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Debts, Deficits, and Development
September 13, 2011 By Erica PincusThe debates surrounding the U.S. national debt and deficit bring with them implications for both overall U.S. development policy and the budgets of USAID and the Department of State. These implications were the focus of the Wilson Center on the Hill event that took place on August 2, “Debts, Deficits, and Development,” moderated by Wilson Center Senior Scholar John Sewell. Sewell said that Congressional action on deficit reduction could potentially reduce funding for development-related initiatives just as the U.S. government “for the first time…is taking development and the notion of development very seriously.”
After an introduction from Sewell, Gordon Adams, distinguished fellow at the Henry L. Stimson Center, began by talking about the lack of attention that international affairs and the civilian side of U.S. international engagement usually receive in the government budget. He noted the growth in personnel and funding at USAID and the Department of State over the past ten years as a success, adding that a fair amount of this growth was related to the conflicts in Iraq and Afghanistan and the global effort against terrorist organizations.
“Foreign policy, development, foreign assistance, [and] diplomacy have increasingly been viewed as a key part of a broadly defined security budget,” said Adams. The first Quadrennial Diplomacy and Development Review had the potential to restructure the Department of State and USAID in line with these goals, he said, but lacked the force to prioritize programs and allocate funds effectively.
In post-conflict environments, Adams emphasized the need to build the capacity to govern effectively, efficiently, and accountably first. “Where we fall down,” added George Ingram, co-chair of the Modernizing Foreign Assistance Network, “is in rushing too much money in right as the conflict ends for two or three years and then getting distracted by other crises from year five to ten; when the country’s built up a capacity and probably could use the assistance, our interest falls off.” In his opinion, that sequencing should be reversed.
Focus on Priorities
Adams continued to emphasize the need for goals and priorities when he addressed the topic of belt-tightening at USAID or the Department of State. According to Adams, the four categories to consider in allocating resources are: security assistance; the individual priorities of foreign assistance and development funds; conflict prevention and resolution; and better preparation and training of personnel. He lauded the military’s commitment to training its servicemen and women throughout their careers and suggested a similar program for members of the Foreign Service. To coordinate these priorities, however, a coherent U.S. development strategy (currently lacking) is essential, said Ingram.
Focusing on how the current budget environment is impacting development, Ingram said that the decade of growth in the international affairs budget for development may have just hit a brick wall. He described the FY 2012 budget as “skewed heavily toward reducing the development accounts and protecting the security accounts,” resulting in an 11 percent overall cut from 2011 levels and some development accounts being reduced by 20 or 30 percent.
Ingram noted that USAID’s overall operating expenses were cut by 27 percent from FY 2011 levels. This operating expense reduction will likely halt planned increases in USAID staff and may ultimately lead to staff cuts. The failure to build up staff at USAID will reduce its ability to manage key development programs and slow the Department of Defense’s efforts to shift responsibilities for development work to civilian hands.
Adams added that in light of shrinking resources, legislators will probably ask supporters of development about the tangible outcomes of investment in development and about the link between development and American interests, so they should be prepared with answers. Ingram cited the successes of U.S. aid over the last decades – such as the Green Revolution and oral rehydration – and noted how they benefited from a long-term perspective rather than approaching development on a project-by-project basis.
Given the tumult in the Middle East since the start of the Arab Spring, the need for expertise in governance is high, said Adams. “The problem of governance in failing, fragile, weak, brittle authoritarian states,” he said, “is a great risk to stability.”
Event Resources:Erica Pincus is an intern at the Wilson Center’s Program on America and the Global Economy.
Image Credit: “Foreign Aid Spending,” courtesy of visual.ly user maggie, published by USAID.
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