RESULTS.org > Take Action > Global Monthly Action Archive > December 2008: Ask your member of Congress to lead on foreign aid reform

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December 2008: Ask your member of Congress to lead on foreign aid reform

The Secretary of State may provide any person or body with development assistance if he is satisfied that the provision of the assistance is likely to contribute to a reduction in poverty.

— International Development Act of 2002 (United Kingdom)

Official development assistance may be provided only if the competent minister is of the opinion that it (a) contributes to poverty reduction; (b) takes into account the perspectives of the poor; and (c) is consistent with international human rights standards.

— Official Development Assistance Accountability Act of 2008 (Canada)

United States foreign aid currently serves a variety of disparate and often competing commercial, political, moral, and security interests. While defense and diplomacy are critical foreign policy tools, development — the third “D” — should be focused on the end of poverty. While an overwhelming majority of Americans support funding to help people in poor countries meet their basic needs,[1] poverty reduction is not the focus of our foreign assistance program. A review of U.S. foreign assistance by the Organization for Economic Cooperation and Development concluded: “The U.S. is the largest aid donor in absolute terms, as well as a highly respected contributor to thinking on poverty in the international arena. . . . However, it does not have a clear policy on poverty reduction.”[2]

Other donor countries, including Canada and the United Kingdom (see above), have reformed their international aid programs by enacting laws that clearly define poverty reduction as the purpose of foreign aid. The U.S. will have a similar opportunity for reform in 2009 with a new administration and members of Congress eager to address this issue. Representative Howard Berman (D-CA), the chairman of the House Committee on Foreign Affairs, has stated his intent to rewrite the Foreign Assistance Act of 1961, the body of law governing foreign aid programs. In a committee hearing on foreign aid reform, Rep. Berman stated, “I strongly believe that America’s foreign assistance program is not in need of some minor changes, but, rather, it needs to be reinvented and retooled in order to respond to the significant challenges our country and the world faces in the twenty-first century.”

While new foreign aid legislation is likely to be introduced in the new Congress, real reform, focused on poverty reduction, will require real leadership. Ask your representative to write personally to chairman Berman and ranking member Ileana Ros-Lehtinen (R-FL) of the Foreign Affairs Committee urging them to focus reform on poverty reduction.

 

Ask Your Representative to Write to the Foreign Affairs Committee Leadership

Introduce yourself as a RESULTS volunteer and a constituent. Acknowledge and thank your representative for actions he/she has already taken to support our work. This is also a great request to make during an in-person meeting with your member of Congress. We have tips on setting up a meeting with your representative during the congressional recess.

Dear Representative ____________:

U.S. foreign assistance is falling alarmingly short of its principal challenge: the alleviation of poverty. I am writing to ask for your leadership in reforming foreign aid in the interest of the world’s poorest citizens.

Much of our foreign aid is not directed to the countries and people who need it most. By clarifying that fighting poverty is the purpose of foreign aid, we can realign our assistance in support of the Millennium Development Goals and invest in the capacity of people to help themselves, which will help to create a more just and stable world.

Please express your personal support by writing to the leadership of the House Foreign Affairs Committee and urge them to make poverty reduction the clear focus of their foreign aid reform efforts.

Sincerely,

 

Sample Letter to Chairman Berman and Ranking Member Ros-Lehtinen

Dear Representative Berman/Representative Ros-Lehtinen:

I am writing in support of the Foreign Affairs Committee’s commitment to substantively reform foreign aid. This effort will require the commitment and cooperation of Congress and a new presidential administration. I support your efforts to build the political will to ensure that we do not miss this transformative opportunity.

The U.S. has an opportunity for bolder, more effective leadership in the fight against poverty. This will require not only a substantial overhaul of current structures, but absolute clarity of purpose. I believe that the principal challenge of U.S. foreign assistance is the alleviation of poverty, and efforts to overhaul our system should be guided by that understanding.

Elevating the priority of global development requires a foreign aid system that:

  • Maintains clear focus on reducing poverty by directing aid to the poorest countries;
  • Maximizes the impact and local ownership of foreign assistance by addressing the inefficiency and costs of tied aid and utilizes effective, multilateral mechanisms;
  • Requires accountability for specific measurable outcomes, with regular and required tracking and evaluation;
  • Provides a level of foreign aid that reflects a clear priority to achieve the Millennium Development Goals.

I am grateful for your commitment to reform foreign assistance and revise the Foreign Assistance Act of 1961, and stand ready to work with you to reform foreign aid to fight global poverty.

Sincerely,

[Your Member of Congress]

What Does “Poverty-Focused” Aid Look Like?

Poverty-focused aid goes to the poorest countries. Because poverty reduction is not the guiding principle of the U.S. foreign assistance program, aid is often not directed to the poorest countries. Many of the top recipients of U.S. foreign aid are selected for commercial, political, and security reasons unrelated to poverty. The U.S. directs just 29 percent of its development assistance to the least developed and low-income countries.[3] On average, other major donor countries give over half of their aid to the poorest countries. Since 2003, the UK has maintained a policy of directing 90 percent of its aid to low income countries.[4] Foreign aid reform should establish country need as a clear criterion for assistance.

Poverty-focused aid is untied. With a few exceptions, U.S. foreign aid is “tied.” This means that goods procured with foreign aid funds must be purchased from U.S. suppliers, and services — such as the training of teachers or health care workers — must be provided by U.S. firms. While this practice supports a domestic constituency, it fails to fully invest in local capacity and is often grossly inefficient. U.S. food assistance is among the most egregious examples of tied aid. The requirement that 75 percent of food aid be carried on U.S. ships may add an additional 50–75 percent to delivery costs, and 65 cents of every dollar is spent on overhead costs.[5]

Poverty-focused aid is more multilateral. Current U.S. law requires that foreign assistance programs be clearly identified overseas as American aid, and USAID has extensive rules and regulations for marking projects as “from the American people.” While effective aid can help soften the U.S. image abroad, sometimes getting credit is at odds with getting results. Multilateral aid — funding given in cooperation with other contributing countries — allows for better coordination, and reduces the burden on recipient countries of managing funds from multiple donors. The U.S. can also leverage its multilateral spending to encourage contributions from other donors. Unfortunately, while other donor countries give about 28 percent of their aid through multilateral channels (like the Global Fund to Fight AIDS, Tuberculosis and Malaria), the U.S. gives far less — as low as 8 percent in 2005.[6]

Poverty-focused aid provides our fair share. While the U.S. is the largest international aid donor in absolute terms, it is not the leading donor relative to the size of its economy. The U.S. gives just 0.16 percent of its national income to development assistance, well below the international target of 0.7 percent, and last among major donor countries.[7] A serious commitment to achieving the Millennium Development Goals will require a scale-up in aid dollars.

 

[1] Chicago Council on Foreign Relations. Worldviews 2002. September 2002. http://www.worldviews.org/detailreports/usreport/index.htm

[2] OECD. The United Status Development Assistance Committee Peer Review. 2006. http://www.oecd.org/dataoecd/61/57/37885999.pdf

[3] OECD.

[4] DFID. Public Service Agreement 2003–2006. July 2002. http://www.dfid.gov.uk/pubs/files/publicserviceagreement03-06.pdf

[5] GAO. Various Challenges Impede the Efficiency and Effectiveness of U.S. Food Aid. April 2007. http://www.gao.gov/new.items/d07560.pdf

[6] OECD.

[7] OECD.