MORE INFORMATION: Questions and Answers on Foreign-Aid Reform

March 3, 2009

What is foreign assistance and how does it work? Foreign assistance, also called foreign aid, is money provided by the United States to other countries for a variety of purposes, some strategic, some humanitarian. Fighting poverty and disease, and promoting economic development and growth, are among the chief objectives of foreign assistance. In many cases – particularly where poverty alleviation is concerned – foreign assistance is not sent directly to another country’s government, but rather is delivered by non-governmental organizations, including faith groups like Episcopal Relief and Development, Church World Service, or Catholic Relief Services. They, in turn, work with churches and other faith communities in low-income countries (like the many Anglican and Episcopal churches in Africa, Asia, and Latin America). This ensures that assistance goes directly to local communities through institutions with experience providing effective aid.

Does U.S. aid work? Yes, U.S. foreign assistance works. It puts children in school, helps women start businesses to provide for their families, prevents the spread of malaria and HIV, and assists farmers working to improve their crops local economies. This leads to results. In the past six years alone, for example, the number of people in poor countries receiving antiretroviral medicines to treat HIV/AIDS has increased tenfold to almost three million. In the past two decades, more than a billion people – a fifth of the world’s population – have gained access to clean water. The examples are endless.

When was the current U.S. foreign-aid system designed, and what purpose was it intended to serve? The current American system of distributing foreign aid was designed by Congress in 1961 through legislation called the Foreign Assistance Act. That bill remains in force today, and while it has been updated and added to in a piecemeal fashion over the years, it has never been revised in a cohesive way. In 1961, most foreign aid was given for strategic purposes like supporting the growth of democracy in free markets at the height of the Cold War. Today’s world is very different, and congressional efforts to supplement the Foreign Assistance Act have led to a behemoth bureaucracy that now sees U.S. aid managed and distributed through 12 different cabinet departments, 25 different agencies, and almost 60 government offices.

Can U.S. aid work better? Yes. While Americans can be very proud of the impact of American foreign assistance in the world, most programs can be better and more effective through cohesive strategies and agency structures, the elimination of duplication and waste, a stronger focus on accountability and transparency, and, a better enumeration of priorities.

What, specifically, should we be advocating? The Episcopal Church, along with more than 15 other partner faith organizations, has developed a set of recommendations for foreign-aid reform which can be read here. We currently are in the process of sharing these with lawmakers, the Obama Administration, and other advocates working for foreign-aid reform. The main tenets of the recommendations involve establishing poverty alleviation as a principle objective of foreign aid, and designating economic development – alongside diplomacy and defense – as chief objectives of our nation’s foreign policy. In the immediate sense, this means Congress and the Administration should develop a strategy – calibrated with the Millennium Development Goals – for long-term poverty alleviation as well as immediate humanitarian needs. That strategy should establish more synergy in the U.S. government, better coordination with other donors, and greater accountability both to American taxpayers and to poor communities being served.

Given the current economic crisis, shouldn’t lawmakers be focusing attention on people hurting here at home rather than those living overseas? This should not be an either/or question. Congress certainly should be, and is focusing attention on the economic needs of Americans, and the Episcopal Church and other faith communities have been strong advocates for this work. As difficult as problems in American communities are, however, on sheer scale, poor people in developing countries are facing even greater levels of poverty and hunger. Approximately 1.4 billion people – more than a fifth of the world’s population – live on the less than a dollar a day, and experts forecast that this number will grow by 50 million as a result of the economic crisis. As need is rising, so does the U.S. responsibility – as part of a single human family – for responding to that need.

A couple of other things should be kept in mind too. First, foreign-aid reform would mean that limited resources would be spent in a smarter way and with greater accountability and impact. That means that results will increase even if resource allocation stays the same. Additionally, foreign-aid reform is in our own nation’s interest. In an increasingly interconnected world, investments in global development increase security and prosperity here in the U.S. by creating more stability, as well as lasting and long-term solutions to problems, around the world. The impact of fighting poverty and building more prosperous communities today will be felt for generations to come.

What does this mean for the MDGs? The Millennium Development Goals currently are just six years from their completion point, and even as dramatic progress has been made in some goal areas, others – like the fight against AIDS – have stagnated overall despite enormous numerical successes in some places. Part of the reason is a lack of coordination and cohesion between the many different donors, including rich countries, private institutions and nongovernmental organizations, and multinational development programs. (If the U.S.’s own programs are as diffuse and multilayered as they are, just imagine what that means for coordination with other large donors!) Reforming U.S. foreign-assistance programs will allow better focus and cohesion in the world’s efforts to meet the MDGs by 2015.

How will this process look in Congress? The effort to reform foreign assistance likely will take more than a year to complete. At the moment, lawmakers in several key congressional committees are in the early stages of reviewing the impact of foreign-aid programs and assessing where, and how, certain changes might be made. Part of this process, which will continue for at least the first half of the year, involves engagement with the advocacy community, including faith groups. Consultation with the Administration is also part of the process. Things could unfold in a variety of ways depending on the preferences of lawmakers and the President. Possible benchmarks along the way might include all or some of the following: congressional hearings, a presidential directive that mandates better coordination of foreign assistance and elevates poverty alleviation as a priority, introduction of a bipartisan congressional resolution in support of reform, appointment of a high-level person or commission to lead the formulation of a global-development strategy, and the writing of a new Foreign Assistance Act or some other legislation that represents a new consensus in how our nation approaches foreign aid.

As the process unfolds, we will keep you informed and involved so that the voices of Episcopalians can have a meaningful say in the process of reform.