Sunday, May 17, 2009

MCC and Foreign Aid reform

It seems that foreign aid reform in the US will have to wait. The recently released 2010 budget does not contain any obvious sea-change in policy or structural reforms and puts an emphasis on health matters. It also strongly supports the Millennium Challenge Corporation, a Bush administration creation, which had its budget halved in 2009 and is now back to its previous level of $1.5 billion.

The failure to restructure US foreign aid should raise some concerns. President Obama's priorities based on this budget are clear - money for health programs, a commitment to MCC, and increased resources for food security. There is also a commitment of nearly $600 million to promote clean energy solutions and help countries deal with the effects of changing temperatures which is a nice change from the Bush administration's anti-science profile. But the administration does not appear to particularly interested in economic development and good governance.

USAID will also likely ramp up its hiring. Hopefully, their new hires will have significant field experience. During the past decade the organization has been hollowed out, losing many with in-depth knowledge of their respective responsibilities. The remaining staff were overworked and underpaid. USAID needs to hire people with clear, successful program implementation experience and not simply good writers or academics with little practical experience.

The numbers are likely to change as the funding program travels the corridors of Congress. I have not seen a change that supports more sustainable economic development and money spent on democracy building and governance have been left at their previous level. So, the status-quo, for the most part, will be in place at least for the next fiscal year.

That's too bad.

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