DR. RAJIV SHAH: Thank you, thanks Sam. I appreciate the chance to be here and it's wonderful to be in a room with so many supporters and partners and likeminded development practitioners, so thank you for that opportunity.

Sam, I want to thank you especially for InterAction's support of our overall agenda and just every step of the way, really pulling together the community to help us learn and really make decisions in a way that does include the input across this broad group of partners.

Kathy (sp), I want to thank you for your leadership and partnership with InterAction as well. And Congressman Connolly, that's a wonderful call to action. (Chuckles.) I won't even try to address the big 50-year vision that you're calling for but I think we have a unique opportunity to work with the Congress to have that be part of this administration's legacy and part of this administration's partnership with Congress. And so we're excited to take you up on that offer and that challenge.

I also wanted to thank our co-chairs, Chris Elias and Susan Hayes. Chris has been a friend and partner for quite a long time and I appreciate everything you're doing here.

I have enjoyed learning deeply about - is there an echo? Or can you hear me okay? You can hear me.

I've enjoyed working with InterAction and learning about the breadth of this community. In the past three years, 80 InterAction members have put more than $8 billion of U.S. taxpayer resources through USAID into work on behalf of, really, the poorest and most vulnerable people in the world.

In many cases, InterAction members put their lives on the line and take great risks in doing this work. I was reminded of the fact recently when I was in Darfur a few weeks ago and we walked through an IDP camp called Otash.

We witnessed a World Food Programme distribution, met with mothers who were receiving health-care services, met with children who were in school or seeking educational opportunities - they were actually out for the summer.

And this particular camp was designed for about 11,000 people five or six years ago. Today, its current population is 71,000. And although the numbers are not ideal in terms of there are too many people in the camp, they've been there for too long and the pathway out is more muddled and more challenging than it should be, it is easy to visit a place like that and have a great deal of respect for the humanity that this community brings to people who really have limited access to hope and to opportunity. And so I want to thank you for that.

But just a few days after we left, eight armed men kidnapped three Samaritan's Purse workers not far from that particular camp. Two of the workers were Sudanese and were released. But a third was a woman from California who is still being held. And it is worth reflecting on the great personal risks that people take because they believe so deeply in the mission Congressman Connolly was highlighting.

Our State Department is doing everything we can to release her. But in 2008 alone, there were 62 humanitarian workers kidnapped. And so we know that your work is invaluable and it's imperiling and we know that you're motivated by, really, the best instincts to do the most good for the most people at the greatest time of need.

And we share that aspiration. And in that sense, we're very much in this together. And I see the opportunity to visit with InterAction as a bit of a family reunion; have a chance to reconnect but also a chance to talk about how we might be able to partner more deeply and more effectively going forward.

And I think that's very important because of what the congressman said. Our time and our opportunity to frame what development should be about for the next 50 years, to frame the architecture that is how we work and to improve - very importantly, to improve our operational execution capabilities is right now.

I believe the next 12 to 18 months is a unique point in time. I don't think the window will last much longer than that. And I think we have to do this in this moment.

Part of this opportunity is driven by political opportunity. This is a president who deeply believes in development. And in his Nobel Peace Prize acceptance speech and more recently in the administration's national security strategy, very clearly outlined how development is the common basis - shared prosperity is the common basis of our long-term security and our deep partnerships with populations all around the world.

We have a secretary of state who insists that development is a strategic, economic and moral imperative - and it can be all of those things - and that we have a chance right now to elevate development to really stand with diplomacy and defense as a major part of our foreign policy.

If you think about that statistically, we're a long way off in terms of our human resource capabilities, the level of budget and investment that goes into the field. But as an aspiration, it does set a target and offer a shift in mindset.

We have a secretary of defense and a chairman of the Joint Chiefs that are constantly calling for greater investment in development for it to be executed more rapidly and to build the expertise in the civilian agencies that ought to lead the development enterprise.

And as we just heard, we have a Congress that is uniquely supportive, that brings unique leadership and a real perspective on where we are in a unique moment in history as we approach the 50-year anniversary of the Foreign Assistance Act and the Peace Corps and USAID.

So to take advantage of this moment and this opportunity, I think we are going to have to do a few things differently. And I'd like to outline a few of those themes.

The first is, we have to do a better job of being evidence-based and really using the latest knowledge and insight to drive effectiveness. I had the opportunity to see this at work in our own agency in Haiti, where we used studies that have come out recently from the Poverty Action Lab that showed distributing chlorine tablets at the point of delivery of water as opposed to independently through private kiosks or other systems would increase their use and their effectiveness.

We now have data from 56 sentinel sites in Port-au-Prince that shows that more people in Port-au-Prince get access to clean water today than they did before the earthquake. And that has resulted in a 12 percent reduction in diarrheal illness compared with pre-earthquake levels. People find that hard to believe but we know that the evidence base exists to make those kinds of improvements in our work across the board.

A second example is with women and girls. We've known and studies have shown for decades that increasing investments in women and girls are for more likely to improve household living standards and indicators for children's educational attainment and nutrition.

We've seen from this own community unique leadership, and CARE and so many other partners, but I really respect what Dr. Helene Gayle is doing at CARE to make visible the opportunity that is represented by potential investments in women and girls and put that at the heart of all of their work.

In many ways, we're trying to follow those footsteps. In our major food security initiative, we are deeply prioritizing investing in women farmers. We are looking at several decades of history where development efforts have essential prioritized providing services to men. And we're asking our partners to hire female extension workers to collect gender-disaggregated data and to invest in women's producers' networks so we can disproportionately drive more of that investment to women.

In our Global Health Initiative, we are really focusing almost most of the major budget increases on maternal and child health - defined broadly - to include nutrition and to include infectious-disease control in those categories.

But when you look at where we're lagging in terms of health progress over the last 15 years, statistically, the answer is in those areas that intersect with benefits that need to be driven specifically to women and to girls. And so we're expanding our programming in that area quite significantly.

A third example is around the private sector. I think we need to do a much better job of incorporating best practices into how to reach the private sector and leverage the private sector. And I think we can learn a great deal from many of the organizations in the room today.

We all know that at the end of the day, our development resources are essentially dwarfed by both direct investment that's generated locally and foreign direct investment that could go into the sectors and the countries where we're prioritizing investment.

And again, we're able to look to InterAction partners to offer best practices and a roadmap for success. For example, Mercy Corps has pioneered efforts to expand access to bank credit using private partners to agricultural producers and to farmers. They've done that by doing real, modern market research; understanding what customers would need in that type of a product; what would be viable over time, and then helping banks design those types of projects, and then getting out of the way so that the banks can expand lending to rural parts of Africa.

They're not the only example but it's one of many and it's a mindset that can help us be more effective in trying to stretch our tax dollars.

And stretching our tax dollars is going to be particularly important in this really tough era. We need to learn from each other and really take seriously the efforts to improve effectiveness, to demonstrate and document effectiveness and to report on how we're getting more development results for the same amount of spending even as we try to increase spending to get ever more impact.

But being evidence-oriented in our work is really just one part of the major reform agenda that we're putting in place at USAID. In addition to that, we're really trying to align our work against serious country-owned and country-implemented plans. And I think AID has been, in many cases, appropriately criticized for often building parallel systems that are not visible to local government, that are not doing everything we possibly can to build local institutional capacity and that are not aligned with the long-term strategic and financial capabilities of the governments with whom we hope to partner.

I enjoyed learning about Oxfam's recent report on ownership and practice. And when I was in Dhaka last week for the food security launch - we launched a major program with Prime Minister Sheikh Hasina there on food security.

It's a tremendous opportunity because Bangladesh has had less arable land because of climate change, more weather vulnerability that's putting pressure on their ability to feed themselves, a rapidly increasing population that will reach 220 million by 2050 and very high rates - more than 40 percent - of chronic child malnutrition that essentially saps that community from the human potential for success over the long term.

But Bangladeshi leaders have now pulled together leadership from around the world in partnership with USAID and some of our experts, who we did send to Bangladesh to help support their intellectual planning work, but also with the Food and Agriculture Organization and others from around the world.

And it was wonderful to go there and see so many of the leading lights and the leading thinkers, whether they were USAID staff or famous ex-USAID employees, like John Mellor, sitting there with the government, putting together effective plans that were bringing in the private sector, bringing in civil society, bringing in NGOs and doing that in a very data-based manner.

But alignment and planning alone is not enough. We really do, as a community, have to push ourselves to build more real, local capacity in the places where we work. InterAction members know this, I think, better than nearly anybody else out there.

For example, Catholic Relief Services, based on the church tenet of subsidiary, has long insisted on working through local providers and building local NGOs in the communities where they work. I've had the chance to see this in action in agriculture and food security in Uganda but I really enjoyed learning that it was CRS that helped develop the guide for how to transition certain parts of the PEPFAR program to local institutions.

These are the types of insights that we need to do a very effective job of learning and building into all of our practices across USAID.

And so I would ask this community to focus more aggressively on evidence-based development, on country-owned planning and alignment, on creating the incentives for good and accountable governance and on building real local capacity in the institutions where we want to work.

But even as we ask more of InterAction, I realize that you should - and I do - have an expectation that USAID will deliver more as a partner as well. And this speaks to the reform agenda we're trying to put in place this year.

The reform agenda starts with building out real policy and budget capability at the agency. We absolutely have to have the ability to speak with one voice and communicate a strong development perspective not just in the interagency or not just at the NSC but, frankly, all around the world where development partners and development practitioners look to this agency and this community of leaders to offer thoughts and insights that will take our field forward and take the practice of this discipline forward.

Just this week, we've created a bureau of policy, planning and learning. That bureau has a number of different offices that will support strategic planning, support science and technology as a new area of reinvigorated investment, support country strategies so that we can move away from annual operational planning and move towards five or even 10-year country strategies that demonstrate long-term commitment and strategic focus.

And through our budgeting capabilities, we will redesign how we allocate what are essentially a series of congressional priorities in a way that allows our country missions to have more flexibility and have more capability to focus on a handful of specific priorities, as opposed to trying to do 15, 16, 18 different things with a relatively modest annual budget.

The second part of our reform agenda is our procurement reform. And I know that each member of my agency and every person in this room wakes up every day really committed to saving lives and improving people's livelihoods.

But right now, we all spend way too much time reporting on process indicators, doing paperwork to demonstrate that we know how to be part of this system and working to provide almost a false transparency that isn't actually able to tell a visitor to a program, how much did you spend on this program, what are you getting in result, and what's your unit cost. And so that's why we're putting procurement reform at the top of the agenda. We're determined to streamline our processes.

And I'd like to thank the InterAction taskforce in particular that's been advising our procurement-reform team.

Our general counsel, Lisa Gomer, will be here later this week to talk about this issue in more detail. But let me just preview a few of my goals for our procurement reform.

The first is, I hope we use this to broaden our base of partners. We simply can't be successful if we work almost exclusively through a small handful of large-contract partners. We need to have a very broad and diverse base of organizations we work with in the NGO community here in the United States and amongst local institutions all around the world.

Second, we essentially need to reduce the size of awards and encourage greater competition in our work. I know that we have tools that allow for certain forms of competition, but what we really need is the competition of ideas and the competition of different strategies for doing things like building local capacity in how we execute the work, and building that into our procurement system will be an important focus of mine.

Third, we will set specific targets for building local capacity, driving resources into local institutions and expecting strong institutional development as we practice this work. We simply have to, as we spend our resources, create the conditions for our long-term exit. And that will only happen if we take this part of our work very, very seriously.

Fourth, we will significantly insource program design, monitoring and evaluation. The days of putting in a large contract the acts of designing the program, executing the program and evaluating the program in one fell swoop need to come to an end. Congress has asked us to do it, it's the right thing to do and we absolutely have to do that in order to be more accountable, transparent and premier, as the world's premier development agency.

And finally, fifth, we will really prioritize true and effective transparency. There's no reason why someone shouldn't be able to go to a GIS map, click on a country, understand where all of our projects are, what they're doing, and the kinds of outcomes they're getting. It should be easy to access. It should be available to laypersons. And it should make our work far more accessible and transparent. So our procurement reform is very important, but our overall reform agenda won't stop there.

In August of this year, we will launch a series of human resource and talent management reforms. We absolutely need to do this to regain the competitive advantage and regain our edge. You know, what I saw in Haiti - and what I saw amongst USAID teammates in Haiti, was that we had people from all over the world who said, I've served in Haiti; I know something about Haiti; I can help solve this problem.

And they came from India, in health; they came from Uganda for recovery planning; they came from Afghanistan to support parts of our program. We have the talent and we have far more capacity in our agency than is apparent to most that observe us.

We need to do a much better job of harnessing and unleashing that capacity against the biggest-priority problems. And our talent management reforms will essentially involve hiring in a significant number of new staff, including our current development leadership initiative, but also including mid-career technical professionals that will regain our ability to be technically competent and technical leaders again.

It will also include more effectively deploying our staff, whether it's deploying people from places where they're already out in the field to hotspots on shorter-term assignments or more rapidly deploying new staff, like our first tour officers and our development initiative staff, we need to get folks into the field faster and we need to get them doing things that they're capable of doing more effectively.

And a final, but very important, part of our talent management reform will be our efforts to better articulate and offer opportunity to Foreign Service nationals. This is very important.

I want everybody in this room to realize what I've come to learn, which is that of the 8,000 staff that we have, 4,000 are Foreign Service nationals. They are from the places we work. Every time I visit a mission, I sit with this group of leaders. And they are real leaders.

They include people who've been ministers of state; they include people who are doctors or technical experts; they're people who know both the culture of their community and how things will be perceived and received far more effectively than, generally, outsiders will.

And we need to do a much better job of treating them like the professionals they are, offering growth paths, rotating them through a broader number of countries and leveraging the technical excellence they bring in order to rebuild our agency's capabilities.

The final part of our reform agenda this year will be in monitoring, evaluation and transparency. And I think Ruth Levine is here with us today. If you are, could you please raise your hand up?

Ruth comes from the Center for Global Development, and I think you all know is one of the acknowledged leaders in this field. I've asked Ruth to lead this effort. And I have also asked her to be aggressive and creative about it.

In every program we do, as appropriate, we should be collecting baseline data and setting up study designs so that we can learn along the way.

One of Ruth's mantras is that we're not going to invest in collecting data, necessarily, for Washington. We'll do some of that. But the focus has to be for improving program execution and program management.

And you know, producing 800-page reports that are not, essentially, read or used to improve the program implementation is simply the wrong way to try to execute a development agency.

We need to be thinner in our requests for data and information, but far more aggressive about using that data and information to make actual management changes in the structures of our programs. And we need to do it all in a way that's completely transparent.

And let me tell you why I believe transparency is such an important part of this. I think we have the best mission in the world, bar none. The ability to go into some of the toughest places around the world and invest in those women or those girls or those young students and provide an education, provide access to health, provide entire communities with the economic basis to be successful over time - that's a great honor, to get to do that. And everybody in a more interconnected and open world wants to be a part of that mission.

But by using development-speak, by describing everything in 400-page reports and by failing to make our work as transparent as possible, we're not really letting in as many partners as we could. InterAction does a wonderful job of reaching millions of Americans with the beauty that is this mission.

And I want AID to learn from you and to do the same thing. And once we show people the cost-effectiveness of these investments, I'm convinced that we will get to achieve what the secretary has called for, in terms of elevating development to really stand with diplomacy and defense, and someday, on a budget basis, you know - (laughter) - in an aggressive way. So that's the agenda.

But let me be honest about what we're up against. Despite the president's strong resource request, we're going to face strong headwinds on the Hill. When the economy is rough and deficit reduction rises to the top of the agenda, more money for foreign assistance is going to be a tough sell. So this community cannot take anything for granted. And we're going to have to ask a lot of you in your organizations, specifically.

We need you to do some things differently. We need you to be transparent about getting more money out of the Beltway and into the countries and into the communities where we're trying to serve. We need you to make the decision to invest in training local resources, instead of choosing to fly in American experts, wherever you're given that choice. And we frankly need to ask your governing boards to do something different and brave.

We need to ask your boards to measure success by your ability to create the conditions for your own eventual, long-term exit. This is hard, because nearly every institution I've ever been a part of has often measured its own metric of success based on its size, based on its budget, based on its staffing. But we need to be the leaders, in this room, that figure out how to put the people we serve and the sustainability of our development enterprise before our own institutional interests.

And I come to this room for that specific request, because I know InterAction NGOs. And I know that you, in your core, share that as a core value and a core belief. That's why you got into this work; that's why you have faith in this work; and it's why you do it against all odds. So I would just ask that we make these changes, that we make these transformations in our business model.

And if we do, you know, I think the potential for us to live up to the congressman's vision for another 50 years with a stronger rationale, with much greater investment, with far more transparent aid assistance programming and with the ability to really motivate the entire world around our mission, I think we will successfully do that together.

So I look forward to having this conversation with you, with the Congress, with the rest of the administration. And I look forward to taking your questions. Thank you. (Applause.)

MR. : I think we'll have time for, maybe, one question. Raj, are you okay for a question, if we could just do that, and then we'll have to make it very brief.

DR. SHAH: Okay.

MR. : One or two questions. Make your question brief and we'll try to get - there are some mikes scattered around the room.

Q: (Inaudible, off mike) - mission director has all of the knowledge on the ground and the skill sets needed. The ambassador often doesn't have a clue, but the ambassador ties the purse strings. So can you comment on that - or how you might be able to help that shift? (Laughter.)

DR. SHAH: I thought you said one easy question?

MR. : Yeah, sorry about that. (Laughter.)

DR. SHAH: Look, at the end of the day - I just came from Bangladesh, where we have an ambassador who is so fully supportive of our mission, and we have a mission that's really deeply engaged as part of the ambassador's agenda. And when I see those two things work together, I get really excited about seriously elevating what we're trying to do. And I'll be specific.

The reason we had such a high-level engagement with Prime Minister Sheikh Hasina with half of her cabinet and with all of the different U.S. resources on the ground in Bangladesh was because the ambassador said, this food security effort is not just going to be important to USAID; I'm going to make this something that is part of my priority, and I'm going to put time and effort and resources into partnering in a way that will elevate our aid mission, that will make it more visible, and that will allow us to be successful.

And to the credit of our AID mission, they walked through that door. You know, they brought in expert resources from other countries - USAID resources - they worked for months to develop the kind of technically grounded planning that I think is what we want to see again in this agency, and they did it directly with ministers and with the prime minister, with the support of the ambassador.

I think that's a model that works. I've seen models that don't work, and I think you've described one version of it. There are other versions, as well. But we need - across the board, we need ambassadors to own and to support the AID mission.

And we need the mission, frankly, to be a little bit more politically engaged so that we recognize that, often, the scale factor and the success factor, at large-scale programming, is having that high-level political will and political commitment of heads of state.

And you're generally going to get that in an easier and more transparent way if you have the support of your ambassador. So I'd like to see those two things come together, but come together in a way where roles are clear, where leadership is clear, and where the USAID mission has the capability to draw on the excellence that does exist around the world to really elevate and to expand the work that we do.

And let me just make - this might be too technical, but let me just say - my favorite moment in Bangladesh was, I got there at 1:00 in the morning. I stayed up till 3:30 reading the technical papers that they had done for this meeting. And this was USAID-supported work that was done hand-in-glove with the ministry. And you know, when you look at Bangladesh and you say, what has happened?

You know, incomes have gone up over the last 40 years; why have they not had the kind of dietary diversity improvement that would wipe out malnutrition? The reason is - and these guys did the analysis - the real price of food - the real price of rice had gone down by about 40 percent between 1983 and 2007. It had gone up for animal protein, dairy, for vegetables, by 200 percent, for that basket of foodstuffs.

So people, of course, continue to eat even more rice as part of their daily basket of food consumption in an environment where that's just not sustainable, and it's not solving their nutrition needs. And I just thought, you know, this was the kind of analysis this agency was able to produce time and time again in case and in sector and in country after country.

And I want to get back to that level of technical excellence, where we're really driving the data-generation process, the evidence-based decision-making process and the policy analysis so that when a head of state has a question about, how do I solve this problem, their first inclination is to call us again.

And you know, that would be a great thing, and it's very consistent with what the congressman mentioned. And it's why we're so eager to work with you, sir, to really be effective again. Thank you.

MR. : Please join me in thanking Raj Shah for joining us. (Applause.)

(END)