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

On July 9, the House and Senate took actions on the FY2010 Foreign Aid Appropriations bill, providing a clearer outline of the final shape of the U.S. global development budget for next year and how ONE priority programs are likely to fare. Of particular importance was the House defeat by wide margins of two cutting amendments that combined, would have slashed over $2.6 billion from the bill, including resources for global health, the International Development Association, and the African Development Fund.

The overall size of the bills is nearly identical — $48.8 billion in the House and $48.7 billion in the Senate – roughly a net cut of $1.35 billion, or 2.5%, from President Obama’s request after taking into account money “forward-funded” in FY2009.

On specific programs, there are similarities as well as major differences.

Global Health: The House and Senate provide $7.8 billion, about 2.5% more than the request, but with slightly different points of emphasis:

• Global Fund – The House appropriates $750 million and the Senate $700 million. Each is higher than the $600 million request.
• Bilateral HIV/AIDS – Both bills are at the requested level of $5 billion.
• Malaria – Both bills are at the requested amount of $585 million.
• Tuberculosis – The House provides $252 million compared to the Senate’s $200 million and the Administration’s $173 million request.
• Maternal and Child Health – The Senate supports $555 million while the House provides $538 million; $523 million is the request.
• Reproductive Health – Each bill includes $520 million, 10% above the request.

Millennium Challenge Corporation: Repeating funding decisions in recent years, the House provides $1.4 billion, only slightly less than the request, while the Senate pares spending back for the MCC to $925 million. Each bill endorses new compacts for Jordan, the Philippines, and Malawi, but the Senate recommends using funds that have been frozen under suspended compacts for Nicaragua and Armenia as sources of added MCC revenue in FY2010.

Food Security/Agriculture Development: House and Senate bills both reduce President Obama’s $1.36 billion Food Security initiative promoted at the G-20 and G-8 Summits. The House provides $1 billion, compared to $1.2 billion in the Senate. Because each bill provides most of the requested funds for Afghanistan and Pakistan, it is likely that cuts in Food Security funding will be absorbed largely by Africa and Latin America.

Basic Education: The House and Senate are far apart on education with the House recommending $1 billion, slightly higher than the request, while the Senate proposes $800 million.

International Development Association (IDA): The Senate backs the Administration’s full $1.32 billion request while the House cuts $85 million of arrearage payments owed to IDA.

-Larry Nowels

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

In late January, you heard from us about a group of global development-focused NGOs across the United States who have been advocating for the U.S. to update the way it administers its development programs. This group of organizations—collectively called the Modernizing Foreign Assistance Network—has gone public once again, and together with other development organizations and interested individuals, has issued an open letter to President Obama and Congress asking for quick action to make U.S. global development efforts more effective. This letter urges our President and Congress to make modernizing foreign assistance a top U.S. foreign policy priority, along with diplomacy and defense .

Your voice can add strength to this letter. Please click here to read and sign this request.

-Chandler Smith

Yesterday, (after speaking at the GWU forum) Bill Gates appeared on CNN to continue pushing Obama to “craft a wide-ranging stimulus package, to help jump-start the nation’s sputtering economy, and double the United States’ commitment to foreign aid.”

Excerpts from CNN.com below:

“On his Web site, Obama has pledged to double the United States’ annual investment in foreign aid to $50 billion by the end of his first term, with the goal of fully funding debt cancellation for poor nations and fighting AIDS and global poverty.

In the interview with CNN, Gates said he thinks Obama will live up to that commitment.

‘Obviously it’s the Congress that gets to actually vote the final decision for how the money is spent, but I do think he will get to that commitment,” Gates said. “I am thrilled to be able to see that people are responding to the success stories. Aid from the United States did go up in the last eight years.’

The interview will air tonight on CNN’s “The Situation Room.”

-Virginia Simmons

The World Bank announced yesterday that they will be doubling aid to developing countries and companies based there. This will total approximately $100 billion over the next few years. The hope is that this can counter some of the lingering effects of the financial crisis as it spreads to developing countries.

Excerpts below, full piece here

“Virtually no country has escaped,” World Bank President Robert Zoellick said in a conference call. “In the face of these conditions, we need a global, coordinated, flexible and fast response to this crisis.”

Mr. Zoellick urged government donors to fulfill their pledges for development aid, adding that other countries also can direct funding into one of the IFC’s credit facilities, which lend money to projects in the developing world.

The IFC plans two new funds intended to recapitalize distressed banks and keep infrastructure projects financed. It plans to invest $1 billion over three years in the bank recapitalization fund, with another $2 billion expected to come from investors.

-Chris Scott

There was a timely article on yesterday’s Huffington Post about the financial crisis and its potential impact on global development programs. We know that foreign assistance is a critical
part of our foreign policy and following through on our commitments for a stable and secure world is as important now as ever before.

Excerpts below, full piece here

Foreign assistance plays a key role in restoring America’s image abroad, and many experts, including military leaders, have made clear its crucial role in preventing the emergence of failed states.

After years of failed US policies abroad, now is exactly the wrong time to engage in isolationism. Warning against a tendency toward isolationism in the face of the current downturn, British Prime Minister Gordon Brown also appealed to rich countries not to use the crisis as a reason to not help the poor. “This would be the worst time to turn back,” he stated.

Americans should be proud that US assistance programs are saving lives. Take for example, the US global AIDS program (PEPFAR). In July 2008, the United States government reauthorized PEPFAR, the single biggest global public health program in history. In its first five years, PEPFAR supported life-saving treatment for approximately 1.73 million men, women and children, and it has increased countries’ ability to better manage health threats using their own resources.

-Josh Lozman

Today’s New York Times features a piece drafted by the Times’ editorial board calling on world leaders to keep their pledge to cut extreme poverty in half. The board makes a sharply nuanced case that living up to these promises made at the turn of the millennium would not only succeed in alleviating global poverty, but also strengthen our and other nations’ national security.

Some excerpts below, but the whole editorial is definitely worth checking out

Today, even as soaring energy and food prices exacerbate the suffering of the world’s poor, the richest nations are falling far behind on their aid commitments — and behind their past giving.

The current financial turmoil could make it even less likely that the wealthy nations will fulfill their promises to the poorest of the poor. Without that money, many of the development goals announced with such fanfare will go unmet.

Many countries tie too many strings to their largess — such as requirements to buy supplies from donor countries. (Aid flows are often swayed by domestic politics in the donor nations, making them unpredictable and difficult to manage by receiving nations.)

Aid isn’t the only area where the developed world is failing. After the 2001 terrorist attacks, wealthy countries acknowledged that poverty can be a fertile ground for terrorism and pledged to open their markets to exports from the world’s poorest nations. Those promises collapsed along with global trade talks this year.

-Chris Scott

Bono continues his live blogging today from UN Special Summit on the Millenium Development Goals. You can see all his posts on the FT.com Blog site.

Below are some excerpts from his blogging late last night.

Aid is a leg-up, not a hand-out

“Lots of speeches etc going on inside the UN… President Bush, President Sarkozy. We’re on the outside today, meeting activists from Africa, India and Europe to talk about holding the people on the inside accountable for their promises.
The promises in question this week are the Millennium Development Goals or MDGs….

For those of you, the many of you, questioning aid on this site, you’re not wrong to suggest that it’s not the only answer. Of course it’s not. It’s trade, it’s governance, it’s private investment. But aid is critical… ask Germany, ask Ireland. See it as a leg-up, not a hand-out.
I’m not talking about the aid of the 20th century by the way. For too many years, much aid was wasted and ended up redecorating presidential palaces instead of building hospitals. That was our corruption as well as theirs. Handing over billions of dollars to a corrupt dictator because he isn’t a Commie, knowing he will use it to suppress discontent and swell personal bank accounts – that makes you complicit. But, this is a new century, and a new understanding of aid and partnership means that we are starting to see different results.”

Read his full post here.

The DATA Report, which ONE launched in Paris on Wednesday, tracks each G8 country’s progress towards delivering its commitments on aid to Africa.

This year’s report found that although U.S. delivery has been slower than hoped, increases in assistance primarily for HIV/AIDS and malaria (areas in which the U.S. is a clear leader) are starting to come. By next year, we predict the increases will double and analysis shows that by 2010 the U.S. is likely to have delivered on its commitment.

Though good news, it’s our job to make sure this actually happens! You can help by signing the PEPFAR petition.

At a time when the U.S. is electing a new president, we hope the current commitments will be seen as a floor to build upon. The U.S. commitment was smaller than others when you compare it to the size of our economy, so now that the U.S. looks likely to achieve this commitment, it would be good to see the U.S. take leadership and make a bigger commitment.

Here are the numbers:

· 2010 Target for ODA to Africa: $8.8bn

· 2007 ODA to Africa: $5.414bn

· Change in ODA to Africa between 2006-2007: $413m

· Change in ODA to Africa between 2004-2007: $581m

· % of increases achieved: 15

· Increase needed between 2007-2008: $1.2bn ($1.1bn in 2004 prices)

· Estimated increase between 2007-2008: $940m ($868m in 2004 prices)

(More G8 countries’ reports to follow.)

-Josh Lozman