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AMERICAN UNIVERSITY RADIO WAMU 88.5 FM

THE KOJO NNAMDI SHOW

RESTRUCTURING USAID

MONDAY, JANUARY 30, 2006

GUESTS

CAROL LANCASTER
Director of the Mortara Center for International
Studies at Georgetown University.
Deputy Administrator of USAID from 1993 to 1996.

LAEL BRAINARD
Senior Fellow Economic Studies, the Brookings
Institution
Co-Director of the Brookings-CSIS Task Force on
Transforming Foreign Assistance for the 21st Century.

WILLIAM REESE
President and CEO of the International Youth
Foundation.

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RESTRUCTURING USAID

01:00 p.m.

MR. NNAMDI: From WAMU at American University in Washington, welcome to The Kojo Nnamdi Show.

America gives out billions of dollars of tax dollars every year that is, for foreign assistance, but many agree that the system is a mess, and needs to be streamlined. Question is how to do it. President Bush surprised many with his commitment to development assistance. Conservatives after all are not traditionally big on sending tax dollars overseas.

Under the new mantle of transformative diplomacy, the administration has outlined changes that are designed to make U.S. foreign policy more effective. Secretary of State Condoleezza Rice has moved to bring USAID, the semi-independent agency, traditionally responsible for American aid, closer into the fold of the State Department, but critics worry that the new move might be misguided.

Joining us to discuss the future of U.S. foreign aid is Carol Lancaster, Director of the Mortara Center for International Studies at Georgetown University. She was Deputy Administrator of USAID from 1993 to 1996 and has visited with us here before. Good to see you again.

MS. LANCASTER: Thanks, nice to be here.

MR. NNAMDI: Also, visiting with us again is Lael Brainard who is a Vice President at the Brookings Institution and Co-Director of the Brookings-CSIS Task Force on Transforming Foreign Assistance for the 21st Century. Lael Brainard, good to see you again.

MS. BRAINARD: Great to be here.

MR. NNAMDI: Joining us also for the first time -- however, for the first time is William Reese, President and CEO of the International Youth Foundation. He is also a Board Member of InterAction, that's an association of more than a 160 American Development nonprofits. Bill Reese, thank you for joining us.

MR. REESE: Good to be here.

MR. NNAMDI: If you have questions or comments about U.S. foreign aid, you can call us at (800) 433-8850 or send e-mail to kojo@wamu.org.

Should foreign assistance be accorded the same importance as defense and diplomacy? Now, Brainard, it used to be a relatively safe assumption. Conservatives are skeptical of international aid, nation building, and other forms of so-called soft power. Yet, under the presidency of George W. Bush, aid has reached historic levels, what happened?

MS. BRAINARD: I think two things have come together, which is partly why this is going to be such a complicated debate. 9/11 -- September 11, completely changed the urgency which National Security strategists put on this issue. So for the first time we see that we actually are involved in major reconstruction efforts. After candidate George W. Bush suggested that nation building was kind of a silly exercise for the United States.

That's one piece of it, the second piece of it is that the coalition supporting HIV/AIDS in particular has really spread across the political spectrum. And so you have a big political force driving from the development side of the spectrum, and these two trends together are overlapping to produce a huge new increase, a doubling of foreign assistance, but also a huge increase in complexity.

MR. NNAMDI: Bill Reese, over fifteen departments are involved in foreign aid. We have heard of USAID and the Millennium Challenge Corporation, but who else is involved?

MR. REESE: Well, Kojo, it may be more than 15 and the more the merrier may not be the answer. You have got almost every federal department involved with its own foreign aid program in one way or another. Department of Justice, Treasury, USDA, the Health and Human Services with the Center for Disease Control, and I could go on and on. And two of the initiatives that Lael has mentioned or referred to, the Millennium Challenge Corporation is now a new corporation, actually.

And that came out of this interesting amalgam of somewhat conservative and very liberal people who wanted to help Africa and the poorest of countries. We have got an aid czar in the State Department with, sort of, autonomous authority, and so it has, I think, made the delivery of our foreign aid much more complicated.

MR. NNAMDI: Well, a lot of people would say that that suggests that some consolidation is necessary on the face of it, you would agree?

MR. REESE: I would agree, yes. I think -- a person said the other day in a different context. He said that radical change is needed incrementally, and I liked that, because I think big change is needed. Real change comes with big ideas, but I think we know in Washington that lasting changing only really comes incrementally.

I think Rice's proposal maybe what the Goldwater-Nickels process led to in a reformation really of the Pentagon, and that is bringing together and making more sense out of many, many, well-intentioned, well-funded programs across our Government, but what we need today is more alignment, more strategy, more coordination.

MR. NNAMDI: The question is as to whether or not it should come under the State Department, Carol Lancaster, in a recent piece in the Financial Times, you compared USAID's integration at the State Department, the FEMA's integration into Homeland Security, that is indeed a provocative comparison, but what do you see as the similarity?

MS. LANCASTER: Well, I think one of the real problems of merging a small agency with its own mission and its own professionals into a larger agency, which has, on a day-to-day basis, a rather different focus, is that the small agency gets lost. It often finds its mission is undercut and pretty soon it isn't very effective and that is what happened, or part of what happened with FEMA. I think that's what would happen with USAID if it became even more closely merged into the Department of State.

MR. NNAMDI: You served during the Clinton administration and it is my understanding that a lot of reasons why the current situation seems as messy as it is, is that the Clinton administration, in effect had to, kind of, hide a lot of money in different agencies, away from the eyes of an aid-skeptical Congress, is that correct?

MS. LANCASTER: I think that's an inversion of the truth. I think that, for a lot of reasons, many different Government Departments started up their own aid programs during the 90s. One of those reasons is that the world is becoming a globalized world, and the Department of Energy can no longer simply work on domestic energy issues without including a concern for what's going on beyond our borders.

That all started as a natural reaction to an integrating world. And it was given, I think, a little more push by some of the bi-national commissions that were set up during the Clinton administration when our, let's say, our Secretary of Energy or Agriculture or Health and Human Services would go abroad with the Vice President and meet in South Africa, in Moscow, and other places with their counterparts.

And of course the conversation was always about, "How can we do something together usually to help the less well-off partner?" And that naturally got the secretaries and their departments into this business. And so I think it's a rather natural phenomenon and you can see it in other governments as well. It's perfectly evident in the German Government and in many others.

MR. NNAMDI: So you don't consider it particularly messy?

MS. LANCASTER: Well, I think it's messy, but I think it's inevitably messy. I'm not sure that anyone can put this genie back in the bottle. I think there is some -- some things that can be done to reduce the mess and -- but those are not the ones that the Secretary of State has proposed.

MR. NNAMDI: Well, Brainard, "Transformational Diplomacy," the phrase has received a great deal of hype. What does it actually mean?

MS. BRAINARD: Well, I think I would hate to be the person trying to describe it to you. I think anytime you try to put one single objective around all of the multiplicity of things our foreign aid is trying to do, you are bound to have some problems.

I think what the Secretary of State's remarks have suggested, what President Bush's remarks have suggested, is that this administration believes that stability -- U.S. stability and security in the long run is not going to be served by autocratic regimes that may be stable and cooperative in the short run, but that rather we need a thorough going democratization agenda.

But let's be serious, that is one piece of what we should try to be doing. I think we have awoken to a reality in the Middle East, which suggests it's a very complicated thing for the U.S. to try to be undertaking. And that democratization is a piece of a broader agenda that has to include basic alleviation of poverty, economic development, economic opportunity. Much as one likes the idea of a bumper sticker, because it raises a lot of support, the reality of the enterprise in the field is incredibly complex -- complicated.

MR. NNAMDI: And there are those who feel that of the three D's, diplomacy, defense, and development, development has traditionally been given short shrift.

MS. BRAINARD: Well, I think that continues in reality to be true. If you look at the actual spending amounts and you ask, "How much of that is bilateral development assistance straight up?" It's only about 10 percent of our foreign aid budget. A lot of money is focused on some of our strategic goals.

Reconstructing societies where we have got some goals that have to do really with the counterterrorism agenda, or the counter narcotics agenda. So the reality of development has been given short shrift, and I think that Carol, and maybe Bill, would agree with me, that only by elevating it and by making it a strong independent entity on its own, is it going to have the kind of stability that it needs to be successful.

MR. NNAMDI: I don't know, Bill you -- it was suggested that you might agree?

MR. REESE: Well, we have talked a long time about trying to have transformational development and that's hard enough to do. Transformational diplomacy, I'm not quite sure, exactly, what that means, but I must say, I don't want to see the democracy baby thrown out with the bath water.

It has only been the last 15 years that the development community has begun to really take seriously, the role of the State, that the State needs to be democratic if people have to have a way to participate, that the civil society is a piece of growing -- a nation and its democracy and its economy.

Back in the 60s and 70s, we didn't talk that way. Governance wasn't even mentioned, wasn't even allowed to be mentioned at the World Bank. I think we have made great progress, actually, in bringing the democracy piece into the whole development agenda, because without countries that are moving towards some sort of participatory open rule -- open participation and rule of law, you won't have the sustainable development that we all want.

MR. NNAMDI: To what extent, Carol Lancaster, is this a short-term versus long-term debate?

MS. LANCASTER: Well, I have always thought that part of the debate was a short term/long term thing. I have also worked for the State Department. And one of the things that is, I think, very much the case in the State Department is that because we are a world power and because we want to exert leadership throughout the world, we often find ourselves dealing with crises and bilateral relations, or crises in some country that's falling apart, or whatever.

That's a very short-term focus and we deal with Governments primarily in those crises. The development mission tends to be a much longer term. It takes time to help bring about beneficial change in other societies, as Lael has mentioned, it's very complex. It often involves many, many more organizations and individuals than Governments.

And so it really is, in what it tries to do, rather different from what the Department of State tries to do. And that's a reality, and that's what makes it awkward to put these two agencies too close together. They can't be separate entirely because obviously development is part of foreign policy, but there are things in foreign policy that are very different from what one does in the development field.

MR. NNAMDI: More specifically, is the fear here that long-term development projects, which involve ultimately America's credibility in the world, may be subjected to the priorities of short-term diplomatic goals.

MS. LANCASTER: I think that's well said. I think that's a fear, certainly one I share, and one shared by many other people. And there is one other thing too. The American foreign policy establishment gets a lot of blame, rightly or wrongly, for things that go wrong in the world. It makes it quite difficult sometimes for development professionals working for the U.S. Government, to do their separate thing with different groups. Sometimes groups that are among the greatest critics, the closer you put them together, the harder that becomes.

MR. NNAMDI: Carol Lancaster is Director of the Mortara Center for International Studies at Georgetown University. She was Deputy Administrator for USAID during the years 1993 to 1996. She joins us in the studio along with William Reese, President and CEO of the International Youth Foundation. He is also a board member of InterAction, that's an association of over a 160 American Development nonprofits.

And Lael Brainard is a Vice President at the Brookings Institution and Co-Director of the Brookings-CSIS and that's the Center for Strategic and International Studies -- we know, we are the acronym capital of earth -- Task Force on Transforming Foreign Assistance for the 21st Century. If you would like to join this conversation, you can call us (800) 433-8850 or send your e-mail to kojo@wamu.org. If you work in the development field, do you think this consolidation or apparent consolidation is a step in the right direction? Call us (800) 433-8850, I am Kojo Nnamdi.

(Intermission)

MR. NNAMDI: Well, we are discussing the future of U.S. foreign aid you can call us (800) 433-8850 or send e-mail to kojo@wamu.org.

Lael Brainard, Condoleezza Rice, it was reported last year, was considering scraping USAID altogether. Do you have any indication of whether she was actually seriously considering that, and is what we are seeing now, a proposal essentially to fold USAID into the State Department, do you think, ultimately?

MS. BRAINARD: I don't think this is a proposal to fold USAID into the State Department. I do think it is a transformation like, if you will. I do think there was a more bolder approach that was quietly scrapped, and this is a more modest version, but I'm hoping it's the beginning of a discussion with Congress, and I think that is really the issue. Congress has to be a piece of this; they have to own whatever changes take place, because they are so integrally involved in the aid enterprise. If they don't believe this is going to work, they are not going to support it.

The other thing, if you will just bear with me for a second, I just wanted to read you a quote. This is, "It's bureaucratically fragmented, awkward in flow. The administration of foreign aid is diffused over a haphazard and irrational structure covering at least four departments and several other agencies. It's based on a series of legislative measures and administrative procedures that were conceived at different times, many of which are now obsolete." That quote is from John F. Kennedy in a special message to Congress in 1961.

The problem is now much worse than that. We already said 15 to 18 agencies. There are about 50 -- 50, five-zero, objectives for foreign aid and the time has come for an overall, but President Kennedy was deeply, personally engaged in it with Congress and I think President Bush is going to have to do the same thing, if we are going to make a material difference here.

MR. NNAMDI: Since we are going back to the era of President Kennedy, Carol Lancaster, tell us the story of the U.S. Information Agency and what happened to that agency when it was folded into another department?

MS. LANCASTER: Yes, that decision was taken during the Clinton administration, and USIA and the Arms Control and Disarmament Agencies were folded into the State Department at that time. There was an effort to fold USAID into the State Department at the same time, but we waged a successful war to keep that from happening. I think there is a general feeling in Washington that the folding of USIA, the Information Agency into the Department of State was a disaster.

That it probably did considerable damage to our public diplomacy and our ability to implement effective public diplomacy. And it's often brought up as a -- as a serving example of what can happen when you shove a small agency with a different mission into a larger one.

MR. NNAMDI: Bill Reese, a lot of the money spent by the U.S. Government does go to nonprofits, which implement programs. How do you feel that the nonprofit community will approach the changes that we are seeing in how U.S. aid is delivered?

MR. REESE: Well, I think a lot of the NGOs or the nonprofits, the non-governmental organizations are quite worried. I will say, speaking now totally for myself, and not for some of the boards or associations that I am associated with, I think some of my colleagues are afraid of the unknown and would prefer a dysfunctional bifurcated, trifurcated, whatever you would call it, system that we have got today, than one that might bring more alignment and order.

I think we need to be looking at the goals of our foreign aid in transformational diplomacy as much as the mechanisms. And we in Washington tend to think about how to redesign the boxes, who reports to whom. And yet we need to look at what are we trying to do over a 5- or 10- or 15-year period and then align the agencies and then the outside implementers, if you will.

Because in fact USAID does contract out or grant out about $1 billion of aid a year to American nonprofits that work internationally. And those nonprofits leverage another $3 billion from the U.S. public foundations, corporations, churches, donations to leverage even more of the U.S. money that goes into that, and we have been doing that, since World War II, Kojo.

MR. NNAMDI: How much of this do you think is driven by the post 9/11 war on terrorism that is that we now have to focus our attention more on parts of the world that we weren't focusing it on before. And we therefore have to bring all of our resources to focus on those parts of the world. And if in fact we have been rendering assistance in Europe after, in the post World War II period, and rendering assistance in other places that are not right now an integral part of the war on terrorism, we need to be refocusing those resources including our foreign aid resources in a different direction.

MS. LANCASTER: I think we obviously have to pay attention to the post 9/11 world and all the threats that emanate from it. But that's not the only thing we do with our diplomacy, and we do -- or at least we say we do care about the standard of living in other countries and we all remember that they are anywhere between 1 and 2 billion people in the world who are living on just a little bit in severe poverty.

Part of what we are trying to do is relieve that poverty and it's interesting and challenging that a lot of times where that poverty is worst is not necessarily where we have the most difficult foreign policy challenges, and so that sets up a little bit of a tension and it's been there, since John F. Kennedy.

MR. NNAMDI: You got an e-mail from Doug in Bowie, Maryland, who writes, "With the election of Evo Morales in Bolivia, that country is moving to end a crop-eradication project sponsored by the U.S. Isn't the U.S. involvement in the drug war a cautionary of short-term politics trumping development issues," Lael?

MS. BRAINARD: I think there are a number of areas where we have to be realistic. We do have short-term interests, and unfortunately, they are not perfectly aligned with our longer term interests and our values. And there is a complicated debate on whether we should be putting more money against eradication or instead against alternative economic opportunities for people in countries where narcotics are the best game in town.

I will tell you that issue of short term versus long term comes front and central in the Middle East. If you look at the amount of money that we are now spending on democratization in the Middle East partnership initiative, it is 5 percent, 5 percent of total assistance that we are writing to Governments in the region as a sort of, blank check for their cooperation on counterterrorism, on Middle East peace. Those are very real goals of the U.S. Government.

And so the question is how do we square that circle. And one of the things that I think Carol is raising is if you have the same organization that has to carry on the short term and the long-term agenda they may find that they cannot actually pursue, for instance, a very tough democratization agenda with the Government that they need tomorrow to help them on counterterrorism. That's why sometimes it's useful to have a second organization that can work with the NGOs and do the democratization at the same time as our state-to-state relations are around counterterrorism.

MR. NNAMDI: We have got an e-mail from Anna in Washington, D.C. There is -- which says Secretary Rice recently acknowledged that she was surprised by Hamas' victory in Palestine. The Palestinian authority received a huge amount from the U.S. and it seems that it didn't work. How would you respond to that?

MR. REESE: Well, I think we expect too much, frankly, out of our own diplomacy and foreign aid, and we expect everything that goes wrong in the world, if we had just been sharper and more organized, the United States would have handled it, and right there is part of the problem that democracies and societies take time to develop.

This was, I believe, the third election in the occupied territories, since the PLO won its first election. I think the election results surprised the PLO themselves and Fatah certainly. It certainly has most of the pundits in all of Europe and not just the United States. So we are going to have to take some time to really figure this out. But you know, Lael and Carol have both talked about our long-term needs. And health needs, commercial and trade, environmental needs, migration issues are long-term things that cannot be solved instantly.

Those issues today are coming from, more and more, the developing world and not Western Europe, who are our traditional allies, our traditional focus. So we have an imperative to be working diplomatically and developmentally with the developing countries in the world independent of the terrorism issue.

MR. NNAMDI: Secretary Rice has noted that the U.S. has nearly as many diplomats in Germany, population 82 million, as in India, population 1 billion. She also noted that there are nearly 200 cities worldwide with over 1 million people in which the U.S. has no formal diplomatic presence, so I guess that underscores the point you were making.

MR. REESE: I think she is right. There -- you look at major businesses around the world, they have reconfigured their people and their products and their assembly lines to deal with the new world. This is a new world for us. We have only -- it started with the fall of the Berlin Wall, but it really has progressed over these last 15 years, and we are going to have to realign some of the placement of people and priorities to deal with a different world.

MR. NNAMDI: Lael Brainard, that reconfiguration in the minds of most people would be a no-brainer.

MS. BRAINARD: I think that it is a no-brainer. It is a little bit late in coming. If you look at the demographics, it's going to get more skewed, rather than less, over the next few decades. We are going to see a 40 percent increase in world population, and 86 percent of the world's population will live in developing countries. So the U.S. really does have an enormous national security interest as well as economic interest, as well as national interest and values in having a much smarter deployment of all of our resources against where that growth is coming from.

MR. NNAMDI: Carol Lancaster, how do you feel about that?

MS. LANCASTER: I think I agree for a change with Bill Reese, and of course I always agree with Lael. I do think we are going to have to be shifting some people resources, some diplomats from Europe to the many parts of the world that are of increasing importance for both economic and security reasons. I think there is going to be a challenge though, making that work, and the challenge is going to come from security threats to us.

If anyone has been to an American embassy lately, they will know what a fortress these embassies are. They are often outside of town, they look like old Tibetan monasteries practically. You can hardly find an entry way. And that is a result of the security threats to us because we are the big targets in the world. Putting more people in these embassies is fine, but it doesn't solve the problem of connecting with the local folks. And putting an American out in an office in the town with a million people makes that person an easy target. Now, I am not sure whether we are going to have the resources to do the kind of things that Secretary Rice is talking about even though they make a lot of sense.

SPEAKER: On to Joan in McLean, Virginia. Joan, you are on the air, go ahead please.

JOAN: Hi Kojo, hi Carol and Bill, this is Joan(inaudible). I worked for over 30 years in USAID and also in a jointly staffed state and the AID office handling U.N. development matters, and I -- actually when this came out I was out in Arizona and I wanted to teach in a class and I wanted to raise one concern and make one suggestion. The concern I have is that when we talk about whether USAID should be closer to the State Department or not, I think the general public can get the impression that one piece of U.S. Government doesn't want to support the other piece of the U.S. Government's foreign policy objectives, and I think, for the general public, that has to be clarified.

The suggestion is -- because I agree about the long-term, short-term objectives sometimes differing, but also with the comment that many of the issues that are long term also reside in state, including environmental, population, and migration issues. Why don't we take a look back at the Alliance for Progress when there was a combination of state and USAID personnel managing the development programs in Latin America?

The last comment I would make is that in general the technical skills that the other agencies that run development programs have, are not matched with the knowledge of development and management skills. It's that combination of skills that has to be brought together, and that lack of bringing them together creates the coordination issues. I'll just take my answer off the air. Thank you.

MR. NNAMDI: I'll start with you Lael Brainard.

MS. BRAINARD: I do think Joan made an extremely good point, and one of the big recommendations coming out of her task force report. Development and foreign assistance generally is a operational enterprise. It needs project managers, it needs people that are out in the field that know how to get things done, and so, however we have configured this thing, wherever it's put, we have to get much better, and reward really superb can-do managers, and that I think -- it cannot simply be moving the boxes around, it has to be increasing the skills that we have to actually make a difference out in the field.

MR. NNAMDI: Can the Latin American experience that our column mentioned, serve as a model for what we do in the future, Bill Reese?

MR. REESE: I would hope it would, but it's so long ago that most of us don't even remember the fact that the State Department and AID actually did work quite well together in many ways during the 60s. And I think Joan has made some important points about personnel and organization and all. It's going to take a lot of retraining, repositioning, and frankly we need first to get our priorities and our goals straight, and then assign people and functions to get it done.

We would -- Kojo, we would put -- we wouldn't try to put all our kids through the same educational system particularly once they get into school. These countries are very different, and a threshold country that is about to become a transformational economy, the type that we're trying to help with The Millennium Challenge Corporation, needs a whole different set of activities in, let's say, a fragile stage that has no government, or a country that has just gone through a horrific natural disaster, a civil war and it's in a rebuilding mode, or a country that, like Egypt or Pakistan that, as Lael has mentioned earlier, were giving them quite a bit of money for foreign policy interest and maybe doing a little bit of development while they were at it.

These countries are different. They need different strategies, and I think the end of the cold war can allow us to start to differentiate these countries and then build the support systems. Whether you merge aid or not, what we need is better coordination across this array of federal agencies so we can just be more effective. The world is expecting of us. They expect Americans to be well organized, and we are not right now.

MR. NNAMDI: Carol Lancaster.

MS. LANCASTER: Just a couple of thoughts. First of all, I would not take the Alliance of Progress as an example of any kind of success. I don't think anyone really saw it as one, in Latin America during the 1960s. The second thing is that we are really talking about; it seems to me the wrong -- the wrong idea here.

I think what the Secretary, the chance that Secretary of State missed was to consider grouping aid agencies together. We have two large aid agencies, The Millennium Challenge Corporation and USAID. It doesn't make sense for them to be separate, and it seems to me the most obvious thing to do is to combine them. There are all kinds of economies of scale and strategy and learning that could be done with these two agencies together, not putting one in another agency.

The third anecdote is this. I am probably traumatized by my years long ago as the Deputy Assistant Secretary of State in the Africa bureau. I was hired to rate the aid budget. I had a lot of stupid things to rate the aid budget for, most of which I failed in because there was a distance between the State Department and AID, and I couldn't make them do what I wanted to do.

MR. NNAMDI: Well, the new head of USAID, Randall Tobias, comes to the organization with minimum development experience; is that significant? Is it good or bad? Because the experience he does have is as a former Eli Lilly Chief Executive who now heads the administration's Global AIDS Relief Program. Is he the person to bring together the two agencies that you are talking about, the Millennium Challenge and USAID?

MS. LANCASTER: I don't know, Mr. Tobias. I have not heard anything negative about his capacities. He has headed a number of major corporations, and I think that shows a, or suggests a certain competence. What he does not bring to the table is a background in development. It's very interesting because people who are appointed Secretary of State almost always have some kind of foreign affairs background. People who are appointed Secretary of Defense almost always have some knowledge of Defense. That doesn't carry over into appointments heading development agencies, and that is one thing that I think is regretful.

MR. NNAMDI: Same question to you on Randall Tobias as the new head of the agency. What do you think?

MS. BRAINARD: Look, I think he has done a terrific job with a very, very tough mandate at the office of the Global AIDS Coordinator, it's a very complicated issue with a lot of very complicated politics, and by all accounts has managed to put together a can-do operational team even with in the confines of the State Department which is where it is located. I can't predict very much about his own, you know, sort of qualifications for the job.

I know he has the confidence of the Secretary, the President and some of the key people on the Hill, which I think is really important but I think I can predict with some certainty that he's going to find himself incredibly frustrated with this position and this title that he's been given, because the reality is that although the Secretary of State has given him all of the power that she has, in reality, by statute, he doesn't even have control over the two offices within the State Department that are more closely associated, the Conflict and Reconstruction Office, the newly created Conflict and Reconstruction Office, and the Office of the Global AIDS Coordinator, let alone the Millennium Challenge Corporation and some of the other agencies that are outside the State Department's control.

So, the reality is what you can do without legislation is very limited and he is going to find himself up against the same constraints that he doesn't have that alignment of budget, strategy, and operations that you need to be successful.

MR. NNAMDI: Well, Bill Reese, the Secretary said he will be designated as having a rank equivalent to Deputy Secretary of State; is that any more meaningful than a title?

MR. REESE: I think it's somewhat more meaningful. He will come in to AID with more power, at least theoretically, under Secretary Rice's mandate that he tried to coordinate and integrate, even though Lael is absolutely right, he does not have the statutory authority over several of these things. So, that is on the one hand sort of inside the beltway, but important political power, that he may not have.

On the other hand, I look at this way. He's run a major global company. He has worked within the State Department and knows a fair amount now and his whole mandate there was to deal with the poorest parts of Africa basically. He has seen the good, the bad, and the ugly inside. Now, he is -- they are calling him a dual-headed person. He is going to be Deputy Secretary for development inside the State Department and head of AID. I think it's fascinating. He does not have all the authorities that he will need, but what Secretary Rice has done, willingly or not, she has opened Pandora's Box. We have today, and this show, I think, is an example that we have today a public discussion about how to organize the third D, development. We know how to organize the other two D's, whether they are performing perfectly or not and we have done it for years. This third D development needs the type of consultation and debate that I think her reforms are going to kick off at best.

With all the partisanship on the Hill too and the divide between both the executive and legislative branch in between our two parties, I don't think she will get more than a third of what she wants done. But it may put these issues out there for people to discuss, so maybe the 2008 election would actually have a discussion.

MR. NNAMDI: We are going to have to take a short break, Carol Lancaster. I know you have to leave. Are there any final comments before you do?

MS. LANCASTER: Well, I would echo what Bill has said. I think it's great to put these issues out there on the table. It would have been nicer to put them out before the decisions had been made, but I guess late is better than not at all.

MR. NNAMDI: And now that they are on the table, that's why they are being discussed here. You can call us if you would like to join that discussion. (800) 433-8850. You can send e-mail to kojo@wamu.org. I am Kojo Nnamdi.

(Intermission)

MR. NNAMDI: We are discussing the future of U.S. foreign aid with Bill Reese, President and CEO of the International Youth Foundation. He is also a board member of InterAction, that's an association of some -- more than a 160 American development non profits, and Lael Brainard, who is the Vice-President at Brookings Institution and Co-Director of the Brooking-CSIS Task Force on Transforming Foreign Assistance for the 21st Century. Here is Obahl in Shepherd's Town in West Virginia. Hi Obahl, you are on the air. Go ahead please.

OBAHL: Hello, my question will have to be that I don't understand why we have to politicize when we are going to give aid, because I think that aid should be given to people that need it, not necessarily what our views on the government are. I guess I'll take my question off the air.

MR. NNAMDI: It's that simple, Bill Reese.

MR. REESE: Well, it's not that simple because if you are going to have transformational development in the countries that can do that, and that shouldn't be a short term or medium-term goal for every country in the world because we'd be setting ourselves and them up for failure. But ultimately we do have to work with governments and governments matter because the real transformational development and diplomacy will take place in countries that have a functioning government and a rule of law.

There are other parts of the world where independent of however that government is, we are getting aid into it usually through churches and NGOs because people need the aid and the government is dysfunctional, fragile, non-existent, and we have decided for humanitarian reasons that we will get aid in there a different way.

MR. NNAMDI: How about this e-mail we got from Cynthia Lael who writes, "I am an anthropologist who has worked on international development for decades, particularly related to the environment. USAID has suffered a 25 percent cut for its Environment and Natural Resources Program. This is despite the importance of this sector for democracy, governance, and conflict resolution. I fear that conservative misunderstanding of how to achieve democratic stable government will reverse the progress that has been made. A long-term perspective is essential for success and the environment provides an example of this imperative."

MS. BRAINARD: Well, I think Cynthia's question actually does go back to the earlier caller's, Obahl's question as well, and the reality is AID's budget becomes a bit of a football depending on the party that's in power and what their beliefs are about what makes for good development. But I think Cynthia's point is very hard to refute given the evidence. Resource management and the environment are critical challenges for a large number of poor nations, and the science associated, for instance, with climate change and how it might affect Island States are just some small examples of why this is so vital.

I would say more generally that AID's budget for Science, unfortunately, has been cut partly because it doesn't have a lot of political support. But if you think, for instance, on one of the biggest, or two of the biggest success stories in development, you'd have to put the Green Revolution, which was heavily dependent on basic research and development in that category, and you'd have to put immunizations in that category again, heavily dependent on science, and environment comes in that category as well. So it is an important area of foreign aid that the political winds unfortunately don't provide the right support for.

MR. NNAMDI: Back to the telephone. Here now is Paul in Takoma Park, Maryland. Hi, Paul.

PAUL: Hello Kojo. Great show. Thanks for putting this subject on the air.

MR. NNAMDI: Thank you.

PAUL: Yes, I have -- development professional for the past 20 years and have taught a course on the politics of relief aid. The issue of -- your speakers have talked about the short and the long-term interests and sometimes the slight disconnect. Well, sometimes my students have said that there is a bigger disconnect and the situation in Darfur, situation called by the Congress and the administration, a genocide, there seems to be conflict with our interest in getting information in cooperation from the Sudanese Government in the war against terror. Could your speakers please comment?

MR. NNAMDI: Bill Reese.

MR. REESE: Well, Paul, you are right on, and there's been a debate for well over 20 years on how does one define the continuum itself from relief to development, and when do we get out of the short term immediate help after a disaster to the longer term, and how do you shift gears into the longer term sustainable development. It will help build that country.

A country's ability to manage itself, of course, is one of the key elements in that. A lot of relief agencies can do their work in purely defined relief without much of a government there. You do your tent cities, your emergency aid, your vaccines, your water systems and all, but when you want to move to longer term development, that's where the -- how the state is organized, how functional it is, how well it's delivering its education and health in a non-relief way is so crucial.

MR. NNAMDI: Thank you very much for your call, Paul. Let's go on to Masood in Sterling, Virginia. Masood, you are on the air, go ahead please.

MR. MASOOD: Hi Kojo, how are you today?

MR. NNAMDI: Fine.

MR. MASOOD: Yeah, I had a comment with regard to aid provided to the foreign nations by the U.S. Government, for example, I know that U.S. Government has been providing aids to the Palestinian Government, basically, Mahmood Abbas and his party and all of that. And -- but at the same time they failed to recognize that there are other countries who are providing more money solely for political reasons to the terrorist organizations on the ground, and those terrorist organizations are using that money to build hospitals, schools, name it, to win the heart and soul of those people.

So simply aid provided to the government, who was supposed to provide some services to the people, give them work, because first, maybe it wasn't enough or maybe it wasn't managed properly. But at the end, we will see that a rogue, a rogue government like Iran will be winner at the end as a result of the Hamas' current election. Providing aid is one thing, but having intelligence on the ground and see what's really happening is another, you know?

MR. NNMADI: You raise a --

MR. ABBAS: I think it all is a failure.

MR. NNMADI: You raise a fascinating and fairly complicated question. Allow me to make it even more complicated and then we'll see if we can get it answered. Earlier this month, an official assessment drawn up by USAID on Iraq painted a significantly darker picture than the accounts offered by the White House and Pentagon, and the question we were going to ask earlier is if that kind of independence is likely to be compromised in the future.

But now that Masood had raised this other issue, it would appear that on the one hand Hamas has won an election in part because of the kind of social services that it has been providing for the Palestinians and the fact that the U.S. was apparently sending money to the Palestinian Authority to provide these kinds of services, the Palestinian Authority officials having been accused of corruption, that the aid wasn't getting there and therefore other organizations which were providing that aid were able to reap the political benefits of providing that aid. Just how does that inform our own foreign aid in general and development aid in particular? First you, Lael.

MS. BRAINARD: Well, I think it's a good question. It's a very complicated area, but there are three things that are illustrated, I think, by it. One is let's not kid ourselves that the transformational diplomacy is going to be easy. And by simply having recognized that democratization is a very important goal for long-term development and long-term relations with a country; it's great to have recognized it, but actually creating policy around it is much more complicated.

The second point that I think it illustrates is we are engaged in a competition for the hearts and minds of people on the ground in these countries. And we didn't do it very well, we didn't do it well enough, and that's probably true in a broader set of countries, and I think it is partly because the U.S. Government has a set of policies that however much money we are spending, those policies are going to affect how we will proceed. And I guess the third the thing is it also suggests we need to have channels to work with non-governmental organizations to deliver services on the ground. This cannot be a state-to-state enterprise.

MR. NNMADI: Bill Reese.

MR. REESE: Well, it's terribly complicated in Palestine, and I have been there many times and watched aid and helped get aid to both NGO and community groups as well as to the local Palestinian Government through their Ministries of Education, or Health, or Community Development et al. And Lord knows they are not going to develop their communities without having an in place infrastructure that's publicly run.

I think we just all need to take a deep breath on this. The bums were kicked out in many ways. You can look at it that way. That's certainly the way many of the pundits are saying it, that the corrupt government that wasn't delivering its services was asked to leave. We are now going to have to see how Hamas will really organize around delivering services, but also in some of the bigger international issues, and that is the whole recognition of Israel, and how it's going to live with its neighbors.

These are big issues, and I hope both our government as well as theirs can actually take this as a time to be a little bit more nuanced and look at the long-term goals. There will not be peace in Palestinian unless young people have jobs and opportunities. There won't be peace in Palestinian unless schools and health systems are functioning, so the development piece has to go on.

MR. NNMADI: And how about winning hearts and minds in Iraq? We have got this e-mail from Sarah in Alexandria, who writes, "Can you speak to the USAID presence in Iraq?" As I mentioned earlier, the USAID report differing somewhat from the pictures given by the White House and the Pentagon, but Sarah says, "Can you speak to the USAID presence in Iraq, the 11,000 projects that are funded by USAID and why Congress zeroed out their budget for fiscal year '06. Is the Congress no longer supporting a development posture in Baghdad, and if so, why?" Lael, do you know anything about that?

MS. BRAINARD: Well, I think on the Iraq front, one of the most interesting questions that we haven't really talked about yet is, in cases where the U.S. military is essentially involved, and so Iraq and Afghanistan are probably the best two cases right now.

One of the most poorly developed parts of the U.S. Government structure is, how do the civilian agencies work alongside this behemoth of the U.S. military and the truth is, I think the military is frustrated with it, I think the civilian side of the Houses are frustrated with it. The State Department Office on Conflict and Reconstruction was intended in part to stand up a more effective civilian partner for the military. But that is one of the questions that I hope the debate that has now been set off will look more seriously at, because I think our ability to make a long-term difference in those societies will depend on both sides of the House working hand in glove and very effectively together.

MR. NNMADI: Bill Reese, seems that there is going to have to be some persuading to do in the Congress.

MR. REESE: Well, I think it has to be bipartisan and both sides of -- both ends of Pennsylvania Avenue to make this work.

MR. NNMADI: And I'm afraid we are just about out of time, William Reese, thank you for joining us.

MR. REESE: Thank you.

MR. NNMADI: Bill Reese is President and CEO of the International Youth Foundation and a Board member of Interaction and Association of over a 160 American development non-profits. Lael Brainard is Vice-President of Brookings Institution and Co-Director of the Brookings CSIS Task Force on transforming foreign assistance for the 21st century. Lael Brainard, thank you for joining us.

MS. BRAINARD: Pleasure to be here.

MR. NNAMDI: The Kojo Nnamdi Show is produced by Diane Vogel, Brendan Sweeney, and Tara Boyle, and Elizabeth Weinstein. Diane Vogel is the Managing Producer. Our engineer is Margo Kelly. Dorie Anisman has been on the phone. Podcast of selected shows, real audio archives and CDs or cassettes are available at our website, kojoshow.org. I am Kojo Nnamdi.