USAID Releases Major Development Study on "Foreign Aid In the National Interest"
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2003-002
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January 7, 2003 at 10:30 am
Contact: USAID Press Office
WASHINGTON, D.C. - The U.S. Agency for International Development (USAID) today issued a major report to inform and focus international development assistance - looking back over five decades of work and looking ahead to future challenges: "Foreign Aid in the National Interest: Promoting Freedom, Security, and Opportunity." The report, commissioned by USAID Administrator Andrew S. Natsios, draws on the best minds of development, democracy and governance to address the critical development challenges facing the world in the next ten to twenty years and beyond.
50 Years of Development Gains
Written primarily by leading development experts and academics outside the agency, the report reconfirms the critical link between national security and foreign assistance. This reflects the commitment of President Bush and Secretary Powell to improve people's lives and reduce poverty in the developing world. As stated in the recently released National Security Strategy, "[t]he aim of this strategy is to help make the world not just safer but better."
The report notes considerable progress in the developing world over the past fifty years, documenting tremendous progress to alleviate human suffering, in particular, reducing infant mortality, increasing literacy, increasing life expectancy, and reducing hunger. The most impressive achievements include:
- The number of deaths among children under 5 is half of what it was in developing countries 20 years ago.
- Developing countries now have an infant mortality rate of 69 for every 1,000 births versus 178 in 1950. Today's infant mortality rate in the developing world is equivilent to the rate in industrial countries in 1950.
- In 1951, 40 percent of people in industrial countries had a secondary education. Today 50 percent of people in developing countries do.
- Per capita caloric intake in developing countries has risen from approximately 2,000 calories a day in 1960 to 2,500 calories today.
The Challenges Ahead
The report lays out the scope and nature of the expected development challenges in the next ten to 20 years and the changes in development assistance required to meet them.
"This report will provide policymakers, development professionals and international affairs experts with new thinking and fresh analysis. It suggests innovative approaches to tackling the problems of our time," noted USAID Administrator Natsios.
The themes that emerge from the report that are especially important to the future of development are:
- Governance Counts - Without transparent, democratic and accountable governance, economic growth and environmental stewardship, to name but a few, cannot be sustained. Foreign aid programs must help developing countries make permanent gains in the rule of law, the protection of human rights and the establishment of a civil society that can constrain the abuses of government.
- The Key to Development - Economic Growth. Economic growth is essential to improving the lives of the poor. Without economic growth, families cannot sustain or increase their income, and tax revenues are insufficient to provide the levels of education and health care currently subsidized by foreign assistance. The only way to ensure this is through high rates of economic growth over long periods of time. Essential to this is sustainable agriculture, thus warranting investments to raise agricultural productivity.
- Microeconomic Reforms Matter - Development assistance in recent years has focused on macroeconomic reform and conditionality. The report suggests that microeconomic reform is the missing link that can create businesses competitive enough to pursue regional and international trading opportunities. Development efforts should support the emergence of an entrepreneurial class, reduce the time it takes to start a business, and fight corruption, so that countries can attract investment.
- Improving Health Care - When it comes to health, developing countries fall into two groups. In the poorest countries people continue to suffer disproportionately from infectious diseases of global concern, including HIV/AIDS, tuberculosis, malaria, and infant diarrhea. Improvements in health in more prosperous developing countries mean that non-communicable diseases that come with age will pose an increasing challenge to countries with aging populations, and new health systems need to be developed and financed to cope with them. Family-based care, preventative health care and quality assurance--approaches familiar in the United States--may have applicability in countries with changing demographics.
- Humanitarian Assistance and Conflict Mitigation - The report lays out in stark terms the growing number of complex manmade and natural disasters. It reminds readers that "all aid is political" -- including humanitarian assistance, and calls on foreign donors to consider foreign aid's impact on conflict when implementing programs. Recommendations to redefine the nature of humanitarian assistance include efforts to improve standards and accountability, improve protection for relief workers, strike a balance among political, military, and humanitarian strategies, and address the links between disasters and development efforts.
- Private foreign aid - Only 20 percent of U.S. funds going to the developing world is official development assistance. Linking U.S. foreign assistance to private initiatives is essential to future success. This includes
partnering with U.S. foundations, corporations, universities, and private voluntary organizations, all of which play critical roles in promoting economic growth and development.
The full report and an executive summary can be found on USAID's web site, www.usaid.gov.
The U.S. Agency for International Development has provided economic and humanitarian assistance worldwide for more than 40 years.
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