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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.

 

2013 SOTU’s Vision For Global Poverty & Progress: How Far Have We Come?

Friday, January 31st, 2014
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See below for a guest post from George Ingram, senior fellow at Brookings and MFAN co-chair. Ingram writes about celebrating the progress made to achieve the ambitious development goals President Obama outlined in his 2013 State of the Union address and recognizing there is still work to be done. The original post can be found on Brookings’ Up Front blog.

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For those of us who care about poverty and progress in developing countries, missing from President Obama’s State of the Union address last night was any serious discussion of development.  It therefore is useful to recall the strong vision on development he presented in the State of the Union address a year ago.  In a single, but powerful paragraph, he stated:

“We also know that progress in the most impoverished parts of our world enriches us all—not only because it creates new markets, more stable order in certain regions of the world, but also because it’s the right thing to do.  In many places, people live on little more than a dollar a day.  So the United States will join with our allies to eradicate such extreme poverty in the next two decades by connecting more people to the global economy; by empowering women; by giving our young and brightest minds new opportunities to serve; and helping communities tofeed, and power, and educate themselves; by saving the world’s children from preventable deaths; and by realizing the promise of an AIDS-free generation, which is within our reach.”

The italics are mine—to demonstrate that this short paragraph contains a commitment to 9 key components that together comprise an ambitious development agenda, headlined by the “eradication of extreme poverty,” but also noting the critical roles of empowering women, improving education and ending preventable child deaths.

Despite only a slight nod to development this year, the assumption is that this paragraph remains the Obama administration’s operative vision to which the administration can expect to be held accountable and against which global progress can be measured. A cursory assessment on each of those 9 key components would suggest encouraging progress:

  • Eradicate extreme poverty. The past decade has witnessed unexpected progress in reducing world poverty. The Millennium Development Goals (MDGs) call for cutting poverty in half by 2015, a target that has been met early. The portion of people living on less than $1.25/day fell from 47 percent in 1990 to 22 percent in 2010. By several calculations and with a continuation of current trends, extreme poverty could decline to 3 percent by 2030.  The administration, specifically USAID, has been struggling to translate its commitment to eradicate extreme poverty into a coherent strategy—not such an easy task given the complex nature of development and conflicting U.S. interests—but the administration’s policies and initiatives do translate into tackling poverty through direct means and through promoting economic growth and prosperity in developing countries.  It is noteworthy that USAID today issued a refreshed mission statement that puts poverty alleviation in the center: “We partner to end extreme poverty and to promote resilient, democratic societies while advancing our security and prosperity.”
  • Connecting more people to the global economy. In December, the ill-fated Doha Round finally produced the Bali Package that brings results which, while modest, are valuable in expanding trade access for developing countries. The principal near-term development trade agenda rests in the hands of Congress: whether the Senate will overcome a myopic single-senator hold to secure renewal of the GSP (Generalized System of Preferences) that has already expired, and whether Congress will renew the African Growth and Opportunity Act before its expiration in 2015.
  • Empowering women. The administration’s record on empowering women is considerable and simply needs to stay on a steady course, from USAID’s and the Millennium Challenge Corporation’s (MCC) policies and programs that advance gender inclusiveness, and the State Department and USAID’s efforts to tackle trafficking and violence against women.
  • Giving the young and bright to new opportunities to serve.  The FY2014 appropriations bill provides a modest increase in funding for the Peace Corps, and it is reported that the White House will soon significantly scale up the Young African Leaders Initiative (YALI) for both African and American youth.
  • Feed. The U.S. bilaterally, and in collaboration with other countries, is making a significant investment in the ability of the world to feed its growing population. Food security is being advanced by Feed the Future, through which the U.S. made a $3.5 billion pledge as part of an $18.5 billion global commitment to address hunger, and the more recent New Alliance for Food Security and Nutrition, a public/private global effort announced at the 2012 G8 Summit to lift 50 million people in Africa out of poverty by 2022.
  • Power.  Power, which was mentioned last night, was tackled in 2013 with the new initiative Power Africa, a unique public/private program that links improvement in government policies and regulations with packaging the finance needed to “power” proposed energy investment projects.  The U.S. government has committed to providing $7 billion of finance that will generate $14 billion from financial partners.
  • Educate. Despite several decades of considerable progress in bringing education to the world’s children, some 57 million children remain out of school.  USAID and other donors have moved from just focusing on getting kids through the school door to making sure there is a learning experience inside the classroom. Thanks to continued support for education in Congress, funding is bumped up slightly for FY2014.
  • Preventable childhood deaths. The story is encouraging.  The global under-5 mortality rate has been cut nearly in half, from 90 deaths per 1,000 live births in 1990 to 48 in 2012, or from 12.6 million to 6.6 million children a year. Encouragingly, the rate in reduction has sped up from 1.2 percent during 1990-1995 to 3.9 percent for 2005-2012. This increased pace in reducing preventable child mortality suggests that concerted effort could produce even more progress.
  • AIDS-free generation. Leaders are lining up behind the concept of an AIDS-free generation. The United States, through PEPFAR, has been leading the charge to stem this scourge.  As of September 30, 2013, 6.7 million individuals are receiving life-saving antiretroviral treatment, a fourfold increase from 1.7 million in 2008. In FY2013, 240,000 babies, who otherwise would have been infected, were born HIV/AIDS free. The world is rid of small pox; we are three countries short of defeating polio; the concept of an AIDS-free generation may sound fanciful today, but the trends and treatments are with us and the goal could be achieved with expanded political will and behavioral change.

At a time when we would wish we were closer to reaching the MDGs, and our optimism is burdened by continued poverty and the accompanying hunger, ill-health and strife, it is important to celebrate the progress that has been made and the good efforts that are being made by the U.S. government, private U.S. organizations and individuals, and their counterparts around the world.

It also is important to note that there remain other significant parts to the development agenda and commitments to be fulfilled—making our aid process more accountable through better evaluation, transparency, and learning; moving from good policy to actual implementation of local ownership, starting with listening to the needs and solutions of local institutions and individuals; effectively promoting open, democratic political institutions and civil society; and leveraging the talents and experiences outside of government, including the private sector, nongovernmental organizations and academia.

We must both commend the progress that has been made and push harder on the ambitious agenda that remains to reduce poverty and bring economic opportunities to those left out.

 

President Notes Value of Foreign Aid in Major Speech

Friday, May 24th, 2013
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President Obama delivered a major speech Thursday at the National Defense University in which he outlined the future of US counterterroism efforts. In so doing, he highlighted the importance of other tools in our national security arsenal, including foreign aid. See below for an excerpt from his speech in which he talks about this new strategic framework and the value of foreign assistance.

“So the next element of our strategy involves addressing the underlying grievances and conflicts that feed extremism — from North Africa to South Asia.  As we’ve learned this past decade, this is a vast and complex undertaking.  We must be humble in our expectation that we can quickly resolve deep-rooted problems like poverty and sectarian hatred.  Moreover, no two countries are alike, and some will undergo chaotic change before things get better.  But our security and our values demand that we make the effort.

This means patiently supporting transitions to democracy in places like Egypt and Tunisia and Libya — because the peaceful realization of individual aspirations will serve as a rebuke to violent extremists.  We must strengthen the opposition in Syria, while isolating extremist elements — because the end of a tyrant must not give way to the tyranny of terrorism.  We are actively working to promote peace between Israelis and Palestinians — because it is right and because such a peace could help reshape attitudes in the region.  And we must help countries modernize economies, upgrade education, and encourage entrepreneurship — because American leadership has always been elevated by our ability to connect with people’s hopes, and not simply their fears.

And success on all these fronts requires sustained engagement, but it will also require resources.  I know that foreign aid is one of the least popular expenditures that there is.  That’s true for Democrats and Republicans — I’ve seen the polling — even though it amounts to less than one percent of the federal budget.  In fact, a lot of folks think it’s 25 percent, if you ask people on the streets.  Less than one percent — still wildly unpopular.  But foreign assistance cannot be viewed as charity.  It is fundamental to our national security.  And it’s fundamental to any sensible long-term strategy to battle extremism.

Moreover, foreign assistance is a tiny fraction of what we spend fighting wars that our assistance might ultimately prevent. For what we spent in a month in Iraq at the height of the war, we could be training security forces in Libya, maintaining peace agreements between Israel and its neighbors, feeding the hungry in Yemen, building schools in Pakistan, and creating reservoirs of goodwill that marginalize extremists.  That has to be part of our strategy.”

Obama NDU speech

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.

 

Transforming foreign assistance

Monday, April 15th, 2013
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See below for an op-ed from MFAN’s co-chairs Rev. David Beckmann, George Ingram, and Jim Kolbe. This piece first appeared in Politico.

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The amount of good our nation has done for poor and hungry people around the world over the last ten years is astounding. We have saved and improved millions of lives through programs like the President’s Emergency Plan for AIDS Relief (PEPFAR), which was launched by former President George W. Bush to battle the disease in Africa, and the Feed the Future initiative, which President Obama started to support small farmers and the growth of local economies in developing countries.

Behind these big ticket initiatives, our foreign assistance approach has also been transformed into a more rigorously evaluated, strategic and selective one that is focused on helping developing countries and citizens take control of their own future. Completing this transformation must be a foreign policy priority for Obama and his successors because effective and robust development efforts will have to play a larger role in U.S. foreign policy if we are to maintain a strong global presence as our major military engagements end.

Recently, the United States Agency for International Development released the results of an extensive internal evaluation that provided the first evidence that reform is making the machinery of U.S. foreign assistance work better. The USAID Forward Progress Report provides a look at how the agency is implementing the reforms that Obama outlined in his landmark Policy Directive on Global Development (PPD) in 2010. The PPD, the first government-wide development policy reform guidance ever issued from the White House, mapped out the transformation agenda and highlighted a “long-term commitment to rebuilding USAID as the U.S. government’s lead development agency and as the world’s premier development agency.”

In the years since, USAID has focused on reforming key areas:

Evaluation and Selectivity: The creation of both the new USAID Bureau for Policy, Planning and Learning and the position of Chief Economist have had clear impact on the agency’s ability to plan and to measure programs and thus make more strategic decisions. The report notes that since 2011, 186 in-depth program evaluations have been completed and published for public review. Furthermore, thanks to a more concerted use of strategic planning, the agency reduced total numbers of program areas by 22 percent and phased out agricultural programs and global health programs in 21 and 17 countries, respectively, where local institutions are in position to take charge.

Country ownership: USAID’s launch of a process to develop Country Development Cooperation Strategies (CDCS) – which involve close and cross-sectoral collaboration with recipient countries to set goals and adapt programs – is an important step towards giving partners and citizens more responsibility and accountability within the development process. Twenty CDCS processes were completed in 2012. Efforts to expand country ownership were further strengthened by the agency’s efforts to direct more resources to local institutions. The report notes a 50 percent increase in funding to local organizations since 2010, from 9.7 percent in 2010 to 14.3 percent this year.

Economic Growth and Innovation: The report outlines that strengthening the Development Credit Authority (DCA) has allowed USAID to leverage more private capital – $524 million in 2012 alone – to support entrepreneurship and growth in developing countries. A premium has also been put on new technology: six USAID missions are now actively using and supporting mobile applications to catalyze development.

Partnership: In addition to strengthening relationships with recipient governments, institutions, and citizens, USAID has developed new partnerships with universities and other private sector organizations in order to build local capacity and improve program outcomes.

Transparency: USAID has established a rigorous, multi-step risk assessment mechanism for determining host country governments’ readiness to receive government-to-government assistance from the U.S. If at any point in this process a government fails to meet those eligibility criteria, it is disqualified from further consideration. Similarly, the Obama administration launched the Foreign Assistance Dashboard over two years ago to make information about U.S. assistance more accessible to both American citizens and those of recipient countries, and has committed to publish its assistance data with the International Assistance Transparency Initiative (IATI).

In addition to increased diligence and resolve by the Obama administration and USAID, congressional engagement is needed to solidify these reforms. The president’s budget includes strong reform elements, including a proposal to reshape the inefficient U.S. food aid system to reach more people and save more taxpayer dollars, and we urge Congress to support this and other proposals, like transparency legislation introduced by Rep.Ted Poe (R-Texas).

Completing the transformation of U.S. foreign assistance will reposition the U.S. as not just the most generous, but also the most strategic, innovative, and effective player in global development. We have saved and improved millions of lives over the last ten years and our efforts have helped strengthen our image abroad: a new field survey of aid recipient countries by Oxfam America finds that 83 percent of respondents believe the U.S. is a better development partner now than five years ago. The opportunity at hand for the next ten years is to turn progress into lasting change by helping those people take control of their own lives.

Rev. David Beckmann, a 2010 World Food Prize laureate, is the president of Bread for the World. George Ingram is a senior fellow at the Brookings Institution. Jim Kolbe, a former Republican congressman from Arizona, is a senior transatlantic fellow at the German Marshall Fund of the United States and a senior adviser at McLarty Associates. They are co-chairman of the Modernizing Foreign Assistance Network.