USAID chief defends budget in Congress

U.S. Agency for International Development Administrator Rajiv Shah. Photo by: Eric Bridiers / U.S. Mission Geneva / CC BY-ND

Why will 45 percent of food aid budget be spent to buy locally-produced food in crisis areas? Will cuts in HIV/AIDS funding erode progress in the fight against the desease? Why is the U.S. reducing its aid budget for Latin America and Caribbean? How far the USAID Forward reform truly moving forward?

These were a few of the hardline questions American lawmakers posed to USAID Administrator Rajiv Shah faced Congress on Wednesday to defend President Barack Obama’s budget proposal for the agency in fiscal 2014.

Appearing before the House appropriations and Senate foreign relations committees, Shah churned out hard data and narrated anecdotes to defend the proposed 6 percent cut in the United States foreign aid budget for next year.

“The FY 2014 request for USAID managed or partially managed accounts is $20.4 billion, six percent below the total enacted funding for FY 2012,” Shah said at one point. “In this tough budget environment, USAID is committed to maximizing the value of every dollar. We have made tough choices so that we are working where we will have greatest impact, and shifting personnel and funding resources towards programs that will achieve the most meaningful results.”

Food aid reform

Perhaps the most talked-about reform during the budget hearings is how the United States is moving towards buying locally-produced food instead of purchasing American commodities and shipping these on board U.S.-flagged vessels to crisis areas.

Republican Sen. Bob Corker was concerned about what pushed the administration to rethink U.S. food aid policy: “What made you and the administration [decide] that 55 percent of the food aid is going to be spent in U.S.? How did you decide?”

Over the past years, about 85 percent of food aid was tied to the purchase and shipping of American commodities. And that, Shah noted, “gives us a little bit of flexibility about 15 percent.”

But precisely that “little flexibility” is almost totally being absorbed in the escalating humanitarian crisis in Syria.

Shah said: “As a result, there are a number of other countries – the Democratic Republic of Congo, Somalia, Pakistan – where we actually have to take children off of the nutrition support because we’re reverting from a more efficient locally-procured food program to the more traditional U.S.-based program.”

About 155,000 kids in Somalia will not receive nutritious food if United States sticks to its traditional food assistance, the USAID chief noted.

Besides, he explained, food aid costs too much not because more food is delivered to crisis areas, but because shipping costs have more than tripled.

“We also want to have a renewed partnership with American agriculture, a partnership that prioritizes high nutrition food products that America ought to have the scientific and technical lead in producing,” Shah said.

Congressmen noted the shipping industry in particular might be hurt by food aid reform.

USAID shipping partners, Shah assured lawmakers, will not feel the shock. He said the government provides under the fiscal 2014 budget a transition support for the agency’s partners.

Corker suggested the reform can be put into legislation if USAID is willing. He asked Shah: “Do you plan to work with this committee to get the reforms you’re putting in place and to code? Or you’re just gonna do the easy route?”

“Absolutely, we would be eager to work with this committee to have as much structure and longevity this renewed vision,” the USAID administrator replied.


Floor conversations over the the President’s Emergency Plan for AIDS Relief focus on decreasing funding. Obama asked for $1.65 billion under PEPFAR for the Global Fund to Fight AIDS, Tuberculosis, and Malaria.

Over the past years, funding for PEPFAR has waned, Republican Senator Marco Rubio noted. “We also understand the impact of the sequester. But the cuts continue to the point now that people are concerned about us retreating on this front,” Rubio said.

Shah however seemed confident that less these projects will not make a dent on the enormous gains achieved in the past in the fight against HIV/AIDS. That’s because local governments are, in part, throwing in their own money to support the cause, he stressed.

“Absolutely not! In fact, I am confident that our approach of bringing together our global health investment around the world and bring other partners to do more will actually accelerate impact,” Shah said.

Budget for Western Hemisphere

Concerns over the reduced funding support for the Americas, Latin America and Caribbean were also raised. Democrat Senator Robert Menendez, for one, cannot understand why the U.S. has to cut budget for the region.

“It doesn’t make a lot of sense in terms of the national security of the United States,” Menendez told Shah. “If we want governments to stop international crime and narcotics trafficking, you have to give poor growers alternative crops.”

For Shah, the issue is just money.

“We too believe the region is critical and important,” Shah said. “We have to present a budget that conforms to an overall 6 percent reduction, which has forced a lot of difficult trade offs in a time when the actual number of humanitarian disasters around the world is doubling.”

USAID Forward

At the end of the day, lawmakers acknowledge that the U.S. development agency can carry out its various missions if it has the wherewithal, ability and personnel. For Menendez, chair of Senate foreign relations committee, discussions boil down to whether USAID Forward is receiving enough funds.

“How would you assess your agency’s progress in restoring in its capacities under the USAID Forward?” the senator asked.

During the hearing, Shah insisted that the agency is transforming the way it does business due to its reform agenda.

“We’re on our way to accomplishing that,” Shah told lawmakers. “Our focus on public-private partnerships has been unique and extraordinarily effective. We have been able to rebuild our budgeting authority, our policy organization. We’ve hired 1,100 new staff because of the Development Initiative.”

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About the author

  • John Alliage Morales

    As a former Devex staff writer, John Alliage Morales covered the Americas, focusing on the world's top donor hub, Washington, and its aid community. Prior to joining Devex, John 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.