Brookings: Topics - Foreign Aid

Good Data: The Foundation of Open Government

Sally P. Paxton and George Ingram — Wed, 22 May 2013 14:36:00 -0400

It is not often one gets excited over a dry, hard-to-understand government memorandum, but the newly released executive order, Making Open and Machine Readable the New Default for Government Information, and its accompanying memorandum are grounds for applause. The open data and transparency community, both in Washington and internationally, have been quick to give much deserved praise for this effort to make U.S. government data truly open and accessible.

Led by U.S. Chief Technology Officer Todd Park and Chief Information Officer Steven VanRoekel, this policy makes open government and transparency core aspirations of the administration. It contains specific steps for agencies, including 1) making data readily accessible and useable, 2) using common, open standards; 2) modernizing information systems; 3) sharing best practices; and 4) reporting progress. As characterized by the Sunlight Foundation, the policy "signals a new era for open data in our government”.

This new policy applies to all executive agencies, with some exceptions for national security systems. For those of us focused on foreign assistance, however, the question is what it will mean for aid information – and more importantly – for improving our aid effectiveness?

The quick answer is quite a bit. If these approaches are adopted and implemented rigorously by U.S. agencies administering foreign assistance, it could pave the way for a revolution in the way aid information is shared and used throughout the delivery chain. Overall, this new policy strengthens the chances of the U.S. government delivering on its commitment to the International Aid Transparency Initiative (IATI), which U.S. agencies are beginning to implement, but whose progress has been very slow. The Office of Management and Budget Bulletin, published in October 2012, made some important steps forward for U.S. reporting on foreign assistance. By comparison, the executive order is a leap forward. Why? Here are some highlights:

For the first time, data will have to be in “open and machine-readable formats”, such as XML, the format that IATI uses. This is hugely important for ensuring that the data is as accessible as possible for all potential users. To date, the U.S. has only published partial foreign assistance data from two U.S. agencies – the U.S. Agency for International Development and the Millennium Challenge Corporation – in the machine-readable IATI XML format, so the new executive order should provide a strong impetus to kick-start progress in other agencies. The importance of machine-readable formats will also be reflected in how donor agencies perform in this year’s 2013 Aid Transparency Index. Data that complies with the IATI standard – in machine-readable, XML format – will be deemed most transparent, as recognized by the U.S. commitment to this internationally comparable data standard.

Agencies now have to support “downstream” users and systems, paying attention to how our own systems maximize information interoperability and accessibility. This means that U.S. systems need to take into account other complementary initiatives, such as IATI. It is therefore a prime opportunity to build IATI compliance into our systems. This supports IATI’s aim of “publish once and use often” for different purposes and different users. So, when doing system upgrades – as recommended in a number of reports, including by the General Accountability Office – we need to be smart about maximizing our IT investments.

Deadlines matter and the executive order sets them. Transparency commitments, such as the Foreign Assistance Dashboard, are great concepts but their implementation has been problematic. Almost two and a half years have passed since the Dashboard’s creation and it is still largely incomplete. It is encouraging, therefore, to see the executive order include the development of a “Cross-Agency Priority” (CAP) goal to track implementation progress with metrics and milestones. This should build on the goals set by the U.S. implementation schedule for IATI by urging agencies to produce good quality, IATI-compliant data.

Best practices will be shared online. Such a repository of agencies’ tools and methods helps us all solve problems and be more effective and efficient. To date, 37 official international donor agencies have signed IATI and 22 have begun publishing to the IATI standard. The sharing of concerns, system limitations and data issues have already proven to be useful in easing and speeding the process of adaptation to open data for all participants. The same holds on the U.S. domestic front. With over 25 U.S. agencies involved in some aspect of administering foreign assistance, it makes sense to bring all agencies into a common learning space to foster “government-wide communities of practice”.

This new approach to open data is both visionary and detailed, and we hope the data starts flowing soon. In the spirit of this new policy, we should embrace IATI as best practice in open aid information and learn lessons from others who have piloted this initiative before us. The president has set the goal of U.S. leadership in open data. It is now the task of the aid transparency champions within the administration to see this through to fruition.

Authors

Sally P. Paxton
George Ingram

Image Source: © Jerry Lampen / Reuters

Why Global Education Financing Must Be Part of Europe's Financial Transaction Tax Revenues for Development

Sarah O’Hagan and Rebecca Winthrop — Wed, 01 May 2013 14:17:00 -0400

As the financial transaction tax (FTT) becomes part of the European political landscape and moves its way through EU member-state legislatures, the use of a percentage of tax revenues for development – and specifically for basic global education needs— remains highly uncertain.

The 11 eurozone countries that got the green light from EU finance ministers in January to move forward with a coordinated tax on financial transactions could deliver as much as €35 billion for their national budgets. But the clear consensus shared by these 11 nations— which collectively represent two-thirds of the EU’s economy— on the timeliness and necessity of implementing such a tax now is not equally matched by a consensus on allocating part of the revenues to international development, let alone education. This is an unfortunate state of things given that the idea of using part of the revenues to support global development was a big reason for the huge social movement in support of the tax.

The backdrop to this uncertainty is the austerity agenda being pursued by many governments, in which foreign aid budgets are under pressure. As a consequence, foreign aid to global education risks falling faster than overall aid levels.

To date, only one of the vanguard countries in the FTT movement, France, passed its own FTT in mid 2012 and committed to allocate part of the revenues to development and climate finance. At the time, many called for 50 percent of FTT revenues to be dedicated to overseas development assistance and climate finance, but that figure soon dwindled to 10 percent, and ultimately 4 percent, for health and environmental projects. The ray of hope is that France has expressed its willingness for the EU FTT to also be partly allocated to development and climate finance, and is currently gathering support.

Civil society groups in France and in Europe generally are more effectively mobilized within the health and environment sectors, and are comparatively weaker on the education front. Yet given that global education is a sine qua non for successful economic development, it’s vitally important that global education activists in France and elsewhere not only mobilize within their countries to earmark revenues for development-- including basic education— but also collaborate across the larger European landscape to set a precedent for the use of financial transactions taxes around the world. An EU financial transaction tax for development could indeed put more kids in school and improve their learning outcomes in developing countries.

The European Union, via its member states and the European Commission, is among the largest donors to global education in the world. But the recent OECD Development Assistance Committee data release revealed a decrease in official development assistance for the second year in the row with significant cuts in countries like Spain and the Netherlands. And an agreement among EU heads of state at the February 8 European Council for the 2014-2020 EU budget is not going to fill this gap. In fact, the budget froze the portion earmarked for development at 2007-2013 levels, leaving the EU far from its commitments to reach 0.7 percent ODA/GNI by 2015.

Another worrying fact is that global education may not be a priority sector for the EU in many countries moving forward according to early word from several developing countries partners.

For low-income countries that simply cannot grow and improve their basic education systems without external financing, a decrease in aid flows without a compensating or greater infusion from innovative financing such as the financial transactions taxes, spells disaster. That is why, in addition to pushing donors to respect their commitment in developing countries to aid, the education community should do all it can to ensure that newly enacted financial transaction taxes allocate part of their revenues to global education.

If these examples are indicative of the way financing for global education has worked to date, they amply underscore the patchwork approach that even pieced together will still leave students in developing countries falling behind.

Authors

Sarah O’Hagan
Rebecca Winthrop

Image Source: © Darrin Zammit Lupi / Reuters

Fund - Don't Cut - U.S. Soft Power

Michael E. O'Hanlon and Gen. David Petraeus — Tue, 30 Apr 2013 00:00:00 -0400

The president’s budget proposal is now on the streets of Washington, D.C. Currently, it would protect funding for the State Department and the Agency for International Development and related activities from further cuts. The combined annual budget for development aid, security aid and diplomacy has averaged close to $60 billion over the past half decade. That is now slated to decline to about $50 billion, partly due to reduced war-related costs. But this amount could come under intense scrutiny. Moreover, if there is no grand bargain between the president and the Congress, sequestration could force reductions of a further 10 percent.

Such an outcome would be bad for our nation’s security. As each of us has testified on Capitol Hill in past years America’s ability to protect itself and advance its global interests often depends as much on its “softer” power as it does on our nation’s armed forces. For example, though Latin American countries were themselves primarily responsible for their progress, the headway many of them made in stabilizing their countries in recent years has been a big plus for American security, too — and American aid had a role in that progress. That is part of why we have supported a budget deal that would repeal sequestration and achieve most further deficit reduction through savings in entitlement spending with similar increases in revenue generation. Implicit in our approach was the thinking that lawmakers should avoid the temptation to gut foreign aid just because it generally lacks a strong constituency in the United States.

America’s spending on development and diplomacy and security aid — the so-called 150 account — has strengthened under Presidents George W. Bush and Barack Obama. That has been a positive and long overdue development. Funds for diplomacy and development were starved in much of the 1990s. Some of the reductions in that earlier period were warranted, admittedly, as aid then was not always as productive as it might have been.

Today, we are arguably doing a good deal better. Various forms of development assistance and aid have, in fact, produced impressive results on a host of fronts in recent years. The President’s Emergency Plan for AIDS Relief, a major initiative of Presidents Bush and Bill Clinton and now President Obama, has played a significant role in helping to turn the tide against the HIV/AIDS epidemic — even if more work remains to be done. Development assistance has also helped more than 600 million people move out of extreme poverty, achieving one of the United Nations Millennium Development Goals several years before the 2015 target date.

Moreover, as John Podesta has recently written, in this century alone, aid has helped reduce the global childhood mortality rate by one-third — impressive, even if only halfway toward the U.N. goal for 2015. The maternal mortality rate has been reduced by almost half, as well. And progress has been seen in other sectors — such as agriculture, energy and other realms, including many in the combat zones where each of us spent considerable time in the past decade.

America deserves considerable credit for much of this progress, as the U.S. is the world’s largest aid contributor, at roughly $30 billion in 2012. The United Kingdom, Germany, France and Japan round out the rest of the top five donors, each providing from $10 billion to $15 billion a year. But relative to our economy’s size, America does not do more than its fair share; it provides just 0.19 percent of gross domestic product in development aid, similar to Japan’s level but less than half that of the three big European donors listed above, and less than a third the U.N. goal of 0.7 percent of GDP. Private donations improve our net national position somewhat, but only to an extent. The State Department budget is still less than 5 percent of the military’s — and the number of Foreign Service officers worldwide is less than half the number of soldiers in a single Army division.

Given our military contributions to international stability and the global economic growth that results from that stability in various areas, American foreign aid doesn’t need to grow substantially. But it should not be cut further. Consider some of the ideas we might want to consider in the years ahead. These should not be unconditional offers of help but would require the right kind of cooperation from key nations abroad whose future stability is central to our own security:

A possible deal to help Egypt revive economic growth and service its debt after a two-year economic downturn following its Arab Spring; this would be contingent on President Mohamed Morsi respecting the Egyptian constitution and helping us with Middle East peace;

A possible proposal to help Pakistan reinvigorate its energy sector, which currently holds back the country’s growth and compromises its quality of life; this would be contingent on Pakistan contributing more to security in the region and to pursuing reforms that reduce disincentives for significant private initiatives in the energy arena;

A major push with other donors to help countries like the Democratic Republic of the Congo reform and strengthen their security forces;

Aid for transitional governments in Libya, Yemen and Mali, and perhaps someday Syria, to get on their feet so they can stabilize, develop security forces, police their own territories and prevent terrorists from establishing sanctuaries;

Ongoing help in future years for Afghanistan’s government provided that it takes steps toward better governance and a sound election in 2014.

This agenda need not break the bank; even taken together, development aid and assistance and these initiatives would not remotely add up to another Marshall Plan. But this discussion suggests that our security will be improved by sustaining foreign aid in the years ahead rather than by making further cuts.

Authors

Michael E. O'Hanlon
Gen. David Petraeus

Publication: POLITICO

Image Source: © Akhtar Soomro / Reuters

Why Congress Should Care About the International Aid Transparency Initiative

George Ingram — Wed, 17 Apr 2013 15:41:00 -0400

As the long-dreaded sequestration process begins to set in, U.S. government programs that have already been feeling the heat of budget pressures are now starting to feel the pinch. Across all agencies and departments, there has never been such heightened vigilance to determine the quality, value, and effectiveness of taxpayer-funded programs in order to save them from landing on the proverbial chopping block. U.S. foreign assistance is no exception, and in fact, is likely to be a popular target despite notable progress over the past decade in how aid is delivered.

One basic tool to help circumvent arbitrary and needless cuts is to make information related to foreign assistance transparent, accessible and comparable with the activities of other international donors. Congress has the important responsibility of choosing how much to allocate for activities that seek to lift millions out of extreme poverty, fight disease, spur growth and restore human dignity. In this challenging budget environment, that responsibility is of even higher consequence, with the potential to affect lives all around the world, either for the better or worse. But to make informed decisions, Congress needs to have at its disposal comprehensive, reliable data that is timely and up-to-date.

The Foreign Assistance Dashboard— a public website launched a little over two years ago by the Obama administration to examine this data— demonstrates a strong commitment to aid transparency. However, compliance from agencies involved in U.S. foreign assistance has been slow; the site still only has partial information (budget plans, obligations and expenditures) for a couple of agencies (USAID and Millennium Challenge Corporation) and just planning data for the State Department, leaving out more than a dozen others as well as critical program and project data that lie beneath the aid-flow surface.

The U.S. made another major commitment to the transparency agenda at the 2011 High Level Forum on Aid Effectiveness in Busan, South Korea, by joining the International Aid Transparency Initiative (IATI). Meeting the IATI commitments, particularly the publication of comprehensive and timely foreign assistance information, is incomplete and moving slowly.

Congress needs to understand that the dashboard and IATI are the tools it has been searching for. Members continuously complain about the opaqueness of foreign assistance – how much assistance is the U.S. providing, to what countries, for what purposes, in cooperation with whom, to what effect? Where is the information to explain to constituents how their tax dollars are being spent? Together the dashboard and IATI will provide this information.

Even more importantly, while there are varying opinions over the best uses and purposes for foreign assistance, members of Congress, Republicans and Democrats, are united in caring that foreign assistance dollars are used well – that tax dollars are not wasted and that the assistance does help lift individuals and countries from poverty and promote U.S. foreign policy interests.

IATI is a critical tool in contributing to the effective use of foreign assistance funds – and not just government provided assistance, but also that which is provided by private entities such as NGOs, foundations and corporations. It is currently the only place for comparable aid information. While the dashboard is a valuable domestic resource, IATI allows a wide range of stakeholders to know what the U.S. government is doing alongside what others are doing. This is the full aid picture and what recipients want to know on the ground.

As of April 2013, 39 government and multilateral donors, and over 100 private organizations, have committed to IATI. When fully operative and with timely and comprehensive data from all donors, we will have the ability through one website to find all donor activity in a particular sector and a particular locale in a country – a virtual one-stop-data-shop for foreign assistance. So how will this improve aid effectiveness?

Let’s say you are: (1) USAID contemplating investing scarce assistance funds in education in region X of country Y; (2) a congressional staffer whose boss has asked whether donors are helping to expand education opportunities in that region; (3) an NGO contemplating working in that region; (4) a finance ministry budget expert in country Y trying to figure out which school districts are in the greatest need of resources in the next fiscal year. IATI will provide the data to help answer these questions.

Through IATI, USAID will know which other donors are engaged in the region, at what level of funding, with what specific focus, and with whom it might coordinate. The congressional staffer can tell his member what donors and at what level education is being assisted. The NGO can tell if this region is overrun by its sister organizations or ignored and with whom it might partner. The ministry budget expert can better allocate scarce resources and query the education ministry staff as to whether it is integrating donor activity into national education plans.

The administration is to be commended for taking the leading in bringing U.S. assistance into the age of data transparency. It is now time for Congress to become involved, by supporting the administration but also by pushing for more robust implementation. Congressman Ted Poe does this in his bill, the “Foreign Aid Transparency and Accountability Act”, which passed the House in the waning days of the last Congress but was held up in the Senate. It is expected that he will soon reintroduce the bill. Congress should act swiftly to enact it into law and recommend that IATI be the standard by which all agencies in the aid space publish their data.

Authors

George Ingram

Image Source: © Philimon Bulawayo / Reuters

Transforming Foreign Assistance

Rev. David Beckmann, George Ingram and Jim Kolbe — Mon, 15 Apr 2013 16:41:00 -0400

The amount of good our nation has done for poor and hungry people around the world over the last ten years is astounding. We have saved and improved millions of lives through programs like the President’s Emergency Plan for AIDS Relief (PEPFAR), which was launched by former President George W. Bush to battle the disease in Africa, and the Feed the Future initiative, which President Obama started to support small farmers and the growth of local economies in developing countries.

Behind these big ticket initiatives, our foreign assistance approach has also been transformed into a more rigorously evaluated, strategic and selective one that is focused on helping developing countries and citizens take control of their own future. Completing this transformation must be a foreign policy priority for Obama and his successors because effective and robust development efforts will have to play a larger role in U.S. foreign policy if we are to maintain a strong global presence as our major military engagements end.

Recently, the United States Agency for International Development released the results of an extensive internal evaluation that provided the first evidence that reform is making the machinery of U.S. foreign assistance work better. The USAID Forward Progress Report provides a look at how the agency is implementing the reforms that Obama outlined in his landmark Policy Directive on Global Development (PPD) in 2010. The PPD, the first government-wide development policy reform guidance ever issued from the White House, mapped out the transformation agenda and highlighted a “long-term commitment to rebuilding USAID as the U.S. government’s lead development agency and as the world’s premier development agency.”

In the years since, USAID has focused on reforming key areas:

Evaluation and Selectivity: The creation of both the new USAID Bureau for Policy, Planning and Learning and the position of Chief Economist have had clear impact on the agency’s ability to plan and to measure programs and thus make more strategic decisions. The report notes that since 2011, 186 in-depth program evaluations have been completed and published for public review. Furthermore, thanks to a more concerted use of strategic planning, the agency reduced total numbers of program areas by 22 percent and phased out agricultural programs and global health programs in 21 and 17 countries, respectively, where local institutions are in position to take charge.

Country ownership: USAID’s launch of a process to develop Country Development Cooperation Strategies (CDCS) – which involve close and cross-sectoral collaboration with recipient countries to set goals and adapt programs – is an important step towards giving partners and citizens more responsibility and accountability within the development process. Twenty CDCS processes were completed in 2012. Efforts to expand country ownership were further strengthened by the agency’s efforts to direct more resources to local institutions. The report notes a 50 percent increase in funding to local organizations since 2010, from 9.7 percent in 2010 to 14.3 percent this year.

Economic Growth and Innovation: The report outlines that strengthening the Development Credit Authority (DCA) has allowed USAID to leverage more private capital – $524 million in 2012 alone – to support entrepreneurship and growth in developing countries. A premium has also been put on new technology: six USAID missions are now actively using and supporting mobile applications to catalyze development.

Partnership: In addition to strengthening relationships with recipient governments, institutions, and citizens, USAID has developed new partnerships with universities and other private sector organizations in order to build local capacity and improve program outcomes.

Transparency: USAID has established a rigorous, multi-step risk assessment mechanism for determining host country governments’ readiness to receive government-to-government assistance from the U.S. If at any point in this process a government fails to meet those eligibility criteria, it is disqualified from further consideration. Similarly, the Obama administration launched the Foreign Assistance Dashboard over two years ago to make information about U.S. assistance more accessible to both American citizens and those of recipient countries, and has committed to publish its assistance data with the International Assistance Transparency Initiative (IATI).

In addition to increased diligence and resolve by the Obama administration and USAID, congressional engagement is needed to solidify these reforms. The president’s budget includes strong reform elements, including a proposal to reshape the inefficient U.S. food aid system to reach more people and save more taxpayer dollars, and we urge Congress to support this and other proposals, like transparency legislation introduced by Rep.Ted Poe (R-Texas).

Completing the transformation of U.S. foreign assistance will reposition the U.S. as not just the most generous, but also the most strategic, innovative, and effective player in global development. We have saved and improved millions of lives over the last ten years and our efforts have helped strengthen our image abroad: a new field survey of aid recipient countries by Oxfam America finds that 83 percent of respondents believe the U.S. is a better development partner now than five years ago. The opportunity at hand for the next ten years is to turn progress into lasting change by helping those people take control of their own lives.

Authors

Rev. David Beckmann
George Ingram
Jim Kolbe

Publication: Politico

Obama’s Budget and International Affairs: Level Funding but Noteworthy Changes

George Ingram — Thu, 11 Apr 2013 16:39:00 -0400

There has been lots of reporting and analysis of President Obama’s FY 2014 budget, particularly on key domestic elements and on defense, but little attention has been given to the international part of the budget.

The most thorough and careful analysis of the international affairs account was released yesterday by the U.S. Global Leadership Coalition.

No need to repeat the analysis here, but I will highlight several noteworthy elements in the budget:

Funding is straight lined from FY 2013 spending levels (includes sequestration), which is about a 15 percent reduction from 2010 levels.
Funding for a range of development activities would increase, including for the development assistance account, health, women and girls, food security, multilateral development banks, and disaster assistance.
Funding to engage the U.S. private sector in development is up significantly – funding for the Overseas Private Investment Corporation increases by one third and for the Trade and Development Agency by a quarter.
Selectivity is alive, with hard decisions being made to reduce the USAID presence in 11 countries, funding for agriculture and HIV/AIDS programs in select countries, and funding for frontline states (Iraq, Afghanistan, and Pakistan).
Embassy security would receive significantly higher funding.

While there are a number of significant changes proposed in the budget, the one that has received the most attention – beginning with leaked information six weeks ago and again with the release of the budget – is the proposal to bring greater efficiencies to food assistance. The heart of the proposal is to reduce the requirement to purchase U.S. commodities and to transport them on U.S. ships, which are costly in terms of time and money, and to allow greater flexibility in purchasing required food items on the open market. Another aspect of the change is to substitute cash payment for “monetization”. Under monetization, U.S. NGOS receive U.S. commodities, ship them to a developing country, and sell the commodities in the local market. The cash is then used to fund important development activities. But there are losses at the several steps in this process so it is an inefficient means of financing development. The same amount of cash directly to the NGOS would reach more beneficiaries.

The proposed reform of food assistance has engendered intense interest and debate within the NGO development community, with some strongly supporting the reform proposals and others more concerned resources could be lost in the legislative process. Two groups, the Modernizing Foreign Assistance Network and Interaction, released statements yesterday, both supportive of reform, but one emphasizing the benefits of reform and the other also seeking to ensure that benefits of the current system not be lost.

However, initial reactions on Capitol Hill have been mixed.

Authors

George Ingram

Image Source: © Kevin Lamarque / Reuters

USAID Sets Model for Transparent Policymaking

George Ingram — Wed, 10 Apr 2013 16:37:00 -0400

President Barack Obama entered the Oval Office in 2009 with a commitment to open government. As a freshman senator he sponsored legislation requiring transparency in government; he campaigned on open government; and, on day one in the Oval Office, he signed an executive order on open government.

Openness is not natural behavior for a bureaucracy, neither in the government nor the private sector. Staff is too busy carrying out normal duties and there is the fear that outsiders will disagree or misrepresent information. In addition, consultations with interested but external parties consume valuable time. Transparency is a typical case of NIMBY—“good for others but I don’t have the time or need.” However, this attitude may be changing in U.S. foreign assistance policymaking.

There have been a few past forays into transparent policymaking. In the late 1990s the Europe and Eurasia Bureau at the U.S. Agency for International Development (USAID) decided to write a strategy on small and medium enterprises (SMEs) in Central and Eastern Europe and the former Soviet Union. Instead of working behind closed doors, it invited some 35 individuals from organizations working in the SME arena to a meeting to help identify major issues. Following that conversation, the Bureau hosted an online discussion on the key topics with eventually some 250 participants, drafted a strategy, put the draft out for comment and then, afterwards, finalized the strategy. The result of this process was a better informed strategy that had community support. The big lesson here was that process matters.

In 2010, following President Obama's speech in Cairo, USAID was tasked with drafting a U.S. government policy guidance document on youth. After the policy was drafted and went through the interagency process, USAID invited some 50 knowledgeable people from the development community to a half-day discussion of the draft policy. Pursuant to the comments, USAID not only made several significant adjustments to the policy but also made public the summary notes from the meeting.

In recent years the Millennium Challenge Corporation (MCC) has significantly raised the bar for transparency—making public the criteria and data for selecting eligible countries and for its principal analytic methodologies. It also has been more open than other agencies in its policymaking process; for example, the MCC consulted outside experts when drafting its gender policy.

Now USAID has joined the new, more transparent world in a way that should be hailed. This move should become the standard practice in policymaking. In 2010, USAID, under the leadership of its new Bureau for Policy Planning and Learning (PPL), decided to draft a series of strategies and policy statements. The latest, a policy on urban services now in its final stages, has followed a process of transparency and openness that should become the model.

Early in 2012 PPL decided to write a policy to guide USAID involvement in urban services. It brought on an expert in the subject matter for two years to assist in the process. By the summer PPL staff decided to make urban services a candidate for a more open process and by the fall had agency leadership buy-in. In early 2013, before beginning to draft the document, PPL commenced a consultative process that included discussion sessions at the Woodrow Wilson Center, InterAction, the Professional Services Council, interagency and with staff at USAID missions. PPL staff then began to draft the policy in an iterative process that involved going back to the interested community to update them on progress and pose questions.

In March 2013, USAID put the draft policy out for public comment, not just to those individuals and organizations that had been involved in the formal consultations, but also to the 227,000 USAID Twitter followers and other social media venues. And, it appears that USAID is listening. USAID has scheduled several public sessions to continue the comment period this month. Today (April 10) I attended the session at InterAction. PPL staff presented a summary of the more than 100 responses from the online consultations that identified critiques of the draft policy’s strength and weakness. That summary was followed by an hour discussion that solicited a number of suggestions.

This deliberative process of policy formulation should result in a policy that is better informed and has broad buy-in. This method should be the template for USAID policymaking moving forward and the standard to which the agency should hold itself accountable. This process would best be institutionalized in formal guidelines on policymaking.

Authors

George Ingram

A Comparative Analysis of U.S. and Japan Foreign Aid Policies for Disaster Reduction

Goshi Tsukamoto — Tue, 09 Apr 2013 00:00:00 -0400

The international community faces a variety of challenges caused by population growth, environmental problems, and an increase in the frequency of natural disasters in the last half century. In many parts of the world, calamities such as earthquakes, floods, landslides, storm surges, and tsunamis have caused a number of tragedies by creating socio-economic disorder, sometimes leading to unprecedented physical and human disruption.

Relatively well-governed countries have sufficient capabilities for rapid reaction and long-term recovery efforts, and are able to build resilience against adverse situations in their societies. Unfortunately, however, in a number of developing countries adequate social institutions and infrastructure have not been established to deal with such situations due to political, economic or historical factors. These regions remain relatively vulnerable to natural catastrophes, and their people are outside the circle of prosperity. [1]

In the global context, as described in 2011 in the initial Policy Framework document from the United States Agency for International Development (USAID), providing assistance in disaster-stricken areas is a fundamental expression of common humanity, representing a visible manifestation of a common belief that is both morally right and strategically sound. [2] While nation states must take the primary responsibility for dealing with their own catastrophes, it is essential for the international community to help others help themselves, based on partnerships.[3] Large-scale disasters in developing countries inevitably cause enormous damage with wide-ranging and long-lasting effects, often eventually resulting in the deterioration of society as a whole. In relation to disaster reduction efforts in developing countries, the significance of international technical and financial cooperation is now shared as a global consensus. In fact, emergency relief and disaster reduction, particularly in developing countries, have become a main focus of international cooperation.[4] Donors have committed themselves to lending life-saving humanitarian assistance through rapid response to emergencies in poorer countries and sharing lessons and technologies to support adequate preparation for disasters. These new techniques and practices are expected to be institutionalized in recipient societies over the long term.

[1] They are more likely to suffer from extremely serious damage from natural disasters and may even be displaced nationally and internationally in some cases. It should also be noted that people in these nations additionally tend to suffer from secondary effects such as a deterioration in sanitary conditions and food shortages, which may last a long time.

[2] United States Agency for International Development, USAID Policy Framework, 2011-2015, p. 2; accessed February 26, 2013, http://transition.usaid.gov/policy/USAID_PolicyFramework.PDF.

[3] Looking at past catastrophic natural disasters, the international community has recognized the importance of disaster reduction and promoted international cooperation in and with vulnerable countries.

[4] In fact, numerous countermeasures against natural phenomena have been designed and implemented.

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Authors

Goshi Tsukamoto

Image Source: © Kena Betancur / Reuters

China’s Increasing Interest in Africa: Benign but Hardly Altruistic

Yun Sun — Fri, 05 Apr 2013 14:42:00 -0400

China’s new leader President Xi Jinping has completed his foreign debut tour as the head of state after visiting Russia and three African countries: Tanzania, South Africa and the Republic of Congo. As the Chinese media hailed his “tremendous victory” and the “successful practice of great power diplomacy with Chinese characteristics”, the issue of China’s role and activities in Africa were once again put under the spotlight. Right before Xi embarked on his trip, Nigerian Central Bank Governor Lamido Sanusi criticized China’s engagement in Africa publicly in the Financial Times. His most quoted charge says “China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism.”

Sanusi’s comment cast a negative shadow to Xi’s first foreign visit and was met with ferocious rebuttals from an infuriated Beijing. China’s Ministry of Commerce pointed to the western countries’ “exploitation of African resources, trade of African people, occupation of African land and destruction of African culture” as the “essence of colonialism” and argued that it is China, not the West, that has provided support for Africa’s economic and social development. China’s Ministry of Foreign Affairs dispatched the head of its Africa Department, Lu Shaye, to deliver a formal demarche to a Hong Kong media outlet. He defended China’s role in Africa and argued that China has improved Africa’s international status by offering it a powerful alternative market and collaborator, delivering to Africa concrete benefits and treating it as an equal partner. In comparison, he argued, the West only “takes resources from Africa” and treats Africa with a condescending attitude.

The drastically diverging perceptions of China’s role in Africa are an interesting phenomenon. The polarization stems from the focus on different aspects of China’s activities on the continent. For example, dragon-slayers emphasize China’s selfish quest for African natural resources and how it sabotages international efforts to keep unpalatable African regimes in check. On the other hand, panda-huggers applaud China’s contribution to Africa’s economic development through infrastructure projects and revenue creation.

Unfortunately, neither reflects the nuanced, mixed nature of what China means to Africa. China enjoys unique financial and political advantages in promoting Africa’s growth through vast financing with little or no strings attached. However, these short-term benefits should not form a cover-up for the potential long-term negative consequences associated with neglecting issues of governance, fairness and sustainability.

On the positive side, China’s economic engagement in Africa has created significant benefits for African countries. Most importantly, Beijing has considerable capacity and willingness to provide financing to fuel Africa’s growth. During his recent trip, Xi reconfirmed China’s commitment to provide another $20 billion in financing to Africa. China usually attaches a significant amount of such funding to infrastructure projects, which forms the foundation for Africa’s industrialization and economic development. Many of these projects require large investment and long pay-back terms that traditional donors are reluctant to provide.

It is true that China does not emphasize the governance side of the story. This is a reflection of China’s own philosophy on the prioritization between economic development and political progress. Many Chinese officials, analysts and businessmen find the West’s overwhelming emphasis on democracy, governance, transparency in Africa amusing. To the West, they would ask an innocent but critical question: “for people who do not have food on the table, what’s the point of having democracy?” Using its own experience of subjugating political liberalization to the “higher cause” of economic development, China finds its approach to Africa as one that prioritizes the provision of basic elements of development, completely legitimate and fully justified.

In this way, China’s intention in Africa is benign. Beijing has no intention to colonize the continent, dictate the politics or economy of the local countries or deprive them of development opportunities. On the contrary, China truly sees itself as Africa’s “brother” and hopes to help African countries develop through infrastructure projects. Beijing seeks an approach different from that of the West, one that avoids the “meddling” with the internal affairs of African countries through conditional aid. In the last several years, China has contributed significantly to the economic growth of some of Africa’s poorest nations. China wants to see a prosperous Africa, which is beneficial to China’s interests as well.

However, this does not mean China is being altruistic. Helping Africa is important, but China would not do so if it had nothing to gain. Indeed, China emphasizes that any bilateral relationship has to be mutually beneficial. And China’s investment in Africa does pay itself back in multiple ways economically: development and exploitation of Africa’s natural resources, access to local market, employment opportunities for Chinese labors and service contracts for Chinese companies on infrastructure projects that China funds. When Chinese officials emphasize that China also invests substantially in countries that are not rich in natural resources to defuse international criticisms, they often forget to mention that China also has its eyes on other things that these countries can deliver, such as their support of Beijing’s “one China” policy, of China’s agenda at multilateral forums and of China as a “responsible stakeholder”. While there is nothing wrong with not being altruistic in one’s motives, it should be noted that China is not helping Africa in exchange for nothing.

In analyzing the nature of China’s activities in Africa, another important voice to examine is that of Africa itself. Many African countries and officials welcome China’s approach and fiercely defend China internationally. This seems like fairly powerful pushback to western criticisms of China’s role in Africa since African countries should know what they need more than anyone else. Africa’s approval of China poses an intriguing question for those in the West who disapprove of China’s activities in Africa: should the West reexamine its approach to Africa in order to better address what African countries truly need?

Authors

Yun Sun

Image Source: © Siphiwe Sibeko / Reuters

U.S. Development Assistance and Sub-Saharan Africa: Opportunities for Engagement

George Ingram and Steven Rocker — Wed, 03 Apr 2013 15:30:00 -0400

U.S. development assistance to Africa creates many opportunities for the United States beyond humanitarian aid, such as strategic national security partners and increased economic prospects. George Ingram and Steven Rocker recommend several strategies for the U.S. government to better utilize and direct its foreign assistance to the region.

This chapter is part of Top Five Reasons Why Africa Should Be a Priority for the United States. Read the full report here and tell us why you think Africa matters to the U.S. Join the conversation on Twitter using #AfricaMatters.

The Priority

Total bilateral U.S. development assistance from the U.S. Agency for International Development (USAID) and the State Department to sub-Saharan Africa nearly quadrupled from roughly $1.94 billion in FY2002 to an estimated $7.08 billion in FY2012.[1] The rapid uptick in U.S. development assistance to the region was largely driven by global health spending, specifically the President’s Emergency Plan for AIDS Relief (PEPFAR), which concentrates HIV/AIDS resources primarily to 14 countries, 12 of which are in sub-Saharan Africa.[2]

Currently, USAID operates 27 bilateral and regional missions in sub-Saharan Africa, which in FY2012 provided bilateral assistance to 47 sub-Saharan African countries. The Africa region’s top five recipients of U.S. assistance in FY2012 were Kenya, Nigeria, Ethiopia, Tanzania and South Africa.[3]

Beyond global health, the U.S. is the leading donor of humanitarian aid to sub-Saharan Africa, particularly in the area of emergency food aid.[4] The Obama administration has also made assistance to agriculture sector development a key priority in recent years through its Feed the Future program, a global hunger and food security initiative.

In June 2012, President Obama signaled his development priorities toward the region with the release of the White House’s U.S. Strategy toward Sub-Saharan Africa. Economic growth, food security, public health, women and youth, humanitarian response and climate change are explicitly listed in the Obama Strategy as U.S. priority areas to further accelerate development progress in the region.

Why is it Important for the U.S.?

U.S. development assistance funds programs on the ground in ways that bring government agencies and American organizations and businesses into collaborative activities with Africans who are trying to lift their countries onto a higher plane of social, political and economic development. The region warrants sustained U.S. engagement for a range of humanitarian, national security and economic reasons.

Humanitarian interests

As a clear sign of America’s moral leadership around the globe, the U.S. has historically been and remains the leading donor of humanitarian assistance to the region. In response to the Horn of Africa drought and subsequent famine in the summer of 2011, for example, U.S. emergency food aid programs provided $740 million to Ethiopia, Kenya, Somalia, South Sudan and Sudan (according to the U.S. State Department). It is fully consistent with American values to continue to respond vigorously and generously to emergencies in the region.

National security interests

Continued terrorist activities in Somalia, the recent insurgency in Mali, and the potential threat of Boko Haram on Nigeria—the U.S.’s largest trading partner in sub-Saharan Africa [5]—emphasizes that the U.S. has important national security interests in the region. Development assistance from the State Department addresses U.S. national security concerns by funding counterterrorism partnerships between the U.S. and African militaries as well as training for African soldiers to conduct peacekeeping missions in countries like Sudan, Somalia, the Democratic Republic of the Congo and Liberia.

Economic interests

Sub-Saharan Africa is a region of great economic promise. From 2001-2010, six of the fastest growing economies in the world were in the region.[6] In fact in 2011, foreign direct investment to sub-Saharan Africa amounted to more than global bilateral official development assistance in 2011.[7] Other countries, including China, are recognizing and acting on the increasing commercial opportunities in sub-Saharan Africa. A recent GAO report found that China’s total trade in goods over the past decade increased faster than and surpassed U.S. trade in the region in 2009.[8]

What is the Opportunity for the U.S.?

Sustainable health systems: The vast majority of U.S. global health assistance to sub-Saharan Africa is used to finance the delivery of health services, which is not sustainable in the long term. Greater focus needs to be directed to building sustainable health systems so African countries can increasingly meet their own needs.
Disaster preparedness and resilience: The U.S. is the leading donor of official humanitarian aid to sub-Saharan Africa. However, very little assistance is allocated toward disaster prevention and preparedness.[9] By focusing more resources and expertise toward these areas, the U.S. could contribute in the long term to achieving a reduction in loss of life and the need for large international responses to disasters.[10]
Economic growth: The U.S. should leverage its assistance and other policies to stimulate economic growth in sub-Saharan Africa. Members of Congress and U.S. government officials should engage the Export-Import Bank, Department of Commerce, Overseas Private Investment Corporation, U.S. Trade and Development Agency and the U.S. Trade Representative to ensure that the U.S. is providing a range of government policies and programs to encourage equitable economic growth and commercial opportunities for U.S. businesses in the region.
Democratization and good governance: The U.S. needs to devote greater attention and support toward governance in sub-Saharan Africa, including improving governmental collection of revenues and transparent budgeting as well as building the capacities of civil society and legislative bodies. In FY2011 and FY2012, U.S. global health requests for sub-Saharan Africa averaged $4.82 billion per year while funding requests for rule of law and human rights, good governance, political competition and consensus-building and civil society under the USAID-managed Development Assistance account averaged only $75.73 million over the same period.[11]

Endnotes

[1] Alexis Arieff et al, “U.S. Foreign Assistance to Sub-Saharan Africa: The FY2012 Request”, Congressional Research Service Report R41840, May 20, 2011, 5

[2] Sessions, Myra, “Overview of the President’s Emergency Plan for AIDS Relief (PEPFAR)” Center for Global Development

[3] Congressional Budget Justification, Foreign Assistance Summary Tables, FY2013,15 http://www.state.gov/documents/organization/ 185016.pdf.

[4] Ted Dagne, “Africa: U.S. Foreign Assistance Issues”, Congressional Research Service Report RL33591

[5] “Africa”, Office of the United States Trade Representative. http://www.ustr.gov/countries-regions/africa

[6] “Daily chart: Africa’s impressive growth”, The Economist, January 6, 2011. http://www.economist.com/blogs/dailychart/ 2011/01/daily_chart.

[7] World Investment Report 2012: Toward a New Generation of Investment Policies, United Nations Conference on Trade and Development, Geneva: United Nations, 2012; see also “Development: Aid to developing countries falls because of global recession”, Organization of Economic Co-operation and Development, April 4, 2012

[8] Government Accountability Office. “Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement” February 2013

[9] Global Humanitarian Assistance. “United States - Country Profile.” Global Humanitarian Assistance. http://www.globalhumanitarianassistance. org/countryprofile/united-states.

[10] USAID Policy Framework 2011-2015. Washington: U.S. Agency for International Development, 2011.

[11] FY2013 Congressional Budget Justification Foreign Operations Regional Perspectives Annex, 3-4

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Authors

George Ingram
Steven Rocker

Image Source: © Handout . / Reuters

Syria's Children are in Desperate Need of Educational Aid

Maysa Jalbout — Tue, 02 Apr 2013 11:57:00 -0400

The UAE is increasingly viewed as an important player in the field of humanitarian aid, particularly in situations of crisis. Since 1971, the UAE has given more than Dh225 billion in foreign aid to more than 90 countries. This trend continued at last week's Dubai International Humanitarian Aid and Development Conference, where the UAE received praise for its pledge of Dh1.1 billion to assist Syrian refugees.

Syria's refugees are in desperate need of safe shelters, medical assistance, food and water. The UAE's money, which it will distribute outside of the UN framework, will go a long way in providing these basic services.

But the UAE could also play a leadership role in ensuring that Syrian children have access to something often overlooked during times of conflict: education.

In their recent report Childhood Under Fire, the UK-based agency Save The Children detailed the effect of the two-year crisis on Syrian children. Young people have been uprooted from their homes, and witnessed death and destruction. Many are separated from their families. Syrian children have experienced tragedies that will haunt them for the rest of their lives.

Without the much-needed physical protection and psychosocial counselling offered to refugee children in schools, Syria's displaced young people will not be able to cope. As reported by the UN High Commissioner for Refugees, there have been cases of children taking their own lives in refugee camps, overwhelmed by the stress. Others, especially those who are not protected by a parent, are in danger of being subjected to harm, exploitation and abduction.

Read the full article on The National »

Authors

Maysa Jalbout

Publication: The National

Image Source: © Stringer . / Reuters

How African Governments Should Respond to the Impact of the U.S. Sequester

Julius Agbor and Brandon Routman — Wed, 27 Mar 2013 14:02:00 -0400

Based on the 2011 Budget Control Act, and due to the failure of the “supercommittee” to agree upon discretionary budget cuts in 2012, across-the-board cuts to all discretionary spending accounts in the U.S. federal budget (now known as the sequester) went into effect in March of this year. At the G-20 finance ministers and central bank governors meeting held in Moscow last February, Christine Lagarde, the managing director of the International Monetary Fund (IMF) insinuated that the sequester might not be the optimal path to medium-term fiscal consolidation in the U.S., and its impact could be wide-ranging on the global economy. The sequester would potentially affect African economies directly through reduced foreign aid and indirectly through lower export receipts, remittances and foreign investment should there be an accompanying significant slow down in the U.S. economy.

According to Secretary of State John Kerry, the effects of the sequester will be fairly dramatic. For instance, they will initiate some $1.7 billion worth of cuts in foreign assistance, which will negatively affect Africa in a number of key ways.

According to the State Department’s estimations, foreign aid to the health sector may be cut by about $400 million. The highly successful President’s Emergency Plan for AIDS Relief (PEPFAR) will loose some $280 million, which will mean that more than a quarter million fewer patients will receive HIV/AIDS medication. Other cuts in the sector will translate into 2.5 million women being denied family planning service, 3 million fewer treatments for malaria and 60,000 fewer treatments of tuberculosis. If these cuts only affected health outcomes, they would be tragic enough; however, they are compounded by budgetary slashes in other areas. There will be cuts of approximately $200 million in humanitarian assistance, cuts in international peacekeeping operations by almost $20 million and significant cuts to agricultural programs like Feed the Future. The Millennium Challenge Corporation (MCC)—another tremendously successful program and one which incentivizes good governance on a national scale throughout Africa—will also likely sustain a hit. As a consequence, cuts to this program could set back the agenda of governance reforms on the continent.

It also should be noted that the funding cuts induced by the sequester are really only a small part of the story; the larger part is the dwindling levels of funding for international assistance in the current cash-strapped climate.

It should be noted that the above figures are estimates from the State Department and the House Appropriations Committee. While we know for sure that the sequestration cuts will be in effect through 2013, the specifics of how and where these shortfalls occur will be ironed out via a budgetary process over the next few months. It also should be noted that the funding cuts induced by the sequester are really only a small part of the story; the larger part is the dwindling levels of funding for international assistance in the current cash-strapped climate. It should be noted that since 2010, there has been a systematic reduction of about 20 percent in U.S. international aid funding, which is occuring despite the fact that it is less than 1 percent of the total federal budget. Furthermore, in an era where most donors are dealing with fiscal problems of their own, finding alternative funding might be difficult. Thus, continuity of some of those programs that are jointly financed with African governments will critically depend on a greater budgetary participation by African governments themselves.

In formulating policy responses to these economic shocks, it is critical that Africa’s governments preserve the sound macroeconomic framework that has undergirded its remarkable economic growth during the last two decades. The optimal policy response of African governments to the sequester will depend on whether the sequester is percieved as temporary or permanent (the fate of these cuts is uncertain in 2014 and beyond) and on country-specific percularities. The country-specific percularities refer to the exchange regime in place (fixed or flexible) and to the availability of policy space – fiscal, monetary and external buffers. Fiscal buffers refer to the ability of governments to run larger fiscal deficits without creating unfavorable debt dynamics and undue pressures in domestic financial markets, while monetary buffers refer to the ability to ease monetary policy in support of economic activity without triggering significant inflation and exchange rate pressures. External buffers simply refers to the availability of a pile of foreign exchange reserves that can be run down in times of need. Generally, countries with flexible exchange regimes have a greater advantage over fixed exchange regime countries (notably, the African Financial Community, franc zone, member countries) in maneuvering support for affected programs as monetary and exchange rate policies can be fine tuned to support fiscal policy.

If the sequester is perceived as temporary, the optimal response would be to scale up budgetary support for similar, African-groomed programs. Countries with enough buffers could temporarily decrease their stock of foreign exchange reserves and run large fiscal deficits supported, where available, by an expansionary monetary policy stance. For countries with limited buffers, budgetary support could come from borrowing from domestic financial markets (where available) or from the International Monetary Fund and other multilateral funding agencies.

The efforts to mitigate the impact of the sequester on African economies should also be complimented by the continents’ bilateral as well as multilateral development partners.

However, if the sequester is percieved as permanent a different set of policy responses, contingent on each countries’ percularities, can be envisaged:

For countries with limited fiscal buffers (that is, those facing both high budget deficits and high debt-to-GDP ratios), the optimal response depends on the depth of countries’ domestic financial markets as well as on the extent of the pressure imposed by financial markets. Where fiscal buffers are limited, domestic financial markets are well developed but governments are under intense pressure from financial markets. For instance, in South Africa, the optimal response will be to allow a full blown impact of the sequester, which would entail a sharp increase in the price of anti-retroviral drugs in a country where 10 percent of the population is currently living with HIV/AIDS. It should be noted that under the Global Health Initiative, in fiscal year 2012, $469 million was allocated towards South Africa’s fight against HIV/AIDS, which currently tops the list of beneficiary nations. There are other African countries where limited fiscal buffers exist, domestic financial markets are developed, but the government is not under intense pressure from financial markets. For instance, in Botswana, the optimal response might be to borrow from domestic financial markets to partially offset the full blown impact of the sequester. Some sub-Saharan African countries have limited fiscal buffers, thin domestic financial markets, but do have some credibility in international markets, including Kenya, Ghana, Zambia, Angola and Mozambique. These countries could attempt to raise funds internationally through sovereign and diaspora bonds.
Some natural resource-exporting countries in sub-Saharan Africa have accumulated savings in the form of a sovereign wealth fund or in foreign currency denominated assets (for instance, the franc zone countries). They could draw down on those resources to finance the additional cost of maintaining the affected programs.

The efforts to mitigate the impact of the sequester on African economies should also be complimented by the continents’ bilateral as well as multilateral development partners. On its part, the Obama administration and the black congressional caucus should strive to minimize the cuts on some of the highly successful programs like PEPFAR and MCC, and if African governments demonstrate greater commitment to good governance, economic freedom and citizen empowerment, they will be more motivated to do so. The responsibility for ensuring that African citizens continue to receive critical services delivered through U.S. foreign assistance ultimately rests with African governments themselves, notably, their willingness to step up budgetary support to similar African-groomed programs.

Authors

Julius Agbor
Brandon Routman

Image Source: © Antony Njuguna / Reuters

Are Aid Donors Repeating Mistakes in Myanmar?

Lex Rieffel and James Fox — Sat, 16 Mar 2013 14:51:00 -0400

The transition in Myanmar that began two years ago — from a military to a quasi-civilian government — is the largest and most encouraging turnaround in the developing world in years.

Much credit goes to President Thein Sein and opposition leader Aung San Suu Kyi for deciding to collaborate in seeking to overcome three huge obstacles to progress in this impoverished and tragedy-prone country: ending the civil war that has been waged since independence, providing a policy and institutional framework that will enable the standard of living to rise rapidly, and exploiting the country’s abundant natural resources in a manner that benefits the whole population.

Responding to the unanticipated and remarkable changes taking place, the World Bank, USAID, and more than 100 other official aid agencies and international non-governmental organizations (NGOs) have flocked to Myanmar to help make the transition a success.

The rush of aid donors to Myanmar is not entirely positive. In the past twenty years, other countries have been “smothered by love.” So far, Myanmar’s aid donors have acknowledged these problems in the past and have committed themselves to adhere to the principles laid out in 2005 in the Paris Declaration on Aid Effectiveness, as well as the updates in Accra (2008) and Busan (2011).

The Myanmar government has also taken note of the problems elsewhere. At an all-donor meeting in January 2013, it got the donors to agree to a set of ground rules to enhance aid effectiveness.

Despite tho se encouraging steps, the makeup of the aid community is likely to produce behavior inconsistent with the Paris principles — thus further complicating Myanmar’s effort to escape its legacy of conflict and stagnation. Donor assistance to Myanmar can do more harm than good in at least four ways:

Senior government officials spend many hours every day meeting with delegations from donor countries, not just their aid agencies but also their parliaments, corporations, international NGOs, media, etc. This stream of visitors is diverting key officials in Myanmar from crucial work on policy formulation and implementation.
Each donor mission is under pressure to “make a difference,” to show its headquarters that it can bring about major improvements that will justify continued funding. USAID is no exception. It has signaled its intention to allocate millions of dollars for its own agriculture sector projects. By contrast, USAID has only committed $600,000 to the multi-donor LIFT Fund, which is a much less burdensome way of delivering aid.
Pressure to accelerate disbursement of project funds is ever-present, making success in this administrative function a major factor in staff promotions. Consequently, building capacity in host-country institutions usually takes a back seat to “moving the money.”
Competition among donors leads to a pattern of non-transparency as each donor seeks to position itself favorably particular sectors or regions. The pattern is reinforced by host country ministries that engage in “donor shopping” to get the most money for the least change.

In our assessment of foreign aid to Myanmar, we have pointed to three steps donors can take to make their aid more effective:

Slow down and do more joint operations. To ensure that senior officials are not overwhelmed by visitors, some host countries have adopted formal limits on the number of aid delegations they will receive. It would be better for Myanmar’s donors to act first to control the flow, including an effort to undertake more joint operations. It would be reasonable for donors to commit at least 30 percent of their funding to these types of operations.
Provide scholarships for foreign study. It will take years for Myanmar to raise the standard of education in its universities to the Association of Southeast Asian Nations (ASEAN) norm, let alone to the prominence it had in Asia when it gained its independence in 1948. To build the expertise Myanmar requires in the short term to meet its development objectives, the only solution is education abroad on a massive scale. One advantage of allocating aid resources to scholarships is that it has the least potential for doing harm.
Be more innovative. A number of techniques for making aid more effective have been proposed since the Paris Declaration was adopted. One of these is “cash on delivery aid.” This technique has the advantage of reinforcing good management within government ministries, minimizing the administrative burden of aid, and ensuring that every dollar of aid goes to support successful projects. None of Myanmar’s donors appear to be using approaches of this kind.

Authors

Lex Rieffel
James Fox

Publication: GlobalPost

Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma

Lex Rieffel and James W. Fox — Fri, 15 Mar 2013 14:09:00 -0400

INTRODUCTION

At the end of March 2011, Myanmar began an ambitious political transition led by newly elected President Thein Sein. Bold moves in his first year included opening a dialogue with opposition leader Aung San Suu Kyi, suspending construction of the Chinese-funded Myitsone Dam, and abandoning a grossly overvalued exchange rate in favor of a marketdetermined rate. These moves unleashed a swarm of visitors seeking to support the transition and “make a difference”: prime ministers, foreign ministers, heads of donor agencies and international NGOs, chief executives of multinational corporations, and many others.

The question posed in this report is whether the outpouring of foreign aid to Myanmar expected in the medium term (three to five years) will be more of a blessing than a curse. The question may seem unfriendly or ideological on the surface, but merits being taken seriously because of the experience of a handful of countries over the past 10 to 15 years that have suffered from large and rapid build-up of foreign aid.

As posed, however, the question is too stark. A gentler version is: what steps can be taken by aid donors and the Government of Myanmar to enhance the effectiveness of aid programs and projects, and mitigate possible adverse consequences?

Our report begins with a brief discussion of the dilemma of foreign aid to Myanmar: how it can be harmful despite the best intentions of the donors. We then present the policy implications of our findings, for the Government of Myanmar and for the donor community. The next two parts of the report describe the Government of Myanmar’s national planning process and the steps it is taking to manage foreign aid. We then assess donor performance against the principles of the Paris Declaration and the Busan Partnership. The last two parts describe donor activity in general terms and then individually for Myanmar’s major development partners.

We have included four appendices with different audiences in mind. Appendix A describes the historical, political, and economic context for readers who are not familiar with this background. Appendix B elaborates on the standards of aid effectiveness contained in the Paris Declaration and Busan Partnership. Appendix C highlights lessons learned from other countries that have been challenged by strong donor interest. Appendix D recounts newly independent Burma’s first experience with national development planning, featuring the work of the American economist Robert R. Nathan, and calls attention to a comparable Japansupported effort launched in 2001.

We should be clear about the limitations of our report on foreign aid for Myanmar. In particular, our knowledge of Myanmar is limited. Altogether we have spent less than six months inside the country over the past 45 years and we do not speak any of the local languages. Moreover, with our 50-year perspectives on economic development, we know that the world’s leading experts are still unsure how to explain China’s phenomenal progress or Argentina’s lack of progress. These experts are even more unsure about how to adapt lessons from global experience to a country like Myanmar that is undertaking a sweeping reform effort with a legacy of complex internal conflicts and poverty-inducing governance.p>

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Authors

Lex Rieffel
James W. Fox

Publication: Nathan Associates Inc.

An Early Assessment of Foreign Aid to Myanmar

Thu, 14 Mar 2013 15:30:00 -0400

Event Information

March 14, 2013
3:30 PM - 5:00 PM EDT

Saul/Zilkha Rooms
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

In the past two years, Myanmar has undergone a remarkable transformation: an unanticipated shift from military to quasi-civilian governance, the election of opposition leader Aung San Suu Kyi to the legislature, steps toward peace with ethnic minorities, and economic reforms designed to alleviate poverty. These developments prompted Western countries to suspend or lift wide-ranging political and economic sanctions, which were responses to the regime’s suppression of the democratic opposition and dismal human rights record after 1988. As sanctions were withdrawn, aid agencies and international NGOs rushed to Myanmar to support the Thein Sein government’s reform agenda. The interest in Myanmar among the donor community and the level of aid activity are extremely high, leading some observers to question whether Myanmar is receiving too much attention from the foreign aid community.

On March 14, Global Economy and Development at Brookings hosted a discussion on foreign aid to the new government of Myanmar. Brookings Nonresident Senior Fellow Lex Rieffel and former USAID Senior Economist James W. Fox presented their new report, “Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma,” which was published by Nathan Associates. Discussion about the report and broader issues followed the presentation and included: Joseph Yun, acting assistant secretary of State for East Asian and Pacific Affairs, and David Steinberg, distinguished professor in the School of Foreign Service at Georgetown University. Alex Shakow, former USAID assistant administrator for policy and program coordination and former executive secretary of the IMF-World Bank Development Committee, moderated the discussion.

Learning to ‘Coexist with Risk:’ The Essence of Japan’s Technical Cooperation with Central American Countries

Goshi Tsukamoto — Tue, 05 Feb 2013 10:24:00 -0500

The Japanese archipelago is one of a number of regions that has been vulnerable to frequent natural disasters. Through its history, tragic experiences have accumulated, and the modern Japanese society and each individual in the country have learned lessons from each of those occasions. Based on these experiences, the Government of Japan has globally disseminated the spirit of “BOSAI,” a Japanese word meaning disaster reduction efforts, in its foreign aid menu.

Central America is an important target area for Japan’s BOSAI assistance. Because of geographical and geological reasons, the region―located in the rim of the Pacific Ocean as Japan is―faces substantial risks of storms and floods, mudslides, earthquakes, and volcanic eruptions. The countries in this region have strived in the past decades to cope with these chronic problems not only at national level, but also at the regional level. One of the fruits of the efforts made by those countries is the establishment of the Coordination Center for the Prevention of Natural Disasters in Central America (CEPREDENAC). However, they still need support from the international community. Upon request by Central American countries, Japan implemented a “Project on Capacity Development for Disaster Risk Management in Central America” (known in shorthand as Project BOSAI) from May 2007 until May 2012. This project brought a variety of know-how and experience for dealing with possible disasters caused by natural phenomena in Central American nations, aimed especially at enhancing capacity for disaster reduction at the local level.

“Aprendiendo a convivir con el riesgo”

Project BOSAI sought to introduce feasible practices for prevention and reduction of damage from inevitable natural disasters, as well as adequate treatments after events, at the community level. Following intensive consultation between the Government of Japan and CEPREDENAC, the project was implemented by the Japan International Cooperation Agency (JICA). It included some of the most vulnerable villages and communities as prioritized pilot sites in targeted countries such as El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and Panama. During the five year course of the project, JICA dispatched a number of experts in various fields, including prevention and reduction of damage caused by inundation, mudslide, volcanic eruption, and tsunami, to those pilot sites. They organized seminars and workshops collaborating with local governments and villages, sharing useful knowledge accumulated in Japanese history, providing materials, and trying to strengthen local institutions and inspire local people under the slogan “aprendiendo a convivir con el riesgo”: learning to coexist with risk. The concrete activities and the fruits of Project BOSAI can be summarized as follows.

Visualizing the risks

For a community to deal with disaster risks, a shared common knowledge in the community about the risks faced in daily life is indispensable. For example, in Atitlan, Guatemala, which frequently suffered from mudslides in the past, an expert from Japan organized a seminar and conducted “Town watching for BOSAI,” in which local people walk around with the expert to appreciate the potential risks and acquire the essential common knowledge by visualizing the risks which confront the community. The participants who joined this program constructed a visible risk map. In fact, they didn’t need to depend on satellite photos but they could understand the environment of the community by handwriting by themselves. Once a community creates a common risk map, it can share the visualized risks which enable people to take action for future prevention and reduction.

Introducing an early warning system

Project BOSAI introduced an early warning system which doesn’t rely on high-tech equipment. For example, in Saragoza, El Salvador, experts from Japan worked with local junior high-school students to make basic rain gauges, utilizing recycled bottles. When it rains, the villagers are asked to observe the amount of precipitation using the hand-made rain gauges and to record whatever happens around the community according to the amount of precipitation. If they steadily continue this, the villagers can obtain a “sustainable early warning system” built on meaningful data. The community can consult this data in subsequent rainstorms to know when the villagers as a whole should take action to prevent and reduce specific damage caused by storms and floods.

Building useful infrastructure from re-purposed waste materials

The coastal communities around the Cañas River in Costa Rica have suffered repeatedly from inundation. They require a large dike, strong enough to prevent flooding. This region is also home to sugar plant plantations that produce a lot of used tires as waste. Therefore, Project BOSAI, inspired by the initiative of local people, helped build a dike utilizing used tires as basic building materials. The community members learned the construction know-how, scientifically justified by Japanese experts, and can reproduce useful dikes as long as they can access used tires. Project BOSAI tries to share this know-how with other targeted countries as well.[1]

Strengthening institutions for disaster reduction

Hurricane Ida struck the Central American isthmus in November 2009. It caused considerable damage to the region. However, the village of Las Ojas, El Salvador, a Project BOSAI pilot site, recorded no fatalities. As the hurricane approached the country, the villagers of Las Ojas could access the updated information emitted by Committee for Disaster Reduction of San Pedro Masahuat, whose local government covered the village Las Ojas, through a radio provided by Project BOSAI. The fact that some of the members of Committee for Disaster Reduction of San Pedro Masahuat had participated in JICA training programs in the past helped facilitate smooth communication between Las Ojas and the municipality. Sirens placed around the community, also provided by Project BOSAI, sounded two hours before the main storm came too close so that people had enough time to prepare themselves.

These examples demonstrate that the spirit of “learning to coexist with risk” has taken root in Central America. It is worthwhile to mention that what Project BOSAI introduced to recipient communities depended neither on expensive high-tech equipment nor on mega infrastructure, but focused on promoting knowledge sharing and inspiring local people. The fruits of the project remain important in the targeted sites, and the positive impact is expected to expand from the pilot sites to other regions. This kind of technology transfer can eventually foster growth in institutional and even personal capacities for prevention and reduction of disaster damage in the region as a whole. In this way, Japan’s foreign aid activities―including those based on the spirit of “aprendiendo a convivir con el riesgo”―draw upon some of the many lessons that Japanese society has learned through its own experiences with natural disasters and applies them to global disaster reduction efforts. Because human beings cannot escape frequent natural disasters, we must prepare ourselves in all ways possible prior to the events for the purpose of reducing the scale of damage and suffering. Japan believes that its own experiences should be shared as a common asset of human society, and therefore it strives to inspire people to adopt damage reduction practices by disseminating thought-provoking experiences. Japan is expected to continue this sort of intellectual contribution in its foreign aid.

[1] The Spanish guidelines are accessible as follows: Guía de la Construcción del muro de contención, con llantas usadas, http://www.jica.go.jp/project/all_c_america/001/materials/pdf/manual_01.pdf; Guía para la Construcción del Dique, http://www.jica.go.jp/project/all_c_america/001/materials/pdf/manual_02.pdf.

Authors

Goshi Tsukamoto

How Effective Is the World Bank at Targeting Sub-National Poverty in Africa? A Foray into the Murky World of Geo-Coded Data

Laurence Chandy, Natasha Ledlie and Veronika Penciakova — Mon, 04 Feb 2013 14:11:00 -0500

How efficiently is aid allocated to reduce poverty? This question was explored over a decade ago in a paper by the economists Paul Collier and David Dollar. Their definition of a poverty-efficient allocation included, among other elements, the simple maxim that to maximize poverty reduction, “aid should be given to countries with large amounts of poverty.” When actual allocations were analyzed, it was shown that donor agencies paid heed to this rule. (Donors did less well at giving aid to countries with good policies, which, the authors argued, resulted in poverty-inefficient allocations overall.)

Intuitively, we would expect this maxim to apply at the sub-national level too: aid will contribute most to poverty reduction in a country when it is allocated to its poorest regions. An examination of sub-national aid allocations could therefore lead to greater understanding of donors’ commitment to poverty reduction. However, the limited availability of sub-national data on both aid and poverty incidence has precluded this level of analysis.

This is starting to change. As part of its “Mapping for Results” initiative, the World Bank has geo-coded its entire project portfolio of 2,900 active projects across 30,400 sub-national locations in 144 countries. Meanwhile, IFPRI’s Harvest Choice initiative has gathered together sub-national poverty data (using the international poverty line of $1.25 a day) from recent household surveys in 24 sub-Saharan African countries to draw detailed poverty maps covering half the continent. Both datasets contain, at a minimum, information at the first-order administrative level, meaning the province, state and governorate.

By combining these two datasets, we can begin to explore the allocative efficiency of aid with respect to poverty at the sub-national level—albeit for a single donor, in a subset of countries, at a particular point in time. The 24 countries we study contain 359 World Bank projects, which together are valued at nearly $19.3 billion.

By combining these two datasets, we can begin to explore the allocative efficiency of aid with respect to poverty at the sub-national level—albeit for a single donor, in a subset of countries, at a particular point in time. The 24 countries we study contain 359 World Bank projects, which together are valued at nearly $19.3 billion.

Our findings suggest that the World Bank rarely focuses its aid in the poorest regions in a country. However we refrain from casting judgment on the appropriateness of the Bank’s allocations due to unresolved questions concerning how targeting is measured, when targeting is appropriate, and how it can best be brought about.

Our point of departure is to consider the different ways in which aid can target the poor at the sub-national level. One approach is to devote aid to regions that have the largest number of poor people. At the country level, this would be equivalent to giving aid to India which is home to hundreds of millions of people living in extreme poverty. Alternatively, regions with the highest poverty rates could be prioritized. This compares to giving aid to Liberia where four in five people live below the poverty line.

For each approach we construct a poverty targeting index. This weights World Bank allocations within each country to generate a measure of how far they deviate from a poverty-neutral scenario in which aid is allocated equally across the country’s sub-national regions on a per capita basis. A positive score means that more aid is allocated to poorer regions within a country whereas a negative score implies a bias against poorer areas. (Note that allocations at a country level are assumed to be fixed; we do not consider the possibility of reallocating aid between sub-national units across national borders. We are also interested only in the incidence of poverty, not the distance of individuals from the poverty line.)

The results from the two indexes are illustrated in Figure 1a and 1b. As might be expected, the two sets of results diverge. For instance, in Kenya, the World Bank is effective at targeting sub-national regions with large numbers of poor people, but avoids those regions with the highest poverty rates.

While both these indexes capture something important, neither provides an adequate account of poverty targeting on its own. We therefore create a composite index which rewards aid allocations to regions where both the number of poor people and the poverty rate is high. At the country level, this would be equivalent to allocating aid to Nigeria, which accounts for the largest number of poor people in sub-Saharan Africa and has a high poverty rate of 68 percent. This index is illustrated in Figure 1c. In only 5 of 24 countries does the World Bank favor poorer regions as reflected by a positive score.

The indexes described thus far invite comparisons between countries as to where the World Bank is most or least assiduous in targeting poverty. However, such comparisons must be made with care as a score recorded in one country may not be achievable in another. This is because the potential for sub-national poverty targeting—the scope for deviating from a poverty neutral scenario—varies from country to country.

This potential is determined by imagining two extreme scenarios in each country: where all aid is reallocated to the poorest sub-national region and the richest sub-national region respectively. The extent to which these two regions differ from others and the country as a whole determines what potential there exists for donors to differentiate themselves from a poverty neutral position.

In our final index, we take the scores from our composite index and express them as a share of the maximum or minimum possible targeting score in each country. This index is illustrated in Figure 2. In only 1 of the 24 countries—the Gambia—does the World Bank approach anywhere near the maximum degree of poverty targeting. Interestingly, we find no relationship between the potential for sub-national targeting and the degree to which that potential is fulfilled.

There remain a number of limitations to our analysis. Not least is that the significance of our findings hinges on the extent to which differences between sub-national units provide an effective lens for viewing the underlying level of inequity in each country. The risk is that our results are more indicative of the design of our indexes and the idiosyncrasies of the data that they capture.

Nevertheless, we believe that measures of poverty targeting can serve as a useful tool in supporting aid effectiveness and poverty reduction efforts. Furthermore, analyses of this kind are likely to become more common. We are on the verge of an explosion in publicly available geo-coded aid data as donors respond to demands for greater transparency and seek to harness information technology solutions for improved coordination and accountability. (The most immediate constraint for poverty data is procedural: standardizing the reporting and collection of sub-national data from household surveys, consistent with the treatment of country-level data.)

Rather than supporting sweeping judgments about donor intentions and performance, the value of poverty targeting assessments comes from their being combined with other sources of information and informing dialogue between donors and partner governments. However, even for this more modest purpose, there remain some significant challenges.

Our analysis points to a number of questions that are likely to emerge in future discussions regarding the use of aid to target the poor, which we outline below. In anticipation of more frequent, sophisticated and complete analyses of poverty targeting, we believe these deserve proper attention.

What is the salient level of analysis for assessing the allocative efficiency of aid? The ability to drill downwards in assessing the allocative efficiency of aid need not stop at the immediate sub-national level. In the future, better data could allow analysis at the village, household or individual level. Indeed governments and donors are taking advantage of breakthroughs in biometric identification and cell phone ownership to design increasingly sophisticated social protection schemes that target poor individuals—a feat that the aid community considered a pipedream only a few years ago. However, just because individual targeting is possible does not make it appropriate for all types of aid; neither is sub-national targeting always appropriate, even where aid projects can be accurately geo-coded (for instance, the creation of an industrial park). The aid community should avoid the reductionist view that poverty impact can be equated with proximity to the poor.

What level of inequality or poverty is necessary for targeting to be an efficient strategy? The case for sub-national targeting is greatest when there is a danger that the benefits of aid will be captured by the non-poor. This seems less likely in countries where poverty rates are very high or where inequality is very low. In these settings, the transaction costs incurred in micro-level targeting may exceed the efficiency benefits of discriminating between different beneficiaries.

How should poverty targeting efforts be coordinated? A true assessment of an aid agency’s allocative efficiency in a country requires an understanding of what other organizations are funding, including the partner government and other donors. The prospects for poverty reduction are almost certainly higher if aid agencies heed the wishes of the partner government rather than each unilaterally deciding to concentrate their efforts in the country’s poorest region. Poverty targeting measures should be used to promote, rather than to evade, a greater division of labor, led by partner governments.

Authors

Laurence Chandy
Natasha Ledlie
Veronika Penciakova

Efforts to Introduce Inclusive Planning in Egypt

Kei Sakamoto — Wed, 30 Jan 2013 11:53:00 -0500

Arab countries lag behind the rest of the world on nearly all governance indicators, particularly those related to voice and participation. Together with a lack of transparency and low accountability, this has led to greater corruption and the emergence of the soft state. A sense of alienation and exclusion, especially among youth, contributed to popular dissatisfaction, which remains unsolved after the revolution. This paper focuses on ways to improve participation in policymaking and economic planning, and to provide a guiding vision to recover from the crisis after the revolution, using Egypt as an example. The paper reviews the experiences of Japan, Malaysia and Indonesia, which indicate the importance of achieving a national consensus on an economic vision for the future, and the policies and programs needed to achieve it. Successful East Asian countries have put in place consultative processes (including different government departments, the private sector and civil society) to agree on national development plans and monitor their execution. The situation has been very different in Egypt where an institutional coordination mechanism among the various stakeholders to build a national vision was missing. The research paper adapts the experiences of East Asia to Egypt’s situation, and presents a proposal for introducing the concept of “inclusive planning” in economic planning and policymaking.

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Kei Sakamoto

Establishing Good Governance in Fragile States Through Reconstruction Projects: Lessons from Iraq

Seiki Tanaka and Masanori Yoshikawa — Tue, 29 Jan 2013 15:49:00 -0500

Countries in transition often go through periods of upheaval and weak governance and Iraq is a prime example. Usually donor agencies hesitate to increase their support as they face two key problems in post-conflict or post-revolution situations: (1) high security risk for transparent implementation; and (2) poor government effectiveness, marred by corruption, ethnic tensions and economic stagnation. But this is precisely the time when donor engagement is needed most. By using the experience of JICA projects in Iraq, we argue that donors should not withdraw their support in difficult post-conflict situations. The paper proposes three mechanisms – information; social recognition; and mediation mechanisms – to solve such difficulties in a post-conflict society. The empirical analysis shows that more intensive communication between donor and government officials especially leads to a positive impact even in war-torn Iraq.

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Seiki Tanaka
Masanori Yoshikawa

Brookings: Topics - Foreign Aid

Good Data: The Foundation of Open Government

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China’s Increasing Interest in Africa: Benign but Hardly Altruistic

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U.S. Development Assistance and Sub-Saharan Africa: Opportunities for Engagement

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Are Aid Donors Repeating Mistakes in Myanmar?

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An Early Assessment of Foreign Aid to Myanmar

Event Information

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Event Materials

Learning to ‘Coexist with Risk:’ The Essence of Japan’s Technical Cooperation with Central American Countries

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How Effective Is the World Bank at Targeting Sub-National Poverty in Africa? A Foray into the Murky World of Geo-Coded Data

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Efforts to Introduce Inclusive Planning in Egypt

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Establishing Good Governance in Fragile States Through Reconstruction Projects: Lessons from Iraq

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