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February 24, 2012
Is the Obama administration changing where and how it spends U.S. foreign assistance? The president’s FY2013 budget request suggests the administration is being more selective — as promised in the Presidential Policy Directive on Global Development — but could have gone further. Our own working group has suggestions to help. Keep an eye out for the report next month, accompanied by country-by-country analysis and a breakdown of U.S. assistance spending.
Development Budget Nuggets
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The development community braced for cuts in the president’s 2013 budget request. Connie Veillette’s initial reaction was cautious optimism – the request was relatively responsible given the political dynamics in this age of budget austerity. While advocates are concerned over cuts to health and humanitarian assistance, the administration did show signs of selectivity, matching some resources to objectives. In her latest in-depth budget brief, Connie addressed the highlights (and lowlights) of this year’s request.
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MCC Faces a Flat-lined Budget
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The Millennium Challenge Corporation (MCC) faces a tough budget reality this year. The FY2013 budget requests $898.2 million for the MCC – the same funding level the agency received in FY11 and FY12. Without an increase in the proposed baseline, the request leaves the MCC vulnerable to more severe cuts in the next round of budget battles. As Casey Dunning argues, $898 million might be enough to fund a second round of compacts and threshold programs, but puts the cornerstones of the MCC model (selectivity, transparency, and evaluation) at risk.
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MDBs "Stay the Course"
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The FY2013 budget request for the multilateral development banks (MDBs) is tame compared to last year’s once-in-a-generation general capital increases (GCIs). The administration’s budget seeks to fulfill multi-year commitments to the main institutions in an effort to preserve U.S. shareholdings (and influence). In her new blog Jenny Ottenhoff highlights fluctuations in the MDB accounts and ponders whether the requests will “stay the course” or suffer from the turbulent political dynamics of an election year (or the appointment of the next World Bank President) as the budget process continues.
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