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 You are in: Director of U.S. Foreign Assistance > Office of the Director of U.S. Foreign Assistance: Releases > Office of the Director of U.S. Foreign Assistance: Remarks (2006)

Fiscal Year 2007 Budget Hearing for the U.S. Agency for International Development

Ambassador Randall Tobias, Director of U.S. Foreign Assistance and USAID Administrator
Testimony before the Senate Appropriations Committee Subcommittee on State, Foreign Operations, and Related Programs
Washington, DC
June 8, 2006

Thank you, Mr. Chairman, for the opportunity to testify before the Subcommittee today on the fiscal year 2007 USAID budget.
 
I want to express my appreciation to you, Mr. Chairman, and to you, Senator Leahy, for your guidance and support in my former role as U.S. Global AIDS Coordinator and to thank you for your commitment to our foreign assistance programs. Your attention to strengthening democracy, Chairman McConnell, and your commitment to augmenting the voice of the disenfranchised, Senator Leahy, have helped citizens hold their governments more accountable across the globe.  I look forward to working with you both, and with the other Members of the Subcommittee, in my new capacity as Director of U.S. Foreign Assistance and Administrator of USAID.
 
My first couple of months as USAID Administrator has reinforced my belief that the men and women of the Agency are motivated by a true sense of mission and commitment. I am eager to do all that I can to sustain their dedication and to ensure that their valuable experience is brought to the table as we embark on reforming our approach to foreign assistance.
         
I just returned from two weeks of travel through Pakistan, then Afghanistan, and Iraq – where hundreds of brave USAID employees put their lives on the line every day in an effort to help people in nascent democracies build a free and prosperous future for themselves.  As I traveled through the region, the full range of USAID programming was on display, from the humanitarian intervention in societies ravaged by natural disasters to the reconstruction of societies ravaged by tyranny and war; from efforts to secure peace and security to efforts to invest in people and help them build richer fuller lives for themselves. 
 
The message I took to President Musharraf of Pakistan and President Karzai of Afghanistan, as well as to President Jalal Talabani, Prime Minister Nuri al Maliki, and the newly-formed government of Iraq was of our commitment to a long-term strategic partnership between the U.S. and their countries.
 
Democracy is taking root in Afghanistan and Iraq and the leaders I met are committed to a new direction for their countries.  We are seeing some economic progress and through programs like Afghans Building Capacity – a multi-year investment of up to $125 million that amounts to the largest and most comprehensive such USAID effort in perhaps 20 years anywhere in the world – we will assist the Government and the people of Afghanistan as they develop the physical and human capacity in the public sector, private sector and civil society to sustain growth both in Kabul and the provinces.
 
I recognize that my testimony this afternoon will be somewhat different from traditional budget testimony.  I will briefly review the FY 2007 budget request for USAID, but will focus my testimony on the Administration’s reform of foreign assistance for FY 2007 and beyond.  In addition to the discussion we are going to have today, my staff and I stand ready to address any detail of the FY 2007 budget request with you and/or your staff after this hearing. 

FY 2007 Budget
The FY 2007 program budget continues efforts to build democracy, good governance and economic growth in Iraq and Afghanistan, and requests funds in support of other frontline states in the Global War on Terror.  USAID will play a critical role in the Provincial Reconstruction Teams that will be deployed throughout Iraq and Afghanistan.  In Sudan, we are well on our way to standing up a mission in Juba.  This will enhance our influence in helping move the country to peace, reconciliation and a better future.  
 
USAID is requesting $3.15 billion for its FY 2007 programs.  In addition, we anticipate working with the Departments of State and Agriculture on joint programs that total $5.4 billion in Economic Support Funds (ESF), Assistance for the Independent States of the Former Soviet Union (FSA), Assistance for Eastern Europe and the Baltic States, the Andean Counternarcotics Initiative and P.L. 480 Title II.  We will also manage a portion of the $2.9 billion requested for the Global HIV/AIDS Initiative by the Global AIDS Coordinator and a portion of the $3 billion for the Millennium Challenge Corporation.  USAID is requesting a total of $679 million for Operating Expenses and $132 million for contributions to the Capital Investment Fund.

Enhancing the Impact of Foreign Assistance: Reducing Inefficiencies and Incoherence
Secretary Rice launched her Transformational Diplomacy and Development initiative in January to address the incoherence and lack of focus in our foreign assistance programs.  In doing so, she noted that both the content and organization of foreign assistance require adjustment to meet the challenges of today’s world.  The Secretary noted, "The current structure of America's foreign assistance risks incoherent policies and ineffective programs and perhaps even wasted resources. We can do better and we must do better." Today, I want to commit to you we will do better.
 
Under the previous USAID and State organizational structure, each agency maintained independent budgeting and planning offices to focus on their own part of foreign assistance. This required two staffs to develop multiple and parallel iterations of their individual budgets in the same program areas, two staffs to agree to and integrate a set of numbers, two staffs to brief the Hill, and a myriad of programs that may be redundant - or worse, at cross purposes. While each agency collaborated with the other, in spite of the best efforts of the people involved, it was done at great cost in time, personnel, and impact.
 
Of great concern to me - and I know to many of you - is the inability of our Washington information systems to capture “all-spigots” funding levels across sectors or in a variety of other dimensions – information that is vital to the oversight work of both Congress and the Administration.  I know it will not be easy, but we need to bring transparency and accountability to explaining the use and result of our foreign assistance funds.
 
I realize that as I outline the challenges we face, I do not need to convince you this afternoon of what we need to do. Congress has consistently called for improved transparency in the way budgets are put together and funds expended - and vastly improved accountability for the results. I simply want to emphasize that I, too, am focused on that goal, and that I look forward to working with you in achieving it.
 
In our current environment, the locus of national security threats has shifted to the developing world, where poverty, oppression, and indifference are exploited by our foes to provide haven for terrorists and the preparation of terrorist acts.   As I know you have recognized with your attention to democracy programs, Mr. Chairman, foreign assistance is an effective tool for countering these new threats.  For this reason and others, foreign assistance has become a foundational pillar of our new national security architecture. 
 
Our approach: We Will Do Better 
As you know, under the reform initiative, the President has appointed me to be Director of U.S. Foreign Assistance, in addition to my Senate-confirmed position of Administrator of USAID.  The President and Secretary Rice have assigned me the task of bringing strategic coherence to our planning, budgeting and implementing of foreign assistance.  I intend to do this first by focusing on our three greatest challenges: the lack of strategic focus in our programs, our fragmented budgeting process, and our inability to track, transparently and in sufficient detail, where our funding goes – all problems I know that  Congress has recognized for some time.
 
First, as your staffs have been briefed, we have introduced a new Strategic Framework for foreign assistance appropriated to both the Department of State and USAID.  This framework establishes a set of broad objectives for foreign assistance that will help transform countries into better, more effective partners to create a safer and more just international system.  We believe that this goal of transforming countries can be accomplished if we focus on five objectives: achieving and maintaining peace and security; helping improve governance and democratic participation; contributing to and promoting investments in people; helping engender economic growth; and maintaining our commitment to respond to humanitarian disasters.
 
At the country level, where the ‘rubber of our programs meets the road,’ this Framework serves as a "roadmap," guiding programming to help us achieve our overall goals. My intent is that we here in Washington – with essential input from Congress - will more clearly establish the goals toward which our foreign assistance will be directed and the measures by which we will track progress. Then, under the leadership of each of our Ambassadors, country teams in the field will define the activities for which funds will be used to most effectively pursue those goals. 
With their expert knowledge of country circumstances, our staff in the field will produce better integrated, more coherent country operational plans that indicate, for each activity, the partner, the amount of money, the expected outputs, and ultimate outcomes that will contribute most effectively to achieving  the established goals.
 
The country operational planning approach differs from the status quo in that all assistance agencies in country will work together as a country team to identify unified resources, both human and financial, to bring to bear on the goals and performance targets of each sector of assistance planned to drive country reforms.  This process produces a single USG document detailing our approach to assistance guided by strategic goals. 
 
These unified plans will be reviewed in Washington for their consistency with overall goals and expectations, with final allocation decisions made only after plans are approved. By requiring detailed and specific planning up-front, directly before FY 2007 funds are appropriated, we hope to improve the strategic focus of our programs sooner and increase the speed their implementation.
 
Second, with the Framework in place, budgetary decisions and program funding proposals will be weighed against how they contribute to the overarching goal the Secretary has set of helping countries become effective partners.  To ensure that our budget staffs at USAID and State allocate funds according to this goal in an integrated and consistent way, I have joined them into one budget, performance planning and results monitoring organization, under my direction.  By bringing this staff together into one office, we have begun to streamline processes, improve efficiency and effectiveness, and reduce the burden that redundant functions place on our field staff. 
 
Finally, we will track where the money goes, including the results it is producing. As you know from your experience in working with me on the President's Emergency Plan for AIDS Relief, I have placed a great deal of emphasis on transparency for our funding. To bring that same level of accountability to the rest of our foreign assistance spending, we are in the process of building a new strategic information system for USAID and State funds that will tell both you and me exactly who is receiving our funds, what they were doing with the money, what is expected as a result, and how that result will help us reach our goals.
 
These changes represent a substantive shift in the planning, allocation, and programming of foreign assistance resources, including new responsibilities for both Washington and the field.  Accordingly, this effort will remain a work in progress for some time, but we are moving as quickly as we can. It is our intent to produce joint country operational plans for USAID and State funds for 35 countries for FY 2007 that we can share with you in February.  By August 2006, we aim to have our new information system in place to begin to collect and track this data. 
 
Beyond this more strategic approach to planning and budgeting and the transparency we intend to provide, I also want to improve our responsiveness to the Congress in other ways.  Beginning today, I want commit that USAID will provide you with answers to your informational requests within 48 hours and to formal letters within a week; or, when that is not possible, we will be in touch with your offices within those timeframes to explain the reasons why, and to work with you to establish a reasonable schedule for getting the information to you.  Along those same lines, I also commit to delivering Congressional reports on time to enable you to do your necessary oversight to make our programs stronger.  

Conclusion
 
As articulated both by President Bush and by Secretary Rice, we are entering a new era of foreign assistance where our resources will be better aligned with our strategic priorities.  We will be more accountable to American taxpayers and use their resources more efficiently and effectively.
 
None of this will be easy.  But in recognition of the fact that our future as Americans is inextricably linked to those we seek to assist, we must be certain that our investments are producing the greatest results at the lowest cost to the taxpayer.  We will need the help of Congress to achieve this aim.
 
Thank you very much, Mr. Chairman.  I will be happy to answer any questions you may have.



Released on June 8, 2006

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