Making Room in the Development Sandbox

The era of Western run foreign assistance is over. Throughout the history of foreign assistance, big development agencies like USAID have called the shots, touting stories of untrustworthy governments and issues of national security as justifications for entirely Western run development schemes.  The rise of South-to-South cooperation and support from developing economies has shifted power in the world of international development. There are many articles that either sing the praises of USAID or tear it down; this is neither. Policy makers must recognize a new wave in international development and consider alternative options to government assistance.

North-to-South aid relationships have been the status quo for as long as foreign assistance has existed. In the past, the North provided the funds, personnel and program structure, and the South provided the location and beneficiaries. But the dynamic is shifting.  Power blocs of emerging economies–like Brazil, Russia, India, China and South Africa (BRICS)–are the new frontiers of global development.  On the growing list of South-to-South programming, Thailand is granting loans to Cambodia, India has started technology sharing programs, and Brazil started infrastructure programs in Paraguay.

In terms of real numbers, the U.S. is still the global leader in ODA and money contributed to foreign assistance, but we aren’t very popular. A number of academics from “developing” countries recently criticized the heavy hand of the United States in foreign assistance programming and decried what they refer to as the “cycle of dependency.” Thinly veiled arguments against South-to-South programming have also emerged from Western development heavies like Jeffrey Sachs and Paul Collier. These practitioners are disputing academics, like Zambia’s Dambisa Moyo, who have called for an African run development plan.

Internationally and domestically, USAID is no stranger to criticism. In 2011, 156 Republican Congressmen called for a drastic defunding of the agency. While defunding one of the largest development agencies in the world may seem brash and ill advised, it is clear that people are displeased with the current norm in development. Recently, USAID came under fire for poor financial accountability and low program achievement. In 2014, an audit of a $88.5 million program in Afghanistan detailed low objective achievement and possibly misappropriated funds. A financial audit, however, could not be conducted due to a lack of funds.

All of this is not to say that USAID is the enemy, the agency has achieved tremendous feats: 850,000 people have been reached through the HIV/AIDS prevention program and 15 million primary school children have been targeted and included in global literacy programs. The emergence of a new development dynamic is not a goodbye to USAID. As South-to-South Cooperation continues to grow, surely USAID will grow and change with it.

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A Not So Indecent Proposal

Last week the White House Administration released the budget proposal for Fiscal Year 2015 (FY15). The proposal included a $700 million (1.4%) overall decrease in foreign assistance compared to the FY14 levels. Some assert this is the manifestation of the American public’s disapproval and disregard for foreign assistance and international development. In reality, however, the new budget demonstrates a continued commitment to foreign assistance and the Obama Administration’s reprioritizing of development goals.

imgresThe overall decrease in aid is largely due to America’s reduced presence in Afghanistan and Pakistan, whose operations formerly made up large parts of the US foreign aid budget. The new budget would not entirely remove aid to these countries, but would remove several on the ground operations focused on post-conflict reconstruction. The country would not necessarily lose its direct monetary assistance from the US, but would lose its technical assistance in infrastructure rebuilding. The decrease in US technical assistance equates to a high monetary loss for each country and makes it appear as though the US is scaling back its overall foreign assistance program. Rather, the US is maintaining its overall monetary assistance but decreasing its capital assistance in certain countries.

The dire picture many paint of the FY15 budget ignores the many strategic aid increases the Obama Administration proposes. The FY15 budget proposal would increase funding for the US Trade and Development Agency (USTDA) by 22%. This agency’s purpose in foreign assistance is to connect American companies with infrastructure investment opportunities in developing nations. By increasing funding for USTDA, the Obama Administration seems to be encouraging the development of public-private partnerships between US private companies and developing countries. This demonstrates not only a shift in America’s approach to foreign aid but also demonstrates the government’s recognition of the large role private corporations could play in the future of development.

imagesThe proposal would also increase funding for the US Millennium Challenge Corporation (MCC), which focuses on aid for countries prioritized by the UN’s Millennium Development Goals (MDG). While overall funding may fall, the increased funding for the MCC demonstrates a stronger commitment to UN development initiatives. The proposal suggests that the US is beginning to prioritize not only its own development interests but global development issues as well.

What does Obama’s budget proposal indicate about his views for the future of US foreign aid? The budget demonstrates a shift in foreign aid priorities. Previously, US foreign aid focused heavily on infrastructure improvements and post-conflict rebuilding. America was especially involved in rebuilding war torn countries in the Middle East. Just look at Afghanistan or Pakistan or Syria as examples. But with a decrease in technical aid towards those countries and an increase in funding to the USTDA, Obama seems to be outsourcing infrastructure reconstruction to private companies. The administration would instead have the US government prioritize economic development. This becomes especially apparent when also considering the increased funding for the MCC. The MCC and the UN’s MDGs focus more on economic and community development in addition to overall capacity building.

This is an interesting approach to foreign aid because Obama appears to be taking advantage of the growing role of private companies in development. Development is no longer just for DAC donors or federal governments. Public-private partnerships have the potential to transform and improve foreign assistance. Using Obama’s strategy, if the private sector focuses on infrastructure development that leaves the US government free to prioritize economic development.

I Predict a Riot!

Predicting the future is here! Well, maybe not quite, but data scientists are currently working hard to accurately predict rebellions, ethnic violence, insurgencies, and mass atrocities around the world through the use of supercomputers and algorithms. With the current political situations and turmoil in countries like Ukraine, Venezuela, Thailand, Syria, and Egypt, making these types of accurate and reliable predictions can be very valuable information.

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Protests in Tahrir Square, Egypt.

So far there have been several attempts to calculate these types of predictions.  For instance, Duke University’s Ward Lab collects and deciphers big data using several software programs that analyze news articles from around the world in order to make predictions about which countries are most at risk for rebellion, increase in insurgency, ethnic violence, domestic crisis, and international crises.  Ward Labs have seen some success in accurately making these predictions. In July they estimated that Paraguay had a 97% chance of insurgency, which later proved to be accurate when guerilla attacks increased.  Additionally, in October, Ward Labs predicted that Thailand was at a 95% risk for a domestic crisis, and in December predicted that Iraq’s probability of having an international crisis was 99%; both predictions have since proven to be true. Ward Labs has not been able to predict everything, though; the current crisis in Ukraine was not on their lists until after the protests had begun.  This is okay, however, as they maintain that their main objective is to test theories, and making accurate predictions is a difficult thing to do.

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(Source: USAID.gov)

USAID is even getting in on the action, partnering with Humanity United to create the Tech Challenge for Atrocity Prevention.  This worldwide technology competition challenges participants to use current technology to create innovative ways of preventing atrocities.  One of the challenges in the competition is to create a model or algorithm to predict where future atrocities are most likely to occur.  Xiaoshi Liu won this challenge, earning himself $12,000 USD.  His algorithm creates decision trees for every five day period, using data from the most recent atrocity and social-political records.  If his model is indeed effective, it will help USAID effectively calculate what countries need help most and mitigate any damages.

Helping data scientists make these predictions is Kalev Leetaru, creator of the Global Database of Events, Language, and Tone (GDELT).  GDELT is a database that stores information about political events from around the world.  Listing who did what to whom, when, and where, GDELT has recorded more than 200 million events going back to 1979, and plans to go even further back to the year 1800.  Every day, information is gathered by examining news reports from all the countries in the world, and through sentiment analysis – a computer automated method to determine the attitude of the writer or speaker – GDELT is able to catalogue human behavior and beliefs across the world. GDELT is available to the public, and has since provided many political scientists the information with which to test their theories and make predictions about future events.

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Mapping areas of protest in Ukraine
(Source: gdeltproject.org)

Making accurate and reliable predictions has proven to be hard; there are always going to be variables that are impossible to envision, such as plane crashes with political leaders on board, or natural disasters that wipe out cities.  We may never be able to make perfect predictions, but with the growing popularity of the business, we are certainly getting better at it.  There is a future for predicting the future.

Local Procurement for Global Success

Large companies obsess over their supply chains. Every item or component must be sourced from a producer, transported quickly and cheaply, and delivered on time. Maximizing a supply chain’s efficiency can lead to massive savings for a company.

In past years, large nongovernmental organizations and aid agencies have been taking a line from international corporations and improving their supply chains through local and regional procurement (LRP). Instead of purchasing their suppliers and goods in developed countries and shipping them where they are needed, organizations have started to carefully source their purchases from the country in which they’re operating or from neighboring countries.

This has several advantages. First, it cuts down on costs by minimizing transportation; USAID estimates that purchasing food through LRP would cost about 30% less per metric ton than purchasing it in the United States and shipping it abroad. Second, it sharply reduces the time it takes to have a purchase delivered where it is needed. Third, the economy of a region benefits from having a large organization purchasing large quantities of goods. With that impetus, farmers and producers have an incentive to increase the quality of their goods and bring them to market.

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How Does the Shutdown Affect USAID?

This week the United States federal government was shut down after Congress failed to come up with a budget plan for the new fiscal year. Officials had spent much of the previous week arguing over funding for the President’s legislative centerpiece the Affordable Care Act. With both parties refusing concessions, the United States has found itself in a situation not seen since the mid-1990’s. Over 800,000 federal employees have been furloughed, public parks and museums have been closed, and various agency activities are put on hold. But how does this domestic issue affect U.S. foreign aid agencies like USAID? So far, not very much.

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Auguring Aid: Discerning Determinants of US Foreign Assistance

Few buildings in Washington are as appropriately located as the accommodations of the United States Agency for International Development (USAID). Situated  in the Ronald Reagan Building where it shares billings with U.S. Customs and a short walk from both the White House and the Chamber of Commerce, the physical crossroads at which USAID dwells parallels the intersection of the various interests that meet—and occasionally clash—in their attempts to shape the Agency’s activities.

These activities, which account for roughly one percent of the United States federal budget,  primarily concern the administration of aid and assistance to foreign states and their populations. Working in concert with the U.S. State Department, USAID defines its raison d’être as:

“the twofold purpose of furthering America’s interests while improving lives in the developing world. USAID carries out U.S. foreign policy by promoting broad-scale human progress at the same time it expands stable, free societies, creates markets and trade partners for the United States, and fosters good will abroad.”

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A New Recipe for Aid: U.S. Food Aid Reform

Under the Food for Peace Act of 1954 (P.L. 480), the United States has provided food assistance to  approximately three billion people in 150 countries for nearly 60 years. While many have benefited directly from U.S. food programs in the last half century, the original food aid model established by P.L. 480 does not reflect  the current needs of food recipients and the financial and agricultural resources of the United States. In his budget proposal for FY2014, President Obama redistributed the funds of P.L. 480’s Title II to reduce inefficiency costs and to reach a broader range of people for the same cost.

Current Food for Peace Costs for Title II

P.L. 480 Title II

The Food for Peace Act (FPA) was implemented in a period of American agricultural surplus. In the aftermath of World War II, shipping food abroad was the most viable method of addressing global food insecurity for the United States. Today, Food for Peace’s main programs include:

  • Title I – Trade and Economic Development Assistance, which facilitates private support for food programs
  • Title II – Emergency and Development Assistance, which channels U.S. agricultural products in response to emergency and non-emergency food aid
  • Title III – Food for Development, which focuses on government to government grants to support food programs in  the least developed countries
  • Title V – Farmer to Farmer, which focuses on technical assistance between farmers in developed and developing countries

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