Rethinking U.S. Foreign Assistance Blog
February 1, 2010
MCC Slated for $1.28 Billion in FY2011 Budget Request
By Casey Dunning
Today the Obama Administration put forth its FY2011 International Affairs Budget, $1.28 billion of which is slated to fund the MCC. This year’s MCC request is 10 percent lower than FY2010’s presidential request of $1.425 billion. However, the $1.28 billion request is 16 percent more than the $1.105 billion that was actually appropriated for the MCC in FY2010.
More on the FY11 Budget
With a full compact pipeline at the ready, the MCC’s FY2011 resources are lined up for compacts in Indonesia, Malawi, Zambia, and the first-ever second compact in Cape Verde. Malawi was named compact-eligible in December 2007 while both Indonesia and Zambia were selected as compact-eligible in December 2008. Cape Verde was re-selected as eligible for a second compact in December 2009. These compacts will follow FY2010 compacts in the Philippines and Jordan.
Given that the FY2011 MCC request is $145 million lower than the FY2010 request, it will be important to secure strong congressional support from Democrats and Republicans to maintain something close to the president’s request level, which is reasonable for the MCC’s expected operations in FY2011. Senators Kerry and Lugar have taken a strong first step in that direction with their recent letter of support and guidance for the MCC. Hopefully they and other members of Congress will ensure that the MCC is able to keep innovating and delivering results on its unique model of development assistance.
On a side note, my colleague tells me that the Treasury Department hosted a conference call today with members of the development community to walk through and answer questions on their portion of the budget request. This is a fantastic idea and it would be great if the MCC were to do the same in the coming days.
January 31, 2010
Farewell
By Sheila Herrling
Friends:
On Friday, MCC CEO Daniel Yohannes announced my appointment as the Corporation’s Vice President of Policy and International Relations. I am both honored and excited to assume that position on Monday and work with the CEO and the immensely capable staff of the MCC on an exciting set of issues aimed at enhancing the organization’s effectiveness. It is, of course, a bittersweet moment for me. I have also been hugely honored to be a part of CGD and given the space and support to think, write and build a program that I hope has helped people better navigate U.S. foreign aid issues and helped foreign aid agencies stay true to their missions.
I want to especially thank you all for your thoughtful comments, both online and off-line. They have both informed my analysis and inspired me personally. It is much of what has made this job so much fun. The Rethinking U.S. Foreign Assistance Program and blog will continue, with posts and analysis from CGD senior staff. And before you know it, there will be a new Director you will know and love and soon be saying, “Sheila who?”
Thanks again to all of you for your attention and support through the years. I trust our paths will cross again and that I will benefit, on “the other side,” from your continued monitoring of the MCC!
–Sheila
January 27, 2010
Kerry & Lugar to MCC CEO: Innovate but Stick to the Original Mandate and Model
By Sarah Jane Staats
In a letter to newly confirmed MCC CEO Daniel Yohannes, Senators Kerry and Lugar describe themselves as “strong supporters of the MCC model and its mandate to fight global poverty though economic growth.” They say the core principles of the MCC–competitive selection based on clear policy performance indicators and country ownership–have allowed the MCC to become a development leader. The predominately supportive letter from the heads of the Senate Foreign Relations Committee gives the new CEO and his management team some running room to innovate and improve upon the model, but that running room come with limits. The letter contains some good food for thought for the MCC and some parameters within which the new team can navigate the challenges ahead.
You can read the letter in full but the key messages to CEO Yohannes from the senators are: More…
January 27, 2010
National Security Spending Exempt from Freeze: The Good, the Bad, and Avoiding the Ugly
By Sarah Jane Staats
Reports that national security spending, including foreign affairs, will be exempt from the federal spending freeze President Obama is expected to discuss in the State of the Union address tonight is good and bad news.
The good: Exempting national security spending, including the foreign affairs budget request–the 150 account–from the freeze signals strong support from the administration for the critical importance of our diplomatic and development efforts for security and prosperity at home and abroad.
The outpouring of support in response to the Haiti earthquake shows yet again the empathy and compassion of Americans for their fellow man, whether or not they live within our borders. This kind of surge in support for an emergency response is often hard to sustain and takes leadership from the White House and beyond. So it is great to see that the Obama administration is taking clear steps in the budget and in policy reviews to maintain and strengthen long-term development programs in its own best interests.
The bad: Exempting these accounts from the rest of the freeze means they remain a pot of discretionary spending that can be redirected as Congress struggles to fund a variety of other priorities. In many ways the exemption–while still causing sighs of relief right now in the development community–puts a big bull’s eye on this particular pot as ripe for pilfering.
Avoiding the ugly: The unenviable task ahead for Congress to make ends meet with a heavily constrained budget means the domestic politics around the international affairs budget could be hell. For several years we’ve seen growing bipartisan support for U.S. international affairs programs as increasingly vital to U.S. national security and American well-being, as well as reflecting American generosity and a belief in opportunity. The fear is that the current political climate, an election year, and a really tight budget could see a return of ugly partisan politics over these issues.
Either way, there is a real risk that the good intentions of protecting the international affairs account could backfire. It’s worth remembering—as budget guru Larry Nowels pointed out to me—that the last time the U.S. took a meat-ax to the 150 budget in the 1990s, it fell 25 percent in real terms over five years and it took a decade and 9/11 to recover.
The trick is going to be navigating the political waters carefully and with continued leadership on the development issues. I hope tonight we’ll hear more than talk of what’s in and out of the spending freeze and that President Obama will make the case (as Secretary Clinton did in her CGD speech earlier this month) that engagement with the rest of the world matters for Americans, even in these difficult times. And that the relatively small 150 account, compared to the rest of the U.S. national security budget, is one of the more cost-effective national security tools in our arsenal.
President Obama and his team will need to keep singing this tune in the coming months, and be backed up by a congressional chorus with leaders from both sides of the political aisle to help avoid the ugly, so our policies—and purse—reflect American smart power in an increasingly interconnected world.
January 26, 2010
Moldova Becomes 20th Country to Sign MCC Compact
By Casey Dunning
On Friday January 22nd, MCC CEO Daniel Yohannes signed his first Compact – a five-year, $262 million agreement with the Republic of Moldova. With US Secretary of State Hillary Clinton and Moldovan Prime Minister Vladimir Filat presiding, Yohannes remarked, “I commend Moldova’s commitment to poverty reduction and economic development opportunities. Moldova’s MCC threshold program has already created an environment where innovative technologies, productivity, and increased access to markets can flourish. Now, with this Compact, MCC looks forward to deepening our partnership with the people of Moldova to foster long-term economic growth.”
Indeed, Moldova’s Compact is a testament to careful planning and an impressive level of project integration. Investments in Moldova will focus on irrigation infrastructure, high-value agricultural production, and road rehabilitation. These projects will all work together to increase local rural incomes and promote economic growth. Rural producers will now be able to successfully produce profitable fruits and vegetables, appropriately market them, and reliably transport them to market.
Added to this is an additional layer of improved access to credit and technical assistance. While prior compacts in Madagascar, Benin, and Morocco included financial access projects, Moldova’s innovative financing facility appears to be a step-up in terms of integrated value-added to the program. It will support related investments by farmers and entrepreneurs in the shift to higher value agriculture production, post-harvest processing, storage, and marketing. This package is co-financed by USAID. We look forward to keeping an eye on this as a model for future compacts.
Moldova’s previous $24.7 million Threshold program focused on anti-corruption by strengthening the capacity of the judiciary, increasing the monitoring capacity of civil society and the media, and curbing corruption in the tax, customs and police services. It succeeded in reducing the number of bribes connected with getting favorable judicial decisions and improved public reporting of corruption cases by the Moldovan media.
January 22, 2010
Through the Looking Glass: Haiti and U.S. Development Leadership
By Nancy Birdsall
This is a joint post with Sarah Jane Staats.
The president and the secretary of state have promised to elevate and strengthen U.S. global development policy in our national interests. In Haiti there is an opportunity to make that promise real–building on the generosity of the American people and the inherent organizational capability of our government. Getting immediate relief to the earthquake’s victims is the critical issue right now. But how we do it matters for the long-term stability of Haiti, the U.S. image abroad and our larger foreign policy interests. Unfortunately, the situation today is highlighting the fissures in the U.S. management of development programs that could put our development goals and leadership at risk in Haiti and beyond.
What do we mean? In Haiti, all three U.S. foreign policy tools—defense, diplomacy and development—in the form of officials and staff of the Department of Defense, Department of State and U.S. Agency for International Development (USAID) are front and center in the news and on the ground. But who is in charge? We see the situation in Haiti as requiring above all leadership from the development side. More…
January 19, 2010
Engaging the Private Sector – Green Opportunities for MCC’s new CEO
By Darius Nassiry
At his first public outreach meeting, MCC’s new CEO Daniel Yohannes expressed his interest in MCC doing more to engage the private sector and his desire to see more investments in wind, solar and hydroelectric energy. As a former CEO of an investment firm focusing on green energy among other sectors, co-founder of New Resource Bank in California, and co-chair of the Mayor of Denver’s Greenprint Council, Mr. Yohannes has ideal experience to lead MCC in this new direction.
By leveraging the private sector and ‘greening’ MCC, Mr. Yohannes can help President Obama fulfill his campaign promise to “incorporate climate change and energy development goals into all tools of U.S. economic engagement, including assistance programs.” Moreover, he can help MCC respond to Executive Order 13514, which directs U.S. agencies to set a target to reduce direct and indirect greenhouse gas emissions and requires that each agency develop and implement a plan to evaluate “climate-change risks and vulnerabilities to manage the effects of climate change on the agency’s operations and mission in both the short and long term.” More…
