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|United States Agency for International Development|
|Formed||November 3, 1961|
|Preceding Agency||International Cooperation Administration|
|Headquarters||Ronald Reagan Building|
|Agency executives||Rajiv Shah, Administrator|
Donald Steinberg, Deputy Administrator
Sean Carroll, Chief Operating Officer
|United States Agency for International Development|
|Formed||November 3, 1961|
|Preceding Agency||International Cooperation Administration|
|Headquarters||Ronald Reagan Building|
|Agency executives||Rajiv Shah, Administrator|
Donald Steinberg, Deputy Administrator
Sean Carroll, Chief Operating Officer
The United States Agency for International Development (USAID) is the United States federal government agency primarily responsible for administering civilian foreign aid. USAID seeks to "extend a helping hand to those people overseas struggling to make a better life, recover from a disaster or striving to live in a free and democratic country." It operates in Africa, Asia, Latin America and Europe.
President John F. Kennedy created USAID in 1961 by executive order to implement development assistance programs in the areas authorized by the Congress in the Foreign Assistance Act. The Congress updates this authorization through annual funds appropriation acts, and other legislation. Although technically an independent federal agency, USAID operates subject to the foreign policy guidance of the President, Secretary of State, and the National Security Council.
USAID's decentralized network of resident field missions makes the Agency an effective manager of USG programs in low-income countries. These programs serve a range of purposes.
Some of the U.S. Government's earliest foreign aid programs provided relief in crises created by war. In 1915, USG assistance through the Commission for Relief of Belgium headed by Herbert Hoover prevented starvation in Belgium after the German invasion. After 1945, the European Recovery Program championed by Secretary of State George Marshall (the "Marshall Plan") helped rebuild war-torn Western Europe. In our era, USAID leads USG relief efforts after wars and natural disasters through its Office of U.S. Foreign Disaster Assistance. Privately funded U.S. NGOs and the U.S. military also play major roles in disaster relief overseas.
After 1945, many newly independent countries needed assistance to relieve the chronic deprivation afflicting their low-income populations. USAID and its predecessor agencies have continuously provided poverty relief in many forms, including assistance to public health and education services targeted at the poorest. USAID has also helped manage agricultural commodity assistance provided by the U.S. Department of Agriculture. In addition, USAID provides funding to NGOs to supplement private donations in relieving chronic poverty.
Technical cooperation between nations is essential for addressing a range of cross-border interests like communicable diseases, environmental issues, trade and investment cooperation, safety standards for traded products, money laundering, and so forth. The USG has specialized agencies dealing with such areas, such as the Centers for Disease Control and the Environmental Protection Agency. USAID's special ability to administer programs in low-income countries supports all USG civilian agencies' work on these vital global concerns.
Among these global interests, environmental issues attract high attention. Since 1991 USAID has been providing environment assistance to 45 countries. U.S. environmental regulation laws require that programs sponsored by USAID should be both economically and environmentally sustainable. USAID focuses on ensuring the protection of world resources that are currently most threatened and threatening for future generations. These resources include land and water and forests. USAID also focuses on managing and preparing people for the risks associated with global climate change.
To support U.S. geopolitical interests, USAID is often called upon to administer exceptional financial grants to allies. Also, when U.S. troops are in the field, USAID can supplement the "Civil Affairs" programs that the U.S. military conducts to win the friendship of local populations and thus to undermine insurgent support. In these circumstances, USAID may be directed by specially appointed diplomatic officials of the State Department, as in Afghanistan and Pakistan during operations against al-Qaeda. USAID can also be called upon to support projects of U.S. constituents that have exceptional interest.
To help low-income nations achieve self-sustaining socioeconomic development, USAID assists them in improving management of their own resources. USAID's assistance for socioeconomic development centers on providing technical advice, training, scholarships, commodities, and financial assistance. Through grants and contracts, USAID mobilizes the technical resources of the private sector, other USG agencies, universities, and NGOs to participate in this assistance.
Programs of the various types above frequently reinforce one another. The Foreign Assistance Act requires USAID to use funds appropriated for geopolitical purposes ("Economic Support Funds") to support socioeconomic development to the maximum extent possible.
USAID delivers both technical assistance and financial assistance.
Technical assistance includes technical advice, training, scholarships, construction, and commodities. Technical assistance is contracted or procured by USAID and provided in-kind to recipients. For technical advisory services, USAID draws on experts from other USG agencies, as well as contracting with experts from the private sector. Scholarships to U.S. universities are complemented by technical assistance to developing country universities, including establishing partnerships with U.S. universities. Commodity assistance is essential to disaster relief, and many host-government leaders have drawn on USAID's technical assistance for development of IT systems and computer hardware procurement to strengthen their institutions.
The various forms of technical assistance are frequently coordinated as capacity building packages for development of local institutions.
Financial assistance supplies cash to developing country organizations to supplement their budgets. USAID also provides financial assistance to local and international NGOs who in turn give technical assistance in developing countries. Although USAID formerly provided loans, all financial assistance is now provided as nonreimbursable grants.
In recent years, the USG has increased its emphasis on financial rather than technical assistance. In 2004, the Bush Administration created the Millennium Challenge Corporation as a new foreign aid agency that is mainly restricted to providing financial assistance. In 2009, the Obama Administration initiated a major realignment of USAID's own programs to emphasize financial assistance, referring to it as "government-to-government" or "G2G" assistance.
USAID is organized around country development programs managed by resident USAID offices in developing countries ("USAID missions"), supported by USAID's global headquarters in Washington, DC.
USAID plans its work in each country around an individual country development program managed by a resident mission. Missions work in over fifty countries, consulting with their government and non-governmental organizations to identify programs that will receive USAID's assistance. As part of this process, the missions conduct socioeconomic analysis, design assistance, award contracts and grants, administer assistance (including evaluation and reporting), and manage flows of funds.
As countries develop and need less assistance, USAID shrinks and ultimately closes its resident missions. Since USAID's founding in 1961, it has closed its missions in a number of countries that had achieved a substantial level of prosperity, including South Korea, Turkey, Tunisia, and Costa Rica.
USAID also closes missions when requested by host countries for political reasons. In September 2012, the U.S. closed USAID/Russia at that country's request. Its mission in Moscow had been in operation for two decades. On May 1, 2013, the President of Bolivia, Evo Morales, asked USAID to close its mission, which had worked in the country for 49 years.) The closure was completed on September 20, 2013.
USAID missions are led by Mission Directors and are staffed both by USAID Foreign Service Officers and by development professionals from the country itself, with the host-country professionals forming the majority of the staff. The length of a Foreign Service Officer's "tour" in most countries is four years, to provide enough time to develop in-depth knowledge about the country. (Shorter tours of one or two years are usual in countries of exceptional hardship or danger.)
The Mission Director is a member of the U.S. Embassy's "Country Team" under the direction of the U.S. Ambassador. As a USAID mission works in an unclassified environment with relative frequent public interaction, most missions were initially located in independent offices in the business districts of capital cities. However, since the passage of the Foreign Affairs Agencies Consolidation Act in 1998 and the bombings of U.S. Embassies in east Africa in the same year, missions have gradually been moved into compounds alongside U.S. Embassy chancery buildings.
The country programs are supported by USAID's headquarters in Washington, D.C., "USAID/Washington," where about half of USAID's Foreign Service Officers work on rotation from foreign assignments, alongside USAID's Civil Service staff and top leadership. USAID is headed by an Administrator appointed by the President and confirmed by the Senate. The current USAID Administrator is Rajiv Shah, appointed by President Barack Obama.
USAID/Washington helps define overall USG civilian foreign assistance policy and budgets, working with the State Department, the Congress, and other federal government agencies. It is organized into "Bureaus" covering geographical areas, development subject areas, and administrative functions. Each Bureau is headed by an Assistant Administrator appointed by the President.
Independent oversight of USAID activities is provided by its Office of Inspector General, U.S. Agency for International Development, which conducts criminal and civil investigations, financial and performance audits, reviews, and inspections of USAID activities around the world.
USAID's global U.S. "direct-hire" staff—those with career contracts—include Civil Service staff in Washington as well as U.S. Foreign Service Officers. The size of this staff was about 3,900 in 2012. An additional 400 U.S. staff work under contracts for shorter periods, typically two to three years. (By comparison, the State Department's U.S. workforce currently numbers about 19,000.)
USAID's host-country staff, who normally receive one-year contracts that are renewed annually, make up the majority of the Agency's global workforce (57% in 2009).
USAID Foreign Service Officers are selected competitively for specific job openings on the basis of academic qualifications and experience in development programs. (This recruitment system differs from the State Department's use of the "Foreign Service Officer Test" to identify potential U.S. diplomats. Individuals who pass this test become candidates for the State Department's selection process, which emphasizes personal qualities in thirteen dimensions such as "Composure" and "Resourcefulness." Note that no specific education level is required for appointment as a diplomatic Foreign Service Officer in the State Department. See "Foreign Service Officer Qualifications.")
In 2008, USAID launched the "Development Leadership Initiative" to reverse the decline in USAID's Foreign Service Officer staffing, which had fallen to fewer than 1,000 worldwide. USAID's goal was to double the number of Foreign Service Officers by 2012. USAID currently has about 1,700 Foreign Service Officers (compared to 13,000 in the State Department).
Finally, note that many more people work on the projects that USAID assists than just USAID's staff. In even a single country, many thousands of people in local communities and government agencies work on projects that receive USAID's assistance. Furthermore, when USAID provides technical assistance, the number of staff contracted to support local communities and government agencies is usually considerably larger than the number of USAID staff who oversee the assistance.
While USAID can have as little presence in a country as a single person assigned to the U.S. Embassy, a full USAID mission in a larger country may have twenty or more USAID Foreign Service Officers and a hundred or more professional and administrative employees from the country itself.
The USAID mission's staff is divided into specialized offices in three groups: assistance management offices; the Mission Director's and the Program office; and the contracting, financial management, and facilities offices.
Called "technical" offices by USAID staff, these offices design and manage the technical and financial assistance that USAID provides to their local counterparts' projects. The technical offices that are frequently found in USAID missions include Health and Family Planning, Education, Environment, Democracy, and Economic Growth.
Examples of projects assisted by Health and Family Planning offices are projects for eradication of communicable diseases, strengthening of public health systems focusing on maternal-child health including family planning services, HIV-AIDS monitoring, delivery of medical supplies including contraceptives and HIV vaccines, and coordination of Demographic and Health Surveys. This assistance is primarily targeted to the poor majority of the population and corresponds to USAID's poverty relief objective, as well as strengthening the basis for socioeconomic development.
USAID's Education offices mainly assist the national school system, emphasizing broadening coverage of quality basic education to reach the entire population. Examples of projects often assisted by Education offices are projects for curriculum development, teacher training, and provision of improved textbooks and materials. Larger programs have included school construction. Education offices often manage scholarship programs for training in the U.S., while assistance to the country's universities and professional education institutions may be provided by Economic Growth and Health offices. The Education office's emphasis on school access for the poor majority of the population corresponds to USAID's poverty relief objective, as well as to the socioeconomic development objective in the long term.
Examples of projects assisted by Environment offices are projects for tropical forest conservation, protection of indigenous people's lands, regulation of marine fishing industries, pollution control, reduction of greenhouse gas emissions, and helping communities adapt to climate change. Environment assistance corresponds to USAID's objective of technical cooperation on global issues, as well as laying a sustainable basis for USAID's socioeconomic development objective in the long term.
Examples of projects assisted by Democracy offices are projects for the country's political institutions, including elections, political parties, legislatures, and human rights organizations. Counterparts include the judicial sector and civil-society organizations that monitor government performance. Democracy assistance received its greatest impetus at the time of the creation of the successor states to the USSR starting in about 1990, corresponding both to USAID's objective of supporting U.S. bilateral interests and to USAID's socioeconomic development objective.
Examples of projects often assisted by Economic Growth offices are projects for improvements in agricultural techniques and marketing (the mission may have a specialized "Agriculture" office), development of microfinance industries, streamlining of Customs administrations (to accelerate growth of exporting industries), and modernization of government regulatory frameworks for industry in various sectors (telecommunications, agriculture, and so forth). In USAID's early years and in some larger programs, Economic Growth offices have financed economic infrastructure like roads and electrical power plants. Economic Growth assistance is thus quite diverse in terms of the range of sectors where it may work. It corresponds to USAID's socioeconomic development objective and is the source of sustainable poverty reduction. Economic Growth offices also occasionally manage assistance to poverty relief projects, such as to government programs that provide "cash transfer" payments to low-income families.
Some USAID missions have specialized technical offices for areas like counter-narcotics assistance or assistance in conflict zones.
Disaster assistance on a large scale is provided through USAID's Office of U.S. Foreign Disaster Assistance. Rather than having a permanent presence in country missions, this office has supplies pre-positioned in strategic locations to respond quickly to disasters when and where they occur.
The Mission Director's signature authorizes technical offices to provide assistance according to the designs and budgets they propose. With the help of the Program Office, the Mission Director ensures that designs are consistent with USAID policy for the country, including budgetary earmarks by which Washington directs that funds be used for certain general purposes such as public health or environmental conservation. The Program Office compiles combined reports to Washington to support budget requests to Congress and to verify that budgets were used as planned.
While the Mission Director is the public face and key decision-maker for an impressive array of USAID technical capabilities, arguably the offices that make USAID preeminent among U.S. government agencies in the ability to concretely follow through on assistance agreements are the missions' "support" offices.
Commitments of U.S. government funds to NGOs and firms that deliver USAID's assistance can only be made in compliance with carefully designed contracts and grant agreements executed by warranted Contracting Officers, not by the technical officers who design assistance. (The Mission Director is authorized to commit financial assistance directly to the country's government agencies.)
Funds can be committed only when the Mission's Controller certifies their availability for the stated purpose. "FM" offices assist technical offices in financial analysis and in developing detailed budgets for inputs needed by projects assisted. They evaluate potential recipients' management abilities before financial assistance can be authorized and then review implementers' expenditure reports with great care. This office often has the largest number of staff of any office in the mission.
Called the "Executive Office" in USAID (sometimes leading to confusion with the Embassy's Executive Office, which is the office of the Ambassador), "EXO" provides logistical support for mission offices, including personnel recruitments and management, computers, transportation, office space, and housing for U.S. staff. Increasing integration into Embassies' chancery complexes, and the State Department's recently increased role in managing USAID, is expanding the importance of coordination between USAID's EXO and the overall Embassy's General Services Office in dividing up responsibilities for support to the USAID mission.
A USAID assistance project is constituted by a funding agreement with an implementing organization, often referred to by USAID staff as an "implementing partner."
Taking as an example assistance with a poverty-relief objective, a beneficiary group might be assisted by local government agencies and NGOs, to which USAID might provide both financial assistance, through budget-support grants, and technical assistance (advisors, access to equipment and training), managed by other implementing partners. USAID's projects might include, for example:
The collection of such projects might be referred to as USAID's "program." Each of these types of funding agreements is profiled below.
This funding agreement would take the form of a letter from USAID's Mission Director, countersigned by the recipient agency, explaining (in annexes to the letter) the agency's objectives, the amount of USAID's financial commitment, the specific expenditures to be financed by USAID's grant, and other operational aspects of the agreement.
USAID's technical office would assign a staff member (U.S. or local) to oversee progress in the agency's implementation. USAID's financial management office transfers funds to the agency, in tranches as needed. Audit under this kind of government-to-government (G2G) financial assistance is usually performed by the host government's own audit agency.
As the host government's agency is usually specialized in services to the beneficiary population (medical services, for example), its staff may not be equipped to undertake investments called for in the program, such as construction, equipment, or management of training and study tours. The government agency might therefore request USAID's assistance in these areas, and USAID could respond by contracting with a firm to supply the serivces requested.
USAID's technical office would collaborate with the government agency in drafting the specifications for what is needed (generically referred to as a "Scope of Work") and in determining whether the required services can be provided from the local market or whether the contract should be open to bids from the U.S. and other sources. USAID's contracting office would then advertise for bids, manage the selection of a contractor from among the competing bidders, sign the contract, and assign a technical-office staff member as its representative to oversee the contractor's performance. (If the work load permits, this staff member might be the same person who oversees USAID's financial assistance to the government agency.)
Non-governmental organizations are, like their government counterparts, usually already engaged in service provision in areas where USAID wants to assist, and they often have unique abilities that complement public programs. Therefore, USAID technical-office staff might set aside a budget and, with the help of the mission's contracting office, publish a solicitation for proposals from NGOs. One or several grants could be made to selected NGOs by the mission's contracting office (wearing the hat of an "Award Officer" as opposed to "Contract Officer" for the occasion). As in the case of a contract, a technical-office staff member would be assigned as the Award Officer's Representative to monitor progress in the NGOs' implementation and to arrange for external evaluations. The grant requires the recipient to contract for external audit.
As some local NGOs may be small and young organizations, the USAID mission's financial management office conducts a careful review of grant applicant's administrative system to ensure that they are prepared to manage USG funds. Where necessary, USAID can devote part of the grant to the NGO's internal organizational strengthening to help the NGO qualify for USAID's financing. (Disbursement of the service-delivery grant may follow completion of the internal organizational development work.)
Technical assistance is available from specialized international NGOs in a number of areas. If the USAID mission determines that TA needs expressed by local implementing partners can best be met by an NGO (rather than by contracting for specific inputs), the relevant technical office will draft a request for proposals that the contracting office will issue to solicit responses from the NGO community. The process is similar to a grant to a local NGO, except that U.S. and international NGO applicants are pre-registered as being eligible to receive USG financing.
These experienced NGOs also frequently make unsolicited proposals to USAID, requesting funding for their own planned assistance activities. In general, USAID provides financial assistance (grants) to organizations who design their own programs (when those programs correspond to the areas that USAID wants to support), while USAID uses contracts to procure services (or products) when USAID and its counterparts have determined in advance what is specifically needed.
In addition to the types of projects described above, USAID uses various other assistance mechanisms for different U.S. objectives. Budget agreements with other USG agencies, which differ from contracts and NGO grants, are common in supporting collaboration between the U.S. and other countries on global issues. To pursue high-profile U.S. foreign policy interests, the State Department may direct USAID in making large-scale budget-support grants to other governments, referred to as "non-project" assistance.
For more details about how USAID manages funding agreements, the required procedures followed by USAID staff—the "Automated Directives System" (ADS) -- are available to anyone who is interested at http://www.usaid.gov/who-we-are/agency-policy. In particular, ADS Series 300 on "Acquisition and Assistance" covers many details about agreements with implementing partners.
Before the Second World War, a notable example of U.S. Government foreign assistance was its contribution to the 1915 Committee for Relief in Belgium headed by Herbert Hoover, to prevent starvation in Belgium after the German invasion. During this period, however, U.S. assistance in low-income countries was often the product of private initiative, including prominently the work of private foundations—Carnegie, Ford, Rockefeller, and others. The Rockefeller Foundation, for example, assisted the breeding of improved maize and wheat varieties in Latin America and supported public health initiatives in Asia.
World War II stimulated a sustained U.S. Government foreign aid effort. One of the USG's responses to the shock of Germany's occupation of France in 1940 was the creation of an agency that was ultimately named the Office of Inter-American Affairs, or OIAA, to counter the potential for increasing German influence in the Western Hemisphere. Under State Department oversight (and initially coordinated by Nelson Rockefeller, the future Vice President of the United States, from the family whose fortune financed the Rockefeller Foundation), the OIAA's more than 1,000 employees undertook a variety of programs including technical assistance projects for economic stabilization, food supply, health, and sanitation.
The OIAA, whose work ended in 1946, furnished the model for President Truman's global "Point Four Program." Announced as the fourth element of Truman's overall foreign policy in January, 1949, Point Four's purpose was to provide technical knowledge to aid the growth of underdeveloped countries around the world. In 1950, the Technical Cooperation Administration (TCA) was established within the Department of State to run the Point Four program.
Point Four's technical development program for underdeveloped areas complemented the Marshall Plan, which the U.S. had created in 1948 to help rebuild war-torn Western Europe. Implemented by the Economic Cooperation Administration (ECA), the Marshall Plan also expanded its reconstruction finance to strategic parts of the Middle East and Asia.
In addition to Point Four and the Marshall Plan, the Fulbright Program of academic exchanges was established in 1946, globalizing the wartime program of exchange visits between professionals from Latin America and the United States.
In light of the Korean War, Congress passed in October 1951 the Mutual Security Act and created the Mutual Security Agency (MSA) to better coordinate civilian assistance with military assistance. The MSA absorbed both the Marshall Plan (replacing ECA) and Point Four (with the Technical Cooperation Administration becoming an agency within MSA).
In 1953 at the end of the Korean War, the incoming Eisenhower Administration established the Foreign Operations Administration (FOA) as an independent government agency outside the Department of State to consolidate economic and technical assistance, including both the MSA and the TCA, on a world-wide basis. The new majority in Congress also required a 25 per cent reduction in staff, which fell mainly on TCA, as in general the Foreign Operations Administration adopted the organization and procedures inherited from the Marshall Plan.
In 1955, foreign aid was brought back under the administrative control of the Department of State and FOA was renamed the International Cooperation Administration (ICA).
In 1956, the Senate conducted a study of foreign aid with the help of input from a number of independent experts, including a notable report from the MIT professors Max Millikan and Walt Rostow. The resulting 1959 amendment to the Mutual Security Act declared that development in low-income regions was a U.S. objective along with and additional to other foreign-policy interests, attempting thus to clarify development assistance's relationship with the effort to contain Communism.
In 1957, the Development Loan Fund was established within ICA to manage ICA's portfolio of loans for development projects. In 1959, the Development Loan Fund became an independent agency.
(Pre-1961 reorganizations can be traced here: http://www.archives.gov/research/guide-fed-records/groups/469.html#469.7.)
In 1961, the Congress approved the Foreign Assistance Act of 1961 with President Kennedy's support, which retained the 1959 policy of international development as an independent U.S. objective and added an emphasis on the need for long-term efforts. Organizationally, the Act called for merging the ICA, the Development Loan Fund, and other foreign aid entities into a new agency.
To implement the Act, the Agency for International Development, or A.I.D. (subsequently re-branded as USAID), was created within the State Department. Its internal organization was adjusted to emphasize country-by-country programming. As in the previous change in Administration in 1953, a major reduction in staff took place.
The Peace Corps was also established at this time. In addition, the Fulbright educational and cultural exchange program was strengthened by the Fulbright-Hays Act of 1961.
During the early 1970s, foreign aid became one of the focal points in Legislative-Executive differences over the Vietnam War. In September 1970, President Nixon proposed abolishing USAID and replacing it with three new institutions: one for development loans, one for technical assistance and research, and one for trade, investment and financial policy. Consistent with this approach, in early 1971 President Nixon transferred the administration of private investment programs from USAID to the Overseas Private Investment Corporation (OPIC), which had been established by foreign aid legislation at the end of 1969.
The Congress did not act on the President's proposal for replacing USAID, but rather adopted in 1973 a proposal supported by USAID management for "New Directions" in foreign aid. By amending the Foreign Assistance Act, the Congress provided that U.S. aid should emphasize "Basic Human Needs": food and nutrition; population planning and health; and education and human resources development. President Nixon signed the New Directions act into law (PL 93-189) in December 1973.
Also in 1973, the "Percy Amendment" of the Foreign Assistance Act required U.S. development assistance to integrate women into its programs, leading to USAID's creation of its Women in Development (WID) office the following year.
A further amendment of the Foreign Assistance Act in 1974 prohibited assistance for police, thus ending USAID's involvement in Public Safety programs in Latin America, which in the 1960s were, along with the Vietnam War, part of the U.S. Government's anti-Communist strategy.
The reforms also ended the practice of the 1960s and 1970s in which many USAID officers in Latin America and Southeast Asia had worked in joint offices led by State Department diplomats or in units with U.S. military personnel.
Foreign aid has always operated within the framework of U.S. foreign policy and the organizational linkages between the Department of State and USAID have been reviewed on many occasions.
In 1978, legislation drafted at the request of Senator Hubert Humphrey was introduced to create a Cabinet-level International Development Cooperation Agency (IDCA), whose intended role was to supervise USAID in place of the State Department. However, although IDCA was established by Executive Order in September 1979, it did not in practice make USAID independent.
In 1995, legislation to abolish USAID was introduced by Senator Jesse Helms, the Chairman of the Senate Foreign Relations Committee, who aimed to replace USAID with a grant-making foundation. Although the House of Representatives passed a bill abolishing USAID, the measure did not become law. In order to gain Congressional cooperation for his foreign affairs agenda, however, President Clinton adopted in 1997 a State Department proposal to integrate more foreign affairs agencies into the Department. The "Foreign Affairs Agencies Consolidation Act of 1998" (Division G of PL 105-277) abolished IDCA, the Arms Control and Disarmament Agency, and the United States Information Agency, which formerly maintained American libraries overseas. Although the law authorized the President to abolish USAID, President Clinton did not exercise this option.
In 2003, President Bush established PEPFAR, the President's Emergency Plan for AIDS Relief, putting USAID's HIV/AIDS programs under the direction of the State Department's new Office of the Global AIDS Coordinator.
In 2004, the Bush Administration created the Millennium Challenge Corporation (MCC) as a new foreign aid agency to provide financial assistance to a limited number of countries selected for good performance in socioeconomic development. The MCC also finances some USAID-administered development assistance projects.
In January 2006, Secretary of State Condoleezza Rice created the Office of the Director of U.S. Foreign Assistance ('F') within the State Department. Under a Director with the rank of Deputy Secretary, F's purpose was to ensure that foreign assistance would be used as much as possible to meet foreign policy objectives. F integrated foreign assistance planning and resource management across State and USAID, directing all USAID offices' budgets according to a detailed "Standardized Program Structure" comprising hundreds of "Program Sub-Elements." USAID accordingly closed its Washington office that had been responsible for development policy and budgeting.
On September 22, 2010, President Barack Obama signed a Presidential Policy Determination (PPD) on Global Development. Although the PPD is classified, indicating that revealing it would damage U.S. national security, it was described in an unclassified fact sheet. The PPD promised to elevate the role of development assistance within U.S. policy and rebuild "USAID as the U.S. Government’s lead development agency." It also established an Interagency Policy Committee on Global Development led by the National Security Staff and added to U.S. development efforts an emphasis on innovation.
On December 21, 2010, Secretary of State Clinton released the Quadrennial Diplomacy and Development Review (QDDR). Modeled after the military's Quadrennial Defense Review, the QDDR of 2010 reaffirmed the plan to re-build USAID's Foreign Service staffing while also emphasizing the increased role that staff from the State Department and domestic agencies would play in implementing U.S. assistance. In addition, it laid out a program for a future transfer of health sector assistance back from the State Department to USAID.
Consistent with this evolving policy environment, USAID re-created in mid-2010 a development planning office, the Bureau of Policy, Planning, and Learning, and on November 23, 2010, announced the creation of a new Bureau for Food Security to lead the implementation of President Obama's Feed the Future Initiative, which had formerly been managed by the State Department.
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|Nation||Billions of Dollars|
|Democratic Republic of Congo||0.24|
|West Bank and Gaza||0.20|
The cost of supplying USAID's assistance includes the agency's "Operating Expenses," $1.35 billion in fiscal year 2012, and "Bilateral Economic Assistance" program costs, $20.83 billion in fiscal year 2012 (the vast bulk of which was administered by USAID).
Up-to-date details of the budget for USAID's assistance and other aspects of the USG's foreign assistance are available from USAID's budget webpage, http://www.usaid.gov/results-and-data/budget-spending. This page contains a link to the U.S. Government's Foreign Operations budget (the "150 Account"), which shows the budgets of all International Affairs programs and operations for civilian agencies, including USAID. This page has a link to a "Where Does the Money Go?" table, which shows the recipients of USAID's financial assistance (foreign governments as well as NGOs), the totals that were spent for various countries, and the sources (U.S. government agencies, universities, and private companies) from which USAID procured the goods and services that it provided as technical assistance.
U.S. assistance budget totals are shown along with other countries' total assistance budgets in tables in a webpage of the Organization for Economic Cooperation and Development, http://www.oecd.org/development/stats/statisticsonresourceflowstodevelopingcountries.htm.
At the Earth Summit in Rio de Janeiro in 1992, most of the world's governments adopted a program for action under the auspices of the United Nations Agenda 21, which included an Official Development Assistance (ODA) aid target of 0.7% of gross national product (GNP) for rich nations, specified as roughly 22 members of the OECD and known as the Development Assistance Committee (DAC). However, most countries do not adhere to this target, as the OECD's table indicates that the DAC average ODA in 2011 was 0.31% of GNP. The U.S. figure for 2011 was 0.20% of GNP, which still left the U.S. as the largest single source of ODA among individual countries.
Dr. Rajiv Shah became Administrator of USAID, shortly before the January 2010 earthquake in Haiti. In response, USAID and other agencies, began working to help Haiti recover and rebuild. Together with the international community and the Government of Haiti, Dr. Shah led USAID to help provide safer housing for almost 200,000 displaced Haitians; supported vaccinations for more than 1 million people; cleared more than 1.3 million cubic meters of the approximately 10 million cubic meters of rubble generated; helped more than 10,000 farmers double the yields of staples like corn, beans, and sorghum; and provided short-term employment to more than 350,000 Haitians, injecting more than $19 million into the local economy. USAID has provided nearly $42 million to help combat cholera, helping to decrease the number of cases requiring hospitalization and reduce the case fatality rate.
The interactions between USAID and other U.S. Government agencies in the period of planning the Iraq operation of 2003 are described by the Office of the Special Inspector General for Iraq Reconstruction in its book, Hard Lessons: The Iraq Reconstruction Experience .
Subsequently, USAID has been a major partner in the United States Government's (USG) reconstruction and development effort in Iraq. As of June 2009[update], USAID has invested approximately $6.6 billion on programs designed to stabilize communities; foster economic and agricultural growth; and build the capacity of the national, local, and provincial governments to represent and respond to the needs of the Iraqi people.
USAID has periodically supported the Lebanese American University and the American University of Beirut financially, with major contributions to the Lebanese American University's Campaign for excellence.
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In 2008, the coca growers union affiliated with Bolivian President Evo Morales ejected the 100 employees and contractors from USAID working in the Chapare region, citing frustration with U.S. efforts to persuade them to switch to growing unviable alternatives. From 1998 to 2003, Bolivian farmers could receive USAID funding for help planting other crops only if they eliminated all their coca, according to the Andean Information Network. Other rules, such as the requirement that participating communities declare themselves "terrorist-free zones" as required by U.S. law irritated people, said Kathryn Ledebur, director of the organization. "Eradicate all your coca and then you grow an orange tree that will get fruit in eight years but you don't have anything to eat in the meantime? A bad idea," she said. "The thing about kicking out USAID, I don't think it's an anti-American sentiment overall but rather a rejection of bad programs".
On September 19, 2011, Dr. Rajiv Shah, along with Dr. Jill Biden and Ad Council, launched the "FWD" campaign to raise awareness about that year's severe drought in East Africa. Through TV and internet ads as well as social media initiatives, FWD encouraged Americans to spread awareness about the crisis, support the humanitarian organizations that were conducting relief operations, and consult the Feed the Future global initiative for broader solutions. Celebrities Geena Davis, Uma Thurman, Josh Hartnett and Chanel Iman took part in the campaign via a series of Public Service Announcements. Corporations like Cargill, General Mills, PepsiCo. and General Mills also signed on to support FWD.
USAID and U.S. foreign economic assistance in general have been the subject of debate, controversy, and criticism continuously since the 1950s.
Those who advocate that poverty relief should be the primary goal of foreign aid may criticize the choice of geopolitical influence as the goal of a given budget allocation. But the budget for poverty relief may be criticized in turn by advocates of environmental conservation, if they feel that it leaves little funding free for environmental projects. Focusing on the environment, on the other hand, may seem premature to advocates of socioeconomic development who see that as the key to realizing all the other goals, including poverty reduction and environmental protection.
These are debates that are arbitrated in Washington by the Congress and the Administration before budgets are decided and before USAID staff undertake detailed programming in the field. In practice, the programs that USAID implements in each country pursue a mix of goals, each of which has value to some stakeholder of foreign aid.
Some feel that USAID overemphasizes technical assistance and should instead provide more financial assistance (budget support, or debt relief). They argue that financial assistance allows recipients to spend as they like with less influence from donors. Others feel that financial assistance does not result in durable improvements and that person-to-person technical assistance has the advantage of sharing knowledge and experience regarding techniques that have worked before, leading to permanent improvements.
In practice, many USAID missions find that their counterparts appreciate having both forms of aid: an assistance package that includes some financial assistance for things that can simply be bought and some technical assistance to confront problems and issues whose solutions are not so clear.
USAID is frequently criticized for paying the full market cost of expert services that it provides to counterparts. Those service providers generally are higher paid than the average person in low-income, developing countries. While the majority of the staff working on USAID-financed projects are from the country where the work is being carried out, USAID is able to recruit from anywhere in the world to get the right person for specific tasks, including widely recognized experts in many cases. USAID uses competition to arrive at market rates for the staff it recruits, and has experimented with volunteer programs for expertise from high paid professions.
Questions are fequently asked as to whether it is a good practice to contract with private firms or individuals for the services of specialists serving limited terms lasting from a few weeks to two or three years. One alternative is to rely more predominantly on career U.S. Government employees, who have twenty- to thirty-year employment contracts. In 1960s, observers commented on a perceived shift in favor of the shorter-term contracts. The facts and policy regarding methods of contracting have been debated continuously since then.
USAID states that "U.S. foreign assistance has always had the twofold purpose of furthering America's foreign policy interests in expanding democracy and free markets while improving the lives of the citizens of the developing world." However, non-government organization watch groups have noted that as much as 40% of aid to Afghanistan has found its way back to donor countries through awarding contracts at inflated costs.
Although USAID officially selects contractors on a competitive and objective basis, watch dog groups, politicians, foreign governments and corporations have occasionally accused the agency of allowing its bidding process to be unduly influenced by the political and financial interests of its current Presidential administration. Under the Bush administration, for instance, it emerged that all five implementing partners selected to bid on a $600 million Iraq reconstruction contract enjoyed close ties to the administration.
Some critics say that the US government gives aid to reward political and military partners rather than to advance genuine social or humanitarian causes abroad. William Blum has said that in the 1960s and early 1970s USAID has maintained "a close working relationship with the CIA, and Agency officers often operated abroad under USAID cover." The 1960s-era Office of Public Safety, a now-disbanded division of USAID, has been mentioned as an example of this, having served as a front for training foreign police in counterinsurgency methods (including torture techniques).
Folha de São Paulo, Brazil's largest newspaper, accused USAID of trying to influence political reform in Brazil in a way that would have purposely benefited right-wing parties. USAID spent $95,000 US in 2005 on a seminar in the Brazilian Congress to promote a reform aimed at pushing for legislation punishing party infidelity. According to USAID papers acquired by Folha under the Freedom of Information Act, the seminar was planned so as to coincide with the eve of talks in that country's Congress on a broad political reform. The papers read that although the "pattern of weak party discipline is found across the political spectrum, it is somewhat less true of parties on the liberal left, such as the [ruling] Worker's Party." The papers also expressed a concern about the "'indigenization' of the conference so that it is not viewed as providing a U.S. perspective." The event's main sponsor was the International Republican Institute.
In the summer of 2012, ALBA countries (Venezuela, Cuba, Ecuador, Bolivia, Nicaragua, San Vicente y Las Granadinas, Dominica, Antigua y Barbuda) called on its members to expel USAID from their countries.
Several studies suggest that foreign aid is used as a political weapon for the U.S. to elicit desired actions from other nations. A state's membership of the U.N. Security Council can give a considerable raise of U.S. assistance.
In 1990 when the Yemeni Ambassador to the United Nations, Abdullah Saleh al-Ashtal, voted against a resolution for a U.S.-led coalition to use force against Iraq, U.S. Ambassador to the UN Thomas Pickering walked to the seat of the Yemeni Ambassador and retorted: "That was the most expensive No vote you ever cast". Immediately afterwards, USAID ceased operations and funding in Yemen.
USAID requires NGOs to sign a document renouncing terrorism, as a condition of funding. Issam Abdul Rahman, media coordinator for the Palestinian Non-Governmental Organizations' Network, a body representing 135 NGOs in the West Bank and Gaza Strip, said his organization "takes issue with politically conditioned funding." In addition, the PFLP, considered a terrorist organization by the United States, said that the USAID condition was nothing more than an attempt “to impose political solutions prepared in the kitchens of Western intelligence agencies to weaken the rights and principles of Palestinians, especially the right of return.”
In 2003, Congress passed a law providing federal government funds to private groups to help fight AIDS and other diseases all over the world through USAID grants. However, one of the conditions imposed by the law on grant recipients was a requirement to have "a policy explicitly opposing prostitution and sex trafficking". In 2013, the U.S. Supreme Court ruled that the requirement violated the First Amendment's prohibition against compelled speech in Agency for International Development v. Alliance for Open Society International, Inc.
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