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This is a joint post with Wren Elhai

Last week, USAID Administrator Raj Shah returned from his first trip to Pakistan since he took office at the beginning of the year. His trip followed close on the heels of last month’s high-level U.S.-Pakistan strategic dialogue in Washington, and was intended to signal that the optimistic words of the strategic dialogue will translate into concrete action. Transcripts of Shah’s press conferences for reporters in Pakistan and in Washington contain helpful information on the direction that the administration is taking in its development strategy in Pakistan. At the very least, it’s the first time we’ve heard Administrator Shah speak at any length about the details of U.S. aid programs to the country.

The two briefings included plenty of the expected, along with a few unexpected points of emphasis.  On the one hand, Shah reiterated the priorities for Pakistan that Ambassador Holbrooke, Secretary Clinton and other U.S. officials have emphasized repeatedly.  These include:

  1. A major shift in focus of U.S. aid to signature, “transformative,” large-scale investments in Pakistan’s energy, agriculture and water sectors. Administrator Shah concluded his briefing in Pakistan with this summation: “We came here to say, ‘How should we expend these increased resources?’, and we heard, ‘Focus on energy, on water, on agriculture, in addition to some of the other social sectors where you’ve been big,’ and that’s what we intend to do.”  Earlier in that press conference, Shah further elaborated on this strategy:

    Part of what we hope to do, instead of focusing on relatively small, discreet projects – build a school here, build a health clinic here, help a community improve a small watershed that serves one or two villages – we’re shifting to focusing on more significant infrastructure investments… Those are the types of things that frankly can have a lot more impact against the aggregate outcome indicator than doing a series of relatively small and discreet projects.

    Note that the administration has already put its money where its mouth is.  In its FY 2011 budget request to Congress, infrastructure spending swells from $50 million in the base 2010 budget to over $400 million for 2011.

  2. An emphasis on partnership with the Government of Pakistan and building Pakistan’s long-term institutional capacity.  Shah predicted a significant rise over the next few years in the percent of U.S assistance channeled through Pakistani institutions.  He noted the administration’s long-term focus: “Instead of taking whatever resources we have and doing projects over a one-year timeframe and then redoing them the following year, we want to work in shared partnership with Pakistani leaders to define ten-year strategies.”
  3. A special focus on aid to areas affected by conflict. Shah explained that he heard “the need to work urgently and aggressively in some of the contested areas in FATA [the Federally Administered Tribal Agencies] and Swat where the Pakistani military has been engaged in an active operation.” Here, again, Shah emphasized the need to make investments in a “long-term economic vision” for the region. Shah noted that economic activities in the FATA and Swat regions, including agriculture, natural resources and mining opportunities could be transformative.

Administrator Shah’s additional remarks offered some revealing, new glimpses.  Among the surprising highlights were the following:

Image: USAID-Pakistan

  1. Say it again: accountability, monitoring and transparency. Shah repeated the words “accountability,” “transparency” and “monitoring” throughout his statements.  In recent months, Ambassador Holbrooke’s emphasis on channeling more U.S. aid through Pakistani public institutions has received a lot of attention.  Administrator Shah’s comments struck a slightly different tone: even when speaking about U.S. efforts to build Pakistani institutional capacity, Shah was quick to point out that the administration is, at the same time, stressing proper oversight and monitoring to ensure taxpayers dollars are spent well.  He highlighted work done with the FATA Secretariat to set up a financial disbursement mechanism to enable the United States to track its resources and report to Congress.
  2. Track development outcomes, not just dollars. Encouragingly, in his statements on monitoring and accountability, Shah emphasized the need to measure outcomes of development programs, beyond what he called, “just tracking the dollars.” He spoke about monitoring key measures of improved wellbeing in the agriculture, education, and health sectors: learning and educational attainment, for instance, and immunization rates and skilled birth attendance.  “To me, those are very important indicators and outcome indicators that let you know if, far from just tracking how the money flows, you’re making people’s lives better,” Shah said. “Ultimately that’s what we really care about, that impact for families.”  He even described ways in which new information technologies such as SMS text messages might make measuring those outcomes easier—and make USAID more accountable to the recipients of American aid.
  3. FATA: still a challenge for monitoring and implementation. A GAO report released on April 15th details the gaps in U.S. efforts to effectively plan, implement and monitor programs in the FATA region. Asked about the report, Shah acknowledged the challenge of effective oversight in FATA and emphasized the danger posed to USAID and Pakistani employees working in the region. He noted that USAID has slowed disbursements when it lacked faith in the monitoring and disbursement systems, and suggested that using new technologies and partnering with Pakistani military to provide security to monitoring teams might be possible solutions.
  4. Education: invest in higher education and build on other donors’ success in basic education. Shah pointed to the work of the UK’s DFID and the World Bank in education and said the administration will “work in closer partnership with them and with the Government of Pakistan.”  He alluded to the World Bank’s education reform program in Punjab, suggesting that the U.S. would find areas where it could be “uniquely helpful” in supplementing what’s already being done. Shah also spoke enthusiastically about the legacy of decades of U.S. investments in Pakistan’s universities, sharing a story of a visit to a university math and science building built years ago with U.S. aid. “Students that go there all see the plaque when they walk in…and the way they talk about the value of U.S. assistance is really deep and powerful,” Shah said.

We are very pleased to see Administrator Shah’s emphasis on transparency, on tracking development outcomes achieved by U.S.-funded programs, and in long-term (even ten year!) planning with the Government of Pakistan.  We encourage him to consider the recommendations issued last month by CGD President Nancy Birdsall in an open letter to Ambassador Holbrooke for enhancing the effectiveness of U.S. aid to Pakistan.  Two recommendations are particularly relevant: to emphasize greater transparency of the U.S. program, USAID could consider creating a public website (similar to recovery.gov or even the Millennium Challenge Corporation site), which would provide ongoing and detailed reporting on the plans, commitments, and disbursements of U.S. aid resources.  And as the United States collaborates with the Government of Pakistan on a longer-term strategy for the U.S. aid resources, we encourage the administration to define with the Government of Pakistan a limited set of key development outcomes for the next five years, and hoped-for annual progress against them.

We are also pleased to see the caution and prudence expressed by Administrator Shah with respect to the insecure FATA region.  As evidenced by the sobering news in the new GAO report on the U.S. aid program there, FATA is an extremely difficult region for the United States to spend a large volume of money well.  Stay tuned this week for a second open letter from Nancy, containing recommendations for U.S. development policy and investments in the FATA region.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.