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Statement of the Administrator
>> Return to CBJ F Y 2002 Home Page >> Statement of the Administrator The U.S. foreign assistance program is an important instrument of the President and the Secretary of State for the conduct of foreign policy. USAID programs are actively engaged in the Middle East peace process, the transitions within the former Soviet Bloc, countries facing crisis, transnational threats, disaster assistance as well as more traditional issues associated with the problems of developing countries.
USAID's FY 2002 budget marks the beginning of a new strategic orientation and the incorporation of a new way of doing business to ensure that USAID's long-term development assistance and humanitarian and disaster relief programs better respond to U.S. national interests. In the future, USAID will be more highly focused on post-Cold War issues and the dual imperatives of "globalization" and the "prevention of deadly conflict."
Globalization has removed barriers to exchange of information, technology, finance, goods and services with startling speed over the past decade. Globalization can lead to productivity increases, economic prosperity and secure markets for U.S. goods and services. However, if developing countries do not implement policies and develop institutions to compete in a global economy, their populations will not realize real benefits from the international trading system. In these cases, globalization can exacerbate the gaps between rich and poor. This can undermine support for economic reform and democratic political institutions and can contribute to instability and possibly conflict.
The increasing number of states that are unable to deal with problems that are potential sources of conflict is of grave concern to the United States. Increasing levels of conflict are leading to regional instabilities, complex humanitarian emergencies and, in some cases, chaos and are threatening the achievement of USAID's development objectives and broader U.S. foreign policy goals.
The phenomena of conflict and accelerating global health problems, especially HIV/AIDS, are having catastrophic effects on societies and are reversing recent developmental gains. In some societies, gains have been totally destroyed, and people are much worse off now than they were several decades ago.
While some of USAID's programs already respond to these challenges, the new Administration intends to more highly concentrate Agency resources and capabilities to address globalization and conflict.
USAID as an institution must recognize its shortfalls and adjust rapidly to improve its effectiveness as a key foreign policy instrument. In this regard, the Administration proposes several important changes. These are:
- Reorientation of USAID programs to focus on four "pillars" supporting achievement of USAID's objectives.
- Introduction of the Global Development Alliance as USAID's new model for doing business. This is USAID's first pillar.
- The simplification, integration, and reorientation of programs and their alignment within three new program pillars.
- Adjusting the Agency's budget priorities to target increased funding for agriculture, HIV/AIDS, basic education, and conflict prevention and resolution.
- Directing senior management attention to the sweeping overhaul of the Agency's management and operating systems.
The Four Pillars
The four pillars represent USAID's new strategic orientation. This orientation involves a new way of doing business, refocusing and strengthening capabilities in many program areas and adding some new areas. The first pillar, the Global Development Alliance, is our business model for the new Administration and applies to the entirety of USAID's programs. In addition, USAID programs and activities will be aggregated into three program pillars. By aggregating current and new programs that are mutually reinforcing into these pillars, USAID will be able to more effectively utilize resources and to describe its programs more clearly. The four pillars are:
- Global Development Alliance;
- Economic growth and agriculture;
- Global health; and
- Conflict prevention and developmental relief.
The Global Development Alliance Pillar
The Global Development Alliance (GDA) is USAID's business model for the 21st Century and is applicable to all USAID programs. The GDA is USAID's commitment to change the way the Agency implements its assistance mandate. USAID proposes to serve as a catalyst to mobilize the ideas, efforts, and resources of the public sector, corporate America, the higher education community and non-governmental organizations in support of shared objectives.
As the first pillar, the Global Development Alliance is based on USAID's recognition of significant changes in the environment of economic development assistance. No longer are governments, international organizations and multilateral development banks the only assistance actors; nor is official development assistance the only source of funding for international economic development. Rather, over the past 20 years, there have been a growing number of new actors on the scene: non-governmental organizations (NGOs), private voluntary organizations (PVOs), the higher education community, foundations, corporations, and even individuals are now providing development assistance. As a result, the U.S. Government is not the only, or perhaps even the largest, source of American funding and human resources being applied to the challenges of development.
USAID, however, is uniquely positioned among this range of actors, as well as within the U.S. Government. USAID plays a critical role within the foreign affairs community, headed by the Secretary of State, and has unparalleled long-term experience with, and access to, host-country governments and their people. These factors, combined with USAID's extensive field presence and technical expertise, represent its comparative advantage to catalyze, integrate, coordinate, and facilitate a public-private alliance among U.S. development assistance actors. For example, a critical element for all development activities is the propitious use of new information technologies. This can only be achieved through collaboration with the private sector, universities and NGOs.
The GDA will be a fundamental reorientation in how USAID sees itself in the context of international development assistance, both in how the Agency relates to its traditional partners, and in how the Agency seeks out and develops alliances with new partners. USAID is already engaged in many successful alliances around the world; for example, the GAVI alliance makes second generation vaccines widely available for immunizations. This is not an entirely new way of doing business for the Agency. What is new is that USAID will pursue a systematic approach to alliances on a much larger scale and will institutionalize these alliances as a central business model across Agency operations.
USAID will look for opportunities where risk-sharing with others can generate much larger benefits in the achievement of overall objectives. In doing so, USAID will increasingly fill the role of a strategic alliance investor in addressing serious development issues. In many ways, this role would be analogous to a venture capital fund in that it would seek to pool larger sources of funding, would specifically not be risk-averse, and would seek to make strategic investments. Unlike such a fund, however, USAID would not seek to establish equity positions, nor would the Agency seek early exits from the activities in which it is investing. USAID will continue to deploy resources where private funding is not available and for activities where the governmental role is clear and pre-eminent.
With the GDA, USAID intends to improve the quality and extent of partnerships with a wide range of non-governmental entities, increase non-governmental financing for development assistance, and enhance policy reform through advocacy.
To launch the GDA, a special unit will be established to expand outreach into the private, for-profit and not-for-profit sectors. This unit will be responsible for describing USAID's new approach, its bona fides and comparative advantages, and for initiating dialogue on the formation of particular alliances. To begin implementation of the Global Development Alliance in its early years, USAID has identified $160 million in the FY 2002 request to be used to initiate the new business model and to help fund alliances by Washington bureaus and field missions. GDA is not expected to become a separate funding account. The special unit and separately identified funding are expected to be temporary. Their need will be periodically assessed, with a view toward fully integrating GDA into the three program pillars and normal USAID business practices not later than FY 2004.
The funds for FY 2002 are proposed from the following accounts: $110 million in Development Assistance (DA); $25 million in Child Survival and Diseases Program Fund (CSD); and $25 million in International Disaster Assistance (IDA). The $160 million requested will support new alliances related to the three program pillars. Uses will be consistent with the authorities of these accounts.
USAID's Three Program Pillars
The Economic Growth and Agriculture Pillar
The global economy has changed remarkably in the past two decades. With the end of the Cold War, a truly global marketplace for goods, services, technology and ideas has materialized, and the World Trade Organization has begun to establish fair and open markets as a common economic goal requiring international oversight. It is critical, both to the U.S. economy and global stability, that developing and transition countries find a way to participate and benefit from this process and that the benefits of globalization be broadly shared. Yet, more than 1.2 billion people live on less than a dollar a day; more than 800 million people continue to go to bed hungry; and more than 113 million children are not in school.
The assistance provided under this pillar will focus on creating economies that are viable over the long term.
To accomplish this, USAID will pursue the mutually reinforcing goals of promoting economic growth to reduce poverty and increased agricultural production to reduce hunger. The interrelationship and interdependence of economic growth, environmental sustainability and the development of a country's human capital will be highlighted within this pillar. Job creation will be essential to both goals in this pillar, especially through the promotion of microenterprises and agro-enterprises.
While human resource development, particularly basic education, and the environment have an impact on all three pillars, they are included with economic growth. This recognizes their essential link to economic development and USAID's efforts to address poverty and hunger under this pillar. Issues of environmental sustainability will continue to play a central role in the execution of USAID programs.
Special emphasis will be directed at integrating growth, agriculture and environmental objectives and concerns in a manner such that market forces play an increasingly important role in the Agency's strategic approach and in determining a program's long-term viability. Throughout these sectors and activities, the Agency will take advantage of new information technologies to accelerate advances. Activities funded will assist: the productive sectors, especially agriculture; the environment and energy sectors; human capacity development (including basic education); micro-enterprises; and improvement of the business, trade, and investment climate.
Funding will come from both the DA and CSD accounts. Given the importance of agriculture and basic education (especially for girls and women) in most recipient countries, USAID plans to increase its emphasis in these sectors. For example, this budget includes a proposed increase in basic education for children from $103 million in FY 2001 to a target of $123 million in FY 2002.
Using the Global Development Alliance model, as well as existing program approaches, the Agency will develop new initiatives, building the capacity of developing countries to meet the science and technology challenges of the 21st Century. A first step would involve expanded efforts in the application of biotechnology for reducing hunger and malnutrition. Complementary actions would involve strengthening of agricultural supplies which underpin production and marketing systems, such as for improved seeds, to ensure that small farmers benefit from the new technologies. Through the GDA, USAID will also consider new approaches to introduce and increase the use of cutting-edge communications technologies to transfer knowledge to poor farmers and emerging agribusinesses, so they can better respond to commercial opportunities presented by regional and global markets.
The Global Health Pillar
USAID groups its maternal and child health, nutrition, family planning, HIV/AIDS and other infectious disease programs, such as malaria and tuberculosis, within this global health pillar. USAID's longstanding investments in these programs have contributed to more children surviving to adulthood, longer life spans, and reduced fertility levels worldwide.
However, many challenges remain. Immunization levels for children in some countries are stagnating or declining, and millions of children continue to suffer from malnutrition. The HIV/AIDS pandemic is devastating Africa, and transmission is escalating in other regions. Many couples still do not have the means to choose the number and spacing of their children, and women continue to die in childbirth from preventable causes. This budget includes major initiatives to combat HIV/AIDS and other infectious disease, maintains funding levels to strengthen support for voluntary family planning, and builds on USAID's successful work in maternal and child health.
Through the Global Development Alliance, USAID will aggressively explore new global health partnerships. In addition, USAID will continue other successful alliances such as the Global Alliance for Vaccines and Immunization (GAVI), Polio Partners, the International AIDS Vaccine Initiative (IAVI) and the Micronutrient Enrichment Initiative, garnering support from local governments, private foundations and multilateral donors to combat dangerous diseases and protect health.
The Conflict Prevention and Developmental Relief Pillar
Given the rising number of collapsed states, internal violent conflicts and complex humanitarian emergencies in the post-Cold War period, some of which have become focal points of U.S. foreign policy, USAID will undertake a major new conflict prevention, management, and resolution initiative. This initiative will integrate the existing portfolio of USAID democracy programs with new approaches to anticipating crisis, conflict analysis, and comprehensive vulnerability assessments, and will provide new methodologies to assist conflicting parties to resolve their issues peacefully.
This initiative will also address ongoing efforts to seamlessly bridge and integrate foreign policy and foreign assistance in a way that accommodates both short-term operational and longer-term structural prevention needs. These new approaches will necessarily involve strategic alliances with institutions such as the U.S. Institute for Peace, the U.S. military, indigenous religious institutions dedicated to conflict prevention and resolution, and NGOs. This approach will require even closer collaboration within the U.S. foreign affairs community, especially the Department of State.
USAID continues to stand at the forefront of agencies around the world in its ability to respond to man-made and natural disasters. The request will enable USAID to maintain this capability (unique within the United States) to provide needed help rapidly when international emergencies occur.
Management
USAID, and its ability to perform optimally, has been seriously compromised for a number of years by ineffective management systems, particularly those related to finance, human resources, information management and procurement. Recently, progress has been made toward strengthening these systems despite difficulties caused by heightened security needs overseas, fewer staff and tight operating expense budgets. Nevertheless, significant work remains to be undertaken in carrying out necessary, sweeping reforms.
- USAID needs a financial management system which meets Federal accounting standards and provides the breadth of cost information to enable effective management of USAID's programs worldwide. The Agency has purchased, configured, tested and installed at headquarters a new core accounting system that will replace the Agency's outmoded systems. The system must now be installed in our field missions and linked to other management information systems, including our procurement system.
- USAID needs a secure information and knowledge management capability for its worldwide operations. The Agency is modernizing its information technology and telecommunications. These efforts must be continued on a priority basis with adequate funding so they do not become the limiting factor in the improvement of the Agency's other systems.
- USAID must meet a growing demographics-driven workforce transition. Enhanced workforce planning, recruitment and training efforts are designed to address the decline in the number of personnel with critical expertise to fill overseas posts and to improve the effectiveness of the Agency's staff. However, the Agency faces a massive challenge in this regard over the next several years. If not met, it will undercut all our other efforts at improvement.
- USAID needs to also improve its ability to procure and deliver services worldwide in a more timely manner. New and expanded training programs have been instituted with special focus on contracts and grants management, and requirements for a new, agency-wide procurement system have been prepared. Much, however, remains to be done.
In sum, it is imperative that USAID continue to aggressively confront the range of management issues still facing the Agency, especially those related to its overseas operations.
The importance that Agency senior management places on correcting management deficiencies and implementing further improvements cannot be overstated. Reforms will be undertaken, wherever necessary, to ensure that efficient and effective operating systems are in place and in use as quickly as possible. USAID will strive to ensure that adequate staff and operating expense resources are committed to achieving these reforms.
Regional Highlights
The following section briefly highlights some of USAID's key programs and areas of special concern where the Agency wants to concentrate resources. These are presented from a geographic or regional perspective.
Africa
Free and fair trade, addressing the HIV/AIDS epidemic, and building regional stability by deepening the foundations of democratic governance are at the core of U.S. national interests in Africa. Promoting broad-based economic and social development in Africa goes to the heart of American values concerning afflicted peoples.
A combination of poverty, infectious diseases, conflict, complex emergencies and natural disasters impede achievable prosperity and the promise of progress in sub-Saharan Africa.
Presently, 300 million Africans live on 65 cents a day or less. The HIV/AIDS epidemic, which claimed the lives of 3.8 million Africans last year, threatens to compromise economic, social and democratic gains. In addition, approximately one-half of sub-Saharan Africa is at serious risk of violent conflict and instability. Finally, with 200 million hungry people, Africa has a staggering need for agricultural development and, at times, food aid. USAID faces these development challenges, recognizing the reality of heightened security concerns and needs, fewer staff and limited program resources.
The FY 2002 program for sub-Saharan Africa will be anchored in HIV/AIDS and health, agriculture, strengthening institutional and human capacity, and the prevention of violent conflict. Stronger public-private sector partnerships in the United States and Africa will be used to promote economic growth, address the HIV/AIDS pandemic, and support the expansion of democratic governance.
Asia and the Near East
The Asia and the Near East (ANE) region is essential to U.S. national security and economic interests. More than half of the world's population live in ANE countries. The United States trades more with ANE countries than with any other developing region. This region is the second most important market, after Europe, for U.S. goods and services. The region contains 68% of the world's extreme poor, 54% of the world's child deaths (under age 5), and almost 50% of the world's illiterates. As a result, the region is the source of difficult and complex issues that, if not managed peacefully, could adversely affect the interests of the United States and its regional allies. These issues include peace and stability in the Middle East, proliferation of weapons of mass destruction, the spread of HIV/AIDS, economic crises, and increased terrorism.
USAID's priorities in the ANE region support economic reform and transparency in East Asia, promote more equitable economic growth and reduced poverty in South Asia, and seek to improve the supply and efficient allocation of water resources and employment opportunities in the Middle East. USAID will continue to support programs that promote family health and allow couples to achieve their desired family size, especially in the Middle East and South Asia.
USAID programs will also respond to humanitarian crises in the ANE region, support democratic transition and increased citizen participation, combat the spread of HIV/AIDS, facilitate access to clean energy resources, and protect vulnerable members of society.
Europe and Eurasia
In Europe and Eurasia, the United States retains its commitment to support peace and stability and help these countries develop closer ties with the West. USAID promotes partnerships between institutions in the United States and their counterparts, which brings additional resources and know-how to the region, reinforces the values and processes of market democracies, and helps to sustain progress after official assistance ends.
In the Balkans, USAID assistance last year provided crucial support to democratic elections in Croatia and Serbia, helping to bring a decade of political misrule and Serbian expansionism to an end. In Southeast Europe, USAID will continue to focus on reducing ethnic tension, promoting democratic processes and economic reforms, and speeding integration into Europe proper.
The northern tier countries of Europe have graduated from bilateral assistance and are on the path to achieving membership in the European Union. An innovative post-presence program supports a small number of wrap-up activities that complete work already underway as well as legacy activities, such as endowments, that support transition without relying on a local USAID mission.
In the countries of Eurasia, programs with non-governmental organizations, regional and local institutions, and small and medium enterprises broaden the benefits of transition and stimulate the demand for policy change at the national level. Anti-corruption efforts are integrated in all sectors of the program. There is greater attention to social impacts, especially to reforming institutions that deliver social benefits and services, expanding primary health programs, and introducing initiatives to control the spread of infectious diseases such as HIV/AIDS and tuberculosis. USAID energy reform programs enhance opportunities to secure U.S. commercial access and viable outlets for oil and gas resources. The major U.S. initiative, begun in 2000, to reduce the risk of proliferation of technology and weapons of mass destruction will receive continued funding. The new Administration is undertaking a series of foreign policy reviews, of which Russia will be the first. This review may result in changes to the U.S. assistance program over the near future.
Latin America and the Caribbean
The countries assisted by USAID in Latin America and the Caribbean (LAC) are the United States' nearest neighbors, and their economic, social, and political development have an extremely important impact on America's well-being. Americans benefit directly when the economies of developing LAC countries expand and their markets open. Since 1990, the number of U.S. jobs supported by U.S. exports to the region has increased by over 2.3 million. Illegal immigration to the United States, which is triggered by political instability and failing economies, is of concern to the United States because of the added pressure placed on domestic U.S. social services and the labor market. Over three-quarters of the illegal immigrants in the United States come from Latin America. Most illegal narcotics consumed in the United States come from the LAC region, with Bolivia, Colombia and Peru being major producers. An additional concern is the cross-border spread of communicable diseases such as tuberculosis and HIV/AIDS.
Protection of the hemisphere's natural resource base enhances the quality of life in the United States. Environmental degradation can be a major cause of regional instability and migration, as well as contributing to the growing intensity, frequency, and toll on life and property of massive natural disasters in the region.
USAID programs in LAC will continue to advance U.S. interests while helping to achieve greater prosperity throughout the Western Hemisphere. While trade has shown positive trends, gross domestic product (GDP) growth for LAC during the 1990s was not enough to reduce the absolute number of poor people or the inequity in income distribution. USAID activities in basic education, agriculture, environment, microcredit and policy reform contribute to economic growth. Significant progress has been made in the health and family planning area, although the accelerating transmission of HIV within LAC is particularly disturbing. Activities in family planning, health, HIV/AIDS, and child survival contribute to global health.
The United States is supporting democratically elected governments throughout the region, consolidating peace in Central America, encouraging emerging democracies such as Haiti, strengthening democracies that are threatened from within, such as Colombia and Ecuador, and supporting activities that enhance the likelihood of a peaceful democratic transition in Cuba.
USAID will continue to play a pivotal role in support of the U.S. efforts to reduce the entry of illegal drugs into the United States. USAID will help governments of key drug source countries improve the administration of justice to deal with traffickers, educate citizens about the dangers of drugs, and provide environmentally and economically sustainable alternatives to farmers.
Central Programs and Technical Centers of Excellence
USAID's central programs support all regions and advance all four pillars through activities that expand USAID's role as a leader, facilitator, and integrator of development assistance worldwide. In fact, in FY 2001 about 80% of the Global Bureau's core funds appropriated from DA and CSD can be directly attributed to programs operating in the four regional bureaus. The remaining 20% supports research on specific issues such as malaria control, HIV/AIDS or more general research and the development of best practices.
Many central programs serve as models, demonstrating how to more effectively engage the not-for-profit private corporate sector, NGOs, and the higher education community overseas. Central programs also sponsor much of the Agency's applied research and undertake major new initiatives and innovations. For example:
- In the area of global health, USAID took a leadership role in establishing mechanisms that reduced the incidence and spread of childhood diseases, such as polio and neonatal tetanus.
- USAID investments in agricultural research are supporting efforts to build increased levels of micronutrients (iron, Vitamin A) into staple crops consumed by the poor. While biofortified varieties will not be found in farmers' fields for four years or more, these first steps are path-breaking applications of new science (biotechnology) in agriculture.
- Regarding the role of women in development, USAID has promoted women's rights and increased public exposure to the issues of trafficking in women and children.
- In democracy and governance, USAID set up mechanisms that permit quick response for rule of law activities and elections following conflict.
USAID has a leadership role, in all regions, in responding to international disasters and providing developmental and transitional relief after a crisis. In FY 2000, USAID responded to 66 declared disasters in 63 countries. This included 46 natural disasters, 16 complex emergencies and 4 human-caused emergencies. Natural disasters affected approximately 154 million people and their livelihoods, and killed more than 45,000 people. From complex emergencies over the last two decades, more than 50 million people remain displaced and these emergencies have cumulatively claimed more than 4.8 million lives in countries including Angola, Burundi, Rwanda, Sierra Leone, Somalia and Sudan. Drought effected approximately 121 million people worldwide including India, Afghanistan and the Horn of Africa.
Complex emergencies continue to require the lion's share, over 70%, of International Disaster Assistance funds. In FY 2000, USAID provided 947,900 million metric tons of Title II emergency food aid to 32 countries. Over 30 million people were helped with these programs implemented by U.S. PVOs and the World Food Program's emergency operations. USAID, working in close collaboration with PVOs and NGOs, has a well-recognized ability to respond quickly and effectively to emergencies. USAID continues to strengthen follow-up capabilities after the initial relief effort, particularly related to responding to the political dimensions of crisis and transitions to democratic governance, including use of Transition Initiatives resources.
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Last Updated on: May 29, 2002 |
