With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
CGD seeks to inform the US government’s approach to international development by bringing evidence to bear on questions of “what works” and proposing reforms to strengthen US foreign assistance tools.
The policies and practices of the US government wield formidable influence on global development. CGD seeks to strengthen US foreign assistance tools with evidence of “what works” and propose reforms grounded in rigorous analysis across the full range of investment, trade, technology and foreign assistance related issues. With high-level US government experience and strong research credentials, our experts are sought out by policymakers for practical ideas to enhance the US’s leading role in promoting progress for all.
US Trade Representative Michael Froman didn't have time for questions, but moderator Frank Sesno asked Jack Lew later in the program. Here's Lew's answer:
In short, Lew said Obama's speech referenced the international component of climate change and that Africa will increasingly need clean power sources. He called climate the "formative issue of our day" and said the United States should use bilateral and multilateral assistance to help developing countries continue to grow their economies while boosting sustainable and affordable power.
President Obama is wheels up for Africa Wednesday. The White House and US development agencies have been unusually quiet prior to departure, but some things are sure to be on the agenda: economic growth, trade, investment, democracy, youth, food security, and health. Obama is widely expected to announce a new power initiative. But Nelson Mandela’s failing health could dramatically shift the trip's tone and focus.
Assuming the itinerary goes as planned, Obama’s first stop will be Senegal, followed by South Africa and Tanzania. Based on his administration’s global development policy work to date, we can expect three themes:
Economic growth, trade and investment. Obama’s economic strategy for Africa is not supposed to be about how much aid, but how to attract trade and investment, said Michael Froman (then White House Deputy National Security Advisor) in a CGD speech last fall. I expect we’ll hear more about the administration’s efforts to link private sector investments with African development priorities and how African economic growth increases demand for US exports, creates jobs at home and opportunities abroad.
Democracy gains, youth and women’s empowerment. Obama is sure to highlight democratic gains in Africa (as former CGDer and Obama administration official Steve Radelet explains in Emerging Africa). He might mention the 2012 Senegalese election that averted incumbent president Abdoulaye Wade’s attempt to win an unconstitutional third term. Obama’s Africa strategy is also big on youth (much to Todd Moss’s chagrin) and women’s empowerment. I suspect we’ll see activities highlighting both and that First Lady Michelle Obama will play a role here, too.
The initiatives: food security, global health and climate power. Obama will highlight two of his administration’s three global development priorities: food security and global health. Senegal and Tanzania are both Feed the Future countries, and Tanzania is also part of the New Alliance for Food Security and Nutrition, launched at the 2012 G8 summit to secure private investment in agriculture in return for policy and regulatory reforms on the part of the Tanzanian government. And we’ll hear about US global health investments that remain the bulk of US foreign aid spending in Africa and are building on President Bush’s emergency plan for AIDS relief (PEPFAR) but suffer from US interagency disfunction. Obama is set to give a major climate speech in the United States tomorrow, but I’m not sure we’ll hear much of it during his Africa trip unless it is linked to a new power initiative.
Presidential trips usually come with announcements of new programs, new money or both (Todd Moss suggests six so-called deliverables). Most bets are on Obama announcing a new power initiative in Tanzania. Tanzania is home to just about every US development program in the book but most notably is a Partnership for Growth country which means it should put Obama’s global development policy into practice. A power initiative would hit most of the policy’s criteria:
✓Economic growth focus.
✓Beyond aid: links to trade and investment.
✓Leverage private sector investment .
✓Build capacity in a partner country’s public sectors.
✓Game-changing innovation, if it includes a solar power component.
It doesn’t hurt that the US Millennium Challenge Corporation is already working with the government of Tanzania to invest $200 million to boost electricity service (including using solar photovoltaic systems), and that two US companies—Symbion and Pike—are working with the MCC and expanding their own private sector investments in the region (all of which former Secretary of State Hillary Rodham Clinton and MCC CEO Daniel Yohannes applauded when they visited the Ubungo power plant two years ago, and Froman also praised in his CGD speech). Tanzania (and South Africa) are also part of the Open Government Partnership’s steering committee, an effort launched at the UN in September 2011—with leadership from Obama—to make governments more open and accountable to their citizens. If there is a new power initiative, it would be ideal to link it to transparency commitments from Tanzania and the United States.
While presidential trip announcements can draw global attention to important issues and policy responses, they run the risk of being photo ops that may or may not amount to much afterwards. The administration should signal how its executive branch officials will make sure any new announcements become something real, including working in partnership with Congress. One need look no further than the so-far failed food aid reforms to remember that a lot of people need to be brought along to make good policy ideas practice.
So far, executive branch agency officials have been tight-lipped about Obama’s trip. Froman (now US Trade Representative) and Treasury Secretary Jack Lew are set to speak at the US Global Leadership Campaign’s conference tomorrow and may say more. Should Nelson Mandela’s health continue to decline, however, President Obama’s trip could end up being less about a specific power initiative in Africa and more about Mandela’s moral and political power.
The Royce-Engel amendment to reform US food aid failed 203-220 in the House this week, as did the farm bill to which it was attached. The food aid amendment would have relaxed requirements that the United States buy American commodities and ship them on US ships. It's painful to see a smart foreign aid reform that would save lives and taxpayer money suffer a narrow defeat.
Could a more proactive strategy from the Obama administration, who proposed food aid reform in the FY2014 budget, have made the difference? Maybe. But the shred of good news here is that the first real vote on foreign aid in ages was closer than expected (it got more votes than the entire farm bill!) and had almost identical levels of support from Democrats (98) and Republicans (105) (more from Oxfam’s Gawain Kripke here). Here's hoping some of that bipartisan appetite for aid reform can help resolve the $10 billion difference in FY2014 foreign aid spending bills between the House ($34 billion) and Senate ($44.1 billion).
If the point of the visit is to cement a deeper relationship with the continent and big new spending is out of the question, then we should throw away the idea of bearing gifts and instead bring what Africans say they really want from America: trade and investment, especially in power and other infrastructure. This is the first talking point for virtually every African head of state, and it’s also what the population seems to think is most important. Recent polling by Afrobarometer in 24 sub-Saharan countries found that Africans identified jobs or infrastructure as their most pressing needs. And they were five times more likely to list one of these as a top priority than either health or education.
But what, really, could the President announce in the next few days? Here are six off-the-shelf ideas, none of which would require new money:
Trade Deliverable: FTAs and BITs. The President could announce the opening of meaningful negotiations for a free trade agreement and/or bilateral investment treaties with a select few countries (Senegal, Tanzania, and South Africa are all good candidates; I’d add Ghana, Nigeria, and Ethiopia too) or a regional grouping (the East Africa Community is the obvious choice).
Trade Deliverable: AGOA re-authorization for 10 years. The President could announce the intention to extend for 10 years the African Growth and Opportunity Act which is due to expire in 2015. Even better, he could commit to upgrading AGOA by shifting the focus from tariff reduction to supporting export competiveness.
Investment Deliverable: A Stronger OPIC. The Overseas Private Investment Corporation’s Africa portfolio is growing ($907 million in new commitments in 2012), but it could be doing much more with a few modest tweaks. Here is my list of seven steps, the most important of which are multiyear authorization, equity authority, and additional flexibility of internal resources to boost the portfolio.
Investment Deliverable: An African Venture Fund at the IFC. The current system within the World Bank, where the US is a leading shareholder, is for its private sector arm (IFC) to subsidize its soft loan sovereign arm (IDA) at a cost of about $500 million each year. Instead, the President could announce support for something akin to Clay Lowery’s proposal for allowing IFC to retain those profits and instead invest them in projects in low-income countries. A focus on Africa is one variant.
Infrastructure Deliverable: Double the US contribution to the ADF. Infrastructure accounts for more than half of the African Development Bank’s portfolio and replenishing its soft loan window is one of the best ways to crowd-in the US contribution. The FY2013 request was just $195 million, so the extra $195 million could be made budget neutral by reducing the $1.3 billion each year provided to the World Bank’s IDA. (Conveniently, replenishment negotiations for both soft windows are going on right now.) A modest shift from IDA to the ADF makes even more sense as IDA graduation creates near-total convergence of their client bases. (Ben Leo and I estimate that within the next dozen or so years, more than 80% of IDA’s clients will be African.)
PowerDeliverable: An ambitious new electricity access initiative. The White House is sending positive signals that a new effort to boost power generation and bring electricity to the 70% of Africans who live every day without it is in the works. I’m most optimistic here, but also hope that US ambitions are high enough to match the tremendous demand for energy.
These kinds of deliverables, rather than another youth forum or social services project, would make all the effort of a Presidential trip greatly worthwhile and send a positive signal that the US is serious about partnership with our African allies. Most of all, these would be a sign of a more mature relationship between the continent and the United States based on mutual respect and shared prosperity.
If you’re in Washington today, you know it’s cloudy outside. But did you know there was an MCC board meeting, too? Probably not if, like me, you look to the Federal Register to confirm if and when the board plans to meet and what’s on the agenda.
The MCC board of directors—still missing one civil society board member—did meet today to consider approving Georgia’s second compact and hear updates on the five compacts set to finish in September: Lesotho, Mongolia, Morocco, Mozambique and Tanzania.
MCC prides itself on being open and transparent, especially with its board of directors, and I praise them for it often (they’re leading the way on the US Foreign Assistance Dashboard and with their own open data catalog). But unless I’m missing something, this board meeting was not in the Federal Register, the MCC hasn’t sent out the usual invite to a post-board outreach meeting and the most recent board meeting summaries on the MCC website are from June of last year (there have been four meetings since then). I’m hoping the lack of public information this time around is an oversight and that the MCC starts letting the sunlight back in soon. It is summer, after all.
Update (6/19/13, 4:38 PM): MCC press release on board meeting is now up. Georgia compact approved.
Update (6/26/13): The MCC will hold its post-board outreach meeting June 27 and tells me future board meeting notices, agendas and minutes will be posted on the MCC website.
There are many, many problems with the House farm bill being debated this week but there are two amendments that would make significant improvements. The first (#55 in this list) is a version of the Royce-Bass Food Aid Reform Act that would provide authorization to untie up to 45 percent of the emergency food aid budget and allow the US Agency for International Development to provide assistance in whatever form—food purchased in the US or locally, vouchers, or cash transfers—would help the most people the quickest. The amendment, from Chairman Royce (R-CA) and Ranking Member Engel (D-NY) of the House Foreign Affairs Committee, also makes the practice of monetization discretionary and limits it to 15 percent of nonemergency food aid. Will McKitterick and I estimated that such a reform might allow the current budget to reach an additional 4 million to 10 million needy people.
The second key amendment is sponsored by Bob Gibbs (R-OH) and Ron Kind (D-WI) and it would make the most troublesome provision in the House bill, the price loss coverage option, a bit less troublesome. The House bill approved by the Agriculture Committee includes fixed price targets and ties payments to current levels of production, which make it more distorting—and more likely to violate US commitments at the World Trade Organization—than the program it replaces, which bases payments on historical acres planted and does not require current production. The Gibbs-Kind amendment would change the fixed price target to a moving average and restore the link to past rather than current production.
The House Rules Committee is meeting this afternoon to decide which amendments will be allowed to go forward and the House is expected to start debating the bill on the floor later tonight or tomorrow.
CGD’s Todd Moss, along with Dewa Mahvinga from Human Rights Watch and Mark Schneider from International Crisis Group are testifying, as are Acting Assistant Secretary of State for African Affairs Yamamoto and Assistant Administrator for Africa of USAID Earl Gast on the government panel.
I’ll be listening for Todd’s assessment of current US government policy, as well as how the United States should be preparing for a transition from 89-year old Mugabe’s 33-year reign. More sanctions? Less sanctions? Lift sanctions? Is there a useful role for the Southern African Development Community (SADC) to play? Does the election mean anything? There are no longer trillion dollar bills in circulation but is Zimbabwe’s economy really on the road to recovery (and what happened to all that diamond revenue)?