Global Development: Views from the Center

Carol -- great quick analysis and, yes, there are will be more questions than answers until we see country/program details in next weeks' CBJ. But there are some intesting bits in State's Budget Summary and Highlights of the 150 Account, including some info on the point you raise (and we're all hoping is in more detail in the CBJ) on the shifts between ESF and DA. According the one of the guiding principles behind the budget:

"Match accounts with the country circumstances and intent they are designed to address. The reform process sought to maximize the use of account authorities in support of effective implementation of foreign assistance programs. Overall, funding for Development Assistance which is intended to support poor countries that demonstrate performance has been prioritized to Developing and Transforming countries. Conversely, Economic Support Funds (ESF) which focus on providing economic support under special economic, political, or security conditions has been prioritized to support activities in the Rebuilding and Restrictive Country Categories. In these later country categories, total funding in the three Objectives supporting long-term development increased by 63% over FY 2006 levels. However, the balance between DA and ESF changed with DA declining by 87% and ESF increasing by 158%."

The optimist in me is excited about what appears to be a shift to aid allocated by purpose. But "purpose" seems to be defined by country characteristics (the 5 baskets). So, now what State is calling "development-type aid" is included in ESF for under-performing countries while DA is now targeted to performing countries. The skeptic in me is worries that for those tracking the development dollars of our foreign aid, the job may become more complicated. We'll know more next week.

Carol,

Thanks for your rapid perusal of the highlights of the Bush budget on aid and development. I think your instincts on AIDS and the MCC are right on. It's pretty clear the Democrats are more favorable to AIDS funding than they are to the MCC. It still seems that deficit fears haven't kicked in, if the Democrats' recent actions are any indication, but I'm still waiting for the shoe to drop and for the rug to be pulled out from under the commitment to fight AIDS and malaria.

I read Sheila's comments on your post with interest. If you get a chance to respond and translate for interested but less-engaged readers, that would be much obliged.

I asked Ambassador Tobias at the Hill budget briefing yesterday about how we can compare development-focused assistance from last year to this, given the shifts between DA and ESF. The budget summary had a handy chart comparing spending in the "governing justly," "investing in people," and "economic growth objectives" across accounts and years, but only for "Rebuilding" and "Restrictive" countries. He promised to get back to us with one for "Developing" and "Transforming" countries. The fact that that material wasn't readily available raises some red flags with me.

From this President report of 08 FY budget, I can see that Bush administration try to increase the supporting rate from the Congress, where democrat is dominated after the mid-term election. Of course only 28% supproting rate is a big annoyance for him. In recent years since 9-11, Bush administration focus on the national defense, and infact increased the budget for it. But this year, he didn't say anything about those issues. But without increasing the budget, how can he manage the cost for extra 22000 soldier in Iraq? This budget address seems nice, but I think it is contradicting what he is saying and what he is doing.

Carol: You are bold to attempt to provide instant analysis of this exceptionally opaque foreign assistance request. There is the challenge of the FY07 base, as the budget uses the expiring continuing resolution, instead of its likely replacement that passed the House last week.

In addition to the important points you raised, the following may be worth considering:
1) the movement of assistance programs among the development & health assistance and ESF accounts is accelerated and now includes Andean alternative development and democracy programs (US contributions to the Global ATM Fund is moved entirely to the NIH); 2) the attribution of future MCC awards among the new country categories raises questions about the continuing integrity of the MCC process; 3) the declining level of USAID operating expenses and the continuing surge in State's salary/expenses account merits close analysis for its impact on the delivery of effective assistance programs.

The skeptic in Sheila Herrling is on the mark regarding the increasing complication of tracking foreign assistance, for security as well as for development. The categorization of international broadcasting, the International Trade Commisson & the US Institute of Peace as 'bilateral assistance' is a stretch. Yet, the Defense supplementals for Iraq & Afghaistan include substantial security assistance, not counted in the State rackup. Transformational diplomacy objectives notwithstanding, these DoD supplementals indicate the distance State has to travel to become an operational agency. Its inability to train & equipt civilian security forces continues to place a burden on an overstretched US Army and Marine Corps.

Regardless of where the cuts will fall, I personally concur to the partial merger of USAID into Department of State in Reform. There is apparently no need for fregmentation as we are in the era of systems approach, whereby we are interdependant and interrelated; at a later stage the organization can rethink and reorganize in accordance with the needs.

Francisca 'Mapitso Matsoha