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US Must Modernize Foreign Aid to Re-establish US Global Standing

By Oxfam

WASHINGTON, DC — Today international relief and development organization Oxfam America released Smart Development: Why US Foreign Aid Demands Reform. The report urges the next US president to make dramatic reforms in the US foreign aid system to improve the effectiveness of US development assistance and to restore US leadership in the fight against global poverty.

“The next president has a chance to create a better foreign aid system that will help lift millions from poverty and re-establish US global standing,” said Raymond C. Offenheiser, president of Oxfam America. “Foreign assistance is the international face of the US, and right now, it’s pretty ugly.”

In its report, Oxfam attributes the demise of US foreign aid’s effectiveness to the following key issues:

  • The US has prioritized short-term security goals at the expense of long-term poverty-alleviation. Currently, the US Agency for International Development (USAID)—which has traditionally led US foreign assistance efforts—administers less than half of US foreign aid while the share administered by the Department of Defense (DOD) has grown from 3.5 percent in 1998 to 18 percent in 2006.
  • Politicians seeking greater control over how foreign aid is implemented have imposed a labyrinth of mandates and requirements on aid adding to the costs and complexity of US development efforts. The Foreign Assistance Act has grown from just 100 pages in 1961 to over 1,500 pages today, and congressional earmarks for pet projects have hindered efforts to focus resources on critical poverty-alleviation programs.

Oxfam says US policymakers and the next US president have to balance the hard power of the US military, with the soft power of US diplomacy and development.

“Some call this balance smart power. Oxfam believes that smart power is impossible without smart development,” said Offenheiser. “Smart development means enabling foreign governments to lead more responsibly and helping their citizens engage more actively in their own economic growth and development.”

Policy recommendations outlined in Oxfam’s report include:

  • Enact a new Foreign Assistance Act;
  • Create a new Department of Foreign Assistance on par with the Departments of State and Defense;
  • Rebuild USAID from the ground up;
  • Create a national development strategy;
  • Recommit to the Millennium Challenge Corporation;
  • Promote strategic, multi-year commitments of US foreign aid;
  • Reform requirements that some or all of US aid must enhance profits for US companies; and
  • Encourage greater leadership and ownership of aid investments by responsible country governments and by their citizens.

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