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5 things the US government is doing to make foreign assistance more effective

April 2nd, 2014
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See below for a guest post from Jennifer Lentfer, Senior Writer on the Aid Effectiveness Team at Oxfam America. Lentfer highlights the aid effectiveness principles from Oxfam’s newly released third-edition Foreign Aid 101 report.

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#1 – AFFIRMING AID’S PURPOSE

President Barack Obama issued the US government’s first ever US Global Development Policy in September 2010. The policy clarifies that the primary purpose of US development aid is to pursue broad-based economic growth as the means to fight global poverty.

The US Global Development Policy also offers a clear mandate for country ownership—that is, leadership by citizens and responsible governments in poor countries—is how the US government will support development. The US has been moving in this direction since the George W. Bush administration.

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#2 – MODERNIZING USAID

USAID Forward is a flagship reform agenda designed to make USAID more transparent, effective, and accountable to US taxpayers and to people overseas.

The issue: USAID Forward addresses outdated procurement policies that perpetuate a cycle of aid dependence, rebuilding staff technical capacity, the reduction of overhead costs associated with contracting by 12–15 percent, the need for rigorous program feedback and evaluation, and finally, the role of innovation, science, and technology throughout USAID’s programs. At the heart of this reform process is acknowledging the leading role that local people and institutions have in transforming their countries.

The results: Since USAID Forward began, USAID has increased the amount of direct support to governments and to citizens and other leaders and problems solvers in host countries by almost 50 percent. In fiscal year 2010, only 9.7 percent of USAID mission funding was awarded directly to host country government agencies, private-sector firms, and local NGOs. In 2013, 14.3 percent of mission funds were awarded directly to these local institutions, which is halfway toward USAID’s goal of 30 percent by fiscal year 2015.

#3 – MAKING US FOREIGN AID MORE TRANSPARENT

The issue: Basic information about where, how much, and for what the US government provides aid has historically been difficult for people to access—both for American taxpayers and for the people in poor countries we are trying to assist. But when the US government shares high-quality, comprehensive, and timely information about our aid investments, it helps:

  • Partners plan better projects;
  • Watchdogs keep an eye on the money; and
  • Citizens both in the US and in partner countries make sure that aid delivers results.

The results: The US government is beginning to disclose basic aid data, as well as make that data more useful to citizens. In 2010, the US unveiled a public website, the Foreign Assistance Dashboard, which provides a view of US aid across agencies and countries. President Obama has mandated publishing machine-readable data on US aid via executive orders and through public, international commitments like the Open Government Partnership. There have also been bipartisan efforts in both houses of Congress to require more transparency from US aid agencies via legislation.

In 2011, the US joined the International Aid Transparency Initiative (IATI), a global agreement by donors to share information about foreign aid in an easy-to-use manner. Since joining IATI, US rankings in the Aid Transparency Index have risen across the board, with the MCC ranking number one in 2013.

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#4 – DEVELOPING NEW MODELS OF PROVIDING AID

The Millennium Challenge Corporation (MCC) is a United States foreign aid agency that is applying a new philosophy towards foreign aid. Introduced by President George W. Bush and established by Congress in 2004, the MCC model requires countries to meet eligibility criteria in three areas: good governance, economic freedom, and investments in people. In return, the MCC provides large, five-year grants (“compacts”) toward development projects that are identified along with representatives from the host country government, private sector, and civil society and that are assessed on the basis of expected economic returns and other technical criteria.

From 2004-2013, the MCC signed compacts with 24 countries and committed over $9.3 billion in aid. Lesotho is an example of a country that took steps to improve economic freedom to become eligible for an MCC partnership by passing a law in 2006 that allowed married women to own property for the first time.

#5 – TACKLING GLOBAL CHALLENGES THROUGH LOCAL INSTITUTIONS

FEED THE FUTURE

The issue: About three-fourths of the world’s poorest people—1.4 billion women, children, and men—live in rural areas, where most of them depend on farming and related activities for their livelihood.

In recent years, increasing food prices around the globe have put pressure on many poor households. In response to these recurring food crises, the Obama administration in 2010 launched the Feed the Future initiative, which aims to help small farmers grow more food and grow their incomes. Feed the Future is designed to deliver aid for agricultural development and food security based on a country’s own assessment of needs and priorities. Feed the Future is also intended to focus on results and leverage US investments in local research and training on farming methods, irrigation, and nutrition for maximum outcomes.

The results: In 2012, almost 9.4 million acres—a land area nearly double that of New Jersey—came under improved cultivation and management practices due to Feed the Future investments, supporting seven million food producers. In Senegal for example, the use of conservation farming techniques resulted in at least a 20 percent increase in yields of maize, millet, and sorghum from 2011 to 2012.

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THE US PRESIDENT’S EMERGENCY PLAN FOR AIDS RELIEF (PEPFAR)

The issue: An estimated 35 million people were living with HIV around the world in 2012. The persistent burden associated with communicable diseases undermines efforts to reduce poverty, prevent hunger, and preserve human potential. Launched in 2003, PEPFAR helps expand access to prevention, care, and treatment by funding programs that are country-owned and country-driven, emphasizing a “whole of government” response to scaling-up proven interventions, which are increasingly financed by partner countries.

The results: PEPFAR has helped contributed to historic declines in AIDS-related deaths and new HIV infections. Going forward, PEPFAR is addressing the continuing challenges of strengthening health systems in developing nations so countries ultimately care for and improve the health of their own people, better protecting the world from global disease outbreaks.

New MCC-PEPFAR Partnership Aims to Boost Ownership

April 1st, 2014
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See below for a guest post from Sylvain Browa, Director of Aid Effectiveness at Save the Children. Browa writes about a new partnership between MCC and PEPFAR to promote country ownership.

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The 2010 QDDR called for the U.S. Government to change the way it does business, particularly, “work smarter to deliver results.” A new memorandum of agreement (MOA) between PEPFAR and MCC announced last week could do just that. Over the next three years, MCC will help PEPFAR increase host-country responsibility and ownership of HIV/AIDS and Tuberculosis (TB) programming in select countries.

This agreement is an important demonstration of PEPFAR’s commitment to doing business differently, and demonstrates how an already successful multi-billion dollar initiative can recognize the need to improve and act on it.

Putting host countries in the driver’s seat in the fight against HIV/AIDS and TB is not just the right thing to do, but has the potential to effectively help sustain the massive gains achieved by PEPFAR over the years. In this new approach, countries will own and (where necessary, learn to) implement PEPFAR priorities. As drivers, these countries will also bring something for the trip – if not the car, at least gas money and a deep knowledge of the road ahead. Greater host country responsibility and ownership of PEPFAR activities puts countries in the position to coordinate investments from other donors to strengthen their national fight against HIV/AIDS and TB.

This new agreement tells us that, in order to reap the full benefit of this mid-course correction, PEPFAR understands the need to get the partnership with host countries right. And they have reached out to a sister agency (MCC) with the comparative advantage and experience to help frame, structure, and set up these partnerships. MCC remains the guru among U.S. aid agencies on how to structure trustworthy partnerships where partner countries are accountable (and rewarded) for formulating their own priorities, implementing them, and delivering results for their people.

From my perspective, this agreement with MCC will work if PEPFAR can objectively commit to:

  • Amending its country operational plan (COP) process to allow partner countries to bring their own priorities forward for meaningful negotiation.
  • Aligning PEPFAR’s often uncoordinated multi-agency interventions in country behind a single entry point of engagement with partner countries like in MCC’s partner government-led MCA teams.
  • Being transparent with partner countries about all PEPFAR programs related information, including budgets, and even policy constraints at home.

In addition to being paid for its services, MCC could learn from PEPFAR’s increasing efforts to value and integrate domestic resources with U.S. funding at the country level and position our financial support (direct support to the public and private sector) as a fundamental element of the country’s available domestic and external resources to fight HIV/AIDS and TB.

This is an interagency collaboration worth following closely. And we will.

PEPFAR and MCC Partner to Promote Country Ownership

March 26th, 2014
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See below for a guest post from Jenny Ottenhoff, Policy Outreach Associate at the Center for Global Development. Ottenhoff writes about a new agreement between MCC and PEPFAR to promote country ownership. The original post can be found on CGD’s blog.

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Last week, PEPFAR signed a three-year agreement with the Millennium Challenge Corporation (MCC) to support efforts to promote greater host-country responsibility and ownership in the US global AIDS program.  Country ownership has been at the core of MCC’s mission (and structure and governance) since its creation, so it’s exciting to see a formalized agreement that will help facilitate lesson sharing and technical support between the two US development efforts.

Transitioning to a sustainable response is an ongoing challenge facing PEPFAR, and no easy feat considering the program was originally designed as an emergency response.  But as we highlighted in arecent report, the MCC model includes three features that could be extremely useful in moving PEPFAR toward a more country-owned approach:

1. First, MCC creates incentives for government commitment as expressed through policy and programmatic performance, where only countries that pass a threshold are eligible for assistance.  Similar indicators and thresholds related to HIV/AIDS and TB performance could be established under PEPFAR to incentivize greater country investment and reward progress towards greater coverage.

2. Second, MCC sets up a compact and account in-country, usually with a government-owned project implementation unit that can compete, contract, and supervise programs directly.  Such a facility could serve as PEPFAR’s country counterpart, channel Global Fund and other donor funding, and evolve toward a single payer or fund as modeled in countries like Rwanda and Liberia.

3.  Finally, MCC is one of the most transparent aid agencies in the world.  The agency posts its planning, obligation and spending data as well as procurement activity and reporting online in aggregated and country-based sites that are easy to access and understand.  These tools help facilitates better understanding, oversight and collaboration among all stakeholders — including partner governments — and would go a long way in helping manage expectations for country-ownership as PEPFAR moves forward.

While specific details of the agreement are not yet public, we do know that PEPFAR funds will be made available to facilitate technical assistance from MCC to help advance country ownership in a yet-to-be-decided set of countries.  But we’ll be watching to see if any of these “MCC features” are reflected in PEPFAR’s program in the coming years.

What the 2014 National Security Strategy Ought To Say, But Won’t

March 14th, 2014
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See below for a guest post from Diana Ohlbaum, Nonresident Senior Associate of the Project on Prosperity and Development at the Center for Strategic and International Studies and MFAN Executive Committee Member. Ohlbaum writes about what she’d like to see included in the 2014 National Security Strategy. This original post can be found on CSIS’s blog.

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President Obama announced last fall that he intends to release a new National Security Strategy (NSS) in early 2014, updating the previous version, published in 2010.  Given that these strategies generally function more as public relations documents than as guiding doctrines, and that 2014 is a high-stakes election year, it may be unreasonable to expect anything risky or bold.  But if the 2014 NSS were to put a clear stamp on U.S. foreign policy and articulate a principled vision of our role in the world, here are a few of the things it ought to say:

#1: Explain why development is important to our national security.

The 3 Ds doctrine – defense, diplomacy and development – has long been de rigeur in Washington’s foreign policy circles.  But the 52-page 2010 National Security Strategydevotes all of 5 paragraphs to sustainable development. There is no clear articulation of why sustainable development is important to U.S. national security and national interests.

The 2010 NSS contains only one sentence that addresses the link between sustainable development and national security, which was then cited in the 2010 Quadrennial Diplomacy and Development Review (QDDR): “Through an aggressive and affirmative development agenda and commensurate resources, we can strengthen the regional partners we need to help us stop conflict and counter global criminal networks; build a stable, inclusive global economy with new sources of prosperity; advance democracy and human rights; and ultimately position ourselves to better address key global challenges ….”[emphasis added].

This is quite an incredible statement when you think about it.  It is not saying that development will create more markets for U.S. exports or level the playing field for American workers.  It is not saying that development reduces the risk of pandemic disease or the impact of environmental change.  It doesn’t say that good governance, transparency and accountability are effective antidotes to transnational crime or that they reduce the risk of violent conflict.  What it says, in effect is: development creates better partners who will do our bidding for us.  Is that the message we want to send the world about why development is important?

#2: Development assistance is not a lever of American policy and influence.

This is probably the most bitter pill to swallow.  But if we are to help bring about lasting gains, swallow it we must.  The United States has other types of aid – Economic Support Funds and billions of dollars of security assistance — that are designed for political ends.

That doesn’t mean, however, that development assistance should ignore politics: in fact, poor governance, weak institutions, and unaccountable processes may be the largest obstacles to growth.  However, there is a difference between using development assistance to build more inclusive and capable institutions for the benefit of local partners and stakeholders, and using it to achieve short-term foreign policy gains for ourselves.

Development assistance is, plain and simple, an investment in a better, safer world.  And it ought to be designed to achieve maximum development outcomes. We are finally starting to learn the lessons of 50 years of development assistance, such as the importance of data transparency, program monitoring and evaluation, clear strategies with measurable goals, country ownership, use of local systems, and harmonization with other donors.  Let’s not abandon those lessons by attempting to leverage aid for short-term diplomatic gains – which doesn’t usually work, anyway.

#3: Development isn’t only about aid.

It’s high time we started recognizing that aid is only a small drop in the bucket when we talk about resources for development.  Foreign direct investment, remittances, and domestic resources are all larger than official development assistance, and private philanthropy is rapidly growing as well.  CSIS’s Project on Prosperity and Development recently released a report examining the ways that the private sector can engage emerging markets.

This doesn’t mean that aid isn’t important – it just means that our development policy must be broader than an aid policy.  And once we start talking about a broader development policy we find two elephants in the room: trade and tax.

Our agricultural and trade policies were not touched on at all as a part of the 2010 Presidential Policy Directive on Global Development precisely because of their political sensitivity.  But we are probably doing more damage to developing countries through our farm subsidies and trade quotas and tariffs than we are helping through our aid.  Such protectionist policies cause poor countries to lose potential jobs and export revenues, and create significant price distortions on their domestic markets, undermining the value of our assistance.  The new Farm Bill and FY 2014 Omnibus Appropriations bill take some baby steps toward a more enlightened food aid program, and the Administration proposes to expand on these in its FY 2015 budget, but more comprehensive reforms are in order.

Second is the issue of illicit financial flows.  Washington hasn’t quite woken up to the fact that the total volume of aid going in to the developing world pales in comparison to the amounts being siphoned out.  In fact, according to a report by the Africa Progress Panel, chaired by Kofi Annan, Africa loses more each year through illicit outflows than it receives in external aid and foreign direct investment combined. Global Financial Integrity estimates that nearly $1 trillion was drained out of the global “south” in 2011 (the last year for which statistics are available) – roughly 10 times the amount these nations received in official development assistance.

Some of this is due to plain old corruption – bribes, kickbacks and embezzlement, pure and simple.  But the vast majority of this is due to tax evasion – in essence, cheating countries out of their own natural and financial resources.   Developing countries are estimated to lose $120-160 billion each year of potential tax revenue from their own citizens who hide their wealth offshore.  And the United States is directly complicit in that, by allowing the registration of untraceable corporations that are the primary vehicle for money laundering, tax evasion, and hiding the profits of transnational crime.

Addressing this problem is essential not only to enable low and middle income countries to finance their own development, but also as a matter of our own national security.  The same laws and policies that make it easy to move, hide, and use dirty money are used by all types of transnational criminals, including drug lords, terrorists, gun runners, sanctions busters, wildlife poachers, and human traffickers.  Cracking down on illicit flows may be one of the most cost-effective ways we have of advancing development, stability, and human security all at the same time.

Which brings me to:

#4 – Strengthen the linkage between efforts to promote development, human rights, and conflict prevention

It has already been shown that conflict and fragility are some of the greatest challenges to development.  USAID’s excellent new discussion paper on “Ending Extreme Poverty in Fragile Contexts” notes the strong correlation between violent conflict and high rates of extreme poverty, with fragile states expected to be home to nearly half of those living under $1.25 a day by 2015.  Similarly, as USAID’s Strategy on Democracy, Human Rights, and Governance points out, “Poverty is underpinned by poor and undemocratic governance, weak and corrupt institutions, and entrenched power dynamics that lead to political and economic exclusion.”

What the 2014 NSS needs to make clear is that the same policies and programs that address corruption, exclusion, and non-accountable governance will help make development more effective and conflict less likely.  We need a much broader conception of what “democracy promotion” really means – as well as a term for it that does not close doors for us around the world – alongside a much stronger capacity to prevent and transform conflicts other than by selling arms, training foreign military forces, or sending in our own troops.

Almost six years ago Gayle Smith, then at the Center for American Progress, authored a marvelous report, “In Search of Sustainable Security,” which was essentially a memo to the future President about what the next National Security Strategy should say.  One of the key points she makes is that “America must recalibrate its foreign policy to rely less on military power and more on other tools that can foster change and enhance our security.”

But in order to do this, we can’t simply cut defense spending, although that’s important.  We need to ramp up our civilian capacities to prevent violent conflict, both through direct prevention – such as diplomacy, dialogue and sanctions – and through structural prevention – which are long-term interventions to transform key socioeconomic and political institutions.

The 2010 NSS and QDDR both talk about strengthening civilian capacity for conflict prevention and transformation, but in practice both USAID and State treat it as something that is way outside the mainstream, unconnected and incidental to their routine work.  The offices that handle these issues are underresourced and underrepresented in the bureaucratic hierarchies, and the work they do is viewed as competing with, and sometimes even at odds with, the priorities of our embassies and missions abroad.  The U.S. Institute of Peace is constantly fighting off attempts to eliminate it entirely.

Conflict prevention ought to be one of the main, if not THE main job of the State Department.  It’s not a special interest or a side-show, it’s what the entire Foreign Service ought to be trained and equipped to do.  Likewise, our efforts at poverty reduction are doomed to failure if USAID does not build its own capacity to help local partners transform power dynamics.  A major investment of time and resources will be required to shift the culture as well as the build the knowledge, skills, tools, and incentives to make the United States as effective at peacemaking as we are at warmaking.  Ultimately, though, that’s the only way that Diplomacy and Development will ever take their rightful place as full partners at the national security table.

The Farm Bill reform that will feed millions

March 11th, 2014
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See below for a guest post from Adam Olson, Oxfam America’s Regional Advocacy Lead based in Chicago. Olson writes about the reforms to international food aid in the 2014 Farm Bill.  The original post appeared on Food Tank.

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Tucked away in Title III of the 2014 US Farm Bill, occupying just one of its 357 pages, quietly sits a reform that will empower thousands of farmers to feed millions more people a year suffering from hunger. Despite its practicality and comparatively low profile, it represents a long, hard fought victory. It’s an expansion of local purchasing of international food aid – and it’s worth celebrating.

Food aid is the backstop of our global food supply. When all else fails, it stands between life and mass starvation. With more than 850 million people suffering from hunger, efficiency in supporting their right to food matters. By using up to $80 million a year to buy food from local sources instead of distant American ones, the reform will feed millions more people. The concept is simple. For instance, if food aid was needed in Vietnam and rice was available in nearby Thailand, it could be purchased there instead of the current practice of shipping it from the US.

This process, proven by other food aid donors and a US pilot project:

1. Cuts food and delivery costs by 25-50%;

2. Reduces the average time it takes to deliver food by 14 weeks;

3. Reaches more people at a lower cost;

4. And, can have longer-term benefit of investing in farmers abroad, making them better able to support their own communities.

Despite all this, even small steps toward permitting local purchasing have been bitterly opposed by special interests, including agribusinesses and shippers. They cling to an antiquated status quo that requires all food to come from the United States. This made some sense when established in the 1950s, when my grandparents were farming in Minnesota. America had a surplus of cheap commodities and food aid was difficult to procure elsewhere. This hasn’t been true for a long time.

The old regime isn’t even particularly profitable for those who defend it, and they know it. In a hilarious Daily Show segment, a shipping industry representative repeatedly cites “heritage” as reason to maintain obsolete regulations. A Farm Bureau economist told Reuters she was more concerned with a loss of “pride” than farm revenue. Food aid amounts to about one percent of US agricultural exports – not enough to measurably impact commodity prices. My grandparents would have been proud to sell that fraction of their crop elsewhere in order to support fellow farmers abroad.

It’s taken common-sense sentiments like that, pushed in a sustained effort over years to achieve this victory. A coalition of organizations, including American Jewish World ServiceBread for the WorldCARECatholic Relief ServicesMercy CorpsOxfam America, and others have helped lead the charge. Champions on Capitol Hill have seen it through. The tragic case of Typhoon Haiyan’s impact in the Philippines and resulting outcry for change emboldened advocates as the Farm Bill went to conference committee. This win is a big, lifesaving step forward.

However, local food aid procurement remains the exception to the rule. If fully funded, the new reform would account for about 5 percent of total food aid activities authorized under the Farm Bill. The best approach is to remove the straightjacket and allow the US Agency for International Development (USAID) to choose the best way to procure food based on individual circumstances. By doing so, an estimated 17 million more people could receive food aid at no extra cost. There is no one-size-fits-all method (see USAID’s great infographics here), and there will always be a need for some commodities grown in the US, but experts should make the call for each situation free of legislative constraints.

We came close to ending more of those restraints last year. President Obama proposed sweeping reform to allow food aid to be purchased locally. Another proposal,offered as a Farm Bill amendment by Representatives Royce and Engel, failed by only 17 votes[i]. The vote was remarkably bipartisan – the issue always has been. In fact, the Bush administration unsuccessfully called for reform. Local purchasing of food aid is something everyone can get behind.

2014 is the year to do it. We expect the Obama administration to continue to push for reform. Budgetary pressures aren’t letting up, mandating the kind of cost efficiencies local purchasing delivers. The need for food aid seems set grow in the short-term; the increasing threat of climate disasters and manmade disasters, like the plight of Syrian refugees, demand a more responsible approach.

2014 is also the International Year of the Family Farmer. What a great time to allow more farmers to respond to food emergencies and break cycles of aid dependency through a more flexible food aid system. Reform in the 2014 Farm Bill, while an important victory unto itself, has given us the momentum to do even better.

 


[i] Correction: Royce-Engel failed by 9 votes rather than 17