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Building the Foundation for Self Sufficiency

April 16th, 2015
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See below for a guest post from Andrew Wainer, Director of Policy Research at Save the Children.

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This week, thousands of policymakers are meeting in Washington for the World Bank and International Monetary Fund (IMF) Spring Meetings. This year’s Spring Meetings include discussions on a vast range of issues: Recovering from the recent Ebola outbreak, global infrastructure development, and migration and remittances are just some of the topics that will be discussed.

While many focus on international foreign assistance and global finance when they think of the World Bank and IMF, this year there is a strong emphasis on domestic resource mobilization (DRM). DRM has several definitions, but one way to think about it is, “The generation of savings from [developing nations own] domestic resources and their allocation to economically and socially productive investments.” Basically it’s about developing nations’ generating their own resources to fund poverty reduction, economic growth, and other social sectors like health and education.

In fact, foreign assistance (ODA) is dwarfed by the potential resources that can be generated by developing countries themselves through raising funds through their own domestic mechanisms, including taxation.

Given the massive financing demands of the Sustainable Development Goals (SDGs) which will be  adopted by the United Nations General Assembly in September, there is now widespread consensus that ODA is not enough to eliminate poverty, and that these goals will primarily need to be reached through developing nations’ generating their own resources.

In middle-income countries, tax revenues already provide more financing than ODA. For lower-income nations to meet the SDGs, they must improve their collection and spending of domestic revenue.

Many nations have a long way to go on this front.

Half of the countries in sub-Saharan Africa collect less than 17 percent of their GDP in taxes while in upper-income countries the percentage is 35 percent.

Research by Save the Children finds that if developing nations could mobilize a minimum of 20 percent of their GDP in tax revenue it would have a major impact on reducing child deaths and contributing to countries’ health and education systems.

This prioritization of DRM in nations’ development strategies also facilitates the strengthening of a country-driven development agenda. As countries generate more of their own resources for development, they are less dependent on external funding. Liberian President Ellen Johnson-Sirleaf states that many nations now seek to, “Reorient the development paradigm away from externally driven initiatives towards domestically inspired and funded initiatives.”

But the potential for nations to mobilize domestic resources is mixed, and particularly for lower developed nations, building the capacity to generate more revenue, requires initial international assistance.

In some cases, ODA and DRM can be complementary. For example, international donors can provide assistance to a developing nation’s tax gathering and administering agencies to build their revenue collection skills.

The U.S. Agency for International Development (USAID) has had an extensive program of DRM assistance in Georgia. This program focused on reducing corruption and revising its tax and customs codes. As a result of the program Georgia’s tax revenue increased.

Developing nations also need international cooperation and assistance when it comes to combatting illicit financial outflows (IFFs) which also steal potential tax revenue for potential use on poverty reduction programs and projects.  IFFs can occur through tax evasion, tax avoidance, or theft. Globally, IFFs represent as much as 4 percent of lost GDP.

Finally, donors can support advocacy efforts of local civil society to empower citizens to voice their priorities to their governments, and to hold their governments accountable for delivering results.

Happily, these issues will be front-and-center during the Spring meeting with civil society sessions on cracking down on shell companies and several World Bank and IMF sessions focused on fiscal management and tax evasion.

It may be counter-intuitive, but developing nations – both governments and civil society — need initial international assistance to build up their own revenue-generating capacity. With some international help, over the long run developing nations’ will be better able to direct and fund their own development priorities.

Broad Coalition Urges President to Nominate a Permanent USAID Administrator

April 16th, 2015
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April 16, 2015 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network by Co-Chairs George Ingram, Carolyn Miles, and Connie Veillette:

Today MFAN, as part of a broad coalition of international development advocates and stakeholders, including four former USAID Administrators, is urging President Obama to expeditiously nominate a permanent Administrator to the United States Agency for International Development. Under the leadership of Administrator Rajiv Shah, USAID has made dramatic steps to strengthen its capacity to deliver results for the American people and for people in developing countries around the world.

Having a Senate-confirmed appointee at the helm of USAID is essential to advancing U.S. development goals and the aid effectiveness agenda. We are calling on the President to nominate a new Administrator as soon as possible to sustain strong U.S. leadership on the development programs that play a vital role in support of our foreign policy goals and are crucial to the lives and well-being of men and women around the globe.

MFAN Thanks SFRC for Highlighting Importance of Reforming Food Aid

April 16th, 2015
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April 16, 2015 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network by Co-Chairs George Ingram, Carolyn Miles, and Connie Veillette:

MFAN wishes to thank the Senate Foreign Relations Committee, especially Chairman Bob Corker (R-TN) and Ranking Member Ben Cardin (D-MD), for convening this week’s landmark hearing on the importance of reforming U.S. food assistance. U.S. food aid programs are instrumental in providing life-saving support to the world’s poorest and most vulnerable, but the current system needs to be improved to deliver more for both hungry people abroad and U.S. tax dollars.

Current laws requiring that food be shipped from the U.S. on U.S. flagged vessels results in time lags and increased transportation and administrative costs that put lives at risk. In addition, delivering U.S. food rather than purchasing locally or regionally sourced food, when available, can inhibit building self-sustaining agricultural systems. Common-sense reforms should be enacted to allow our food aid programs to deliver results faster, more effectively, and more efficiently – at no additional cost to American taxpayers.

We have already seen the positive impact of the small increases in flexibility that were included in the 2014 Farm Bill and the FY2014 appropriations bills. With an estimated one in nine people in the world being food insecure, this is a critical time to ensure that U.S. food aid programs have all the necessary tools at their disposal to respond quickly and effectively to those in need.

We are encouraged by the bipartisan efforts of Congressional champions like Senators Bob Corker (R-TN) and Chris Coons (D-DE) to fix our food aid system, such as the Food for Peace Reform Act (S. 525). We look forward to continuing to work with Congress to ensure our food aid dollars have the maximum impact.

Broad Coalition Calls for Urgent Food Aid Reforms for Efficiency, Effectiveness

April 13th, 2015
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As a diverse coalition from the nonprofit sector, we are strongly in favor of U.S. food assistance that delivers results faster, more effectively, and more efficiently. We applaud the leadership of the Chair and Ranking members of the Senate Foreign Relations Committee, Senators Bob Corker and Ben Cardin, for elevating the importance of the life-saving Food for Peace program and the need to maximize its reach and efficiencies.

For more than five decades, U.S. food aid programs have been assisting the poorest, most vulnerable people in the wake of disasters and other crises. We urge Congress to pursue common-sense reforms that increase the ability to reach more vulnerable people with both emergency and non-emergency assistance.

These common-sense reforms would come at no additional cost: In fact, increasing the flexibility of existing funding and delivery mechanisms can significantly increase the reach of our current programs to millions more people at no additional cost. The United States should be empowered to better utilize the tools necessary to respond to hunger and to match the type of assistance with the reality of any situation – including utilizing cash transfers, local and regional procurement, vouchers, and the delivery of U.S. commodities.

Small increases in flexibility in the 2014 Farm Bill and the FY2014 appropriations bills have already benefitted vulnerable people around the world. In the past year alone, these reforms have reduced costs, allowed a wider range of programming options to improve program outcomes, helped achieve more sustainable results, and reached 800,000 additional people, more quickly.

Flexibility in food aid has helped feed millions of refugees and internally displaced persons affected by the crisis in and around Syria. This includes a wide range of programs such as a U.S.-funded food voucher program for Syrian refugees in Turkey as well as distributing life-sustaining food bars purchased in the U.S. to Syrian refugees in Erbil, Iraq.

This is an important opportunity to expand the impact of one of our most vital international programs. We stand ready to work with Congress to ensure these gains can be realized.

ActionAid USA
Action Against Hunger
Alliance to End Hunger
American Jewish World Service
Bread for the World
CARE USA
Church World Service
Convoy of Hope
Edesia
The Episcopal Church
Evangelical Lutheran Church in America
Feed the Children
Friends Committee on National Legislation
Global Poverty Project
Helen Keller International
InterAction
Maryknoll Office For Global Concerns
Mennonite Central Committee U.S. Washington Office
Mercy Corps
Modernizing Foreign Assistance Network
ONE
Oxfam
Save the Children
The Borgen Project
The Hunger Project
United Church of Christ, Justice and Witness Ministries
United Methodist Church, General Board of Church and Society
USAID Alumni Association (UAA)

Statement: MFAN Applauds Important Reform Elements in the Global Food Security Act of 2015

March 25th, 2015
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March 25, 2015 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network by Co-Chairs George Ingram, Carolyn Miles, and Connie Veillette:

MFAN is pleased to see that the Global Food Security Act of 2015 (H.R. 1567), recently reintroduced by Reps. Chris Smith (R-NJ) and Betty McCollum (D-MN), includes important reform elements that would help strengthen accountability mechanisms and promote greater country ownership of U.S. foreign assistance programs related to food security and global agricultural development.

MFAN believes that accountability is best achieved through transparency, evaluation and learning, which is why it is encouraging to see the Global Food Security Act of 2015 incorporate components of all three areas. The legislation promotes transparency by requiring that indicators and benchmarks be established to measure progress, and that results and spending information be reported publicly in a transparent and timely manner. It also calls for a whole-of-government approach to establishing coherent and coordinated monitoring and evaluation systems; and it states that strategies, partnerships, and programs be regularly reviewed and updated and that lessons learned be shared with a wide range of stakeholders.

The legislation also demonstrates a commitment to principles of country ownership. It requires that U.S. government agriculture, nutrition, and food security strategies align with country-owned strategies, and that plans be developed with input from relevant stakeholders in partner countries. It also calls for a USG strategy on building local capacity in order to support the long-term success of programs.

We applaud the bill sponsors for the inclusion of these elements as they are crucial to ensuring greater effectiveness and sustainability of U.S. global food security and agriculture programs. However, we believe the legislation could be made even stronger in several ways. First, the coordinating function within the U.S. government should lie with the United States Agency of International Development (USAID), our principal development agency, rather than the White House. USAID has been leading the development programming for the Obama Administration’s Feed the Future initiative since its inception and has the requisite expertise and experience to lead coordination across U.S. agencies. Second, reporting on spending and project data should be done in accordance with the International Aid Transparency Initiative (IATI), which the U.S. has already committed to implementing, and measures should be included to ensure that this data is accessible by all development stakeholders, especially the beneficiaries. Third, the legislation should specify that local, developing country institutions be the first option for implementing programs where appropriate capacity and conditions exist.

We look forward to working with Congress to ensure the reform elements in the bill are strengthened.