Transcript: Press Conference By USAID Administrator Dr. Rajiv Shah

Islamabad, April 14, 2010

Dr. Rajiv Shah:  Good afternoon.  Thank you for coming.

This is my first trip to Pakistan as the Administrator of the U.S. Agency for International Development.  Before I start with a few brief introductory remarks, I'd like to offer my condolences to the families of the Pakistani security personnel who were killed and those also injured during last Monday's attack on the U.S. Consulate in Peshawar.  Our thoughts and prayers are with the families and we wanted to offer our condolences and our thoughts.

This visit was an opportunity for me to learn about the priorities in development and in our partnership between the United States and the Government of Pakistan, and between the people of the United States and the people of Pakistan.  It was also an opportunity to put in place many of the principles that we talked about during the recent strategic dialogue hosted in the United States by Secretary Hillary Clinton and by Foreign Minister Qureshi.  Primary amongst those commitments was a commitment that USAID and on behalf of our entire portfolio of foreign assistance here, that we would do things differently going forward in order to be better partners, deeper partners, and more respectful partners of the Government of Pakistan and the people of Pakistan and Pakistani institutions.  I'd like to share with you a few thoughts on how we're trying to do that.

First, on behalf of President Obama and Secretary Clinton, we have made a significant long term commitment to offer assistance and to cooperate in the development of Pakistan across a broad range of sectors and across a broad range of subjects and topics.  Our commitment is genuine and will be very long term.

Second, we have a real commitment to building Pakistani institutions.  For too long, especially at USAID, our investments have often gone to U.S.-based contractors and U.S.-based organizations and too much of those resources have landed back in the United States.  We are trying aggressively to change that.  This visit was an opportunity for me to meet with government ministries, to meet with the leadership teams at universities and to visit with thought leaders in a variety of different sectors in an effort to meet, understand and work with Pakistani institutions more directly.

Our team is committed to increasing the proportion of spending that we provide directly to the government and directly to Pakistani institutions, civil society organizations, and non-profit organizations as we carry out our work.

Third, we are trying to make real efforts to listen, learn and set priorities in a shared way.  Too often our priorities have been set in Washington and we have not had the ability or process that allowed us to be as responsive as we'd like to be to leaders in Pakistan from all walks of life.  As a follow-up to the Strategic Dialogue that started in Washington, I've had the opportunity to meet with government ministers, leadership teams, private sector and NGO organizations in energy, agriculture, water resources, health, education, and on issues like women and girls.

This has been a unique opportunity to put in place some of the constructs we talked about, to get some critical feedback on our own programs, to set priorities in a way that's consistent with each of our partners, and to do that in a mutual dialogue that will continue over time.

For example, in energy we will have a number of new shared programs.  We've already announced four new production plant refurbishments which will provide 450 additional megawatts of power as part of the $125 million energy program announced by Secretary Clinton in October 2009.  But this is really just the first example of a major new approach.  We will work in deep partnership with Pakistani organizations and the ministries in that sector to help advance the cause of meeting the production needs of this country and to produce electricity in a more consistent and more effective way.  We are having a deep policy dialogue on the types of policies that could be changed in order to attract more private investment in this sector, and we in the U.S. government are committed to using a broad range of investment tools and development assistance to provide support in a way that encourages private investment to help meet the long term needs of Pakistan in the area of energy.

In agriculture, we've heard clearly that this is a top priority and we intend to respond as such.  We are already working to develop a program with the Government of Pakistan and the Pakistan Agricultural Research Council to address water resources, irrigation and productivity of Pakistani agriculture.  This is just one initial step in a major long term partnership for the agriculture sector because we recognize that more than 20 percent of GDP in this country is related to agriculture, and more than 50 percent of all employment is in the agriculture sector.

We have heard that water resources are a real challenge, and over the next 10 or 20 years will continue to be constrained, and so we will work with a real sense of urgency and bring a broad set of resources from across the private and public sector in the United States to work in partnership with Pakistani firms and Pakistani government entities to help improve the living and production situation for Pakistani farmers.

In health and education, the U.S. Agency for International Development has had a long and productive record of work in these sectors.  We've worked aggressively in primary education and contributed to expanding access and improving teacher quality in a number of different areas in Pakistan.

In health, we've focused on a broad range of services to provide needed support, especially for women and girls.

But going forward in both of these sectors, we will work more closely with ministries and with local institutions and we'll make sure that we expand access to services in some of the most vulnerable parts of the country.

In addition, we have the opportunity to meet with the Higher Education Commission and a series of higher education institutions from around the country.  We've very optimistic about the potential for us to partner with the people of Pakistan and with the Higher Education Commission to really support some of the great institutions that offer real opportunities to Pakistani students.

These are all just a few examples that represent our new way of working.  We will come here, we will listen, we will work in more respectful cooperation, and we will invest more of our resources directly in institutions that reach Pakistani people and that serve the Pakistani economy more directly.  We're excited about taking this new approach and it really does represent one aspect of what President Obama and Secretary Clinton have framed as the new strategic dialogue and a new strategic partnership that is broad and that is deep and that is very meaningful for our country and for the people of Pakistan.

Thank you, and I'm happy to take questions, as well as I will ask my colleagues also to help me take some questions.

Question: Ever since Pakistan has become a partner in the war against terror, it has suffered a lot on the economic front.  A careful estimate asserts that Pakistan has suffered almost $40 billion loss ever since it has become a partner in this war.  But your prescription is like giving a patient who is on the deathbed small doses of medicine, whereas Pakistan needs a huge dose to recover on the economic front.

So do you think that this approach will solve the issue?

Dr. Shah:  First, we have seen and respect Pakistan's commitment in addressing issues of common interest with respect to the effort against insurgents, and to the extent that that does have costs, we have a broad range of partnerships to address some of those costs.  But really, I'd like to step back and suggest that the point of the Strategic Dialogue was to offer a broad approach to our partnership.  I have the opportunity to represent the U.S. Agency for International Development and we do development programs and development cooperation, but what will really help make our efforts more effective will be all of the other aspects of the overall partnership.  We're in a dialogue together on trade and investment issues, we're on a dialogue on policy changes and transformation that will unlock greater private investment in some of the core sectors and again some of the core infrastructure needs in energy and water resources that will be critical, and we will restructure our programs really across a five and ten year period to work in a very deep and meaningful way.  Across that timeframe, we will have significant additional resources in part due to the Kerry-Lugar-Berman legislation in the United States that offers a larger window of commitment between our two countries on the assistance side.

All of those things combine to represent a very broad and very deep partnership and one that is intended to help meet needs in a broad way and to do it really in partnership with leadership here that is committed to meeting those needs through that partnership and through many others.

Question: It was alleged by a parliamentary committee that a big chunk of American aid which was meant for IDPs and routed through international NGOs has fallen into the hands of terrorists.  What do you say?

Dr. Shah:  We actually have very specific mechanisms for tracking those resources and I could let our Mission Director, Bob Wilson, or Ambassador Robin Raphel, address that.

Mission Director Wilson:  As the Administrator said, we do have fairly rigorous control mechanisms.  A lot of the resources that were transferred to international NGOs or the UN agencies have been tracked and have been closely monitored.  The resources that we transferred through the Government of Pakistan which includes a $44 million cash transfer for IDP family recovery also carries with it a very detailed tracking mechanism where you can track dollars to individual recipients.

I think what we did was to do as disciplined and as rigorous a control as possible, and much more than we've done in the past.

Question: My question is regarding in which sectors you are spending and how much you are spending in Pakistan.

Dr. Shah:  We are in the midst of transforming our program to be more aligned with the priorities we just heard.  The priorities that we've been asked to focus on are in agriculture, energy, and water resource management, in addition to the current portfolio of work that includes economic growth, health, and education.

It will take a little time to achieve that full transformation, but we're in the midst of shifting from those areas to expand dramatically our investments in energy, water and agriculture, really to help drive a strategy that is more oriented around economic growth and inclusive economic growth that reaches those rural communities and those farm and agriculture communities. We know that agricultural GDP growth, for example, is anywhere from three to five times more likely to be poverty reducing in its effect in generalized GDP growth.  It's that type of thinking and that type of dialogue with leaders here that has encouraged us to move in that direction.

Ambassador Raphel: We're in one of these situations where we're going back to some of the things that we used to do that were successful in the 1960s and 1970s, going back to agriculture, which after all supports 60 percent of the people in this country, and investing again in energy like we did with Tarbela Dam and Mangla Dam.

The idea is to look at infrastructure sectors where there hasn't been sufficient investment and invest strategically in a way that helps to unblock some of the obstacles to economic growth.  The new part of our assistance will be going to those kinds of programs while we continue with some of the more traditional programming in health and education and so on.

Question:  A few years back, the government allocated $750 million to spend in FATA for programs to develop FATA.  I'd like to know how much of that money has actually been spent -- not just authorized, but actually spent.  And could you specify some programs in the tribal areas that you have actually done something on this?

Dr. Shah: I've had the chance to review that portfolio and it's incredibly impressive the amount of work that's taken place, especially given some of the constraints of operating in that environment.  It's been a real commitment both to support people who have served for a while as IDPs and then come back and real efforts to improve health, education, access to water, potable water, and a range of other programs.

Mission Director Bob Wilson:  We have not spent at the annual level that we projected, and that's due in large measure to the security situation out there, and difficulty in implementing projects in an insecure environment.  But nevertheless we have done a number of things in livelihoods, small scale community infrastructure, health and education, and we continue to expand the number of platforms that we've got for doing those kinds of things.  We're signing up programs with the FATA Secretariat and working with local NGOs to expand the number of implementers out there at the same time.

Again, we have not reached the annual expenditure targets, but we are working to try to get up to that level. We've spent approximately $150 million over two years, far below the $150 million per year target that was established in 2006.

Ambassador Robin Raphel:  I would just add that in programs of this type, when you have a target - like we do of $750 million over five years -- you usually start out a little slow.  It's what the engineers call a "S curve": you start out slow, then the program grows, and then it tails out towards the end.  So while we haven't met $150 million a year, the intention really was $750 million over five years, and that kind of scale in that part of the country.

Question:  My question is about the American credibility in Pakistan.  Keeping in view the last 50 or 60 years, whenever Americans are in trouble, they come to Pakistan, they spend some dollars here and they go back. So can we perceive that the same situation will happen like this in this new strategic dialogue process?  What are your final goals?

A second question is what is the total amount with USAID to spend in this year or the next couple of years?  Is this coupled with the Kerry-Lugar bill, or would it be separate from the Kerry-Lugar bill or other assistance to Pakistan?

Dr. Shah: The goal of the Strategic Dialogue is to say, "Okay, let's review what we've done together over the past 10 to 15 years.  And let's listen to the feedback we were getting."

The feedback we were getting was that we could do a better job of listening and setting priorities in a shared way.  We could do a better job of listening and setting priorities in a shared way.  We could do a much better job of investing resources in Pakistani institutions and in Pakistani governments at all levels.  And we could do a better job of staying focused on our strategies and on our commitments and seeing them through over a very long period of time.  That's why I'm here.  We came to follow up on every aspect of that.  So we are in the process of adjusting the way we do our work so that we can invest in local institutions.

The question about the FATA Secretariat was a good example of that.  Sometimes it takes a little bit longer to create the institutional structure and create the financial management and accountability mechanisms that we are going to need in order to monitor the resources, but we're willing to invest that time and that effort to create the mechanisms it will take to really build strong Pakistani institutions over time.  That's a new way of working for us, and it's a big part of this transition.

We've gone through each sector and have said, instead of taking whatever resources we have and doing projects over a one-year timeframe and then redoing them the following year, we want to work in shared partnership with Pakistani leaders to define ten-year strategies, and the invest in a much more robust way across those long term strategies.  Again, that will take a little while, but those conversations have all moved forward since the Strategic Dialogue.  It's part of this visit and there will be subsequent ones.

These are some of the things that I think do reflect a new way of working.  Absolutely it's our goal to see that through in a very specific way.

In terms of the total resources, I think people recognize the Kerry-Lugar-Berman authorizing legislation is for $7.5 billion over five years.  It allows us to dramatically expand our portfolio of development cooperation with Pakistan, and we see it as a unique and important opportunity.  It's very much why we want to put a lot of these new ways of working in place in order to support spending those resources here in a way that's effective and sustainable, so that ten years later we can look back and be really proud of the shared things we did together, much like we can be when we look at some of our work in the 1960s and the 1970s that really helped millions of Pakistani families lead fundamentally better lives.

Question:  Sir, I wonder if you could shed some light on the whole question of the argument experts have made that the aid should be tied to Pakistan's success in stemming militancy.  To what extent has that been severed from the idea of seeing that there's progress on stemming militancy?

Secondly, the question that you alluded to about better accountability for the money disbursed, what's been done to achieve that?  How is the tracking different today than it was say two years ago?  Thank you.

Dr. Shah: Accountability is an area where we're very focused as an agency around the world doing a much better job of tracking accountability, and some of these things we're starting to see happen. In fact, our Mission here in Pakistan is leading the effort on some of these things.

For example, in order to spend resources directly through budget mechanisms that are linked to governments at all levels, we do require very specific certification, financial management controls, accounting and auditing to be in place, and a partnership relationship where we can track those resources.  We need to do that to make sure that U.S. tax dollars are absolutely spent against the objectives they were defined for.  And we're doing that.  We've done that in a number of specific examples, and I think that's a good example of how it does take time to work with the ministry and put in place that kind of a mechanism, but it's an example of doing that to make sure we have better accountability for spending and resources.

There's another way to think about accountability that goes beyond just tracking the dollars.  I really do believe especially with all the modern access to technology and transparency technologies that we should do a much better job of actually listening directly to the people we serve.  So if we have agriculture programs providing seed and fertilizer support to farmers, we can survey farmers, get data directly from farmers, often by SMS texts, to find out, "Are they getting it?  Are they planting? Is it making a difference?"

Women who send their kids to school can let us know whether teachers are showing up, or whether kids are getting a good education.  There are testing and auditing systems we could use to track educational attainment.

In our health programs, we do a pretty robust job of tracking immunization rates, of tracking the number of skilled attendants at birth as part of efforts we have to train women to be community health workers and provide a broad range of services.

To me, those are very important indicators and outcome indicators that let you know if, far from just tracking how the money flows, you're making people's lives better.  Ultimately that's what we really care about, that impact for families so that people are leading better lives as a result of USAID partnerships with the Pakistani people.

The whole Strategic Dialogue is predicated on the concept that our partnership with the people of Pakistan is a broad one that covers many different objectives and many different sectors.  You saw that this week in the recent visit with President Obama. You saw that during the Strategic Dialogue in Washington, which covered 15 or 18 different topics. 

I'm thrilled that the U.S. Agency for International Development plays such a large role on so many of the topics that are about human improvements and support for economic growth.  But even that is one part of a broader set of issues that we jointly care about and our partnership is broad enough to be able to cover that range of issues.

We're not setting conditions related to other sectors.  What we're doing is demonstrating a way of working that is part of the Strategic Dialogue and part of the broad framework, but we want to listen and be long term committed partners.  Achieving these types of goals -- transforming agriculture to improve the lives of more than 50 percent of Pakistani people or meeting Pakistan's long term energy needs, largely through private investment -- require focused long term commitment.  The Strategic Dialogue, the Kerry-Lugar-Berman legislation and President Obama and Secretary Clinton's strong commitment is to see those things through and to have that long term, dedicated commitment to this relationship.

Question:  You mentioned that the United States is working in education, health, and basic infrastructure.  We have a large population of youth -- more than 50 percent of our population is less than age 25.  Do you have any specific program about the technical education of Pakistani youth?  If we do not engage our youth in positive activities we know what will happen in our country.

Secondly, could you give us a clear answer about the capacity of Pakistan institutions in the NGO sector and the government sector.  Are you satisfied that the aid which is coming through United States and different donor agencies will really materialize in terms of the uplift of the society?  And are you satisfied about the transparency?

Mission Director Wilson:  We have several vocational education activities ongoing, but they're not of the scale that we're interested in supporting.  We had a discussion this morning with the Minister of Education, who was very keen on strengthening the vocational education mechanisms for that very reason that you mentioned, that there is a huge youth bulge here in the country and employment is a key concern.

We have funds reserved for vocational education.  We haven't moved them entirely, but we're looking at ideas on that.

Dr. Shah:  I think the second part of your question was about whether the capacity exists in Pakistani institutions to see through these types of goals and objectives. I think the right way to think about that is what are we trying to achieve together?  What sort of capacity exists today?  And how do we do things together in order to build that capacity to achieve those goals?

So if you think about that in health, for example, we might want to double the number of skilled attendants that can be at every birth in this country.  We want to make sure every time there's a birth there's a skilled attendant at that birth to really dramatically reduce the rate of maternal mortality, which is far too high in Pakistan.  Today we don't have enough health workers and skilled attendants, but that's why we're investing in training women to be skilled attendants, and it's part of the Lady Health Worker Program. As we set these long term goals, we want to do that work in a way that builds capacity within the health system, within the ministry, within the institutions and the NGOs that provide some of the services in a community development manner.

Clearly, the capacity does not exist to achieve these big goals in each area, but the whole purpose of transforming the way we work, to spend more of our resources here as opposed to in the United States, is to make sure that we build that capacity to both achieve those goals and then sustain them over the long term.

Question: Market access is a big problem for Pakistan.  Would any of your programs help opening of North American and European Union markets, especially for our agriculture products?

Dr. Shah:  Yes.  We are looking at a broad range of things we can do to improve those kind of marketing opportunities.  And sometimes the programs will bring technical resources and build technical capacity here, for example in animal and plant health inspection, so that in some agricultural value chains like mangos, the local economic production system can meet international phytosanitary standards.

In other cases, we're looking at different types of trade relationships we could have that tie to core agricultural value chains or other production value chains.  That's the purpose of having this broad strategic dialogue.  Instead of being restricted to just what programs we can do, we can also think more broadly about what kinds of policies need to change here and around the world in order to achieve the long term vision of success, which is a real transformation in many of these sectors.

Question: How much money have you spent and what exactly are you doing in Swat since the military operations last year?

Mission Director Wilson:  We've provided credits for approximately 50 schools in the Swat area.  The amount of that is approximately $25 million.  That will include advisory, consultancy, engineering and technical assistance monitoring.

In addition to that, a number of programs that we established during the return phase of the IDP crisis continue to today and will continue until September.  Those are designed to provide agricultural inputs, tools, health and education support, refurbishment of schools in a temporary sense until the longer term reconstruction phase begins.

Question: Is there any plan to build a new dam in Pakistan?

Dr. Shah:  Yes.  We're actually looking at a broad range of operations, some of which would include construction of and refurbishment of, improvements of the dam infrastructure.  There also are basic things we can do, like do a better job of using satellite imagery for tracking, monitoring and making available information about water resources in a more specific and effective way.  And we'll look at a range of other strategies for irrigation as well.  Dams can lead to certain types of irrigation opportunities, but there are a range of other technologies including drip systems and pivot systems that we've been discussing with colleagues here over the last few days.

We'll be looking in a broad way at improving access to irrigated agriculture and we'll do whichever things make the most economic sense and meet needs in the most effective way.

Question:  Can we say that United States will help Pakistan in augmenting the capacity of the Tarbela Dam and Mangla Dam, which were built with U.S. aid?

Ambassador Raphel:  We're already involved now in refurbishing one of the turbines at Tarbela, so we're looking at that.  We've also been looking at Monga.  No firm decisions there, but we have a fondness for it, since we were involved early on in its construction.

We're looking to partner with other donors and with the international financial institutions who have more resources than we do and a great deal of expertise, so between your government experts and the financing and expertise that comes from the World Bank and the Asian Development Bank and our part, that will leverage everybody's capacity and resources to do more on that side.

Question:  Indicators from Pakistan show that overall aid from different donor countries has not been able to make significant change in Pakistan.  Why is the hard earned money of U.S. taxpayers being dumped in a country where the security situation is really bad?

Dr. Shah: First, while it is true when you look in aggregate many of the human development indicators have not moved in the direction you'd want them to move over, say, the last decade, there have been successes.  Immunization rates are an example, and in some areas agriculture productivity is an example

Part of what we hope to do, instead of focusing on relatively small, discreet projects -- build a school here, build a health clinic here, help a community improve a small watershed that serves one or two villages - we're shifting to focusing on much more significant infrastructure investments, thinking of how you rebuild the agricultural research and extension and productivity sector in a holistic way, making some of the policy changes that would improve market access for high value agricultural output.  Those are the types of things that frankly can have a lot more impact against the aggregate outcome indicators than doing a series of relatively small and discreet projects.

We will remain committed to health and education, but we want to move beyond that and focus also on large scale strategies, infrastructure investments, and things that could really be transformative, like they were in the 1960s and 1970s, when we were able to support the creation of some of the universities, we were able to support the green revolution in this area and provide seed and fertilizer support and research capacity and technical partnership.

That's exactly the purpose of rethinking the strategic relationship, taking a long term view and focusing on those sectors where we think we can see much more productive growth that would really change the economy and the outcomes for the Pakistani people.

Question: How much budget are you going to allocate in the sector, and how much time it will take to complete?

Dr. Shah:  We've been in this dialogue on the energy sector, and we've already made the $125 million commitment last October.  Between then and now, four major infrastructure improvement projects are already underway as part of that, as well as more specifically working with many of the regulatory agencies and the companies that are part of that sector.  So that's some progress from October 2009 to now.

We recognize the urgency of this, and that's why even today in part our meeting with President Zardari was on this point, and really focused on what can be done immediately to meet the needs in the next few months and through the summer.  We're going through every production possibility and trying to do that in a real technical partnership with the government, that is of course leading this effort.

Ambassador Raphel:  In addition to infrastructure, of course, there are a number of policy reforms and technical issues that need to be sorted and aligned between the generating companies and the distribution companies, the issue of circular debt and so on that need to be sorted out for the sector so that it can really function in an effective way in the future.

Part of our dialogue is about those issues as well as where we can intervene on the infrastructure to be the most effective and helpful in the short term.

Question:  There has been a strong lobby for investing in peace and investing in development.  Vice President Joe Biden and the new Secretary of State Hillary Clinton have said that America should spend more on peace.  But the facts are contrary, because trillions of dollars are spent on the war, while USAID projects whether in Afghanistan, whether in Pakistan, are just peanuts.  What do you say, sir?

Dr. Shah:  I appreciate that, and President Obama does represent and insist on change.  A big part of that change is fundamentally restructuring the dialogue and the partnership we've had with Pakistan.  That's the entire purpose of the Strategic Dialogue: to broaden that discussion, to ask questions and to listen.  In some cases, we heard that we need to do things very differently, so within weeks of the first Strategic Dialogue meeting, I came here so that we could put in place a new way of working that would respond to that.

We are incredibly serious about changing the way we work here, to be better partners, to be more focused and more structured, and to achieve outcomes on behalf of the Pakistani people that are more significant over a longer period of time.  Our commitment is a long term commitment.  It is not conditional on specific items.  We know in deep, important partnerships there will be ups and downs in those partnerships, but we are committed for the long run to the types of things I talked about today, and we're committed to coming here, listening, and changing the way we work so that we can be better and responsive partners and deliver better outcomes for the Pakistani people.

Financially, we are significantly increasing the portfolio of investment from USAID and across the board in our country assistance. Ehile the financial component is just one component of a much deeper policy and government-to-government and people-to-people partnership, even in that one component we're making significant increases. 

If there's any one thing I'd highlight, it's that we came here to say, "How should we expend these increased resources?", and we heard, "Focus on energy, on water, on agriculture, in addition to some of the other social sectors where you've been big," and that's what we intend to do.