn get better marks than website or PDF formats).

The report makes three general recommendations:

  • All development actors need to publish more information to IATI. It should be published consistently, cover all relevant IATI fields, and include information beyond financial data.
  • Publishers need to improve their data quality to make it more useful. It needs to be timely, and conform to IATI standard so it can be compared between organizations.
  • Everyone can benefit from using IATI data.

For details, see information on the full Aid Transparency Index 2013 report.

MCC certainly deserves kudos for its excellent showing in this year’s index, and we hope its commendable commitment to transparency will continue. InterAction would also like to see other U.S. foreign assistance agencies take up the challenge to provide more transparent and useful data to the public. While more information being published to the Foreign Assistance Dashboard (particularly by USAID) in recent months is a welcome development, we would still like to see this data be made available in as accessible and user friendly a format as possible. We hope that the 2013 Aid Transparency Report will encourage the administration to keep aid transparency as a priority with an eye on making USAID and the Department of Defense the most improved agencies in the world in next year’s Aid Transparency Index.

 

MCC Named Most Transparent Donor in 2013 Aid Transparency Index

Thursday, October 24th, 2013
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Today Publish What You Fund released their 2013 Aid Transparency Index (ATI) and out of the 67 donors worldwide assessed, the Millennium Challenge Corporation (MCC) tops the list. The 2013 ATI is the third annual index, and this year marks the first time a U.S. Government agency has taken the top spot. The Global Alliance for Vaccines and Immunizations comes in at Number 2, while the UK’s Department for International Development (DfID) takes third.

2013 ATI Ranking

The index is based on information donors publish about their development projects and is then scored on 39 indicators divided into three categories: commitment to aid transparency; organization-level publication of financial information and general plans; and the availability of country-specific project activities. Format of the data also played a major role in this year’s rankings. Donors that publish data in machine-readable formats such as XML, per the IATI Standard, are rewarded because it makes the data easier to compare and use.

Five other USG agencies were among those assessed by the index, though none made it into the top tier “Very Good” category with the MCC. The Treasury Department came in at #19 and USAID came in at #22 in the “Fair” category, showing quite a bit of improvement in comparison to last year’s rankings. The Department of Defense came in at #27 and the Department of State at #40, both in the “Poor” category and PEPFAR in at #50 in the “Very Poor” category.

U.S. progress in terms of making aid data available is notable—and the State Department announced this week that the U.S. African Development Foundation (USADF) joined State, DOD, USAID, MCC, and Treasury in adding data to the Foreign Assistance Dashboard. But it is essential that the data be useful. Publishing to the IATI Standard, the only open data standard for aid information, ensures that data is comparable and usable for donors and recipients of aid.

The U.S. has set a goal of publishing 70 percent of its aid data to IATI by the end of the year and has pledged full implementation of its IATI commitment by 2015, though it seems unlikely they will meet these goals at the current pace.

Why Congress Should Care About the International Aid Transparency Initiative

Thursday, April 18th, 2013
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See below for a guest post from MFAN co-chair and Brookings senior fellow George Ingram on how the International Aid Transparency Initiative (IATI) and the Foreign Assistance Dashboard are the tools Congress has been looking for to prove the value of U.S. foreign assistance programs. This post originally appeared on the Brookings blog

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As the long-dreaded sequestration process begins to set in, U.S. government programs that have already been feeling the heat of budget pressures are now starting to feel the pinch. Across all agencies and departments, there has never been such heightened vigilance to determine the quality, value, and effectiveness of taxpayer-funded programs in order to save them from landing on the proverbial chopping block. U.S. foreign assistance is no exception, and in fact, is likely to be a popular target despite notable progress over the past decade in how aid is delivered.

One basic tool to help circumvent arbitrary and needless cuts is to make information related to foreign assistance transparent, accessible and comparable with the activities of other international donors. Congress has the important responsibility of choosing how much to allocate for activities that seek to lift millions out of extreme poverty, fight disease, spur growth and restore human dignity. In this challenging budget environment, that responsibility is of even higher consequence, with the potential to affect lives all around the world, either for the better or worse. But to make informed decisions, Congress needs to have at its disposal comprehensive, reliable data that is timely and up-to-date.

The Foreign Assistance Dashboard— a public website launched a little over two years ago by the Obama administration to examine this data— demonstrates a strong commitment to aid transparency. However, compliance from agencies involved in U.S. foreign assistance has been slow; the site still only has partial information (budget plans, obligations and expenditures) for a couple of agencies (USAID and Millennium Challenge Corporation) and just planning data for the State Department, leaving out more than a dozen others as well as critical program and project data that lie beneath the aid-flow surface.

The U.S. made another major commitment to the transparency agenda at the 2011 High Level Forum on Aid Effectiveness in Busan, South Korea, by joining the International Aid Transparency Initiative (IATI). Meeting the IATI commitments, particularly the publication of comprehensive and timely foreign assistance information, is incomplete and moving slowly.

Congress needs to understand that the dashboard and IATI are the tools it has been searching for. Members continuously complain about the opaqueness of foreign assistance – how much assistance is the U.S. providing, to what countries, for what purposes, in cooperation with whom, to what effect? Where is the information to explain to constituents how their tax dollars are being spent? Together the dashboard and IATI will provide this information.

Even more importantly, while there are varying opinions over the best uses and purposes for foreign assistance, members of Congress, Republicans and Democrats, are united in caring that foreign assistance dollars are used well – that tax dollars are not wasted and that the assistance does help lift individuals and countries from poverty and promote U.S. foreign policy interests.

IATI is a critical tool in contributing to the effective use of foreign assistance funds – and not just government provided assistance, but also that which is provided by private entities such as NGOs, foundations and corporations. It is currently the only place for comparable aid information. While the dashboard is a valuable domestic resource, IATI allows a wide range of stakeholders to know what the U.S. government is doing alongside what others are doing. This is the full aid picture and what recipients want to know on the ground.

As of April 2013, 39 government and multilateral donors, and over 100 private organizations, have committed to IATI. When fully operative and with timely and comprehensive data from all donors, we will have the ability through one website to find all donor activity in a particular sector and a particular locale in a country – a virtual one-stop-data-shop for foreign assistance. So how will this improve aid effectiveness?

Let’s say you are: (1) USAID contemplating investing scarce assistance funds in education in region X of country Y; (2) a congressional staffer whose boss has asked whether donors are helping to expand education opportunities in that region; (3) an NGO contemplating working in that region; (4) a finance ministry budget expert in country Y trying to figure out which school districts are in the greatest need of resources in the next fiscal year. IATI will provide the data to help answer these questions.

Through IATI, USAID will know which other donors are engaged in the region, at what level of funding, with what specific focus, and with whom it might coordinate. The congressional staffer can tell his member what donors and at what level education is being assisted. The NGO can tell if this region is overrun by its sister organizations or ignored and with whom it might partner. The ministry budget expert can better allocate scarce resources and query the education ministry staff as to whether it is integrating donor activity into national education plans.

The administration is to be commended for taking the leading in bringing U.S. assistance into the age of data transparency. It is now time for Congress to become involved, by supporting the administration but also by pushing for more robust implementation. Congressman Ted Poe does this in his bill, the “Foreign Aid Transparency and Accountability Act”, which passed the House in the waning days of the last Congress but was held up in the Senate. It is expected that he will soon reintroduce the bill. Congress should act swiftly to enact it into law and recommend that IATI be the standard by which all agencies in the aid space publish their data.