Testimony of Ambassador Wendy Chamberlin
Assistant Administrator, Bureau for Asia and the Near East
The Middle East Partnership Initiative (MEPI)
Before the Subcommittee on Middle East and Central Asia
Committee on International Relations
U.S. House of Representatives
March 19, 2003
Chairman Ros-Lehtinen, Members of the Subcommittee, I welcome the opportunity to appear before the Subcommittee today to discuss the role of the U.S. Agency for International Development (USAID) in supporting the Middle East Partnership Initiative (MEPI). Recent events have clearly demonstrated the enormous risks posed to our nation by the existence of nations with weak institutions, high poverty, and limited opportunity. As noted in the National Security Strategy of the United States, "Poverty does not make poor people into terrorists and murderers. Yet poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders." For this reason the Strategy calls for the US to ignite a new era of global economic growth through free markets and trade while expanding the circle of development by opening societies and building the infrastructure of democracy. Against this backdrop, MEPI is an important tool to address systemically these issues in the Middle East. My staff and I are fully committed to using all the resources available to us to support this important new initiative.
Based on USAID's extensive experience around the globe, the MEPI's focus on democracy, economic growth, and education is exactly right. The gaps in economic openness, political freedoms, and educational opportunities in the region are well documented in the 2002 Arab Development Report produced by the United Nations Development Program (UNDP). The importance of these issues in creating the conditions for broad based growth and development is also well recognized by the development community.
To inform the debate on development and economic assistance, USAID's Administrator Andrew Natsios commissioned an analysis of recent trends and challenges. The report, "Foreign Aid in the National Interest: Promoting Freedom, Security, and Opportunity," speaks to the importance of promoting democratic governance and driving economic growth as key themes. Education is both an end in itself, as literacy rates are a key development indicator, and essential to support the goals of democracy and growth.
USAID's report recognizes that political parties are among the core elements of democracy. It also demonstrates the important link between democracy and good governance. The two are mutually reinforcing, and when they go together, resources are used to advance the public good. A functioning democracy gives citizens the means to participate in policy making and to monitor officials. Leaders then feel the obligation to justify and explain decisions, giving the public a stronger sense of policy ownership. When government institutions perform their designated role with a high degree of transparency, transaction costs are low and trade and investment can flourish. Democracy must also include an independent judiciary, an elected legislature that can check the power of the executive branch, and civil society that can participate in shaping policy.
Turning to the second element in MEPI, economic growth, the "Foreign Aid in the National Interest" report notes that economic growth in the US has been moderate, averaging 1.7 percent per person since 1776. But over our nation's 225 year history, per capita income has increased 44 times. The key to improving living standards and reducing poverty is sustained economic growth over the long term. Sound macroeconomic policies are well recognized as being essential for economic growth, but good economic governance is also essential. Institutions and rules must be in place to sustain growth once it starts. Globalization provides an unprecedented opportunity to direct resources toward development. Countries that have experienced growth in trade and investment have also achieved faster growth. Foreign investment is particularly valuable because it transfers not just capital but also technology, management know-how, and access to new markets. The report also notes that wealth is actually created in the microeconomic foundations of the economy, rooted in company operating practices and strategies as well as the overall business environment. This has important implications for assistance providers.
The report also discusses the importance of investing in people. In the early stages of growth, investments in education and health improve the distribution of assets. At later stages equitable growth requires providing skilled and unskilled workers for opportunities for secondary education and on-the-job training.
It is our goal, then, to work with our colleagues at State to sift through the enormous experience available in each of these areas to craft new and innovative approaches for advancing our goals. We must also be rigorous in evaluating new programs to recognize and replicate successful approaches and to quickly discard methods that do not work. While the critical elements of a successful program can be developed and disseminated, the unique circumstances in each country require that Embassy and USAID officials on the ground tailor the programs to local conditions. Success will ultimately be judged by demonstrable impact and results.
We are pleased to note that a significant number of activities that will be directly funded by MEPI this year will be implemented by USAID. Our goal is to ensure that USAID remains a key implementing partner in the future. We will work to create streamlined and collaborative project identification and design processes. We will also develop procedures to clarify management and reporting responsibilities. The goal is to minimize the administrative burden of the program while maximizing impact.
We have also devoted considerable resources to the joint State/USAID program reviews. We believe there is much right with current programs in the region and that many of our programs already contribute directly to MEPI's objectives. Democracy, economic growth, and education are the focus of many existing programs. But we also recognize that there is room for improvement and there is an urgent imperative to show results. It is our firm desire to involve and inform the NEA Bureau of State in all aspects of strategy development, program design, monitoring, and evaluation with respect to USAID programs in the region. NEA Bureau representatives participated at the earliest stage of our process to re-craft the county strategy for Morocco. With respect to Egypt, State/NEA, the USAID mission and USAID/Washington are assessing all facets of the current USAID/Egypt program. This has included meetings and visits, a great deal of written information and, most recently, a teleconference with the mission to address specific questions and issues. We are confident that this process will lead to a more focused program and greater achievement of our goals and objectives. However, we also need to ensure that the program review process does not become so cumbersome that it impedes implementation of critical elements of the current program.
In conclusion, USAID believes the Middle East Partnership Initiative is timely and well focused on the critical issues in the region. It is our goal to use USAID's extensive expertise and resources to aid in the success of this important new undertaking.
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