Obama plans to elevate USAID?

The rebirth of USAID

By Patrick Cronin

May 4, 2010 | The Daily Caller

The new White House plan to "elevate development as a pillar of national security strategy, equal to diplomacy and defense" may spark the biggest political fight over development since Jesse Helms made the head of development report to the Secretary of State. The impending brawl may not be immediately obvious. After all, the Obama administration's goal of boosting development resembles the '3-D' triad of defense, diplomacy, and development crafted by the George W. Bush administration. But whereas the Bush administration sought to tightly circumscribe the U.S. Agency for International Development (USAID), the Obama administration seeks to restore USAID to its glory days of the 1960s.

The restoration of USAID will take herculean reform and uncommon patience, if it is even possible at all. No doubt leaking the Presidential Study Directive this week, in advance of the National Security Strategy and months before the completion of the Quadrennial Diplomacy and Development Review, was deliberate. The Obama administration (or at least a portion of it) figures it can stake out its agenda (and perhaps claim on resources) before the rest of the interagency consumes all of the policy and budget oxygen inside the Beltway. As with development itself, however, this directive will only be as good or bad as its implementation, and on that score there are many questions that will need to be addressed.

The directive's opening paragraph provides the best short mission statement for development, which it notes "is essential to our security, prosperity and values." Moreover, it is keenly attuned to the global security environment, which is marked by economic integration and political fragmentation; emerging powers and fragile states; globalization opportunities and transnational threats. Consistent with other keystone documents of the Obama administration, the directive emphasizes the need for proactive development engagement in order to build capable partners.

All of this is exemplary. The hard bits are its agenda are embedded in the rest of the directive, which calls for a deliberate development policy, a new business model, a new architecture, and a new compact with Congress.

A deliberate development policy is prevented, as the document observes, by the nation's 1,000 extant development goals. Those goals represent myriad different interests and political bargains, as the United States abandoned a straightforward model of half a century ago, back when USAID mission directors largely determined how to spend tax dollars in less developed countries. Some of the results were spectacular, including paving the way for economic growth and reform in the Asian tigers but also elsewhere like Chile [and India! - J]. This most laudable of goals in the directive will face the toughest of battles, because it will require many centers of power in Washington to cede authority back to USAID. The problem is not so much USAID as the proliferation of goals and authorities and earmarks that have often satisfied Washington's powerbrokers at the expense of promoting development around the world.

Similar problems will attend the call for a new business model. The directive focuses on the need for greater collaboration with the private sector and civil society, leveraging multilateral institutions such as the World Bank, a better division of labor among major donors, and more disciplined analysis to determine what programs work. In a time of financial and economic crisis in the United States, the effort to spur a better business model within USAID should receive plaudits from both sides of the political aisle. But here's the rub: will USAID, even in exchange for renewed authority over the nation's development programs, and policy, agree with Congress on the governance and transparency necessary to birddog long-term development spending?

The directive assumes the acquiescence of the State Department, which hitherto has made clear that development programs must be conducted within the context of policy made at Foggy Bottom. Will State loosen its reins over policy, including development policy, in order to give USAID the autonomy to work effectively and make America a global leader in development? There are sound reasons for letting development work free from much of the short-term thinking of foreign policy. At the same time, will the State Department and the White House, for that matter, really have confidence that USAID will be there when it is needed to stabilize conflict and post-conflict states or when development is a useful part of a whole-of-government response? The directive includes paragraphs on each of these two points. The forthcoming QDDR report in September will be telling, as least with respect to how far President Obama will go in making USAID more independent once again.

The White House directive's push for fostering "the next generation of emerging markets by enhancing our focus on broad-based growth and democratic governance" has an appealing sound to it, and surely it is consistent with supporting a liberal international order consistent with U.S. values. But the same directive later focuses on the need to "hold long-time recipients of U.S. assistance accountable for achieving development results." The emphasis on economic growth is excellent and the over-parching logic is internally consistent. But 2010 is not 1960, and the Western development model is increasingly under assault by "the Beijing consensus." That consensus refers to the current situation in which an authoritarian and mercantilist China free rides on our international order and cherry picks resource-rich countries, which in exchange for supplying resources to feed the voracious Chinese market appetite, China provides major infrastructure projects without other conditionality.

But the fourth and final hurdle will be money. The brief call for a new engagement with Congress only hints at the battle royal to be fought over scarce resources. In addition to clashing over a new Foreign Assistance Act, the nation's budgetary realities—including a $12 trillion national deficit, an anemic economy with high unemployment, and the retirement of Baby Boom retirement—raise questions about where new development dollars will be found.

None of these monumental challenges detract from an excellent capstone document about where the administration would like to steer development. But in glossing over some of the major obstacles along the path, it begs for a new national debate on development.

Patrick Cronin is a Senior Advisor and Senior Director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS).