Amid budget woes, USAID reforms don’t cost too much money, say experts

George Ingram, co-chair of the Modernizing Foreign Assistance Network and Sarah Jane Staats, director of Rethinking U.S. Foreign Assistance at the Center for Global Development. Photo by: personal collection

Just two years ago, the U.S. Agency for International Development made drastic reforms to engage more local partners, incubate innovations and strengthen its internal processes. These early goals under USAID Forward are being met and some have already surpassed expectations.

This year, USAID wants 10 of its missions around the world to support mobile money initiatives and increase the total value of public-private partnerships with 1-to-1 leverage by 10 percent. Over the next two years, it wants to increase mission funding awarded to local institutions by 30 percent, complete 70 country strategies and release 250 high quality evaluations.

That’s a lot of goals — and of course, that costs a lot of money as well.

As sequestration took away $85 billion from this year’s budget and the United States is entering another budget circus, how can USAID Forward really go forward?

Sequester realities

The reality of sequestration is that USAID can still achieve its goals but on a smaller scale, George Ingram, co-chair of the Modernizing Foreign Assistance Network, told Devex.

“We’ll be able to do less in health, less in education, less in democracy. That’s where you’re going to see the impact of sequestration,” said Ingram. “You may reach the percentage goal, but it’s going to be a percentage point of a lower magnitude.”

The other reality of across-the-board cuts is its power to limit agency’s capacity to spend wisely on investments.

“When you have a blunt instrument like sequestration that just does across-the-board cuts, it limits the opportunity to be really smart about where and how to spend the money,” Sarah Jane Staats, director of Rethinking U.S. Foreign Assistance at the Center for Global Development, told Devex.

Immune from cuts

Still, the good news, according to development experts, is that most of the reform elements are not expensive undertakings, or that these reforms have been protected from the cuts.

“A lot of the reforms in USAID Forward don’t actually cost a lot of money,” said Staats. “Using evidence from USAID evaluations to better inform future activities doesn’t cost new program money — it requires the right staff and incentives to use the information.”

USAID Forward’s promise to be more focused and selective about programs and areas in which USAID works, explained Staats, “is about using existing resources better, rather than asking for new ones.”

“USAID’s Development Credit Authority is another example where a few dedicated staff were able to mobilize a huge amount of commercial capital with limited U.S. spending,” noted Staats.

For Ingram, another case in point is USAID’s goal to complete 70 country strategies by 2014.

“To me, that strategic planning is critical to using your resources in a smart, effective way,” he noted.

Hiring the right people and training them well, however, take money, said Ingram.

“To date, those aspects of the reform plan have mostly been protected,” he said. “But we need to go back to the normal budgeting process to ensure aid has the resources to hire the people they need.”

Sequestration, added Staats, is not the problem per se.

“The budget process doesn’t make it easy. It’s a bit of a gauntlet for any agency to use any evidence-based decision to inform budgetary decisions, when you have a scenario that the budgets are going through such a protracted process that they don’t come out after the planning,” she said.

A lobbying, education tool

Whether sequestration can negatively impact the reforms is still up for debate. But according to the experts, USAID can leverage the result of the USAID Forward progress report to demand for greater budget on the Hill.

“I think it should very much help USAID make the case that this is not your ‘father USAID’ anymore,” said Staats. “Attention on the numbers and trying to guess and respond and react takes away our distraction from some of the good progress on another reforms.”

It’s not just a lobbying tool, but educational material for Congress as well.

“This progress report provides the Congress with some of the data and information they need to assess whether or not foreign assistance is being used effectively,” said Ingram. “That is a question that I hear up on the Hill all the time.”

Continue to learn

Experts have also said USAID should continue to learn from the lessons gleaned from the progress report.

“Counting the number of evaluations is important,” said Staats. “But the more important issue is whether USAID is learning and changing process based on what they learn. I think there are some good stories and anecdotes.”

Ingram added: “The important thing in the next couple of years is to continue to learn what’s working and what’s not working, to really use this evaluation and draw from them the lessons learned and modify the way USAID does business according to those evaluations.”

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About the author

  • Alliage profile

    John Alliage Morales

    As a staff writer, John Alliage Morales covers the Americas, focusing on the world's top donor hub, Washington, and its aid community - from Capitol Hill to Dupont Circle, Foggy Bottom to the downtown headquarters of USAID, the World Bank and Millennium Challenge Corp. Prior to joining Devex, Alliage worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data and produced in-depth stories on development and other topics.