Leadership Vacancy Raises Fears About USAID's Future

By Mary Beth Sheridan
Washington Post Staff Writer
Wednesday, August 5, 2009

NAIROBI, Aug. 4 -- As Secretary of State Hillary Rodham Clinton begins a seven-country African trip with a visit to Kenya, the main U.S. foreign aid agency is in limbo, entering its seventh month without a permanent director despite pledges by the Obama administration to expand development assistance and improve its effectiveness in poor countries.

Clinton has backed the use of "smart power" -- employing a full range of economic, military, political and development tools in U.S. foreign policy -- but many aid experts are questioning whether the U.S. Agency for International Development could lose clout under her plans. While Clinton has championed additional personnel for USAID, aid groups worry that the once-autonomous agency could be swallowed up in the State Department, with long-term development goals losing out to short-term political aims.

"Both President Obama and Secretary Clinton have said how important development is. Increasingly, it's a painful contrast between their rhetoric and the reality of having no leadership" at USAID, said Carol Lancaster, interim dean of the Walsh School of Foreign Service at Georgetown University, who served as deputy administrator of the aid agency under President Bill Clinton.

The Obama administration inherited a foreign aid system starved of civilian experts and burdened by a bewildering array of mandates. USAID's full-time staff shrank by 40 percent over the past two decades, but the assistance it oversees doubled, to $13.2 billion in 2008. The agency has a skeleton crew of technical experts, with four engineers for the entire world, Clinton noted recently. Increasingly, USAID has become a conduit for money flowing to contractors, who have limited supervision from the agency.

As USAID has weakened, foreign assistance programs have proliferated across government agencies, especially the military, causing duplication and confusion. Meanwhile, aid budgets have been saddled with presidential directives, "buy America" provisions and congressional earmarks that raise the cost of aid and reduce its effectiveness, development specialists say.

"In the USAID budget, every dollar has three purposes: help build an Air Force base, support the University of Mississippi, get some country to vote our way," said the Rev. David Beckmann, president of the aid group Bread for the World, describing the plethora of political claims attached to aid. The development program, he said, "is a mess."

The waste of billions of U.S. reconstruction dollars in Iraq and the growing role of development in the U.S. strategy in Afghanistan have given new urgency to long-running debates about reforming the aid system.

During his presidential campaign, Obama promised to double overall U.S. foreign assistance to $50 billion and build a "modern development agency." His campaign literature said that "no single person . . . (is) responsible for directing and managing what should be one of our most powerful foreign policy tools."

While development groups and experts have welcomed Obama's boosting of the assistance budget, many are "very, very disappointed" with the lack of progress in reforming the aid system, said Brian Atwood, who headed USAID in the 1990s. The frustration of USAID employees bubbled up at a town hall meeting at the agency that Clinton held last month.

"When will we be getting political leadership in our agency?" an employee asked Clinton. "And I think we'd also like to hear from you why it's taking so long. I think you know we're very concerned about this."

Obama administration officials say the lack of a USAID leader does not indicate a lack of attention to development. The administration has requested in next year's budget 350 new positions for the agency, which currently has a full-time staff of 2,200.

In the next few weeks, the White House plans to bring together the roughly two dozen government agencies involved in assistance in an effort to shape development policy, a senior administration official said, speaking on the condition of anonymity to discuss internal deliberations.

And during the recent Group of Eight summit in Italy, Obama secured pledges totaling $20 billion for food and agricultural aid for the world's poorest countries.

"It's a landmark initiative. It happened during the first six months of this administration, working with the existing USAID leadership," said Mike Froman, the deputy national security adviser for international economic affairs, referring to career staff members.

Many aid organizations endorse Obama's campaign idea of a single point of contact for development programs. Before the election, a coalition of prominent experts called for the creation of a Cabinet-level department to coordinate development, as many other Western countries have. Two of them, Mike McFaul and Gayle Smith, went on to key jobs on Obama's National Security Council staff.

But Clinton, who has a deep interest in development, has moved to keep USAID inside the State Department. She recently launched a quadrennial review, modeled after the Pentagon's strategic-planning exercise, to draw up a blueprint for more closely integrating diplomacy and development.

With no permanent USAID leader in place, however, some development experts are concerned that the agency has little say in the blueprint. Fears of being absorbed into the State Department run deep at USAID, which lost control of its budget and its policy office under President George W. Bush's administration.

"AID and State are like oil and water," said Andrew Natsios, a USAID administrator under Bush. He and two other former directors of the agency wrote an article last fall in Foreign Affairs saying that the "semimerger of USAID and the State Department has not worked." They cited differences in missions, personnel systems and timelines, with development workers focused on longer-term goals and diplomats on shorter-term political crises.

"State doesn't realize it, but the more they absorb AID, the more dysfunctional it [AID] will become," Natsios said.

He and another development expert, who spoke on the condition of anonymity, said the uncertainty over the fate of USAID within the State Department had discouraged some candidates from pursuing the agency's top job.

At the town hall meeting last month, Clinton said, without giving details, that the position had "been offered." But she said some qualified individuals were so put off by the arduous White House vetting process that they dropped out. "The clearance and vetting process is a nightmare. And it takes far longer than any of us would want to see," she said. "It is frustrating beyond words."

Several development experts said the top candidate in recent weeks appeared to be Paul Farmer, a charismatic doctor who has built hospitals for the poor in Haiti, Rwanda and other countries.

Senior State officials say the concerns about USAID being swallowed up by their department are overblown. Greater integration of diplomacy and development will give the aid mission more importance, not less, they said.

"This is not about subverting development to diplomatic ends," said Anne-Marie Slaughter, the State Department's director of policy planning. Instead, she said, Clinton sees development as central to solving political problems such as those surrounding Iraq, Sudan or global epidemics. "Those issues can't be addressed without a really strong development component, because they have to be bottom-up. You can't negotiate a treaty and think that's going to stop a global epidemic," Slaughter said.

Atwood, who led USAID under President Clinton, said Hillary Clinton was a major ally when she was first lady, working behind the scenes to help the agency's top officials.

"That's why I have so much confidence in her doing the right thing at USAID," he said. But without a director, he said, "she's had her hands tied behind her back."

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