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Before his tenure at CGD, Steve was deputy assistant secretary of the U.S. Treasury for Africa, the Middle East, and Asia from 2000 to 2002. He left CGD to become chief economist for the U.S. Agency for International Development.
There's good news out of Africa. Seventeen emerging countries are putting behind them the conflict, stagnation, and dictatorships of the past. Since the mid-1990s, these countries have achieved steady economic growth, deepened democracy, improved governance, and decreased poverty. Former CGD senior fellow Steve Radelet's new book Emerging Africa: How 17 Countries Are Leading the Way takes a fresh approach to development in Africa by recognizing the important differences between the emerging countries, the oil-exporters (where progress has been uneven and volatile), and the others (where there has been little progress) instead of treating sub-Saharan Africa as a monolithic entity. Please join us in launching this important addition to the ongoing conversation about a complex continent.
In his response to Senator Richard Lugar's (R-IN) questions for the congressional record following a June 2007 hearing of the Senate Foreign Relations Subcommittee on International Development, Foreign Assistance, Economic Affairs, and International Environmental Protection, Steve Radelet urges reform of the Foreign Assistance Act of 1961 and calls on the U.S. to support the International Initiative for Impact Evaluation. Radelet, who leads CGD's foreign aid efforts, says that the Foreign Assistance Act of 1961, which was designed for the Cold War era, no longer applies to the current foreign assistance apparatus. He suggests a new FAA, that would stem earmarks and review the FAA's current human rights and other restrictions. Radelet also suggest that U.S. support of the International Initiative for Impact Evaluation will both reform ineffective development programs and build a knowledge base for the future implementation of effective development programs.
Read Steve's testimony, Foreign Assistance Reform: Successes, Failures, and Next Steps:
Access Steve's comments (pdf)
CGD senior fellow Steve Radelet, co-chair of the Modernizing Foreign Assistance Network, shares a surprising new analysis of U.S. aid spending (it has fallen sharply in the past two years!) and explains how the next administration can bolster America’s security and reputation through better investments in reducing global poverty, fighting disease, and creating economic opportunity around the globe.
Q: What should President-elect Obama and his transition team be thinking about as they look for smart ways to strengthen U.S. global development as a pillar of U.S. foreign policy?
A: First, I think it’s important to acknowledge that President-elect Obama said more about global development in his campaign than any other incoming president. His “Common Security, Common Humanity” strategy sets out a bold agenda to bolster America’s security and reputation and show our nation’s values through investments in alleviating global poverty, fighting disease, and creating economic opportunity around the globe. At the same time, Obama has recognized that Americans want smart and effective government programs that work.
U.S. foreign assistance has had some great successes, including supporting the Green Revolution in agriculture, helping to eradicate small pox, supporting HIV/AIDS prevention and treatment programs, getting more girls into school, and building infrastructure to attract foreign private investment and spur local business. But our overall efforts are not as effective as they should be. They suffer from lack of coordination across more than 20 different agencies that provide assistance, from burdensome restrictions in outdated legislation that severely restrict our ability to respond effectively on the ground, and from a lack of an overall guiding strategy. And while funding for foreign assistance has grown over the last decade, it declined sharply during the last two years, as some of my colleagues and I describe in a new CGD Note “What’s Behind the Recent Declines in U.S. Foreign Assistance?”
President-elect Obama, his team, and key leaders in Congress have the opportunity to make every dollar we spend on development programs much more effective, especially since there is bipartisan consensus on the need to move forward. The Democratic Party platform recognizes this imperative: “We will modernize our foreign assistance policies, tools, and operations in an elevated, empowered, consolidated, and streamlined U.S. development agency. Development and diplomacy will be reinforced as key pillars of U.S. foreign policy, and our civilian agencies will be staffed, resourced, and equipped to address effectively new global challenges.” The Republican Party platform makes a strong call for “a review and improvement of the Foreign Assistance Act of 1961 oriented toward: alignment of foreign assistance policies, operations, budgets and statutory authorities; development of a consensus on what needs to be done to strengthen the non-military tools to further out national security goals; greater attention to core development programs…and great accountability by recipient countries.” So there is enormous agreement in both political parties about what needs to be done.
The Modernizing Foreign Assistance Network, which I co-chair, has recommended a four-part approach to address these challenges and strengthen our assistance programs:
Develop a National Strategy for Global Development;
Reach a “Grand Bargain” between the Executive branch and Congress on management authorities; and plan, design, and enact a new Foreign Assistance Act;
Streamline organizational structures and improve capacity, preferably by creating over the long run a Cabinet-level Department for Global Development, or possibly a strong non-Cabinet professional development agency; and
Increase funding for and accountability of foreign assistance.
These steps will go a long way towards creating the development capacity necessary for the United States to effectively face 21st-century challenges.
Q: What initial actions can be taken during the transition period and in the early days of the new administration to begin this process? Are you calling for the Millennium Challenge Corporation (MCC) and the President’s Emergency Plan for AIDS Relief (PEPFAR) to be folded into USAID?
A: MFAN recommends that the president-elect and his team take two key early steps. First, they should announce soon a strong, experienced, high profile nominee for USAID Administrator, simultaneously name that person as interim head of the MCC and PEPFAR, and make him or her a key part of the National Security team. This step would begin to provide much-needed coordination and coherence across our assistance programs, and would elevate development to a new level in our foreign policy dialogue. It would also create a package of responsibilities that would attract a strong, very high-profile leader that has the vision and leadership skills needed to drive the modernization effort forward over the next few years. At the same time, with one very senior leader named to provide vision and head the overall effort, three strong professionals should be named to run USAID, the MCC, and PEPFAR on a day-to-day basis, much as we have now. We do not recommend eliminating either the Office of the Global AIDS Coordinator (OGAC) or MCC structure, eliminating the OGAC coordinator or MCC CEO positions, or folding these activities into USAID as it is now constituted. OGAC and the MCC should be maintained as strong and separate programs with special characteristics, just as they ultimately would be under the aegis of a strong development agency in the future.
Second, we recommend that the incoming administration name a “Deputy National Security Advisor for Development” with joint NEC/NSC responsibility for interagency and White House coordination and coherence of development policy. This person’s responsibilities would include coordination across programs and policies regarding democracy, humanitarian assistance, and crisis and conflict response, and ensuring consistency with U.S. trade policy. This position would be supported by several senior director positions at the NSC/NEC. Two key actions would be coordinated by the directorate with the new development nominee: developing a National Strategy for Global Development (in tandem with the new National Security Strategy), and initiating a review of all foreign assistance and international crisis management authorities, including those in DoD, to determine which authorities are most appropriately civilian and which are most appropriately military.
There is no silver bullet here; no one recommendation will be enough to bring our foreign assistance up to date and make it as effective as it can be. And we know it is not possible to have a new development strategy, new legislation, and consolidation (hopefully into a new cabinet agency) on the first day, so these recommendations represent the first key actions along the road toward meaningful reform. Without the initial step to put one person in charge of our three largest development programs, we risk continuing the diffuse leadership and uncoordinated efforts that will undermine the prospects for serious modernization of U.S. development programs to effectively combat poverty, fight disease and hunger, and widen the circle of development and prosperity.
Q: Why should the United States care about foreign assistance and global development in the midst of the financial crisis?
A: The financial crisis makes it imperative that we focus on rebuilding the U.S. economy, and it clearly will put significant strains on an already overburdened budget. But at the same time, it shows us yet again that U.S. and global prosperity rise and fall together; the same is true for domestic and global security. The very issues that we want our global development programs to address—including poverty, hunger, and economic stagnation—are being exacerbated by the current turmoil.
Unfortunately, America’s image in the world has deteriorated sharply in recent years, undermining both our standing as a global leader and our ability to create a better, safer world. The financial crisis has exacerbated this situation. Understandably, many Americans will be tempted to turn inward to try to protect their own interests. Yet the reality is that, now more than ever, the prosperity and security of Americans is integrally linked with the prosperity and security of the rest of world.
While we work to fix the economy at home, people around the world will be looking for the United States to restore its international leadership to help limit the economic and political consequences of the crisis. Our success or failure in restoring U.S. and global economic stability to create jobs, increase trade and private investment, and prevent the emergence of rogue nations and groups that foster insecurity and fear will depend in large part on our ability to strengthen all of our tools of global engagement, including building a more robust diplomatic corps and much more effective development programs to complement our defense and security programs.
For our long-term security and prosperity, one of the worst things we could do is to draw back from our efforts to engage with the world and support people in developing countries. President-elect Obama and his team clearly understand that, and have the strong support of leading members of Congress such as Howard Berman, Nita Lowey, Betty McCollum, Christopher Dodd, Richard Lugar, and Robert Menendez. The economic crisis is both a mandate and an opportunity to fundamentally reform our national security and foreign policy so that every investment we make abroad is strategic and cost-effective. So why should we care about strengthening our engagement with developing countries right now? In short, we can’t afford not to.
Q: Isn’t all this talk about modernizing foreign assistance an inside-the-beltway conversation? Does anyone outside Washington care?
A: Survey after survey shows that Americans are supportive of development assistance, but they want to be sure that our money is being spent effectively to help those who need it. Particularly with the deep concerns over the direction of our foreign policy in recent years, people across the country want the United States to engage in smart new ways with the rest of the world. The ONE campaign was ubiquitous during the presidential primaries and debates. Organizations like Bread for the World, Oxfam, and Save the Children have networks of millions of Americans that are actively engaged in the issues and talking to their members of Congress. Recent polling suggests that a strong majority—76 percent—of those questioned support modernizing foreign assistance. They want to see results and believe that reforming foreign assistance will help ensure that our programs are helping promote prosperity and security globally and at home.
Q: Some argue that while we need to modernize our foreign assistance programs, we can do a lot without new legislation. Do we really need to rewrite the Foreign Assistance Act?
A: If we are serious about real reform, the answer is yes—as much for the process of executive branch and congressional collaboration as for the substance that emerges. It is true that we can, and should, take several steps to strengthen our programs that do not require new legislation. These include rebuilding the professional capacity of our development organizations, streamlining procurement procedures, building a more effective monitoring and evaluation capacity, and reversing presidential directives that in their totality undermine program effectiveness, among others.
But at the core of many of the problems we face are the burdensome requirements that have been built up over the years as part of the Foreign Assistance Act of 1961. The dialogue with Congress on these issues is so broken that the act has not been re-authorized for more than 20 years. We need to rebuild the trust between the executive and legislative branches and reach a “Grand Bargain” on management authorities, responsibilities, and operational modalities. This step is crucial for supporting our personnel in the field so that they can be responsive to the highest needs in particular countries and make sure every dollar we spend is done so effectively.
It is important to recognize that legislation alone is not the answer—rewriting the Foreign Assistance Act must be seen as part of a complete package that includes developing a new strategy for global development, consolidating programs into a new, strong development agency, and increasing funding and improving the allocation of funding over time.
Q: What else needs to be done to finally bring U.S. foreign assistance into the 21st century?
A: One of the most important steps towards realizing this goal will be for President-elect Obama, his foreign policy team, supportive members of Congress, and our community of development professionals to keep making the public case that U.S. global development efforts are critical for our national security and long-term prosperity. We have to emphasize that foreign assistance modernization is inextricably tied to the creation of a new foreign policy approach for the United States and will bring more strategic depth, efficiency, and accountability to our global development efforts. This is particularly important because the financial crisis, geopolitical instability, and emerging demographic pressures will cross paths in more unpredictable ways over time. We can’t afford not to prepare to address these challenges now.
It will take leadership and cooperation to complete foreign assistance modernization, which I believe the Obama Administration will see as a way to realize its own political and foreign policy goals. In the short term, changing the way the system works will make government work better and be more cost-effective. More importantly, it will create a structure that will be up to the task of handling President-elect Obama’s proposed increases in foreign assistance strategically and efficiently, and ultimately ensure that U.S. development programs meet our foreign policy goals for creating better, safer world.
Edward W. Scott Jr., the founding chairman of the Board of the Center for Global Development, recently visited Liberia together with members of his family and a group that included CGD board member Belinda Stronach. It was Scott’s first visit but far from his first involvement with Liberia. In 2006, after listening to Liberia’s President Ellen Johnson Sirleaf outline the challenges she was facing in rebuilding the country following 14 years of civil war, Ed offered to provide her with some special assistance aiming to finance a need she would identify that most conventional donors would not support. After consulting with CGD senior fellow Steve Radelet -- who has been assisting President Sirleaf as an economic advisor since her election in late 2005 -- on options to be considered for this special assistance, he decided to sponsor a select group of highly trained young professionals to serve in Liberia for one year as special assistants to members of Liberia's Cabinet. The program is called the Scott Family Liberia Fellows program. Its first group included three Liberian expatriates and three young professionals of other nationalities. This first group of fellows began working in Monrovia in June 2007. The program is now in its second year and has grown to 16 Fellows with four additional sponsors (the Open Society Institute, the McCall MacBain Foundation, Humanity United, and the Nike Foundation).
In advance of Liberia’s Independence Day on July 26, CGD director of communications and Lawrence MacDonald spoke with Ed Scott about his first visit to Liberia.
Q: What impressed you most?
A: The extraordinarily high quality of the senior governing team, from the president and the cabinet ministers to their subordinates. They are very savvy and totally dedicated to rebuilding the country. President Sirleaf has been able to attract back to Liberia members of the Liberian diaspora who have been very successful in other fields—investment banks, major corporations, research, and other fields.
Q: What is it like to be on the streets of Monrovia?
A: So much was destroyed by the war that even with strong and effective leadership, recovery is extremely slow. People say it’s improved a lot but compared to other cities in Africa, the contrast is dramatic. While it has been five years since the actual fighting stopped, Monrovia still has not been put back to any kind of level that one would call “normalcy.” There is hardly any electricity from the public grid, and virtually no public water. The public buildings are a wreck, hotels are a wreck, and there is garbage everywhere. Everything that can be broken is broken. The resources being put at the disposal of the government are so limited -- Liberia’s entire national budget is just $200 million -- so they have little choice but to crawl out of this mess in baby steps inch by inch.
Q: How would you describe the attitudes of the people that you met?
A: There is clearly a desire for peaceful forward motion. Almost everybody I met spoke about their hopes for peace and development. You have the impression that this is a country that has all the ingredients necessary for a major successful rebound, maybe even to a better status than before the war. The population is relatively small. The quality of the governing group is very high. They have an abundance of natural resources -- iron ore, timber, diamonds, rubber -- plus the ship registration business that they have had for more than half a century. There is absolutely reason why the country shouldn’t thrive again.
Q: In your view, what’s the biggest single challenge that the country faces?
A: The large number of young people, basically ages 15 to 30, who have never been to school because of the war and in many cases are illiterate and cannot do simple arithmetic. These people need jobs and income but are not trainable to do anything because they cannot read or write. Liberia has a teen and adult literacy program, but it’s not adequately funded. It’s just crazy that the official donors have not invested more money into this and other educational and “make-work” programs that could reduce the risk that Liberia will sink back into conflict.
Q: I would have thought that donor money is pouring into Liberia. Isn’t that the case?
A: Some is, but a large amount is tied up in World Bank, IMF and foundation mumbo-jumbo. For example, Liberia was just a few points short of qualifying for an MCA (U.S. Millennium Challenge Corp.) grant. Why didn’t the US administration just say “screw it!” and give them the grant!!? With the right support, Liberia can be a model of how the rich world can help to pull a well-deserving, well-governed country out of post-conflict chaos. Several years after the end of the civil war, some European countries still refused to support debt relief for Liberia because of bureaucratic hurdles. This is now changing, but the process has been slow.
Q: Give us an example of the sort of program you think the donors should support right now.
A: Take the simple task of cleaning up Monrovia. There ought to be a "make-work" program to clean up every single piece of trash in the city. This could have a five to ten year time horizon creating jobs that would give people hope. The psychological boost of having the city trash-free would be tremendous. In the meantime those employed in this “make-work” program could be given baseline literacy education and some skills training. Few would disagree with this kind of approach, but donors won’t fund it because it does not fit their model of funding only projects that they see as central to long-term sustainable growth. My response is that if the 85 percent of the society that is unemployed and mostly unemployable decide to take up arms again and resort to violence because they are despondent and without hope, then you won’t have to worry about “long-term sustainable growth.” It’s completely irrational.
This note examines how countries are selected to receive funding under the Millennium Challenge Account. The authors argue that while the Millennium Challenge Corporation’s proposed selection process is a reasonable starting point, there are several simple steps that could be taken to improve the system.
In this study, Steven Radelet examines the MCA's potential promise and possible pitfalls. He offers a rigorous analysis of the MCA’s central challenge: making foreign aid more effective in supporting economic growth and poverty reduction in the poor countries. He systematically explores what makes the MCA different and pinpoints the critical issues that will determine its success or failure.
In this essay Steven Radelet explains how since the mid 1990s seventeen Sub-Saharan African states have transcended the conflict and dictatorships of decades past to establish themselves as burgeoning world states. Approaching the discussion by delineating between cultural differences across the region, Radelet offers a dynamic analysis of the new and encouraging growth observed in several African countries.
Donald Kaberuka, the new president of the African Development Bank, leads an institution whose financial standing has been restored from the near collapse of 1995, but whose operational credibility remains a work-in-progress. This CGD working group report offers external, independent advice to Kaberuka and the Bank's board of directors on broad principles to guide the Bank’s renewal. The report contains six bold yet achievable recommendations for management and shareholders as they address the urgent task of reforming Africa's development bank. Prominent among the recommendations is a strong focus on infrastructure.
This paper considers what role pull instruments or challenge programs (such as the World Bank's Poverty Reduction Support Credits or the United States' Millennium Challenge Account) could play within the overall framework of foreign aid, asking how they could be designed to function as effective and efficient incentive instruments and how they could best complement other aid modalities.
This report was prepared by a Working Group convened by the Center for Global Development to identify key priorities the Paul Wolfowitz at the start of his tenure at the World Bank on June 1, 2005. It argues that Wolfowitz's biggest challenge will not be managing the Bank, with its 10,000 staff, but leading its shareholders, the nations of the world. The report offers five bold but practical recommendations for restoring the legitimacy and increasing the effectiveness of the world's largest development institution.
Liberian President Ellen Johnson Sirleaf, who will host President Bush on Thursday in the final stop of his five-country Africa tour, has news that may surprise some people: despite the problems in some African countries, things are clearly improving in much of the continent. In a new CGD essay co-authored with senior fellow Steve Radelet, Sirleaf describes how a growing number of African countries are embracing democracy and good governance, strengthening macroeconomic policies, and benefiting from debt relief. These countries are in the midst of an economic and development rebound, with economic growth averaging 5 percent for a decade, poverty rates beginning to fall, and social indicators beginning to improve. The essay concludes with recommendations on how this progress can be sustained and consolidated.