The Foreign Service Journal, March 2008

M A R C H 2 0 0 8 / F O R E I G N S E R V I C E J O U R N A L 47 In this new era, it may finally be possible to begin to empower and fund the foreign policy institutions of govern- ment so that they can bring balance to a national security establishment in which DOD dominates in resources, clout and perspectives. In other words, the F process might, for the first time, allow us to create capabilities in the civilian arena that can complement our military power. But it is not enough to make foreign assistance planning an integrated State/USAID effort. Our diplomats need to begin taking the economic and development missions seri- ously, transforming State into an agency more broadly com- mitted to our foreign relations as a whole. Until now, America’s diplomatic institutions and Con- gress have spent nearly half a century slicing and dicing our overseas engage- ment capacity into increasingly smaller and more ineffectual pieces. They did so largely because diplomats negotiat- ed, represented and reported from abroad, but shied away from program development and implementation and strategic planning back in Washington. So we gradually created a bewildering array—a diaspora, if you will —of pro- grams and agencies: the European Recovery Program, the U.S. Informa- tion Agency, USAID, the Arms Control and Disarmament Agency, and the Peace Corps, to name but a few. In addition, Treasury funds multilateral development banks and Agriculture administers food aid programs. This organizational disarray was well under way by the late 1960s, leaving many foreign policy institutions — especially State — incapable of doing strategic resource planning, pro- gram design and program implementation. Worse, their institutional cultures actively resisted engaging in such plan- ning. As a result, State came to depend on USAID and, increasingly, DOD to implement foreign assistance programs via Economic Support Funds, Foreign Military Financing and International Military Education and Training, as well as assistance targeted to Eastern Europe and the former Soviet Union. USAID, meanwhile, became a strange hybrid: a development agency with its own culture and ways of doing business, carefully defending itself from assaults by State, while acting as the implementing arm for State’s more strate- gically intentional assistance programs. Despite State’s absorption of ACDA and USIA in the late 1990s, and talk of eliminating USAID as well, the prolifera- tion of discrete aid programs continued into the 21st centu- ry. The Bush administration’s establishment of the Millenni- um Challenge Corporation in 2004 only continued the devo- lution process, setting up yet another institution carefully protected from all the others. Even the President’s Emergency Plan for AIDS Relief, though operated out of State, has kept its distance from other foreign assistance pro- grams. This design was obviously imperfect. Yet State kept inventing its own programs (counternarcotics, counterterror- ism, training for African peacekeepers, etc.) — never mind that it had neither the institutions nor skills to run them. A Long Overdue Breakthrough The founding of the Office of the Director of U.S. Foreign Assistance in 2006 drew its intellectual inheritance from a step taken more than a decade earlier: the creation of a staff-level resource planning office in Foggy Bottom. This office helped prepare the Secretary of State’s views on all of the funding spigots we have in internation- al affairs and began a process of strate- gic planning. Secretary of State Colin Powell for- malized this process, creating a Bureau for Resource Management and putting the budget planning process in the hands of his deputy, Richard Armitage. Armitage held significant budget hear- ings every year, where State and USAID budgets were examined, and the Secretary was given options and tradeoff decisions to make. The F process followed in 2006. State’s goal was ambi- tious: to integrate the budget planning of all the various for- eign assistance institutions and rewrite the basic legislation authorizing them (the Foreign Assistance Act of 1961, as amended) to provide funds for meaningful program cate- gories and strategic purposes. Congress pushed back, instructing the administration to see what could be done with existing accounts and authorities at State and USAID, using the flexibilities already available. The result was half a loaf, and only half-baked at that, but still an important first step. The new post of Director of Foreign Assistance was created and “dual-hatted” as USAID Administrator. The director pulled together a planning staff, mostly fromUSAID, where the best expertise was located. It began allocating the Fiscal Year 2007 assistance budgets and planning the FY 2008 budget — halfway through the plan- ning year when field budget requests were already in. The schedule was tight, the new process was opaque and not fully thought through, and communication with the field was poor. But there was real progress. State and USAID had a com- mon statement of goals and objectives, which provided the The F process might, for the first time, allow us to create capabilities in the civilian arena that can complement our military power.