Presentation by Donald Steinberg, USAID Deputy Administrator to the USAID Alumni Association Annual Meeting

Thursday, October 18, 2012
Subject 
The Democratization of Development

Friends:

It is a great honor to speak here today on the state of USAID and our collective efforts to ensure that the agency is adapting to the new world of development.  I must say that it’s a bit intimidating to speak of USAID in the presence of people like Jim Michel and Carol Peasley and Stacy Rhodes.  I feel like the man who is about to give a speech on whale anatomy and looks up to see Jonah sitting in the audience.

Hooked on Development

I also see Abbe Fessenden here, which reminds me of my first experience with USAID some 36 years ago.  In 1976, I was assigned as a first-tour Foreign Service officer to Bangui in the Central African Republic, where my principal duty was to put together a $2 million rural health program for the province of Ouham under the direction of our Ambassador and Abbe, who was the regional USAID officer in Yaounde. 

With no experience, I had the novel idea to travel to the region and talk to people there.  We first talked to government officials – provincial governors, mayors and military commanders – all men.  They told us that health conditions were generally acceptable, and that their principal need was an air-conditioned office building for government workers.  

Then we went out to the marketplaces and the community centers to talk with women.  They said that mothers and children were dying in vast numbers from childbirth and preventable childhood diseases.  They said that the causes included mothers in weakened conditions from malnutrition, malaria, diarrhea, and schistosomiasis; the absence of trained midwives and birth attendants; and the lack of village clinics with basic drugs.  They were also realistic enough to know that neither the government nor the donor community would build them a fancy hospital filled with doctors and nurses. 

And so we took their cue.  We put together emergency feeding programs for children and pregnant and lactating women.  We supported training and financial incentives for community health workers.  We built and stocked village health huts.  We drilled boreholes to ensure clean water.  Over the next two years, we monitored the progress, made course corrections, and built local capacity to take over the program.

By the time I left the Central African Republic in 1978, we could already see significant declines in child and maternal mortality.  And I was hooked: hooked on the role of women in development, hooked on development itself, and most of all, hooked on the U.S. Agency for International Development. 

No agency has done more good around the world.  I’ve admired the professionalism and dedication of USAID’s humanitarian, recovery and development work.  In the unlit corners of the world, USAID serves as the eyes, the arms and the conscience of the global community.  

The New World of Development

Programs like today’s Annual Meeting permit us to celebrate our successes.  Indeed, the last two decades have been a validation of our work.  There has been more progress in global development since the end of the Cold War than in any time in history.  In the decade and a half since the mid-90s, real incomes have risen 60 percent across developing countries, infant mortality rates have plunged by a third, and primary school enrollment rates jumped nearly 15 percent. 

The number of people with incomes below $1.25 a day has fallen by more than 600 million, a drop of nearly one-third in just 15 years.  Democracy is much more widespread -- in sub-Saharan Africa alone, the number of democracies has grown from 3 in 1989 to more than 20 today.  Never before have so many of our partner countries been democracies.

But we’re also humbled by the task ahead at this moment of change in the development arena.  As we address the daunting and continuing global challenges of disease, illiteracy, unemployment, corruption, bad governance, food insecurity, and climate change, we know that the world in which we operate has fundamentally changed.

First, throughout the world, assistance budgets are tighter and our funders are demanding greater effectiveness, accountability, transparency and attention to potential corruption.  They want to help countries help themselves to join the ranks of those generating their own capital for development, like South Korea, Brazil and India, and they’re insisting on creating sustainable country systems able to stand on their own.

Second, donor government aid is no longer the driving force behind development that it once was.  In broad terms, official U.S. development assistance now totals about $30 billion a year – yes, still less than 1 percent of the federal budget.  By contrast, NGOs, foundations, faith-based groups and corporate social responsibility generate and distribute some $39 billion a year.  Another $100 billion is provided by American residents in remittances; and around $1 trillion goes to developing countries from all sources of private investment.   Private capital flows to developing countries are seven times larger today than just a decade ago.

Third, we’re in an age of empowerment – reflecting the democratization of development.  Governments and civil society in partner countries no longer accept programs and policies “made in America,” or Brussels, London or Beijing, for that matter.  They demand ownership over their own development drives.  And with the rise in democracy and civil society, we are more comfortable in knowing that this ownership reflects the voices and aspirations of the citizens of developing countries.

Fourth, there is a growing consensus on the discipline of development among donors, partners, IFI’s, foundations, NGOs and private companies, reflected in the outcome document of the Busan Conference.  Busan put results at the center of our collective development agenda, backed by tough monitoring mechanisms to ensure accountability.  Transparency was brought front and center, including with the U.S. accession to the IATI accord.  Busan also brought emerging donors – including China and India – under the tent.  Building on the Monrovia principles, there was an emphasis on the unique needs and challenges of fragile states.  We reaffirmed our common commitment to disaster risk reduction and building resiliency.  

Finally, there’s a new focus on inclusive development that addresses marginalized groups, including women, people with disabilities, the LGBT community, indigenous populations, and displaced persons.  The Arab Spring in particular reminds us that stable societies need more than 6 or 8 or 10 percent per capita growth rates.   Development is a “whole of society” exercise where all groups are planners, implementers and beneficiaries under the watch-phrase: “Nothing about us without us.”  And in this vein, we must work even harder to ensure space for civil society actors in the face of growing restrictions on them in many developing countries. 

USAID Forward

These broad changes demand new business models for all of us in the development arena.  This is one area where AID has a huge advantage.  We’ve always been a flexible agency, challenges ourselves to adapt to new environment and look to the long-run.   And so, as we develop new ideas and initiatives, I get the frequent feeling that we’re really going “back to the future.”  The President’s Feed the Future initiative, for example, finds its roots in USAID’s role in promoting the Green Revolution.  DNA tests would show that the African Economic Policy Reform Program of the 1980s is an ancestor of the Partnership for Growth program.  Our new focus on resiliency draws on the lessons of the Greater Horn of Africa Initiative of the 1990s, and even the QDDR bears a strong resemblance to the State-AID Joint Policy Council that Tish Butler and I directed a decade ago.

This is what Administrator Raj Shah means when he talks about USAID needing to merge with ourselves.  The advice and recommendations that you’ve shared with the current leadership form the basis for the USAID Forward reform agenda.  Your counsel has been essential as we adopt a new approach that is both more ambitious and more humble than before.  If official assistance is now scarcer and no longer dominates capital flows to developing countries, we need to focus on specific niches where governments and ODA have a comparative advantage. 

And so we’re using our convening authority to draw together partners across governments, international institutions, civil society, and the private sector.  We are making strategic investments that leverage other people’s money, including by reducing risk factors. 

We’re also linking with other U.S. government agencies to put together coherent packages of aid, trade and investment promotion under the President’s Partnership for Growth program, which is identifying constraints to growth in El Salvador, Philippines, Tanzania and Ghana, and addressing these directly.

We are taking a new look at public-private partnerships, and developing rigorous standards for results, accountability and evaluation.  We cannot simply slap a “public-private partnership” label on any government interaction with an NGO or private company and thus exempt it from tough standards of effectiveness.  As a community, we’re reviewing best practices in the 1200 or so partnerships in which we’ve engaged.  Our Food Security Initiative for the G-8 Summit draws on this principle, bringing together more than 50 private firms to generate billions of dollars in resources, as does the Child Survival Summit.   

We’re also applying focus and selectivity, concentrating our efforts with depth and scale on food security under the Feed the Future Initiative, global health, climate change, democracy and governance, economic growth, and humanitarian response.   And we’re sharpening our tools of accountability, adopting a gold standard system of monitoring and evaluation. 

We are incorporating science and technology.  Coming back to the U.S. government two years ago, I felt like I had to go through a new language training program.  All of a sudden, people are talking about crowd-sourcing, grand challenges, datapaloozas, and hack-a-thons.  I always thought computer hackers were evil, but now I find my agency working with a group calling itself “Random Hacks of Kindness.” 

We are also emphasizing country ownership – not in the sense of risking taxpayers’ dollars by working with potentially corrupt or inefficient entities, but by seeking to build and work through sustainable country systems in our partner countries through implementation and procurement reform.  In government-to-government assistance, for example, we begin by conducting stringent assessments of financial management and auditing systems in partner government agencies.  If these systems are transparent, efficient and free from corruption, we work with them.  If there are gaps, we seek to address them, including through technical assistance and programs like reimbursements for agreed expenses.  If the systems are not fixable, we go elsewhere.

Finally, we’ve broadened our efforts in inclusive development, bringing on coordinators charged with mainstreaming and integrating gender, disabilities, youth, and LGBT issues into all our programs, infusing these principles into our agency’s DNA. 

UAA’s Role – Drawing on a World of Experience

I’d like to conclude by reflecting on the role that the anted to reflect on the role that the USAID Alumni Association can play and is playing in these reform efforts. 

In fact, the four roles identified for UAA in its 2012 business plan are exactly what is needed. 

The Public Outreach Committee under Ann Van Dusen and Brad Langmaid is serving to inform the American people and their elected representatives of the continuing importance of development assistance. 

The Strengthening USAID Committee under David Cohen and Pam Mandel is helping develop a new generation of assistance officers through innovative mentoring, training and coaching programs. 

The Development Issues Committees under Curt Farrar and Larry Smucker is reinvigorating the development dialogue and sharing its institutional memory with agency thought leaders. 

And the Membership Committee under Nancy Tumavick and Paula Goddard is strengthening UAA’s institutional capacity to achieve the ambitious agenda UAA has set for itself.  

USAID – From the American People, For the American People

The changes I’ve described are essential to ensure that we will continue to get the public support we collectively need.  If we can show taxpayers, Congress and private donors alike that we know what we’re doing, that we are producing measurable and sustainable results, that we are good stewards of their dollars, and that we are channeling their resources through a modern development enterprise, they will continue to support us.  Because ultimately, I think the American people get it. 

They know that prosperity and human security abroad promotes our national security interests, our national economic interests, and our national values.

It is in our national security interest.  Stable, prosperous countries are less likely to traffic in arms, drugs, and people; less likely to send off large numbers of refugees across borders and even oceans; less likely to serve as hosts for terrorist training camps and pirates; less likely to incubate and transmit pandemic diseases; and less likely to need American forces on the ground.

Development is in our economic interest as well.  Growth in developing countries will be the primary market for American exports and American jobs over the next decades.  Most of the fastest growing export and investment markets for the United States are in former or current assistant recipient countries.  There are also huge opportunities available for building infrastructure, including clean energy and telecommunications, as well as providing technical assistance. 

Equally important, the American people want us to project our values abroad.  They want to live in a world that’s peaceful, prosperous, democratic, and respectful of human rights and human dignity.

In a changing global landscape, the generosity and humanitarian spirit of the American people is one thing that has not changed.  

Thank you.  

Last updated: October 31, 2012

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