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CGD Policy Blogs

 

Foreign Aid Remix: Yohannes and Shah Head Back to the Hill

MCC CEO Daniel Yohannes and USAID Administrator Rajiv Shah are heading back to Capitol Hill Thursday to testify together before the House Foreign Affairs Committee. I expect Yohannes and Shah will sing different parts of the same tune: the United States is prepared to do more with less as it strives to fulfill the administration’s global development vision. But it should also be a remix of their joint hearing two years ago with questions on how Congress should prioritize among US development programs. Shah and Yohannes can hit some new high notes on how their agencies are being selective with aid dollars, sharing more aid data and doing better evaluation. They should also be clear about the differences between USAID and MCC. And let’s hope the committee members can avoid the low notes from two years ago when partisan spats (including some in Latin) marred what could have been an important development policy conversation between the executive branch and Congress.

Budget Bonanza: What You Need to Know on Foreign Aid, Food Aid, and the IMF

 

Statutory deadlines and sequester disarray aside, we at last have President Obama's FY2014 budget request. It's not the grand vision that most budget requests are—instead, it's being touted (or derided) as a budget of compromise, particularly on the domestic front. Unlike a normal budget process, we already have the House and Senate budget resolutions, so this is broadly more about a longer-term fiscal agreement than about influencing specific FY14 funding numbers. 
 

A Scalpel, Not an Ax, for President’s FY14 Foreign Aid Budget

President Obama's total FY2014 international affairs budget request--$52 billion--looks a lot like what was left for international affairs in FY2013 after sequestration. But the administration uses a scalpel, not an ax, to get there in FY2014. The FY2014 budget, if approved, shifts significant resources away from Iraq, Afghanistan, Pakistan and concentrates spending on food security, global health and multilateral investments. And the big news, of course, is an overhaul of US food aid.
 

I see three signs the president’s scalpel is guided by his 2010 Presidential Policy Directive on Global Development (PPD) (and I owe a huge debt to the always-stellar USGLC budget analysis from Larry Nowels and others):

Don’t Count the IMF Out on the Hill

As expected, the president’s budget includes a request for Congress to approve US participation in the 2010 IMF quota reform agreement.  There’s a very strong case for approving the request, and I’ll simply point you herehere, and here to read it in detail.  Suffice it to say, the IMF is a bargain for US taxpayers, promoting growth and stability globally in ways that directly benefit the US economy and often working in support of US strategic interests around the world. 

The Budget Is Coming: Expectations High for Foreign Aid Reform

President Obama is set to release his FY2014 budget request tomorrow and expectations for foreign aid reform are high. At the top of the list is a widely-anticipated overhaul of US food aid that my colleague Kim Elliott says could be a bipartisan proposal that shakes up the status quo (and saves money and lives, too). Meanwhile, USAID has hinted that the budget will show some reductions in country program areas that either no longer need USAID to continue or were too small to have an impact.  The request will also matter for the MCC, which has a record number of countries eligible for compacts  but could be facing near record low funding. And I’ll be looking for signs that the budget reflects the president’s global development priorities outlined in the Presidential Policy Directive, including a focus on economic growth and results, leadership in the multilateral development banks and progress on food security. More than anything, I’m hoping the budget request shows a smarter way to rethink US foreign aid than the across-the-board sequestration cuts.

I hope you’ll help us read through the budget request tomorrow and share your views on whether it meets, exceeds or falls short of expectations.

A New Era for MCC Threshold Programs

MCC has entered a new era for its threshold program.  Honduras is set to become the first country to implement a new model of the program which is expected to help a country become compact eligible by allowing it to demonstrate its willingness to tackle tough reforms addressing policy constraints to growth in partnership with MCC.  There is potential for valuable insight from this approach, but it has some limitations: the threshold program experience may not translate directly to a future compact experience, and any insight gained will only be relevant for countries that have a shot at compact eligibility based on other criteria.