Beyond Assistance

1. International Consortium on Governmental Financial Management Beyond Assistance Highlights of the report of the HELP Commission to the President, Congress, and Secretary of State on foreign assistance reform. Tom Briggs, Executive Director, HELP Commission January 9, 2008

2. Commission Details • Membership • 15 appointed by leadership of the 2005-6 Congress • 6 appointed by the President in 2005 • 1 ex-officio, the Administrator of USAID, represented by Alonzo Fulgham • Term and Funding • Two years to complete work – December 7, 2007 deadline • $4 million appropriation • Sponsorship • Congressman Frank Wolf (R-Va) • Staff • 4 full-time professionals • 10 part-time professionals • 2 administrative • 2-4 interns

3. Operations • 18 meetings from February 2006 through October 2007 • 70 academics, practitioners, analysts, and government officials provided verbal and written input at meetings • Additional meetings with current and former secretaries of state, USAID Administrators, NSC staff, Members of Congress, Congressional staff, Gates Foundation in Seattle, and others • Travel to 18 countries to observe aid on the ground • Scenario planning workshop

4. Commission’s Vision In furtherance of U.S. national security and foreign policy goals and objectives, the HELP Commission’s vision is of a world without extreme poverty where people live in peace and realize human dignity, liberty, justice and economic opportunity.

5. “Beyond Assistance”? • Dr. Paul Collier, The Bottom Billion • Seriousness of purpose implies use of all available policy instruments: • Foreign aid • Security • Trade • Governance

6. Findings • The world has changed and U.S. assistance programs have not kept pace. • Foreign assistance alone is insufficient to help developing countries achieve long-term, sustainable economic growth. • Long-term economic growth and job creation contribute the most to sustainable development. • We need a clear and common vision for development across and throughout both branches of the United States Government. • An integrated approach to our government’s development assistance is needed. • We must play to our strengths and work with others.

7. Recommendations • Rewrite the Foreign Assistance Act. • Do more to help developing countries build vibrant private sectors. • Create a new business model and engage new non-governmental partners. • Align America’s trade and development policies. • Strengthen the management capacity of our nation’s assistance agencies. • Reorganize all U.S. international affairs functions • Determine funding from the bottom up, based on the needs and commitment of developing countries and on the national and security interests of the United States.

8. Additional Recommendations • New relationship between the executive and legislative branches of government • $500 million Humanitarian Crisis Response Fund • $500 million Foreign Crisis Fund • Simplify the appropriation account structure to improve accountability and authority • Clarify DoD’s role in development assistance • Use public diplomacy and branding more effectively • Emphasize infrastructure and agriculture

9. Headlines • Boldest – duty-free, quota-free access to U.S. market for world’s poorest countries • Insightful – Grand Bargain to reform the Executive-Legislative relationship • Wonkiest – four-way tie • HR • Procurement • Unified policy, budget and evaluation system • Abolish the OE account • Difficult – two-way tie • Structure • Funding

10. Funding All commissioners would agree with the statement: “Foreign assistance resources should be increased when and if the reforms recommended in the report are implemented and proven successful.” All but two would agree with the statement: “Foreign assistance resources should be increased if the reforms recommended in the report are implemented.” Most would agree that foreign assistance resources should be increased. The key message is to spend enough to accomplish America’s development and humanitarian goals.

11. Commission’s Objectives for Structure • Elevate development relative to defense and diplomacy • Vest responsibility in a single organization • Single USG voice • Consolidate policy formulation, program design, implementation, operations in one organization • Provide access to all the tools necessary for development • Improve accountability to the Congress • Enable strong partnerships with private sector and NGOs • Root policies and programs in reality

12. Five Common Structural Objectives • Reduce the number of agencies responsible for development • Rewrite the Foreign Assistance Act • Improve interagency coordination • Link authority and responsibility • Create a new structure for foreign assistance activities

13. Three Alternatives • Majority View: International Affairs Department • Four members: Department of International Development • Minority View: State Integration

14. International Affairs Department:The “Smart Power” Department • Create a “super-department” to bring together all of the skill sets and resources needed to successfully execute a “smart power” strategy. • All non-defense foreign policy and operations—the 150 Account • Recognizing that different organizational cultures and skill sets needed for a successful “smart power” strategy in U.S. foreign affairs, distinct “disciplines” or “forces” will be created, and then coordinated through an unified structure directed by the Office of the Secretary. • The sub-cabinet departments will organize, train & equip • The regional and country groups will carry out operations • Ambassadors will be the “commanders” of this unified structure, and will be drawn from each of the sub-cabinet departments and assigned to the regional groups by the Office of the Secretary. • There is an existing organization structure like this—the Dept. of Defense. We can use the lessons learned from DoD to build the “International Affairs Department”. • National Security Act of 1947 • National Security Act Amendment of 1949 • Goldwater-Nichols Act of 1985 • We are only learning from the organizational structure. We ARE NOT turning development and foreign affairs into the military or DoD! • This new Department of International Affairs IS NOT the Department of State, although it subsumes its functions, along with those of USAID, MCC, and most other organizations funded exclusively by the 150 Account.

15. International Affairs Department Secretary of State Key Plan, Program, & Budget Sub-Cabinet Dept. (Train & Equip) Regional Operations Groups

16. Department for International Development • Cabinet-level department • Elevate development and ensure complementary relationship with diplomacy and defense • Would include MCC, PEPFAR, humanitarian, and development activities • Regional and functional bureaus • ESF and IMET would remain at State, with a requirement for joint programming with DID • Coordinating function in the White House, probably as a joint function of the NSC and NEC

17. State Integration • Rationale • Emphasizes post-9/11 threats • Will facilitate links to new actors in development • Builds on existing State Department activities • Organization • Headed by Deputy Secretary of State • Under Secretaries would head functional areas such as Economic Development and Trade; Disaster Relief, Refugees, Migration and Humanitarian Assistance; and Political Affairs, Democracy Support, and Public Diplomacy • Subsume MCC, TDA, and the regional development banks. Peace Corps, OPIC, and Ex-IM could stay independent.

18. Recommendations for Policy Wonks • Human resources • Procurement and contracting • Unified policy, budget, and evaluation system • Abolish the OE account

19. The Grand Bargain • Re-engage the authorizers. The FAA has not been re-authorized since 1985 and has not had a comprehensive re-write since enactment in 1961. Recent authorizations have all been in appropriations’ bills. • Adopt common procedures for accounts, agencies, and bodies of the Congress itself • Consolidate the 39 foreign assistance accounts • Make the Congressional Budget Justification process meaningful • Consider a consolidated 050/150 budget • Provide joint guidance from the NSC and OMB to agencies • Align the priorities of the Executive and Legislative using the budget process • Technical improvements (single point of contact, unified accounting systems, M&E)

20. Duty-free, quota-free Access • The United States should offer duty-free, quota-free access to its market for: • MCC-eligible countries; and • Countries with 2006 nominal GDP per capita less than $2,000. • The reason is that to do good, we must first stop doing harm. • We collected $20 million more in duties from MCC eligible countries in 2006 than we provided in the 2007 MCC appropriation. • We, and the EU, impose the highest tariff rates on the poorest countries. • And, please see the numbers on the following slide:

21. Trade Source: The Trade Partnership (Washington, DC) from U.S. Census data.

22. Special Recommendations • Enhance job creation and poverty reduction through SME technical assistance and finance • Development Applications Research Institute • More local purchase of food aid • Support agriculture, including value chain development • Build human capital through education

24. Remember role – not the Congress, not the Executive • Deal with conflict early in process • Limit size of Commission • Stand the pyramid on its base (funding and staff) • Provide sufficient time • Ensure enlightened leadership • Don’t waste time fighting the standard governmental processes