MFAN Statement: USAID Administrator’s Tough Speech Heralds New Development Business Model

January 19, 2010 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chair David Beckmann:

In an extraordinary and hard-hitting speech today, United States Agency for International Development (USAID) Administrator Raj Shah laid out the clear progress that is being made in changing the U.S. approach to development and reforming his agency, which has been a target of strong criticism in recent years.  The reform agenda is essential and timely, because helping struggling people build livelihoods and escape poverty has never been more critical to our success in battling extremism, opening new markets for U.S. products, and strengthening America’s allies around the world.

Administrator Shah’s message was unmistakable: America needs to take a more business-like approach to development, and everyone involved in the enterprise must be more focused on results and hold themselves to a higher standard of accountability.  While emphasizing that development “is as critical to our economic prospects and our national security as diplomacy and defense,” he explained that these reforms “are not trying to build an updated version of a traditional aid agency… we are seeking to build something greater: a modern development enterprise.”

He hammered home this message and echoed President Obama’s vision for development with perhaps the most important idea in the speech: that over time, our foreign assistance will create “efficient local governments, thriving civil societies and vibrant private sectors,” thereby making countries more accountable to their citizens while helping them “graduate” from U.S. assistance.  Administrator Shah also helped put the issue in context for the American people, noting that our long-term competiveness and global leadership is contingent on how well we reach and sell products to the world’s fastest growing economies in places like Africa.  Development is a key ingredient to helping these markets stabilize and grow, when used effectively in tandem with diplomacy and trade, among other things.

We were pleased that Administrator Shah did more than simply reiterate a vision in his speech; he actually detailed the steps that USAID will take by:

• Making sustainable economic growth and empowered local citizens core goals across all USAID development efforts;
• Moving to save hundreds of millions of dollars over the next five years by consolidating staffing, administrative, and program management activities globally;
• Accelerating negotiations to graduate as many as seven countries from U.S. assistance by 2015;
• Creating a new evaluation framework that will help USAID make decisions on what programs to continue, while also communicating results to the American people through the new USAID Dashboard;
• Unveiling a new procurement system that will increase competitiveness; and
• Establishing a new taskforce to prevent waste, fraud and corruption.

Taken together, these reforms will bring U.S. development efforts firmly into the 21^st-century and help strengthen USAID as the effective leader of those efforts.  We urge Administrator Shah to remain laser-focused on this reform agenda, including by reaching out to bipartisan Members of Congress to develop legislation that will enshrine this new development business model in law in order to drive long-term results.

For additional information, please contact Sam Hiersteiner at 202-295-0171 or shiersteiner@gpgdc.com.