A Sustainable Approach to Poverty Reduction: Our Common Cause

Thank you, Bishop Wenski, for that kind introduction and thank you all for welcoming me here today.

As some of you may recall, when I testified before the Senate at my confirmation hearing more than 8 months ago, I made one thing quite clear. America's commitment to feeding the world's hungry and relieving suffering has not changed in the course of our nation's history-nor should it be shortchanged today.

As I told the Foreign Relations Committee, we cannot turn our backs on the millions of children who succumb to starvation and disease each day, when the ability to address it is in our hands. We cannot turn our backs on citizens who toil under oppressive poverty, seeking their families' daily survival, but with little opportunity to secure the future. I vowed that I would do all I could to work with the men and women of the U.S. Government to strengthen both these core commitments and the human capabilities that enable their achievement. And today, I stand by that promise.

Let me assure you that the concerns raised by the Conference of Catholic Bishops and Catholic Relief Services in the Catholic Campaign Against Global Poverty are very much at the fore of my thinking. Among the goals articulated by the campaign is support for effective aid programs that foster long-term development and empowerment of the poor.

Transformational diplomacy derives from the conviction that for foreign assistance to engender lasting economic, social, and political progress, it must aim to transform institutions, economic structures, and human capacity, so that nations can sustain further economic and social progress on their own. In other words, this reform is all about putting in place a process that allows us to take a sustainable approach to poverty reduction.

The combined impact of our five objectives–to achieve peace and security, improve governance and democratic participation, promote investments in people, and engender economic growth–will be to address one key cause of poverty–the institutional incapacity that prevents many countries in the developing world from meeting the needs of their people.

For the first time in our nation's history, all U.S. foreign assistance is now being applied to the achievement of a single overarching goal–the goal Secretary Rice has articulated as transformational diplomacy: "helping to build and sustain democratic, well-governed states that will respond to the needs of their people and conduct themselves responsibly in the international system." And therefore, a fundamental purpose of this reform is, in the end, to better ensure that we are providing both the necessary tools and the right incentives for host governments to secure the conditions for their citizens to achieve their full human potential.

As this goal has become more widely communicated, some have raised concerns that the words "poverty alleviation" do not appear directly within the goal. Others have said that the goal itself sounds too focused directly on state governance, and therefore too political.

For some, the goal as stated feeds the fear that traditional development assistance is now being overtaken by foreign policy concerns–and therefore short-term goals will overtake our long-term development objectives.

I understand why people have these concerns. But I strongly disagree that these concerns are grounded in substance. In fact, in many ways, it is just the opposite. I would argue that our foreign policy is now recognizing what has been best practice in the development arena for at least a decade

Among development professionals, best practice recognizes that empowering human potential and progress in a country's development requires a paradigm that is focused on sustainability–and with that, a paradigm focused ultimately on local ownership.

The framework seeks to focus U.S. foreign assistance on those objectives that are critical to achieving the transformational diplomacy goal. The framework explicitly identifies a comprehensive and long-term approach. It recognizes that nations cannot progress without peace, security, and stability.

They cannot progress without just and democratic governance. They cannot progress without investments in the human capacity of their citizens. And they cannot progress without economic growth. When we then add humanitarian assistance, these five areas are now the objectives of U.S. foreign assistance.

Having had the opportunity to travel to Beirut recently, I have seen first hand the best practices put in place by groups like Catholic Relief Services (CRS)–one of the many courageous NGOs whose local presence made it possible for the United States to provide vital assistance in the early days of the conflict, and whose "cash for work" programs we relied on to help Lebanese communities get back on their feet quickly.

I note this example to illustrate what we are trying to achieve through the reform because CRS performs its work by engaging indigenous organizations and working to strengthen civil society. This strikes at the very heart of an approach to foreign assistance that focuses on helping to build and sustain well-functioning and accountable states that respond to the needs of their people.

As we all recognize, globalization has drastically reduced the barriers to communication with our international neighbors, allowing ideas, goods, and people to travel across borders at speeds unknown just a decade ago. The ease of proximity makes our security vulnerable to previously unheeded enemies.

The locus of national security threats has shifted to the developing world, where poverty, oppression, injustice, and indifference are exploited by our foes to provide haven for criminals and the planning of criminal acts. Foreign assistance is an effective tool for countering these new threats, and thus has become a foundational pillar of our new national security architecture.

But this does not mean that foreign assistance will be entirely security-focused. To the contrary, focusing our assistance primarily on security, to the detriment of investments in health, education, water, and other important sectors would not produce the results we are seeking with our foreign assistance.

The framework and transformational diplomacy goal acknowledge that an appropriate balance must be struck among development objectives in order to bring about lasting change in countries. Development must engender fundamental changes in governance and institutions, human capacity, and economic structure concurrently so that countries can sustain further economic and social progress on their own.

It is our objective through the reform to more accurately identify just what would be required to help a country advance developmentally. For this reason, we took a country-based approach and allocated resources according to investments that would move the country along a development trajectory.

When determining FY 2008 levels, we attempted to put resources where they would have the greatest impact. In some cases, this meant putting more resources into peace and security; in others it meant putting them into areas where there was a development gap in a key program area.

For example, if the indicator for rule of law for Angola, which is categorized as a developing country in the framework, showed that it performed lower than the average for all transforming countries, which is the next highest category of countries in the framework, the USAID and State sectoral and country experts deciding how to allocate funding for Angola might choose to invest resources in programs to improve the rule of law in order to close the gap in that area.

These country teams also considered absorptive capacity, current governance structures, and several other country conditions when determining whether investments in one particular sector or another would maximize the impact of those resources. We chose this country-based approach intentionally, in order to focus our discussions, time, and objectives, and ultimately resources, on what would help countries to advance along a development trajectory.

We strive for country change precisely because we believe so strongly that the people of the United States can and should play a role in helping people around the world strive for and achieve better livelihoods both because it is the right thing to do and because it is in our interest as a Nation to do. This core belief in human potential is the cause I believe that draws us all together.

"I am certain it is a matter of common cause among us here that the continued impoverishment of millions of people throughout the world has become one of the great sources of global instability. Those who are deprived will inevitably act to demand a better life… The simple point we are trying to make is that the dire poverty of some is not an affliction which impacts only on those who are deprived. It reverberates across the globe…impacts negatively on the whole of humanity, including those who live in conditions of comfort and plenty. The inescapable conclusion from all this must surely be that our interdependence, bringing us together into a common equation, across the oceans and the continents, demands that we all combine to launch a global offensive for development, prosperity and human survival."

These words were spoken by Nelson Mandela in 1991 at the World Economic Forum. I believe they capture the very essence of the transformational diplomacy initiative launched by the Secretary.

His conviction was that we should be supporting nations to help respond to the needs of their people and contribute productively to the international system, and that it is to our own peril not to do so. I believe that this vision is our common cause. The U.S. Government and NGO community together must use their comparative advantages to augment the sustainable impact of foreign assistance in combating poverty and making the world a safer place.

In order to make the reform work, I will need your support as you meet with your NGO colleagues and as you lobby the Hill for increases in foreign assistance. I know that Members of Congress listen to you and will consider carefully your impressions of the reform. And I know that we must earn your support by putting forward thoughtful plans to help those who need our assistance.

So rather than my continued talk, I hope that we can use the remainder of this session to discuss your thoughts about what I have shared with you today. I look forward in listening to your ideas, concerns and suggestions and we move forward toward improving foreign assistance together.

Thank you very much.