The Foreign Service Journal, April 2004

“We’re making the transition from the 1990s, when our whole HR apparatus was focused on downsizing and outplacement of employees, into a growth mode where recruitment and leadership development and workforce plan- ning, training — all of these capacities are being almost rein- vented from scratch,” USAID Assistant Administrator for Man- agement John Marshall told the House Government Reform Com- mittee last year. It’s a tough assignment to entirely rebuild an agency’s staff, restore its morale, and at the same time, oversee two of the most important projects in the agency’s history — assistance to Iraq and Afghanistan — but that is exactly what Natsios and Marshall are trying to do. In an interview, Marshall said he and Natsios understand their burden. They are attacking the agency’s many problems “as diligently as we can,” he says. They know that if they aren’t successful in turning USAID around, all the new program spending and new enthusiasm for development may be for naught. Ten Years in the Desert Last August, the General Accounting Office — Congress’s watchdog agency — didn’t mince any words when it reported on the state of USAID. Reviewing the period from 1990 on, GAO noted that USAID had continued to evolve from an agency in which U.S. Foreign Service officers directly imple- mented development projects to an agency where a declining number of full-time staff struggle to oversee contractors and grantees who carry out the day-to-day development work. In fact, USAID spokeswoman Portia Palmer says, the transition from an organization of “doers” to an organization of “managers” began in the 1980s. But the 1990s budget-cutting completed the process. Long before 9/11, foreign aid was a conundrum for Washington policy-makers. Members of Congress faced a difficult task justifying it to their constituents, especially in light of the general perception that foreign aid has failed to lift developing countries out of pover- ty. There was also considerable pressure to cut discretionary spending to balance the budget. As a result, throughout the 1990s, Congress reduced foreign aid spending. At the same time, Congress exacerbated USAID’s problems by micromanaging its expenditures, loading up its appropriations with earmarks requiring it to work in particular countries or with particular contractors, rather than allowing the agency’s technical experts to decide how best to allocate their dwindling funds. Congressional meddling has had the effect of putting “a huge straitjacket on our people in the field,” Natsios says. Ironically, during the same period in which USAID lost 37 percent of its workforce, the number of countries with USAID programs almost doubled. Congress, for political and diplomatic rea- sons, ordered the agency to open many of those mis- sions. So for years, as the GAO reported, USAID has been taking from its program budget to cover admin- istrative costs that should be covered by its operating budget. “We had so many mandates and so little fund- ing, we’re always robbing Peter to pay Paul,” Marshall says. Staffing was a major casualty of the cutbacks, forc- ing USAID to rely heavily on personal service contrac- tors — primarily U.S. contractors and some foreigners, who work on temporary contracts at overseas missions — to manage development activities that are designed, implemented and evaluated by for-profit companies and nonprofit nongovernmental organizations. “We just didn’t have enough people in the 1990s even to oversee our projects,” says Atwood. “The consequence was that we became a wholesale agency. We had to farm out a lot of the work, and we were able to over- see it less effectively.” The problem continues today. About two-thirds of the personal service contractors at USAID work in technical positions, according to the GAO, but many F O C U S 34 F O R E I G N S E R V I C E J O U R N A L / A P R I L 2 0 0 4 Shawn Zeller is a staff reporter for Government Executive magazine. Congressional meddling has had the effect of putting “a huge straitjacket on our people in the field,” Natsios says.