Obama Updates Development Profile: Ag and Private Sector Now Friends

May 21, 2012
President Obama announced $3 billion in new private sector investments in agriculture in three African countries at a packed event in Washington, D.C., last Friday. The New Alliance for Food Security and Nutrition is the cornerstone of the United States' 2012 G-8 commitments to development led by USAID and administrator Rajiv Shah. There's a lot to like about the partnership: presidential leadership, a link between public and private investment, and a focus on policy change. But all eyes are on how the relatively modest investments will be implemented and whether they can reach the ambitious poverty reduction targets.In his remarks at the Chicago Council's symposium, President Obama said the new alliance would build on the G-8's 2009 $22 billion global food security commitments. The White House fact sheet says:
The New Alliance for Food Security and Nutrition is a shared commitment to achieve sustained and inclusive agricultural growth and raise 50 million people out of poverty over the next 10 years by aligning the commitments of Africa’s leadership to drive effective country plans and policies for food security; the commitments of private sector partners to increase investments where the conditions are right; and the commitments of the G-8 to expand Africa’s potential for rapid and sustainable agricultural growth.
The new alliance focuses initially on Ethiopia, Tanzania, and Ghana. More than 45 multinational and small and local business have committed $3 billion in investments; the countries have committed to specific business environment policy reforms.Here’s what to like about the announcement:ObamaThe president is using his bully pulpit to champion development. The president has been relatively quiet on global development since issuing his policy directive in September 2010. In his remarks on Friday, President Obama made a strong case for why global development and food security are in the United States' moral, economic, and security interests. It's still a big deal that development is on the president's agenda and that he is using his bully pulpit to champion the issues (something the Bush administration understood and CGD president Nancy Birdsall urged prior to the 2008 elections).ObamaIt's the PPD in action. The new alliance checks off just about all of the presidential policy directive on global development's key elements. It's selective, country-led, focuses on economic growth and policy reforms, leverages the private sector and multilateral development agencies (African Development Bank, World Bank, International Fund for Agricultural Development, etc.), and emphasizes results and accountability.ObamaLinks private investment, public sector know-how and policy reform. The new alliance and specifically USAID administrator Rajiv Shah are exploiting U.S. convening power to leverage country policy reforms and private investments. ONE Campaign co-founder Bono went so far as to suggest the announcement could signal the death of the traditional donor-recipient relationship, presumably in part because of the country leadership, but also because of the mix of public and private sector roles.Comments:Some critics argue the United States--and the other G-8 members--are trying to replace missing in action public funds with smaller private investments. But few expected the United States (or others) would come up with new, large sums of money. And while it's easier to experiment when times are flush (think creation of PEPFAR and MCC), it’s still a good thing if tight budgets push new approaches for better aid delivery. It just means the stakes are a lot higher for the administration to:1. Move quickly to implementation. President Boni Yayi of Benin (and African Union chairman) put it this way: “Let's go now to action!” The challenge for the administration (as is often the case for developing countries themselves) is execution. I'm eager to better understand how the letters of intent between the countries and the companies will work, what will happen if companies fail to invest or countries fall down on their side of policy reforms, what USAID's role will be, how the investments relate to the African Union’s Grow Africa initiative already underway as well as Feed the Future and the Global Agriculture and Food Security Program, and the timeline for investments.2. Show evidence that investments lead to poverty reduction. While most agree that private sector investment should follow aid, not everyone agrees that private sector investments will lead to poverty reduction. The new alliance will have to include clear, transparent measures to show whether or not the investments are reducing poverty.3. Bring Congress along. Chicago Council symposium co-chair and former member of Congress Dan Glickman remarked Friday that the president proposes ideas, but if Congress doesn't go along, those ideas don't go anywhere. Bipartisan congressional support--and legislation--was critical to the creation of PEPFAR and MCC during the Bush administration. The Obama administration passed up the opportunity to work with the House (Rep. Howard Berman) on a new Foreign Assistance Act and the Senate on a bipartisan food security agenda (led by Sen. Richard Lugar whose leadership will be sorely missed and Sen. Robert Casey). For food security to become the Obama administration's signature (and lasting) development issue, it must have Democratic and Republican support in Congress. Those prospects look a lot dimmer on both sides of the aisle today.The star-studded symposium on Friday lit up much of the development community, but attention will quickly shift from show to substance. The new alliance includes a leadership council to drive and track implementation and report to the G-8 and African Union on progress. G-8 watchers are understandably nervous about the size of the commitments and that it looks and feels different. They'll be looking to the leadership council, the White House and USAID to share information early and often to shed light on whether the administration's agriculture focus will be a fleeting or permanent part of its development profile.I’m eager to know what others think and hope the G-8 and food security experts among you will add your comments below. 


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.