MR. STEINBERG: Thank you for that welcome and thank you for coming to the program here today. I'm Don Steinberg and it's my pleasure to introduce today's proceedings to mark the release of the Quadrennial Diplomacy and Defense Review, or QDDR.

SECRETARY CLINTON: Development. (Laughter.)

MR. STEINBERG: Hmm. (Laughter.) Let's rewind the videotape. (Laughter.) To mark the release of the Quadrennial Diplomacy and Development Review. (Applause.) This could be the shortest tenure for a deputy administrator at AID in history – (laughter) – but I am indeed pleased to welcome my colleagues here at USAID as well as our friends from the State Department, including Secretary Clinton, Under Secretary Kennedy, and Policy Planning Director Slaughter, as well as others from other agencies, the Hill, civil society, and the media, for what will be an on-the-record forum. We will hear shortly from Administrator Shah and Secretary Clinton, and then we'll have some time for some questions and answers moderated by USAID's Counselor Bambi Arellano.

Winston Churchill once said that writing a book is an adventure. To begin with, it's a toy and an amusement, then it becomes a mistress and a master, and then a tyrant. And in the last phase, just as you're about to be reconciled to your servitude, you kill the beast and you fling it out to the public. (Laughter.) For the scores of professionals at State and AID who have toiled on the QDDR for the last year, I'm sure this sense of relief is indeed the dominant feeling here today. But for the rest of us, our feeling is one of gratitude.

Drawing on input from throughout both agencies, the QDDR has produced not just a report, but a process, a blueprint, and a vision for our agency's adaptation to the 21st century world of diplomacy and development. I think House Foreign Affairs Committee Chairman Howard Berman put it well when he said yesterday, “Through the QDDR, Secretary Clinton and Administrator Shah have demonstrated their commitment to changing the way we do business and increasing the effectiveness, efficiency, and accountability of our foreign affairs agencies.” And Senator Kerry said, “The QDDR represents the kind of critical thinking we need to help us achieve our national security and foreign policy objectives.”

We're fortunate at this time of change to have in Secretary Clinton and Administrator Shah leaders who combine vision, a sense of purpose, and imagination to bring the promise of the QDDR to fruition. And in that spirit, it's my distinct honor to introduce to you USAID Administrator and my former boss, Dr. Rajiv Shah. (Laughter and applause.)

ADMINISTRATOR SHAH: Good morning, good morning, good morning. Thank you, Don. Don has only been here two months, but he has become our resident QDDR expert. And for that, we thank you for your energy and enthusiasm, willingness to take this across the finish line, and great partnership in this endeavor.

Most importantly, I'd like to thank today the hundreds of USAID and State Department staff who gave your insights, your feedback, and most of all your time to this process of producing this report. At the end of the day, I really believe your contributions made a huge difference and your voices were carefully heard. I'd also like to thank members of the State Department here with us today, perhaps most notably Anne-Marie, who has been the champion and overseer of this important program and project.

There are so many people who aren't here today who spent so much time with the best of intentions and with the interests of development and diplomacy in their hearts and minds, but most notably, Jack Lew and I think Cheryl Mills just deserve a lot of credit for their commitment. Jack, now in a new role, hopefully will help us implement the QDDR. (Laughter.) I also want to thank Dana Hyde and Karen Hanrahan, Patrick Kennedy, and so many others who have been real partners in this endeavor.

But of course, we're all excited here today, Secretary Clinton, because you are here. And your vision, your leadership, your ambition in launching this review, your determination that we take development incredibly seriously as a part of our foreign policy, our national security, and our efforts to make the world a better place have kept us all going. And it was very important for me. Almost about a year ago, I had two very special days. One was when Secretary Clinton delivered a groundbreaking speech on development at the Center for Global Development, followed by an emotionally exciting moment for me, which was the chance to join this agency, where we were sworn in right here.

And we said at that time that we believe in this agency, we believe in development. And we noted that any organization is only as good as its people and its processes. And during my first year here, I have realized that our people are amazing. To a person, in fact, having the opportunity to serve with you has been just a tremendous honor for me in this first year.

But – and this might be an understatement – I don't feel the same awe and respect for our processes, rules, and regulations. (Laughter.) I currently believe – (applause) – I really do believe the work we've done in the QDDR lays out a serious blueprint for making the kind of tough organizational changes that will be required to allow everyone in this room to achieve excellence faster, more efficiently, cut through the red tape and the bureaucracy, and deliver the kind of results we all seek.

The Secretary today is taking time out from what must be one of her busiest and most unpredictable months on the job. It reminds us of her willingness to come here to USAID and sit with our USAID Forward leadership team and in detail go through our plans in procurement and human resources, in evaluation and monitoring, and in how we wanted to streamline this agency. I think that's a unique thing for someone of Secretary Clinton's stature and as the Secretary of State to spend that kind of time endorsing those reforms and building that into the QDDR in such a remarkable way.

The QDDR is a statement of support for USAID. It grants us the hiring authority to attract and retain top talent. It gives us the budget authority that we will need to make really tough – and I mean tough – tradeoffs in a difficult environment. And it helps realign our incentives so we can be a better and more inclusive leader in the space of development with all of our partners, with people in countries where we serve, with new actors in business and philanthropy that are transforming development, and with our interagency partners that bring so much technical excellence to subject after subject.

Critically, the QDDR endorses the USAID Forward reform agenda, and I thank all of you for taking that forward in your work. But I think we need to remind ourselves that, in the end, success for this agency and the people we serve will not be delivered in a document or a directive, no matter how well constructed that document is. Our success will be determined by each of you in this room and our ability to demonstrate that we can, in fact, work smarter, work harder, that we can be inclusive leaders, and we can deliver the results that we are now accountable for.

The QDDR has provided us a blueprint to get there, but it's going to be hard, and it's going to get harder as we go forward in these next few years. But thanks to the resolve of this agency, the focus and the commitment to the results that you all have shown, I think we enter 2011 on a very, very high note. In fact, thanks to Secretary Clinton's dedication to the cause of development, we are now empowered to tackle the difficult and meaningful work ahead of us. But with that authority comes accountability, and my focus in a singular way in the years ahead will be to ensure that USAID is delivering the results we seek and the results that the American people and people around the world deserve.

It's a very exciting time, and Secretary Clinton, we are thrilled that you are here to share with us your thoughts on the QDDR. Without further delay, Secretary Clinton. (Applause.)

SECRETARY CLINTON: Well, it is wonderful to be back here, and I want to thank Raj for that very kind introduction, but more than that his commitment and dedication to the mission and the people of USAID. It was nearly a year ago that I came here to swear him in as the USAID administrator, and I do think it's quite remarkable to look back and see all that you and this extraordinary team have accomplished in such a short period of time.

I also want to thank everyone who has been involved in this quite demanding process. Certainly, Deputy Administrator Ambassador Don Steinberg, Dr. Anne-Marie Slaughter, the director of State's Policy Planning staff, Pat Kennedy, the under secretary for Management, a wonderful team, some of whose names have already been mentioned, who have worked tirelessly. But this was a kind of all hands on deck experience, and many, many of you were willing to participate in the working groups, to put forth suggestions, to make comments on drafts, and I greatly appreciate your experience, your ideas, and your debates as we tried to put together the first ever QDDR.

Now, we set out to conduct as thorough and useful a review as possible, not only to identify general areas for improvement, but to try to determine exactly what changes were needed and how to start implementing them. Our success depended on the quality and range of contributions that we received from you and your colleagues around the world. And I am, by not only speaking to you but also speaking to missions around the world, thanking everyone who participated in what turned out to be a global review.

Now, I have said many times that the people of the State Department and USAID are among the finest public servants our nation has ever produced, and we have seen this time and time again in this QDDR process. And now I am delighted, finally having seen this delivered, that we can move on to the hard work of thumbing through it, marking it up, meeting about it, and determining how best to implement and to ensure that American diplomacy and development remain the gold standard.

Now, I discussed some of the findings of the QDDR earlier this week at a town hall at the State Department, and we all began to answer questions about what this will mean for our future endeavors. I know there are many more questions, and I want to just make a few broad points, and then we're going to open the floor.

The QDDR rose from a basic premise that as the world changes, we must change as well or be left behind or rendered irrelevant or marginalized. And as we performed this review, we asked one question again and again: How can we do better? How can we do better in adapting our strategies and structures to today's world, addressing the rise of new powers, the emergence of new threats, the invention of new technologies, and the evolution of our own knowledge about how to solve problems and produce results?

Now, to some extent USAID and State have adjusted in recent years to keep up with global change, but we can and must go farther. Otherwise, we risk chasing trends rather than shaping trends.

How can we do better in carrying out our programs every day by reducing inefficiencies, cutting down on waste, maximizing our resources? As public servants we are called to get the best results for our country, to make sure our investments, which are really taxpayer investments, pay off in broad and lasting ways, from averting conflicts to opening new markets, to reducing and resolving threats to our country.

And then there is the crucial question for this audience in particular: How can we do better in delivering on our commitment to elevate development as a central pillar of U.S. foreign policy?

Nearly two years ago, at my Senate confirmation hearing, I spoke about the need for the United States to use all three elements of our power: development, diplomacy, and defense. And one year ago, in the speech that Raj referred to, at the Center for Global Development, I outlined a new approach to development, one that brought new rigor, new coordination, and a new commitment to results to our programs worldwide.

Then three months ago the White House released the Presidential Policy Directive on Global Development, the first by any administration in history, which offered additional guidelines for pursuing a robust 21st century development agenda. And now with the QDDR, we have a comprehensive program of reform to help us achieve that agenda. So while this review will have a major impact on both State and USAID, it will affect many agencies across our government. It represents a milestone in the long and continuing process of rethinking and reinvigorating your core mission. And the QDDR helps us move closer to another goal, one that is a top priority for the Obama Administration: to rebuild USAID as the lead development agency of the United States and the premier development agency in the entire world.

Now, the QDDR does not represent a complete overhaul of our nation's work in either development or diplomacy. Much of what we do we already do very well. But the recommendations in this report are targeted and specific, and they cover a wide range of operations, from the equipment we provide to our officers in the field to the strategies we rely on in response to crisis, to how we recruit talent and formulate our budgets. All told, we believe that implementing this review will make us more efficient, more effective, more innovative, more transparent, and more accountable. Let me just briefly describe the recommendations that fall into four broad categories.

The first is transforming development to deliver results, to work more effectively with partner countries to generate economic growth, decrease poverty, increase opportunity. Delivering results means targeting our investments, making smart, strategic choices about where we will and where we will not dedicate our resources. Going forward, we will focus on six areas of excellence where we have the most expertise and ability and where improvements, we believe, will yield the broadest benefits across societies and countries: food security, global health, climate change, sustainable economic growth, democracy and governance, and humanitarian assistance. And in each of these areas, we are supporting women and girls, who are often the most effective drivers of progress.

As you know, the Obama Administration has launched major initiatives in global health with the Global Health Initiative, the Global Climate Change Initiative, and the Feed the Future Initiative. And starting immediately, USAID will be expected to play a bigger leadership role. AID will now lead the Feed the Future Initiative, directing a coordinated whole-of-government effort to implement the country-led agricultural strategies that you helped us develop. USAID has already begun to practice inclusive leadership in this area through the Norman Borlaug Research Initiative launched in June with the Department of Agriculture.

We hope to move leadership of the Global Health Initiative to AID by the end of 2012 if AID meets defined benchmarks in building its capacity to lead a coordinated whole-of-government effort of this magnitude. We must continue to build local capacity to help our partners carry forward development. And we need to do so in a way that enhances our ability to produce results on the ground. Now, I want to thank AID for giving this effort an important boost recently by streamlining some contracting and grant procedures to support greater collaboration with local organizations and swifter implementation of our programs at the local level.

The QDDR also identifies ways to increase innovation, to design tools and technologies that are suited to the places that we work, and that can potentially transform millions of lives. We've already created a Science and Technology Office for the first time in two decades. We've brought in 23 fellows from the American Association for the Advancement of Science. We've launched the USAID Development Innovation Venture Fund to test new ideas and bring successful ones to scale.

Now, moving forward, we will create a development lab here at USAID, a first of its kind venture that will find game changing innovations and connect them through our development goals. We will also create an innovation fellowship to bring two dozen leading development thinkers to USAID to help us drive discovery. And we are making our aid more transparent by, among other steps, creating a new web-based dashboard that will publish data on State and USAID foreign assistance. It just launched earlier this week at www.foreignassistance.gov.

Now, investments like these may originate in Washington, but as always, the true measure of their value will be determined in the far reaches of the world every day in the work of U.S. diplomats and development experts and our partners. And that brings us to the QDDR's second area of focus: improving diplomacy and development work in the field, starting with better integration and coordination among the dozens of American civilian agencies that have a presence overseas.

An overarching goal of the QDDR is to marshal the full effects of our nation's civilian power. Our civilian power is obviously critical to our leadership, but it is often hobbled our own failure to better coordinate and maximize the impact of the American team – not the USAID or the State or the USDA or the DOJ or anybody else, but the American team. And it is one of the ways that we can try better to coordinate and integrate our civilian efforts that are too often fragmented and disconnected.

In some countries, USAID, State, Agriculture, Energy, and others are all working on complementary projects, sometimes in the same building, but not together. There is no unified leadership. This must change. In an atmosphere of tighter and tighter budgets, we will rise together or fall separately. We cannot afford redundancies, duplication, and so much else that has undercut our ability to deliver on America's goals. So the QDDR lays out a plan for empowering Chiefs of Mission to direct and coordinate all U.S. civilian programs in each country while also having more of a voice in the policymaking process here in Washington. The USAID mission director will be the development advisor to the chief of mission, and USAID Foreign Service officers will be eligible to serve as chiefs of mission themselves. I just swore in a very effective USAID mission director as an ambassador, and I am looking for more. So that is a pledge I make to you.

Empowering chiefs of mission to provide much needed leadership is an organizational fix to a serious problem. But on its own, it's not enough. Inclusive leadership and successful collaboration cannot be achieved through reforms alone. It has a lot to do with attitudes and mindsets. We're each called upon to make a sincere personal commitment to working together toward shared goals, whether we're in country or in Washington. We need to care more about getting results and less about guarding our turf. And I want to emphasize this is a message that I've delivered to State and I've delivered to our sister agencies throughout the government, because everybody has to make progress. We learned a lot about how all of the agencies in the federal government are now trying to stake out their own turf, have their own lines, do their own work, and that is just a recipe for disaster and failure. So we are working hard to avoid that.

Beyond coordination, we're also making organizational changes to some of the bureaus at State to reflect the rise of new threats and our new integrated approach to connected issues. And we're stepping up engagement beyond governments by building stronger ties with the private sector, NGOs, civil society, and certainly citizens of other nations.

The QDDR's third area of focus is improving how we prevent and respond to crises and conflicts. That has to be a core mission of both State and USAID. Whether we are responding to an earthquake, preventing a country from dissolving into violence after a disputed election, bringing a swift end to violence if it does occur, our ability to prevent fragile states from becoming failed states is critical to the security of our nation and the world as a whole. And it demands both diplomatic and development intervention. So the QDDR lays out a number of recommendations how State and USAID can work more closely together in this area.

Fourth and finally, the QDDR focuses on helping us work better by working smarter, including how we manage contracts and procurement, something that Raj and the team here is really ahead of the curve on; how we run our planning and budget processes and how we set goals and measurements that will really explain what we do to ourselves, to each other, and to the public.

And on each of these fronts, the USAID Forward reform agenda is a model. You are building a more balanced workforce, one that isn't so dependent on contractors. In the last year, you've already added more than 600 new Foreign Service officers. The QDDR will help you go even further by endorsing new hiring authorities and tripling the number of mid-level career staff, a big gap at both State and AID, and the new USAID Suspension and Debarment Task Force will ensure that the work contractors do on our behalf in the name of the United States is above board and well carried out.

USAID is gaining more say over its budget, thanks to new procedures outlined in the QDDR and the recently reopened Office of Budget and Resource Management. This office will allow USAID to build and execute its budget, making informed tradeoffs that respect the agency's core competencies and priorities, while also being realistic about the current budget environment.

Through your new Office of Policy Planning and Learning, USAID is building a robust planning process to help us think strategically about current and future policies, to ensure that we are guided by cutting edge theories and practices and to monitor and evaluate the results of our work. Recent evidence summits are already ensuring that development strategies are data driven and rooted firmly in evidence. I want to commend Raj and the team for the energetic leadership that you've shown on these reforms. You didn't wait for the QDDR to be done, but you got to work and rolled up your sleeves.

Now, I know that USAID Forward and the QDDR represent a change to the status quo. Change is not easy, but these reforms also represent a vote of confidence in USAID, confidence that you can and will make the changes that are needed to continue to build a modern, efficient, world class, leading development agency. Now, with that vote of confidence does come the responsibility to deliver, and I know and trust that you will.

We've already made progress, and we need to keep moving ahead. We have a blueprint for our next steps, thanks to the QDDR. We have strong leadership with Administrator Shah and Deputy Administrator Steinberg and a wealth of assistant and deputy assistant administrators, and most importantly, the core group of AID employees who have been through all the ups and downs over the last 20 to 30 years. I am well aware of those ups and downs. My hope is to institutionalize reforms that will give AID the platform, the foundation, the strength to survive whatever political winds blow from whatever direction. I've been distressed, as I'm sure many of you have, to read recent comments in the paper from some present and future congressional members about cutting foreign aid and doing away with it and all the rest of it.

So I am very confident we can make the case, but I want to underscore that the status quo is unsustainable. Without reform, without these changes, without this energetic push to deliver results, it will be very difficult to sustain the political and budgetary support that we will need going forward. Just when I think we are poised to reclaim ground that has been lost, we face a lot of difficult decisions. You will have with me a strong advocate in your corner, who is ready and willing to take the case to the Congress. But the best way we can sell what it is we need to do and the resources required to do it is by each and every one of you embracing the changes that are needed so we can say, in the one breath, the work we do is so important, it is one of the three pillars of foreign policy and national security, it needs the resources to be able to do that, and we're not standing still. We're asking ourselves the hardest possible questions, we are changing to be as transparent and evidence-driven and results-oriented as possible. And I think that is a winning argument.

Now, your dedication to the global good is legendary, and now your contributions and commitment will determine whether this review of U.S. diplomacy and development yields results that will give us the position and standing that your work so richly deserves. I hope you will continue to work with us to improve our nation's work around the world and to make a real difference in everywhere we are. Thank you all very much. (Applause.)

MODERATOR: Thank you, Madam Secretary, Administrator Shah. It's wonderful to see all of you here this morning, a wonderful opportunity for us all to get together and hear about these important, important conclusions. As many of you know, we are being beamed to the world this morning. Our missions are watching in, as are the staff from most of our missions. And we would like to make sure that they are aware that we are responding, we are aware of the questions they've sent in.

So to start out, we would like to ask a question of the Administrator, of the Secretary, that really reflects a series of questions we got not only from Washington, but also from the field. And that is: What is it specifically that you would like to see us do in the coming year? We've talked broadly about the expectations laid out in the QDDR, but how do you visualize the role of our staff in the coming year more specifically?

SECRETARY CLINTON: Do you want to start?

ADMINISTRATOR SHAH: Sure. I will – I'll start and take that. There's probably one big conceptual thing that is the real answer to that question, and that is across all of these different things we are doing, whether it's procurement, human resources, how we incorporate the development leadership initiative into our staff and into our success, how we implement the evaluation policy and everything else – it is that we need to change our mindset. And the term we've used for that is inclusive leadership.

But it is basically – once you take accountability for delivering results, whether it's in food security or global health or any number of other areas of excellence and commitment, you have to be quantitative and rigorous about what those results are, you have to communicate them broadly, we have to do the hard work to recognize and build political support for those results, and then we have to deliver them. And we have a lot of rules that have formed over decades of every time there was a misstep or a negative outcome, there was a new rule or regulation. And we can't just focus on the compliance approach of meeting those rules and regulations. That is no longer good enough. We now have to force ourselves to make the tough changes to deliver the kinds of results we need.

And I want to commend the procurement reform team and Lisa – I see Lisa there. They keep sending me memos to sign that change the rules so that we can achieve the goals that have been laid out by the Secretary and in the QDDR. And that's exactly what I want to see more of, just every time we have rules that we can change that allow us to deliver results, whether it's building local capacity by investing in local institutions, doing host country contracting – the fact in Pakistan we got from 10 percent to 50 percent in 18 months is extraordinary. And if they can do it there, we can do that everywhere else in the world.

So this agency has a lot of knowledge and skill, but we have to change our mindset. We're no longer going to be about compliance with the ADS, and we are going to be about delivering the specific results we've talked about.

SECRETARY CLINTON: Well, I would only add that I hope everyone will read, over your holiday break – (laughter) – the 200-page QDDR that's online – and you can get a taste of this with the executive summary – and really thoughtfully review the recommendations and think about how, as Raj has said, you can be a leader in helping us realize the goals that are set forth.

I think that the mindset point is a very, very valid one, and it is hard to be part of an agency like AID that's done so much good for so many over so long a period of time and not get into the pattern of thinking, well, we've done it this way, we're going to continue to do it this way. But I don't think there's many things we've done the same way even 10 years ago that we do now in any other area of our lives. We don't communicate in the same ways. We have different kinds of social networking. There's just a lot of changes that we have to figure out how best to utilize on behalf of the work that we do.

So I would ask that you come with a very open mind, that you read the QDDR, you raise questions in the process of implementation that Raj and Don and others will run. But I hope that your first response is, well, let me see if I can understand this and how I could do this and what a difference it might make. Then I think we'll have a real shot at continuing the reform agendas.

And the only other point I would make is that this questioning about how best to do development is not just happening here in Washington. It's happening everywhere. There will be a very important summit about development at the end of 2011 in Seoul, Korea. The OECD is doing a lot more evidence-based kind of assessments of development. I want us to be at the forefront of that. I want people to be saying, “Boy, the Americans really have it right. They understand we have to do more on country-led efforts. They understand they've got to do a better job coordinating their own government. They understand that evidence should drive programs.” I mean, even if we love a program – and there are many programs I love and that I've supported over the years – if there's a better way to produce the outcomes we're seeking, we need to look at that. So that's the mindset that I think Raj is looking for.

MODERATOR: Thank you very much. Okay. We will now take a question from the floor. The microphones are available to you, if you would just raise your hands, and people will reach out to you.

Susan.

QUESTION: Hi, I'm Susan Reichle. I'm the head of the Policy Planning and Learning Bureau, and just thrilled to have – not just have you, but your whole team here with us today. I want to thank you very much – not just to be here for the release, but also to continue the discussion. Because one of the things that we talked a lot about as task force leaders of Task Force Four, which turned into 12 – (laughter) -- which lengthened to about 12 or 14 months, but it was really useful because we were able to really dig into the issues. And one of the things you particularly touched on today is how we need to make our case. And when we're overseas, whether we're development officers dialoging with our ministers of justice or agriculture or health, and working in tandem with our political section leads and econ leads, there is a sense of integration and unity of effort and getting things done. And most importantly, there's a sense of real appreciation for the work that we do overseas.

And yet when we come back here to Washington, there is much less of an appreciation and a sense of the importance of civilian power and elevating development and diplomacy. And as we enter this new year, Madam Secretary, I think one of the questions we have on our mind is not just the implementation internally but also externally, and what we can do as we're dialoguing with our counterparts on the Hill, in Congress, but also with the American people, and what you would like us – like to see with this new tool of the QDDR, now that we actually have a document, thanks again to Ann-Marie Slaughter and so many people who toiled away at this. How can we use this most effectively? Thank you.

SECRETARY CLINTON: Susan, that's a wonderful question and let me just make a couple of suggestions, but I do think we need to give even greater thought to how it should be answered. First, I think as interactive as this can be with the American public, with the Congress, with other audiences would be very helpful. That's why I'm excited about your dashboard and your posting of foreign aid, not just dollars but projects.

Because part of what I'm looking for is to enlist the American public in what we do as diplomats and development experts. And it's been my – one of my principal priorities since accepting this job, which is to move diplomacy and development to an equal level with defense. Now, we know that defense has at least a 12 times bigger budget, and we know that they have many, many, many more people, and we know that given modern military demands, they often are acting as diplomats and development experts. We know that. But we also know that the way America should lead around the world is by leading with civilian power, not military power. And so part of what I've been trying to do is to make the case for what we are doing and what we are capable of doing so that we can get better understanding and win back some of the funding that has drifted to the Defense Department.

And one of things that I noticed as a senator – and I served in the Armed Services Committee. I went to Iraq and Afghanistan several times. One of things I noticed is that there were pots of money given to young military officers called the Commander Emergency Response Funds, CERF funds, that were like – were totally unaccountable. If this young captain thought that a school outside of Mosul needed to be repaired, he went and hired people to repair it. And I know enough to know that no diplomat or development expert could have ever gotten that done without six months of paperwork. (Laughter.)

And so when people say, well, the military's so much more efficient; they can move so much more quickly; they're more agile, they're more flexible, they're more this – well, yeah. (Laughter.) And part of what I'm trying to change is that we become all of those things. But we have to demonstrate that. We can't just assert it. We have to demonstrate it, and we are. We have proven to be a very good partner in both Iraq and Afghanistan. The military now recognizes that it actually matters if you have an agricultural expert going out and talking to farmers about what they might do to rotate crops, for example. So we have to make that case. And it's not just enough for us to kind of nod at each other. We've got it make it publicly and persistently, repetitively.

So I think you're right, Susan, that the next step is to make sure we get our position out, that we get the QDDR's principal findings and recommendations out. And let's be creative. We've done some good stuff with what I call 21st century statecraft, where we're using the new technologies of communication. Yes, I know. I can't get this on my suit, so that's why I'm holding it. (Laughter.) Thank you. She just sent me a note which said, “Move the mike further away.” Thank you very much. (Laughter.) I appreciate that.

So what I'm trying to do is to figure out how we can tell our story, tell it more effectively, not get frustrated because people don't understand it or don't believe it or don't want to support it. And we haven't done as good a job of that as we need to, and I think this provides us with a platform to say we've taken a hard look at ourselves, we're prepared to change mindsets, change procedures, change rules and regulations.

And one of the things that Pat Kennedy has been laboring under is how we change our calculation of risk. If we're going to put civilians into dangerous places, as we do every single day, as you know better than most, what good does it do if they can't leave the compound? And yet, we don't want to have people taking unnecessary risks, but we don't want people handcuffed so they can't take any reasonable risk. So we're thinking through all of that, and we have to have that discussion with the broader public so that they know what we're doing. (Applause.)

MODERATOR: Excellent. We have a question over here. Raise your hand so they'll give you the mike.

QUESTION: Hi, good morning and thank you for being here. My name is Joshua Mike. I'm the coordinator for Feed the Future at the Regional Development Mission for Asia and Bangkok. I happen to be here this week for training, and I thought I'd take a risk and cut out an hour to come here and ask you a question about risk-taking. (Laughter.) You could maybe edit that out of the video. (Laughter.)

My question is about risk-taking and how the QDDR lays the foundation for fostering a risk-taking culture in the agency for the field mission staff. If you were to send a message back to the mission directors conference in Asia and to all of our colleagues right now, what elements can we expect the QDDR to allow us to take risks, not only in program design but in procurement? I understand there's undertones in the USAID Forward mechanisms and issues going forward. But what's the clear message that we can take back to the field that will allow missions management to allow the technical staff to foster a risk-taking culture in our missions?

SECRETARY CLINTON: I'm going to turn to our experts here, Raj and Pat and Ann-Marie and Don.

ADMINISTRATOR SHAH: Well, let me just thank you for taking the risk to be here. (Laughter.) I should highlight that we're doing this weeklong agricultural development training course, and it's the first time, I think, in several decades that we've started these training courses on specific issues. That's exactly the kind of technical focus, when the Secretary spoke about areas of excellence. The way we'll get excellent is by having strong technical training in those areas, so even though you're skipping out on part of it, I just want folks to know that we think it's very important that we're doing that again – (laughter) – and I want to thank the team that pulled that together.

The Asian mission directors are actually meeting right now, or just completed their meeting, with a number of our USAID Forward team leads. And they're tackling exactly that question. The answer to that question is at a couple of levels. At the senior management group level, and how we do assignments and evaluations for those leaders that go into mission director, deputy mission director positions, we have restructured the way we're using criteria to identify who goes where and who is deemed as being successful. The number one criteria is now inclusive leadership; it's the ability to work with the interagency, the ability to build support across varying partners for a vision and implementing that.

A second – the second criteria is what we're calling likelihood of success against the USAID Forward agenda. And a lot of the discussion in the team that would – sort of processing what does that mean for how we evaluate people came down to, is this the kind of person who's going to take risks to work with local institutions, to push the boundaries on host country contracting, to do so many of these different things in trying to figure out how to implement the agenda. And I think – I'm hoping that the next step will be to build those same criteria into performance reviews for everyone.

And then the final thing I'd say is just a conversation that I had with the Secretary over the summer, when we were really constructing the procurement reform, and I'll quote you – I'll get it wrong – but the Secretary said one thing we should make clear to people is the decision to work with local institutions and the decision to work with host countries, it's a policy decision, and we as policy leaders want to take accountability for that decision. We do not want every contract officer to be reviewed, if something goes wrong, to have their career impeded because they were being creative and thoughtful and rigorous in applying a policy that has come out of the QDDR and the PSD. The reason it's a policy decision is because we think ultimately that's the exit strategy, that if you're serious about the Secretary's comment about we create the conditions that enable our exit, you have to have that deep local capacity and capability. So I think we have to do more work to kind of really figure out how, especially at the contracts officer level, we take some of that risk up and have it held in a different place.

MS. SLAUGHTER: Just if I had to summarize in a couple of words, I would say the QDDR sees all of you, all of our diplomats, all of our development professionals as creative problem solvers. The focus on results says you do what you've got to do to get it done, and you do it creatively. Obviously, you don't just go smashing through rules. But the focus is on getting it done. And I've heard Raj say many times when crisis strikes – when the Haiti earthquake struck, you all had all sorts of ideas to just get it done. And that's what we really have to be able to do, because in the end we have to deliver results.

MODERATOR: All right. We'll take one more question, and then it is my understanding that the Secretary has a very busy calendar for today. I would just like to –

ADMINISTRATOR SHAH: But we will stay.

MODERATOR: We will continue the questions after her departure, but thank you again very much.

QUESTION: Hi. Thank you, Administrator Shah and Secretary Clinton for having this forum and providing the opportunity to ask questions. My name is Megan Shmitt. I'm a policy fellow in the Bureau for Global Health, and I had a question about the Global Health Initiative, the GHI. On page 76 of the QDDR, it notes –

MS. SLAUGHTER: Yay. (Laughter.) Thank you.

SECRETARY CLINTON: Thank you for reading it. (Laughter.)

QUESTION: It notes that the GHI expands on U.S. global health commitment by focusing on five vital areas in health in which we can deliver meaningful results – disease prevention and treatment, health systems, maternal and child health, neglected tropical diseases, and increased research and development. And those five areas are also cited on page 83. Family planning has been, and remains, a key part of this agency's work in global health and is also a key component of the GHI. So I'm wondering, given that, and, Secretary Clinton, given your own demonstrated commitment to family planning and reproductive health issues, why family planning isn't recognized here and, indeed, seems to sometimes be left out of public messaging around an initiative that is part of the QDDR. Thank you.

SECRETARY CLINTON: Well, first let me say – (applause) – we consider family planning part of maternal and child health, and we think it's important to make it clear it's not some special program that we're advocating for. It is an integral part of taking care of women and girls. And from my perspective – (applause) – when Raj and I have talked about investments that could make a real difference quickly, family planning is at the top of the list.

So we are 100 percent committed to family planning, but we concluded – and I think it's fair to say, Anne-Marie, you might want to add or Raj add – that we didn't think – we think we have a stronger case to make if we continue to say family planning is not something separate from taking care of women and girls. So that was the decision we made, and it was meant to actually more strongly embed family planning in our health agenda, because we also think it's an economic issue, and it's an empowerment issue, and it's an issue that cuts across much of what we do in development work.

Raj or Anne-Marie, do you want to add anything?

MS. SLAUGHTER: I can't improve on that.

SECRETARY CLINTON: You want to add anything?

ADMINISTRATOR SHAH: I would just add that – I would take it to the next level and say if you look at the actual breakdown within the GHI of where we're driving investments, the goal is to pick those areas that are most likely to generate the biggest return in terms of health and population well being. And family planning, maternal, child health is the single area that gets the biggest percentage increase, if you take nutrition out, because nutrition started at such a low base, that it's not safe. So I think that it's important to recognize that, and we want to implement that in a way that's consistent with all of the GHI principles.

SECRETARY CLINTON: In fact, one of the things that Raj and I have done is to change some of the policies we inherited to enhance the delivery of family planning and to make clear that family planning is a priority across all development missions. And there needs to be a lot more thought given as to how we effectively support family planning. So I think that you will find both from our commitment in the QDDR and, as Raj says, the budgetary support through GHI, we are 100 percent behind doing as much as we possibly can in family planning.

And I do have to excuse myself, leaving these four very able people here to answer even more questions. But I want to thank you all for once again being part of our efforts over the last two years to really rebuild and reclaim USAID, and I look forward to working with you, and I wish all of you a very happy holiday season and a very happy New Year. (Applause.)

MODERATOR: All right. We still have a very, very high-level panel up in front of us and we'll continue the questions. We'll do two or three more and then – I wanted to make the comment up front, though, that the website that deals with the QDDR does include a question-and-answer format. This will be an interactive process over the next year, if not years, where questions that people have will be responded to through a Q&A. This is an ongoing process, interactive, and we want to make sure you're being heard.

I would like to field the next question, which did come from us from Ukraine. And I think it probably is for Pat Kennedy. It is from Milan Pavlovic, who is the regional legal advisor. And he said in May 2004, under the auspices of the Joint Management Council, USAID and the State Department signed an MOU that created the Crossover Assignment Program, or CAP, which permits eligible USAID Foreign Service officers to bid on selected Foreign Service positions. The Secretary made a reference to this, but this is much more specific.

I have not seen any CAP positions listed in the past cycle. Does the QDDR envision reviving and expanding the CAP program?

UNDER SECRETARY KENNEDY: I think the answer to that is a clear yes. I think what we've been facing, both at USAID and at State for the past few years, is the shortfalls in staff that we've all been having to address. You take the shortfall in staff from both agencies and then you add to that the surge into Iraq, Afghanistan, and Pakistan, and you cannot get easily to filling all those incredibly important jobs that have been given to State and AID by the President in Iraq and Afghanistan and Pakistan. We are just ending up short.

So the answer is yes. The way we build the teamwork that the Secretary has talked about is by working together, and the crossovers are very important. I mean, I'm old. I've been at this for 38 years. And I remember in my youth, in the Bureau of African Affairs, the joint administrative operations, the combined administration operations, that delivered services to USAID and State together all over the African continent. And it was done by having State and AID people come together and work – or work on teams and deliver the services and the products that were needed.

And so the answer is I'm committed to it. I know that the State Department is. I know that USAID is. But the way we're going to do it is to take advantage of the additional resources that the Secretary has obtained for us in the FY9 and the FY10 and, hopefully, in the Fiscal Year '11 and '12 budgets, so that we have the people to do all those missions.

MR. STEINBERG: Let me just add that, indeed, the QDDR does talk in great specificity about the importance of cross-rotational assignments. It is in the context of exactly what Pat is talking about, developing skills within AID that are appropriate for State and vice versa. We are firmly committed to that, both at reasonably middle levels but also at the top. And the QDDR does talk specifically about opportunities for AID officials to serve as ambassadors and deputy chiefs of mission, and you heard the commitment of the Secretary of State to seek out additional opportunities in that regard, and vice versa. And so we are indeed opening our doors to State Department Foreign Service officers who are interested in serving in the exalted positions of mission directors.

MODERATOR: Other questions? We'll take a couple more. Over here.

QUESTION: Thank you all for coming today. I really appreciate it. I'm Jonathan Shepard from the Office of Learning, Evaluation, and Research. I really appreciated hearing the focus on evidence. And taken together with the Secretary's remarks about the somewhat dismaying news in the paper, we can sort of observe two conflicting trends: one, to focus more on an evidence-based approach that innovates and assesses alternatives, and perhaps requires us to take a hard-nosed look at some programs that may not be as successful as we might hope; and the other is perhaps a culture that encourages us to tell and adhere only to our success stories. And I just wondered if one of you would speak to that tension and how it might be resolved, especially with regard to our relations on the Hill. Thank you.

ADMINISTRATOR SHAH: Well, let me take that. Thank you first for that set of comments because the work that LER is doing is really both super-consistent with some of the excellence this agency has achieved in evaluation and learning over time, and will make that more visible. It's great to hear the Secretary speak about the evidence summit. I am very excited about that. We need to power those with more data and information that comes from the learning and evaluation portfolio.

There are two things I'd flag. One is on a fun note. For those of you that have not seen the video that was produced by the Learning and Evaluation Research team – (laughter) – there's a little cartoon vignette on evaluation. And it is fabulous to watch. (Laughter.) I was watching it very late last night at home because the team gave me the video. But it speaks to how challenging it is going to be to implement the new evaluation policy. And I just thought it was so funny. It was a woman who clearly had all this expertise about evaluation and an officer from the field, and it's a sort of comical interaction.

But we are going to have a lot of opportunities to really build excellence into program evaluations by requiring, really, that every program over $20 million has a certain type of methodological structure to collecting baseline data, doing that at the inception of projects and programs, reporting regularly on effects versus control groups, and doing that in a really consistent way that feeds our public messaging as well as our internal decision making.

And I guess that's the answer to your question in terms of how does that all tie together to budgets and programs and how we communicate with the Hill. We need to use the same data and information externally that we use internally to make judgments about why we are making the resource tradeoffs we're making. And I don't see Mike here --- oh, there's Mike. Well, Mike and the budget team are fully committed to making sure that as we get into the season of needing to make those tough tradeoffs, we're doing it based on where we think we're going to get relative value and making sure we protect those areas.

MS. SLAUGHTER: If I can just add, one of the central premises of the QDDR is development is a discipline. It is an empirical discipline. It is growing. The way we do this is to gather evidence, figure out what works, figure out what doesn't, and we have to change the frame. When we talk to Congress, when we talk to people, this isn't just assistance – does this program work, tell the stories that make people feel good and get more assistance. This is about how do countries develop. And in that, as in any discipline, if you can't say what doesn't work, you can't possibly figure out what does.

One last thing, though. I am – I can't tell you how remarkable the Bureau of Policy Planning and Learning is in terms of the short time you've been up. I've actually been sending notes to the Secretary saying, “Look at what PPL is doing. Look, they're issuing papers. Policy Planning at State can learn quite a few things.” And frankly, to be a thought leader, you're already making extraordinary strides.

MODERATOR: Thank you. I think I will close with a question that we received from USAID's vice president of AFSA and I'll run through some of the issues that were raised quickly. He is here today and I just wanted to honor, Francis (inaudible), that you took time to put this in writing. It talks about the differences between the personnel systems for the State Department and USAID and just cites a couple of examples, and then I'll ask Deputy Administrator Steinberg to respond.

Entry-level salaries at USAID start well below those paid for the same level of education and experience at the State Department. This is due to differing methodologies on promotion and other things across the two agencies. Per diem differentials are also higher for State Department and USAID personnel. Another example – the lower priority is given, of the lower priority at USAID includes foreign institute services such as training and even childcare. In some cases, State officers are eligible for certain hardship differentials, which USAID officers working next to them cannot assess.

I did want to give the deputy administrator a chance to respond to these concerns because I – we feel that in the – one of the major pieces of USAID Forward is talent management. And one of the major ways we manage the best talent and the most highly motivated talent in our agency is by ensuring that we are responsive to their concerns.

So, Don.

MR. STEINBERG: Well, I'm delighted to have this opportunity. I was, as you may know, an AFSA member for many, many years during my State Department career. Very proud of the work that AFSA does, as well as the work that AFGE does in representing our employees on both Foreign Service and Civil Service side. I also welcome the input that both AFSA and AFGE provided during the whole process of preparing the QDDR.

The question specifically on differentials is one that we're very concerned about. We have looked at, for example, entering salaries for our DLI staff. And we're reviewing those salaries right now in collaboration with you and your staff to make sure that we are attracting and rewarding people who are coming in, sacrificing – in many cases – other careers where they were making substantially more.

We're also having a monthly meeting now with the State Department, AID in the context of our Foreign Service Institute to review exactly what the training opportunities and other work requirement-related opportunities would be to make sure that there is comparability and fairness.

We're all in the same boat here. And the QDDR, if anything, established a sense of respect, of collaboration, of cooperation between the State Department and USAID, and that indeed has to be reflected in how we treat our people.

MODERATOR: And on that note, this is a very special time of the year, as they say, so I think we will end here. Please continue to look at the website, not just to post your questions but also to see the responses that will be forthcoming. We look forward to moving forward in what will be definitely a challenging year. Raj, I'll give you the microphone to close out.

ADMINISTRATOR SHAH: Thank you. I just wanted to do two things. The first is once the lights came up, I saw that Ambassador Jim Michel is here. And Jim, if you would stand up, I think we owe you – (applause) – we owe Jim a deep, deep sense of gratitude. He really was the leader for the QDDR process at USAID for many, many, many months, which sometimes might have felt like many, many years. So thank you, Jim. (Laughter.)

I just want to conclude by reiterating my gratitude to all of you for really taking this seriously and providing such depth of knowledge and understanding and input at every level. I have shared this anecdote, but before I had the privilege of being sworn in, I was able to not participate, but listen in on a QDDR meeting to start to get a flavor for what was this task at hand. And I was struck in those early task forces by the real sense of breadth and introspection that was taking place in terms of people being very creative, drawing on their career experiences, thinking differently about so many different topics.

And the challenge in this past year has been narrowing that to a set of things that are transactions that we can get done that will help us perform better and help us get to a place where we're delivering more results more efficiently and effectively to people in great need all around the world. And so your efforts have made a huge difference and your voices really have been heard. And I think no – in no place – the tangible evidence of that is that this document, in many ways, does restore for USAID the core authorities required to take ownership and accountability for delivering development results.

And so I'll just conclude by pointing out that that will require a shift in our mindset. We are going to have to be just more singularly focused on performance and results. Sometimes that'll mean asking others to do things differently, sometimes that will mean asking ourselves to do things differently, but it's not going to be easy. But it will be a lot of fun, and I hope that as you take some time over this holiday season, you reflect on a tremendous year, an agency that stood together to tackle crises around the world and continued to advance our tremendous, tremendous mission. And I look forward to working with you in the years ahead to drive this to success.

But those of us that – those of you that are here from the Hill and the NGO community, as supporters, we need you more than ever. Those of you here in the building, you know what the task at hand is. And for all of you watching in missions around the world, thank you for your commitment to just making this the very best enterprise in the world on global development. Thank you. (Applause.)