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CGD Experts Urge Foreign Assistance Modernization in Congressional Testimony

April 28, 2008

Steve RadeletCGD senior fellow Steve Radelet and president Nancy Birdsall, in testimony last week before U.S. House and Senate committees, urged the Congress and executive branch to modernize U.S. foreign assistance to meet the demands of the 21st century.

Speaking before the House Foreign Affairs Committee on Wednesday (see Sheila Herrling's account), Radelet said that the confluence of today's foreign policy challenges, with the broad agreement on the importance of foreign assistance as a critical foreign policy tool, the successes we are seeing around the world in economic and social development, and the upcoming change in administration create the best opportunity in decades for modernizing and strengthening our foreign assistance programs.

"It will require passion, bold vision and concerted bipartisan leadership by Congress and the executive branch. But taking up this important challenge will enhance the leadership role of the United States in the world, strengthen our ability to forge alliances to achieve out broader goals, enhance our security, and help fight poverty around the world," Radelet argued.

New House Foreign Affairs Committee Chairman Howard Berman (D-CA) kicked off the hearing with a bold opening statement: "It is painfully obvious to Congress, the administration, foreign aid experts, and NGOs alike, that our foreign assistance program is fragmented and broken and in critical need of overhaul. I strongly believe that America's foreign assistance program in not in need of some minor changes, but, rather, it needs to be reinvented and retooled in order to respond to the significant challenges our country and the world faces in the 21st century."

Ranking member Ileana Ros-Lehtinen (R-FL) supported the chairman's call for reform and characterized the current fragmented system as "a bowl of spaghetti." She also raised the need for an independent agency for evaluation, perhaps not unlike the new International Initiative for Impact Evaluation that grew out of a CGD working group and is now supported by growing list of members, including developing country ministries, donor countries, philanthropic foundations, and development NGOs.

Other witnesses at the hearing joined the call for major overhaul of our foreign assistance apparatus and the need to reach a grand bargain among the executive branch, Congress, and the American people on a national strategy for global development and a new foreign assistance act.

Neither committee members nor witnesses questioned the need for U.S. foreign assistance reform. They emphasized the need to clarify foreign assistance priorities and the merits of rewriting, or at least revising through reauthorization, the Foreign Assistance Act of 1961. Most members also supported the need to improve organization and inter-departmental collaboration, but they had various opinions on whether there would be enough political support for a new cabinet-level department of development.

The next day, in testimony before the Senate Foreign Relations Committee on the Jubilee Act for Expanded Debt Relief and Responsible Lending, (S. 2166) Birdsall urged the next administration and Congress to work together to channel the strong constituency for debt relief into demand for an overhaul of U.S. foreign assistance (see Sarah Jane Staats's full account).

"I hope that the next administration, together with the Congress, will find a way to reflect Americans' growing commitment to better lives in poor countries not only in debt relief programs...but via a broader set of development-friendly policies consistent with our national values and our interest in global as well as American security and prosperity," Birdsall said.

Birdsall also pressed the U.S. to fulfill its $872 million in outstanding commitments to the multilateral development banks and to consider other mechanisms to help poor countries protect themselves from future debt problems caused by external shocks before expanding debt relief to new countries.

She argued that the World Bank and IMF should offer temporary financing to relieve debt service burdens due to shocks to low-income countries' economies beyond their own control--such as those caused by natural disasters or sudden price hikes in commodities like food and oil. Birdsall praised the intent of the legislation that was the subject of the current hearing but cautioned against it in its current form.

During the House hearing on Wednesday, some committee members asked whether creating a new cabinet-level department for international development would be akin to the recent experience--and encounter the same perceived pitfalls--of pulling twenty-two separate agencies under the authority of the Department of Homeland Security or DHS.

Radelet responded that DHS pulled together separate agencies with very different functions while a cabinet-level department for development would pull together programs with similar objectives that are currently spread out among different agencies and lack strategic coordination. Consolidating them under one new agency would reduce layers of bureaucracy, rather than creating new ones as some members feared, he said.