Needs of Poor, Not Politics, Should Drive Reform of US Foreign Aid

By Oxfam

The following is a statement from Raymond C. Offenheiser, President of Oxfam America, on Secretary Rice’s announcement of USAID restructuring.

“Secretary Rice announced a momentous overhaul of the State Department and the US Agency for International Development (USAID) that will certainly change the way the US helps the poor across the world. The steps she has proposed as part of her “Transformational Diplomacy” initiative—posting more diplomats in poor countries and crisis zones, focus on teaching more languages used in the developing world, and ensuring that the State Department can evolve to face a post-Cold War world are to be commended.

As an international organization committed to long term solutions to poverty and hunger, we want to see US taxpayer money used as effectively as possible to make the biggest difference for the billion people across the world that struggle to survive on just a dollar a day. As an independent organization that does not pursue or accept USAID funding but works alongside USAID initiatives, we recognize the magnitude and importance of this restructuring.

Indeed, President Bush has made great strides to increase and restructure overseas assistance. But lives are at stake so we must proceed cautiously and wisely. The following four areas of focus must drive the reform of US foreign aid, ensuring that the long-term needs of the poor—not politics— come first.

1. The Needs of the Poor, Not Politics, Should Drive Reform of US Foreign Aid

Since the attacks of September 11th there has been a drastic shift in US foreign assistance that has blurred the lines traditionally separating development and humanitarian aid from political and military action. It is essential that any plan to restructure the State Department and USAID does not further erode the independence of aid groups to fight poverty and respond to humanitarian emergencies based on the need on-the-ground, not based on the agenda of the White House or the Pentagon. <p>

The safety of NGO staff and the people we are trying to help is compromised by any perception that development and humanitarian assistance is a political and military tool. Secretary Rice and the incoming Administrator of USAID must publicly affirm the independent nature of development and humanitarian assistance, and work to restructure USAID in a way that reflects the core values of independence and impartiality that should guide development and humanitarian programs.

2. Building Institutions Should be Cornerstone of US Aid Strategy

For far too long, food aid and other forms of assistance that breed dependence have been large components of US foreign aid. Secretary Rice should outline a far-reaching yet detailed strategy for how US money will be used to strengthen economic systems, government agencies, civil society groups, and basic infrastructure in poor countries. Increasing agricultural production or supporting poor communities through micro-credit programs is only one part of the solution. <p>

Strong local institutions are required to ensure development at the village level will have results at the national one. Better roads to bring goods to market, reliable banks where poor people can save their money and receive credit, and government institutions where the rights of the most marginalized are respected and defended are all examples of investments that encourage sustainability.

3. US Aid Budget Must be Increased Dramatically

Restructuring USAID and America’s approach to foreign aid should be accompanied with further increases in funding for development and humanitarian assistance. Although the US is the largest donor in the world, and US assistance has been on the increase, the US is lags behind other developed countries in terms of how much foreign aid we give in proportion to our huge economy (only 0.16% in 2004). <p>

The type of generational changes Secretary Rice is proposing requires an equally ambitious vision for increasing the amount of money we are willing to spend on programs that help the poorest of the poor get out of poverty.

4. US Must Adopt Complementary Aid and Trade Policies Promoting Inclusive Globalization

US foreign assistance should be accompanied by pro-development policies in other areas, particularly trade. Secretary Rice’s speech today did not mention what the US is prepared to do to enable poor people in developing countries to compete fairly in the global marketplace. <p>

While trade and agriculture have an enormous capacity to help poor countries develop, the unfair trading system currently in place is holding them back. For example, if Africa increased its share of world trade by just one per cent, it could make five times the amount it currently receives in aid. But this opportunity is negated by trade protectionism and unfair agricultural subsidies to farmers in countries like the US. Reforming of US trade policy, such as subsidies on commodities like cotton and rice should go hand in hand with aid programs that provide developing countries the means to make and market goods globally.


REPORTER’S NOTE: Oxfam America is an independent humanitarian and development agency that does not receive any money from USAID. Its budget is financed by private donations and the generous grants of charitable foundations.

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