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U.S. Aid Shift Envisions Path to Self-Sufficiency

Matthew O. Berger

WASHINGTON, Oct 25 2010 (IPS) - As part of a more general promise of reform to U.S. development policy, the U.S. Agency for International Development is poised to fundamentally alter the way it tackles poverty overseas.

When President Barack Obama announced a new Global Development Policy at the Millennium Development Goals summit in New York last month, he said the United States would be moving toward building up the capacity of developing countries so that they can develop themselves.

“Consider the millions of people who have relied on food assistance for decades. That’s not development; that’s dependence, and it’s a cycle we need to break,” he said. “Instead of just managing poverty, we have to offer nations and peoples a path out of poverty.”

The first steps in that new path may be unfolding at USAID, where officials have been overseeing far-reaching reforms to their implementation and procurement practices, according to agency documents and those familiar with the agency’s work.

This implementation and procurement reform, or IPR, affects “how USAID does everything it does”, says Oxfam America’s director of aid effectiveness, Gregory Adams.

Maura O’Neill, chief innovations officer at USAID, calls the reforms an “early outcome” of the policy changes announced by Obama and says they might make it possible to “imagine a world where aid is no longer necessary”.

A USAID factsheet lists the first objective of the reforms as strengthening partner country capacity to improve aid effectiveness and sustainability.

This development would directly address breaking the cycle Obama alluded to in September by promoting the concept of ownership, whereby developing countries have greater say over the type of assistance they receive rather than relying on what donor countries want to give them.

It would also address promises the U.S. and other countries made in 2005 when they agreed to take steps toward increasing country ownership and other development priorities as part of the Paris Declaration.

“Poor countries are poor not just because they lack resources but because they lack the systems to attack that poverty,” says Adams. Rather than helping countries to solve their own problems, “too often the U.S. has tried to manage U.S. assistance using U.S. systems”.

Now, USAID is poised to implement reforms that will help citizens and governments in developing countries build up the capacity to be able to take charge of their own development.

“If we are to build conditions where aid is no longer necessary than we will need to build up country capacity,” explains O’Neill.

And the agency has concrete goals for the short- and medium- term to ensure those reforms take place.

In terms of strengthening developing country capacity, USAID will increase the amount of money it channels through country systems from less than 10 percent to 20 percent in at least 25 countries by fiscal year 2015.

There are similar goals for the other five objectives of the reform: strengthening the capacity of local civil society and private sector partners, increasing the number of partners the agency works through, using U.S. resources more effectively, strengthening ties with bilateral and multilateral donors, and rebuilding the agency’s own technical capacity.

Beyond redirecting money, USAID is also looking at ways to decrease the incidence of poor governance and corruption – which critics of increasing country ownership point to as a potential flaw of the reforms.

Oxfam, an advocate of increasing country ownership, points out that the reforms would not simply give sums of money over to poor country governments but give those governments more of a say in what the aid money goes to and how it is provided.

Adams wonders whether U.S. policymakers will see the first corruption scandal that is uncovered as a success or a failure. “Countries cannot develop if they’re not uncovering corruption – that’s part of the development process,” he says.

Toward that end, and toward ensuring U.S. aid is effective, USAID has been developing a tool in Liberia to assess country systems, according to O’Neill.

Some of the reforms are underway already, while others will be soon and still others will need some approval from the U.S. Congress.

O’Neill says that already there are six projects working to build local capacity on the ground – in Egypt, Kenya, Peru, the Philippines, South Africa and Thailand.

She says that the reform targets associated with IPR are expected to not only increase in future years but also have a broader impact on USAID’s work as the agency “learns better, quicker ways to arrive at development outcomes”.

In that sense, she says, IPR is a “base initiative” for broader efforts.

Oxfam’s Adams also expects the concrete targets to grow over time, though he says they do go far enough for now.

“Whether they’ll be able to [implement reforms over the] longer term or expand them over time largely depends on whether there is a consensus on what they’re trying to do,” he says, explaining that ultimately the debate in Washington will be about whether development “is about giving people a bunch of stuff or developing consensus on how people are going to solve their own problems”.

He believes it is the latter and sees the new direction at USAID as an effort to “try to help people help themselves – the ultimate teach-a-man-to-fish type of policy.”

“[Oxfam doesn’t] see development as resource transfer but as the ability of society to figure out how to allocate resources and meet the needs of the people…The service- delivery model has no exit strategy,” he says, a point he sees borne out in Haiti where the government has lacked the capacity to deal with its population’s problems for decades and so donors largely work through NGOs instead.

To really help Haiti, Adams says, you have to help that government build up the institutional capacity it has lacked for so long. “There is no solution in Haiti that goes around their government,” he says.

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