The Foreign Service Journal, December 2010

$1.558 billion in total aid for Egypt, of which $250 million is economic sup- port and the remainder military. For Israel the request is $3 billion, most of it in the form of military assistance. These are substantial sums of the taxpayers’ money, to be sure. But our political objective to date has been achieved — there has been peace be- tween the two countries for over 30 years. Imagine how the Middle East would look today if Egypt and Israel had continued to be fierce antagonists all these years! Improving the Efficiency of U.S. Foreign Aid It is well-known that the U.S. for- eign economic assistance program is not efficiently organized and adminis- tered today, and that this results in waste (though not nearly as much as critics claim). USAID, which once managed or controlled almost all as- sistance, is but a shell of the powerful, independent organization it once was. Most of its policy, program and budget functions have been subsumed within the State Department, and the USAID Administrator is a subordi- nate of the Secretary of State. Meanwhile, numerous other aid spigots have sprouted. State itself runs huge programs outside the purview of USAID. The Millennium Challenge Corporation, the Overseas Private In- vestment Corporation, the Trade and Development Agency, and the Peace Corps are all involved in development in some fashion. In addition, the De- partment of Defense and many other agencies (Agriculture, Treasury, Jus- tice, Health and Human Services, etc.) have their own mini–foreign aid offices operating more or less independently of State and USAID. Basic reform and centralized con- trol are overdue. And over the years, numerous studies and proposals for reform have been made by knowl- edgeable individuals and groups. Bills have been floated by Senator John Kerry, D-Mass., Senator Richard Lugar, R-Ind., and Representative Howard Berman, D-Calif. Foreign aid lobby groups have been very active, as well, such as the Center for Global Development. Most of these efforts call for USAID to be reinvigorated and again put in control of most or all U.S. economic as- sistance programs. But thus far, at least, their advocacy has been in vain. Recently the Obama administra- tion, after long study, announced its economic development policy. To no one’s surprise, it says that assistance re- mains a key aspect of U.S. national se- curity policy, alongside diplomacy and defense. Such assistance must be sub- stantial, results-oriented and sustain- able. But disappointingly, the report does not call for a reduction in the number of governmental aid spigots and the strengthening of USAID, although there is the usual lip service for greater coordination among agencies. So it seems to me that the inefficien- cies and waste in the process will re- main. Perhaps the administration does not want to approach Congress for basic reforms on a secondary but con- tentious matter like foreign aid with so many more critical issues on its plate. And anyway, too many interests, in- cluding the State Department itself, profit from the existing situation and oppose a more powerful USAID. Accordingly, the approach I laid out in my November 2009 Speaking Out column, “Merge USAID Fully into State,” remains the only realistic way to improve matters greatly in the foreseeable future. To make that hap- pen, the Obama administration could ask Congress to pass legislation incor- porating the rest of USAID, and as many of the other aid spigots as possi- ble, into State, then combine them to form a separate development assis- tance bureau. Finally, that should then be made a specialty (cone) equal to other cones such as political, economic, adminis- tration, etc. Such legislation should also ensure that the other federal enti- ties involved in disbursing foreign economic assistance are closely over- seen and coordinated by this new bu- reau. ■ Raymond Malley, a former Senior Foreign Service officer, spent 23 years in operational and management posi- tions with USAID. After retiring in 1983, he performed numerous con- sulting assignments for the agency during the next 20 years. He also had a long second career as a senior exec- utive with a global Korean industrial manufacturing group. He now lec- tures, writes and teaches international affairs at the Institute for Lifelong Ed- ucation at Dartmouth College. D E C E M B E R 2 0 1 0 / F O R E I G N S E R V I C E J O U R N A L 15 S P E A K I N G O U T USAID, which once managed or controlled almost all assistance, is but a shell of the powerful, independent organization it once was.