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Remarks by Chairman Jim Kolbe (AZ), House Appropriations Subcommittee on Foreign Operations to USAID Mission Directors Conference

October 09, 2003

Good morning. It is great to be here to have a chance to see many of you again, and to meet other mission directors. I want to thank Administrator Natsios for the opportunity to be here today.

As some of you know, we have 13 subcommittees on the Appropriations Committee. I serve as chairman of the most interesting one known as "the Subcommittee on Foreign Operations, Export Financing and Related Programs." It is exciting and a challenge to chair this subcommittee because it has such a breadth of responsibility that covers nearly every foreign policy issue.

The subcommittee is made up of a very bipartisan group of fifteen members. I work very closely with Mrs. Nita Lowey from New York, the ranking minority member. We have a small and talented professional staff led by Charlie Flickner, who has been working in foreign policy and international affairs on the hill for some 30 years.

I want to leave time this morning for questions, so let me briefly cover four things:

1. Status report on the next year's budget (regular and supplemental)
2. HIV/AIDs Programs
3. Three trends in foreign assistance
4. And finally, the importance of management improvements at the agency.

First, let me tell you where we are in the appropriation process this year. Budget reformers used to suggest that Congress should improve the appropriations process by producing a bill spanning two fiscal years. Well, in recent years, the problem has been to try to get it all in one year, much less two.

It seems as though we are constantly dealing with regular appropriation bills and supplemental appropriation bills.

We passed our Foreign Operations bill for 2003 as part of an omnibus bill in February of this year. Two months later, in April, we were back with an emergency war supplemental. Then, three months thereafter we worked to get the regular fiscal year 2004 Foreign Operations bill through the House. We have been waiting for our Senate colleagues to take action ever since, and will likely have to go to conference with a Senate bill that has never been debated on the floor.

In the meantime, the President submitted a new Iraq and Afghanistan supplemental requesting some $21.3 billion -- under my subcommittee's jurisdiction. It's a little odd to supplement 2004 before we have a budget to supplement! But so be it. We are considering the Iraq/Afghanistan package in committee just two hours from now. So, this will mark the fourth Foreign Operations appropriations bill we will have considered this year.

My best guess - certainly my hope -- is that Congress will adjourn by Thanksgiving and both this supplemental bill and our regular 2004 bill will be sent to the President for signature.

Now, let me share with you a few comments on HIV/AIDs. I note on your schedule that this is a topic of major discussion for your sessions yesterday and today. I hope your meeting with Ambassador Tobias went well. He leaves for Africa soon, and many of you will have an opportunity first hand both to show him the scope of the problem and the programs you manage to fight this pandemic.

I consider the fight against HIV/AIDS to be the most important health care issue facing the world - and with the exception of the war on terrorism, our most important national security issue. No other issue presents a greater challenge to improved standards of living in much of the developing world. No other issue does more to feed hopelessness and despair. No other issue more exposes chronic underinvestment in the health systems of entire countries. No other issue threatens the social and political stability of whole continents as does AIDS.

You can be proud of the role of USAID in leading this fight for the United States. The Foreign Operations Subcommittee dedicated money to fight HIV/AIDs first in 1987. But USAID began its HIV/AIDS program a year before that. Since then, your agency has dedicated more than $3 billion to this fight.

HIV/AIDS is not the only health issue facing the developing world. Our increased attention and assistance to fight this disease must not come at the cost of attention to other devastating diseases, such as malaria and tuberculosis. Indeed, we know that a successful program to combat TB can extend by a decade or more the life expectancy of those suffering from AIDS. The initial President's request for FY 04 dramatically reduced funding for these other diseases, for maternal and child health, and for other health accounts for USAID. The House mark restores them to last year's levels, and I will keep a sharp eye out for cuts in the future.

Let me tell you about 3 trends in the foreign assistance area.

1. Greater Specialization & Coordination
2. Greater Accountability & Transparency
3. Greater Reliance On Economic Growth & Trade To Achieve Development Goals

Because of the urgency of responding to the HIV/AIDS pandemic and the development of the Monterrey Consensus, we are seeing trends and needs for greater specialization and coordination in development. An example of this can be seen in the way President Bush and Secretary Powell spearheaded negotiations for the creation of the Global Fund. It is an organization specialized - or focused -- on the eradication of 3 diseases: HIV/AIDS, TB, and malaria.

Its key components are local ownership, and coordination of public, private, and civil society players. Because its resources will dwarf the programs of most bilateral programs, MDBs, and multilateral organizations, international donor coordination is an absolute "must." I realize that the performance of country-coordinating mechanisms of the Global Fund - the key group for developing a nation's action plan -- have varied greatly by country. However, this type of cooperative approach must continue, and you can help to make it better. All of you need to play an active role in monitoring, measuring, and improving the performance of CCMs.

In January, the President also committed the United States to spending an additional $10 billion over 5 years to fight AIDS. I strongly support this program, and will be one of the staunchest advocates of reaching the total $15 billion over 5 years. Spending billions of dollars quickly -- yet efficiently and transparently -- will take a whole new way of doing business. Coordination among US Government and other international agencies will be paramount.

For those countries where the pandemic is raging or on the verge of exploding, the planning and implementation of health related strategic objectives of USAID will receive the oversight and direction of the Special Coordinator on HIV/AIDS. Overall, your agency will have to adjust to working in a team environment where new organizations are lending expertise to the process of delivering assistance.

That does not mean that USAID will be relegated to a minor role in the President's plan. However, it does mean that you will have greater scrutiny from policy makers in Washington who have the direct ear of the President. More and more, your operational autonomy will have to be proven and earned.

Each of you, with your experienced staffs and extensive knowledge of the on-the-ground realities in your countries, will be instrumental in ensuring funds are used wisely and are coordinated with other programs and agencies. One contribution you can make from the start is to facilitate communication among key players, starting with Ambassador Tobias.

Another example of specialization is the creation of the Millennium Challenge Account. While Congress is still wrestling with its authorization, I think one of the lessons or outcomes of this debate is the realization that bureaucratic specialization is a necessity. In essence, no one agency or entity in our foreign policy process can address the spectrum of development objectives, national security needs, or diverse in-country environments in which the US government must operate as a global power.

A second trend relates to accountability and transparency. In many ways this trend is most exemplified by the Monterrey Consensus. In this document there is an implicit and explicit understanding that developed countries will provide new resources for development if developing countries agree to improve performance in key areas such as the quality of governance and commitment to rooting out corruption. The President's proposal for the MCA reflects the US commitment and approach to implementation of this consensus. Other examples of this trend include the creation and operations of GAVI - the Global Alliance for Vaccines & Immunization -- as well as the Global Fund.

New stakeholders are being introduced to ensure greater accountability of these funding organizations. As examples of public private partnerships, both GAVI and the Global Fund include NGO's or stakeholders unrelated to any government donor, government recipient, or quasi-governmental entity. These new stakeholders - who are voting members on their boards -- are demanding results and more transparency in the development process.

The third trend is really more of a hope or vision than a clear trend. It relates to the important realization in development that we will have to rely more on economic growth to achieve our development objectives. Achieving the Millennium Development Goals is not about an incremental $50 billion in donor resources in the form of budget support as the Europeans or the World Bank might suggest.

Rather, it is about using whatever new resources we can muster to incentivize an environment for private enterprise, good governance, and integration into the global economy. Once the world gets its development agenda positively focused on economic growth and trade, I am convinced development can take off in a dramatic fashion.

Along these lines, I have been a strong supporter of trade capacity building. I am such an advocate because I am convinced that trade can be a lever to reduce poverty and help countries generate the resources they need to spend on education and health care.

Globalization is here to stay. We need to help developing countries manage it and leverage it to their benefit. Trade capacity building can be an important way to build sovereign authority to manage that integration better.

Let me turn to my last topic.

All of you here are mission directors. Each of you knows the importance of having in place the systems, processes, and personnel so you can lead your mission. You have no less than four sessions on topics related to management today. Someone certainly thinks it matters.

For you, out in the field, good management touches every aspect of your operations. In my world of policy making, I see it impact our country's ability to respond to each and every foreign policy challenge. For us both, it has a direct impact on our ability to generate confidence in USAID's mission.

Here are a few facts.

• Personnel: nearly 60% of the US direct hire foreign service personnel will be eligible for retirement in 2005.
• Financial management: we don't have or can't operate an integrated system that connects on a worldwide basis and supports day to day operations.
• Procurement: we lack the means to systematically evaluate ourselves in terms of efficiency or competitiveness.

These challenges are not new. But I will tell you that complacency about them could have dire consequences for USAID's future, and importantly, my ability to help this agency. Negative perceptions of the agency, antiquated systems, and massive retirements make it urgent that we find meaningful management solutions that will address the problems head on.

Unless we overcome these obstacles today, we -- as a country -- will not be able to meet tomorrow's foreign policy challenges. The reason is simple. The negative perceptions of USAID's effectiveness - real or fictional, -- will work against us.

Administrations - current or in the future - will find means to take new resources coming on line and put them in other places, not USAID. The existing resources provided to USAID will be questioned. Over time, the agency will lose its policy voice.

Now, it is imperative that we avoid this outcome. I don't believe there is a substitute for USAID in the federal government. It is a critical asset that must be increasingly utilized - not allowed to atrophy. However, I will tell you that no amount of public relations work, no amount of congressional testimony, no amount of agency championing by various constituencies is going to change that outcome if we do not fix the management of the agency.

In order to do so, we will have to secure changes in agency operations that bring about greater transparency, efficiency, and a stronger sense of accountability. We need dramatic improvements - in financial management, procurement, performance measurement, and human resources. This could create a framework to renew congressional and other stakeholder confidence in the agency. Without greater transparency in each of these dimensions, policy makers and stake holders will continue to be frustrated. Thickets of prose in congressional budget justification, wonderful reports by contractors, and ad hoc data calls will not substitute for systematic changes that fundamentally and positively alter the transparency between Washington and your mission.

When I assumed the chairmanship of the Foreign Operations Subcommittee, one of my top priorities became helping the agency meet management challenges. I think our subcommittee has helped these past three years. Through the various spending bills, I have inserted a variety of provisions:

• Specific language has been added to allow the agency to use program money for new direct hires.
• General language has been provided to empower the USAID to charge O&E to the State Department when USAID implements ESF programs on their behalf.
• To address the issue of new and secure facilities, I have tried to make sure that the agency can assess reasonable costs to other agencies when they use USAID buildings.

In the field, these changes and the discussion of management improvements may seem to be little more than paperwork and not much substance. But it is not window dressing. So please, heed my message: we cannot afford to take this as business as usual.

All of you have serious, difficult jobs. You are running missions with millions of dollars in programming. In many cases, you and your staff are putting your lives at risk to help our country. I want you to be successful. I want you to be safe. I want your agency to grow in stature and to grow in resources over time in order to make a development difference.

Later today you have several panels focusing on management issues. As you approach these sessions and take the results back with you into the field, I hope you may approach it with the following philosophy.

1. First, make management improvements a significant and meaningful part of your personal objectives and evaluations. Collectively, as a group, make it a priority.
2. Second, as a mission director and leader within the organization, be a catalyst for process change. Fight complacency and the natural inclination to do things as they have always been done. The good of the order depends on change. It is has to come. Without it, USAID as an organization will only get weaker - politically and organizationally - even as challenges in US foreign policy grow.
3. Third, help encourage the organization to understand that change is coming - whether any of us, individually or as an organization, likes it or not. We can use change positively to reinvigorate the organization. Or, we can resist it and watch the world move around us.

It is with a sense of urgency that I share this message with you. No matter how many strategic objectives we have, or how well they are drafted, we will not be successful unless we have an organization that is managed to achieve those goals.

Let me conclude by noting that as I travel overseas - and I think that has been a dozen times this year alone - I try to get out to look at the programs under my subcommittee's jurisdiction.

I have met with many of your missions. I have observed at close range the programs you administer. I meet with NGO's here and abroad. I meet with foreign leaders and the recipients of the foreign assistance you distribute.

This is a great opportunity for me to have all the mission directors here in one place this morning. Because I want to say again to those I've seen overseas and those of you I have not yet met how much I appreciate the work all of you do on behalf of the American people.

You and your staff - and that includes the dedicated foreign service nationals and the larger family of USAID from personal service contractors to NGOs -- you represent the best, maybe the most noble of causes, because you toil to make people's lives better, and to build a better world.

Whether you serve in Managua or Bamako or Manila or Sarajevo -- you represent the people of the United States and our values and way of life. You represent what is best about this country. I am grateful to you for the sacrifices you and your families make and for your hard work. And I am so very, very proud of each of you. Thank you.

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