Reflections by J. Brian Atwood, former administrator of the US Agency for International Development on economic development are presented. If the US fails to plan now for the new influx in world population in the next decade by investing in development assistance, then it risks the demise of globalization and economic and social progress. That is both a humanitarian and a pragmatic cause for further action.
Congress, USAID, and Foreign Aid's Future
It is too early to objectively assess my own experience, but I often wonder what I might have done with all the time lost defending the US Agency for International Development (USAID) against those who were intent on killing it. It is perhaps surprising that the Agency was able to produce so much development innovation during this period, but the willingness to create new concepts and approaches to US aid and development made the fight to preserve the Agency worthwhile.
Even during the congressional threats, the Agency continued to lead the donor community by strongly advocating work in the democracy-governance sector, including developing civil societies by working with host country, non-governmental organizations. The USAID created an Office of Transitions Initiatives to fill the gap between crisis response and long-term development, launched a presidential initiative in the horn of Africa that combined food response to an impending famine with development and diplomatic prevention techniques, aggressively pursued a new micro-enterprise initiative, effectively used earmarked congressional resources to mount an international strategy against infectious diseases, devised a strategy to help poor nations reduce greenhouse gas emissions while showing them they could continue to grow economically, set up a business network to encourage small and medium-sized American businesses to partner with enterprises in the developing world, created food-security initiatives throughout Africa, and made a major push to close the gender gap in the developing world by promoting a variety of women's initiatives.
This is not to suggest that the budget cuts, the merger debate, and the straitjacket imposed by congressional earmarks had no negative consequences. With respect to the overall volume of official development assistance (ODA), the United States led the world in the wrong direction. The United States' ODA fell from a high of US$57 billion to a low of US$47 billion during this period. Meanwhile, the US foreign aid contribution as a percentage of its GDP fell to 0.011 percent.
Those who argued that private capital flows to the developing world would somehow compensate for the loss of ODA were proven wrong when short-term capital investments took flight in the midst of the 1997-1998 Asian financial crisis. In any case, little private capital was invested in the poorest countries, and the capital that went to the emerging markets did not take the form of equity investment. …