White House Foreign Aid Review is Long Overdue. Here's How to Get Reform Right
By Mark Dybul, Rob Mosbacher, John Danilovich | OCTOBER 29, 2018
The Donald Trump Administration is nearing the final stages of a White House-led foreign assistance review. This is an undertaking that is overdue and one that we have consistently advocated for over the past decade. The administration’s goal, as we understand it, is to align our foreign assistance more clearly with our national interests. We strongly support such alignment and believe that effectively reformed foreign assistance is a powerful tool that can simultaneously advance our national interests and those of the people we seek to help.
But the particulars of the foreign aid review are critically important, and we are concerned that a process that in the end renders a development strategy and budget that simply divides countries into two categories — friends and everyone else — is unlikely to have a positive effect on our national interests and could actually harm them.
The BUILD Act, a culmination of bipartisan efforts on Capitol Hill and backed by the administration, will create a new U.S. development finance institution. Here's what's next.
In the creation of the new International Development Finance Corporation under the BUILD Act and the reforms and restructuring of USAID that is being undertaken by Administrator Mark Green, the administration has significantly strengthened our ability to drive the types of accountability and growth-centered approaches that are fundamental to successful development.
IDFC gives the United States a much stronger platform for marshaling private capital to achieve development impact, and Administrator Green has put forward a bold transformation agenda that would re-orient U.S. assistance around the journey to self-reliance and re-organize USAID into a more capable and fit-for-purpose development agency. Congress recently passed the BUILD Act, and it is imperative that Congress also approve the reform proposals that Administrator Green has submitted.
We believe that these reform agendas will make our development dollars more effective for those we seek to help, provide better value for the American people, and more clearly advance our broad national interests. While these are positive developments, there is a risk that the White House’s broader foreign assistance review will miss the mark in achieving transformative and lasting reforms, by ignoring the lessons learned from past reform efforts.
Foreign assistance programs play a key role in national security and in helping the U.S. counter China abroad, representatives said.
First, it’s important to note that past Republican-led foreign assistance reform efforts have been successful in advancing development while also advancing our national interests, and the factors that led to this enduring success are as essential today as they were then.
The most prominent example is the U.S. President’s Emergency Plan for AIDS Relief, which has not only saved millions of lives and succeeded where so many thought it would not, but also has changed the way we do foreign aid. PEPFAR’s reforms — and those of the President’s Malaria Initiative — include clear mandates for program leadership and responsibility, combined with aggressive and measurable targets that allow the president and Congress to hold the government accountable for real results.
Likewise, the Millennium Challenge Corporation fundamentally changed the donor-recipient relationship, rewarding strong country performance and aligning our interests with the interests of the recipient. These and other Republican-led reforms have provided a value to the taxpayer, a level of accountability, and have advanced our national interests globally.
Second, we are concerned that the aid review process so far has lacked sufficient consultation or transparency. We all have served in government, including leading U.S. development agencies, and we are acutely aware of the necessity of deliberation that is protected from outside lobbying and interference. However, fundamental changes that are rolled out without the input of Congress and external stakeholders are more likely to be counterproductive and unsustainable.
The reason PEPFAR, PMI, MCC, and the Obama-era reforms of Feed the Future have been successful and have endured is that they sought congressional buy-in early, creating laws with significant changes in policy and spending that still enjoy strong bipartisan support today. We urge the administration to bring Congress into the conversation and seek a reasonable degree of bipartisan support that is necessary to achieve lasting reforms. Otherwise, Congress is likely to reject any significant changes sought as part of the review.
Third, we are concerned with some specific proposals under consideration that we believe would undermine U.S. interests abroad. One idea is that grant-based assistance is less effective or can be replaced by other forms of finance. While we are strongly in favor of leveraging more investment capital and using other market forces to drive development, not every problem can be met through these tools.
Bill Gates told the European Parliament Wednesday that the continent's generosity on aid could help prevent cuts in the U.S.
Grants are the foundation of our humanitarian development assistance and relief operations, and grants are necessary to push for reforms and build the know-how necessary to make lasting changes. Grants are not rewards, and they can be used smartly to create opportunities for increased investment and job creation.
We also are concerned about a view of multilateral organizations that assumes our national interests are too often diluted or compromised by such organizations. In fact, in cases such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, as well as Gavi, the Vaccine Alliance, our humanitarian development goals are supported and our funding leverages significant resources from other donors to advance our goals. In other words, these institutions are the places where other countries help carry the burden and do their fair share.
Finally, we are deeply concerned by the approach to development assistance that treats its provision as a reward and the cutting of development assistance as a punishment. We certainly agree that the U.S. cannot reward countries that undermine us. But, behind the effort to “take names” seems to be a misunderstanding of what our assistance really does. Our assistance has changed significantly in recent decades, with development and humanitarian assistance being directed at the people through nongovernmental and faith-based organizations, not government elites.
More fundamentally, such an approach is short-sighted. Healthy, educated populations with good governance and a regulatory environment that promotes economic growth — which is what our aid does — open markets for American goods and services, creating jobs at home. Access to markets is also promoted when countries have a positive view of the U.S. A recent, bipartisan review led by Senators Bill Frist, a Republican, and Tom Daschle, a Democrat, provided clear data that aid can change hearts and minds and extend our positive influence globally.
Development is also an essential tool to promote peace and stability. For that reason, military leaders such as Secretary of Defense James Mattis and his predecessors over the last several presidential administrations have consistently advocated in favor of investments in aid. Supporting productive and stable countries is far more important for our national interest than how a country votes at the United Nations. This is to say nothing of the ethical implications of cutting off life-saving treatments — a decision that certainly would harm our long-term national interests more than it would ever have a chance to cajole countries into line.
We have for years, publicly backed a rigorous review of our assistance and significant reforms in order to better advance our interests and those we seek to help. The administration’s pending review could serve as a step in that direction, and one that holds the potential to reshape our approach to development and the benefits and value it provides. Our sincere hope is that the administration uses this opening to build consensus and drive those reforms in the right direction and toward success.