Can Biden cement a foreign aid reform legacy?

With less than a year remaining in U.S. President Joe Biden’s term, experts say his administration has made progress on pledges to repair and reform America’s foreign aid system — with some big caveats and unfinished business for the months ahead. When Biden took office in January 2021, the U.S. government’s primary foreign aid agency, USAID, was reeling from controversial political appointments, budget attacks, and management problems in the final year of former President Donald Trump’s administration. Even before taking office, Biden announced he would nominate Samantha Power, a former United States ambassador to the United Nations, to lead the agency and elevate her role to a permanent seat on the National Security Council. The overarching message that accompanied Biden’s foreign policy leadership choices was — in his own words — “America is back, ready to lead the world, not retreat from it.” His administration has sought to repair frayed alliances, re-engage with international institutions, and restore confidence in its commitment to multilateral cooperation on issues such as climate change, human rights, and democratic governance. At USAID, leaders have called for revitalizing and diversifying a depleted workforce, making the agency more responsive to partner countries’ needs, and shifting resources and authority to those communities grappling directly with the world’s biggest challenges. “We must offer people, not a vision merely of international development but a vision of inclusive development,” said USAID Administrator Samantha Power in a November 2021 speech that laid out her vision for the agency. Three years in — and with the clock of an election year ticking — aid experts want to see policy and institutional changes translate into real change in how U.S. foreign aid gets delivered. “In the first year, this administration took its time to set a vision to get organized, and then in the second and third year, we saw the administration drive good policy changes,” said Walter Kerr, executive director of Unlock Aid, a coalition pushing to reform U.S. foreign aid spending. But, Kerr added, those efforts have yet to produce behavioral changes in the “real 3D world.” “I think 2024 really will be the year where we have to see if USAID is going to match commitments and pledges with reality,” he said. Building blocks In several areas, U.S. aid experts see an administration that has successfully built institutional and policy frameworks to support some of its biggest priorities, but which still has work to do when it comes to matching those with real resources and implementation. One example is democracy and governance, said Susan Reichle, president and CEO of the International Youth Foundation and former USAID counselor, the most senior foreign service officer position. In September, USAID launched a new Bureau for Democracy, Human Rights, and Governance, a major victory for putting these issues at the center of the U.S. government’s global development approach. “I don't think folks should underestimate how hard internally people were fighting for that to happen for many, many years,” Reichle said. At a time when democratic backsliding is described as an existential threat to development progress — with Biden hosting two summits for democracy to rally countries to the cause — the new bureau aims to put more resources behind USAID’s support for democratic partners. Democracy, rights, and governance accounted for just over 3% of USAID’s budget in the 2022 fiscal year — or about $2.2 billion — but were heavily overshadowed by the agency’s bigger programs in global health and humanitarian assistance. The overall foreign assistance budget has climbed to record levels during Biden’s administration. USAID spent over $30 billion in 2022, with increases driven by the war in Ukraine and the ongoing response to the COVID-19 pandemic. “Even if we are effective beyond our wildest dreams, there will always be so much more health money and so much more humanitarian assistance money, so we have to be able to influence the way they’re spending that money and what they’re doing,” Shannon Green, who leads the bureau as assistant to the administrator, said at a launch event last year. “We've seen incremental change, but not really the kind of wholesale change that … we desperately need to achieve the results at the speed required.” --— Walter Kerr, executive director, Unlock Aid Building the internal capacity and bureaucratic structures to take on this challenge represents a big step, Reichle said. “When you create things, it's really hard to dismantle them,” she said. Policies and baselines Aid experts say the administration currently stands at a similar juncture between policy and results on the agenda item that many regard as a hallmark of Power’s tenure: the effort to broaden USAID’s partner base and shift more resources to local partners. That ambition is represented by twin goals on localization that Power laid out in her 2021 speech: that 25% of USAID’s funding should go to local organizations by 2025, and that 50% of USAID’s programs should be locally led by 2030. “It pointed to a high-level commitment to this issue, and it also creates a baseline to measure progress,” said Jenny Russell, senior director for public policy and advocacy at Save the Children USA. Russell added that Power and her team have leveraged their leadership with other donors, including philanthropic organizations, to help build a shared commitment among major funders for locally led development. “They’re serious about making waves on this issue,” she said. In 2022, USAID released a Local Capacity Strengthening Policy to inform how it supports local organizations to define and achieve their goals, and to play a larger role in development programs. “It's not just the policy itself, but it was the way it was done,” Russell said, pointing to over a year of “coordination with local actors” to develop a clear understanding of what they considered good capacity strengthening to entail. In 2023, USAID released a new acquisitions and assistance strategy, which seeks to address some of the barriers inside the agency’s procurement process that have contributed to an entrenched status quo where the majority of funding flows through a small handful of big contractors and international NGOs. Behind the localization targets, Russell and others see an approach to shifting authority and funding that is both wide-ranging and granular, with Power’s team digging into different components of USAID operations in hopes of pushing them all in the same direction. “I think there was a broader move to see how policies need to respond to reflect this commitment,” said Gunjan Veda, executive director and executive coordinator of the Movement for Community-Led Development. ‘Time to do the work’ The mission to transform USAID is not yet accomplished. “We've seen incremental change, but not really the kind of wholesale change that we were promised a few years ago and that we desperately need to achieve the results at the speed required,” said Kerr from Unlock Aid. “Now policies have been changed. It's time to do the work,” Kerr said, calling for “a real concerted effort to move money in different ways” in 2024 and to shift from “just 1% to 2% differences” in USAID’s funding approaches to the “double-digit percentage changes that we need to actually feel like real changes have manifest themselves.” In Kerr’s view, USAID has an opportunity to demonstrate that kind of significant shift in the massive set of contracts it is currently rolling out to improve global health supply chains in lower-income countries. These contracts, known as NextGen, have an expected value of close to $17 billion. They follow in the wake of a current supply chain project in which USAID’s overreliance on a single, U.S.-based contractor created significant performance risks. “Here's the contract that is the largest in the agency's history, and funding activities in a sector — health and logistics — that is actually extremely developed in at least many of the countries where USAID operates,” Kerr said. “If there is ever a time to start working more with the private sector, to work more with local and proximate actors, to change business as usual, it has to be with this set of contracts. I can't think of a better opportunity,” he added. The agency has so far awarded two pieces of the contract — a Control Tower award to consulting giant Deloitte, and a technical assistance contract to a group of seven organizations. When it comes to bringing about a broader shift in the U.S. foreign aid system, Kerr said there are “speed limits” for what the government’s executive branch is able to do on its own. “We really need Congress to come in and to help ... re-architect a new system that's much more results-oriented, much more deliberate about getting resources to proximate actors, much more focused on innovation, much more focused on meeting countries’ needs in ways that position the United States as a good partner,” he said. Undermined and overshadowed Yet, according to Veda, there is one issue that casts a pall over America’s role as a global development partner: the war in Gaza. The Biden administration’s staunch support for Israel’s military campaign and its unwillingness to support a cease-fire risk undermining its global credibility on development issues in general and community-led development in particular, Veda said. According to USAID, more than 85% of Gaza’s population is displaced, more than 26,000 Palestinians have been killed, and 2.2 million people — the territory’s entire population — are facing acute food insecurity. As of last month, nearly 70% of homes and half of all buildings had been destroyed. The U.S. government has contributed over $112 million in humanitarian funding to assist with the crisis caused by Israel’s war against Hamas. “For an administration to not take a stand on critical issues like cease-fire, to actually block those initiatives, puts everything into question — the commitment to human rights, the commitment to localization, the commitment to listening to countries, listening to what people want,” she said. The White House’s position also calls into question the degree to which development priorities are really front and center in U.S. foreign policy decision-making — as Power’s elevated role on the National Security Council indicated they might be, Veda said. “The developmental voices have been very clear around what is needed in Gaza and what the U.S. response needs to be, and that has not shown up in the foreign policy actions of the United States,” she said.