Remarks by Administrator Rajiv Shah at the USAID Forward Progress Event

Wednesday, March 20, 2013

[As Prepared]

About a year and a half ago, I traveled with Dr. Jill Biden and Dr. Bill Frist to the world’s largest refugee camp, 50 miles from the Somali border.

In a camp originally built for one-fifth its capacity, I met mothers who had carried their children for weeks across famine-stricken lands and terrorist-held territories.

The famine had proven once again the power of extreme poverty, extreme climate, and extreme ideology to undermine security and create a moral catastrophe.  

About three weeks ago, I returned to the region and saw a very different picture.

Today, we’re replacing food aid with seeds and farm tools so that farmers in over 400 communities can withstand drought and earn more.

We’re replacing piracy on the coast with small fishing markets so that young people can find work and a reason to resist a life of criminality.

And in Mogadishu—a city once synonymous with the word “war”—we’re installing solar-powered streetlights. The city’s mayor told me that when the lights went on, Somalis came out to celebrate in the streets at night for the first time in decades. 

We know this is the beginning of a long, fragile journey for the people of Somalia.

But we also know that development is not achieved in a day. Even for our own nation, this journey continues, having passed through profound periods of adversity and progress.

So while you will always be able to find a dirt road that’s unpaved or a farmer who’s not using the latest technology, we know that the arc of progress is not measured by a single success or setback.

It was precisely this journey—from dependence to dignity—that I thought about just last week in Burma. At the doorstep to China, I saw democracy beginning to flourish and a market economy beginning to take hold. And I met a leader—Aung San Suu Kyi—who inspires hope in all of us.

As President Obama has made clear, our support will remain conditional on the government’s genuine commitment to reform. But a powerful story is underway—of a military dictatorship that had a clear choice between two kinds of societies and is choosing democracy and transparency.

We recently led a delegation of American companies to Burma, including Cisco, Hewlett-Packard, Intel, Google, and Microsoft, to explore partnerships that would speed the nation’s transition—the “Tech Dream Team,” as the Burmese Minister of Communications called them.

The visit—and our Agency’s central role in bringing it about—reflected a fundamental new approach to development.

If the old model was hiring a contractor to build a road, the new model is partnering with engines of American innovation—corporations, foundations, NGOs, and faith-based communities—to help nations build innovation economies and democratic societies connected to our own.

It is precisely in places like Somalia and Burma where our work to apply this new model matters most—where our commitment to do what’s smart meets our desire to do what’s right.

That’s why, three years ago, President Obama and Secretary Clinton called for elevating development alongside defense and diplomacy as full partners in our foreign policy.

Today, that call that is being carried forward with new passion and leadership by Secretary Kerry. In his first major address as Secretary of State, he put forth a clear and businesslike argument for development as an investment in a stronger, safer America.

His call reflects the fundamental new realties of our time.

Today, private capital flows vastly exceed official development assistance, and companies in all sectors—including small entrepreneurs—seek a foothold at the intersection of emerging markets and social good.

            At the same time, we are drawing down from a decade of war and rethinking how to project our leadership and power abroad. In this environment, we know our future  prosperity and security will be determined not only by our military might, but also by our economic partnerships and moral actions abroad.

To meet these high expectations, we have to elevate development not only in the polices of nations already making good choices, but also where it’s hard and where there will be setbacks.

From Somalia to Afghanistan, North Africa to the Northern Triangle, we need one cohesive vision of development that is grounded in evidence and capable of meeting the challenges of our time.

Our new model adopts some best practices we’ve learned as a community across more than five decades…

From the Peace Corps’ engagement of young people…

To the Overseas Private Investment Corporation’s focus on the value of private investment in development…

 To the Millennium Challenge Corporation’s emphasis on the conditionality of aid; to the World Bank’s leadership in open data…

We need one clear and comprehensive model of development to take these principles to scale with new partnerships, a greater emphasis on innovation, and a relentless focus on results.

Pursuing Results-Oriented Development

We know that development is a discipline, not simply a good deed. It requires strategic planning, evidence-based approaches, and robust monitoring and evaluation to create a foundation for success.

Most important, it requires us to make trade-offs—tough choices about where our work will have the greatest impact. Since 2010, we have reduced program areas by 177—a 22 percent reduction—including in our core priorities for food and global health, where we have phased out 38 country programs. These efforts have helped free up our people and resources to go where they are needed most.

We introduced a new evaluation policy that’s been called a “model for other federal agencies” by the American Evaluation Association. Today, third parties perform evaluations to a high-quality standard, and you can access all 186 evaluations from the last two years right now on your iphone. In fact, you can download apps that also present the results of Demographic Health Surveys for more than 80 countries in the world and a USAID map of our programs so everyone in the world can see where we’re working.

Through an evaluation in Benin, we learned that community health programs naturally favored men in their hiring, which limited our ability to provide care to women. So we’re redesigning our recruitment to help more women become community health workers.

In Haiti, we learned that local councils needed support with far more basic functions that we originally anticipated. So we started a new activity to help them collect fees and enforce town ordinances.

All told, more than 50 percent of our evaluations have led to mid-course corrections, and more than 33 percent have led to budget changes.

We continually strive to maximize return on investment.

In addition to training over 400 individuals to perform cost-benefit analyses, we’ve completed 30 of these assessments for agricultural projects that have a total value of over $500 million. An initial analysis of just six of these countries has shown an average rate of return of 22 percent.

In practice, this means that we have reached more than 7 million farmers around the world with new technologies, helping to reduce child hunger and malnutrition in parts of the world where it holds back entire societies.

These results are not meant to show we’re perfect. We’re not. It’s meant to show something much more important—that we’re learning and getting better every day.

Going Local

In a world where great ideas and inspirational leadership come from everywhere—where a fourteen-year-old girl in Pakistan can become a global voice for justice—we have to renew our commitment to find and support local solutions that will lead to sustainable change.

In 2010, we took a hard look at our own systems and saw that only 9 percent of funds went directly to local institutions. Our goal is to work ourselves out of business, but instead—too often—aid perpetuates itself.

Today, we’re embracing a responsible path to replace our efforts overtime with those of local change-agents in accountable institutions, thriving markets, and vibrant civil societies.

It’s about the local community leader in Ethiopia who stands up land tenure reform that gives equal ownership to both husband and wife.

And it’s about the HIV-positive volunteer in India who defies the persistence of stigma to raise awareness about prevention.

In January, I joined Senator Jim Inhofe and several other members of Congress for a visit to Project Mercy, a small organization in the highlands of southern Ethiopia.

It was founded by Marta Gabre-Tsadick, the first woman senator in Ethiopia, and her husband Deme. Both fled Ethiopia when civil war erupted in 1974, but they soon returned to establish a holistic program that wouldn’t treat individuals as beneficiaries, but as partners in the development of economically vibrant communities.

Today, they educate over 1,600 children, and every parent who sends a kid to school either cost shares or contributes their labor to a community project.

All you have to do is meet people like Marta and Deme to know that the future of development lies in their hands, not ours.

I’m pleased to say that we’re building on our work with Project Mercy with a direct partnership that will help them turn their model farm into a sustainable enterprise that doesn’t rely on outside donations.

All told, we have awarded $745 million to local institutions in 73 countries this past year alone. That’s a 50 percent increase since 2010, and halfway to our five-year goal of 30 percent of our resources supporting local solutions.

As a result of these efforts, the Ministry of Education in Afghanistan can print its own textbooks for the first time.

A teaching hospital in Kenya can sub-grant to Indiana University to continue its HIV/AIDS research.

And a farmers’ association in Guatemala can become the signature partner in our joint efforts to improve food security for 32,000 households.

Country ownership does not mean we write blank checks to foreign governments. Before entering a direct partnership, we use sophisticated tools to assess their financial management capacity and safeguard U.S. resources.

So far, more than 33 missions have completed initial risk assessments of country governments, and 30 of those countries have successfully continued to a more robust “stage 2” evaluation. Seventy institutional assessments are underway right now.

In many cases, as recently happened in Malawi and Senegal, our assessments uncovered challenges that prevent us from working directly with local governments.

But they also created powerful incentives for governments to improve their systems so they can graduate to direct partnership. Far from being irresponsible with American taxpayer funds, this approach creates incentives for our partners to strengthen their own institutions and replace aid with self-sufficiency.

We also do not assume good policies naturally follow development investment.

Aid should be conditional on real commitments to reform—including fighting corruption, making market-oriented policies, and collecting more domestic revenue.

From the New Alliance for Food Security and Nutrition to the Child Survival Call to Action… from Afghanistan to Egypt, we are demanding mutual accountability.

The Road Ahead

Today, each of you has our USAID Forward Progress Report. It has detailed data—region by region—on our performance across a series of metrics that track our efforts to rebuild our capacity and strengthen our impact.

Of the seven metrics we established, we are proud of our success in key areas: we have rebuilt our staff, repositioned our workforce, and embraced results-oriented development. We have also exceeded our targets in private sector partnership.

But we have not hit all of our targets, particularly in prioritizing local solutions, and the felt experience of partnering with us is still too burdensome and bureaucratic.

We also know we need to continue improving the quality of our evaluations. During our recent review, we found that while two-thirds met our standards, as many as one third of them did not. We know we need to work harder to communicate our expectations and maintain our standards.

American Legacy of Innovation

With your support, we will redouble our USAID Forward reform effort to stay focused on our agenda of change.

And we will do so with a new sense of urgency.

In his State of the Union address, President Obama called upon us to join the world in ending extreme poverty in the next two decades.

The President’s call presents an incredible opportunity to harness science, technology, innovation, and entrepreneurship to achieve progress that was simply unimaginable in the past.

In the tradition of innovators like Bill Gates and Steve Jobs, we have launched mobile money programs in five countries around the world—enabling millions of the world’s poor to get a loan and save money for the first time.

In Haiti, where an earthquake buried much of Port-au-Prince under mountains of rubble, mobile money has enabled users to make more than 5 million transactions since June 2010.

In recognition of these efforts, we recently received the “Best Government Policy for Mobile Development” award at the GSMA Mobile World Congress.

In the tradition of great private sector leaders like Andrew Carnegie and Warren Buffet—who understood the power of investment to lift millions from poverty—we have dramatically expanded our Development Credit Authority, using loan guarantees to unlock large sources of local capital for small businesses.

Last year, we approved 38 new partial credit guarantees to mobilize a record $700 million in commercial capital—$500 million more than in 2011. This capital will empower more than 1 million entrepreneurs and 140,000 businesses, from a print shop in Dar Es Salaam to a mango farm in Haiti.

And in the tradition of scientists like Norman Borlaug and Gertrude B. Elion, who won the Noble Prize for helping develop the first breakthrough in AIDS therapy, we have launched four Grand Challenges for Development—grant competitions designed to focus the world’s brightest minds on our toughest challenges.

At the same time, our Development Innovation Ventures fund is bringing new faces and novel solutions to our work—70 percent of applicants have never worked with us before.

And our seven development innovation labs—that stretch from Berkeley to Kampala—are generating exciting breakthroughs and proving that young people will lead the way.  

This is just the beginning.

In my annual letter this year, I wrote about the work our Agency does around the world to forge new partnerships to answer the President’s call.

We need to shift from development being a task carried out by institutions to a movement that connects the best and most powerful aspects of America with young people, entrepreneurs, and community leaders around the world.

As we look ahead, I believe we’ll have the opportunity to elevate development not only in the policies of nations, but also in the hearts and minds of millions of people.

I look forward to working with all of you as we come together to achieve one of the greatest legacies in history and an end to extreme poverty.

Thank you.