The Foreign Service Journal, June 2006

J U N E 2 0 0 6 / F O R E I G N S E R V I C E J O U R N A L 5 If American diplomacy is to become even more focused on hands-on activism and manag- ing programs to advance our agenda in key developing coun- tries, major elements of the ini- tiativemust be our foreign assis- tance programs and the Agency for International Development. For transformational diplomacy (TD) to succeed, it will be necessary to greatly strengthen USAID by ensuring ade- quate personnel and operating budgets, and create new assistance programs that will reconcile the inherent short-term (i.e., political) nature of the TD initiative with the fundamentally long-term nature of economic and democratic development. Despite a remarkable increase in foreign assistance during the Bush administration, USAID is still reeling from a decade of relentless attacks and cutbacks. USAID’s cadre of Foreign Service officers is hardly a quarter of what it once was. Year after year it goes through contortions to tap project funds to cover shortfalls in operating expens- es, while visions of the mid-1990s RIFs and furloughs haunt its staff and poison agency morale. Nor is USAID everywhere it should be to advance transformational diplo- macy. It has no presence in a number of important TD focus countries. Many overseas missions were closed in the 1990s in response to earlier budget cuts and shifting post-Cold War priorities. The number of bilateral USAID mis- sions in Africa fell from 36 to 22 in 1996. USAID’s overseas presence essentially reflects the pre-9/11 world. It is based on a strategy of shrinking to survive and choosing an “invest-in-suc- cess” model that, while an excellent development strategy, in no way addresses the challenges of our post-9/11 re-ordered priorities that force us to deal with the problems posed by precisely those countries left outside an invest-in-success strategy. There is a strong institutional proclivity at USAID to have USG funding chan- neled to countries where it has missions and to minimize assistance flows to countries where it doesn’t. This may be a natural bureaucratic reaction, but it distorts the process of matching U.S. interests with U.S. aid allocations. The recent confirmation of Randall Tobias as USAID Administrator and, particularly, his concurrent accession as the first State Department Director of Foreign Assistance has attracted much attention. It has also generated palpa- ble fears among USAID’s employees over their agency’s future and the role of long-term development in the adminis- tration’s foreign policy plans. After a series of briefings at both State and USAID, I have concluded that the administration truly has no intention of State absorbing USAID, that it does not want to spend the energy and the polit- ical capital that an agencymerger would require, and that it really wants to make U.S. assistance programs more respon- sive to perceived policy imperatives. The extent to which it can match assis- tance programs with policy in its remaining two-and-a-half years in office remains to be seen. For TD to succeed, however, the State Department must come up with something my briefings reveal it is not yet aware of — assistance programs specifically designed to allow the diplo- mats Secretary Rice wants to be “hands- on” to carry out the transformational work she wants done. The officers being repositioned from Europe to pri- ority transformational countries must have well-conceived and well-funded programs with which to engage their target audiences and advance our values and agenda. If the point of departure for the Secretary’s vision is action not reporting, these people need the right tools — and the right training — to do the job she wants done. Most existing USAID programs will not permit this, but State does have a few modest pro- grams that are useful models, such as the Democracy and Human Rights Fund. The experience and expertise at USAID should be invaluable in crafting the answer to this need. All of us know that the U.S. gets far too little credit internationally for our contributions to international develop- ment: bilateral assistance, IMF/World Bank support, direct investment by businesses, openness to imports, remit- tances from immigrants here, and the intellectual contributions generated by the success of our private enterprise model. Our policy focus has now shift- ed to imparting values and developing institutions. For this high-profile shift to succeed, it will require certain addition- al, unavoidable investments. n P RESIDENT ’ S V IEWS Foreign Assistance: Transformational Diplomacy’s Key Missing Ingredient B Y J. A NTHONY H OLMES J. Anthony Holmes is the president of the American Foreign Service Association.