Commencement Address by USAID Administrator Dr. Rajiv Shah at the University of Michigan in Ann Arbor, Michigan

Friday, April 30, 2010

Professor Tesar, thank you for that introduction and the invitation to return to U-M.

Being back on campus brings back memories of my own graduation day. Ann Arbor in bloom, everyone in gowns, the marching, the music … and the speech by some guy I’d never heard of.

You know, on the way here this afternoon, I took a detour to the Michigan Union to have a look at the bronze plaque beside the steps.

The one that commemorates that night – almost 50 years ago – when JFK came to this campus and called for students to devote their lives to helping less fortunate people in the farthest corners of the globe lead better lives.

I remember checking out that plaque as an undergrad, and hearing that calling. But I never imagined that one day I’d have the honor of serving a President who inspires me as much as President Kennedy inspired others on that night in 1960.

And I never imagined I’d have to speak so near that site – on the eve of my boss’s commencement address.

This might be the hardest assignment I ever got from the econ department.

I know you all are slightly more excited to hear the President tomorrow morning. At The Big Event. In The Big House. I know I am!

So I’m not going to even try to inspire you.

But I am going to try to recruit you.


We’re hiring.

Professor Tesar told you a bit about USAID. If you’ve taken one of the Department’s development courses – and I was thrilled to hear that several were over-subscribed – you know a lot about what we do. But if you haven’t, you might be most familiar with USAID from seeing our acronym – in red, white and blue — on the side of a bag of grain … at the top of the evening news … or in a clip about a tragedy unfolding overseas.

We are the agency that invests most of America’s foreign aid, more than $20 billion a year. Providing disaster assistance is part of what we do. So is helping countries that are struggling in the wake of war. But our real focus is long-term sustainable development.

Our job is to save lives and fight poverty, expand human rights and economic opportunity, build democratic institutions and improve governance— and, in the process, enhance U.S. prosperity and national security.

We do this not simply out of a sense of moral obligation but because it is more efficient to make friends now than to fight enemies in the future. And because in a globally interconnected world, the problems we face require global solutions.

It’s a tough job description. The dedicated employees of USAID try to make a dent in some of the most stubborn problems that afflict humanity.

Consider the problem of hunger.

For the first time in decades, the number of chronically hungry people has climbed to more than 1 billion.

We know that children who are chronically hungry during their first two years never catch up – especially in the critical area of brain development. And we know how to address this problem – invest in local agriculture, improve sanitation and health systems, expand the availability of safe drinking water, and provide immunizations for common diseases.

I just returned from Afghanistan where I saw these interventions working to help communities get back on their feet. We have more than 400 staff in Afghanistan.

Many will spend weeks, months and even years away from friends and family.

That’s not easy.

And the pay, well it’s … okay. But nothing compared to what any of you could earn on Wall Street.

So why should you do it? Why do we do it?

Well, consider the benefits. I’m not talking about our 401(k) or our health plan, though they’re not bad. I’m talking about the feeling we take home at the end of the day.

The feeling that – if we do our job right – we can protect thousands of parents from experiencing the death of a child, we can help millions of mothers turn two acre plots into farms that farms that feed their families, we can assist eager learners all over the world.

And we are not just limited to acts of individual charity. We can succeed at scale. Take the oral rehydration therapy that USAID developed and distributed. It saved millions of children around the world. Or our nation’s partnership with scientists and political leaders in Asia? It helped to bring about a Green Revolution that saved hundreds of millions from starvation.

And our efforts to write off debt for African nations willing to reinvest the proceeds in their people? That effort paid for nearly 40 million more children to attend school during this last decade.

This is the kind of work we do, and almost everything that we do is shaped by the work of economists like you.

How? Well, take the work of Saul Hymans. He was my adviser. Back when I was studying here, Professor Hymans was known as the Michael Jordan of macroeconomic modeling. To a relatively nerdy student like me, his modeling was more dazzling than Jordan’s jump shot.

The handiwork of Professor Hymans, who recently retired, made me realize that econometrics offered powerful insights into how to support economic growth and smooth out business cycles. His work on growth helped people keep their jobs and lead better lives.

But as we all know, certain kinds of growth are more inclusive than others. Through the work of World Bank economists, we learned that agricultural sector growth is four times more likely to reduce poverty than generalized GDP growth in struggling countries. That is why our Agency will be investing heavily in developing drought-resistant crops and modern marketing opportunities for small-scale farmers.

Behavioral economics is also producing results that we are putting right to work.

Based on studies that showed higher usage when chlorine tablets were distributed at the tap, rather than in local kiosks and shops as is common practice, we insisted that the truckers delivering water to Haitian earthquake victims distribute disinfectant tablets at each stop. As a result, the percentage of people in Port-Au-Prince who get chlorinated water is higher today than it was before the earthquake. This victory for public safety would not have happened without the underlying work of economists.

I am determined to make our development work as evidence-based as the best economics.

So, you see, the degree you are about to receive can be used to dramatically change the fate of vulnerable people throughout the world.

Today’s development community is not just made up of USAID and other professional do-gooders. It embraces the efforts of rock stars, like Bono, and captains of industry, like the CEO of Coca-Cola – who joined with my agency to promote productive water use in Africa.

So, if your next stop in life is the business world, maybe you can help develop new ways to turn a profit by spreading the benefits of capitalism.

To help you get started, I suggest you pick up the late U-M Professor C.K. Prahalad’s groundbreaking book, “The Fortune at the Bottom of the Pyramid.” It brought attention to how businesses can profit and alleviate poverty by developing products and marketing chains for people who live on less than $2 a day.

Or you can use the knowledge, influence, and affluence that you acquire through your business career during your retirement — like my previous boss, Bill Gates.

People like to mock economists for being heartless. You’ve all heard the old joke: We know the price of everything, and the value of nothing.

Well, your class is proving them wrong.

I was so proud to learn how Wolverines helped in the aftermath of the Haitian earthquake – raising funds and donating supplies.

And I’ve heard that many of you used your school vacations to volunteer abroad.

Charles Wolcott? Raise your hand! I heard that you helped set up a micro-finance operation in rural Honduras. Benjamin Arnold, can you wave? I’ve been told that you performed a study to help a Costa Rican recycling operation reach profitability. And Nancy Cao, are you out there?

Instead of treating yourself to a graduation trip is it true that you are going to volunteer at a school in Bogota? That’s amazing.

What you all have already done as undergraduates proves that economists have heart.

Now I could say, “Follow your heart,” but that would be a bit too cliché, even at a commencement.

Instead, let me put it this way: disappoint your parents.

I did.

My parents came to Michigan from India to give my sister and myself the best possible shot in life.

When I got my degree, they were as proud as your parents are today. Because they believed they had safely launched me on a steady professional trajectory. Next stop: Med school.

But when I received my MD, I went to Tennessee to volunteer for the Gore campaign. After that ended – not exactly as I’d hoped – I moved across the country to work for the Gates Foundation.

Why? Well, I reasoned that surgery wasn’t the only way to save a life. The best development work can do that too. Save real people—from death, despair, and the need for further assistance.

My parents weren’t immediately persuaded. But after a while, they understood me.

And their support encouraged me along my path.

So, to all you parents: Congratulations on a job well done!

But beware that you might still have some hard work ahead of you.

Because I am convinced that the Class of 2010 and their whole generation – the first truly global generation – will challenge they way we all see the world.

That plaque at the Union reminded me, reminds us all, that our country is not just a place between two oceans, but also an idea: The idea that all people are endowed with the right to life, liberty and the pursuit of happiness.

And that we each have the power to make that idea a reality in even the most remote reaches of the world.

I feel so fortunate to have a job where I get paid to go to these places, and to meet, learn from, partner with, and serve these communities.

I wish you all the same sort of good fortune.


And listen: After you pick up your diploma, come pick up a USAID application.

I brought a few.

Thank you.

Department of Economics, University of Michigan, Ann Arbor, MI