The Foreign Service Journal, October 2007

V.P. VOICE: USAID BY FRANCISCO ZAMORA Penny Wise and Pound Foolish I n previous articles, I have referred to the “Operating Expenses” crisis at USAID, citing my concern that this sit- uation is bad for our agency and nation. Below is a more precise, factual and, I hope, convincing summary tomake my case. This information is a result of our close collaboration with InterAction, a nongovernmental umbrella group repre- senting more than 165 organizations, in response to an offi- cial request from Sen. Richard Lugar, R-Ind., ranking mem- ber of the Senate Foreign Relations Committee. In terms of real dollars, operating expenses have actually decreased over the last 25 years, a decrease that is even more significant when viewed as a per- centage of USAID’s total budget authority. This decrease has limited the agency’s ability to fill critical positions with experienced and qualified direct- hire staff and impaired the planning and implementation of its programs. The charts below show USAID OE levels over the last 25 years, USAID’s total budget authority for that period, and OE as a percentage of USAID’s budget authority. The first chart shows both USAID’s operating expenses and total budget authority as adjusted for inflation. The second depicts the down- ward trend inOE funding relative to total budget authority from 1982 to 2007. Over the last 15 years, larger and larger portions of this account have been consumed by costs such as computer tech- nology, rent and security needs that were not as substantial in the 1980s when OE was generally funded at its highest levels. These increasing costs, when combined with decreasing appropriations for OE, have forced the agency to operate with an ever-smaller work force, which, in turn, com- promises program effectiveness. Operating expense constraints have also resulted in the hypercentralization of USAID planning and program design. In the months since Secretary Rice’s announcement of her transforma- tional diplomacy initiative in January 2006, that hypercentralization has evenmanifested itself in the suggestion that missions should close in certain “non-strategic” countries around the globe. In an April 12 memo to all USAID field staff, then-Director of Foreign Assistance Randall Tobias said, “[USAID] will need to shift resources away from some functions, including those nations whereUSAID’s full-scalemis- sion platforms are not critical to deliveringU.S. assistance effec- tively. Specifically, I will propose the deployment of USAID ‘development attachés’ to assist U.S. chiefs of mission and coun- try teams in such nations.” It would seem that, during a time when the White House has acknowledged the importance of development relative to defense and diplomacy, the administration should be looking 66 F OR E I GN S E R V I C E J OU R N A L / OC T OB E R 2 0 0 7 A F S A N E W S Operating expense constraints have resulted in the hypercentralization of USAID planning and program design.