Remarks by Ann Marie Yastishock, Deputy Assistant Administrator for Asia, at the Center for Strategic and International Studies

Tuesday, May 22, 2018
Building the New India: USAID’s Approach to Infrastructure

Thank you for inviting me to be part of this important discussion and on such a distinguished panel.

I serve as Deputy Assistant Administrator for Asia at USAID where I manage development programs and our Missions in India, Southeast Asia, and the Pacific Islands. I just returned from India last week so will share some recent observations.

The U.S.-India development relationship spans more than 70 years. In that time, USAID has partnered with the Government of India in overcoming some of the country’s most pressing development challenges -- such as acute food insecurity and inadequate infrastructure -- while also strengthening the government’s capacity to manage and implement its own development agenda.

USAID’s historical infrastructure-related accomplishments in India are significant: we helped establish the first Indian Institute of Technology (IIT, Kanpur); 14 regional engineering colleges; eight agricultural universities producing world-class research; 20 thermal and hydroelectric power plants; and over 1,000 irrigation systems. We also helped launch the first municipal bond for water supply and sanitation infrastructure development in India.

Our programming in India has consistently evolved to reflect the country’s development progress. What began as a traditional donor-recipient relationship has become a peer-to-peer strategic partnership.

Today, India has significant domestic resources; strong institutional capacity; and a development-focused government. These factors present opportunities for our development relationship to evolve further.

Still, while India has made significant development gains, the distribution of those gains has been uneven. There are, in many ways, two Indias: a burgeoning middle-to-upper class, and a large proportion of the population who have not reaped the benefits of the country’s growth. Our continued partnership with the government and people of India aims to generate broad-based, shared development, including at the state level. Infrastructure improvements are critical to achieving this inclusive development.

I’d like to talk for a minute about USAID’s approach to infrastructure. We generally do not invest in the direct construction of large infrastructure such as dams, pipelines, or ports. Instead, we build partner countries’ capacity to improve the regulatory and enabling environment to attract fair, sustainable infrastructure investments that do not lock them into a debt trap. We address binding constraints to investment such as a weak regulatory environment; constrained fiscal space; high rates of corruption; weak rule of law and contract enforcement; ineffective procurement processes; and insufficient human capacity. We also prioritize helping our partner countries mobilize their own domestic resources to more effectively engage with the private sector and other international actors to unlock new streams of infrastructure financing.

USAID also conducts environmental and social safeguard reviews of multilateral development banks’ infrastructure proposals to ensure that measures are in place to prevent or mitigate adverse effects to the environment and natural resources; harm caused by involuntarily resettling people; adverse effects on indigenous communities; and threats to physical or cultural resources, such as historic sites. USAID may recommend that the US Government abstain on or reject a proposal should these safeguards not exist or if we deem them inadequate.

USAID’s ultimate goal is to help partner countries become self-reliant so that they can lead and finance their own development, including mobilizing resources from domestic or other international sources. We are guided by the principle that foreign aid’s purpose is to end the need for its existence.

Across all of our infrastructure work, we prioritize building local ownership, engaging private enterprise, and mobilizing resources from domestic and international sources.

Now that I’ve described USAID’s approach to infrastructure development, I’d like to provide a few recent examples of the impact our work is having in India.

First, USAID has convened a partnership of seven microfinance institutions, or “MFIs”, to launch the “Microfinance Support Program” to help rural families across nine Indian states purchase reliable clean energy lighting solutions. In the last two years, the program facilitated loans worth $21 million which brought light to the homes and businesses of 1.8 million people. The program has proven profitable and the partner MFIs are now independently expanding the program to new areas.

Second, we have partnered with the private sector and Government of India to establish “Water ATMs” in Hyderabad that provide safe, affordable drinking water to 150,000 people living in the city’s urban slums. In a country where many people continue to face challenges to accessing affordable, clean water, these Water ATMs save lives.

Third, widespread open defecation in India causes the death of more than 500 children every day. USAID supports the Government of India’s national sanitation program which contributed to 141 Indian cities declared as open defecation-free in 2017 and the expansion of toilet access to 150 million people. Our work in the near future in support of this campaign will help states improve sewer infrastructure planning and prioritization, procurement processes, and project management.

Lastly, USAID supports the Government of India’s “Power for All” initiative, which aims to provide 24/7 power to all Indian households by 2020. To help achieve this objective, USAID strengthens energy-related policy and regulatory institutions; expands businesses’ and entrepreneurs’ access to finance; and enhances the country’s institutional and human capacity. USAID has supported the installation of 450 MW of renewables, saved 87MW, and leveraged $600 million in last five years. USAID also supported energy access to 1.7 million people through its programs.

In addition to working on infrastructure issues at the state and national levels in India, we also work on a regional basis.

We advance cross-border electricity trade, energy market formation, and clean energy access amongst Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan, and Sri Lanka. This project harmonizes policy, legal, and regulatory frameworks across the region and advances the interconnectivity of energy transmission systems. We have helped operationalize a 500 megawatt India-Bangladesh transmission link that is providing power to more than 10 million people; an MOU between India and Sri Lanka to develop a high capacity underground transmission connection; and the signing of an India-Nepal power trade agreement.

I should also note that in February, the State Department led the U.S. Government interagency to host the first US-Japan-India trilateral Infrastructure Working Group (IWG) meeting here in Washington to promote collaboration for transparent and accountable infrastructure development in the Indo-Pacific region. The Infrastructure Working Group focuses on four areas: developing a shared definition of best value and quality infrastructure; coordinating on regional infrastructure projects; improving policy frameworks; and expanding opportunities to partner with the private sector.

India faces unprecedented pressure to provide its fast-growing and quickly urbanizing population with access to energy, clean water, food, quality education, and health care. Safe, reliable, and advanced infrastructure lies at the intersection of these development challenges.

India has made extraordinary progress on its journey to self-reliance and USAID is proud to elevate our partnership with the people and Government of India. Thank you very much.

Washington, DC

Last updated: May 22, 2018

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