Foreign Aid in Crisis

U.S. foreign aid to help more than 100 countries grow their economies and fight poverty has failed in many cases because of a nit-picking insistence by Congress and the State Department that aid officials measure the short-term success and failures of assistance, a former senior aid official said Wednesday.

"Everyone wants quarterly indicators" but development "takes a long time," said Andrew Natsios, former head of the U.S. Agency for International Development (USAID).

Speaking to a gathering of current and former aid officials, experts and contractors, Natsios said that the current system of inspector generals in every branch of government places an emphasis on instant gratification and leaves little chance for improvements to take root and grow.

For example, USAID helped found a system of universities in India in the 1960s but the system was plagued in early years by corruption and cronyism. Had the inspector general system -- Natsios calls it the "counter bureaucracy" -- been in effect then, Congress would have ordered AID to pull the plug on the new universities.

However, when the high-tech boom swept the world and India in particular since the 1990s, it took shape inside those same universities, which took several decades to develop academic and scientific credibility and expertise.

"We'd have been forced to shut it down," Natsios said in his talk at the Center for Strategic and International Studies. But today these schools are at the heart of India's economic growth.

While some monitoring and evaluation is needed to be sure foreign aid projects are appropriate and effective, "who is in charge of the regulators? -- no one" said Natsios, currently a professor at the Bush School of Government and Public Service at Texas A&M University.

"I think they are out of control."

Since 2000, U.S. foreign aid has run from $10 billion to $20 billion a year on average with spikes reaching nearly $30 billion in some years due to major nation-building efforts in Afghanistan and Iraq that have wound down as U.S. troops pulled out.

Politicians have long attacked foreign aid as a waste of money and said the resources are needed back in the USA. So Congress has been eager to impose strict monitoring and evaluation systems led by inspector generals appointed from outside the agency to be able to assure voters the money is not being wasted.

In the second George W. Bush administration, just as Natsios was leaving his post after six years as USAID Administrator, the USAID budget authority was taken away from the agency and given to the State Department. That move was bitterly criticized by aid officials fearing that aid decisions would be based on political expediency rather than humanitarian need.

Aid officials -- confession here, I worked as senior writer for USAID from 2003 to 2010 -- said aid budget decisions should be made not by diplomats but by development experts with years of experience fighting poverty, disease, hunger and underdevelopment.

These aid officials feared aid decisions would be made by ambassadors and diplomats seeing to curry favor with local governments rather than attack poverty. Natsios said that equally disastrous for aid effectiveness would be to dump projects before they get a chance to take root in developing countries. He cited a study that indicated it may take 20 years after a program ended to see the results in terms of reducing poverty and improving education levels.

Natsios, who served as a special U.S. envoy to Sudan as well as a senior official with the humanitarian agency World Vision, proposed some significant changes in U.S. foreign aid:

-- Assign foreign service officers to spend eight years in a country - not the one to three year assignments now common. -- Decentralize budget authority so that mission directors overseas can spend money on useful projects without taking a year or more to get approval from the State Department in Washington.. -- All U.S. foreign aid should go through USAID and not be splintered through State, Defense, Justice, Agriculture and other U.S. offices that have foreign aid programs. -- AID should be able to shut down projects that are not working well.

"The system is coming apart," said Natsios. AID no longer does infrastructure projects such as the roads, dams, bridges and airports it has left as a legacy in so many countries.

U.S. foreign aid should not just be what America wants them to have but should be what each country says it wants, said the former official.