The Foreign Service Journal, June 2006

if the executive and legislative branches are serious about expanding foreign assistance, they must restaff the USAID Foreign Service to bring in officers with the tech- nical (economists, agricultural scientists and medical doc- tors, etc.) and program management (procurement offi- cers, financial analysts and logistics officers, etc.) skills needed to sustain this effort over the long term. The increasing reliance on contractors and FSNs is also exacerbating chronic funding problems. While USAID’s overall budget rose from $7.6 billion in FY 2000 to over $12.6 billion in FY 2005, representing a 44- percent increase when adjusted for inflation, the oper- ating expenses component (which includes salaries and benefits for direct hires, administrative costs, and main- tenance of computer systems) increased far less sub- stantially — going from $519 million in FY 2000 to just $696 million in FY 2005, or about 17 percent when adjusted for inflation. The OE budget of USAID is rooted in the mistaken view that technical staff is sepa- rate from programs. An anachronism, it is compromis- ing the agency’s ability to carry out its work. Another critical foreign assistance issue that needs to be addressed is the diffuse organizational structure of the agencies and departments administering the cur- rent foreign aid program. Our foreign assistance port- folio is now spread out over a dozen federal depart- ments. There are too many internal bureaucratic and external interest-group pressures driving conflicting agendas, leading to a serious imbalance in funding for some sectors and reliance on organizations lacking expertise on program implementation abroad under sometimes challenging conditions. For example, Africa needs to strengthen democratic institutions and good governance, prevent or settle civil conflicts, stimulate economic growth through trade and agricultural development (70 percent of the people are farmers) and build infrastructure. Yet with the exception of the Millennium Challenge Account, the U.S. govern- ment’s budget for Africa has been focused disproportion- ately on humanitarian assistance and social services. While these social service programs are admirable, does anyone believe that their success would meet the conti- nent’s development challenges? If so, consider just one statistic: the U.S. government spent over $1.4 billion on food aid to Africa in FY 2005, but only $134 million on agriculture programs to enable Africans to grow their own crops and end recurring food crises. Toward a Strategic Vision Finally, the U.S. foreign assistance program lacks both strategic coherence and a comprehensive vision — unlike national military policy, which regularly undergoes the Quadrennial Defense Review. This is a broad, governmentwide process that produces a strate- gy to drive programming and budget allocations. In contrast, while USAID has worldwide sector and coun- try strategies and program-results indicators in each of the 80 countries in which it has a presence, these have no effect on spending done by other departments. Worse, hundreds of special-interest-driven congres- sional earmarks and directives determine programming decisions, not a thorough analysis of U.S. interests, pro- gram performance or host-country needs. Precisely because President Bush has so dramatical- ly increased foreign assistance funding and reformed the strategy for using it, the need for structural reform to address these discontinuities is all the more appar- ent. The Rice Plan for Foreign Assistance Reform will tie together the president’s foreign assistance initiatives and correct some of the weaknesses in the existing sys- tem. Under the plan, the administrator of USAID will be dual-hatted, also serving as the director of foreign assistance programs, with Deputy Secretary of State rank and control over all 150 Account spending. Randall Tobias, my successor as USAID administrator, will have authority to speak for the U.S. government internationally concerning foreign assistance policy and implementation. And by holding both portfolios, he will be able to rationalize what is currently a highly dif- fuse, and not very strategic, use of foreign assistance dollars. In English, we say that “the devil is in the details,” for the invariably boring minutia of how processes will be changed and business models altered determine the success of reforms in any institution. We all know that badly implemented reforms can make things worse rather than better. However, there is a Hungarian proverb that suggests the other side of this reality: “The angel is in the details.” Sometimes even modest reforms, well implemented, can be profoundly salutary. Sec. Rice’s proposals provide the structure needed to ensure that our $27.5 billion in foreign assistance resources are effectively and accountably used, advanc- ing America’s vital interest in seeing developing coun- tries succeed in achieving good governance. F O C U S 24 F O R E I G N S E R V I C E J O U R N A L / J U N E 2 0 0 6