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European Affairs
International Development
There is a Growing Consensus on How to Make Aid Effective
By Andrew S. Natsios
Some critics of foreign aid claim that it does not work because they do not see immediate results. This line of argument always annoys me. Development does work - we simply need to take a longer perspective than one or two years. People also forget that developed countries develop, as well as developing countries.
To illustrate this point, one need only look at economic and social indicators for the United States in 1950. They were at levels similar to those in the developing world today. The United States has made remarkable progress in health, literacy, human rights, infrastructure, economic growth and per capita income in the last 55 years. Europe, which was emerging from an extraordinarily destructive war in 1950, is now completely unrecognizable compared to its condition in the postwar years.
Another point is that recent changes in the world require us to review development through evolving lenses. Such changes include the devastating impact of internal conflicts, the increasing role of globalization, and, of course, the terrorist attacks of September 11, 2001. It is in that light that we hope to continue the excellent cooperation that we already enjoy with the European Union on a wide range of development issues. The European Union shares Washington's view that security and development are closely connected. It is no accident, for example, that the first headquarters of al Qaeda was in Somalia, which has not had a functional national government since 1991 - although attempts are now being made to remedy that.
When al Qaeda was evicted from Somalia, it went to Sudan, which has been embroiled in a destructive civil war for 22 years. Al Qaeda then moved to Afghanistan, a third failed state. Failed states are not in the national security interests of the United States or of Europe - or, in fact, of the people in the countries themselves. The local inhabitants are those who suffer most from anarchy and chaos.
The similar approach of the United States and the European Union to failed states is one of many areas in which we agree. Despite some political differences, we both recognize the critical importance of supporting the transition processes in Iraq and Afghanistan. At the operational level, we are cooperating very closely in both countries to coordinate our work on reconstruction and development. In Africa, we are both giving priority to promoting economic growth, democracy and good governance as critical elements of development.
We have jointly pursued peace agreements in Liberia, Sudan and Sierra Leone. We are collaborating to encourage stability and welfare in Haiti and in the Palestinian Authority. Following the recently signed peace agreement in Sudan, the southern Sudanese need substantial reconstruction assistance to begin the process of governing, and there are also humanitarian and reconstruction needs in the north. If there is a real settlement that ends atrocities and human rights abuses in Darfur, the United States, the European Union and other donor governments can begin assisting in the reconstruction of the region.
We both recognize the urgent need to combat HIV/AIDS and other diseases in Africa, and we welcome measures to increase our collaboration and ensure that all funds are being used effectively. And we are gratified by the excellent coordination between the United States and the European Union in the wake of the tsunami disaster in the Indian Ocean.
As in any partnership, however, there are certainly areas in which we differ with some of our European colleagues. We do not agree, for instance, that targets for official development assistance should be linked to the GDP of donor countries. Such targets do not reflect the capacity of recipients to use aid effectively, nor do they account for the balance of foreign assistance provided through private rather than official channels.
The U.S. approach to international development goals will depend on the context in each country. If a government is predatory, corrupt and repressive, no amount of foreign aid is going to rescue the population from that government.
"If a government is predatory, corrupt and repressive, no amount of foreign aid is going to rescue the population"
As agreed in the Monterrey consensus, adopted by the International Conference on Financing and Development in Mexico in 2002, each country has primary responsibility for its own economic and social development. To meet the goals to which the international community aspires, developing countries must adopt domestic policies and build institutions that promote sustainable, broad based economic growth.We can help them to meet that challenge. Increased official financial aid is necessary, but it is not sufficient for development.
Although some differences remain, there is a growing consensus within the donor community on the essential components of aid effectiveness. USAID has recently published a commitment to nine basic principles of development, but the reality is that we have not articulated simple rules of development that we can explain to people outside the development community. So, we have started discussions with non-governmental organizations, the United Nations and the military (which has a more developed doctrine on the conduct of wars) to see if we can agree on a general development doctrine that would apply to all sectors and programs.
Perhaps the most striking area of agreement between the United States and the European Union is on the priority to be given to the various action programs that we need to adopt. While we are collaborating with the European Commission in the field in all regions and sectors, the Commission's emphasis on trade is extraordinarily important. We can negotiate all the agreements we want to bring down trade barriers, but if we do not help developing countries to take advantage of such new openings, they will go unused.
If, for example, a developing nation has no port for shipping exports, how can it trade? If there is no refrigeration at airports, how can produce be moved before it rots? If potential exporters do not understand U.S. and EU health regulations – even if there are no tariff barriers - how do they comply with the rules and ship high-value food products that can bring much-needed income to developing countries? We have established three centers in Africa to help countries enhance their capacity to deal with these issues
We look forward to future cooperation between the European Union and the United States on humanitarian assistance, post-war reconstruction and longterm development issues.
Andrew S. Natsios has been Administrator of the U.S. Agency for International Development (USAID) since 2001. He was previously Chairman and Chief Executive Officer of the Massachusetts Turnpike Authority from April 2000 to March 2001, with responsibility for managing the "Big Dig" highway construction project in Boston, the largest public works project in U.S. history. He has served as Secretary for Administration and Finance for the Commonwealth of Massachusetts and Vice President ofWorld Vision U.S. He was a senior official at USAID from 1989 to 1993.