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January 23, 2005

An Open Letter to President Bush on the UN Education Fast Track Initiative and the U.S. Millennium Challenge Account

Posted by Nancy Birdsall in Advocacy, Education, Foreign Aid Reform, Global Development, Global Education Tags: , , ,

Dear President Bush:

In recent weeks, American schoolchildren, churchgoers, and individual citizens have shown their remarkable empathy for victims of the Asian tsunami. That empathy combined with the wish to promote global security in an increasingly interdependent world explain the solid political support for your leadership in financing the global effort to combat AIDS and creating the Millennium Challenge Account (MCA). These programs increased U.S. foreign aid for the first time in more than 40 years. More important, by targeting aid to countries with governments that are competent, honest, and democratic, they have brought a new discipline to aid, and a welcome insistence that that it make a measurable difference in the lives of the world’s poor.

According to a recent national opinion poll, Americans chose provision of basic education as the most important goal of U.S. support for international development programs. They see education as the path to freedom in the world’s poorest countries and to a more secure global system for all. U.S. support for education touches a wellspring of the American spirit that you have invoked in your speeches—an emphasis on an “ownership” society based on incentives for individual effort and responsibility.

We urge you now to lead Americans in a vital new international effort to bring that kind of incentive to every child no matter how poor: the opportunity to shape one’s own future. Poor people, especially poor women, usually own little more than their labor. With education, that labor becomes a productive asset, making it possible for poor people to take responsibility for their well-being and that of their societies. Without such a transformation, poverty fuels frustration, anger, fanaticism and violence – and in the case of girls, a high risk of falling victim to sexual abuse and AIDS.

There is a simple way to take up the challenge that no child, anywhere in the world, is left behind. For two years officials from rich countries including the U.S. have been negotiating with a group of poor countries plans to ensure that every girl and boy completes primary school by the year 2015. The donors have agreed to support the plans of a select group of countries —selected for a “Fast Track Initiative” because they have the leadership to move effectively on those plans. They have done so on the grounds that the education plans make sense and that the governments are honest and competent enough to implement them. Four of these countries — Ghana, Honduras, Mozambique and Nicaragua – are also eligible for U.S. support from the MCA.

Why not encourage these countries to ask for education funding through the MCA funds, ensuring that in these four poor countries no child is left behind? This would not be an earmark, and countries themselves would make the decision about whether or not to apply; but it would be an invitation to use the MCA resources to make one of the most valuable investments possible.While these governments are far from perfect, their leaders have shown that they are committed to extending the benefits of education to all their children. Their efforts would proceed much faster if they had the financial resources to implement budgeting, auditing, and expenditure controls, and to create incentives for public officials and teachers to perform well.

Action now could break a deadlock. The donor education group has made good progress in identifying countries that are suitable for Fast Track status but are at an impasse where action is most needed: pledging and disbursing money. For the four Fast Track countries that have also qualified for the MCA, we are talking about a comparatively trivial initial sum: perhaps $1 billion over three years, equivalent to about what we currently spend every week or so in Iraq. Action by the U.S. to assure a significant chunk of this funding would cause other donors to follow suit, so that millions of kids who would otherwise grow up without an education can go to school.

We write to you as two Americans who were among the 35 members of the international Task Force on education of the United Nations Millennium Project. The Millennium Project has recommended doubling foreign aid to meet a set of development goals, including universal basic education for all, by 2015. Your Administration has not explicitly endorsed the broad recommendations of the UN report, hewing to the commendable U.S. tradition of signing on to pledges only when prepared to fulfill them. However, in the case of education, we urge you to insist that the U.S. take up leadership on the international initiative – if not formally then in the real sense of putting money on the table. Financing is ready in the special MCA account that you created and the account is targeted already to a select group like those named above; these countries have education plans already prepared. Moreover your Administration has announced a renewed commitment, as Secretary Rice said in her confirmation hearings, to the kind of multilateral cooperation that the donor group and the potential recipient countries have already created.

The rest of the rich world awaits the kind of leadership from the U.S. to which it has long been accustomed. The American people await your leadership in implementing the priority they have set – on education as an investment in the well-being of the poorest kids in the world, and in the security and stability of our global community.

Nancy Birdsall
President
Center for Global Development

Ruth Levine
Senior Fellow and Director of Programs
Center for Global Development

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October 6, 2004

An Open Letter to Jim Lehrer

Posted by Nancy Birdsall in Economic Development, Fragile States, HIV/AIDS, Human Rights, Inequality, U.S. Foreign Aid Reform Tags: , , ,

To: Jim Lehrer

From: Nancy Birdsall

Subject: Missed opportunity to include development in the foreign policy debate

Dear Jim – How regrettable that the presidential debate on foreign policy and security focused on such a predictably narrow set of topics.

We know that voters understand that poverty and political repression in the developing world create conditions in which radical fundamentalism and terrorism are bred and thrive. Surveys show that three out of four Americans favor helping poor countries as a way to fight terrorism. Solid majorities believe that fighting global disease is as important to America’s well being as fighting terrorism and strengthening homeland security.

The American public understands that foreign policy goes well beyond the traditional view of national security. The debate was our best chance to hear the candidates’ views beyond the war on terror. Instead the debate became a 70-minute Q&A on their previously known positions on Iraq and Afghanistan, a few minutes on North Korea and Iran, and a total of just five minutes for the entire rest of the world — in this case Russia and the Sudan.

The debate made no mention of the U.S. role in scores of countries where grinding poverty is a daily affront to American values of liberty and opportunity. Americans are worried about globalization, but we heard nothing on how the candidates would balance concerns about jobs at home against the strategic value of trade policies that foster economic growth, poverty reduction and political stability abroad. Americans are genuinely concerned about the global HIV epidemic – both from a humanitarian and security perspective – and the candidates have bold but very different plans to fight it. But we heard nothing about that or other risks that originate in weak states such as transnational crime, money laundering, and drug trafficking.

It is right, of course, that Iraq and Afghanistan feature prominently in a U.S. foreign policy debate. But a lesson from the September 11 attacks is that little-noticed trends in poor, remote countries can have a profound impact on the U.S. We wish you had asked the candidates to comment on their plans to respond to the challenges posed by the dozens of weak and failing states that could become safe havens for illicit drug and weapon networks. We wish you had asked them how they will deal with the effects of instability in oil-rich Angola, Venezuela, Nigeria, Azerbaijan and, increasingly, in Saudi Arabia. You have an unrivalled reputation for providing serious, substantive coverage of foreign affairs, as you do each night on the News Hour with Jim Lehrer. Many of us who work on development issues had hoped that with you at the helm the debate would have included at least some questions about how the candidates see the links between global poverty and the well-being of Americans.

That opportunity is now past. Looking ahead, we can only hope that in the four weeks of campaign that remain you and other reporters will press President Bush and Senator Kerry on how they propose to use the resources and influence of the U.S., the richest and most powerful nation on earth, to fight global poverty in a world where 2 billion people barely survive on the equivalent of less than two dollars a day.

Sincerely,

Nancy Birdsall

President, Center for Global Development

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January 21, 2004

Response to the 2004 State of the Union Address

Posted by Nancy Birdsall in Global Development, Modernizing U.S. Foreign Assistance Tags: ,

In the 2004 State of the Union address, President Bush set out for the American people, indeed for the world, his vision of “A Nation with a Mission.” Last year, President Bush announced in his State of Union address a new $15 billion initiative to fight the HIV/AIDS pandemic in Africa and the Caribbean. This year, there was no mention of the U.S. role in fostering prosperity in the world’s poor countries. Despite dedicating a large portion of his address to foreign policy, President Bush’s focus on the international arena was too narrow. A foreign policy agenda focused only on the war on terror does little to address the underlying causes of long-term global instability. What will be our resolve and strategy in the war on global poverty? Certainly poverty does not cause terrorism, but the lack of economic, social and political opportunity faced by billions of the world’s citizens creates the fertile ground in which seeds of anger and terror can grow.

Access the full commentary (PDF)

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May 20, 2002

How to Travel Africa On the Cheap

Posted by Administrator in Africa, Private Investment, Trade Tags: , , , ,

By Amar Hamoudi

U2 Front Man Bono and US Treasury Front Man Paul O’Neill may have had a few differences during their Africa tour, but they clearly agree that Africa needs increased market opportunities.

Therefore, it’s no surprise for example that earlier this week Secretary O’Neill touted the African Growth and Opportunity Act of 2000 (AGOA) as an important piece of US development policy. (AGOA is intended to allow African exporters to claim exemption from tariffs on most goods that they send to the United States.)

Mr. O’Neill seems mighty proud of AGOA. The reasoning seems to be that aid is for naïfs who don’t understand how the market works, while schemes like this reflect the sleek new market-friendly approach to development for the 21st century.

But if you think our aid policy is flawed, just have a look at AGOA—it’s at least as bad. It’s misnamed; there’s virtually no GO in it at all. Last year, 85% of the goods sent here under the AGOA program were oil or oil products. (In the first month of this year, that number was down a bit, to 56%, thanks in large part to a few European car manufacturers wising up to AGOA and exporting a few dozen cars out of South Africa). Were import duty exemptions for Exxon/Mobil or Royal Dutch Shell what Secretary O’Neill meant when he said that AGOA will “advance export-driven private sector growth”?

In fact, AGOA seems to have had no impact on exports from Africa at all. Over the course of last year, exports from AGOA-qualifying countries fell by at least as much as exports from all developing countries.

AGOA hasn’t worked because it has serious structural flaws. First, in order to qualify, countries must submit reams of complex paperwork—so much so that even 15 months after AGOA was put in place, about three fifths of the exports from qualifying countries were still being taxed, since countries couldn’t figure out how to go through the procedures to claim their benefits!

And then there’s the fact that the law doesn’t give any protections to exporters against all the other trade barriers (other than standard tariffs) that the U.S. throws up. For example, take the recent case where a consortium of west coast fruit producers asked the Bush administration to suspend South Africa’s AGOA benefits on canned pears, arguing that competition by imported pears from South Africa had created a hardship. This was similar to the requests for protection, which steel producers and softwood lumber producers had successfully put to President Bush earlier this year. (The administration has not ruled on the pear issue yet.)

(The response of fruit producers in South Africa, by the way, was revealing. They said AGOA did induce them to send exports to customers in the USA instead of other countries, but that it did not induce them to expand their production. Investing to expand production, they said, is too risky because the benefits can be revoked at any time. So much for AGOA’s promise to generate growth or opportunity.)

Producers in Africa can expect that any time they succeed in taking advantage of AGOA, some special interest group here will demand that their benefits get taken away. They’ll have to hire expensive lawyers and promise that they’re not really growing or providing new jobs. If they have to make this claim, what was the point of the law in the first place?

Of course private sector growth is necessary to improving livelihoods in Africa. After all, private firms are better at producing most things than governments are. But many of the impediments to private sector growth are exactly the sorts of things that aid is designed to address. Improvements in health, education, and infrastructure, for example, are essential precursors to private investment, and are underprovided by the market.

O’Neill has insisted over and over that aid must have measurable results. How come his tool of choice—AGOA and similar initiatives to legislate increases in trade and investment flows— doesn’t have to pass the same tests?

It’s not the use of public resources to affect market dynamics is anathema to the Bush administration. President Bush recently committed some 300-billion taxpayer dollars to protect U.S. farmers from the effects of market competition. He said this spending was justified because the livelihood of farmers “depends on things they cannot control: the weather, crop disease, and uncertain pricing.”

In African countries, where on average over 85% of exports have been in agricultural products or other primary commodities, the principle is the same. Africans—just like U.S. farmers—don’t need lectures from the Bush administration. Instead, they need the sort of help, which neither AGOA nor our aid policies are providing right now. It’s time we do our part, and make some serious reforms.

Amar Hamoudi was a Research Associate at the Center from October 2001 to August 2002.

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