US PROGRESS 2004–10

The US increased its development assistance to sub-Saharan Africa by $4.28 billion between 2004 and 2010, delivering 121% of the increases it promised in 2005. Of US global development assistance increases between 2004 and 2010, 51% were directed towards sub-Saharan Africa. Increases in US development assistance to the region between 2005 and 2010 were driven by a focus on global health, specifically through the President's Emergency Plan for AIDS Relief (PEPFAR) and the President's Malaria Initiative, as well as compacts with well-performing countries through the innovative Millennium Challenge Corporation. More recently, the US has emerged as a leader on agriculture and has revitalised its relatively stagnant progress on aid effectiveness indicators with concrete steps to improve the quality and impact of its development programmes.

LOOKING AHEAD: 2010–15

Although the US does not have an overall development assistance commitment that extends beyond 2010, two landmark development initiatives – the Global Health Initiative and Feed the Future – provide a blueprint for development assistance spending over the next several years. The $63 billion, six-year Global Health Initiative (GHI) was announced in 2009 to build on PEPFAR through a comprehensive approach for US investments in health. Feed the Future, a programme to improve agricultural productivity, link farmers to local and regional markets, enhance nutrition and build safety nets, was launched following the 2009 G8 summit, where President Obama pledged to seek $3.5 billion from Congress over the following three years to contribute to the L'Aquila Food Security Initiative. Due to severe budget constraints facing the US, neither of these commitments will be delivered on time. For FY 2011, Congress essentially froze funding for global health and agriculture at FY 2010 levels, well below the amounts requested by President Obama. Not only does this slow progress on reaching the resources pledged for both initiatives, but budgetary pressure is expected to become more intense for spending in FY 2012 and beyond. The potential size and scope of these cuts could threaten many US development programmes and undermine the potential of the GHI and Feed the Future, which are both about halfway through implementation. Funding for the GHI is already off track, with only 42% of the total ($26.2 billion) approved during the first half of the initiative. In order to deliver the full $63 billion commitment, Congress would need to approve an average annual amount of $12.3 billion through to FY 2014. It is still feasible, however, that some of the health goals – including many of those set for HIV/AIDS – will be met even if the full level of funding is not provided. The prospects for Feed the Future are similar. Although President Obama has requested more than $3.5 billion to fund the initiative from FY 2010 to FY 2012, only about half the resources have been appropriated in the first two years. The impact of these cuts will be significant. For example, for the 20 Feed the Future focus countries, USAID's proposed budgets assumed that up to ten countries would qualify for full implementation of the initiative . Under amounts approved in FY 2010 and FY 2011, however, only six or seven might qualify. If funding were to drop to levels proposed in the FY 2012 Budget Resolution passed by the House of Representatives, the entire initiative would likely stallbefore it has really begun. For the GHI, many of the targets set seem out of reach unless funding is scaled up and/or lower costs and new efficiencies are applied. While the budget outlook is bleak, prospects for leveraging US development tools beyond development assistance – specifically to support better governance and improved aid effectiveness – are promising. In June 2010, Congress enacted into law a provision requiring extractive companies registered on US stock exchanges to disclose payments made to governments for oil, gas and mining to the US Securities and Exchange Commission. This legislation is a critical first step towards empowering citizens with information to hold governments accountable for investing revenues into development. In 2011, ONE encourages the SEC to issue a strong and effective rule under which this new law will operate, that will maximise its impact on development opportunities in developing countries. In 2010 the US issued two major policy reviews: the Presidential Policy Directive on Global Development (PPD) and the Quadrennial Diplomacy and Development Review (QDDR). Offering the first ever blueprint for US development policy, these two documents call for a set of reforms to improve the design and implementation of US global development programmes. Together, they seek to strengthen the principles of country ownership; better align US programmes with developing country priorities; apply a more rigorous evaluation system to measure the impact of programmes; enhance transparency in where and why the US invests its global development resources; and encourage innovative solutions to development challenges. ONE applauds these policy adjustments and looks forward to their full implementation over the next few years. The targets – to increase the proportion of US funding provided to partner country governments, local organisations and local businesses, to double direct grants to local non-profit groups, to ramp up the percentage of contracts with local businesses, to transfer leadership of HIV/AIDS treatment programmes from external entities to partner countries and local organisations and to complete Country Development Cooperation Strategies in all USAID mission countries by 2013 – are significant and should be met fully. Aid effectiveness is an area where the US has lagged behind other donors in recent years. The implementation of these reforms and others could provide a platform for US leadership at the Fourth High Level Forum on Aid Effectiveness in Busan.