I. Public Benefit
Members of the herders' cooperative Bishrelt Sumber selling their dairy products at a local
trade fair. Photo: G. Odgarav, PACT/Mongolia
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National security and global economic prosperity are inextricably
linked and must be addressed jointly. Continued economic prosperity
for the United States cannot be assured in the absence of
prosperity, freedom, and economic opportunity worldwide. USAID's
successes in opening markets through ambitious trade and investment
agendas, in multiplying development efforts through private
sector participation and recipient country accountability,
and in supporting U.S. businesses through outreach and advocacy,
build prosperity and security at home and abroad. USAID works
closely with other agencies, businesses, labor groups, and
non-government organizations (NGO) to build a strong and dynamic
international economic system that creates new opportunities
for U.S. business, workers, and farmers.
The remarkable growth and prosperity of the developed economies
have demonstrated the strength of a dynamic, open international
trading system based on free trade and free markets, good
governance, and the rule of law, which is a key element of
sustainable development. Conversely, the lack of economic
opportunity for many around the world is an underlying factor
for a number of the grave challenges the United States faces.
Regional instability, social and environmental destabilization,
food insecurity, unemployment, and humanitarian crises further
marginalized vulnerable populations. USAID's efforts to promote
trade and sustainable economic development have a direct positive
effect on these vulnerable populations while also strengthening
the U.S. economy.
As the world's largest importer and exporter, the United
States has a significant impact: trade reached $2.8 trillion
in FY 2004. Exports account for roughly 10 percent of gross
domestic product (GDP), but contribute much more in terms
of GDP growth, as export growth contributed about 15 percent
of U.S. economic growth during the past decade. U.S. workers
in export sectors have higher than average wages, and one
of every five U.S. manufacturing workers depends on exports
for a job. The capacity of developing countries to buy U.S.
exports depends, in turn, on their ability to expand their
exports to the major developed countries.
Imports by the United States make competitive, lower cost
goods available to U.S. consumers and quality supply components
available to U.S. industries. The United States is the largest
importer from developing countries, importing goods worth
more than $777 billion in 2004, approximately 10 times the
value of the total of all official development assistance
to developing countries from all donors. Furthermore, a productive
agricultural sector is critical to overall economic growth,
trade expansion, and increased income-earning opportunities,
not to mention food security. Equally important is increased
access to infrastructure—communications, transport,
water, energy—and underpins the expansion and improvement
of services in all other sectors of development. Continued
growth and the economic opportunity gained from open trading
systems, good governance and the rule of law, critical infrastructure,
foreign investment, U.S. development assistance, and international
cooperation on financial issues promotes political liberty
abroad and national security at home.
II. Resources Invested
III. Selected Performance Trends
IV. Illustrative Example of Significant Achievement
As World's Majority Shifts to Cities, USAID Tackles Urban
Issues
Graph of the world's urban population.
Source: USAID Frontline March 2005 Issue
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In recent years, hundreds of millions of poor people in developing
countries have packed up their belongings, sold their land
and farm animals, and moved from their villages into growing
cities such as São Paulo, Lagos, Mexico City, Bangkok,
and Shanghai.
The increase of 2.5 billion city dwellers in the next two
decades is basically unstoppable, as people abandon exhausted
and overcrowded farmland in search of the jobs and conveniences
of city life: education, electricity, hospitals, and cinemas.
But when millions arrive, will they find decent housing, adequate
schools, water and sanitation, jobs, and security? Or will
many live in shantytowns, lacking title to their houses, and
join the growing ranks of the urban poor?
Lacking the safety net and traditions of their ancestral
villages, will these urban poor be ripe for recruitment by
criminal gangs or those who preach ethnic, religious, or other
forms of hatred and terrorism?
To address the vast demographic change taking place across
the planet, development experts at USAID and elsewhere are
working to help the urban poor gain title to their houses,
get credit to start small businesses, and create municipal
associations so cities can share their solutions to common
problems.
USAID is also showing mayors and city administrators how
to raise funds for roads, hospitals, water systems, and schools
by selling municipal bonds.
The move to the cities means that poverty—which used
to be mainly rural in developing countries—is becoming
mainly urban, requiring foreign aid groups to shift their
focus.
Above all, say experts, there is a need to build political
will among the leaders of cities to tackle the lack of services.
Although USAID and other donors cannot alone provide the resources
for the massive improvements needed to create safe and healthy
urban spaces, USAID does have the expertise to assist municipal
governments improve things—especially as many national
governments decentralize, granting taxation and other authority
to cities.
In Johannesburg, South Africa, for example, USAID educated
people to accept that by paying taxes they support city planning.
Now the capital market in South Africa provides bond revenue
for transportation, education, water, sanitation, public places,
and job programs.
The Agency and other donors such as the World Bank are working
with creative and dedicated political leaders in cities such
as Bogota to address major problems created by urban poverty.
The best source of expertise to these cities may well be
the example set by U.S. cities and towns. They can show municipal
governments how to raise funds and take care of vital services,
especially when many developing countries lack resources.
Since the growth of industrial jobs is not keeping up with
the influx of people, USAID is supporting regional and international
trade as well as micro credit to the informal sector, such
as small shops or street vendors.
Serbian Knitwear Maker Doubles Revenues,
Continues Growth
Milos Ivkovic (left) oversees design, quality control, and all aspects of
Ivkovic's creations.
Photo: USAID/Serbia
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For Serbian knitwear maker Ivkovic Trikotaza, the future
is looking as bright as the company's innovative fashion.
The company's senior management received support from the
USAID Serbia Enterprise Development Project (SEDP) team in
streamlining production, standardizing sizing, and promoting
Ivkovic designs at prominent international trade shows. To
help cover costs of exhibiting, SEDP offered financial assistance
through a matching grants program. And to make it easier for
buyers to review the designs, SEDP featured Ivkovic prominently
on the Web site portal of the Serbian apparel industry.
Results were swift. Ivkovic Trikotaza has sold its entire
production for 2005, received financing to help cover the
costs of their expansion, and managed to enter new markets.
The company is now emerging as a major international brand,
available in the world's top metropolitan cities like London,
Rome, Tokyo, and New York. General Director Milos Ivkovic
is extremely pleased with the company's new image: "The
production is at the maximum of our capacities. We're running
all the machines in three shifts, 24 hours a day. From here
it's all about further expansion."
Technology for the Little Ones in Guatemala
Until recently, access to educational technology was nothing
more than a dream for children of rural local communities
in Guatemala's highlands. USAID helped fund the installation
of 16 mini-technology centers called CETEBITOS which are equipped
with eight to 10 multimedia computers, a printer, Microsoft
office software, as well as locally-developed multimedia software,
to help students develop reading and writing skills in their
native languages of K'iche', Sakapulteko, and Ixil.
Rural Guatemalan schools are not numerous. In addition,
most teachers speak Spanish while first graders speak in one
of 24 Mayan languages. Not sharing a common language halts
the learning processes and causes children both frustration
and humiliation, as well as possibly damaging their self-esteem.
Before the USAID bilingual intercultural education programs,
common wisdom was that technology had no place in this context
of school.
USAID helped to introduce the technology model in rural
primary schools of Guatemala which integrated the active participation
of the entire community. Parent groups formed to equip the
centers, obtain electricity and adequate security, and establish
administrative and use policies. Teachers participated in
extensive training to bring their new skills and knowledge
to primary school students. Today, hundreds of children in
the Quiché department are using computers to learn
to read and write their first letters in their native Mayan
languages.
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