Global Development Alliance
THE DEVELOPMENT CHALLENGE: With the establishment of the Global Development Alliance (GDA) as one of USAID's four pillars came formal recognition of the major shift in resource flows to the developing world. In 1970, 70% of the money that went to the developing world from the United States was official development assistance (ODA); 30% was private. By contrast, in 2000, 80% was private and 20% was ODA.
There are many types of private resource flows. Foreign direct investment(FDI) and net capital markets to the developing world is the most significant at $27.8 billion in 2000. However, these investments by U.S. private investors in the developing world fluctuate with the macroeconomic environment. In addition, they are unevenly distributed with most flows going to wealthier countries in the developing world. Personal remittances from ethnic diasporas are large and historically have been overlooked. In 2000, U.S. immigrants from developing countries sent back $18 billion to their home countries. Family and private foundations have taken on a significant role in development. The Bill and Melinda Gates Foundation spends on a par with USAID, the largest bilateral donor, in the area of developing world health care. Non-governmental organizations (NGOs),
corporate foundations and corporate giving, religious organizations and family and private foundations all contribute significant financial, human and in-kind resources. Their cash resources totaled an estimated $11 billion in 2000. U.S.
universities and colleges make a significant contribution to development through the over $1 billion that is spent on scholarships for foreign students, many from the developing world. All of these private resource flows in 2000 dwarf
the United States' Part 1 (assistance to the world's poorest countries) ODA of $10 billion to the poorest countries and our Part 2 (assistance to those countries that are “graduates” of strict developing country status) ODA of $2.5 billion to our allies such as Israel and Russia.
Until now, USAID has not been integrated into the wide spectrum of U.S. private activity in the developing world. The purpose of the GDA is to combine USAID resources, where appropriate, with those of others. USAID has unique strengths
that it brings to any alliance: USAID has a large number of field missions, many with over 40 years in a country; USAID professionals have unique technical expertise; and USAID is the largest bilateral donor in the world. USAID's portfolio
of alliances with other partners demonstrates the enlarged impacts and reachthat the Agency achieves working with others for common development objectives.
The USAID Program: The GDA Secretariat, charged with mainstreaming the use of this business model within USAID, has the following objectives:
- Change the way the Agency - at all levels and in all regions and sectors - defines its role and acts;
- Reach out to new partners to work in concert with them and maximize collective achievements in improving the economic, social and political conditions of people in the lesser developed world;
- Work with USAID's traditional partners in this changing environment to engage them in new and creative ways; and
- Clearly demonstrate the commitment of the U.S. Government, through its foreign assistance programs, to address the reality of a budget that will never be enough to adequately respond and creatively gather and channel the resources of others to further this goal.
Working in alliance with others sharing the Agency's goals and objectives is not new, but it is increasingly important to maximize the use of this model in all appropriate situations. The Secretariat is a small staff with an enormous agenda. In the first year of its existence, the office prepared an alliance-builders tool kit for Agency staff to help mainstream the GDA business model; held a three-sector conference in collaboration with the U.S. Chamber of Commerce to announce clearly and broadly USAID's intent to work with the private sector and others in new ways; provided guidance to Agency staff on identifying alliance opportunities, developing alliances and reporting them; and funded important alliance opportunities in economic growth, education, environment, and agriculture.
OTHER PROGRAM ELEMENTS: Across the Agency, over 80 alliances were established in FY 2002 with USAID funding totaling approximately $385 million (of which $200 million is dedicated to the Global Fund to Fight AIDS, Tuberculosis, and Malaria). These alliances leveraged non-federal resources on at least a 1:1 basis. The largest number of new alliances were formed in Africa (36), and the sector which received the largest amount of alliance funding was agriculture, followed by environment (including water), economic growth, and education. These alliances represent a new way of doing the work necessary to achieve
results under existing strategic objectives. The first year of experience with this emphasis on the use of public-private alliances was approached in varying ways by different bureaus and operating units. The Bureau for Global Health, in fact, has been a leader in this approach and, in recognition of the GDA business model, is increasing its consideration of potential alliances. Relatively new to this way of thinking, from the USAID/Washington perspective, the Africa and the Asia and Near East Bureaus held competitions between mission proposals and allocated resources for the most promising alliances through an incentive fund. Other bureaus targeted specific sectors or previously identified opportunities. Information sharing was transparent, lessons are being learned, and the Agency is well positioned to further expand the development and success of alliances in FY 2003 and beyond.
OTHER DONORS: The list of private sector alliance partners is extensive and continues to expand rapidly. The FY 2002 Incentive Fund was used to enter into alliances related to education (Academy for Educational Development, ChevronTexaco,
Sun Microsystems), youth (International Youth Foundation), economic growth (Small Enterprise Assistance Fund), water for the poor (Conrad Hilton Foundation, World Vision, Lions' Club), quality coffee production and small farmer income generation (Coffee Quality Institute), information technology (Information Technology of America Association), and protecting forests through certification of forest products (World Wildlife Fund, Certified Forest Products Council, Home Depot).
For a printable version of this section, that includes the charts and graphs from the Congressional Budget Justification FY 2004, please click here. (Note: This file is in pdf format.)
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