The World Bank's most successful program -- "Doing Business," which ranks countries on the ease of starting and running a formal business -- has helped spark major free market reforms in over 100 countries during its 10 years of existence. It serves as a major "strategic conversation starter" for American diplomats, makes it easier for entrepreneurs to get access to bank loans, increases the number of business start ups in developing countries, and helps governments bring companies out of the gray economy into the formal economy. But it now is in danger of being weakened, outsourced, or done away with.
So why would anyone dislike Doing Business? Countries that rank poorly compared to their geostrategic rivals (such as China, India, or Argentina) or don't believe in free markets and the private sector as the primary driver of prosperity tend to dislike the index. This has resulted in an unfortunate effort inside the World Bank to do away with the index.
Doing Business reflects a broadly American and widely accepted view about development -- that the private sector is its main driver. A small number of influential, vocal countries on the board of the World Bank such as China, Brazil and India dislike where they end up on the DB rankings. As a result, they have called on bank management to change the methodology of the report to reflect aspects that they can perform more highly on and to stop ranking countries according to the ease of doing business. In addition, several quarters are calling for the World Bank Group to give the Doing Business project to another institution.
Jim Kim became the new president in July 2012, and with his ascent, anti-reform forces within the bank's bureaucracy and on its board sensed their chance to kill, cripple, or "outsource" the index. After a messy board meeting last summer where no consensus was reached, Jim Kim punted and convened a panel to review Doing Business. That panel is expected to release a recommendation about the fate of Doing Business in May or June. This weekend the World Bank hosts its spring meetings, and Doing Business will be one of the hot topics of conversation t. For my day job, I am hosting an event on Friday morning to recognize the 10th anniversary of the report. The World Bank cancelled a large research conference last December following the 10th release of the report because of the review and the "controversy" around the index.
Doing Business ranks countries by how hard or easy it is to start a "formal' (tax-paying, bank loan-taking) business. In many countries, setting up a business "by the book" can cost tens of thousands of dollars and conceivably years of fighting red tape. But operating in an informal economy is bad for prosperity: no access to bank loans, many opportunities for bribes, and less folks paying any taxes at all. Doing Business was incubated with strong support from the Bush administration through contributions to the methodology from USAID, funding from USAID, and political support from State and Treasury. The last three World Bank presidents, especially Bob Zoellick, were strong supporters of Doing Business.
The fact that the World Bank releases an annual ranking gives Doing Business power and influence in unique ways because of the bank's pull in developing countries. Attempts to "outsource" Doing Business to an academic institution will greatly reduce the power of the index.
At a time when the Obama administration and development thought leaders speak about the importance of funding activities that are "evidence based" and "data driven," the data and facts generated by the Doing Business indicators are undeniable and powerful. The data creates the ability to compare countries and local governments across jurisdictions and have made it possible to systematically study the effects of regulations and red tape on private enterprise. Reforms empower entrepreneurs and takes power from crony capitalists.
To the administration's credit, they have supported Doing Business but could use some help from Republicans. Through Congressional action, Republicans need to weigh in with the administration (especially the Treasury Department) and with the World Bank's leadership.
This is a great bipartisan opportunity for the chairman and ranking members of the Senate and House Appropriations, Foreign Relations, and Financial Services Committees to take action to support a pro-business development agenda. Because the World Bank should be a force multiplier of American influence in the world, Republicans supported (and rightly so) the renewal of the general capital increase of the World Bank. In return for supporting the GCI, the U.S. should be expected to retain its "big seat" at the table and exercise that influence with Jim Kim and bring in allied shareholders in favor of strengthening Doing Business. Killing, crippling, or outsourcing the index to another institution is one of the worst things the World Bank could do and would be a direct rebuke to the bipartisan support that the World Bank receives.
The U.S. renewed its commitment to the World Bank through the GCI, and it is time for the World Bank to renew its commitment to a proven program that supports free markets, cuts corruption, and empowers entrepreneurs.
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While we have no doubt that Bob Schieffer, the moderator of Monday night's foreign policy debate, will have plenty of material to choose from in formulating his questions for the candidates, we couldn't resist a chance to add our own suggestions. Following are some potential questions for the debate as submitted by the Shadow Government crew:
1. Mr. President, is there any foreign policy challenge America faces that you would concede has gotten worse on your watch because of actions you have taken or not taken? In other words, is there any foreign policy problem that you would say can be blamed at least partly on you and not entirely on Republicans or President Bush?
2. Mr. President, what is the fairest criticism of your foreign policy record that you have heard from Governor Romney over the course of this campaign?
3. Mr. President, what is the most unfair criticism of Romney's foreign policy platform that you have heard your supporters levy over the course of this campaign?
4. Mr. President, why do you say that Romney is proposing defense expenditures that the military have not asked for when Romney is just proposing restoring funding to the levels you claimed were needed in your own budget a few years ago. That budget, which you asked for, reflected what the military asked for didn't it? And didn't you order the military to accept deeper cuts -- thus they can't now speak up and ask for those levels to be restored without being insubordinate, so isn't it misleading to claim that they are not asking for them when you ordered them not to?
5. For both: Both campaigns have featured senior retired military endorsements as a way of demonstrating your fitness to be commander-in-chief. Don't you worry that such endorsements drag the military into partisan politics, thus undermining public confidence in a non-partisan military institution?
1. Mr. President, history tells us that prestige matters; that is, nation-states who are regarded for their power, whether military, economic or moral, are less often challenged by those who wish to upset the peace or change the international order that favors the interests of the great powers. Has your administration seen an increase in the prestige of the United States or a decrease, and why?
2. For both: Isn't a reform of our foreign aid system and institutions long overdue, and shouldn't reform have as its primary goal the promotion of direct and tangible US interests, such as more trade with more countries that govern themselves democratically? If this is truly the appropriate goal for international development funds, then why aren't all aid recipients required to practice sustained and real democracy?
1. For both: Do you believe that the economically endangered nations of Europe should adopt policies of austerity, as countries like Germany have argued, or that they should turn instead to more fiscal stimulus? If you prefer stimulus, is there any level of debt/GDP at which you get concerned about their ability to pay those debts? If you believe these countries should borrow more, from whom should they borrow? Should the United States be offering funds?
2. For both: There has been almost no progress on global trade talks since the summer of
2008. How would you assess the health of the World Trade Organization and the
world trading system? Is this important for the United States? What would you
do to strengthen the WTO, if anything?
3. For both: In 2009, in response to the stimulus bill, a top Chinese economic official said, ""We hate you guys. Once you start issuing $1 trillion-$2 trillion... we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do...." Brazil's finance minister, Guido Mantega, has accused the United States Federal Reserve of igniting a global currency war with its policies of quantitative easing. To what extent does the United States need to consider the international ramifications of its economic policies? Do you believe a strong dollar is in the U.S. interest? If so, what does that mean?
1. For both: What do you consider the top two national security threats to our country?
2. For both: How do you see increasing energy independence for the United States affecting our foreign policy?
3. President Obama, you have threatened to veto any changes to the 2010 Budget Control Act, yet both your Secretary of Defense and the Chairman of the Joint Chiefs of Staff believe sequestration going into effect would be disastrous. How will you enact the Budget Control Act without damaging our national defense?
4. Governor Romney, you have committed to increase defense spending; where does the money come from to do that in year 1 of a Romney administration?
5. President Obama, Vice President Biden has said that your administration will withdraw U.S. forces from Afghanstan in 2014, whether or not the Afghan security forces are then capable of taking over the fight. Do you agree?
1. For both: Under what circumstances would you authorize military action against Iran's nuclear facilities? Will you intervene to stop the civil war in Syria? If so, what lessons have you learned from our recent experiences in Iraq, Afghanistan, and Libya that will shape how you undertake an intervention? How do you plan to accomplish a responsible transition to Afghan leadership for security there? What should be the mission of U.S. troops in Afghanistan after transition, and how many troops will be required to accomplish it? Or do you envision a complete withdrawal of all forces?
2. For both: Should the United States support the spread of democracy abroad? What is the role of democracy assistance in U.S. grand strategy, and how does it relate to our overall national interests? How will you respond to future peaceful uprisings like the Green Revolution or the Arab Spring?
3. For both: Some Americans are concerned that the government has accumulated too much power over the last decade in its effort to develop a robust counterterrorism capability. Others believe we need to keep those powers because the terrorist threat has not abated. Do you plan to sustain the government's new, post-9/11 war-time powers, reportedly including targeted killings and indefinite detentions, indefinitely? If not, will you publicly and explicitly commit to defining a clear end-state to the war against al Qaeda, the achievement of which will terminate the new powers?
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Governor Romney delivered a major speech at the Clinton Global Initiative on Tuesday, focusing on foreign assistance, global development, and how U.S. policy should evolve in these fields. He laid out a vision for placing development assistance squarely in the center of the nexus of trade, investment, and policy reforms. He sees the private sector and capitalism at the center of human progress (read "economic growth" for those in the business), and he also stressed the central place of institutions that support political freedom and rule of law (read "democracy and governance" for those who follow this stuff closely). He strongly endorsed 10 years of progress on public-private partnership in development -- a major factor in development since the Bush administration, adopted energetically by the Obama administration, and a central focus of the Clinton Global Initiative (so, no, he was not in favor of "privatizing foreign aid," just as no one would say that about Hillary Clinton when she talks about public-private partnerships through her Global Partnerships Initiative, as she does here).
Finally, he emphasized what serious development thinkers have been talking about but have only found limited appetite for within development bureaucracies -- a much larger focus on small and medium sized enterprises.
Governor Romney's speech is by far the most detailed speech by either of the major candidates on development in this electoral cycle and likely the most detailed speech of any candidate during the primaries in this cycle.
There has been a series of responses (including a GREAT post from my friend Paul Bonicelli yesterday and a thoughtful op-ed from Amb. Mark Green and Rob Mosbacher) to Governor Romney's speech, not surprisingly, as it outlined a bold plan for American assistance moving forward.
In sum, serious thinkers about development and America's role in it have been positive in their praise as they recognize the depth of the thinking behind this speech and know that the most serious change and advancement in U.S. development policy have happened under Republican presidents.
Governor Romney's strategy would place U.S. assistance on the cutting edge of development theory and practice. By linking greater investments in economic growth and the institutions that promote liberty with a renewed vigorous global trade agenda and pro-growth domestic policies under a Romney administration, along with the sorts of investments in assistance Gov. Romney described in his speech, we are talking about a very powerful combination of forces that are pro-development and help the United States share in that prosperity.
Development theorists and practitioners talk about "private sector led development," but when push comes to shove and the money is allocated, the temptation is always to fund pressing social service delivery projects or photogenic or politically connected causes. At the end of the budget allocation race, policy reform investments that support economic growth, and investments that support democracy and governance --the two sorts of investments that most development practitioners know matter -- often get left behind.
Finally, Governor Romney's speech recognizes the changed world that we live in and the need to change our development policy, processes, systems, and priorities to reflect this changed world. First, foreign aid can help but is dwarfed by trade, investment, remittance, and private philanthropy by foundations, individuals, church groups, and corporations. He cited the central fact that U.S. economic engagement has changed over the last 40 years with massive foreign direct investment flows going to middle, lower, and poor countries in massive amounts, the massive flows of remittances and, the massive amounts of private charity. At the same time his description of "corrupt governments" suggests a skeptical view towards various forms of budget support and an interest in aid transparency initiatives.
Another central change from the past is that the United Nations Development Program estimates domestic resource mobilization in low income countries will reach $394 billion by 2015. Compare that to global ODA of approximately $120 billion, and domestic resources are only going to get bigger over time as societies continue to move up the ladder of development. Foreign aid is a minority shareholder in the business of development already. Development practitioners can provide expertise, technical support, and strengthen the institutions that support private sector led growth and democratic governance, but ultimately over time/in due course (please note emphasis here, so no panicked misinterpretations, please) we want to be moving out of the direct social service delivery business and instead have governments themselves "pick up the tab" using domestic resources similar to the way that PEPFAR is evolving.
The global economic situation means that budget austerity is impacting foreign assistance around the world including the Netherlands, Canada, Spain, Ireland, Italy, and possibly the UK. We should assume that the 150 Account (the account in the U.S. budget where foreign aid is housed) which has until now has defied gravity is going to be examined in the light of trillion dollar deficits and $16 trillion in debt. Regardless of the overall topline number, questions about aid effectiveness and development priorities are going to be at the forefront of any U.S. development conversation under any administration just as that conversation is happening in the rest of the "DAC" (the Major League Baseball Commission equivalent for foreign aid donor) countries. Pressing humanitarian needs (such as ending polio in our time) will always be a part of the U.S. foreign assistance policy as the U.S. still stands ready to respond in situations international disaster relief, but long term foreign aid's role needs to change with the changed global context.
Governor Romney sees foreign assistance as a form of "soft power." It is clear that Governor Romney sees foreign assistance as an instrument of American power and influence and one that we should use to ensure that the 21st century is an American century.
Note: While Dan Runde co-chairs the Romney Campaign's International Assistance Working Group, the blog post above contains Mr. Runde's own opinions.
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Juan Forero's article, "Latin America's New Authoritarians," in the Washington Post on Monday is in many ways an excellent piece. It sheds light on the kinds of authoritarian regimes that have come into being in the region over the last decade or so. But in his reporting and in some of the experts he quotes, there is a use of language that shies away from calling these regimes exactly what they are: undemocratic, dictatorial, and arguably, tyrannical. In several places in the article these new regimes are contrasted with the former Latin American dictatorships (presumably of Pinochet, the Argentine junta, and others), leaving readers to draw the inference that the new forms are worrying but not as bad as the old forms. It is as though there is a form of authoritarianism that is obviously bad and must be dealt with, and then a new form that should cause us concern, but is not yet the threat or the evil that the old form was.
As an academic and former official at USAID in charge of programs that supported democrats around the world, I find this kind of talk and the implications it leaves troubling. We cannot support democracy and the brave people who seek our help if we quibble about who is and who is not "really" a dictator. While both diplomats and political scientists have to be subtle and use nuance sometimes, fundamentally we should be clear in terms of the objectives our interests compel us to work towards. So even to suggest that Hugo Chavez is somehow better than Pinochet is missing the point -- and risks giving aid and comfort to him and causing despair for his democratic opposition.
As a congressional staffer in the late 1990s when Chavez was coming to power, I agreed with a number of congressmen and staff who noted that the general attitude in the U.S. government was unrealistic when it came to who Chavez was and what he intended. We were right.
We are now in the 13th year of "Bolivarian democracy" in the form of Hugo Chavez's Venezuelan regime. Over the years, a few more have joined him (with his aid) in Latin America by creating their own modified "democracies." Correa's Ecuador, Morales's Bolivia, and Ortega's Nicaragua all count as non-democratic states in my view if we are trying to be honest about the essence of democracy. (We dodged a bullet with Lugo's Paraguay and Humala's Peru since they have proved to be too weak -- or smart -- to go full-on Chavez.) It is worth noting that this is not a region-bound phenomenon; witness Putin's "controlled democracy." Nor is it time-bound. Robespierre's French republic was not a democratic state as I understand the term when the guillotine was the state symbol and when more liberty caps than powdered wigs adorned the heads plopping into the basket. Dictators have been putting adjectives in front of their use of the term democracy to dress up their authoritarian regimes for a long time. Thank you Jean-Jacque Rousseau, among others.
But we should be clear: Such regimes as Chavez's are an offense to the idea of democracy (constitutional republicanism, if you will) and mushy linguistic constructs and semantics are an offense to the English language -- or any other language in which it is written that a regime is an "authoritarian democracy," a "people's democracy" or a "revolutionary democracy." If you have to modify it, it isn't really a democracy. In Venezuela, Ecuador, Bolivia, and Nicaragua, the citizens simply do not live under democracy. They are not living in a constitutional republic. Yes, there are constitutions, yes, there are regular elections according to codified rules (most of the time). But much intervenes that is intimidating, repressive, and sometimes violent, so much so that the meaning of democracy is voided.
Here is a listing of the sins against democracy that occur in each of these states (as is the case in Russia, it is worth noting):
Intimidation of voters by using technology to nullify the secret ballot and to tie a person's vote to her employment.
Intimidation of the press by blackmail, repressive regulation, forced bankruptcy, and unfair prosecution.
Intimidation of business people by forcing them to serve the state's interests or lose their enterprises, thus putting the economic well-being of many citizens solely in the hands of the regime.
Manipulation of electoral law and use of the state's purse to provide the regime with a compliant legislature.
And finally, what might well be the worst tactic of all, intimidation of judges and the judicial branch. Democracy is not simply about people being allowed to vote, which is why I earlier referred to constitutional republicanism. It is about individuals being treated as citizens who live under law, not the rule of men. For that to occur, the law must be inviolate and the judges must be free to make impartial rulings without having to prefer the regime's interests. When the judges are intimidated into compliance, or simply removed and replaced with party hacks, the safeguard of democracy is gone, and I would argue, so is democracy in all but name.
Those oppressed by the forgoing means number in the hundreds of thousands, if not millions. So what if in some cases they aren't poor? They are citizens, and they deserve all the rights provided in a democracy.
Just because there are currently few or no desaparecidos or violent suppressions in South America does not mean there is no dictatorship à la Pinochet or the Argentine junta. Just because Chavez or Morales have killed fewer people when suppressing protests than the authoritarians of the 70's and 80's did does not mean they are not running a dictatorship. Just because Ortega has not assassinated opposition figures or declared martial law does not mean he has not just as effectively silenced his opposition. He gets no laurels for having forced them to withdraw from politics -- or to Miami.
As a political scientist, I can appreciate the need to be as descriptive as possible and to define terms with granularity. As one who was formerly responsible for supporting U.S. diplomacy as a development official, I can appreciate that sometimes nuanced language in formal settings is appropriate. But U.S. policymakers (and the Europeans and a growing number of other countries) don't have the luxury of being academic about their work if they expect to clearly articulate that our interests include a world with more real democracies and prospering free peoples. Mr. Feroro is right to point out that the U.S. and the Brazilians, to name two, could do more regarding the new authoritarians. But no one who purports to promote democracy and to support democrats around the world should kid himself: If policy is founded on a muddled view of what democracy is and isn't, then democracy and democrats around the world will suffer. Let us settle at the outset that democracy means real freedom, not pretended freedom, and craft our policy that way.
The Senate version of the foreign assistance bill is taking shape, and it is commendable for being both sound and a broadly bipartisan approach, even though it signals the death knell of the Obama administration's commitment to "smart power." The Subcommittee on Foreign Operations yesterday approved $52 billion in foreign assistance, only 2 percent less than this year's spending. That is an amazing commitment to help other countries and shape the international order, given that the United States will have to borrow $20.8 billion of that money.
Predictably, the Senate is reducing aid to Pakistan. While still providing $1 billion in aid to Pakistan, the bill would reduce that aid by 58 percent. Pakistan itself provoked the hardening opposition: Its extortionate demand for upwards of $3,000 customs charge on every truck carrying NATO supplies into Afghanistan was the driving factor in shaping Congressional attitudes. Previous to the suspension that has been in place the past six months, the cost to us was $200. The U.S. may very well end up paying in customs fees what it previously gave in foreign assistance, but perhaps not: Supply routes have been substantially diversified. We may simply end up paying Pakistan's neighbors.
The Obama administration also bears not inconsiderable responsibility for the cuts to Pakistan. Soldiers joke that we haven't fought a ten year war in Afghanistan, but ten one year wars because the approach kept shifting. The same is true with Obama administration "strategy" toward Pakistan. President Obama came into office having campaigned on conducting unilateral military attacks inside Pakistan, setting a confrontational tone; then adopted a "strategic dialogue" approach of $5 billion in annual assistance to Pakistan in order to reassure them; suspended in 2011 military aid to Pakistan; then made the aid conditional on Pakistan's full support in our war effort. Now the Obama administration cannot even get the Pakistani suspension of transit rights lifted by including Pakistani President Zardari in the NATO summit festivities. Relations with Pakistan have never been worse. Given that Pakistan is essential to achieving our war aims, this would seem to refute National Security Advisor Tom Donilon's claim that the Obama administration repaired America's relations with America's allies.
Iraq also came in for reductions in aid, a whopping 77 percent, the largest cut enacted in the bill. The Senate understandably eliminated funding for the ill-conceived and clownishly executed State Department police training program. So much for what Secretary Clinton termed "the largest civilian program since the Marshall Plan." For those who wonder why enormous swathes of civilian activity have migrated into the Pentagon, State's incapacity to develop an executable program for capitalizing on the military's gains in Iraq should explain it.
And for all the administration's grandstanding at the NATO summit about our long-term commitment to Afghanistan, the Senate would reduce assistance there by 28 percent, equating the administration's draw-down in military forces with a draw-down in civilian activity. Needless to say, civilian spending should increase to cushion the transition as military forces withdraw. But having bungled both the largest civilian program since the Marshall Plan and the "civilian surge" in Afghanistan, the Department of State and USAID are in no position to persuade the Congress. Not that they have tried, incidentally. It is incredibly disheartening to compare the silence of State/AID in defending their budget to the roar of DOD claxons the past six months in conditioning Congressional attitudes about cuts to defense spending.
In one final grace note, the Senate bill would reduce aid to Egypt by the $5 million required to buy the freedom of U.S. citizens that were to have been put on trial in Egypt for promoting democratic change. As Senator Graham put it, "we got our money back."
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Yesterday, Josh Rogin highlighted testimony given by Peter Lavoy, acting Assistant Secretary of Defense for Asia and Pacific Security Affairs before the House Armed Services Committee about U.S. plans to not move forward with the 240,000 tons of North Korean food aid it had promised during recent meetings in Beijing. This decision was made as a result of North Korea's plans to launch a satellite into space, violating the moratorium they recently agreed to.
I have said previously that linking a U.S. humanitarian assistance program to the resumption of six party talks is a bad precedent. This type of action will lead many to believe that this would be a U.S. attempt to bribe the North Koreans to the table by taking advantage of a dire humanitarian situation.
Reports by U.S. non-governmental organizations working in North Korea are again saying that North Korean people are suffering from a severe shortfall in food supplies. This is not a new scenario for North Korea. The regime has continually struggled to feed its people since the famine of the mid 1990s, when over one million people lost their lives.
What is more shocking is the effect the many years of living on less than 1,700 calories a day have had on the general population. I saw this first-hand in a Pyongyang park in 2008 where some elderly people were quietly harvesting grass so they could supplement a meal. Today, a North Korean child can expect to be up to 7 inches shorter than his/her South Korean counterpart and 20 pounds lighter by adulthood.
Those in the NGO community with access to remote areas of the country have confirmed many in North Korea suffer from malnutrition and infection. In many cases, people outside of the capital are on the brink of fatal starvation.
Recently, five U.S. non-governmental aid agencies urged the U.S. government not to delay the provision of food aid, stating that "delay or potential cancellation of this program would violate humanitarian principles which hold that lifesaving assistance should not be used to achieve political aims." I couldn't agree more.
These five organizations have been working in North Korea for years, have first hand knowledge of the situation in-country, and have proved their ability to work alongside the World Food Programme to assure food assistance reached those most in need.
Where is Special Envoy Robert King in this scenario?
Why has the administration allowed the Department of Defense to announce food assistance has been halted?
It was Special Envoy King and a senior representative from USAID who were responsible for negotiating the resumption of food assistance during the March meetings.
It begs the question -- who is in charge of U.S. humanitarian policy in North Korea and what is the Obama administration's overall strategy?
Until a coherent strategy is articulated, questions will continue to be asked about the philosophical and practical origins of this administration's approach to humanitarian assistance and the need for North Korea to halt its nuclear agenda. These are, and should remain, separate issues.
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Last Thursday's 90-minute debate in South Carolina was the first time Republican candidates vying for the 2012 Presidential nomination focused specifically on foreign-policy and national security. It is of course true that Americans are more interested in issues that face them domestically; with unemployment still above 9 percent, an economy that is still sluggish, and a consensus that we are in for a slow recovery, how could they not be? But it is also true that the next president will be drawn into issues that affect us globally -- the uncertain outcome of the Arab Spring, weak democracies in Latin America, and development issues in Africa.
I was surprised that several candidates suggested that, each year, our foreign assistance budget start at "zero." Really?
The only candidate to respond in a way that I found realistic was Huntsman, who blasted his colleagues with "sound-bite" campaigning. I couldn't agree more.
During my time in the Bush administration, we stressed the importance of foreign assistance and the fundamental role it plays in laying the foundations for democracy, the rule of law, economic development, health interventions, building bridges, and promoting the ideals of freedom and liberty.
Here are several key quotes from President Bush's introduction to the 2006 National Security Strategy:
America now faces a choice between the path of fear and the path of confidence. The path of fear - isolationism and protectionism, retreat and retrenchment - appeals to those who find our challenges too great and fail to see our opportunities. Yet history teaches that every time American leaders have taken this path, the challenges have only increased and the missed opportunities have left future generations less secure.
This is still true today. The presumptive leader of the United States needs to demonstrate his or her understanding that our country must continue to lead on the world stage. It is important that we as a nation (and our elected leaders) turn not to isolationism, even in rhetoric, but convey how we will continue to deal with global security and development challenges.
The path we have chosen is consistent with the great tradition of American foreign policy. Like the policies of Harry Truman and Ronald Reagan, our approach is idealistic about our national goals, and realistic about the means to achieve them.
The introduction goes on to say that the United States should also continue to promote economic prosperity around the world and to support vibrant democracies.
How is this done?
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Imagine the chairman of the Joint Chiefs of Staff testifying that if defense funding were reduced, seven hundred thousand people in Libya would die, and tens of millions elsewhere in the world. It would be considered fear-mongering of the most repulsive kind. In fact, it would be considered a threat to the integrity of our civilian-led military to attempt such a blackmail of the Congress.
But that's exactly the approach USAID Director Rajiv Shah took last week testifying before the House Appropriations State and Foreign Operations subcommittee. He said that if proposed reductions to USAID's budget go into effect 70,000 children will die. He added that he considered that a very conservative estimate, and that among other effects, another 800,000 recipients of our international disaster assistance in Darfur would be at risk.
Shah testified that 30,000 deaths would come specifically from scaling back anti-malaria programs, 24,000 from lack of immunization, and 18,000 lack of skilled attendants at births. All this from cutting 16 percent of the Obama administration's international affairs budget request.
Hard to say which is more offensive, Shah threatening Congress will have blood on its hands unless it continues to fund USAID programs, or the bureaucratic and cultural mindset that considers increased spending the only solution to a multivariate problem.
USAID was created as an entity separate from the State Department (and military assistance) in 1961, in order to remove from development assistance the taint of being provided in order to advance America's interests. USAID's official history rather unselfconsciously states that "It was thought that to renew support for foreign assistance at existing or higher levels, to address the widely known shortcomings of the previous assistance structure, and to achieve a new mandate for assistance to developing countries, the entire program had to be 'new.'"
The whiff of sanctimony pervades USAID still, which is part of why it is so unpopular on Capitol Hill, where elected representatives often find unpersuasive that the spending of their constituents money abroad should have no connection to our national interests.
Providing money through the Agency for International Development is by no means the only -- or even the most effective -- way to alleviate disease and poverty in the world. Case in point: funding for AID was dramatically cut in the 1990s, and yet that decade saw nearly a billion people lifted out of poverty by actual economic development. USAID's funding has been increased by 150 percent in the past decade -- most of that coming with the advocacy of a Republican president and his secretaries of state.
There are many ways USAID could compensate for reduced government spending:
In fact, USAID's Quadrennial Diplomacy and Development Review champions all these approaches. USAID just doesn't practice them.
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There are reports coming out of North Korea again that they are suffering from a severe shortfall in food supplies. North Korean emissaries have gone on a multi-national tour asking foreign governments to resume food assistance programs to feed their malnourished population.
This is not a new scenario for North Korea. The regime has continually struggled to feed its people since the famine of the mid 1990s when over one million lost their lives.
What is more shocking is the effect the many years of living on less than 1,700 calories a day have had on the general population. I saw this first hand in a Pyongyang park in 2008 where some elderly people were quietly harvesting grass so they could supplement a meal. Those in the NGO community with access to remote areas of the country have confirmed many in North Korea suffer from malnutrition and infection. In many cases, people outside of the capital are on the brink of starvation.
Today, a North Korean child can expect to be up to 7 inches shorter than his/her South Korean counterpart and 20 pounds lighter by adulthood.
A recent Washington Post article stated that the North Korean request has "put the United States and other Western countries in the uncomfortable position of having to decide whether to ignore the pleas of a starving country or pump food into a corrupt distribution system that often gives food to those who need it least."
Not if the policy makers in Washington use the agreement reached in 2008, which remedied past problems of the regime diverting humanitarian food shipments to the military or for black market revenues.
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Secretary of Defense Gates is right. It would be a tragic irony if, having come this far in Iraq, the United States faltered and failed to fund adequately the next phase of the mission. Even with adequate funding, the mission will be hard enough.
Congress is right to take a hard look at the Iraq situation. The security needs in Iraq exceed anything the U.S. State Department ever has dealt with in the past. The current plan, which will shift the burden almost entirely from the Department of Defense to State, is distinctly inferior to the original plan, which envisioned a renegotiation of the Status of Forces agreement to allow a modest U.S. military presence as a stabilizing factor. The administration fumbled the original plan and while Gates hints at the possibility of reviving it at the eleventh hour, it may be too late. The current plan relying on the U.S. State Department to do more than it ever has done before is a barely satisfactory Plan B. But it is manifestly superior to Plan C, which involves walking away from Iraq entirely and hoping for the best. I believe once Congress has looked at and thought about the situation carefully, it must conclude that funding the State Department plan is the only responsible course of action available at this point.
I understand the frustration of people who believe the Iraq war was a mistake from the start, but I do not understand their desire to compound what they believe to be one error with strategic blunders of comparable proportions: abandoning Iraq or failing to provide the resources necessary to keep Iraq on a successful trajectory.
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For an administration that claims there is no conflict between our interests and our values, the Obama administration has sure seemed to have a difficult time balancing U.S. interests in a stable Egypt with the U.S. values of a democratic Egypt.
The administration is in a legitimately tough position deciding how much support to continue giving an authoritarian government that has proved useful to us. But as the protests have worn on, the president, like Secretary Clinton, hit a better balance, calling on the Mubarak government to set in motion a transition to free elections. Vice President Biden was characteristically maladroit, claiming Mubarak was not a dictator and explaining that all the Egyptian protesters were seeking was "a little more opportunity." The Pentagon was characteristically calm and forward leaning, reaching out to the Egyptian defense establishment -- which is indistinguishable from the Egyptian government at its highest levels -- to urge professionalism and restraint.
The Egyptian military has already delivered on the only important near-term military request the United States is likely to make: not using force against the protesters. How might democratization in Egypt affect U.S.-Egyptian military cooperation? Short of an Iranian-style Islamic government overtly hostile to the United States, Mubarak's departure is unlikely to affect military cooperation with the United States. The United States does not actually rely on the Egyptian military for much militarily, and most of that which the United States does is very much in their interests to continue. But it could affect Egyptian-Israeli cooperation, with enormous consequences for the United States.
For military purposes, the United States relies on the Egyptian government in three main ways: 1) acting as a transit for U.S. military forces, 2) preventing Egypt from becoming a base for terrorist activity that would affect the United States, and 3) protecting Israel.
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Foreign aid is once again under fire. Every so often a few politicians -- usually Republicans -- get up in arms about our government's gift of large amounts of money to other countries. Equally often, media stories appear detailing how ineffective aid supposedly is. The picture emerges that foreign aid is unnecessary, ineffective, and wasteful.
For example, the Republican Study Committee (RSC) released a proposal last week to cut the budget for the U.S. Agency for International Development (USAID) by $1.39 billion as part of a broader package of deficit-reduction proposals. (Hat tip to our friends at The Cable for their post on the subject.) There were similar rumblings after the Republican takeover in 1994. Republicans seem to have an inborn suspicion -- usually dormant, but one that fitfully flares up once per decade -- that aid is just a handout from rich countries to poor ones to help the former ease their consciences.
Or take the lengthy Wall Street Journal story last week that declares, "A massive U.S. aid program that has made Pakistan the world's second-largest recipient of American economic and development assistance is facing serious challenges, people involved in the effort say. The ambitious civilian-aid program is intended in part to bolster support for the U.S. in the volatile and strategically vital nation. But a host of problems on the ground are hampering the initiative." Despite billions of aid, the United States remains unpopular in Pakistan; thus, the article implies, aid is ineffective.
These criticisms of foreign aid rest on faulty notions of what aid is and what it is supposed to accomplish. There are two views of aid reflected here, neither of which are helpful.
I propose a third view of foreign aid.
The advantage of this view is that it is realistic. The United States can actually do this. The U.S. is not trying to change people's heart or minds, contrary to the bribery view. It is only trying to change their capacity. Additionally, this view helps the U.S. prioritize which countries should get aid, and what kind, contrary to the charity view. Giving billions to Tuvalu would be a commendable act of charity for the Salvation Army, but it would be folly for USAID because Tuvalu is not a strategic priority for the United States.
(I am not arguing that we should never be charitable. Rather, every possible foreign aid program is an act of charity. Charity by itself cannot help us decide which charitable programs to undertake. The United States either has to flip a coin to allocate our charity randomly, or consult our own interests to allocate it strategically.)
The Marshall Plan is a good model. The United States gave something like $25 billion (in today's dollars) per year to Western Europe after World War II. It was undoubtedly an act of charity. The money helped the Europeans rebuild their economies and saved tens of millions of people from poverty or even starvation. But it was also a strategic investment. Policymakers at the time worried about a return of the Great Depression following demobilization and the Marshall Plan helped Europe become a strong trading partner for the United States. Most importantly, U.S. officials feared the rise of Soviet power and hoped the Plan would bolster European governments' stability and prevent the spread of communism.
This view of foreign aid would help protect it from the kind of cuts the congressional Republicans are proposing. Aid is hard power. It is a weapon the United States uses to strengthen allies and, thus, ourselves. But this view would also help save it from the kind of limitless, grandiose visions Democrats sometimes seem to have for it. This is the sort of view that I hoped Secretary of State Clinton would incorporate in the recent Quadrennial Diplomacy and Development Review. But despite the document's many strengths it did not seem to offer a framework for prioritizing among the Unites States' many foreign aid opportunities.
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Well, that was awkward. The world's leading economic authorities just gathered in Washington for a weekend session of policy glowering. Heading into the regular fall meeting of the World Bank and International Monetary Fund, there was some hope that some constructive, multilateral dialogue could defuse tensions and calm talk of currency wars. It was not to be.
What happened? The United States went into the meetings pushing for multilateral solutions, in particular an enhanced role for the IMF. In a speech at the Brookings Institution last week, Treasury Secretary Tim Geithner addressed the issue of global misalignments:
This problem exposes once again the need for an effective multilateral mechanism to encourage economies running current account surpluses to abandon export-oriented policies, let their currencies appreciate, and strengthen domestic demand.
He noted that this was part of the long-standing mission of the IMF, then went on to argue that the world's powers had already agreed to address these issues:
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The administration has decided that promoting economic development around the world is essential. Foreign assistance is a crucial part of how the United States relates to the developing world and plays a critical role in U.S. national security policy. To date, however, U.S. programs have not been as effective as they ought to have been. Aid flows through too many channels and there is poor overall coordination among the relevant agencies scattered through the government. It is time for this to change.
The preceding paragraph was pretty easy to write, since those were key themes of Secretary of State Condoleezza Rice in 2006. The paragraph works equally well this week, as the Obama administration unveils its own approaches. I'm well-versed in the earlier version, since I had the privilege of working on those issues as a member of her policy planning staff. After an extensive review of foreign assistance programs and countless intra- and interagency discussions about how the sprawling aid apparatus might be improved, Secretary Rice implemented a series of reforms, most prominently featuring tighter integration between the U.S. Agency for International Development (USAID) and the State Department.
Skip forward four years. After not one, but two extensive and concurrent reviews, the Obama administration is poised to tackle the same problems. It is doing so in the context of a United Nations discussion of the (limited) progress that has been made toward the Millennium Development Goals. Herewith, some places to look for potential changes.
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The policy debate over whether to press autocratic yet "friendly" regimes on democracy and human rights is often cast as "values versus interests" or "realism versus idealism," but in the case of Egypt it is better framed as the trade-off between short-term and longer-term interests (or even medium-term, considering President Hosni Mubarak's age of 81 and his regime's brittleness). For a dwindling time longer, Mubarak might continue to offer a degree of stability and be a sometimes reliable partner on regional peace and security issues. But his remaining time in office is finite, and there are positive ferments for reform brewing in Egypt that are in the strategic interest of the United States to support. In a sign of the times, even Mohammed El-Baradei, frequently nettlesome in his former role as head of the IAEA, has emerged in the unlikely reincarnation as one of Mubarak's most energetic electoral challengers.
Jackson Diehl points out as much in his excellent column urging the Obama administration to seize the democracy agenda in Egypt as a strategic opportunity in a troubled region. And he is right. But the Obama administration seems to see this as more of an annoyance than an opportunity, at least judging by its damaging cuts imposed over the past year on U.S. democracy funding in Egypt. Besides whacking the budget from $45 million to $20 million, perhaps even more damaging was the Administration's imposition of new regulations prohibiting any USAID funding going to groups not approved by the Egyptian Government -- which happen to be precisely the same groups that are the most potent reformers and that most need the funding.
While the concern is sometimes raised that visible US funding for reformers risks "tainting" them, the fact remains that the democracy funding was only given to Egyptians who applied for it aware of and willing to assume any risks. And several groups and individuals -- such as Safwat Girgis, Ahmed Samih, Radio Horytna, and the Egyptian Center for Human Rights -- have been willing to appeal publicly for U.S. funding and support in the wake of the budget cuts. Even more important than the funding itself can be the display of American moral support for democracy activists, which can increase their sphere of protection and alert autocratic regimes of the heightened diplomatic cost to any repression.
This is linked to economic reform as well. The Egyptian state monopolizes not only political life but also too much of the economy, and even though its economic growth rates have accelerated in recent years they have not kept pace with a burgeoning population. The Mubarak regime's autocratic constraints on political and economic liberty have atrophied what could otherwise be a vibrant middle class and civil society. Instead, Egypt remains mired in a negative cycle in which lack of economic opportunity leaves large numbers of un- or under-employed citizens (especially young men), who in turn have few outlets for constructive political expression -- hence in part the persistent appeal of the Muslim Brotherhood. Despite a rich intellectual and cultural history, abundant natural resources, and strategic location, Egypt continues to chronically under-perform in most political and economic development metrics. For example, in the Legatum Prosperity Index, Egypt ranks in the global bottom third on economic fundamentals, and among the world's lowest on democratic institutions, governance, personal freedom, and even social capital -- the last factor indicating that Egyptian citizens distrust not only their government but also each other.
What to do? The Obama administration should at a minimum pursue a three-part strategy. First, restore -- better yet, increase -- funding for beleaguered democracy and human rights activists, and do not let the Egyptian government decide who receives the grants. Second, as Jay Hallen argues here, transform economic development programs so that funding helps support urban Egyptian entrepreneurs and access to capital for growing small and medium size enterprises. Third, senior U.S. officials -- especially President Obama and Secretary Clinton -- should consistently and publicly support the principles of religious freedom, freedom of expression, freedom of assembly, and open electoral competition in Egypt.
Implementing these points by no means precludes also working constructively with Mubarak, who still is Egypt's leader and can sometimes be a helpful ally. But the current "Mubarak-only" policy is short-sighted and ineffective. Moreover, it is a policy of Mubarak's own devising -- as he has squelched liberal political dissenters and presented himself as the essential strongman who is the only alternative to Islamic extremists -- and not a policy in the American interest.
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Shadow Government is a blog about U.S. foreign policy under the Obama administration, written by experienced policy makers from the loyal opposition and curated by Peter D. Feaver and William Inboden.