Foreign Aid | Council on Foreign Relations

Sub-Saharan Africa

Guest Post: Making the Cut: HIV/AIDS and Male Circumcision in South Africa

Laura Dimon is the Africa Studies intern at the Council on Foreign Relations. Previously, she worked for the Clinton Health Access Initiative in Pretoria, South Africa. She has entered the Columbia University School of Journalism. At the 19th International AIDS Conference, Secretary Clinton announced that the U.S. will give forty million dollars to South Africa to support a voluntary medical male circumcision program for almost half a million boys and men in the coming year. Why South Africa, and why circumcision? South Africa has the highest prevalence of HIV/AIDS in the world. There are 34 million people in the world living with HIV/AIDS and 5.38 million of them are in South Africa; 16.6% of people ages 15-49 in South Africa are HIV-positive. Many South Africans are unaware of these staggering statistics. Further, South Africa’s general public is unlikely to be familiar with circumcision’s role in the prevention of transmission of the disease. But in the words of Dr. Anthony Fauci, circumcision is “stunningly successful” in preventing female-to-male transmission. His views are supported by various studies in Africa which have shown that circumcision cuts transmission risk by about 60%. Why is this? According to the CDC, the inner mucosa of the foreskin—compared to the dry external skin surface—has a higher density of target cells for HIV infection and higher likelihood of abrasion during intercourse, providing entry points for the virus. Further, the microenvironment of the space created by the unretracted foreskin may be conducive to virus survival. Finally, the higher rates of STDs observed in uncircumcised men may also increase susceptibility to HIV. Beyond the science, beliefs about circumcision are deeply rooted in cultural practice and tradition and vary greatly between regions and ethnic groups in Africa—and elsewhere (a German court recently banned circumcision of minors.) In South Africa, the Zulu have historically not favored circumcision, but the Xhosa and Sotho view it as a rite of passage into manhood and perform it traditionally, not medically. As the correlation between circumcision and prevention of the transmission of HIV/AIDS becomes better known, the number of procedures in South Africa is likely to increase, especially where it does not clash with deep-seated religious or ethnic values.

Blog Post by Guest Blogger for John Campbell August 2, 2012 Africa in Transition
Sub-Saharan Africa

Question of the Week: China in Africa Part III

This is the third Question of the Week post about Chinese involvement in Africa. Last week, we focused on the debate of whether Africa or China itself benefits more from Chinese aid. The week before that, we discussed the challenges of measuring China’s aid to Africa and the country’s South-South aid philosophy. This week, we look at the benefits and drawbacks of Chinese health aid to Africa. The China-Africa relationship is in the news once again. At last week’s Forum on China-Africa Cooperation (FOCAC), Beijing promised to disburse $20 billion in manufacturing and agriculture loans, bring 1,500 medical professionals to the continent, provide 18,000 Africans with scholarships, and more. Rhetoric at the highest levels of government underscored the debates over China’s involvement in Africa. Chinese President Hu Jintao emphasized the mutually beneficial nature of the China-Africa relationship, arguing that China-Africa cooperation “meets the fundamental interests of China and Africa and conforms to the global trend of peace, development, and cooperation.” South African President Jacob Zuma, meanwhile, declared, “Africa’s commitment to China’s development has been demonstrated by supply of raw materials, other products and technology transfer. This trade pattern is unsustainable in the long term. Africa’s past economic experience with Europe dictates a need to be cautious when entering into partnerships with other economies.” China’s pledge to send 1,500 healthcare professionals to Africa highlights an ongoing area of focus of Chinese foreign aid. As early as 1963, China gave health assistance to newly independent Algeria. As the Knowledge@Wharton Network reports, using information from Chinese sources, “By the end of 2010, China [had] sent 17,000 medical workers to 48 African countries…In 2009 alone, 1,324 medical professionals worked at 130 institutions in 57 developing countries. Of that number, more than 1,000 doctors were in 40 African countries…” Like much of its other assistance to Africa, Chinese health aid arguably has a notable commercial element. Beginning in the 1990s, Chinese health aid to Africa started on a for-profit track, according to Council on Foreign Relations senior fellow Yanzhong Huang. As Huang writes, “Instead of treating foreign aid as purely a ‘political task’ or providing only ‘one-way’ free aid, China now emphasized the economic aspect of foreign aid and used it to promote mutual benefits and trade. Accordingly, the medical teams in some recipient countries began to charge fees for medicines and services, and to use the revenue to purchase medical products made in China (which was counted as China’s foreign aid).” Indeed, the distinction between China’s health aid and commercial activity can be ambiguous; for instance, “It is not clear whether a $6 million hospital built by a Chinese company in Kinshasa, Democratic Republic of the Congo, in 2004 was a grant or linked to a commercial activity,” says David Shinn, a former U.S. ambassador to Ethiopia and Burkina Faso. However, for-profit health assistance may benefit Africa all the same. “These for-profit ventures may not exactly conform to the same idea of health diplomacy as the donated clinics, but they do further the objective of providing healthcare in under-served areas of Africa to help improve China’s stature on the continent. Few patients will necessarily know whether a particular clinic comes from China as a non-profit or for-profit enterprise; the patients instead recognize that they now have access to health care,” argues Jeremy Youde, assistant professor of political science at the University of Minnesota, Duluth. A hallmark of Chinese health aid to Africa is antimalarial efforts. China has contributed 30 antimalaria clinics to Africa, and the country has a long and complex history of work on antimalarial drugs. “China is exploring cost effective ways to help the Third World and is interested in making distinct contributions…Malaria suits these requirements. It is not that expensive. It is cheaper than fighting AIDS,” says Joseph Cheng, politics professor at Hong Kong’s City University. Treating malaria also represents a profit opportunity for Chinese companies. Particularly after 1999, “Health aid was repackaged to promote the exports of Chinese pharmaceuticals,” writes Yanzhong Huang of the Council on Foreign Relations. China’s work with malaria in Africa highlights the challenges that both sides face in establishing effective foreign-supported healthcare programs. On one hand, China’s antimalaria efforts have provided the continent with much-needed services and healthcare options. “To help Africans fight malaria, China has adopted several measures, such as dispatching CMTs [Chinese medical teams], conducting training programs, providing free facilities and drugs, and building antimalarial centers,” Peking University professor Li Anshan reports. He adds that “Antimalaria efforts are a major task for CMTs, which usually distribute free medicine to patients. Cotecxin—the most effective antimalarial drug produced in China—and acupuncture [which alleviates a limb ailment associated with malaria treatment] have enjoyed a great reputation in Africa.” However, China’s antimalaria programs and drugs have come under scrutiny. Problems include reportedly insufficient training for African medical professionals in China-sponsored malaria treatment centers, as well as inadequate clinical trials for some antimalarial drugs. Some African medical facilities are thus unable or unwilling to use the drugs, according to the Financial Times. Additionally, counterfeiting threatens the credibility of Chinese-made medicines. Fake antimalarial drugs, apparently made in China, have serious consequences for public health efforts in Africa, as The Guardian reports. In addition to endangering patients’ health, widespread use of ineffective antimalarial drugs also creates drug resistance. What do you think? This is the third and final Question of the Week post about Chinese involvement in Africa (you can read the first post here and the second post here). Please let us know what you think about China’s involvement on the continent. Does it lead to positive outcomes or does it actually impede development? Are the costs to Africa too high? Are its critics unjustified? Use the Comments section below, and stay tuned for new Question of the Week posts soon. You can also receive updates from the Development Channel by email.

Blog Post by Development Channel Staff July 25, 2012 Development Channel
Wars and Conflict

The Complex Ties Among Poverty, Development, and Security

Over the past decade a new conventional wisdom has emerged that security and development are mutually reinforcing, and that long-term security is not possible without reducing poverty and promoting economic development. This implies that economic development in unstable regions that pose potential threats to U.S. security should be a key pillar of U.S. foreign policy, a viewpoint embraced by top officials in the Obama Administration. Global poverty and economic crises pose risks on four fronts. First, sudden drops in income, so-called “negative growth shocks,” generate political instability and violence. When people living on the brink lose their livelihoods, they are more likely to turn to arms—either because they are angry at perceived injustice, or because they see few other options and feel they have little to lose. One highly regarded study of African conflicts, lead by U.C. Berkeley economist Edward Miguel and NYU political scientists Shanker Satyanath and Ernest Sergenti, found that a negative growth shock of 5 percent increases by 50 percent the likelihood that a country will be engulfed in conflict. Economic crisis, accompanied by public perception that some benefited unfairly from prosperity while the burdens of austerity fall most heavily on those who were left out, creates a dangerous search for scapegoats. The violent mob attacks and forced out-migration of ethnic Chinese in Indonesia in 1998 were caused in large part by a belief that Chinese shopkeepers were benefiting from the sharp price increases of rice and cooking oil that were caused by the Asian financial crisis. The turn towards virulent anti-Semitism in Weimer Germany can in part be attributed to the runaway inflation and crushing economic contraction that gripped Germany after World War I. Economic collapse generated despair and outrage and hopelessness, and made ordinary Germans receptive to the xenophobic racism that eventually produced a terrible genocide and spawned Germany’s imperial aggression. Second, low per capita income weakens states: poor states have severely limited financial, administrative, legal, and military capabilities. A number of well-known studies—by Stanford political scientists James Fearon and David Laitin, Oxford economists Paul Collier and Anke Hoeffler, and others—have found a strong relationship between poverty and civil war. Political rebellion and quasi-political criminal activity are more feasible when central governments are weak and incapable of mounting effective counterinsurgency efforts. Poverty also makes civil war more likely because a weak state lacks the resources to provide critical social services like health and education, creating an opening for fundamentalists and would-be rebel groups to win hearts and minds by stepping into the gap. In Lebanon, for example, Hezbollah has built strong support beyond its Shi’a base—throughout a broader population of Sunni, Druze, and Christians—by operating schools and hospitals for thousands of Lebanese. Paradoxically, poverty increases the public’s need for government help while reducing a state’s capacity to meet these demands, creating fertile ground for rebel and terrorist groups. Third, when ordinary people are left with no viable economic opportunities other than traffic in drugs and other illicit commodities, they are likely to sympathize with the rebel groups who make those kinds of livelihoods possible. Guerrilla organizations in Afghanistan, for example, sustain themselves through drug trafficking. They buy raw crops from poor farmers, and, in turn, protect growers from government prosecution and eradication efforts. Afghanistan’s economic decimation has left poor farmers with no real choice other than opium. An Afghan farmer can gross significantly more from poppy than from wheat—$254.28 per kg from dry opium, compared to only $0.40 per kg for wheat. At the same time, the cost of opium production and distribution is low, as poppy is drought resistant and easy to transport and store. Limited irrigation, poor transport infrastructure, lack of access to markets, and the unenforceability of business contracts due to weak court systems make opium the most lucrative crop by a wide margin. Drug-related exports currently account for roughly 15 percent of Afghanistan’s Gross National Product. However, it would be cavalier to conclude that the risks of conflict and instability posed by economic crises and poverty requires the substitution of military adventurism with a package of coercive economic aid policies. History also has important lessons to teach about the perverse unintended consequences of American economic intervention in developing countries. Foreign aid can undermine democratic accountability, generate corruption, and reduce the incentive of rulers to meet the needs of the broader public. When developing country governments receive large amounts of financing from abroad, rulers often dance to the tune set by donors instead of responding to the needs of local citizens. Lack of democracy has been shown to make famine more likely: when the poor have no voice in determining spending priorities, politicians do not prioritize delivering on programs and policies that help the most vulnerable. This lack of accountability also breeds corruption on the part of recipient country government bureaucrats, since they ultimately must answer neither to domestic voters nor foreign donors. And, historically, aid dollars have often been misspent supporting large-scale extractive industries, like the World Bank-financed oil pipeline in Chad and Cameroon. But in the absence of good governance, economic dependence on natural resource extraction reduces economic growth, weakens democracy, fosters corruption, and increases the likelihood of conflict. Done wrong, well-intended development aid can even exacerbate violence directly. Detailed analysis by political scientist Peter Uvin of conflicts from Rwanda to Afghanistan to Sierra Leone reveals that prior to the conflicts, development and humanitarian aid reinforced tensions and repression by favoring some factions over others, and increasing the disparities between ethnic groups. Warring factions were then incentivized to fight to capture aid resources. Aid, when funneled into the hands of local actors, strengthens certain groups at the expense of others: reinforcing unjust local power structures, increasing inequality, and exacerbating grievances. In sum, the connections between economic development, foreign assistance, and security are complex. Failure to grapple with these complexities can actually increase instability, conflict, and terrorism, while leading the U.S. further down the rabbit hole of long-term entanglement without an exit strategy. So that’s the bad news. There are no simple answers, and no clear strategies to generate long-term economic growth. But now the good news: we do know what can be done to reduce poverty and improve basic levels of human development, especially in the areas of health, education, and agriculture. Foreign aid can achieve significant concrete improvements in the lives of the poor, if attention is paid from the outset to inequality and distributional challenges, and if the power to shape development policies is placed in the hands of the intended beneficiaries themselves. Stay tuned as the Development Channel continues to explore what works (and doesn’t work) in fostering equity and opportunity in the global economy and improving the lives of the global poor.

Blog Post by Terra Lawson-Remer July 19, 2012 Development Channel

Sub-Saharan Africa

Question of the Week: China in Africa Part II

Is Chinese aid and investment a positive force for development in Africa? This is the second Question of the Week post about Chinese involvement in Africa. Last week, we focused on China’s South-South philosophy and issues involved in measuring its aid and investment. This week, we examine the contentious debate on whether China’s aid benefits Africa and its people—or simply China itself. It is clear that Chinese involvement in Africa benefits China, providing the country with natural resources, construction contracts, new markets for goods, and more. The key question is whether Chinese involvement benefits African citizens at the same time. The Chinese government is well known for its “no strings attached” aid policies—its willingness to deal with regimes without trying to change their governance through conditional aid, even in the case of serious human rights abuses. “…Chinese loans are often negotiated in secret, come without conventional expectations attached, and are offered to countries where Western money fears to tread, usually with good reason,” explains Evan Feigenbaum of the Paulson Institute. These regimes, of course, may squander aid money, either through inefficient development projects or on other priorities altogether. McKinsey executives Steve Davis and Jonathan Woetzel contend that “the Chinese approach to aid and investment presupposes that an effective public sector exists in the recipient country,” a problematic assumption that is not always true. Chinese political priorities appear to play an important role in the country’s foreign aid and investment. “As in the case of most other major donors, Chinese aid to Africa is driven largely by strategic and political objectives,” assert David Shinn and Joshua Eisenman in their book China and Africa: A Century of Engagement. “Chinese aid, in turn, helps to strengthen the position of African governments. This may explain why China emphasizes, among other projects, the construction of government buildings, presidential palaces, parliaments, police headquarters, military facilities, political party offices, and public stadiums. Such a policy does not constitute conditionality, but it is a reminder to the ruling elite that China is helping to keep them in power.” Shinn and Eisenman also note the importance that China places on African support for Chinese interests with regard to Taiwan. As they explain, “support for the One China Principle is Beijing’s foremost requirement for collaboration and diplomatic recognition. Many African nations see affirmation of Beijing’s sovereignty over Taiwan as a necessary part of their diplomacy with China, an easy concession that costs them nothing but can pay dividends.” As for the effects of Chinese aid to Africa (and Chinese commercial ventures on the continent, which are often closely related), an April 2011 Economist article features a litany of concerns about Chinese projects: a new road in Zambia that was washed away by rains, a hospital in Angola that was closed due to poor construction, and crude oil spills created by a Chinese state company in Sudan. Beyond some negative outcomes, other evidence suggests that Chinese aid is often a way for China to employ its own citizens and companies, garner diplomatic support, and extract much-needed natural resources from recipient countries. The Chinese government “requires that foreign aid contracts be awarded to Chinese contractors it picks through a closed door bidding process in Beijing,” a process that can leave African aid recipients or borrowers with inflated construction costs and without the option of employing local contractors, according to the New York Times. In a 2009 paper, scholars Chris Alden and Ana Christina Alves highlight concerns over China’s environmental impact and labor practices in Africa. They note that “China has proved to be sensitive to African and international pressure,” but that “policy shifts in Beijing do not necessarily translate into tangible changes at the bottom of the chain”–that is, among Chinese companies and agencies working on the ground in Africa. Hence the need, in their view, for better regulation of all countries’ companies and agencies operating on the continent. To some African leaders, Chinese aid is a vital and appreciated source of funding and assistance. “Most of our [African] countries cannot access the markets to borrow. We are forced to turn to sources of concessional financing, which are now very, very limited,” said Togo’s Minister of Finance Adji Oteh Aya at a World Bank-IMF conference last year. China is an important such source. Ngata Ngoulou, an official from Chad who also attended the conference, described how Chad was building a Chinese-supported oil refinery, a project he thought that “traditional partners…would have discouraged.” Even outside of aid per se, Chinese commerce arguably has important development outcomes for Africa. “[China’s] involvement has helped Africa perhaps more than any nation has helped Africa in any ten-year period directly and indirectly,” said Stephen Hayes, president and CEO of the Corporate Council on Africa, in testimony before a subcommittee of the Senate Committee on Foreign Relations. Hayes argued that “infrastructure has expanded in many countries thanks to Chinese investment and political interests,” that “increased competition for strategic minerals has driven up the price of commodities and raised national incomes for many African countries,” and more. Economist and author Dambisa Moyo also argued in a recent op-ed that China’s involvement in Africa “… has spawned much-needed trade and investment and created a large market for African exports—a huge benefit for a continent seeking rapid economic growth.” However, some wonder how much growth China has really produced in Africa. Responding to Moyo, Oxford Analytica senior analyst Jolyon Ford argued that Moyo’s piece failed “to interrogate some rather basic questions that go beyond headline investment and trade figures in the China-in-Africa story.” Ford also questioned the inclusiveness of recent economic growth, the true state of local job creation, capital flight as compared to incoming investment, and more. The evolution of Zambian President Michael Sata’s attitude toward China highlights the economic benefit that some leaders believe Chinese investment offers. After Zambia’s 2006 presidential election, which Sata lost, he “…railed against the ‘poor paying’ Chinese as ‘infesters’ [a wordplay on ’investors’] and further raised the stakes by promising to cut ties with China and embrace Taiwanese business,” according to an IRIN News report. But in a significant reversal after his 2011 presidential victory, Sata declared to a meeting with a Chinese delegation this March that “[Chinese] investment has benefited both Zambia and China. Therefore, every expansion in investment should be for the mutual benefit of the two countries and its people …I would encourage you to bring more Chinese investors to invest in various areas of investment in the country especially mineral exploration. We would also like you to get involved in agriculture, textile[s], and many other sectors.” What Do You Think? This is the second Question of the Week post about Chinese involvement in Africa. Last week, the Development Channel reviewed the South-South philosophy underlying Chinese aid and the issues involved in measuring it. Please let us know what you think about China’s involvement on the continent. Does it lead to positive outcomes or do its drawbacks unnecessarily impede development? Are the costs to Africa too high? Are its critics unjustified? Use the Comments section below, and check back for a new Question of the Week post next week.

Blog Post by Development Channel Staff July 18, 2012 Development Channel
Health

New from CFR: Laurie Garrett on U.S. Global Health Arrangements

In a recent post on her blog, Laurie Garrett, CFR senior fellow for global health, discussed historical and ongoing changes in the U.S. government’s global health bureaucracy, focusing on the impending closure of the State Department’s Global Health Initiative office. As Garrett writes: For those of you that haven’t dedicated hours to tracking the U.S. foreign assistance bureaucracy this may seem a dreadful exercise in inside baseball, but I assure you that this matters. We have an American expression that neatly summarizes what is going on—“trying to get the biggest bang for the buck.” This is what happens when cataclysmic global economics meets austerity + dire global health needs, mixed inside an American bureaucratic Cuisinart. You can view the full post on The Garrett Update.

Blog Post by Development Channel Staff July 13, 2012 Development Channel
Sub-Saharan Africa

Question of the Week: China in Africa

The Development Channel is pleased to launch a new feature, Question of the Week. These posts will review important questions and controversies in global development by providing background information and links to a full spectrum of analysis and opinion. Today’s post is the first in a series on Chinese aid and investment in Africa. This week, we cover the South-South philosophy underlying Chinese involvement on the continent, as well as the measurement issues that make China’s activities difficult to gauge. Next week’s post will tackle the question of who benefits—China or Africa itself. Enjoy the posts and please give us your thoughts on this topic—and other potential Questions of the Week—in the Comments section below. Introduction While foreign aid is often pictured as flowing from countries in the global North to countries in the global South, this model has been changing as emerging countries themselves give growing amounts of aid. China is at the forefront of this “South-South” aid movement, particularly in Africa, where it gave around 46 percent of its aid in 2009. In an April 2011 white paper issued by China’s Information Office of the State Council, the Chinese government explains that China in fact has a history of giving assistance to other countries as early as the 1950s, and that its first project in Africa was the Tanzania-Zambia Railway in the 1970s. While Chinese aid has significant potential for poverty alleviation and development in Africa, it has also faced allegations of being extractive and meant to benefit China more than Africa and its people. This question provokes regular and vigorous debate. Two weeks ago, for example, noted economist and author Dambisa Moyo wrote an op-ed rejecting common criticisms of Chinese involvement in Africa, prompting a response from Jolyon Ford of Oxford Analytica. South-South Philosophy Officially, China characterizes itself as a developing country aiding other developing countries, stating in its 2011 white paper that “China’s foreign aid falls into the category of South-South cooperation and is mutual help between developing countries.” In The Dragon’s Gift: The Real Story of China in Africa, American University professor Deborah Bräutigam explains that “Chinese aid and economic cooperation programs emphasized infrastructure, production, and university scholarships at a time when the traditional donors downplayed all of these.” Bräutigam also argues that Chinese aid was crafted to create an (ostensibly) win-win economic situation for China and the continent, noting that “subsidies for productive joint ventures were supposed to create employment, local capacity, and demand for Chinese machinery and equipment.” Bräutigam asserts that China has particular credibility with African nations in the development field because it, too, is a developing country. In Africa: Altered States, Ordinary Miracles, longtime journalist Richard Dowden, now president of the Royal African Society, highlights another aspect of China’s appeal for Africa, remarking that “in their formal, stylized way the Chinese emphasize the best of Africa, never referring to its failures and explicitly denouncing ‘Afropessimism.’ They ignore the aid agency images of poverty and war that African rulers so resent.” Dowden contrasts the difference between official Chinese websites, which emphasize cooperation between China and Africa, and “Britain’s Department for International Development websites on Kenya and Ethiopia, which begin by describing them as the poorest countries in Africa.” Chinese officials enthusiastically describe their philosophy and defend their aid to Africa against Western criticisms. Recently, Chinese Ambassador to Malawi Pan Hejun rebuked Western censure, saying, “some Western media say China is in Africa only for minerals and oil. It’s not true. We want to have broader co-operation in other fields like health and education. Malawi has no minerals and no oil, but it is one of the African countries we want to establish a relationship with.” Apparently addressing criticisms over unconditional aid, he also said, “it’s not China’s policy to make regime change... You have no right to interfere with the internal affairs of a peaceful country and its set of laws.” Upon the release of China’s foreign aid white paper last year, Chinese Vice Minister of Commerce Fu Ziying declared, “it is nonsense to say we are there only for the resources.” He also noted that foreign aid programs have required sacrifice on China’s part, too, as over 700 Chinese workers have died working on Chinese development projects in Africa since 1950. Measurement Issues It is important to note that foreign aid from China is difficult to define and quantify. A recent working paper from the Center for Global Development underscores the uncertainty, saying that “China’s [annual] aid estimates range anywhere from $1.5 to $25 billion; if the upper estimate is accurate, it ranks as the second largest donor after the United States.” In its own white paper, China says that it has given $38.83 billion in various forms of aid through 2009, aid that increased at an average annual rate of 29.4 percent from 2004 to 2009. A Guardian article, though, notes that the white paper “falls short on offering any detailed information on aid flows.” The AidData blog explains how Chinese aid often falls outside the traditional OECD definition of Official Development Assistance (ODA), making it difficult to quantify. In a March 2012 working paper, the International Monetary Fund (IMF) highlights the specific difficulties of measuring foreign aid from BRIC countries, noting that “most BRICs include all development support (including loans that have below-market interest rates) that is designed to help countries grow, while the OECD definition excludes nonconcessional assistance.” The AidData blog also mentions that unlike many donor countries’ aid projects, Chinese aid is “carried out by embassies and consulates rather than development agencies.” Indeed, those evaluating Chinese aid run into an overlap between projects that generate revenue for China and projects meant as development assistance, raising questions about what should count as aid. American University professor Deborah Bräutigam clarifies the nature of this ambiguity in a 2011 paper, noting that “…the lion’s share of China’s officially supported finance is not actually official development assistance (ODA)… Export credits, non-concessional state loans, or aid used to foster Chinese investment do not fall into the category of ODA. China’s cooperation may be developmental, but it is not primarily based on official development aid.” What Do You Think? This is the first Question of the Week post about Chinese involvement in Africa. Next week, the Development Channel will tackle the question of whether African countries or China itself benefits more from Chinese aid and investment. In the meantime, please let us know what you think. Does China’s involvement lead to positive outcomes or do its drawbacks unnecessarily impede development? Are the costs to Africa too high? Are its critics unjustified? Please use the Comments section below, and check back for the new post next week.

Blog Post by Development Channel Staff July 11, 2012 Development Channel

Foreign Aid

Welcome and Mission Statement

Welcome to the Development Channel, a forum for issues and innovations in global economic development. In recent years the line between the developed and developing worlds has blurred. China is the United States’ largest foreign creditor and jobless Portuguese are flocking to their country’s former colonies. Indeed, while the United States and Europe have struggled, China, India, Brazil, and other emerging economies have surged. Africa has achieved robust growth and plunging child mortality. Poverty is falling in every developing region, and a middle class is growing in places long associated with deprivation. Inclusive development, however, remains an urgent priority. Nearly 1.3 billion people still live on less than $1.25 per day, and almost 1.2 billion more live just above this margin. As China and India have grown, inequality in these countries has increased, with many people excluded from the fruits of prosperity. Many relatively rich nations harbor huge pockets of poverty: almost 75 percent of the world’s poorest people actually live in middle-income countries. Burgeoning populations of young people worldwide face scarce jobs and opportunities, while the hoped-for demographic dividend remains elusive. Fragile states in Asia, Africa, and the Middle East are trapped in cycles of poverty, conflict, and poor governance. Environmental degradation and climate change threaten the world’s poorest and most vulnerable, but they require global solutions. And longstanding health woes, such as HIV/AIDS and malaria, continue to plague the poor, even as noncommunicable diseases become a major threat. At the same time, the landscape of development is shifting. South-South cooperation is increasingly robust, with emerging countries such as the BRICS bolstering their foreign assistance and investment (the two can be hard to distinguish). By contrast, official development assistance (ODA) from traditional donors fell last year in real terms after largely steady increases since 1997, and this aid is projected to “stagnate” in the coming years. Private capital is ever more central to growth and development. Indeed, ODA constitutes only 18 percent of total financial flows from developed to developing countries, with investment, remittances, and philanthropy making up the rest. Improving governance at the local, national, and international levels is now recognized as a critical ingredient for inclusive development, including efforts to boost community participation and government accountability through greater transparency. The importance of monitoring and evaluation has also come to the fore, with economists debating new and better research methods to measure results. In the face of these trends, and recognizing the critical importance of better engagement with global development challenges, CFR’s Civil Society, Markets, and Democracy Initiative (CSM&D) has launched the Development Channel to explore big ideas about opportunity and exclusion in the global economy. Since these are pressing issues that concern us all, the goal is to bring the discourse about development into a broader conversation not limited to specialists. The Development Channel will feature innovations in thinking and practice, with the aim of catalyzing more effective action on the challenges of poverty and inequity. We are interested in new research, new thinkers, new leaders, and new approaches. We will highlight contributions from emerging scholars and practitioners, whether from civil society, academia, business, or the policymaking community. We will examine the big debates about how to do development better. And CFR scholars will offer critical analysis with articles, reports, meeting videos, and more. We look forward to hearing from you along the way.

Blog Post by Development Channel Staff June 18, 2012 Development Channel
United States

Video Brief: Foreign Aid

The winner of the 2012 U.S. presidential election will have to address shifting priorities and maintain the relevancy and impact of U.S. foreign aid as government assistance is dwarfed by other forms of capital flows and new donor countries emerge, says CFR’s Isobel Coleman.

Explainer Video with Isobel Coleman April 6, 2012
United States

John B. Hurford Memorial Lecture: Transforming Foreign Aid

NICHOLAS KRISTOF: This is a(n) on-the-record meeting, and we have people -- council members watching remotely at other locations around the world. They will be submitting questions to this, after following on a password-protected teleconference.Raj Shah has been running USAID, has been traveling relentlessly around the world and has been aiming not only to administer the agency but really to transform aid and the way the U.S. delivers it around the world. He -- usually people say somebody needs no introduction, then proceed for several minutes -- (laughter) -- but I'm just going to say that Raj does need no introduction, and introduce him for the annual Hurford lecture.Raj? (Applause.)ADMINISTRATOR RAJIV SHAH: Thank you, and good afternoon. It's wonderful to be here, and I want to thank Nick for that kind introduction and for moderating today. We -- we're all of course, especially all of our 8,000-plus staff, are all avid readers and followers -- (chuckles) -- of Nick. So this is a very special opportunity.I also want to thank the Hurford family and foundation, and the council -- and I see Richard Haass there -- thank you very much for having me here.You know, tomorrow's International Women's Day, and on -- and it's a particularly important moment for us to recognize that there's just so much that we can do with our foreign assistance and with our development efforts around the world. And it's easy for those days to come and go without adequate recognition, but I am so excited to be here, in part because when we -- when I joined USAID, it became very clear to me very quickly for President Obama and for Secretary Clinton and for this administration -- and, I would now argue, frankly, in a bipartisan way in Washington -- there is a tremendous amount of support for taking development far more seriously as the third leg of how America presents itself around the world. Diplomacy, defense and development together are capable now of presenting our values, our capabilities, our ability to avoid conflict and shape a more peaceful and more interconnected world, and our ability to reach out and touch some of the world's most vulnerable populations and do it with great American technology, spirit, willingness to serve and deliver outcomes that at the end of the day make us better and make us stronger. It's particularly exciting to be in this role in this particular time, because many of the institutions that were created to pursue development objectives, to reduce poverty, hunger, suffering, inequality, were created after the Second World War and were designed for an era when official foreign assistance actually took place because we didn't have enough private capital going to these places or were designed in an environment where the United States was the laboratory and the inventor for the world and could create technologies that would spread quickly, and were designed, frankly, to engage with big countries that have huge populations of very, very poor and vulnerable and threatened populations, places like India and Brazil, Southeast Asia, that have of course since then transformed themselves and are now redefining the way the world interacts.So the opportunity to be part of our country's development portfolio at a time when the world has so dramatically shifted in terms of what's needed and the context in which we work is a -- is a great challenge and a great opportunity.We've tried to rise to that challenge in a few specific ways. And I would argue that the things we're trying to put in place now are setting the stage to help us achieve some very specific results. And I'd -- I would like to speak to some of those in a moment.But before doing that, I just want to describe a few components of our new approach to how we work in development around the world. The first is that we focus very much on delivering value for money. We made some tough decisions. We all know that the political environment has both required that and frankly, in this space, in some contexts, it's the right thing to do. We've lowered our exposure, shifted our staff -- global staffing, concentrated on those countries and those priorities where we know the expenditure of U.S. tax dollars can generate concrete and specific results.We've prioritized science, technology and innovation. You know, some of the biggest advances in global development, some of the biggest success stories over the last four decades have been when a Minnesota-based researcher created a new form of wheat that transformed food production in Asia and saved hundreds of millions of people, or when the agency that I'm a part of helped invent oral rehydration solution and salts and had it tested in Mali and 40 other countries around the world. And since then that specific effort has saved 11 million children from death due to diarrhea.It's those types of technological and scientific advances that have powered progress in the past and now, with the advent of the mobile phone and the new horizons around technology and interconnectedness, have the power to take us forward.But perhaps most profoundly, what we've tried to do in reforming our approach, in changing our approach is to recognize that at the end of the day, the United States really no longer -- and perhaps never did -- has a lock or a monopoly on creating the best solutions. And for anyone who reads Nick's columns, you certainly hear and see in those stories of incredible entrepreneurs, whether they are, you know, a prostitute somewhere in a very difficult environment or a girl who's been trafficked but who manages to break free and protect others, or whether they are a young entrepreneur in a slum in Nairobi creating systems for tracking food needs and water availability, an entrepreneur that we now work with to do things like identify where we need to prioritize putting food and other items during critical humanitarian emergencies.And so our effort has now really focused on how we identify those superstars and leaders in countries in whom we can invest; who are capable of changing their environment, changing their economy.And in doing so -- I'd like to just offer one example, if you put the slide up. This is Dr. Suraya Dalil. About eight or nine years ago Suraya Dalil was working training midwives in Afghanistan. Afghanistan had the highest rate of maternal mortality and one of the highest rates of child mortality anywhere in the world. And we made a determination -- my predecessors made a determination that they could work with her to help her build an institution, a ministry, a health system that in Afghanistan would help provide basic and low-cost services to a large percentage of the population. Health services and coverage went from 9 percent to 64 percent. And over the last nine years -- and we now have this from validated studies -- we've seen the single fastest decline in maternal mortality anywhere in the world take place in Afghanistan. And we've seen women's lives go up -- in terms of longevity -- by more than 18 years, a tremendous, tremendous accomplishment, that resulted from identifying local leadership, making investments, working in partnership with the international community and doing the right things.I believe this sort of approach is increasingly helping us meet the challenges of our time. In the next -- if I go to the next slide -- in fact, you know, we really recognize that the opportunity today to reach out and connect to local change agents and leaders is greater than it has ever been. This slide is a picture of protesters, of course in Tunisia, and you would note there was a reason the protesters in Tunisia were chanting "dignity before bread." It was because they recognized and they felt that they needed to have more open space to communicate, more right (towards ?) self-determination, and that if we defined development aspirations too narrowly, as just economic improvement or health improvement or whether people had access to an education, it somehow didn't capture the very basic and fundamental underlying human rights that they sought to fight for.We've been excited to have the opportunity in Tunisia, in Egypt, in Libya, and in many other countries through the Middle East and North Africa to work aggressively with partners and to make sure that we reach local society -- local change agents. We support civil society organizations -- some you've read about, of course -- that work to expand access to democratic processes. The president made a very strong commitment that we would stay firm in better aligning our long-term strategic interests in the region with our core and fundamental beliefs in self-determination and respect for basic freedoms, human rights and human dignity. And USAID is honored really to have the chance to be on the forefront of implementing that approach in very difficult and very important environments. Another area where we work that has traditionally been an area of controversy -- but I hope we're getting beyond that now -- is in our partnerships in active conflict environments. Today our largest program is in Afghanistan where we have more than 450 people taking many of the same risks that our military personnel take, working side by side in fields and in communities to help achieve a basic stability so that our troops can come home as rapidly and as safely as possible. The truth is it's been quite controversial, over the course of more than a decade, for development partners to be engaged actively in military conflicts. But the reality is we can no longer sort of hide behind that controversy. We know that countries that face violence over a period of 20 years have had poverty rates that are 20 to 30 percent higher than those that see peace. No country in an active conflict is anywhere near meeting their millennium development goals, which are the goals and objectives that have been laid out for achieving basic improvements in the human condition and agreed to by all 190-plus nations. And so we've really taken efforts in places like Afghanistan to expand our presence, work in a more sustained way, and make sure that some of the gains that have been achieved, whether it's 7 million more people including more kids and 3.5 million girls that are in school today there that were not at the beginning of the conflict, 1,800 kilometers of road, a nearly 10 percent annualized growth rate -- those are great results and great accomplishments. Our challenge now is to sustain those even as we transition out in terms of our significant military presence. And one of the major challenges that we have had in development, that we're trying to adapt and change as we enter this new era, is how we work with institutions and companies in the private sector. You know, many in our community still have a -- if not bad taste, at least a little bit of discomfort from early corporate activity that did cause significant harm to poorer populations in poor countries. Sweatshops, infant formula, Bhopal -- those are all words that conjure up images of corporations as predators, taking advantage of circumstances and a lack of controls. But today, many of the best corporations have a much more enlightened understanding. They see that the fastest growing markets around the world are often very early emerging markets. They note that in sub-Saharan Africa there are 15 countries that have grown at 5 to 7 percent annually for about eight years in a consistent way. They see tremendous fortunes being made as people create products and services that can be sold on cell phones to even the most remote parts of the world and they see the outcomes that relate from that. Just one example that I'd like to offer that I think is emblematic of our new way of working in this space is a partnership we were able to launch with Pepsi in Ethiopia. Pepsi will invest significant resources to reach 30,000 chickpea farmers -- and (I know ?) you say, well, why are you talking about chickpea farmers? -- and they'll reach 30,000 chickpea farmers as part of building out a business to produce both hummus for their commercial markets and to produce a high-nutrition, ready-to-use, high-protein paste that can be delivered to kids in -- at risk of chronic and severe malnutrition in and around the Horn of Africa. It's those types of partnerships, brokering those types of deals -- in that case between Pepsi and the world's largest food aid provider, the World Food Programme, with USAID in an intermediate role -- that, I think, increasingly will define whether -- our ability to do that will define whether or not we'll be successful going forward. Is it -- the next slide.This is a photograph of a visit I made that had a profound impression on me last summer and fall to Dadaab, Kenya. This is the site of the -- of the world's largest refugee camp, and it was at this site that I had the opportunity to meet a young mother named Habiba (ph), who had traveled 60 (kilometers), 70 kilometers by foot from inside of south-central Somalia to safety at this refugee camp. Along the way of her trek, she was attacked. She had two children, and she was -- over time, they didn't have the strength to continue on themselves. So she carried them in her arms. And then, along the way, she determined that she couldn't physically go on carrying both kids and had to make a choice that, as a parent of three, I can't even process or understand, about leaving one of her children behind, as others have had to do, as she took her other child to safety. Those are the kinds of choices that people have to make in environments where the combination of famine, of war, and strife and drought -- in this case, the worst drought in 60 years that affected more than 13 million people -- when those conditions come together and create those environments. And as we look forward, our -- the United States -- and I am proud of this -- can say that we were more than 60 percent of the global effort to tackle the humanitarian crisis that took place. We mobilized international partners. We did many of the things -- we did a lot of innovative things in that context to make sure we could reach populations, even inside of Shabab-controlled environments, in a way that was safe, but that ultimately delivered to them either resources, high-nutrition foods, health and water interventions that saved lives. And while we all know that more than 35,000 children under the age of 5 perished by -- around the end of September, I'm convinced that our efforts taken together, as a global community, did save tens of thousands of children's lives and are one of the proudest moments the international humanitarian community has had in doing that. This year, as we go forward, we're very focused on using the lessons from that experience to prevent the reach of the next set of disasters and to build greater resilience into our programs. It took me a while to figure out what the world "resilience" meant in this context. Resilience means helping people who live in very vulnerable situations avoid the negative consequences of those types of situations. An example of resilience is a very innovative partnership we have with Swiss Re, the reinsurance firm, where we've designed insurance products for pastoralists in Kenya and Ethiopia and parts of Somalia, so that when rainfall -- it's rainfall index insurance: When it doesn't rain as much as is expected, they get an insurance payment. Six hundred of those families got insurance payments from that program the -- over the course of the summer, and it kept them in their communities, and it kept them persisting onward and avoiding the need to go on one of those long and dangerous treks.I'd like to conclude just by briefly describing what I think of as our three biggest opportunities as we go forward. I think the first is our opportunity to mobilize technology, innovation, partnerships like the Swiss Re program and target those parts of the world that we know are increasingly vulnerable to climate shock and climate change and will increasingly suffer from situations like this.And that -- we're at the end of this month pulling the international community together in Nairobi in order to lay out a plan to do precisely that and build more resilience into places like the Horn of Africa, in environments like the Sahel in West Africa, where 6 1/2 million people this year are going to likely be at risk if our rainfall measurement systems and prediction systems are accurate, and do a better job of letting people protect themselves with all of this new capacity to help them improve their own lives.But that's not enough, and that's why the second opportunity and the one that is really our -- the president's top development priority is to really invest in countries so they have the capacity to feed themselves. We know it is anywhere from one-eighth to one-tenth the cost to help someone feed themselves than to provide food aid, and we know that despite the fact that every part of the world except for parts of sub-Saharan Africa and parts of dry-land South Asia have escaped food insecurity, in the places where it continues, it has been getting worse over the last few years, not better.So we're investing in a program we call Feed the Future, a partnership with other international donors and with countries themselves to help countries invest in the technologies and the strategies to literally boost their harvests and pull themselves out of poverty. We're excited because that is starting -- we're starting to see real results. The same day that we were at this camp -- can I have the next slide? The same day we were at this camp -- I'm not sure where this is -- (chuckles) -- but the same day we were at the camp, that afternoon we went -- I was with Dr. Jill Biden and Senator Frist, and the three of us went to an agricultural research institute outside of Nairobi.And at that institute we saw new forms of hybrid maize or corn being developed in partnership with U.S. universities. We saw scientists, some of whom had been to Purdue for training and education, creating orange-flesh sweet potatoes, potatoes that actually have more vitamin A in them, pro-vitamin A, and therefore they help kids protect themselves from river blindness and other diseases. And we saw that in parts of Kenya, food production had tripled in just a few years, in part as a result of our partnerships, and that had helped about 4 1/2 million people in Kenya not need humanitarian assistance through this crisis.That's what success looks like in that context. I was thrilled just last week to see new data out of Bangladesh where for the first time in decades their most populous states are going to be sufficient -- self-sufficient in rice production in large part because of a major international partnership to improve the quality of production of rice in that part of the world. And we're seeing child stunting rates for children who are chronically malnourished go down 20 (percent), 30 (percent), 40 percent in just a few years in Central America as a result of our new way of working and tackling these problems.As Secretary Clinton has said, ending child hunger in particular is not something that we need to learn how to do; it's just a matter of having the will and the commitment and the desire to partner and get it done. And that's our second priority.The third priority is another area where we have all the tools and technology necessary to create huge advances in the human condition. Today there are nearly 8 million kids who are under the age of 5 every year who die of preventable disease. And we know that if we had the OECD or the first-world child mortality rate extrapolated globally, that would be about a million and a half kids.So that difference, that 6 1/2 million kids every year, is what we think of as preventable child death. And we've seen huge progress in creating new vaccines for diarrhea and pneumonia. I see some folks here who've been part of that effort. We've seen new strategies, new technologies, things as simple as an insecticide treated bed net that, for a few dollars, can help protect a child for years. We've now seen, in partnership with -- students at Rice University have developed a CPAP machine -- for those of you that are doctors, a continuous positive airway pressure machine -- that helps kids breathe in the first few days of life. They've developed one for $160. You -- in this country, to buy one for a hospital will cost a couple thousand dollars.It's those types of advances that are making possible now what we believe is the largest reduction in child mortality ever, and we think for the first time you can look across the horizon and try to end completely preventable child death in a generation. And so that's our third major objective and commitment, and we are later this year pulling together the global community to try to raise resources and to get folks to focus on what it will take to achieve those kinds of goals.Could I have the next -- I think it's the last slide.And I just want to -- I don't want to get into detail here, but I want to share what success looks like when those things work. If you -- this is a demographic picture of different parts of the world in 1960 and 2010. And the big, exciting thing about saving kids' lives is when you save their lives, they actually -- people invest more; people have fewer children to begin with, and then they invest more in those children getting an education and improving their status in life. And that process is known as a demographic dividend. And countries that have experienced that demographic dividend have added 2 percent to their annual growth rate on an annualized basis for about 15 years.So just think of how powerful that could be if we could start to see -- and you see the demographic dividend take place by the different shape of the distribution of populations in Asia and Latin America versus in Africa. We now believe we're on the cusp of seeing that kind of a demographic dividend take place in Africa.And I'll conclude with the following thought: If we succeed in these efforts, if we can protect vulnerable populations and avoid the story I told you about that I heard at Dadaab, if we can end large-scale food insecurity and help countries develop their agriculture as a basis for developing their economy and if we can end preventable child death and usher in a demographic dividend in countries like Nigeria and DRC and Ethiopia, we can look out and envision a world that is more interconnected, that is safer, where people and children and communities everywhere have real human opportunities and where they have more opportunities for self-expression and basic human dignity.And at the end of the day I would argue, President Obama would argue and I -- what I'm excited about is members in both parties on both sides of the aisle in Congress would argue that that is in our national interest. It is deeply and profoundly in our national interest to create a world where we have trading partners instead of places where we have to send soldiers.And while sometimes it's hard for political systems to take the long view and make the decisions to prioritize what it takes to get there, this story is a -- such a critical part of our national security strategy, our foreign policy strategy and our own capacity to create an economy that is vibrant and lively and has jobs here.And so I appreciate the chance to be with you today, and I look forward to taking questions and hearing your thoughts.And I'd leave you with the following request -- (chuckles) -- which is -- it's hard to sometimes talk about these issues, but I would just make the case that if we all in this room for starters -- and then we all reached out to people we know and work with -- would talk more about these issues, if we all had a little bit more Nick Kristof in us -- (chuckles) -- and we could process the fact that these are solvable problems and that solving them is not just creating benefits for others, but really creating benefits for our own country and is ultimately the purest expression of what it means to be American and how we demonstrate our values, then we'll be better off as a political system, as a country and hopefully as a global community.So thank you. (Applause.)KRISTOF: Thanks very much, Raj, for a terrific presentation. In a moment I'm going to broaden it up and make it a conversation with members here and with those who are remote.Let me just start off by tossing a couple of questions your way. You ended by making the point that this isn't just about our values but also about our national interest and about our national security. And I think a lot of us have been advocates for assistance in making similar kinds of arguments. But I must say, you know, when we look at what is happening in huge beneficiaries of American assistance, like Afghanistan, which you mentioned is the biggest USAID program, Pakistan, Egypt, then isn't it harder to make that argument that billions of dollars have bought good will, have bought openings for American diplomacy? You know, do the skeptics maybe have a point on that ground?ADM. SHAH: Well, you know, I think it's hard to judge the quality of American assistance by, you know, our approval ratings in different countries. At the end of the day, our belief is if we design efforts that generate real results, that if people can see and appreciate and value those results, that we're part of the solution. And I've looked at this carefully, and I'll tell you, when people who are affiliated with, associated with or even aware of our programs -- even in Pakistan, we get more than 1,050 press mentions in Pakistan a month, and the great majority of them -- "we" being USAID -- are incredibly positive. And when we go and see the communities that we're touching because we created road infrastructure in schools in Waziristan or because we've helped put a thousand megawatts onto the electrical grid over the course of the last two years, we see real appreciation for that. But the honest answer is, I don't think development partnerships will ever have -- will ever fully define the way other countries see us. They see us -- certainly that's part of it, but they also notice if we -- you know, if there are incidents that are deeply offensive to their religious beliefs or their cultures, or if they believe that we are doing things in their country that are inconsistent with the -- with the basic, you know, aspirations they have.So it's complex, but -- you know, but at the end of the day, if -- you can especially look after -- immediately after big disasters. That's probably when we're most visible, when people see the power and presence of American engagement and we move the sort of numbers on our approval rating, so to speak. But otherwise, I would argue it's better to focus on delivering results and being true to that spirit and that outcome than trying to necessarily design programs solely to have more visibility.KRISTOF: But just to push back a little bit, I mean, when Kerry-Lugar-Berman was being sold, we all made the argument that this was an essential way to improve our relations with one of the crucial players in the world. And, I mean, USAID may be getting favorable mentions in the Pakistani press; the U.S. itself sure is not. And in that period we've been spending billions of dollars, relations have deteriorated. And what have those billions bought us?ADM. SHAH: Well, you know, on behalf of a certain part of that portfolio, they've bought us real human results; you know, whether it's the kids in school or vaccination programs for large percentages of the kids in the country that are improving their health. We've trained 22,000 midwives that are helping to reduce the number of women who die during childbirth. Those results matter, because over time, you just can't have stability and opportunity if mothers die when they give birth, if kids don't make it to the age of 5, if population growth is out of control. It creates such tension and pressure that the long-term trajectory for stability is just not there. So they deliver those real results. I think that's the first thing we got to focus on. I would argue they also do help in what is a very complex, multifaceted relationship that has its ups and downs. They help serve as a bit of a stabilizing force. I don't want to pretend that, you know, by any means our development partnership with Pakistan trumps everything else. It doesn't. But it's part of the area of positive cooperation that -- you know, that Pakistanis can appreciate. It's not the whole story, as we all know, nor is it likely to become the whole story.KRISTOF: Let me ask one other question before handing it -- broadening it. I think there is a general sense that USAID programs like Feed the Future have been really well thought out and well done, but I think there's also a sense that one of the central challenges assistance faces these days is not just designing great programs, but in building political will around America for support in general. And a couple years ago, President Obama said that development was going to be on par with defense and diplomacy, and I must say that, you know, if you look at the White House since then -- I mean, haven't they been kind of AWOL in that effort to make the case for aid politically so that there is broad support?The -- I mean, you're out there making the case. Secretary Clinton has been making the case periodically. President Obama not so much, no?ADM. SHAH: Well, I would disagree. (Laughter.) I think the president's been out there every clearly saying -- not only proposing, you know, the largest and, I would argue, most results-oriented budgets and policies in this space that we've ever had as a country, building on a strong track record of President Bush in this space, but he's also very clearly and personally said that he will continue to fight for foreign assistance even when things are very, very tough, because it's a critical expression of our values and it is both good for us and critical to our national security and foreign policy strategies.So I would disagree with that presumption, as you wouldn't be surprised.KRISTOF: I figured you would.ADM. SHAW: But I'd also say, you know, I think you have to step back and just say over the last 10 or 15 years, one thing that's changed dramatically is, before it used to be the case, if you wanted to be in development or be engaged in development, you would be at institutions like USAID or the World Bank or you'd be trying to get into those institutions. Today there are faith-based organizations, student groups, entrepreneurs, folks in university research labs that are all doing really exciting, innovative things, and because they're just more interconnected, can -- you know, a group of students at MIT can develop a water filtration device to take arsenic out of the water that is low cost and a breakthrough for people in Bangladesh. There's a group of -- there's an engineering and business school group at the Blum Center at the university -- at Berkeley that created an improved cookstove that we're now distributing in Darfur that helps to reduce indoor air pollution and improve health outcomes and reduces the need for firewood, which -- and women get, you know, attacked and are at risk when they're out searching for that. And I mentioned the Rice students who developed the CPAP machine. I just think the long-term trend here is incredibly positive. More Americans -- you can't go to a U.S. college or university without being overwhelmed -- as you know, of course -- by the interest in development. And we issued a program to enhance our partnerships with universities. We've had there webinars -- it's a way for us to communicate with potential applicants -- each of which have had more than 700 people on them, some of the biggest, most subscribed programs we've ever created in our history. And I think it's because there's an explosion of interest in our country to support and engage in development. And I think someday that will turn into significant political support for what we're doing, if we do it well and if we're delivering real results.KRISTOF: Thanks. I'd like to invite members to ask questions. If you are watching remotely, you can email your questions to [email protected]. Please wait for the mic before you ask your question. Stand up; identify yourself. And please do ask a question, OK? (Laughter.) Where's the mic? OK. Yes.QUESTIONER: Hi. My name is Dan Rhodes (ph). Raj, United States enterprise funds have been among the outstanding successes in the history of American foreign aid. The original programs are now -- the first generation are now winding down. What is current thinking and planning for a new generation of American enterprise funds?ADM. SHAH: Well,l thank you. For those who don't know, the enterprise funds have been public-private partnerships that have been set up in countries that were experiencing transitions, most notably in Eastern Europe and the former Soviet satellites. And you're absolutely right, they've been very successful. Many have made money and have returned money to the U.S. Treasury over a long period of time, and they did help to stimulate critical business investment in countries.Today we are actively creating those types of enterprise funds in Tunisia and Egypt and countries throughout the Arab Spring. We're using a broader set of tools now to help motivate more private-sector business activity and job creation in those countries.And one of those tools is a -- is a new tool we have called the Development Credit Authority that actually provides loan guarantees so that, you know, small-scale agricultural businesses can get lending from their local banks.And we found that those local financial institutions have been very sort of skeptical about investing in local businesses. And that's a good thing for us, because then we provide the credit guarantee, they start putting the loans out there, and it turns out that the riskiness of the loans were far overestimated. So for every dollar we've actually spent through our credit authorities, we've leveraged $28 of local investment in small businesses in the health sector and food and agriculture and getting clean water and improved sanitation services to populations in need. And I think -- I think that's very much part of the future -- so enterprise funds and a much broader set of tools that today can unlock real entrepreneurial activities in countries.KRISTOF: Yes. Yeah.QUESTIONER: Thank you. Hi. My is Mallika Dutt and I'm with Breakthrough. Raj, I'm curious to hear how the global pandemic of gender-based violence and discrimination plays into these approaches and opportunities that you've just laid out for USAID.SHAH: Thank you. You know, I -- the -- we issued our first gender policy this last week, and we launched it at the White House. And it was surprising to me -- I've been at AID for about two years, but it was the first gender policy that the agency has released in more than three decades.And what we've learned in those three decades is extraordinary. We know that a dollar of income that goes to a woman is far more likely to be invested in children's health and education and in moving a family out of poverty than, unfortunately, that same dollar going to a man. I joke about that in my own household -- (laughter) -- here at home.But the reality is, a lot of data has concentrated on making the case that women are important, and has been -- and we've done less, over the last few decades, to really understand how to make sure, in all of our programs and efforts, we're focusing on women and girls and protecting or prioritizing their interests.So now when we launch our Feed the Future efforts, we have a data system that collects data on beneficiaries and makes sure that women's incomes are increasing and other measures of women's empowerment. In our civil society programs, we're specifically tracking, are we supporting women-headed NGOs and giving them more visibility in the social context that they work? In our health programs, we of course look to focus on women for a variety of obvious reasons, in maternal health and family planning as major efforts that we support.And we're just, I think, getting much more sophisticated in developing measures and metrics to do that so that it -- we're really not saying we're going to allocate X amount of money to gender programs but rather say, in everything we do, we're going to be businesslike and sophisticated in measuring the results for women and girls.And we see it makes a huge difference. You know, the program I mentioned in Guatemala, where we've seen those big reductions in child stunting, that's in part due to effectively focusing on women for nutrition education and other types of activities.QUESTIONER: Laurie Garrett, from the council. Thank you very much for joining us today.Many in the global health and development community were pretty stunned by President Obama's proposed 2013 fiscal year budget. The largest cuts proportionally anywhere in the entire federal budget would go to global health at somewhere between 3.5 (percent) to 5 percent. And the rationale given was, well, we're more efficient, we're better at getting bang for the buck, and we're consolidating programs. A lot of the global health community greets that with great skepticism. We're -- obviously, you must defend the position because you're in the administration. Rather than ask you to defend it, can you explain it?SHAH: Sure. (Laughter.) Well, first, I'll say it's not true, of -- that these are the largest reductions, because actually, we carved out the foreign assistance component, which overall -- and this is an -- you know, by comparison to previous years, this is an austerity budget. There's no question that this budget overall is presented to rationalize our fiscal situation. But our overall foreign assistance budget is down about a percent, a percent and a half, overall, as part of this budget.That said, in -- you know, in health, we've submitted a request for $7.9 billion. As you've noted, that's about 60 (percent) -- 50 (percent) or 60 percent of total global health spending. It's the single largest item in the U.S. foreign assistance account and the entire U.S. foreign operations account. And we think we're getting incredibly strong results for that significant investment. We are on path to -- as President Obama made a commitment, to put 6 million on antiretroviral drugs. And you know, cost of those drugs have come down by a third of what they used to be.We're on path to ensure that in a global partnership, every pregnant woman with HIV gets treatment so that she can avoid transmitting HIV to her children and we can have an AIDS-free generation. We have resources in that budget to support the Global Fund and to ensure -- and we've had a big increase in our commitment to the Global Fund to make sure that we're investing in those multilateral vehicles that allow us to leverage our dollars with the dollars of other donors and generate 2 (dollars) or 3 (dollars) or $4 of investment for every 1 (dollar) we put in.And we have the resources to lay the groundwork for the vision that I laid out in terms of what's possible on child health and child mortality, which is very exciting -- will take more resources in the years to come, but we can lay the groundwork for ensuring that every kid gets to sleep under a malaria bed net, that every kid gets basic vaccines that our children here get, that every child around the world has access to, you know, basic therapies like oral rehydration if they get diarrhea, which has actually come down in recent years.So you know, we're doing the best we can in a -- in a difficult fiscal environment, but this budget is designed to absolutely meet those very specific commitments.KRISTOF: Yes.QUESTIONER: I'm Gary MacDougal (ph), a longtime public company CEO, now chairman of foundations. And I've had interaction with AID over many years. And my question relates to performance outcome measurement.My observation has been that lots of money gets wasted, that AID doesn't measure things very well, and when they do measure, they often measure the wrong thing. Have you this addressed this problem? And I'm not going to ask you to criticize your boss' boss, but I'm going to ask you to criticize your organization. Have you addressed this problem? And have you considered having a high-level performance outcome measurement executive reporting directly to you? Because you have to create systemic cultural change in an organization that's been that way for many years and you've only been there 24 months. So what do you think about performance outcome measurement?SHAH: Well, first, this might surprise you -- (chuckles) -- but I agree with you completely. I was stunned to learn when I got there -- because I was at the Gates Foundation for a long time and we put in place very rigorous performance management systems there and in fact had modeled some of those -- and I know, because I was part of this -- on some of AID's templates for how you do programmatic evaluations that came out of the late '80s and early '90s. So I was stunned when I got there to learn that an institution that was sort of synonymous with good evaluation had gone from doing something like 600 program evaluations in the early '90s, after having a more than tripling of the budget, had gone down to doing about 190 a year by the time I got there. So your basic presumption is absolutely accurate.What was more crippling was that they followed what I call a kind of two-two-two model -- that they'd hire two consultants, they'd go out for two weeks, they'd produce a report that two people would read. And frankly, that doesn't -- (laughter) -- that doesn't tell you anything.So we got -- we got -- we put together a world-class team. We came up with a new evaluation policy. By the end of this year, we -- this will be the first year that this is in place -- we will publish 250 high-quality, independently conducted program evaluations all done by third parties. They will not be edited or cleaned up; they will go straight to our new website at the end of the year.And every year, I think we will be generating data and information on what works and what doesn't work in a transparent and clear way and in a way that, I think, within a few years will clearly establish our institution hopefully as a -- as a model in this space.And I was quite thrilled -- you don't have to believe me -- that there's an institution called the American Evaluation Association that actually issued a statement that they thought what we were trying to do was a best-in-class approach and encouraged other federal agencies to take on a similar one. There's a lot more to it, but I think it's really, really important.And here's why: I had this really interesting conversation with Stephen Harper, the prime minister in Canada, who led this maternal health/child health group. And I said, OK, if I were in your government, what would your advice or instructions to me be. And he said there's no other area of public policy where the difference between the way people feel about the quality of your work is so stark. You know, either they think you're spending your money in a businesslike way, generating results, saving lives, and they have this tremendous generosity; they want to do more; they want you to do more, or they assume it's going to corrupt dictators, it's not being used well, it's all wasted, and they want you to disappear. And he said there's no middle ground. (Chuckles.)So -- and I believe -- from my experience, I can say that there certainly feels like there's some truth to that. So I think it's important that we kind of lead in this space so that we can -- you know, our country and Americans can believe what we're doing is generating real results, because I'm confident it's so. The ability to unlock the political support for this work will just go through the roof.KRISTOF: Yes.QUESTIONER: John Kine (sp), Kine (sp) Foundation. I've spent a great deal of time in the field in your type of activity, and I find it extremely interesting and useful. And it is truly -- distributing directly to Third World dictators is rarely a platform (for this ?).A question of public diplomacy: The U.S. is by no means the largest percentage distributor of foreign assistance, but -- although in absolute money, it's a very large one. Should we show some of our trade deficit as a kind of credit? In other words, many people in this room have something on their backs or in their pocket that is made in, let us say, China, or whatever, Bangladesh. And that's the kind of -- our trade deficit is a kind of aid distribution, because you're giving work to very poor people sometimes. (Inaudible) -- people, they wouldn't get the job. This is just a public diplomacy suggestion.SHAH: Well, yeah. I -- that's an interesting idea. I think that -- I would say two things. The first is, you know, I think there's a difference between designed, results-oriented investments in areas where we think we have the most bang for buck and other types of things. And that's a -- that's an interesting suggestion. Others have suggested that U.S. family remittances to their families back home should also count. As someone who grew up in an Indian-American home watching my father make those remittances back to his family, I know he would certainly not want the U.S. government counting that as official development assistance -- (laughter) -- and would probably be pretty vocal about it. So that's one thing.The second thing is an -- is the flip side of that point, which is if you look at the biggest aid recipients in our past -- South Korea, Taiwan, other Southeast Asian countries -- and you look at the trends in sub-Saharan Africa, 11 of the 14 fastest-growing export markets under the president's export initiative have been recent or current U.S. aid recipients. And you know, and South Korea is just an incredible example. They had a lower per capita income, a lower per capita caloric consumption in the -- in the 1960s -- in the late 1960s than in eastern Africa. And today, obviously, they are a fully industrialized country, one of our largest trading partners, a source of a free trade agreement that will create hundreds of thousands of jobs in this country.And you know, that's what success looks like. And I think we need to constantly remind ourselves that this is about creating the kind of world where we can continue to prosper and be successful by lifting others up and connecting them in a -- in an appropriate way to the global economy.KRISTOF: We've had some questions that have come in from members watching remotely. One is from Cedric Suzman in the World Affairs Council of Atlanta, who asks: Can you tell us what role water, with its connection to nutrition, sanitation and health, is playing in your portfolio, your projects around the world?SHAH: Well, water is very important. I think water and food go hand in hand. Seventy percent -- 75 percent of total water consumption in places we work is for agricultural purposes. There still are about 1.2 billion people around the world that don't have sufficient access to clean water, which is an extraordinary thing because obviously, we all take that so completely for granted.We're convinced that water and food security are critical national security priorities. And that's why, you know, Feed the Future is a program that's most notably about food security. But you can't have food security without effective water strategies. And we'll be issuing in a few weeks, on World Water Day, a new water policy. We're very enthusiastic that there are some great opportunities to improve outcomes, particularly on how productive water is used and what that means in the production of food and in the management of watersheds and water resources.So it's very important. It's a space where public investment is dwarfed by private investment or by the investments of multilateral development banks. So it's a space where we want to partner more with others in order to get larger-scale solutions. KRISTOF: Yes, yes, yeah, absolutely. (The ?) microphone is right beside you.MR. : (Off mic.)QUESTIONER: Thank you very much, first of all, for your very informative and inspiring talk about the United States. I know that you came to the agency with a -- with having a lot of baggage and regulations in place, and I wanted just to ask you, are you taking any steps to remove what was put in place in 2008, which is an absolute ban on abortions for -- on U.S. aid going to women and girls raped in armed conflicts, such as in the Congo and Sudan?SHAH: So there's a very -- there's a law in place that precludes USAID from using our direct resources to support abortions and the provision of abortions, and we have very careful controls to demonstrate that we are abiding by that law. President Obama, when he took office issued a repeal of the Mexico City policy, which actually had gone so far as to make sure that the U.S. couldn't work with any organization that was affiliated with providing knowledge about a comprehensive set of family planning services. That repeal has allowed us to reinvigorate our family planning programs and to refocus on women's health. And so we've been -- we've been very focused on basic, broad and comprehensive family planning. We've been very focused on investments in women's health. And in the specific environments you're discussing, we do quite a lot of work to work with women after traumatic situations and to make sure -- and after, you know, fistula repair and things like that and to make sure -- increasingly and, I think, very importantly -- that we put basic protections in place in a range of different contexts. But, no, we do not provide resources for abortion, and the law doesn't allow us to do that. KRISTOF: We have time for one or maybe two questions if we're -- if we're brief.(There's pressure ?).QUESTIONER: Hi, my name is Imatra Watchahur (ph) with TerraNova Strategic Partners. I wanted to ask if you could share with us what are your biggest challenges in coordinating foreign assistance with the larger bilaterals and multilaterals around the world?SHAH: That's a -- it's a great question. I spend a lot of time trying to coordinate our assistance. I guess I'd break it into two different components. One is around humanitarian emergencies or immediate transitional emergencies. And in those environments, you know, usually there's a "friends of" group that will be developed, like the Friends of Libya, that brings together partners and explores how we can work together. We've taken some extra measures to really make sure we do this well. In fact, I've traveled, for instance, to Southern Sudan with my counterparts from the United Kingdom and Norway. We just felt if we went together, we could send a message of unity; we could ensure that we weren't duplicating efforts. It was a very interesting trip because a lot of it was spent working with our own teams who -- you know, everybody wants to be doing everything. And so we had to stand next to each other and say, no, he's going to do this, and Norway's going to do, you know, help with the management of the oil resources, and the U.S. is going to focus on health and education and then hope -- and then that got the message through. So there's some -- we're being more effective at that. The second part is the new partners. You know, in the crisis in Somalia and in many parts of sub-Saharan Africa, partners from the Islamic countries and the Arab states are doing more and more in this space on humanitarian and development needs and partners like China are major investors in Africa, for example, for their own economic interests and resource priorities. So we have created global agreements to try and make sure that people abide by basic standards in how they do their work, that all these new partners whom we welcome into the -- into the space abide by standards of transparency; of fighting against corruption and graft, as opposed to contributing to it; you know, participate in the international fora for communicating and making clear what they're doing, what their intentions are; and then we learn together. And that is, I think, the big challenge over the course of the next decade, will be really getting that piece right with these new partners. KRISTOF: After what you talked about, bringing efficiency to USAID, I don't dare go over time. (Laughter.)SHAH: (Laughs.)KRISTOF: So I'd -- you know, we asked you questions about your boss, about the agency itself, and you've answered with a lot of grace. I should also mention that your annual letter is coming out on Friday, I believe. Is that right?SHAH: Yes. Yeah. This is part of our effort to communicate better the value of this work and what we're learning and where we can do better -- (inaudible).KRISTOF: And that'll be on your website?SHAH: That'll be on our website at usaid.gov on Friday. So please check it out, and we'd welcome your feedback and your insight. It's a practice I've shamelessly copied and borrowed from my previous employers, Bill and Melinda Gates, who also do an excellent annual letter that is very informative.KRISTOF: So please join me in thanking Dr. Shah for being with us. (Applause.) --------------------- (C) COPYRIGHT 2012, FEDERAL NEWS SERVICE, INC., 1120 G STREET NW; SUITE 990; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED. UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION. FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES. FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL 202-347-1400 OR EMAIL [email protected]. THIS IS A RUSH TRANSCRIPT.------------------------- NICHOLAS KRISTOF: This is a(n) on-the-record meeting, and we have people -- council members watching remotely at other locations around the world. They will be submitting questions to this, after following on a password-protected teleconference.Raj Shah has been running USAID, has been traveling relentlessly around the world and has been aiming not only to administer the agency but really to transform aid and the way the U.S. delivers it around the world. He -- usually people say somebody needs no introduction, then proceed for several minutes -- (laughter) -- but I'm just going to say that Raj does need no introduction, and introduce him for the annual Hurford lecture.Raj? (Applause.)ADMINISTRATOR RAJIV SHAH: Thank you, and good afternoon. It's wonderful to be here, and I want to thank Nick for that kind introduction and for moderating today. We -- we're all of course, especially all of our 8,000-plus staff, are all avid readers and followers -- (chuckles) -- of Nick. So this is a very special opportunity.I also want to thank the Hurford family and foundation, and the council -- and I see Richard Haass there -- thank you very much for having me here.You know, tomorrow's International Women's Day, and on -- and it's a particularly important moment for us to recognize that there's just so much that we can do with our foreign assistance and with our development efforts around the world. And it's easy for those days to come and go without adequate recognition, but I am so excited to be here, in part because when we -- when I joined USAID, it became very clear to me very quickly for President Obama and for Secretary Clinton and for this administration -- and, I would now argue, frankly, in a bipartisan way in Washington -- there is a tremendous amount of support for taking development far more seriously as the third leg of how America presents itself around the world. Diplomacy, defense and development together are capable now of presenting our values, our capabilities, our ability to avoid conflict and shape a more peaceful and more interconnected world, and our ability to reach out and touch some of the world's most vulnerable populations and do it with great American technology, spirit, willingness to serve and deliver outcomes that at the end of the day make us better and make us stronger. It's particularly exciting to be in this role in this particular time, because many of the institutions that were created to pursue development objectives, to reduce poverty, hunger, suffering, inequality, were created after the Second World War and were designed for an era when official foreign assistance actually took place because we didn't have enough private capital going to these places or were designed in an environment where the United States was the laboratory and the inventor for the world and could create technologies that would spread quickly, and were designed, frankly, to engage with big countries that have huge populations of very, very poor and vulnerable and threatened populations, places like India and Brazil, Southeast Asia, that have of course since then transformed themselves and are now redefining the way the world interacts.So the opportunity to be part of our country's development portfolio at a time when the world has so dramatically shifted in terms of what's needed and the context in which we work is a -- is a great challenge and a great opportunity.We've tried to rise to that challenge in a few specific ways. And I would argue that the things we're trying to put in place now are setting the stage to help us achieve some very specific results. And I'd -- I would like to speak to some of those in a moment.But before doing that, I just want to describe a few components of our new approach to how we work in development around the world. The first is that we focus very much on delivering value for money. We made some tough decisions. We all know that the political environment has both required that and frankly, in this space, in some contexts, it's the right thing to do. We've lowered our exposure, shifted our staff -- global staffing, concentrated on those countries and those priorities where we know the expenditure of U.S. tax dollars can generate concrete and specific results.We've prioritized science, technology and innovation. You know, some of the biggest advances in global development, some of the biggest success stories over the last four decades have been when a Minnesota-based researcher created a new form of wheat that transformed food production in Asia and saved hundreds of millions of people, or when the agency that I'm a part of helped invent oral rehydration solution and salts and had it tested in Mali and 40 other countries around the world. And since then that specific effort has saved 11 million children from death due to diarrhea.It's those types of technological and scientific advances that have powered progress in the past and now, with the advent of the mobile phone and the new horizons around technology and interconnectedness, have the power to take us forward.But perhaps most profoundly, what we've tried to do in reforming our approach, in changing our approach is to recognize that at the end of the day, the United States really no longer -- and perhaps never did -- has a lock or a monopoly on creating the best solutions. And for anyone who reads Nick's columns, you certainly hear and see in those stories of incredible entrepreneurs, whether they are, you know, a prostitute somewhere in a very difficult environment or a girl who's been trafficked but who manages to break free and protect others, or whether they are a young entrepreneur in a slum in Nairobi creating systems for tracking food needs and water availability, an entrepreneur that we now work with to do things like identify where we need to prioritize putting food and other items during critical humanitarian emergencies.And so our effort has now really focused on how we identify those superstars and leaders in countries in whom we can invest; who are capable of changing their environment, changing their economy.And in doing so -- I'd like to just offer one example, if you put the slide up. This is Dr. Suraya Dalil. About eight or nine years ago Suraya Dalil was working training midwives in Afghanistan. Afghanistan had the highest rate of maternal mortality and one of the highest rates of child mortality anywhere in the world. And we made a determination -- my predecessors made a determination that they could work with her to help her build an institution, a ministry, a health system that in Afghanistan would help provide basic and low-cost services to a large percentage of the population. Health services and coverage went from 9 percent to 64 percent. And over the last nine years -- and we now have this from validated studies -- we've seen the single fastest decline in maternal mortality anywhere in the world take place in Afghanistan. And we've seen women's lives go up -- in terms of longevity -- by more than 18 years, a tremendous, tremendous accomplishment, that resulted from identifying local leadership, making investments, working in partnership with the international community and doing the right things.I believe this sort of approach is increasingly helping us meet the challenges of our time. In the next -- if I go to the next slide -- in fact, you know, we really recognize that the opportunity today to reach out and connect to local change agents and leaders is greater than it has ever been. This slide is a picture of protesters, of course in Tunisia, and you would note there was a reason the protesters in Tunisia were chanting "dignity before bread." It was because they recognized and they felt that they needed to have more open space to communicate, more right (towards ?) self-determination, and that if we defined development aspirations too narrowly, as just economic improvement or health improvement or whether people had access to an education, it somehow didn't capture the very basic and fundamental underlying human rights that they sought to fight for.We've been excited to have the opportunity in Tunisia, in Egypt, in Libya, and in many other countries through the Middle East and North Africa to work aggressively with partners and to make sure that we reach local society -- local change agents. We support civil society organizations -- some you've read about, of course -- that work to expand access to democratic processes. The president made a very strong commitment that we would stay firm in better aligning our long-term strategic interests in the region with our core and fundamental beliefs in self-determination and respect for basic freedoms, human rights and human dignity. And USAID is honored really to have the chance to be on the forefront of implementing that approach in very difficult and very important environments. Another area where we work that has traditionally been an area of controversy -- but I hope we're getting beyond that now -- is in our partnerships in active conflict environments. Today our largest program is in Afghanistan where we have more than 450 people taking many of the same risks that our military personnel take, working side by side in fields and in communities to help achieve a basic stability so that our troops can come home as rapidly and as safely as possible. The truth is it's been quite controversial, over the course of more than a decade, for development partners to be engaged actively in military conflicts. But the reality is we can no longer sort of hide behind that controversy. We know that countries that face violence over a period of 20 years have had poverty rates that are 20 to 30 percent higher than those that see peace. No country in an active conflict is anywhere near meeting their millennium development goals, which are the goals and objectives that have been laid out for achieving basic improvements in the human condition and agreed to by all 190-plus nations. And so we've really taken efforts in places like Afghanistan to expand our presence, work in a more sustained way, and make sure that some of the gains that have been achieved, whether it's 7 million more people including more kids and 3.5 million girls that are in school today there that were not at the beginning of the conflict, 1,800 kilometers of road, a nearly 10 percent annualized growth rate -- those are great results and great accomplishments. Our challenge now is to sustain those even as we transition out in terms of our significant military presence. And one of the major challenges that we have had in development, that we're trying to adapt and change as we enter this new era, is how we work with institutions and companies in the private sector. You know, many in our community still have a -- if not bad taste, at least a little bit of discomfort from early corporate activity that did cause significant harm to poorer populations in poor countries. Sweatshops, infant formula, Bhopal -- those are all words that conjure up images of corporations as predators, taking advantage of circumstances and a lack of controls. But today, many of the best corporations have a much more enlightened understanding. They see that the fastest growing markets around the world are often very early emerging markets. They note that in sub-Saharan Africa there are 15 countries that have grown at 5 to 7 percent annually for about eight years in a consistent way. They see tremendous fortunes being made as people create products and services that can be sold on cell phones to even the most remote parts of the world and they see the outcomes that relate from that. Just one example that I'd like to offer that I think is emblematic of our new way of working in this space is a partnership we were able to launch with Pepsi in Ethiopia. Pepsi will invest significant resources to reach 30,000 chickpea farmers -- and (I know ?) you say, well, why are you talking about chickpea farmers? -- and they'll reach 30,000 chickpea farmers as part of building out a business to produce both hummus for their commercial markets and to produce a high-nutrition, ready-to-use, high-protein paste that can be delivered to kids in -- at risk of chronic and severe malnutrition in and around the Horn of Africa. It's those types of partnerships, brokering those types of deals -- in that case between Pepsi and the world's largest food aid provider, the World Food Programme, with USAID in an intermediate role -- that, I think, increasingly will define whether -- our ability to do that will define whether or not we'll be successful going forward. Is it -- the next slide.This is a photograph of a visit I made that had a profound impression on me last summer and fall to Dadaab, Kenya. This is the site of the -- of the world's largest refugee camp, and it was at this site that I had the opportunity to meet a young mother named Habiba (ph), who had traveled 60 (kilometers), 70 kilometers by foot from inside of south-central Somalia to safety at this refugee camp. Along the way of her trek, she was attacked. She had two children, and she was -- over time, they didn't have the strength to continue on themselves. So she carried them in her arms. And then, along the way, she determined that she couldn't physically go on carrying both kids and had to make a choice that, as a parent of three, I can't even process or understand, about leaving one of her children behind, as others have had to do, as she took her other child to safety. Those are the kinds of choices that people have to make in environments where the combination of famine, of war, and strife and drought -- in this case, the worst drought in 60 years that affected more than 13 million people -- when those conditions come together and create those environments. And as we look forward, our -- the United States -- and I am proud of this -- can say that we were more than 60 percent of the global effort to tackle the humanitarian crisis that took place. We mobilized international partners. We did many of the things -- we did a lot of innovative things in that context to make sure we could reach populations, even inside of Shabab-controlled environments, in a way that was safe, but that ultimately delivered to them either resources, high-nutrition foods, health and water interventions that saved lives. And while we all know that more than 35,000 children under the age of 5 perished by -- around the end of September, I'm convinced that our efforts taken together, as a global community, did save tens of thousands of children's lives and are one of the proudest moments the international humanitarian community has had in doing that. This year, as we go forward, we're very focused on using the lessons from that experience to prevent the reach of the next set of disasters and to build greater resilience into our programs. It took me a while to figure out what the world "resilience" meant in this context. Resilience means helping people who live in very vulnerable situations avoid the negative consequences of those types of situations. An example of resilience is a very innovative partnership we have with Swiss Re, the reinsurance firm, where we've designed insurance products for pastoralists in Kenya and Ethiopia and parts of Somalia, so that when rainfall -- it's rainfall index insurance: When it doesn't rain as much as is expected, they get an insurance payment. Six hundred of those families got insurance payments from that program the -- over the course of the summer, and it kept them in their communities, and it kept them persisting onward and avoiding the need to go on one of those long and dangerous treks.I'd like to conclude just by briefly describing what I think of as our three biggest opportunities as we go forward. I think the first is our opportunity to mobilize technology, innovation, partnerships like the Swiss Re program and target those parts of the world that we know are increasingly vulnerable to climate shock and climate change and will increasingly suffer from situations like this.And that -- we're at the end of this month pulling the international community together in Nairobi in order to lay out a plan to do precisely that and build more resilience into places like the Horn of Africa, in environments like the Sahel in West Africa, where 6 1/2 million people this year are going to likely be at risk if our rainfall measurement systems and prediction systems are accurate, and do a better job of letting people protect themselves with all of this new capacity to help them improve their own lives.But that's not enough, and that's why the second opportunity and the one that is really our -- the president's top development priority is to really invest in countries so they have the capacity to feed themselves. We know it is anywhere from one-eighth to one-tenth the cost to help someone feed themselves than to provide food aid, and we know that despite the fact that every part of the world except for parts of sub-Saharan Africa and parts of dry-land South Asia have escaped food insecurity, in the places where it continues, it has been getting worse over the last few years, not better.So we're investing in a program we call Feed the Future, a partnership with other international donors and with countries themselves to help countries invest in the technologies and the strategies to literally boost their harvests and pull themselves out of poverty. We're excited because that is starting -- we're starting to see real results. The same day that we were at this camp -- can I have the next slide? The same day we were at this camp -- I'm not sure where this is -- (chuckles) -- but the same day we were at the camp, that afternoon we went -- I was with Dr. Jill Biden and Senator Frist, and the three of us went to an agricultural research institute outside of Nairobi.And at that institute we saw new forms of hybrid maize or corn being developed in partnership with U.S. universities. We saw scientists, some of whom had been to Purdue for training and education, creating orange-flesh sweet potatoes, potatoes that actually have more vitamin A in them, pro-vitamin A, and therefore they help kids protect themselves from river blindness and other diseases. And we saw that in parts of Kenya, food production had tripled in just a few years, in part as a result of our partnerships, and that had helped about 4 1/2 million people in Kenya not need humanitarian assistance through this crisis.That's what success looks like in that context. I was thrilled just last week to see new data out of Bangladesh where for the first time in decades their most populous states are going to be sufficient -- self-sufficient in rice production in large part because of a major international partnership to improve the quality of production of rice in that part of the world. And we're seeing child stunting rates for children who are chronically malnourished go down 20 (percent), 30 (percent), 40 percent in just a few years in Central America as a result of our new way of working and tackling these problems.As Secretary Clinton has said, ending child hunger in particular is not something that we need to learn how to do; it's just a matter of having the will and the commitment and the desire to partner and get it done. And that's our second priority.The third priority is another area where we have all the tools and technology necessary to create huge advances in the human condition. Today there are nearly 8 million kids who are under the age of 5 every year who die of preventable disease. And we know that if we had the OECD or the first-world child mortality rate extrapolated globally, that would be about a million and a half kids.So that difference, that 6 1/2 million kids every year, is what we think of as preventable child death. And we've seen huge progress in creating new vaccines for diarrhea and pneumonia. I see some folks here who've been part of that effort. We've seen new strategies, new technologies, things as simple as an insecticide treated bed net that, for a few dollars, can help protect a child for years. We've now seen, in partnership with -- students at Rice University have developed a CPAP machine -- for those of you that are doctors, a continuous positive airway pressure machine -- that helps kids breathe in the first few days of life. They've developed one for $160. You -- in this country, to buy one for a hospital will cost a couple thousand dollars.It's those types of advances that are making possible now what we believe is the largest reduction in child mortality ever, and we think for the first time you can look across the horizon and try to end completely preventable child death in a generation. And so that's our third major objective and commitment, and we are later this year pulling together the global community to try to raise resources and to get folks to focus on what it will take to achieve those kinds of goals.Could I have the next -- I think it's the last slide.And I just want to -- I don't want to get into detail here, but I want to share what success looks like when those things work. If you -- this is a demographic picture of different parts of the world in 1960 and 2010. And the big, exciting thing about saving kids' lives is when you save their lives, they actually -- people invest more; people have fewer children to begin with, and then they invest more in those children getting an education and improving their status in life. And that process is known as a demographic dividend. And countries that have experienced that demographic dividend have added 2 percent to their annual growth rate on an annualized basis for about 15 years.So just think of how powerful that could be if we could start to see -- and you see the demographic dividend take place by the different shape of the distribution of populations in Asia and Latin America versus in Africa. We now believe we're on the cusp of seeing that kind of a demographic dividend take place in Africa.And I'll conclude with the following thought: If we succeed in these efforts, if we can protect vulnerable populations and avoid the story I told you about that I heard at Dadaab, if we can end large-scale food insecurity and help countries develop their agriculture as a basis for developing their economy and if we can end preventable child death and usher in a demographic dividend in countries like Nigeria and DRC and Ethiopia, we can look out and envision a world that is more interconnected, that is safer, where people and children and communities everywhere have real human opportunities and where they have more opportunities for self-expression and basic human dignity.And at the end of the day I would argue, President Obama would argue and I -- what I'm excited about is members in both parties on both sides of the aisle in Congress would argue that that is in our national interest. It is deeply and profoundly in our national interest to create a world where we have trading partners instead of places where we have to send soldiers.And while sometimes it's hard for political systems to take the long view and make the decisions to prioritize what it takes to get there, this story is a -- such a critical part of our national security strategy, our foreign policy strategy and our own capacity to create an economy that is vibrant and lively and has jobs here.And so I appreciate the chance to be with you today, and I look forward to taking questions and hearing your thoughts.And I'd leave you with the following request -- (chuckles) -- which is -- it's hard to sometimes talk about these issues, but I would just make the case that if we all in this room for starters -- and then we all reached out to people we know and work with -- would talk more about these issues, if we all had a little bit more Nick Kristof in us -- (chuckles) -- and we could process the fact that these are solvable problems and that solving them is not just creating benefits for others, but really creating benefits for our own country and is ultimately the purest expression of what it means to be American and how we demonstrate our values, then we'll be better off as a political system, as a country and hopefully as a global community.So thank you. (Applause.)KRISTOF: Thanks very much, Raj, for a terrific presentation. In a moment I'm going to broaden it up and make it a conversation with members here and with those who are remote.Let me just start off by tossing a couple of questions your way. You ended by making the point that this isn't just about our values but also about our national interest and about our national security. And I think a lot of us have been advocates for assistance in making similar kinds of arguments. But I must say, you know, when we look at what is happening in huge beneficiaries of American assistance, like Afghanistan, which you mentioned is the biggest USAID program, Pakistan, Egypt, then isn't it harder to make that argument that billions of dollars have bought good will, have bought openings for American diplomacy? You know, do the skeptics maybe have a point on that ground?ADM. SHAH: Well, you know, I think it's hard to judge the quality of American assistance by, you know, our approval ratings in different countries. At the end of the day, our belief is if we design efforts that generate real results, that if people can see and appreciate and value those results, that we're part of the solution. And I've looked at this carefully, and I'll tell you, when people who are affiliated with, associated with or even aware of our programs -- even in Pakistan, we get more than 1,050 press mentions in Pakistan a month, and the great majority of them -- "we" being USAID -- are incredibly positive. And when we go and see the communities that we're touching because we created road infrastructure in schools in Waziristan or because we've helped put a thousand megawatts onto the electrical grid over the course of the last two years, we see real appreciation for that. But the honest answer is, I don't think development partnerships will ever have -- will ever fully define the way other countries see us. They see us -- certainly that's part of it, but they also notice if we -- you know, if there are incidents that are deeply offensive to their religious beliefs or their cultures, or if they believe that we are doing things in their country that are inconsistent with the -- with the basic, you know, aspirations they have.So it's complex, but -- you know, but at the end of the day, if -- you can especially look after -- immediately after big disasters. That's probably when we're most visible, when people see the power and presence of American engagement and we move the sort of numbers on our approval rating, so to speak. But otherwise, I would argue it's better to focus on delivering results and being true to that spirit and that outcome than trying to necessarily design programs solely to have more visibility.KRISTOF: But just to push back a little bit, I mean, when Kerry-Lugar-Berman was being sold, we all made the argument that this was an essential way to improve our relations with one of the crucial players in the world. And, I mean, USAID may be getting favorable mentions in the Pakistani press; the U.S. itself sure is not. And in that period we've been spending billions of dollars, relations have deteriorated. And what have those billions bought us?ADM. SHAH: Well, you know, on behalf of a certain part of that portfolio, they've bought us real human results; you know, whether it's the kids in school or vaccination programs for large percentages of the kids in the country that are improving their health. We've trained 22,000 midwives that are helping to reduce the number of women who die during childbirth. Those results matter, because over time, you just can't have stability and opportunity if mothers die when they give birth, if kids don't make it to the age of 5, if population growth is out of control. It creates such tension and pressure that the long-term trajectory for stability is just not there. So they deliver those real results. I think that's the first thing we got to focus on. I would argue they also do help in what is a very complex, multifaceted relationship that has its ups and downs. They help serve as a bit of a stabilizing force. I don't want to pretend that, you know, by any means our development partnership with Pakistan trumps everything else. It doesn't. But it's part of the area of positive cooperation that -- you know, that Pakistanis can appreciate. It's not the whole story, as we all know, nor is it likely to become the whole story.KRISTOF: Let me ask one other question before handing it -- broadening it. I think there is a general sense that USAID programs like Feed the Future have been really well thought out and well done, but I think there's also a sense that one of the central challenges assistance faces these days is not just designing great programs, but in building political will around America for support in general. And a couple years ago, President Obama said that development was going to be on par with defense and diplomacy, and I must say that, you know, if you look at the White House since then -- I mean, haven't they been kind of AWOL in that effort to make the case for aid politically so that there is broad support?The -- I mean, you're out there making the case. Secretary Clinton has been making the case periodically. President Obama not so much, no?ADM. SHAH: Well, I would disagree. (Laughter.) I think the president's been out there every clearly saying -- not only proposing, you know, the largest and, I would argue, most results-oriented budgets and policies in this space that we've ever had as a country, building on a strong track record of President Bush in this space, but he's also very clearly and personally said that he will continue to fight for foreign assistance even when things are very, very tough, because it's a critical expression of our values and it is both good for us and critical to our national security and foreign policy strategies.So I would disagree with that presumption, as you wouldn't be surprised.KRISTOF: I figured you would.ADM. SHAW: But I'd also say, you know, I think you have to step back and just say over the last 10 or 15 years, one thing that's changed dramatically is, before it used to be the case, if you wanted to be in development or be engaged in development, you would be at institutions like USAID or the World Bank or you'd be trying to get into those institutions. Today there are faith-based organizations, student groups, entrepreneurs, folks in university research labs that are all doing really exciting, innovative things, and because they're just more interconnected, can -- you know, a group of students at MIT can develop a water filtration device to take arsenic out of the water that is low cost and a breakthrough for people in Bangladesh. There's a group of -- there's an engineering and business school group at the Blum Center at the university -- at Berkeley that created an improved cookstove that we're now distributing in Darfur that helps to reduce indoor air pollution and improve health outcomes and reduces the need for firewood, which -- and women get, you know, attacked and are at risk when they're out searching for that. And I mentioned the Rice students who developed the CPAP machine. I just think the long-term trend here is incredibly positive. More Americans -- you can't go to a U.S. college or university without being overwhelmed -- as you know, of course -- by the interest in development. And we issued a program to enhance our partnerships with universities. We've had there webinars -- it's a way for us to communicate with potential applicants -- each of which have had more than 700 people on them, some of the biggest, most subscribed programs we've ever created in our history. And I think it's because there's an explosion of interest in our country to support and engage in development. And I think someday that will turn into significant political support for what we're doing, if we do it well and if we're delivering real results.KRISTOF: Thanks. I'd like to invite members to ask questions. If you are watching remotely, you can email your questions to [email protected]. Please wait for the mic before you ask your question. Stand up; identify yourself. And please do ask a question, OK? (Laughter.) Where's the mic? OK. Yes.QUESTIONER: Hi. My name is Dan Rhodes (ph). Raj, United States enterprise funds have been among the outstanding successes in the history of American foreign aid. The original programs are now -- the first generation are now winding down. What is current thinking and planning for a new generation of American enterprise funds?ADM. SHAH: Well,l thank you. For those who don't know, the enterprise funds have been public-private partnerships that have been set up in countries that were experiencing transitions, most notably in Eastern Europe and the former Soviet satellites. And you're absolutely right, they've been very successful. Many have made money and have returned money to the U.S. Treasury over a long period of time, and they did help to stimulate critical business investment in countries.Today we are actively creating those types of enterprise funds in Tunisia and Egypt and countries throughout the Arab Spring. We're using a broader set of tools now to help motivate more private-sector business activity and job creation in those countries.And one of those tools is a -- is a new tool we have called the Development Credit Authority that actually provides loan guarantees so that, you know, small-scale agricultural businesses can get lending from their local banks.And we found that those local financial institutions have been very sort of skeptical about investing in local businesses. And that's a good thing for us, because then we provide the credit guarantee, they start putting the loans out there, and it turns out that the riskiness of the loans were far overestimated. So for every dollar we've actually spent through our credit authorities, we've leveraged $28 of local investment in small businesses in the health sector and food and agriculture and getting clean water and improved sanitation services to populations in need. And I think -- I think that's very much part of the future -- so enterprise funds and a much broader set of tools that today can unlock real entrepreneurial activities in countries.KRISTOF: Yes. Yeah.QUESTIONER: Thank you. Hi. My is Mallika Dutt and I'm with Breakthrough. Raj, I'm curious to hear how the global pandemic of gender-based violence and discrimination plays into these approaches and opportunities that you've just laid out for USAID.SHAH: Thank you. You know, I -- the -- we issued our first gender policy this last week, and we launched it at the White House. And it was surprising to me -- I've been at AID for about two years, but it was the first gender policy that the agency has released in more than three decades.And what we've learned in those three decades is extraordinary. We know that a dollar of income that goes to a woman is far more likely to be invested in children's health and education and in moving a family out of poverty than, unfortunately, that same dollar going to a man. I joke about that in my own household -- (laughter) -- here at home.But the reality is, a lot of data has concentrated on making the case that women are important, and has been -- and we've done less, over the last few decades, to really understand how to make sure, in all of our programs and efforts, we're focusing on women and girls and protecting or prioritizing their interests.So now when we launch our Feed the Future efforts, we have a data system that collects data on beneficiaries and makes sure that women's incomes are increasing and other measures of women's empowerment. In our civil society programs, we're specifically tracking, are we supporting women-headed NGOs and giving them more visibility in the social context that they work? In our health programs, we of course look to focus on women for a variety of obvious reasons, in maternal health and family planning as major efforts that we support.And we're just, I think, getting much more sophisticated in developing measures and metrics to do that so that it -- we're really not saying we're going to allocate X amount of money to gender programs but rather say, in everything we do, we're going to be businesslike and sophisticated in measuring the results for women and girls.And we see it makes a huge difference. You know, the program I mentioned in Guatemala, where we've seen those big reductions in child stunting, that's in part due to effectively focusing on women for nutrition education and other types of activities.QUESTIONER: Laurie Garrett, from the council. Thank you very much for joining us today.Many in the global health and development community were pretty stunned by President Obama's proposed 2013 fiscal year budget. The largest cuts proportionally anywhere in the entire federal budget would go to global health at somewhere between 3.5 (percent) to 5 percent. And the rationale given was, well, we're more efficient, we're better at getting bang for the buck, and we're consolidating programs. A lot of the global health community greets that with great skepticism. We're -- obviously, you must defend the position because you're in the administration. Rather than ask you to defend it, can you explain it?SHAH: Sure. (Laughter.) Well, first, I'll say it's not true, of -- that these are the largest reductions, because actually, we carved out the foreign assistance component, which overall -- and this is an -- you know, by comparison to previous years, this is an austerity budget. There's no question that this budget overall is presented to rationalize our fiscal situation. But our overall foreign assistance budget is down about a percent, a percent and a half, overall, as part of this budget.That said, in -- you know, in health, we've submitted a request for $7.9 billion. As you've noted, that's about 60 (percent) -- 50 (percent) or 60 percent of total global health spending. It's the single largest item in the U.S. foreign assistance account and the entire U.S. foreign operations account. And we think we're getting incredibly strong results for that significant investment. We are on path to -- as President Obama made a commitment, to put 6 million on antiretroviral drugs. And you know, cost of those drugs have come down by a third of what they used to be.We're on path to ensure that in a global partnership, every pregnant woman with HIV gets treatment so that she can avoid transmitting HIV to her children and we can have an AIDS-free generation. We have resources in that budget to support the Global Fund and to ensure -- and we've had a big increase in our commitment to the Global Fund to make sure that we're investing in those multilateral vehicles that allow us to leverage our dollars with the dollars of other donors and generate 2 (dollars) or 3 (dollars) or $4 of investment for every 1 (dollar) we put in.And we have the resources to lay the groundwork for the vision that I laid out in terms of what's possible on child health and child mortality, which is very exciting -- will take more resources in the years to come, but we can lay the groundwork for ensuring that every kid gets to sleep under a malaria bed net, that every kid gets basic vaccines that our children here get, that every child around the world has access to, you know, basic therapies like oral rehydration if they get diarrhea, which has actually come down in recent years.So you know, we're doing the best we can in a -- in a difficult fiscal environment, but this budget is designed to absolutely meet those very specific commitments.KRISTOF: Yes.QUESTIONER: I'm Gary MacDougal (ph), a longtime public company CEO, now chairman of foundations. And I've had interaction with AID over many years. And my question relates to performance outcome measurement.My observation has been that lots of money gets wasted, that AID doesn't measure things very well, and when they do measure, they often measure the wrong thing. Have you this addressed this problem? And I'm not going to ask you to criticize your boss' boss, but I'm going to ask you to criticize your organization. Have you addressed this problem? And have you considered having a high-level performance outcome measurement executive reporting directly to you? Because you have to create systemic cultural change in an organization that's been that way for many years and you've only been there 24 months. So what do you think about performance outcome measurement?SHAH: Well, first, this might surprise you -- (chuckles) -- but I agree with you completely. I was stunned to learn when I got there -- because I was at the Gates Foundation for a long time and we put in place very rigorous performance management systems there and in fact had modeled some of those -- and I know, because I was part of this -- on some of AID's templates for how you do programmatic evaluations that came out of the late '80s and early '90s. So I was stunned when I got there to learn that an institution that was sort of synonymous with good evaluation had gone from doing something like 600 program evaluations in the early '90s, after having a more than tripling of the budget, had gone down to doing about 190 a year by the time I got there. So your basic presumption is absolutely accurate.What was more crippling was that they followed what I call a kind of two-two-two model -- that they'd hire two consultants, they'd go out for two weeks, they'd produce a report that two people would read. And frankly, that doesn't -- (laughter) -- that doesn't tell you anything.So we got -- we got -- we put together a world-class team. We came up with a new evaluation policy. By the end of this year, we -- this will be the first year that this is in place -- we will publish 250 high-quality, independently conducted program evaluations all done by third parties. They will not be edited or cleaned up; they will go straight to our new website at the end of the year.And every year, I think we will be generating data and information on what works and what doesn't work in a transparent and clear way and in a way that, I think, within a few years will clearly establish our institution hopefully as a -- as a model in this space.And I was quite thrilled -- you don't have to believe me -- that there's an institution called the American Evaluation Association that actually issued a statement that they thought what we were trying to do was a best-in-class approach and encouraged other federal agencies to take on a similar one. There's a lot more to it, but I think it's really, really important.And here's why: I had this really interesting conversation with Stephen Harper, the prime minister in Canada, who led this maternal health/child health group. And I said, OK, if I were in your government, what would your advice or instructions to me be. And he said there's no other area of public policy where the difference between the way people feel about the quality of your work is so stark. You know, either they think you're spending your money in a businesslike way, generating results, saving lives, and they have this tremendous generosity; they want to do more; they want you to do more, or they assume it's going to corrupt dictators, it's not being used well, it's all wasted, and they want you to disappear. And he said there's no middle ground. (Chuckles.)So -- and I believe -- from my experience, I can say that there certainly feels like there's some truth to that. So I think it's important that we kind of lead in this space so that we can -- you know, our country and Americans can believe what we're doing is generating real results, because I'm confident it's so. The ability to unlock the political support for this work will just go through the roof.KRISTOF: Yes.QUESTIONER: John Kine (sp), Kine (sp) Foundation. I've spent a great deal of time in the field in your type of activity, and I find it extremely interesting and useful. And it is truly -- distributing directly to Third World dictators is rarely a platform (for this ?).A question of public diplomacy: The U.S. is by no means the largest percentage distributor of foreign assistance, but -- although in absolute money, it's a very large one. Should we show some of our trade deficit as a kind of credit? In other words, many people in this room have something on their backs or in their pocket that is made in, let us say, China, or whatever, Bangladesh. And that's the kind of -- our trade deficit is a kind of aid distribution, because you're giving work to very poor people sometimes. (Inaudible) -- people, they wouldn't get the job. This is just a public diplomacy suggestion.SHAH: Well, yeah. I -- that's an interesting idea. I think that -- I would say two things. The first is, you know, I think there's a difference between designed, results-oriented investments in areas where we think we have the most bang for buck and other types of things. And that's a -- that's an interesting suggestion. Others have suggested that U.S. family remittances to their families back home should also count. As someone who grew up in an Indian-American home watching my father make those remittances back to his family, I know he would certainly not want the U.S. government counting that as official development assistance -- (laughter) -- and would probably be pretty vocal about it. So that's one thing.The second thing is an -- is the flip side of that point, which is if you look at the biggest aid recipients in our past -- South Korea, Taiwan, other Southeast Asian countries -- and you look at the trends in sub-Saharan Africa, 11 of the 14 fastest-growing export markets under the president's export initiative have been recent or current U.S. aid recipients. And you know, and South Korea is just an incredible example. They had a lower per capita income, a lower per capita caloric consumption in the -- in the 1960s -- in the late 1960s than in eastern Africa. And today, obviously, they are a fully industrialized country, one of our largest trading partners, a source of a free trade agreement that will create hundreds of thousands of jobs in this country.And you know, that's what success looks like. And I think we need to constantly remind ourselves that this is about creating the kind of world where we can continue to prosper and be successful by lifting others up and connecting them in a -- in an appropriate way to the global economy.KRISTOF: We've had some questions that have come in from members watching remotely. One is from Cedric Suzman in the World Affairs Council of Atlanta, who asks: Can you tell us what role water, with its connection to nutrition, sanitation and health, is playing in your portfolio, your projects around the world?SHAH: Well, water is very important. I think water and food go hand in hand. Seventy percent -- 75 percent of total water consumption in places we work is for agricultural purposes. There still are about 1.2 billion people around the world that don't have sufficient access to clean water, which is an extraordinary thing because obviously, we all take that so completely for granted.We're convinced that water and food security are critical national security priorities. And that's why, you know, Feed the Future is a program that's most notably about food security. But you can't have food security without effective water strategies. And we'll be issuing in a few weeks, on World Water Day, a new water policy. We're very enthusiastic that there are some great opportunities to improve outcomes, particularly on how productive water is used and what that means in the production of food and in the management of watersheds and water resources.So it's very important. It's a space where public investment is dwarfed by private investment or by the investments of multilateral development banks. So it's a space where we want to partner more with others in order to get larger-scale solutions. KRISTOF: Yes, yes, yeah, absolutely. (The ?) microphone is right beside you.MR. : (Off mic.)QUESTIONER: Thank you very much, first of all, for your very informative and inspiring talk about the United States. I know that you came to the agency with a -- with having a lot of baggage and regulations in place, and I wanted just to ask you, are you taking any steps to remove what was put in place in 2008, which is an absolute ban on abortions for -- on U.S. aid going to women and girls raped in armed conflicts, such as in the Congo and Sudan?SHAH: So there's a very -- there's a law in place that precludes USAID from using our direct resources to support abortions and the provision of abortions, and we have very careful controls to demonstrate that we are abiding by that law. President Obama, when he took office issued a repeal of the Mexico City policy, which actually had gone so far as to make sure that the U.S. couldn't work with any organization that was affiliated with providing knowledge about a comprehensive set of family planning services. That repeal has allowed us to reinvigorate our family planning programs and to refocus on women's health. And so we've been -- we've been very focused on basic, broad and comprehensive family planning. We've been very focused on investments in women's health. And in the specific environments you're discussing, we do quite a lot of work to work with women after traumatic situations and to make sure -- and after, you know, fistula repair and things like that and to make sure -- increasingly and, I think, very importantly -- that we put basic protections in place in a range of different contexts. But, no, we do not provide resources for abortion, and the law doesn't allow us to do that. KRISTOF: We have time for one or maybe two questions if we're -- if we're brief.(There's pressure ?).QUESTIONER: Hi, my name is Imatra Watchahur (ph) with TerraNova Strategic Partners. I wanted to ask if you could share with us what are your biggest challenges in coordinating foreign assistance with the larger bilaterals and multilaterals around the world?SHAH: That's a -- it's a great question. I spend a lot of time trying to coordinate our assistance. I guess I'd break it into two different components. One is around humanitarian emergencies or immediate transitional emergencies. And in those environments, you know, usually there's a "friends of" group that will be developed, like the Friends of Libya, that brings together partners and explores how we can work together. We've taken some extra measures to really make sure we do this well. In fact, I've traveled, for instance, to Southern Sudan with my counterparts from the United Kingdom and Norway. We just felt if we went together, we could send a message of unity; we could ensure that we weren't duplicating efforts. It was a very interesting trip because a lot of it was spent working with our own teams who -- you know, everybody wants to be doing everything. And so we had to stand next to each other and say, no, he's going to do this, and Norway's going to do, you know, help with the management of the oil resources, and the U.S. is going to focus on health and education and then hope -- and then that got the message through. So there's some -- we're being more effective at that. The second part is the new partners. You know, in the crisis in Somalia and in many parts of sub-Saharan Africa, partners from the Islamic countries and the Arab states are doing more and more in this space on humanitarian and development needs and partners like China are major investors in Africa, for example, for their own economic interests and resource priorities. So we have created global agreements to try and make sure that people abide by basic standards in how they do their work, that all these new partners whom we welcome into the -- into the space abide by standards of transparency; of fighting against corruption and graft, as opposed to contributing to it; you know, participate in the international fora for communicating and making clear what they're doing, what their intentions are; and then we learn together. And that is, I think, the big challenge over the course of the next decade, will be really getting that piece right with these new partners. KRISTOF: After what you talked about, bringing efficiency to USAID, I don't dare go over time. (Laughter.)SHAH: (Laughs.)KRISTOF: So I'd -- you know, we asked you questions about your boss, about the agency itself, and you've answered with a lot of grace. I should also mention that your annual letter is coming out on Friday, I believe. Is that right?SHAH: Yes. Yeah. This is part of our effort to communicate better the value of this work and what we're learning and where we can do better -- (inaudible).KRISTOF: And that'll be on your website?SHAH: That'll be on our website at usaid.gov on Friday. So please check it out, and we'd welcome your feedback and your insight. It's a practice I've shamelessly copied and borrowed from my previous employers, Bill and Melinda Gates, who also do an excellent annual letter that is very informative.KRISTOF: So please join me in thanking Dr. Shah for being with us. (Applause.) --------------------- (C) COPYRIGHT 2012, FEDERAL NEWS SERVICE, INC., 1120 G STREET NW; SUITE 990; WASHINGTON, DC - 20005, USA. ALL RIGHTS RESERVED. ANY REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION IS EXPRESSLY PROHIBITED. UNAUTHORIZED REPRODUCTION, REDISTRIBUTION OR RETRANSMISSION CONSTITUTES A MISAPPROPRIATION UNDER APPLICABLE UNFAIR COMPETITION LAW, AND FEDERAL NEWS SERVICE, INC. RESERVES THE RIGHT TO PURSUE ALL REMEDIES AVAILABLE TO IT IN RESPECT TO SUCH MISAPPROPRIATION. FEDERAL NEWS SERVICE, INC. IS A PRIVATE FIRM AND IS NOT AFFILIATED WITH THE FEDERAL GOVERNMENT. NO COPYRIGHT IS CLAIMED AS TO ANY PART OF THE ORIGINAL WORK PREPARED BY A UNITED STATES GOVERNMENT OFFICER OR EMPLOYEE AS PART OF THAT PERSON'S OFFICIAL DUTIES. FOR INFORMATION ON SUBSCRIBING TO FNS, PLEASE CALL 202-347-1400 OR EMAIL [email protected]. THIS IS A RUSH TRANSCRIPT.-------------------------

Event with Rajiv Shah and Nicholas D. Kristof March 7, 2012
United States

John B. Hurford Memorial Lecture: Transforming Foreign Aid: A Conversation with Rajiv Shah

Rajiv Shah, administrator for the U.S. Agency for International Development, discusses how foreign assistance and development efforts can spread U.S. values, deter conflict, and shape a more peaceful world.

Event March 7, 2012
Development

From Aid to Development Partnership

Overview U.S.-ROK cooperation in international development is at its early stages, but forging such cooperation has great potential. It enables the two countries to jointly pursue their common interest in the promotion of international development and the shared hope that stability and prosperity will extend to developing countries, many of whom are eager to take Korea's path toward modernization. It is also a potential means to both enhance cooperation with aid recipients and strengthen aid efficiency in a fiscal environment that will require development dollars to go further to achieve their objectives. Despite the bureaucratic and political difficulties inherent in pursuing donor coordination, there are important payoffs from enhanced coordination in the U.S.-ROK development relationship. In this program on U.S.-Korea policy Working Paper, Senior Fellow Scott A. Snyder and Research Associate Seukhoon Paul Choi argue that the two countries should seize this opportunity to establish a new system of partnerships between aid recipients and donors and enhance donor coordination.

Report by Scott A. Snyder and Seukhoon Paul Choi February 16, 2012
South Korea

Busan High-Level Forum: From Dead Aid to Better Development?

The Busan High-Level Forum (HLF)—which met from November 29 to December 1 and involved more than three thousand delegates from nearly one hundred sixty countries as well as representatives from international and civil society organizations, businesses, and foundations—agreed to establish a new development architecture. The forum was originally convened to evaluate the progress made since the adoption of the Paris Declaration for Aid Effectiveness in 2005. However, unprecedentedly broad participation made the HLF a truly universal gathering of traditional and emerging donors. This breadth of participation resulted in a compromise that goes beyond aid effectiveness to establish a new framework for development cooperation. The Paris Declaration concluded with fifty-six partnership commitments and twelve evaluation indicators that donor and recipient countries agreed to implement by abiding by five core principles: ownership, alignment, harmonization, managing for results, and mutual responsibility. But the 2011 survey and evaluation of the Paris principles revealed that only one of the twelve indicators had been fully implemented. The Busan Outcome Document (BOD) also declared that progress was "uneven and neither fast nor far-reaching." In contrast with the 2008 Accra Forum, which based its Agenda for Action on the Paris principles, the Busan HLF concluded that these principles are too process-oriented, technical, and not focused on poverty reduction. Terms like "dead aid" were used to reflect this growing skepticism toward aid effectiveness. Moreover, the European financial crisis has weakened aid commitments from traditional donors. Against this backdrop, the diversity of views among participating countries made it more difficult to achieve meaningful consensus. Traditional donors, especially the European Commission, asserted that the principles of aid effectiveness are "the best we have yet" and favored bolstering the Paris principles over refashioning aid norms. Emerging donors such as China, Brazil, Russia, and India contended that traditional donor standards should not apply to them. They argued that existing international agreements regulating north-south cooperation should be viewed separately from those that govern south-south cooperation. Developing nations insisted on untying all aid by 2013 and making their country systems (e.g., public finance management and local procurement) the default option for aid implementation. Civil society groups such as Better Aid and Open Forum argued that human rights provisions and the Rights-Based Approach should be included in the principles of the BOD. Both South Korea and the United States took a more flexible stance toward aid effectiveness, advocating a new approach designed to achieve significant poverty reduction. South Korea desired to maximize the Busan Forum's impact, attempting to forge a new global consensus around "development effectiveness" as an alternative to "aid effectiveness." But the BOD ultimately reflected compromise among these various positions. The attempt to expand the scope of the Organization for Economic Cooperation and Development Development Assistance Committee (OECD DAC) discussion from aid to development was reflected in the title of the BOD: "Global Partnership for Effective Development Cooperation." The South Korean government proposed that the concept of development effectiveness encompasses effective institutions, gender equality and empowerment for development results, the active involvement of emerging donors and the private sector in development cooperation, and a monitoring framework set with UN collaboration. Another example of an effort to accommodate opposing views was the decision to make the declaration voluntary rather than binding. China is not a signatory to the Paris Declaration and does not uphold existing principles on aid effectiveness. Though several traditional donors argued that China must abide by established aid norms, China argued that there are differences between north-south and south-south cooperation. Furthermore, it opposed the notion of "differentiated responsibilities" in regard to development. To satisfy China and other emerging donors, the phrase was changed to "differential commitment." Tied aid was another issue on which compromise limited success. An earlier draft of the BOD included a clause on untying 100 percent of aid by 2015. But the United States and Japan objected based on U.S. concerns regarding the impact of possible aid cutbacks and Japanese interests in sustaining aid recipient demand for technology. Consequently, all reference to a time frame on untying aid was removed from the BOD. As the financial crisis constrains the ability of traditional donors to expand their aid levels, there is an additional need to mobilize private finance (e.g., foreign direct investment, public-private partnerships). However, emphasis on private sector donors also drew criticism. Concerns were expressed that an enhanced private sector role would shift responsibilities from traditional donors to private actors, and that development cooperation would degenerate to profit-driven motives. Another area where consensus could not be reached was on the question of how to build the future aid architecture. The OECD DAC Working Party for Aid Effectiveness—which spearheaded the execution and monitoring of aid effectiveness—sought agreement on a new global framework. Opinions differed on how to institutionalize the monitoring of Busan agreements. Lacking consensus, the Working Party's mandate was extended to June 2012, by which time it would establish monitoring indicators and advise on how diverse development actors including businesses and emerging donors can converge to form a global partnership. Despite these many disagreements, South Korea's role and contributions as the host country were widely acknowledged. Among post–World War II independent countries, South Korea is the only nation to have transformed from an aid recipient to a donor country, demonstrating that aid does indeed have a positive effect. South Korea received more than twelve billion U.S. dollars in aid from 1945 to the 1990s. With its own development experience of using aid successfully as part of its development and modernization, South Korea led the promotion of the "from aid to development" paradigm shift. South Korea also helped to achieve agreement on "differential commitments." South Korea, with the United States, played leading roles in the inclusion of gender empowerment in the BOD. Moreover, South Korea acted as a bridge between emerging and traditional donors. South Korea will also help include UN agencies like the UNDP and UNDCF in the processes for establishing the Global Partnership. Overall, how would one evaluate the final outcome of the Busan HLF? While expectations of a binding agreement were dashed, a new development cooperation framework (e.g., south-south and triangular cooperation) that consists of an inclusive partnership with emerging donors and private sectors was established. Thus, the Busan HLF provided momentum for a major shift in the discourse on aid effectiveness that can strengthen the impact of poverty reduction in developing nations. However, only time will tell whether the compromises made for this inclusive partnership will result in sincere efforts by all parties to implement their nonbinding commitments.

Report by Hyuk-sang Sohn December 14, 2011
Sub-Saharan Africa

Richard Joseph on Nigeria and Insecurity

Undated handout image courtesy of the U.S. Air Force shows a MQ-1 Predator unmanned aircraft. (Ho New/Courtesy Reuters) Richard Joseph, the John Evans professor of political science at Northwestern University and a distinguished Africanist, has an important oped on the Brookings website, “Nigeria and Global Insecurity.” Professor Joseph’s theme is twofold--that “the lines between al-Qaeda, Islamic extremism in Africa, and wider insecurity in the continent’s most populous nation, Nigeria, are converging”; and despite this challenge, a purely military approach will not prevent this. On the first point, he links Osama bin Laden’s interest in Nigeria to Umar Abdulmutallab’s attempted bombing of a Northwest plane to Anwar al-Awlaki in Yemen. He also recalls the UN headquarters bombing in Abuja by (allegedly) Boko Haram, but emphasizes the generally inward focused nature of that group, that “most Nigerians now acknowledge the intractability of the threats they face, fostered as much by material grievances as by the bludgeoning tactics of their own security forces in response to domestic upheavals.” Concerned with the prospect of deep cuts in U.S. foreign aid and a Pentagon request for five billion dollars for drones, Joseph argues “This is not the time (for the United States) to slash foreign aid, but rather innovatively seek to promote transformative governance and job-producing economic growth.” Read the article here.

Blog Post by John Campbell October 19, 2011 Africa in Transition
Foreign Aid

How a Faltering Dollar Starves Food Aid

Famine in the Horn of Africa underscores the problems of an international foreign aid community struggling to keep up with its commitments at a time of a falling dollar and rising food prices, says CFR’s Laurie Garrett.

Interview with Laurie Garrett and Toni Johnson August 9, 2011 Renewing America
United States

How Does the Debt Debate Affect Foreign Aid?

The U.S. debt ceiling and deficit debate has led to challenges on foreign aid spending, but while aid could be leaner and more effective, CFR’s Stewart Patrick argues Congress should look to consolidate programs rather than simply cut them.

Interview with Stewart M. Patrick and Toni Johnson July 26, 2011 Renewing America