President Obama signed a Presidential Study Directive (PSD) on Monday calling for a government-wide review of U.S. global development policy. According to White House staff, the president has asked National Security Adviser Jim Jones and National Economic Council Chairman Larry Summers to lead the review. The review will include all U.S. government agencies involved in global development as well as Congress and constituents. Findings and recommendations from the review will be provided to the president in January. All of this is welcome news to many in the development community who have been tracking the growing momentum in Congress and the executive branch to strengthen U.S. global development efforts. And the directive signals that the White House is seriously thinking about how the U.S. engages with poor countries and promotes global development, including but not limited to stronger and smarter foreign aid.

While we wait to read the full details of the latest Presidential Study Directive (PSD) on global development (it’s not yet publicly available), we know that PSDs initiate reviews of policy procedures generally pertaining to national security and President Obama’s first PSD, Organizing for Homeland Security and Counterterrorism, might serve as a good guide for what we can hope to see in the global development PSD. I’d like to see the global development PSD keep similar language calling for:

1. A full, interagency review of how to reform the White House organization to create an integrated, effective and efficient approach, in this case to strengthen U.S. and global prosperity and security;
2. Full participation from all the U.S. government agencies involved in global development (from State, to USAID, MCC, Treasury, Defense, Centers for Disease Control, Department of Agriculture, and many more) and a commitment to consult important stakeholders in Congress and among outside experts during the course of the review; and
3. Consideration of the recommendations from numerous bipartisan and expert studies on the issues (from the Modernizing Foreign Assistance Network’s New Day New Way; the Center for Global Development’s White House and the World: An Global Development Agenda for the Next President; the Brookings/CSIS’s Security by Other Means report; and many others).

Unlike the first PSD on counterterrorism, I hope that the global development PSD will include the USAID administrator among the addressees (even better if we soon have a new USAID administrator appointee—those growing impatient are casting their votes for the next administrator here!). I also hope to see some language encouraging the review to address the full range of U.S. policies—from foreign aid, to trade, climate change, migration and more—that affect how the U.S. engages the rest of the world, including developing countries. I’m also eager to learn how the White House will engage the multilateral development institutions such as the World Bank and the International Monetary Fund in the review and potentially other development donors from the UK, Germany, France, Japan, and elsewhere.

The White House call for a presidential study directive on global development comes on the heels of announcements from both the executive and legislative branches aimed at strengthening U.S. global development efforts including:

1. The Department of State has said it will undertake a Quadrennial Diplomacy and Development Review (QDDR);
2. House Foreign Affairs Committee Chairman Howard Berman (D-CA) and Mark Kirk (R-IL) introduced the Initiating Foreign Assistance Reform Act (H.R.2139) that calls on the administration to develop a national strategy for global development and now has 100 Republican and Democratic co-sponsors;
3. Senate Relations Committee members Kerry (D-MA), Lugar (R-IN), Menendez (D-NJ), Corker (R-TN), Cardin (D-MD) and Risch (R-ID) introduced the Foreign Assistance Revitalization and Accountability Act of 2009 (S.1524) that calls for strengthening the U.S. Agency for International Development and monitoring and evaluation of aid programs; and
4. House Foreign Affairs Committee Chairman Berman and his staff have begun the process of rewriting the outdated 1961 Foreign Assistance Act.

Together, these are welcome signals that the executive branch and Congress are committed to strengthening U.S. global development. The trick, as Sheila Herrling at the Center for Global Development points out, is going to be figuring out how to put them all together so that you end up with a smart, coordinated U.S. strategy for confronting poverty, inequality, conflict and disease that threaten prosperity and security globally and at home.

-Sarah Jane Staats

“The issues that we face today- from chronic poverty and hunger to violent acts of terrorism- require that we work seamlessly toward identifiable goals.” Senator Richard Lugar opened with a strong statement on the importance of aid reform yesterday at a hearing of the Senate Committee on Foreign Relations that I attended called The Case for Reform: Foreign Aid and Development in a New Era. Witnesses at the hearing included Peter McPherson, President of Public and Land Grant Universities and former administrator of USAID, Jeffrey Sachs, Director of the Earth Institute at Columbia University and Rev. David Beckmann, President of ONE partner organization, Bread for the World and Co-Chair of the Modernizing Foreign Assistance Network.

The hearing highlighted a bill written by Senators Kerry, Corker, Menendez and Lugar that seeks to strengthen USAID and thereby strengthen the effectiveness of U.S. foreign assistance. The bill has three main facets:

• To strengthen the monitoring and evaluation program of USAID by creating an “internal evaluation and knowledge center” and reinforce the partnership between USAID and the State Department to make sound decisions relating to development.
• To coordinate all U.S. agencies that have a role in foreign assistance by promoting information sharing and appointing a Mission Director at USAID to coordinate all development and humanitarian assistance within all countries where the U.S. works.
• To create a high-level task force at USAID and increase training within USAID and other U.S. development programs to alleviate the disorganization that has arisen with increased funding and decreased staffing at USAID.

McPherson, Sachs and Beckmann spoke very highly of this bill and were in agreement with the idea that the U.S. must increase their capacity in foreign assistance through higher level leadership and monitoring and evaluation. If these steps are taken, USAID will become an effective long-term development agency rather than the short-term disaster relief organization, which it has evolved to in recent years according to Senator Kerry.

Jeffrey Sachs had many strong words of advice to the United States development community. He stated that the framework of development assistance should focus on agriculture, healthcare, education, infrastructure, small business development and climate change, emphasizing that progress on these issues will promote resources which would in turn reestablish law and order in countries like Kenya where it is lacking.

Rev. Beckmann mentioned that the American people value aid reform and increased resources to developing countries, even in hard economic times. He praised ONE along with other NGOs for reaching out to members to voice these opinions and encourage their representatives to support initiatives such as the Water for the World Act and the Global Food Security Act.

- Leah Moriarty

On Monday, we noted that the Munk debates program would feature a discussion about foreign aid and we encouraged those who watched to post their thoughts and reactions. ONE’s Policy Advisory Board member Paul Collier, along with Stephen Lewis, Dambisa Moyo, and Hernando de Soto talked for almost two hours about the opportunities and challenges of foreign aid. The purpose of the Munk debates is to “enliven and elevate public discussion of the political, social, and cultural issues shaping the course of the world’s events and Canada’s future.” This goal was certainly accomplished – the debate participants engaged in a lively discussion about their thoughts on how and why foreign aid has affected Africa and what are the best ways to reduce reliance on donors to finance programs. Exchanges like this are helpful to educate people about foreign aid and the array of perspectives about it.

While there was disagreement between the two ’sides’, represented by Moyo and de Soto, arguing that aid does more harm than good, and Lewis and Collier, arguing the opposing view, there was common ground. The debate participants agreed that African countries cannot continue to rely on foreign aid to the extent they are now, that strong leadership and good governance are critical to transitioning from aid dependence, and that aid has had mixed results over the past 60 years. There was also agreement on the importance of the private sector in economic growth, through investment and job creation.

The audience voted before and after the debate on whether foreign aid does more harm than good. The outcome? The majority of people do not believe that aid does more harm than good. This means that both before and after the debate, the majority of the audience believes that aid does more good than harm. Before the debate, 61% of the audience voted ‘against’ the principle that aid does more harm than good, compared to 59% of the audience who voted after the debate. The opposing side, who believe aid does more harm than good, had 39% of the votes before the debate and 41% afterwards.

What do you think? Watch the webcast and let us know.

-Lisa Fleisher

The Swedish and Dutch governments announced today that they will suspend $33 million in aid to Zambia following reports about embezzlement in the Ministry of Health. Reports indicate the civil society was calling for the Ministry of Health to publish expenditures, but former President Mwanawasa cancelled the spending reports, which may have led some officials to siphon funds for their own use. In response to concerns that the lack of funding will affect the delivery of health services, the Minister of Finance Musokotwane stated that the Zambian government will develop a plan to fill the gap and investigate the corruption charges.

The transparent publication of spending by donors and governments is a critical component of ensuring money for development is used as effectively as possible. Like the Global Fund to Fight AIDS, TB, and Malaria, the Swedish and Dutch governments’ response to reports of embezzlement in the health sector suggests their support for the idea that well-governed programs are critical to successful development and that aid can help to encourage transparency and accountability.

-Lisa Fleisher

On the Financial Times blog, Steve Radelet offers a response to the question “Is aid working?” Radelet takes to task Dambisa Moyo’s “extreme views” by suggesting the more important question is “Under what circumstances does aid work, and what can be done to make it more effective?”

Excerpts below, full post can be found here

Ms. Moyo argues that “Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased.” But this storyline is at least a decade out of date. Since 1996 – twelve years now – economic growth across sub-Saharan Africa has averaged 2.3 per person per year. And it is not just due to oil. There are 18 strongly performing countries, none of them oil exporters, that together have achieved per capita growth averaging 3.1 per cent, meaning that average incomes have increased nearly 50 percent in twelve years. Most of these 18 countries are now democracies, including Mozambique, Tanzania, Ghana, Lesotho, Namibia, Mali, South Africa and others, and the majority are measurably improving governance. Across Africa literacy rates are up, infant mortality rates are down, and 34m more children are in school since 2000. And according to analyses by the World Bank, poverty rates (at $1.25/day poverty line) peaked at 59 per cent in 1996 and dropped to 51 per cent by 2005, a remarkable drop in nine years. Poverty in Africa has been falling, not rising.

What happened? The turnaround is primarily due to stronger leadership in Africa, much better economic policies, lower debt burdens, new cell phone and internet technologies, and an emerging and vibrant business class. What about aid? Aid has been neither panacea nor demon. Much has been wasted on sordid dictators, projects that didn’t fit local needs, and bureaucracies that ensure only a fraction of funding gets to those that need it. But much has helped support success.

-Chris Scott

In the Financial Times, Mo Ibrahim argues that while investment and good governance will ultimately solve Africa’s problems, “effective aid has an important role to play in the quest for sustainable economic growth and poverty reduction.” Ibrahim offers this assessment in light of the recent debate about aid in the wake of Dambisa Moyo’s book Dead Aid. Ibrahim argues for a “holistic approach to development in Africa that is centred on good governance.”

Excerpts below, full piece here

The critical argument should not be about aid or no aid – no one can question the necessity of pure humanitarian aid as long as it satisfies basic good governance criteria. The argument should be about where to focus aid to achieve the best returns for donor taxpayers and aid recipients. I propose two areas to focus aid: the hardware of Africa, infrastructure and regional integration; and human software, in the form of education and health.

The reality is that most African countries are sub-scale and fundamentally unable to compete in a global market. If economies the size of the UK, Germany and France find regional integration necessary to ensure growth, then 53 un-integrated African states have a competitive disadvantage. This fragmentation is evident in Africa’s transportation infrastructure, geared towards trade outside rather than within the continent. Africa needs to integrate its economies and open their borders to each other. Development aid can help these efforts and facilitate intra-African trade. This capital investment cannot succeed without investment in education and health.

Finally, while debate on development aid is of great importance, more of this energy should be spent on climate justice. Africans have emitted the least carbon per capita but will have to face the greatest consequences of its emission. A worthier use of the time of these great African and other economists is to devise a solution that allows the continent to meet the adaptation and mitigation costs of climate change.

-Chris Scott

Jeffrey Sachs wrote a strong op-ed in the Huffington Post on Sunday outlining the flaws he sees in many anti-aid critics arguments and highlighting the many benefits of effective aid. I pulled out some excerpts below, but recommend reading the full piece.

The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training…

I certainly don’t begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I’d find Moyo’s views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help…

Americans are predisposed to like the anti-aid message. They believe that the poor have only themselves (or perhaps their governments) to blame. They overestimate the actual aid from the US by around thirty times, so they imagine that vast sums are flowing to Africa that are then squandered. Many believe, typically in private, that by saving African children we would be creating a population explosion, so better to let the kids die now rather than grow up hungry. (I’m asked about this constantly, usually in whispers, after lectures). They don’t understand the most basic point of worldwide experience: when children survive rather than die in large numbers, households choose to have many fewer children, in fact more than compensating for the decline in child mortality. Africa’s high child mortality is ironically a core reason why Africa’s population is continuing to soar rather than stabilize as in other parts of the world.

Of course, most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs – the good and the bad – into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back. Nor do Americans hear that many poor countries graduate from the need for aid over time, precisely because aid programs help to spur economic growth and successfully prepare countries to tackle future priorities. US aid to India for increased food production in the 1960s paved the way for India’s growth takeoff afterwards. There are countless other examples in which countries have benefited from aid and then graduated, including Korea, Malaysia, Taiwan, Israel, and others. Egypt is on that path today, and Rwanda, Tanzania, Ghana, and others will be as well if both donors and recipients carry forward with a sensible assistance strategies…

During this C-Span interview, Rev. David Beckmann talks about the need to reform U.S. foreign aid. A more efficient foreign assistance system-with better coordination, better accountability, better clarity-will ensure that people get help faster and more effectively.

The process started with the submission of a new bill in Congress, HR 2139, the Initiating Foreign Assistance Reform Act of 2009. Beckmann is president of Bread for the World and co-chair of the Modernizing Foreign Assistance Network.

-Adlai Amor, Director of Communications, Bread for the World

On Tuesday, Representatives Howard Berman (D-CA), Chairman of the House of Representatives Foreign Affairs Committee and Mark Steven Kirk (R-IL) introduced the ‘Initiating Foreign Assistance Reform’ Act of 2009 (HR 2139). The bipartisan bill represents a remarkable step forward in the effort to better organize and coordinate US foreign assistance programs. What is particularly striking about this important bill is new language requiring increased transparency in American aid programs for developing countries.

As a key member of the group who launched Publish What You Fund (PWYF), ONE has been actively involved in the debate around increasing aid effectiveness and is very proud of the advisory role PWYF played during the drafting process of a new bipartisan bill designed to increase accountability and improve the effectiveness of U.S. foreign aid.

Section 4 of the bill addresses how US aid will become more transparent, stating that “the American taxpayers and recipients of United States foreign assistance should, to the maximum extent practicable, have full access to information on United States foreign assistance.” Departments and agencies responsible for directing foreign aid will be instructed to post information on the internet about the amount of money disbursed as well as information about contract agreements and monitoring reports for specific programs on a country-by-country basis. Additionally, the bill instructs that information should be posted in a timely way. In addition, the bill states that because of the importance of understanding the role of foreign assistance from the United States relative to funding from other donors, the US should participate in the International Aid Transparency Initiative, established on September 4, 2008, at the Accra High Level Forum on Aid Effectiveness.

Aid effectiveness is critically important, especially in these tough budgetary times. We’re excited to see a bipartisan team of congressional leaders introduce this bill and looks forward to working with the powerful group of unlikely allies, like William Easterly, to increase aid effectiveness, accountability and transparency. Keep an eye on the ONE Blog for updates on how we can help move this bill through Congress.

-Lisa Fleisher

Time magazine honored George Clooney yesterday as one of its 100 Most Influential People in 2009 for his activism around the crisis in Darfur. George has been a great friend of ONE, and working with the organization he cofounded, Not on our Watch, he has been an influential player in the fight to focus attention on the humanitarian crisis in Darfur — and on the responsibility of the US government and other world leaders to do something about it.

ONE cofounder Bono writes about Clooney in the Time 100 Issue:

His commitment to ending the atrocities in Sudan is not a role, not a performance. It is real — and it is serious work. Some people think celebrities should stick to the script, stay feted and fetal in their air-conditioned trailers. Some people think it’s an appalling juxtaposition to see the rich and famous in a photo call with the vanquished and the vulnerable.

It is. George knows that. But he also knows that the cameras trained on you and the column inches dedicated to you could be covering something a little more important than, well, you. Like the slaughter of innocents in Darfur. Like the refugee camps full of starving Sudanese.

And he knows the details, the nuances of his and your sides of the argument. Hey, if you’re going to pay attention to George Clooney, he’s going to insist you pay attention to this stuff. Now there’s a radical idea.

Read the full text here.

Bono also interviewed George on his work in Darfur for a CNN special on the Time 100 hosted by Anderson Cooper that will air Friday night May 1 at 11 PM EDT on both CNN and CNN International. It will re-air on CNN Saturday and Sunday at 8 and 11 PM EDT.

-Kathy McKiernan