Rethinking U.S. Foreign Assistance Blog

 

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: Read More…

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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.

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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.

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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. Read More…

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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.” Read More…

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January 12, 2010

Shah Sworn In As USAID Administrator

By Sheila Herrling

On January 7th, in front of a standing room only crowd, Dr. Rajiv Shah was officially sworn-in as the new USAID Administrator. Presiding over the ceremony was Secretary of State Hillary Rodham Clinton, who praised Shah as a “passionate, visionary experienced development expert” who would help in “rebuilding AID as the premier development agency in the world, bar none.” For his part, Administrator Shah embraced what he called “a unique moment of opportunity” for the Agency, one that ties directly to “the President’s bold vision to embrace development as indispensable to American foreign policy.” Overall, he reinforced many of the same principles in his remarks that had been laid out a day earlier by Secretary Clinton in her speech at CGD, championing the successes of U.S. foreign assistance while cautioning that major internal reforms are necessary to make USAID more effective. 

While the appointment of Administrator Shah represents a significant step forward for USAID, it should be noted that the bulk of the work is just beginning. I’ve talked before of the set of fundamental challenges facing Shah as he takes the helm of the Agency. Filling out the rest of his leadership crew – 12 of which, like him, require Senate confirmation – is at the top of the to-do list.  We’re all anxious to see who emerges by his side!  Who would you like to see?

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December 29, 2009

Shah Confirmed by Senate to Lead USAID

By Sheila Herrling

On December 24th, the full Senate confirmed Raj Shah as USAID Administrator.  After eleven months of guessing-games and intrigue, this element of the drama is finally settled.  Now, that same level of attention and energy needs to turn to the tougher stuff – positioning of the agency in the U.S. government, defining its mandate, and giving it the authorities it needs to raise the bar on effective development policy and foreign assistance.

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