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A Strategic Approach to Addressing Poverty and Global Challenges: We Are in This Together

Ambassador Randall L. Tobias , Director of U.S. Foreign Assistance and USAID Administrator
Address at the Center for Strategic and International Studies
Washington, DC
February 5, 2007

[Video and audio are available on the CSIS Web site.]

Thank you, Dr. Hamre [Dr. John Hamre, President and CEO of CSIS], for hosting us this afternoon, and thanks to all of you for coming.

My topic today is not mine. It is ours: "We are in this together."

What do I mean by "We?" I mean those of us in this room. The governments of host nations who allow us the privilege of working with them and learning from them. Our foreign service officers. Our brave, committed NGO partners. Our soldiers. Congress. Fellow donors. The individuals who commit themselves to analyzing and dissecting poverty, conflict and economic growth to ensure that our practices keep progressing.

And when I say "We are in this together," what do I mean by "this?"  I mean poverty, uncertainty, instability, waste, war, global warming, fear, set backs, progress, lives saved, innovation, possibility, potential.

And when I say "We are in this together," what do I mean by "together"?  I mean we need to have one united front to combat poverty. One united front to undermine the forces that create poverty. One united front to break the cycles that sustain poverty. What I really mean is that if we really want to be successful--and I know we do-- then we are in this together. And the time is ripe for a New Deal for poverty reduction.

We are seeing unprecedented attention being given to foreign assistance and poverty right now. TV and movie stars are joining forces with academics, NGOs and the government to raise awareness about poverty issues. Corporate philanthropy dedicated to poverty alleviation is at an all-time high. College campuses across the US are uniting to address humanitarian crises.

It is very likely that many of you in this audience today have played a key role in raising awareness of the vital importance of foreign assistance. Some of you have left the comfort of your homes and families on many occasions and for extended periods because you believe so deeply that we, as a nation that has been so blessed with wealth, order, and peace, should be doing everything in our power to help others live better than they are living now.

Others of you in this room today believe in foreign assistance because you have seen, perhaps first hand on the front lines in Iraq, Afghanistan, or Pakistan, the undeniable positive contribution foreign assistance makes to national security. You have seen the impact of training and capacity building on the ability of a nation to take care of its people and create a stable economic and social environment. And you know that foreign assistance reduces the likelihood of future military action.

On Capitol Hill, it is rare today for a member of Congress, whether freshman or senior, to ask, "What is the U.S. Agency for International Development?" Instead, more and more Members are realizing the profound and complex inter-connectivity of our world and are correspondingly funding foreign assistance at unprecedented levels. Nothing illustrates this better than the recently passed Continuing Resolution which prioritized HIV/AIDS relief, malaria, and Darfur in a politically challenging fiscal environment.

And we have made great progress. I'm not sure enough people appreciate that our Official Development Assistance has nearly tripled over the past 5 years from approximately $10 billion in 2000 to $28.5 billion in 2005.

Yet after years of effort and billions of dollars of assistance, we still see some countries in the same position they were in 40 years ago - or worse.  Since my time as Global AIDS Coordinator, and more so since I took this job, I have spent a lot of time in the field, consulting with USAID Mission Directors, Ambassadors and implementing partners about why this is so. In fact, over the past few months, I have met face-to-face with 120 U.S. Ambassadors and 65 USAID Mission Directors, either here in Washington or around the world.

So what is impeding progress and where have we seen progress?  More or less across the board, they point to the fragmentation of foreign assistance; the inability, as a result of changing priorities driven by multiple actors, to implement a strategy that focuses resources, with predictability, on the real critical barriers to progress.

Without predictability, they cannot form meaningful partnerships with their host government counterparts, other donors, or their partners on the ground. They cannot make sustained commitments to what will truly address the root causes of poverty in their country. The unpredictability of their funding is due to a number of factors - and I want to focus on two.

First, unpredictability is due to failures in the executive branch to put systems in place that allow for a demand-driven, collaborative process for allocating funds to shared goals - let alone the right shared goals. As many of you have heard me note on other occasions, our past "strategy" for foreign assistance was whatever was cobbled together from the myriad missions, offices, bureaus, and agencies involved in foreign assistance, each acting from their own sets of priorities.

Second, sector-driven allocations have meant that the field received flavors of funding that did not always match the most compelling needs in that country. For example, one country needs basic education money, but could only get family planning money. Or another needs funds for agriculture, but only biodiversity funds are left.

So year after year, those in the field patch together a program that indeed alleviates some suffering, but yields "patches of green" rather than flowing interconnected "pastures of green." There is no one group, organization or agency to point to for the lack of a coordinated system of foreign assistance.
We created this situation together. Members of Congress are responding to constituent interests, or their own heart felt concerns, when they earmark funds-and why shouldn't they? They are taxpayer funds, after all.

When we announce new initiatives, the executive branch is striving to address compelling unmet needs in the developing world, or develop strong partnership ties with our international neighbors, or promote critical foreign policy interests. NGOs are responding to what they think are truly the needs on the ground when they lobby for funds for a particular sector. All sides are trying to work within the balance of power to do what's right. If we could rest assured that we are doing our best, then there would be no need for reform of foreign assistance.

But we can and we must do better. The stakes are too high for us not to commit ourselves collectively to doing this better. When domestic programs aren't working well, we can count on our own democratic system to vote leaders out of office and vote in those the voters believe will do a better job. But our partners in developing countries do not have the privilege of voting those of us in the development community out of office for not doing our jobs better. And yet our policies and lack of coordination surely impact their well-being, and often times their very lives.

On their behalf, I share with you today four principles that I believe we can and should come together to support.

One: We must focus on country progress.

And the new Strategic Framework for U.S. Foreign Assistance explicitly focuses on country progress. The goal is to help build and sustain democratic, well-governed states that respond to the needs of their people, reduce widespread poverty and conduct themselves responsibly in the international system.
Its explicit intent is to move countries from a relationship defined by dependence on traditional foreign assistance to one defined by full sustaining partnership status.

In past budget years, much of the budget was built not by country, but by sector: So much for family planning, so much for basic education, so much for security assistance, and so on. Then funding from within these sector levels were parceled out by country, on the basis of multiple sector-based strategies - one for family planning, etc. You get the picture.

But in many areas where we've chosen to give X dollars to a sector, we have based this decision on what it means for us, rather what it does for them. I don't mean that these sectors are not critical to a country's development strategy - clearly they are. It's a matter of what should drive the country's development program - country-prioritized need or a set global amount for a sector. We must tailor development programs to the unique needs of each recipient country in reaching the transformational diplomacy goal.

This year, we made foreign assistance planning and budgeting country-focused. We brought together teams of experts from USAID and State in Washington, with consultation with their field counterparts, and we gave them an overall target number for each country. Not by account, not by sector; just a total.

We gave them data on the status of country progress against independent indicators assessing poverty, human capacity, life expectancy, governance, and barriers to economic growth. We gave them the new Strategic Framework for U.S. Foreign Assistance, and the balance of interventions it implies for the circumstance unique to each country category. And we then asked them to allocate that budget to the areas that would best advance individual country progress.

For full truth in advertising, we did set three sector levels: for HIV/AIDS, Malaria, and Food Aid. The emergency nature of each of these interventions demanded a different approach. And indeed their allocation by country was not inconsistent with what countries were requesting. The benefit, in this year, was in coordinated planning based on the totality of U.S. Government resources being planned for each country. We were able to ensure, looking across agency contributions, that programs are mutually supportive and coordinated for maximum impact and sustainability. That's the first principle.

Two: We must focus our resources where they will make the most sustainable impact.

Foreign assistance in the past has run the risk of being a mile wide and an inch deep. With a thousand agendas embedded in our foreign assistance programs, our impact was diluted and diffuse. It is important to note, as I often do, that there is very little that we have been doing out there that is bad. Someone, some community, is benefiting from the services we are providing, the interventions we are supporting. But that is not the point. The real question is, are we achieving sustainable impact? Are we doing more than short term charity? Are we, in fact, enabling transformation? Are we giving people what they need to sustain further progress on their own?.

Based on the new country-driven process, we have prioritized resources to the areas that we believe will promote and sustain long-term country progress. Funding is increased to programs targeted to improving governance and democratic participation; programs mitigating diseases that threaten the human and economic capacity of countries to progress on their own; programs that expand access to and improve the quality of education; and programs that enhance economic opportunity and the skills needed to participate in the global economy.

All of this is a result of a demand-driven process that asked experts to prioritize limited resources on the basis of the most significant levers that will achieve country progress - and to focus our resources so we can achieve real impact.

I often think about our past practice of allocating funds as being similar to teaching an individual a little French, a little German, and a little Spanish. If we keep doing it, that person will very slowly be able to speak a little more French, a little more German, and a little more Spanish. But if we instead took the resources spent on each language and put them toward one language, that person would be able to communicate fluently, and would then be better able to learn the other languages on his/her own.

Similarly, when we split up our resources into too many sectors in one country, progress will be slow and often imperceptible. If we instead focus our resources, we enhance the ability of a country to gain enough strength and stability in one sector to sustain further progress on its own.

Three: We must focus our resources in states critical to long-term stability and prosperity.

In the FY 2008 budget request, you will find that 51% of Department of State and USAID program assistance resources are concentrated in Rebuilding and Developing countries. These are the countries that are farthest away from sustaining partnership status, as measured by instability, poverty, human capacity, life expectancy, governance, and barriers to economic growth; all critical barriers to regional stability and success in the Global War on Terror.

We have seen the risks that "ungoverned spaces" can pose to our national security and to their regional neighbors; we are also very aware of the costs of these "ungoverned spaces" to their own citizens. States like Somalia, Afghanistan, Sudan, and the Democratic Republic of the Congo are among the poorest in the world. Their citizens are among the least able to access basic needs-including security.

At the same time, to truly transform the development landscape, we also need to focus on Developing States such as Nigeria, Ukraine, Georgia, Pakistan, Jordan, and Indonesia - states that are on the cusp of transitioning to economic, political and social self-sustenance, and that, with continuing progress, can serve as anchors for regional stability and prosperity. We need to work with them to help them strengthen their institutions to make their progress permanent.

Four: We must do all within our power to achieve full funding for this year's foreign assistance budget request.

The piece parts of this year's budget are intricately intertwined, and based on principles designed to maximize country progress. Like a Rubik's cube where all of the colors are neatly arranged on each face. But when one side has to be moved, the other colors on all sides of the cube get jumbled and misaligned.
So if we are to achieve this alignment, if we are to truly achieve transformation, we first need every penny requested in the FY 2008 budget for foreign assistance.

As you all well know, right now we are in a climate of budget fiscal restraint. For too many, foreign assistance is a politically uncostly target for cutting the budget. Many of us have been told to expect a lower budget level. With this in mind, we might be tempted to fight for what has for too long been referred to as "traditional development assistance," defined as the funds that help only the very poorest, the very base of US foreign assistance.

But I ask you to consider what is "traditional development assistance?" And is that a term that we really want to use to describe what we are trying to achieve - country progress that will help build and sustain democratic, well-governed states that respond to the needs of their people, reduce widespread poverty and conduct themselves responsibly in the international system.

Tradition implies ritual, custom, habit, convention. Is that how we want foreign assistance to be considered? I would argue that we need progressive development assistance. Every penny helps countries progress. Democracy programs that help build the institutions and accountability for health service delivery are every bit as integral to sustainable development as the service delivery itself.

The U.S. Government cannot continue to provide funds for service delivery at the expense of the institutional capacity-building that will enable that service delivery to be sustained . We need to rid ourselves of that tradition if we are to convince the American people and Congress that they should support foreign assistance.
If we are to have this budget request fully met, then each one of us here today, and all of your friends, and your friends' friends, will need to understand the importance of protecting the entire foreign assistance budget. If there is a leak in the boat, just because it is not in your end of the boat, will not keep the boat from sinking. Congress needs to hear your voices in support of the whole, the entire solved Rubik's cube, not one that becomes distorted and misaligned.

Over the past 9 months, my office has put a lot of ideas on the table about how the U.S. Government can and should move forward with transparency, coordination, accountability and effectiveness. We have worked closely with the Office of the Global AIDS Coordinator and the Millennium Challenge Corporation to ensure that our country-based plans complement the inputs of each organization. And we have developed a system that will better define and track what we are doing with our foreign assistance resources. We have taken the critical first step of getting our own house in order, but we have only begun.

At the same time, we need to help each other think about how we can build a foreign assistance process that unites donors, implementers and host countries in putting together in each country one national development strategy, one mechanism for implementation, and one system for monitoring and evaluating development programs. We need the ideas of practitioners and experts to continue to help us refine both what we are doing and how we are communicating it. I am grateful to those who communicated to me or to my staff that the transformational diplomacy goal needed to explicitly include the word "poverty."

I hope our decision to include poverty is an indication to you that we are listening, we want your ideas, and we want to work with you. Change may sometimes not occur as quickly as you would like, but it doesn't mean that your input is not or will not bring about change. At the same time, I am heartened by what I take as signs that we truly are in this together.

Over the last couple of months, my staff and I have met on numerous occasions with many leaders in the development community and on the Hill. We have presented the framework and reform elements to multiple consortia of NGO groups, including InterAction, the Global Health Council, the Global Leadership Campaign, faith-based NGOs, environmental NGOs, education NGOs, labor NGOs, and gender equity NGOs. We have solicited input from these groups on the framework itself, on the indicators that we will use to measure our progress, as well as on our process for ensuring that our foreign assistance resources are integrated, coordinated, and comprehensively targeted to the achievement of the transformational diplomacy goal.

Throughout this process, I've been struck by the fact that, notwithstanding an incredibly fast-paced process which has in many cases limited our ability to communicate even more thoroughly with all interested parties, the principles of this reform have widespread support. As we move forward together, I want to humbly ask you to do the same thing I asked USAID and State Department employees to do when I started in this position: please leave your uniforms at the door. We will better engage with one another and achieve more gains in development when we think about our suggestions in terms of "them, not us."

The attraction of the idea to include poverty in the transformational diplomacy goal was that it didn't belong to one organization or sector, it belonged to the united interests of our movement. Parochial interests that are not grounded in data or country progress do not serve our cause and they do not serve our goal to have the President's foreign assistance budget request fully funded. Those wishing to find ways to cut the budget will be looking for ways to divide us. We cannot - we must not - allow them to do that. We must not, because we are in this together.

Thank you very much.

Released on February 5, 2007

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