A New Day For Us Development Assistance

POLICY MEMO

June 2008

A New Day for U.S. Development Assistance The New Day, New Way proposal is about more than simply increasing funding or making bureaucratic changes in our government; it is about changing the way that the American people relate to the world’s poor.

InterAction has been calling for the rationalization and reform of U.S. foreign assistance for a number of years, and fully supports the vision and recommendations of the New Day, New Way proposal of the Modernizing Foreign Assistance Network. The network, which includes InterAction CEO Sam Worthington, is a new coalition of NGOs, think tanks, and foreign policy experts. We embrace the proposal’s principles and recommendations as an important step towards rationalization, and recognize that we are entering a political climate in which they can be achieved.

The New Day, New Way proposal outlines five core principles that should guide any effort to revitalize U.S. foreign assistance: •

Elevate global development as a national interest priority in actions as well as in rhetoric.

• Align foreign assistance policies, operations, budgets and statutory authorities. • Rebuild and rationalize organizational structures. • Commit sufficient and flexible resources with accountability for results. • Partner with others to produce results.

The proposal also recommends four specific actions: • 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. • Increase funding for and accountability of foreign assistance. 1400 16th Street, NW Suite 210 Washington, DC 20036 202-667-8227 [email protected]

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• Streamline the organizational structure and improve organizational capacity by creating a Cabinet-level Department for Global Development.

InterAction supports these recommendations because they are consistent with our own principles for effective foreign assistance reform. We believe that any approach to the

modernization of foreign assistance should establish a primary objective of improving the lives of the world’s poor and vulnerable people, and should emphasize that long-term development not be subordinate to political priorities. It should also build local capacity by empowering and holding all stakeholders – including recipients – accountable for achieving definable results and sustainable change. Finally, modernization must reduce the fragmentation and multiplicity of development programs across numerous U.S. Government agencies, and ensure that American development programs are managed by development professionals rather than diplomats or military personnel.1 We believe that the recommendations of the New Day, New Way proposal give us the space and create the opportunity to fulfill these principles.

Modernizing Development: Key Recommendations The four key recommendations of the New Day, New Way proposal are mutually reinforcing and should not be considered individually but rather, as a “complete package.” For instance, radically increasing funding for development without creating an overarching strategy for those funds could lead to further fragmentation of foreign assistance programs. At the same time, creating a new Cabinet-level agency focused on development, without coupling it with the necessary increases in funding for the programs under its jurisdiction, risks weakening rather than strengthening development. The following recommendations must be considered and implemented as a comprehensive plan for elevating and modernizing development.

1 “Building a More Secure World with Effective U.S. Foreign Assistance: Principles and Values to Guide Foreign Assistance Reform.” Published by InterAction, March 2006.

Create a National Strategy for Global Development: The U.S. has more than fifty foreign assistance programs spread across multiple departments and agencies, with no single entity responsible for managing their budgets, policies, or activities. The State Department’s F Bureau was intended to play this role, but it lacks both the statutory authority and the stakeholder buy-in to succeed. To ensure that U.S. development programs do not overlap or work at cross-purposes, we must have a single national development strategy. Among other things, this strategy would determine how and where we spend our development assistance dollars, which countries and programs will be prioritized, how American trade policies should compliment development, and how we can better partner with multilateral actors and aid recipients to achieve development results.

Reach a “Grand Bargain”: The Foreign Assistance Act of 1961 is badly outdated and is in dire need of modernization. Faced with budgets that are often entirely earmarked before funds ever arrive in a recipient country, USAID and other implementing agencies struggle to respond nimbly to changing circumstances and new challenges on the ground. On the other hand, Congress has a right and an obligation to ensure that U.S. foreign assistance dollars are spent effectively. Only by reaching a “grand bargain” between the Executive Branch and Congress, in consultation with stakeholders, can we strike the necessary balance between these two competing interests so that our foreign assistance programs can be implemented with agility, efficiency, effectiveness, and transparency, and in a manner that is accountable to the priorities of Congress and the American people.

Increase Funding for and Accountability of Foreign Assistance: Wealthy nations are not meeting the needs of the world’s poor, and we must increase funding for

poverty-reducing development assistance. Even when we are able to respond quickly to catastrophes such as the recent earthquake in China, Cyclone Nargis in Burma, or the global food crisis, the U.S. government is effectively robbing from Peter to pay Paul. There are finite resources available for international development and humanitarian response and, unfortunately, responding to one crisis (or development intervention) often pulls funding away from another. Not only do investments in development assistance promote the American ideal of lending a helping hand to those who are most vulnerable, they also reap national security and economic growth dividends.

provide a detailed description of how such a department might be organized.

Create a Cabinet-level Department for Global Development: For a number of years, InterAction has called for re-capacitating and reinvigorating USAID, and since early 2007, has supported the creation of a Cabinet-level department focused on international development and humanitarian response. While there are a number of other proposals for streamlining and rationalizing American foreign assistance programs, InterAction, like the Modernizing Foreign Assistance Network, has determined that a Cabinet-level agency is the best option for elevating development assistance in a way that prioritizes people-centered, sustainable development. InterAction will release a series of papers in late June 2008 that further describe the rationale for a new Cabinet-level department and

The Modernizing Foreign Assistance Network unites new constituencies around these themes. It is heartening that the NGO community is forging new partnerships with traditional foreign policy and national security experts around a shared set of principles and recommendations, with the ultimate goal of building a better, more stable world. The New Day, New Way proposal is about more than simply increasing funding or making bureaucratic changes in our government; it is about changing the way that the American people relate to the world’s poor. It recognizes that promoting American values, enhancing our national security, and promoting global economic growth are all in our national interest, and can be achieved by modernizing our foreign assistance capabilities.

Reducing Poverty and Improving America’s Standing in the World InterAction’s member organizations are a diverse group. Despite their differences, two key themes bind them together: 1) dedication to restoring America as a force for positive change in the world; and 2) an unwavering commitment to reducing poverty and alleviating human suffering.