ADMINISTRATOR POWER: Good afternoon, everyone. Thank you, Tine for that introduction, and for your many years of service at USAID across several posts and regions.
I am thrilled to be followed by Representative Joaquin Castro, whose leadership on the Foreign Affairs Committee has been nothing short of exemplary. He has been both a champion of America’s foreign assistance, and a reformer, helping us become a more diverse Agency at home and a more equitable force for good in the world.
I also want to thank David Berteau and Paul Foldi for inviting me to speak to you today, and for their leadership of organizations upon which the U.S. government so thoroughly depends to fulfill its charge to our citizens and our allies.
USAID, in particular, could not fulfill its mission without the commitment and partnership of the people in this room.
That’s what I’d like to spend my brief time speaking to you about today: our shared mission.
When it comes to the relationship USAID has with the companies that help implement its programs around the world, the conversation tends toward bright lines and distinctions – direct hires versus contractors; U.S.-based development companies versus local organizations.
Perhaps at no time has that distinction meant less than earlier this year when Kabul fell to the Taliban, and those Afghans who had supported the U.S. during its involvement in Afghanistan were suddenly at risk of retribution. Would the Taliban respect the same lines that we drew internally – would they care about the difference between a Foreign Service National or someone who helped implement a USAID project?
That’s what I mean when I say we share a mission –this summer we worked together to try to get imperiled Afghans evacuated, we continue to work together on behalf of the many vulnerable people who still wish to leave, and, even against the grim backdrop of Taliban rule, we continue to try to find ways to support Afghans as they pursue their aspirations. Elsewhere, we share the same goals as well: we want to help Haitians recover after an earthquake and build back better infrastructure and institutions. We want to help Guatemalan companies purchase goods from Guatemalan farmers so their children are less likely to flee in search of opportunity. And we want to help South African health workers administer South African-made COVID-19 vaccines to protect their populations and reduce their dependence on production capacity abroad.
Our shared goal in development, whether you work for a development agency, for a non-profit, or at a private company, is to help populations prosper and live lives of dignity, not dependence. That is what partner nations ask of us, it is what sits at the heart of country strategies and program designs – and it is what gets most of us out of bed each morning.
The question is how to do that not just effectively but sustainably – so that the welfare gains that arise from a program don’t evaporate once a contract ends.
What we know, after decades of effort and evaluation, is that “locally-led development “support(s) local institutions in the most effective manner,” “nurtures sustainability,” and “prioritizes the perspectives and preferences” of those we hope to serve –“recipient governments, civil society organizations, and host-country professionals.”
Those aren’t my words; they are yours, drawn from a white paper based on the experiences and insights of Council members.
And what it signals is that, after years of debate and rhetoric, some of it quite pointed, there is now a broad recognition that local actors are best positioned to drive their countries’ development. That’s a view shared not just by development practitioners, but by President Biden, Vice President Harris, and lawmakers from both sides of the aisle on the Hill. It also stands in contrast to other models of development practiced by the People’s Republic of China, which is conducted between States.
Just yesterday, I hosted a ministerial designed to confront the latest challenge in our fight against COVID-19 – turning the vaccine doses that arrive on the tarmac of partner nations into actual vaccinations. As the supply of global vaccines has finally begun to catch up, many countries now need the support to distribute and administer them to their populations. Part of that effort involves strengthening cold chains and recruiting more health workers. But part of it is also battling the vaccine hesitancy that virtually every country on earth, including the United States, has had to confront. If ever there were a development challenge that required an understanding of local history and culture, trusted partners and messengers, an inherent understanding of how people consume news and information – this is it. And it might just mean the difference between whether we win the race against this pandemic or whether it continues to endure.
So the question isn’t whether we should prioritize locally-led development; the question is how we can successfully do it together. Because despite ambitious targets, and initiatives prioritized by several of my predecessors, the percentage of USAID dollars going to local partners remains stubbornly where it was a decade ago, at approximately six percent.
A big part of the reason is that working locally is genuinely hard. For USAID to authentically engage with local partners – to listen to them and understand the context in which they operate and co-design programs and awards with them takes time. And when the same time is involved in issuing a $100 million award versus one that is $10 or $1 million dollars, the members of our fairly small contracting officer team are understandably incentivized to go big.
As you know first-hand, USAID can also be a demanding partner; regulations meant to limit fraud, waste, and abuse lead to significant regulatory burdens that can be tough to manage for local institutions. Few local organizations have the teams necessary to churn out the 40-page proposals needed to bid on a new project. And even if organizations do win awards, a sudden influx of government money can overwhelm a small organization’s balance sheet, or cause it to expand too quickly for its long-term health.
All these challenges are real. Together they represent the significant gravity that pulls against our ability to invest in partner country institutions and organizations. But while daunting and the source of consternation for Administrators before me, I do believe we can make meaningful progress.
As I mentioned in a speech at Georgetown last month, we intend to staff up USAID’s depleted foreign service ranks, including by adding the contracting officers on which so much of our push for local partnerships depends. We’re also going to grant permanent authorities to our foreign service nationals to serve as contracting officers, which will help us develop lasting expertise about local organizations and businesses even as our expat staff rotate onward to new Missions.
This boost in staffing will also allow us to support organizations to overcome the paperwork and reporting burdens they encounter, giving us the flexibility to offer more, smaller awards.
But we’re also working with the White House and our allies on the Hill to review our risk posture, reporting requirements, and to push for the patience required to work with local partners. A major case in point is the Centroamérica Local initiative – with congressional support this effort will set $300 million aside for us to work directly with local organizations in El Salvador, Guatemala, and Honduras over the next five years.
Finally, there’s the question of what “local” truly means – how do we define what we mean by a local organization?
Last month, I had the chance to travel to Moldova, where, amidst showing support for one of the world’s democratic bright spots, I got a crash course lesson in Moldovan wine. Although the country has been making wine for 5,000 years—it sits on the same latitude as Burgundy and Bordeaux – it was, until recently, largely a supplier of inexpensive bulk wine to Russia.
But thanks to a significant award granted to Chemonics, the sector has been transformed into a source of high quality vintages that now make their way across the EU. The wine industry now accounts for five percent of all of Moldova’s exports, and helps provide revenue to over 200,000 farmers.
At nearly every stage of this programming, local experts and partners were at the forefront of the effort. Local wine experts wrote white papers and helped usher in policy proposals and foreign direct investment. Local companies developed marketing and communications campaigns. And now, the industry is now being sustained entirely by local expertise. It also won more prestigious wine prizes last year than competitors from Argentina and New Zealand.
That work, it would seem, is entirely in line with the goals we share—but does it qualify as local development?
To answer this question and lift our sights on what we hope to accomplish, we developed not one, but two targets. Our first target aims to drive 25 percent of our assistance directly to local partners, so that U.S. taxpayer dollars flow directly to the economies – not the governments, but the economies – of the countries we partner with. We have to be honest that what truly helps local institutions thrive is not just expertise or guidance from expats – these days often delivered over zoom rather than in-person – but money and the leadership experience that comes from managing people and programs.
What we care about, ultimately, is not just hitting targets but delivering the sustainable development gains we all seek. We care about impact, not just accounting. And in the past, we’ve seen the flawed incentives and unexpected consequences that can accompany grand new goals. That’s why we established a 50 percent Local Voices target, so that half of every dollar we spend would put local communities in the lead of projects that impact their lives.
So when it comes to accounting for the Moldovan wine industry program, or direct cash transfer programs administered by an overseas nonprofit, or even the work of diaspora organizations – efforts that are not local by definition – the key question will be, are local organizations setting the priorities of the program, even if they are not the prime contractor?
These targets have already, in large part, been informed by conversations our teams have had with all of you, but as we shape them into guidance that reaches each of our Missions, we hope we can continue to rely on your feedback and support.
Whether it is helping establish private tuberculosis service providers in Nigeria, building up Jordan’s tourism industry by training hotel and hospitality workers, or working with the private sector to set up job-training facilities in violence-plagued districts in El Salvador, we’ve seen our implementing partners intentionally design programs with local communities that deliver real results and lead to clean handoffs from implementing partners to local organizations.
That is the inclusive development model we hope to replicate with you, throughout the world. That is the expertise and spirit of partnership we hope you bring to this effort. And that is the way we will reach our shared mission, together.
Thank you.