Growing Generosity: What Governments Can Do

In last week’s blog, I quoted both Governor Romney and Secretary Clinton on their visions for foreign aid. Both are recognizing how private financial flows – philanthropy, investment and remittances – far outpace government flows. Of all financial flows from the developed donor countries to the developing world, some 80% are now private and only 20% from governments. The new reality calls for a reinvention of foreign assistance to deal with the new players and entirely new streams of money flowing into developing countries.

Measuring these flows and trends over the last 7 years in our Index of Global Philanthropy and Remittances we featured government initiatives in both the Bush and Obama administrations. These include the Global Development Alliance, African Diaspora Marketplace, and Secretary Clinton’s new Global Philanthropy Working Group. This new working group, headed by Dr. Tomicah Tillemann at the State Department, is  part of State’s Strategic Dialogue with Civil Society and will focus on how to help grow civil society in emerging democracies and economies. Continue reading

Could It Be that Both Parties Agree on Foreign Aid?

At the 2012 Clinton Global Initiative held in New York City, Secretary Hillary Clinton pointed out the changes in the developing world and the rise of private financial flows. Similarly, the next day at the same venue, Republican presidential nominee Governor Mitt Romney laid out his vision for foreign assistance. Among his comments, he too pointed out how the developing world has changed and applauded the involvement of the private sector through partnerships– “public and private, for-profit and nonprofit, charitable and commercial.” The Center for Global Prosperity (CGP) was pleased to notice that both speakers used figures published in the Index of Global Philanthropy and Remittances to make their points, with portions of their speeches sounding uncannily similar. Continue reading

CGP Launches the 2011 Index of Global Philanthropy and Remittances

The Center for Global Prosperity is pleased to announce the release of the 6th annual Index of Global Philanthropy and Remittances. For the 2011 edition, CGP has gone green and published the Index online. You can still download the Index and its Executive Summary for free as always by going to the following link (PDF) or by going directly to our website at The 2011 Index covers philanthropy, remittances, official development assistance, and private capital investment for 2009 (the most recent year for which data are available), showing the impact of the first full year of the global recession on financial flows to the developing world.

As predicted in the 2010 Index, U.S. philanthropy to the developing world remained steady, reaching $37.5 billion in 2009, compared to $37.3 billion in 2008. Remittances from the United States to developing countries reached an estimated $90.7 billion in 2009, down from $96.8 billion in 2008. This money, sent from migrants living in developed countries to their families and hometown villages, however, was still the largest U.S. financial flow to the developing world in 2009, exceeding even private capital investment of $69.2 billion. Continue reading

Aid for National Security: Asking the Hard Questions

When the Republican Study Committee recommended cuts in the State Department and USAID budgets for 2011, including slashing USAID’s operating budget and eliminating $250 million for Egypt, the Administration hit back strong. Secretary of State Clinton called these cuts “devastating to our national security” and ones that “will damage our leadership around the world.” Rajiv Shah, head of USAID, followed suit on the proposed cuts, warning, “That would have massive negative implications for our fundamental security.”

National security has long been an objective of foreign aid, along with international disaster relief, development, and democracy. The push now to justify our foreign aid programs more and more on national security grounds is an attempt to bring Republicans along, since aid for security has been a strong reason for Republican support over the years.

What’s interesting to me is that no one has examined the track record of foreign aid for security purposes. Have we achieved foreign policy and national security goals with our aid to Egypt, Vietnam, the Philippines and other countries whose aid budgets come from the so-called  “economic support funds” allocated by the State Department and administered by USAID? Continue reading

Dateline Davos

I chose from hundreds of sessions on the opening day of the 41st annual World Economic Forum at Davos, a five day whirl of meetings and entertainment with some 2,500 participants, including heads of governments, CEOs, academics, and artists. Topics range from the New Economic Reality, Insights on China, and the Future of Employment, to Music for Social Change, the Power of film to Revitalize Culture, Economics, and Hope, and Bollywood extravaganzas.

I went to the Role of Business in Development session, moderated by Linda Rottenberg, Co-Founder and CEO of Endeavor, a non-profit “mentor-capital” fund which identifies and helps budding entrepreneurs (featured in our 2009 Index of Global Philanthropy and Remittances). While it seemed fairly straightforward to me what the role of business was in development, i.e. create jobs, wealth and prosperity, thus empowering individuals with the freedom to choose their livelihoods and lifestyles, I wanted to hear what the dynamic entrepreneurs on this panel had to say. Continue reading

World Health Day brings attention to non-communicable diseases

By Dr. Carol Adelman, Director of the Center for Global Prosperity

I would like to take the opportunity on this year’s World Health Day to acknowledge decades worth of efforts in global health by my colleague Jeremiah Norris. Recently, Jerry has been in the forefront bringing chronic diseases to the attention of the international health policy makers and development practitioners and has made strides in this direction.

Fittingly, this year’s World Health Day focuses on health in urban environments, and non-communicable diseases are the listed as the first main health issue in cities. Urban population account for the majority of the world’s population and is expected to rise. Likewise chronic diseases are also expected to rise. The WHO estimates that by 2030 75% of all deaths in the world will be due to non-communicable diseases. Cardiovascular disease is already the main cause of death globally, and in low-income countries specifically, heart disease is the second leading cause of death.

Continue reading

Dateline Davos: January 28, 2010

Attending the 2010 World Economic Forum (WEF) annual meeting is a whirl, and you stay on the move. My first session was on social networking where CEOs and top executives from most major sites – LinkedIn, Facebook, Myspace, and Twitter – were answering questions from eager participants on censorship, the value of transparency, and whether literacy, education, and teaching are threatened by social marketing sites. I then hurried to a panel on chronic diseases, where experts worried about the new pandemic of “Globesity,” and an African Minister of Health warned that cancer was now killing more of his countrymen than AIDS, TB and malaria combined. Senior fellow, Jeremiah Norris, and I have been urging the global health community for over twenty years to do more about chronic diseases because they are the largest killers and cancers, cardiovascular disease, strokes and diabetes are a tremendous burden on worker productivity and national healthcare expenditures. It was good to see some serious attention being paid to the no longer “silent” epidemic of chronic diseases.

Topics and events here in Davos range from climate change to energy, nuclear threats, philanthropy, Shakespeare, foreign aid and trade, economic growth, the Great Recession, the economics of happiness, to James Cameron talking about his latest work, Avatar, and Lang Lang, renowned Chinese pianist, playing for us all in the packed Congress Hall.

I participated in a great session on “Rethinking Philanthropy,” with Judith Rodin, President of the Rockefeller Foundation, Martin Fisher, head of Kickstart, Matthew Bishop, New York Bureau Chief of The Economist USA, Alvaro Rodriguez Arregui, Co-founder and managing partner of ICNIA Partners, and Justice Muhammed Taqi Usmani, Vice President, Darul-Uloom in Pakistan. The focus was on the challenges faced by philanthropy today and the innovations for future. Technology in philanthropy as well as in so many fields discussed here at the WEF sessions, reigns supreme. Former President Clinton, who spoke to us today, said he never realized the extent and importance of technology and how cell phones and text messaging have been essential to disaster management operations and fund raising. The Index of Global Philanthropy and Remittances, has been featuring new technologies in philanthropy and remittances over the last four years, and it is exciting to see this field continue to grow and improve.

I was especially happy to finally meet Martin Fisher whose project, Kickstart, we featured in our very first Index. Martin’s manual irrigation machine, The Money Maker, is manufactured in Africa, and he now tells me that over 90,000 Africans have bought this low cost, efficient machine and increased their incomes. His plans are to stick with this winning model and scale up in even more African countries.

The WEF has formed a partnership with the Clinton Global Initiative and the UN to address both immediate and longer term needs in Haiti. Former President Clinton laid out the needs and plans for now and the future, citing the distribution system for just getting humanitarian goods to people is the most critical. He cited over 150,000 dead and 200,000 injured with hundreds of thousands still needing shelter, food and water. The focus of all these partners is on, as Clinton put it today, “Rebuilding the country they want to be, not what they were.” With analogies to Rwanda’s recent growth through its good governance, he was optimistic about the chances for Haiti. Whether Haiti can pull this off is of course the big question in a country that has failed miserably over the years. This will be an opportunity to take the lessons we have learned from past development aid mistakes and try to get it right in Haiti. The terrible tragedy of Haiti has brought the Obama Administration and the world’s development aid network a chance to make some lasting changes in a long suffering country.

Carol Adelman
Director & Senior Fellow
Center for Global Prosperity

The New USAID Administrator: Transactional or Transformational?

As the Obama Administration’s pick for USAID Administrator, Dr. Rajiv Shah is highly credentialed and experienced in the field of foreign assistance and development as well as in the political ways of the world. The question I have for him is whether he will be a transactional or a transformational leader? Will he continue business as usual or finally do the much needed makeover of foreign aid – one that recognizes that the developing world and the delivery of foreign assistance have fundamentally changed, now needing an entirely new government aid business model. (See my previous work with Nick Eberstadt in the Weekly Standard, or in AEI’s Development Policy Outlook.)

If he listens to the concerns of most in the development field, he’ll be transactional – busy moving boxes on organizational charts at USAID and throughout the rest of the government, fighting for more money and people, trying to make USAID a preeminent and independent agency, and decrying the number of USG offices that dispense foreign aid and the lack of coordination therein. In short, he’ll be focusing on much loved topics among government officials and the contractors and NGOs who receive billions of USAID dollars.

The topics, however, are of little concern to the people in poor nations. They would much prefer a transformational leader who views developing countries and the people in them as partners, not “recipients,” who expects those partners to have local ownership in aid projects by contributing their own resources and time, and who demands the utmost transparency and accountability in the management of aid funds. They would prefer a leader who focuses on the results of a project in the field, who surveys people in developing countries on what their problems are and how USAID projects could be improved, who provides funds for locally identified problems which will vary from country to country and not necessarily fit into all the earmarks and special interests in Washington, DC.

U.S. Government foreign aid is now a minority shareholder – only 9 percent in the total U.S. financial flows to the developing world. Philanthropy, private investment and remittances make up the rest and dwarf USAID’s budget. This is the new reality of how assistance and investment to the developing world is being delivered. The new USAID Administrator should open up the USAID bidding process to the thousands of privately funded programs by foundations, corporations, PVOs, religious organizations, and individuals, so they can more easily compete with their ongoing successful initiatives or their new innovative ideas.

Most importantly, the new USAID Administrator – to be transformational – needs to understand that the current USAID business model is very broken. By that I don’t mean broken organizational charts, lines of reporting, coordination or morale. (All the new USAID Administrator has to do is read up on what African and other leaders, have been saying about our foreign aid to know that they don’t care which government aid agency is providing resources, or whether Dr. Shah or Deputy Secretary Jack Lew is signing off on projects, or whether aid officers are demoralized or not.)

They care about being a real partner in USAID projects, having their own skilled, local talent used in projects, and having money spent to develop local capacity and institutions so that they can help themselves and graduate from foreign aid the future. They prefer this demand driven assistance versus the predominant top down project design process where USAID gives huge awards to expensive contractors with high overheads, who then write a lot of reports, make a lot of trips, and hold a lot of meetings with astonishingly poor evaluation of results. (See previous work by Bill Easterly, Raj Desai and Homi Kharas.) President Obama expressed his concerns on how “western consultants and administrative costs end up gobbling huge percentages of our aid overall.” Also, in this same radio address he has noted the importance of demand driven ideas, good governance, and value of investment in addition to aid.

Once the broken business model is fixed, the government aid development community won’t have to call for new organization charts, new seats at the National Security Council, or elevating the topic of “development” as a core pillar of U.S. foreign policy. All this will miraculously happen when there are results that everyone can see and that are delivered at reasonable costs. USAID slipped onto the back burner because it lost its way and didn’t adjust to a new developing world with local talent to work with and a large and vibrant private sector engaging in innovative, faster and more efficient ways of delivering foreign aid. Its new role is still very important – as a convener of resources, helping to identify and support those private and public programs that are working and to bring them into countries that need them – to work with local talent.

Dr. Shah, leave the org charts alone and just find 12 good people who share a new vision for foreign aid, hire them, and get on with it. Nothing raises the stature of any USG agency than projects that work.

Carol Adelman
Director & Senior Fellow
Center for Global Prosperity