D E C E M B E R 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 The buzz is back. The idea that was so pervasive earlier this year, that the State Department under Secretary Rice intends to take over USAID, has flared up again despite adamant denials. This time, though, the percep- tion is that a merger by stealth is already well advanced. Reports of rock-bottom morale and rumors of a surge in voluntary retire- ments reflect a growing perception of huge shifts in power and control from overseas to Washington and from USAID to State. I’ve gotten the impres- sion that all our foreign assistance pro- fessionals think is missing is an official announcement that long-term develop- ment has now been supplanted as the agency’s overarching goal by short-term political considerations cloaked as “transformational diplomacy.” The initial announcement early this year that the newUSAIDAdministrator would concurrently be the Deputy Secretary of State for Foreign Assistan- ce generated major heartburn among USAID staff but little reaction at the StateDepartment. Aggressive efforts to assuage those concerns focused on com- ing reforms in the allocation process and potential benefits from streamlining multiple pots of our aid funds. But now, eight months into the effort, people have seen enough detail about the process, and learned of major funding cuts and reallocations, that the decibel level of concern has skyrocketed. This applies within State as well, where long- standing thematic and regional programs are reportedly being relegated to the margins of via- bility. A number of affected peo- ple have expressed alarm that the new USAID Administra- tor/Deputy Secretary, former pharmaceutical executive Randall Tob- ias, is trying to apply to the huge, com- plex foreign aid structure the formula that worked relatively well for him, albeit on a much smaller scale, as head of PEPFAR, theWhiteHouse initiative to fight HIV/AIDS. PEPFAR’s hall- marks include: the narrowest possible geographical and thematic focus to achieve immediate impact; maximum control by headquarters, with limited input on funding decisions from pros in the field; and a focus on ensuring mea- surable results even in the near term for use as PR and in budget battles. But what works in the fight against HIV/AIDS, some veterans believe, is not an appropriate approach to the complex, interrelated issues and pro- cesses of economic and social develop- ment. They want flexibility in the field to be able to respond quickly to changes on the ground. They fear a zealous pur- suit of demonstrable results—an inher- ently short-term focus —will be the tail that wags the dog, reordering priorities, damping creativity and risk-taking, and dictating a supply rather than demand- driven dynamic between the U.S. and its aid recipient partners. The need for “local ownership” has become an article of faith in development. While that may converge completely with Washington’s political agenda when it comes to dis- tributing anti-retroviral drugs to AIDS sufferers, it could be quite the opposite with our larger programs and broader goals. Reducing our aid’s geographical and thematic focus creates other problems, particularly on a strategic level in terms of how to use aid to pursue overall U.S. interests. USAID was forced to shrink to survive during the 1990s, when a con- centrated, “invest-in-success” model was also a reasonable development stra- tegy. However, this approach neglects many challenges in a post-9/11 world, where we must find a way to engage with precisely those countries to which we give short shrift. The same is true, many believe, for our regional programs and our initiatives on transnational threats like WMD proliferation and environmental degradation. The growing disquiet in State and USAID is striking in that consciousness of these profound changes has been such a creeping phenomenon, slowly sinking in without frank discussion, debate, or intellectual buy-in by the major stakeholders involved. Most of the large and diverse U.S. development community doesn’t have a clue. While some briefings on Capitol Hill have taken place, I understand, invitations were limited and the focus was on process not substance. After the mid- termelections, of course, there will soon be new individuals in key positions and a different approach to oversight. Perhaps this would be a good time to initiate an all-parties review of the new paradigm so that the necessary support here at home is achieved in advance. P RESIDENT ’ S V IEWS Foreign Assistance “Reform:” The Short-TermMentality Sets In B Y J. A NTHONY H OLMES J. Anthony Holmes is the president of the American Foreign Service Association.