Changing aid landscape and shrinking budgets

Photo credit: Stephen Elliot

With shrinking foreign assistance budgets and a changing aid landscape, there needs to be a more focused, efficient approach to development, said several speakers at the opening plenary session at InterAction’s annual Forum in Crystal City, Virginia on Monday.

“Assistance budgets are tighter and our funders are demanding greater effectiveness, accountability transparency,” said USAID Deputy Administrator Don Steinberg in the opening plenary session which looked at the role of development in U.S. global engagement.

“Donor government assistance simply is not the driving force behind development as it once was,” Steinberg said, pointing out that in the United States foreign aid was still less than one percent of the total federal budget and amounted to some $30 billion last year.


By contrast, NGOs, foundations, faith-based organizations, corporate social responsibility programs generated and distributed some $36 billion; he told the packed room on the first day of the three-day Forum, which runs until Wednesday.

USAID, he said, was using its convening authority to bring together different players and partners. While relying more on public-private partnerships, Steinberg said there was also a new emphasis on applying vigorous standards to these arrangements.

“This is a time of great hope and a time of great challenge (in the development arena),” he said, adding that the Obama administration was committed to working closely with civil society in devising programs that took into account changing business models in development.

Co-plenary speaker Maria Otero, Undersecretary of Civilian, Democracy and Human Rights at the State Department, also pointed to the need to be more “nimble” in the current tight fiscal climate.

“As we face ever more tightening budgets, we also need to be efficient and we also need to work more closely and collaboratively with civil society organizations,” said Otero.

In a spirited panel discussion after the plenary, former USAID administrator and ex-envoy to Sudan, Andrew Natsios, took aim at USAID for planning too much in the “short-term” and for an over-zealous bureaucracy.

“If you look at the planning horizon, it is shrinking and that is in my view, disastrous,” said Natsios, who said the State Department was taking over USAID.

Fellow panelist John Norris from the Center for American Progress outlined the difficult budgetary cycle ahead, particularly in the lame duck session during this presidential election year. “We are headed for a rocky, rough period ahead.”

Both Natsios and Norris urged NGOs and others to make a bigger effort at showing lawmakers and others what was happening in the field. First-hand experience of on-the-ground development work was an efficient tool to convince lawmakers and others to continue investing in foreign aid programs, they said.

The U.S. government, said Norris, needed to streamline its systems but there also must be more accountability on the part of foundations that are playing a more important role in the development arena.

“They are all big kids,” he said of foundations. “I think they could take some criticism and they should be willing to engage in that kind of dialogue.”

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Contributed by Sue Pleming