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U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT:

MANAGEMENT CHALLENGES AND STRATEGIC

OBJECTIVES

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

ORGANIZATION, AND PROCUREMENT

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

APRIL 28, 2009

Serial No. 111–50

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

EDOLPHUS TOWNS, New York, Chairman

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

MARCY KAPTUR, Ohio

ELEANOR HOLMES NORTON, District of

Columbia

PATRICK J. KENNEDY, Rhode Island

DANNY K. DAVIS, Illinois

CHRIS VAN HOLLEN, Maryland

HENRY CUELLAR, Texas

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

PETER WELCH, Vermont

BILL FOSTER, Illinois

JACKIE SPEIER, California

STEVE DRIEHAUS, Ohio

——— ———

DARRELL E. ISSA, California

DAN BURTON, Indiana

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

BRIAN P. BILBRAY, California

JIM JORDAN, Ohio

JEFF FLAKE, Arizona

JEFF FORTENBERRY, Nebraska

JASON CHAFFETZ, Utah

AARON SCHOCK, Illinois

RON STROMAN, Staff Director

MICHAEL MCCARTHY, Deputy Staff Director

CARLA HULTBERG, Chief Clerk

LARRY BRADY, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, ORGANIZATION, AND PROCUREMENT

DIANE E. WATSON, California, Chairman

PAUL E. KANJORSKI, Pennsylvania

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

HENRY CUELLAR, Texas

JACKIE SPEIER, California

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

BRIAN P. BILBRAY, California

AARON SCHOCK, Illinois

JOHN J. DUNCAN, JR., Tennessee

JEFF FLAKE, Arizona

——— ———

(III)

C O N T E N T S

Page

Hearing held on April 28, 2009 .............................................................................. 1

Statement of:

Walsh, Michael, former director of procurement, USAID Insidengo; James

Kunder, former Deputy Administrator, USAID & Bureau had for Iraq

and Afghanistan Programs; Thomas Melito, Director, International Affairs and Trade, U.S. Government Accountability Office; and George

Ingram, Academy for International Development ...................................... 6

Ingram, George .......................................................................................... 61

Kunder, James ........................................................................................... 40

Melito, Thomas .......................................................................................... 47

Walsh, Michael .......................................................................................... 6

Letters, statements, etc., submitted for the record by:

Ingram, George, Academy for International Development, prepared statement of ........................................................................................................... 63

Kunder, James, former Deputy Administrator, USAID & Bureau had

for Iraq and Afghanistan Programs, prepared statement of ..................... 42

Melito, Thomas, Director, International Affairs and Trade, U.S. Government Accountability Office, prepared statement of .................................... 49

Walsh, Michael, former director of procurement, USAID Insidengo, prepared statement of ........................................................................................ 9

(1)

U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT: MANAGEMENT CHALLENGES AND

STRATEGIC OBJECTIVES

TUESDAY, APRIL 28, 2009

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

ORGANIZATION, AND PROCUREMENT,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 9 a.m., in room

2154, Rayburn House Office Building, Hon. Diane E. Watson

(chairwoman of the subcommittee) presiding.

Present: Representatives Watson, Connolly, Cuellar, Hodes,

Bilbray, and Duncan.

Staff present: Bert Hammond, staff director; Valerie Van Buren,

clerk; Adam Bordes, professional staff; Dan Blankenburg, minority

director of outreach and senior advisor; Adam Fromm, minority

chief clerk and Member liaison; Ashley Callen and Daniel Epstein,

minority counsels; and Glenn Sanders, minority Defense fellow.

Ms. WATSON. I would like to call to order the hearing of the Subcommittee on Government Management, Organization, and Procurement. We also include Government oversight. We will come to

order.

Today’s hearing will examine the short and long term management challenges and strategic objective of the U.S. Agency for

International Development as it contends with its ever increasing

portfolio of foreign assistance needs and geopolitical objectives.

Without objection, the Chair and the ranking minority member

will have 5 minutes to make opening statements, followed by opening statements, not to exceed 3 minutes by any other Member who

seeks to be recognized.

Without objection, Members and witnesses may have 5 legislative days to submit a written statement or extraneous materials for

the record.

Today we are holding this hearing on the U.S. Agency for International Development [USAID], its management challenges and its

strategic objectives.

USAID is the lead Federal agency that directs and manages U.S.

development assistance programs. Over the past decade, USAID’s

role has been expanded to meet the many new challenges of the

post-cold war and 9/11 world. Reflecting the newfound importance

of our Nation’s foreign assistance programs, USAID’s budget and

responsibilities have been significantly enhanced over the past decVerDate 11-MAY-2000 15:09 Jun 07, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 U:\DOCS\56374.TXT KATIE PsN: KATIE
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ade. Furthermore, the growing importance of the Agency’s mission

is articulated in the President’s elevation of development to theoretically equal footing with defense and diplomacy as part of the

three Ds of U.S. national security policy.

The question arises as to whether USAID is equipped to meet

the new set of challenges. Many believe it is not and that the Agency lacks a clearly defined development strategy, and suffers from

significant management and human capital challenges, and program duplication and overlap.

I am struck, for example, by the number of U.S. Government

agencies that plan and implement foreign assistance programs.

They have become so numerous that the Department of State and

USAID control a little over half of the U.S. foreign assistance budget. Taken alone, USAID, it is my understanding, manages just over

40 percent of the total U.S. foreign assistance budget. The proliferation of foreign assistance programs throughout the U.S. Government has resulted in a patch-work of different programs with

different strategic objectives. Many, if not most, of these programs

are important and beneficial, but I am concerned that there is a

lack of coordination to ensure that the full benefits of these programs are realized.

If USAID were in counseling, I would observe that it is a patient

that suffers from serious identity issues. In effect, USAID has become everything to everyone. Each year USAID is given new

marching orders and budget authority. The problem is that there

is no programmatic consistency for meeting the Agency’s long term

strategic goals and objectives. Programs may take years to implement on the ground, but the Agency’s legislative authority may not

reflect the realities of implementing programs on the ground.

USAID’s development strategy and strategic objectives may be

further blurred by the semi-merger, in 2006, of the Department of

State and USAID. As a result of the creation of the ‘‘F’’ Bureau and

the Director of Foreign Assistance at State, USAID and State share

identical strategic goals. The question arises: are USAID’s strategic

goals too broad and oversized? Are we muddling foreign policy objectives with development objectives?

Clearly, USAID’s problems, if we are completely honest, are in

part the making of ourselves, the Congress. Many of us are aware

that Congress has not passed a foreign assistance authorizing bill

since 1985. In effect, the authorizing committee has been

marginalized. I applaud and fully support Foreign Affairs Committee Chairman Berman’s efforts to overhaul the antiquated Foreign

Assistance Act of 1961 and to reinvigorate the authorization process. I believe the success of these efforts will have direct bearing

on the future viability and success of the program.

To date, the administration has not named a new Administrator

for USAID. It is my sincere hope that the administration will name

the new Administrator as soon as possible. Let me assure my colleagues on the subcommittee that I intend to hold a followup hearing on USAID and invite the new Administrator to testify once he

or she has been put in place.

Finally, I want to thank all the witnesses that are here today for

taking time to appear before our subcommittee. Most of them have

decades of experience working at USAID and have devoted their

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careers to development work. I look forward to their comments on

an issue that is sometimes overlooked by Congress but is nonetheless an essential element of our Nation’s foreign security status.

All right, the ranking member.

Mr. BILBRAY. Thank you, Madam Chair. Madam Chair, to expedite the process I would like to introduce my opening statement in

a written form, please.

Ms. WATSON. No objection.

Mr. BILBRAY. Without objection, thank you.

Let me just say, though, briefly that I think USAID has a long

history of service around the world. I think that, frankly, historically it has taken what is thrown at them and responded as best

they could.

Let me say, though, getting back to this issue of building on the

concept of teaching people to fish rather than giving them fish, my

biggest concern is that there may be a lot of fault for USAID for

problems that we face today. A lot of it may not be rightfully pointed out at the organization because, like the Chair pointed out,

there is a whole lot of other agents out there under the guise of

USAID.

I think that one of the things that I would ask us to take a look

at is where we are going long range with this. Let me just say this

to the gentlemen here: You have a Democrat and Republican

standing in front of you. We have a new administration that

doesn’t even have a head yet. I would like these hearings to be set

as a proactive process rather than a reactive judgment.

The proactive process is pointing out to the new administration

the pitfalls and the mistakes in the past, and the opportunities and

successes of the past, so they can avoid those pitfalls and take advantage of the opportunities. I hope all of you approach this with

the attitude that here is a chance for your information and your

experience, both positive and negative, to be contributed to help

this new administration maximize those opportunities and avoid

the pitfalls.

I think that is one thing Republicans and Democrats can do on

this Oversight Committee now, rather than waiting for a couple of

years and then having Republicans find ways of attacking the new

administration and finding fault, is for Democrats and Republicans

to work together to point out problems and challenges so that the

new administration can avoid them.

Let me just say that one of the things that I feel really concerned

about is that a lot of our foreign aid goes in under the guise of

teaching capitalism, teaching independence, and teaching productivity. What we end up doing, then, is teaching them corruption,

mismanagement, and all the negative things that we point to other

countries about.

Many times this is the only face except for the military that

parts of the world know. And the last thing we want them to think

is that what America is about is big guns and stupid Government

programs or inefficiency and corruption. I think that is the big

challenge. You just have to admit, around the world, some of them

have to shake their head in how could America be as successful as

it is if this is what it is all about.

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So I just have to tell you frankly, my perceptions—and I do not

blame USAID alone on this—my perceptions of the greatest challenges we face today in Afghanistan are not military. I think the

front line failure in Afghanistan has been in our inability to go in

and appropriately apply aid during the period of opportunity we

had over the time. I say this to the Bush administration. As big

as a supporter as I have been on certain issues, I think that the

USAID program in Afghanistan has been a disaster. There are always reasons for that.

Believe me, I was a mayor when I was 27. I know it is easy for

those who have never done anything to second guess those who are

in there. Those who have never done anything have never made a

mistake. But what I really would ask you to do is point out how

we could have done it better in places like Afghanistan so that the

new administration can figure out how to avoid the problems, so

that our men and women who are fighting over there won’t have

to fight this war again, and so it will actually be a success.

I think the success, Madam Chair, in our last two interventions

is not going to be counted by the men and women who won the

war. It is going to be counted by the economic and social success

that we leave behind. Our USAID programs are actually going to

be the ones that pull that off.

With that, I yield back, Madam Chair.

Ms. WATSON. Thank you, Congressman Bilbray.

Now I will yield to Congressman Cuellar.

Mr. CUELLAR. I don’t have a statement. Thank you, Madam

Chair.

Ms. WATSON. All right.

Congressman Connolly, do you have a statement to make?

Mr. CONNOLLY. Thank you, Madam Chairwoman.

Last week, Secretary Clinton testified before the Committee on

Foreign Affairs, of which I am a member. I was pleased to hear

that the State Department is pursuing a more comprehensive approach to diplomacy, one that will consist of something more than

reaching for the holster.

In the last 8 years, USAID has been hollowed out. We need to

restore USAID to being the premier development agency of the

U.S. Government. An ambitious foreign aid agenda is the necessary

complement to this more thoughtful approach to diplomacy.

As we learned and continue to learn from Afghanistan, it is essential to maintain a level of trust among the general populations

in which the United States has a national security interest. Only

in the context of widespread fear and distrust of the United States

can regimes such as the Taliban emerge and consolidate power. We

witness similar problems now in Pakistan where the Taliban has

unfortunately a growing influence.

Since prior to the Soviet invasion, we have invested billions of

dollars in military aid for various factions and governments in Afghanistan and Pakistan. Yet those countries are now controlled or

in danger of falling under the control of factions whose raison

d’etre is opposition to U.S. influence. Clearly, our aid has not been

as efficacious as it could have been.

I would suggest that our foreign aid must be closely linked to our

national security objectives but must not be perceived as entirely

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self-interested. This necessitates investing in countries where there

is not necessarily an immediate and clear national security interest.

Moreover, aid should not be based on political alliances with certain parties of politicians. When we were funding Afghan revolutionaries in the 1980’s, we did not anticipate that they would use

their newfound skills to attack America two decades later. Our aid

to Israel may be a model. Regardless of which party has been in

power, the United States has provided aid to Israel with great effect.

Within this context of depoliticizing aid on one level so that it actually reflects our national agenda, I greatly appreciate the testimony we will hear today. James Kunder notes in his testimony

that we should have a more comprehensive strategic vision to guide

our distribution of aid. It is kind of a long term strategic planning

could help avoid reactionary programs such as political interventions that sometimes end up being counterproductive.

Michael Walsh emphasizes the importance of maintaining

USAID connections to small contractors because these non-governmental organizations are often closest to the people we want to

serve. If we are attempting to build trust with populations in areas

that are important to our national security, then this is an important ingredient of success.

Again, I want to thank you, Chairwoman Watson, for holding

this hearing. I look forward to our ongoing efforts to enhance the

efficacy of USAID.

Ms. WATSON. Thank you. If there are no additional testimony,

the subcommittee will now go to the witnesses before us today.

It is the policy of the Committee on Oversight and Government

Reform to swear in all witnesses before they testify. I would like

to ask all of you to please stand and raise your right hands.

[Witnesses sworn.]

Ms. WATSON. Let the record reflect that the witnesses answered

in the affirmative. Now let me begin again by welcoming and

thanking our distinguished expert panelists for agreeing to be with

us this morning.

First, Mr. Michael F. Walsh is the director of Programs for Finance, Grants, and Contracts at InsideNGO, an association for

chief financial officers and grants and contract managers for nongovernmental organizations working in international development

and humanitarian relief programs. He previously served in various

roles for two decades at the Agency for International Development

and most recently worked as USAID’s Chief Acquisition Officer and

Procurement Executive.

Then, Mr. James Kunder is a founding member of the Kunder/

Reali Associates, an Alexandria-based consulting firm focusing on

international development and reconstruction issues. He is a senior

resident fellow in economic policy at the German Marshall Fund of

the United States. Since 1987, he has served in multiple senior positions at USAID both domestically and abroad, and until January

2009 was Acting Deputy Administrator. In addition, he has published numerous articles on international humanitarian issues,

peacekeeping, and crisis management.

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Mr. George Ingram is the executive director of the Education Policy and Data Center in the Academy for Educational Development.

The Center works to improve education policies and programs in

developing countries through better access, use, and analysis of

education data and information. He also serves as president of the

U.S. Global Leadership Campaign, an alliance of more than 400

companies and NGO’s that promote greater resources for U.S. engagement in international affairs. Prior to his work in the private

sector, Mr. Ingram was a senior staff member of the House of Representatives Committee on Foreign Affairs responsible for international economic and development issues.

Then, Dr. Thomas Melito is a Director in the International Affairs and Trade team at GAO. In this capacity, he is primarily responsible for GAO work involving the management of development

assistance by the U.S. agencies and multi-lateral organizations.

Over the past 10 years, Mr. Melito has been focusing on a wide

range of issues including U.N. management reform, peacekeeping

procurement, the efficacy of international food assistance, and combating human trafficking. Mr. Melito holds an M.A. and Ph.D. in

economics from Columbia University and a B.S. in Industrial and

Labor Relations from Cornell University.

I welcome all the witnesses and we look forward to your testimony. I would ask that each of the witnesses now give a brief summary of their testimony and try to keep this summary under 5

minutes if you can. Your complete written statement will be included in the hearing record.

So Mr. Walsh, we will start with you. Please proceed.

STATEMENTS OF MICHAEL WALSH, FORMER DIRECTOR OF

PROCUREMENT, USAID INSIDENGO; JAMES KUNDER,

FORMER DEPUTY ADMINISTRATOR, USAID & BUREAU HAD

FOR IRAQ AND AFGHANISTAN PROGRAMS; THOMAS MELITO,

DIRECTOR, INTERNATIONAL AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND GEORGE INGRAM,

ACADEMY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF MICHAEL WALSH

Mr. WALSH. Thank you. I would like to thank the subcommittee

for taking the time to look into these important issues and for the

opportunity to share my perspective. This morning, I would like to

speak to you about the opportunities and challenges facing USAID

and the broader NGO community.

As I was leaving USAID in 2007, an estimated 50 percent of

USAID foreign service officers were eligible for retirement. As they

leave, their years of experience leave with them. Since then, approximately 50 percent of the USAID officers have less than 5

years experience with USAID.

These newly minted officers represent a new USAID. This is a

new USAID that: one, must bridge the experience gap by bringing

in more mid-level foreign service officers and providing the entire

work force with better training and supervision; two, do more than

just award grants and contracts but support their procurement system with more staff and funding to update policies and procedures

and to roll out worldwide systems; and three, address real operVerDate 11-MAY-2000 15:09 Jun 07, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 U:\DOCS\56374.TXT KATIE PsN: KATIE
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ational issues—those identified by a formal committee of USAID,

NGO, and contractor operational professionals—with congressional

support to look at the actual nuts and bolts of implementing foreign assistance. Now is the time to commit to change.

Regarding my first recommendation, USAID staff need more

technical and professional training. They have simply lost their

technical edge. Beyond classroom training and Web-based training,

they need knowledge management systems, conferences, and other

opportunities for professionals to share ideas and experiences, especially with experts in the broader sector. Also, USAID needs the

authority to hire mid-level staff to narrow the technical and experience gap.

Until this can be done, USAID will continue to bundle larger

awards made through limited competition. As a consequence, small

and medium sized organizations have difficulty competing. The

large get larger and the others don’t. The resulting concentration

of the sector means fewer new ideas and approaches to address the

challenges of development.

The burden of over regulation and multiple layers of audit coupled with staff with limited experience result in a compliance oriented, risk avoidance approach to management. We heard of a

technical representative who tracked all grantee travel and field

trips with a matrix to carefully ensure that they performed as proposed. He didn’t have time to visit the field sites to get a firsthand

look at the work. We have to get beyond auditing to the penny and

support managing to the dollar, risk management rather than risk

avoidance.

The contracting officers I supervised in east Africa flew into

souther Sudan and saw firsthand the challenges of working there.

The terminal is often just a cluster of thorn trees and the roads are

only notional. Yet the NGO’s working there must still comply with

Buy American, Fly American, and Drive American while documenting every penny and every partner. I expect my COs, my contracting officers, to understand this context and manage it appropriately

within the rules and regulations.

USAID’s experienced procurement policy and support staff have

this development perspective as well, yet they are overwhelmed. At

this point, there is one person responsible for all grant policies at

USAID, which represents approximately $4 billion annually. Another specialist is responsible for personnel services contracts,

which is the employment mechanism used to engage half of

USAID’s work force, especially overseas. Only four people are available to negotiate overhead and that is probably the largest ratio of

negotiators to cognizant agencies of any other civilian agency in the

Government. Just four people conduct audits around the world.

They need help, especially if USAID is to move forward with a

new work force and a new Foreign Assistance Act. As you address

issues in the Foreign Assistance Act, please do not neglect to increase the efficiency and effectiveness of implementation. The fly

by Drive American requirements come from another area. The importance of development to national security suggests that Congress should consider tradeoffs between tied aid and the effective

use of the development dollar.

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Further, the approvals associated with these requirements are

very cumbersome, requiring, for example, every single international trip to have prior approval and a protracted waiver process to purchase laptops and right hand drive vehicles because none

are made in the United States.

We encourage Congress to consider establishing a formal advisory committee of USAID, NGO, and contractor representatives

and an operations issues review committee to examine longstanding impediments to efficient and effective implementation. We ask

for congressional support to assure that the new USAID and its

contractors and grantees are not saddled with encumbrances from

the old USAID. Development is simply too important to tolerate

this any longer.

I spent 3 years as the Director of OAA trying to update policies,

roll out systems, and upgrade the skills of our staff with budgets

that were regularly cut. It doesn’t work. USAID represents so

much to the world, they must be supported with adequate funding

and renewed support for efficient and effective aid delivery.

I am happy to respond to your questions and look forward to

working with you as you undertake this important endeavor.

Thank you.

[The prepared statement of Mr. Walsh follows:]

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Ms. WATSON. Thank you so much, Mr. Walsh.

Now, Mr. Kunder, you may proceed.

STATEMENT OF JAMES KUNDER

Mr. KUNDER. Thank you, Madam Chair. I want to jettison my

prepared remarks because I have had the honor of testifying many

times before the House of Representatives and I have to say that

I just think that the opening statements have captured many of the

issues perhaps better than I have every heard them captured in

opening statements before.

I think the lesson of USAID, the history of USAID and our country’s foreign aid program, is a story of recapturing the same lessons

over and over again. During the height of the cold war, we understood that if America’s foreign policy was going to work we were

going to have to reach the hearts and minds of people in Africa,

Asia, and Latin America. That is why we built up something like

the U.S. foreign aid program that had about 10,000 employees at

that time.

Then, during the 1990’s with the breakup of the Soviet Union,

with moves toward greater Government efficiency, we decided we

really didn’t need all these tools of foreign policy. We let the number of USAID foreign service officers—the American technical experts that we send to Africa, Asia, and Latin America—decline to

just over 1,000 scattered across 85 countries of the developing

world. Now I think once again, in the context of Afghanistan and

the many other threats to our national security in the developing

world, we understand once again that this is a capacity that we

have needed and desperately need today.

So the four points I touch on in my testimony, Madam Chair, are

simply these: First, we do need a comprehensive strategy. We do

not have a consensus within the U.S. Government between the

Congress and the administration, the previous one or this one, on

what exactly we want to accomplish with our foreign aid program.

Do we want to help our friends or do we want to eliminate illiteracy and disease from the face of the earth?

I would respectfully submit that if the Congress ordered the U.S.

Agency for International Development to eliminate illiteracy from

the face of the earth in the next 20 years and said we don’t care

where you give the money, we don’t care how much money our

friends get, we just want you to eliminate illiteracy, they would

eliminate illiteracy. But the problem is they are told to eliminate

illiteracy, protect mountain gorilla habitat, give money to our

friends, and about 20 other objectives. That is what causes confusion in our foreign aid program.

Second, we do need to rebuild the staffing. As I mention, we have

had about an 80 percent decline in our foreign service officer work

force at USAID. It strikes me as very telling that our Nation has

recently made a decision that potential instability in Africa is critically important and therefore has created U.S. Africa Command, a

new U.S. military command to treat problems of instability in Africa.

I have nothing against the U.S. military; I was proud to wear the

American military uniform myself. But it strikes me that at

AFRICOM headquarters in Stuttgart, Germany, we have 1,600 perVerDate 11-MAY-2000 15:09 Jun 07, 2010 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 U:\DOCS\56374.TXT KATIE PsN: KATIE
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sonnel. We have 1,600 American personnel there because we care

about instability in Africa. USAID has 460 officers scattered across

all of Africa actually working in the African countries to address

instability. So somehow we have let our numbers and our toolkit

get distorted over the last couple of years.

The third point I make in my testimony is that, as a number of

the Members have said, we do have a proliferation of more domestic agencies getting involved in the foreign aid program. I take a

somewhat iconoclastic point of view, Madam Chair. I don’t think

you can put the genie back in the bottle. I don’t think you can tell

the U.S. Environmental Protection Agency, don’t think about Africa

or don’t think about Latin America, because these environmental

problems are global. We have the same thing with Centers for Disease Control. Obviously, today the headlines are Swine Flu. We

can’t let health care protection stop at the national boundaries.

We need to pay attention to what is going on globally but we do

need to create, I argue, a new set of coordination mechanisms

under the USAID Administrator so that all cylinders are firing together and all parts of the U.S. Government that have some overseas responsibilities are coordinating their efforts.

Then the fourth point, which a number of Members also touched

on already, is that this question of consolidation between State and

USAID. I touch on the security issues. What distinguished the U.S.

foreign aid program positively during much of its history was the

people to people aspect of it with American technical experts reaching out to Africans, reaching out to Asians, reaching out to Latin

Americans. In our current security environment, what we are doing

is instead of having these folks out in the rice paddies and out in

the farmers’ fields, more and more we are consolidating our development experts, out of security concerns, in these fortress embassies around the world.

Whereas before a women’s group in Africa or a farmers’ group

could walk up to the USAID office building, knock on the door, and

actually meet some Americans and find out we don’t all have

horns, now they can hardly get past the Marine guard detachment

to actually meet any Americans. So I think there are some real

challenges in this consolidation of State and USAID that I think

are undercutting our attempts to increase American influence in

the developing world.

I just want to add, as Mr. Walsh said, I really appreciate the

committee taking an interest in this because it is an area that most

folks don’t pay much attention to. But it is critically important to

our Nation’s foreign policy.

Thank you, Madam Chair.

[The prepared statement of Mr. Kunder follows:]

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Ms. WATSON. Thank you so much.

Now we are going to go to Dr. Melito. You may proceed.

STATEMENT OF THOMAS MELITO

Mr. MELITO. Madam Chairwoman and members of this subcommittee, I am pleased to be here to discuss the challenges currently facing the U.S. Agency for International Development in establishing a strategic acquisition and assistance work force plan.

USAID’s total foreign assistance has more than doubled since fis- cal year 2002 from about $5 billion to about $11 billion in fiscal

year 2008. Most notably, obligations overseas increased by 600 percent from about $1 billion in fiscal year 2002 to about $6 billion

in fiscal year 2008. Given USAID’s reliance on non-governmental

organizations to implement its activities, it is vital that the Agency

effectively manage those activities, especially overseas.

My testimony today is based on a report we issued in September

2008. I will focus on three topics. First, I will discuss USAID’s capacity to develop and implement a strategic acquisition and assistance work force plan. Second, I will describe the extent to which

USAID can evaluate its acquisition and assistance function. Finally, I will summarize our recent recommendations as well as the

actions that USAID has taken in response.

Regarding the first issue, in September 2008 we reported that

USAID lacked the capacity to develop and implement an acquisition and assistance strategic work force plan. We found that the

Agency lacked sufficiently reliable and up to date overseas staff

level data, including information on their competencies. USAID

staff are responsible for monitoring activities of recipients to provide reasonable assurance that the funds provided are used in accordance with applicable regulations and sound business practices.

Without sufficiently reliable and up to date data on its overseas

staff levels and their competencies, USAID cannot identify its critical staffing needs and adjust staffing patterns to meet those needs.

We witnessed this weakness during our field visits to seven

USAID missions last year. At five missions we visited, the number

of staff with the necessary competencies were considerably less

than adequate. At two missions they were more than adequate. For

example, mission officials in Mali said they had delayed time sensitive seasonal agricultural projects because staff was not available

when needed to approve contracts.

Our survey of acquisition and assistance staff overseas supported

these findings from our field work. For example, about 70 percent

of respondents overseas reported that it was somewhat or very difficult to alter staffing patterns to meet the demands of changing

workloads.

USAID has launched some ad hoc attempts to address weaknesses in its acquisitions and assistance work force. However, these

efforts lack critical elements of a strategic work force plan, particularly comprehensive information on its staff overseas.

I will now turn to my second topic. USAID has not implemented

an evaluation mechanism to provide adequate oversight of its acquisition and assistance function. Such oversight is essential for

ensuring adherence to USAID regulations and policies, especially

overseas.

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In fiscal year 2007, USAID developed an annual scorecard evaluation as a mechanism for assessing weaknesses in operations. The

scorecard would also function as a risk-based approach to determine locations for onsite visits. While USAID has finished piloting

the scorecard evaluation, it has not implemented it. Without implementing this mechanism, USAID cannot certify the overall adequacy and effectiveness of management controls for its acquisition

and assistance function.

To address the concerns I just summarized, we recommended in

our September 2008 report that the Administrator of USAID develop and implement a strategic acquisitions and assistance work

force plan that matches resources to priority needs such as the

evaluation function. USAID agreed that it needed to put in place

a strategic work force plan that includes all of USAID’s acquisition

and assistance staff at overseas missions.

While USAID officials informed us that they have improved guidance to missions for preparing staffing data, they cannot ensure

that all missions are accurately capturing these data or instituting

procedures to ensure that the data reported from overseas missions

are reliable. In addition, USAID officials do not expect to begin collecting competency information for overseas staff until 2011 at the

earliest.

Finally, USAID has increased its staff for evaluations from four

in fiscal year 2008 to nine as of April 2009. However, it has not

implemented the evaluation mechanism and has completed evaluations of only two missions since the time of our report. USAID officials said that they have been unable to make further advances

due to other priorities.

Madam Chairwoman and members of the subcommittee, this

concludes my prepared statement. I would be happy to answer any

questions you may have.

[The prepared statement of Mr. Melito follows:]

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Ms. WATSON. Thank you very much.

Now, Mr. Ingram, you may proceed.

STATEMENT OF GEORGE INGRAM

Mr. INGRAM. Madam Chair and members of the subcommittee, I

am going to focus on the strategic aspects and the strategic infrastructure that is necessary to get to those management challenges

and changes. I have provided a rather detailed statement but I am

going to follow the outline that occurs at the back of it in the last

three pages, which tries to set out an overall picture of the steps

that are necessary to bring a coherent, elevated development function to the U.S. Government.

One is leadership. The U.S. Government needs to be structured

with strong leadership that has the ability to speak with a single

voice on development issues, and that therefore can leverage and

maximize the impact of U.S. investment in development.

Two, as Mr. Kunder said, we need a plan. We need a global development strategy that is constructed in an open, transparent

fashion that articulates a coherent, realistic set of objectives and

priorities for U.S. assistance and how we will accomplish them.

Three, that strategy should contribute to an executive branchlegislative branch agreement on the purposes and objectives of foreign assistance. It should be codified in a new statute that replaces

the Foreign Assistance Act and provides a clear statement of the

goals and priorities, lines of authorities and accountability, and

that allows the managers of our assistance programs the flexibility

that is needed to respond to the opportunities in developing countries.

Four, all core development activities should be streamlined into

a single organizational entity built on the best practices of all the

component parts. Some functions may maintain their unique characteristics and identity, such as the MCC and PEPFAR. Others

may remain independent, such as OPIC and TDA and regional

foundations, but are brought into a close coordination with the core

development organization.

This development function needs to be both independent and integrated with the rest of the U.S. Government. It needs a degree

of separation from the demands of other U.S. Government policies

in order to preserve the programs that will address the long term

nature of development. But it also needs to be integrated to ensure

that development programs are consistent and support U.S. foreign

policy objectives.

The mechanisms to accomplish this duality include, on the independence side, USAID having strong respected leadership that is

empowered to lead the U.S. Government on development issues.

And USAID needs a direct reporting line to OMB.

On the integrated side, USAID must operate under the foreign

policy of the Secretary of State. There needs to be a Governmentwide global development strategy to lead what all Departments are

doing in the development area. USAID country missions must operate as part of the U.S. Government country teams under the direction of an ambassador.

And there would be joint staffing including, I would suggest, that

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opment-related international organizations should be brought into

a new USAID office of multi-lateral development that is jointly

staffed by professionals from USAID, the Treasury Department,

and the State Department.

Finally, the Agency needs its systems and processes and staffing

rebuilt and redesigned along the lines that my colleagues have spoken of.

Thank you.

[The prepared statement of Mr. Ingram follows:]

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Ms. WATSON. I want to thank all of the witnesses for your testimony. We are going to now move to the question period and proceed under the 5-minute rule.

I am going to begin with questioning Mr. Kunder and then I

would like all of you to address this particular question. Mr.

Kunder, you stated in your testimony that establishment of a comprehensive set of strategic goals for the U.S. foreign aid program

is management challenge No. 1 and should be the centerpiece of

any effort to rewrite foreign aid legislation in this Congress. What

elements or point do you think should be incorporated into a strategic plan for USAID and should a new set of strategic goals be the

centerpiece of any foreign aid rewrite? Then the others can chime

in when you finish.

Mr. KUNDER. Thank you, ma’am. We could obviously have 3 day

workshop on that question.

I think our Nation understands that it is in our strategic interests to help our allies at one level, and that at another level to take

on the global scourges that make people discouraged, distraught,

and become terrorists around the world. Obviously, there are a lot

of suffering people around the world who give up, who are desperate, and who are attracted by extremist ideologies.

Conceptually, what we need to do is run a foreign policy that operates at both levels. We need to help our strategic friends but we

also need to take on these long term issues that afflict mankind

which lead to hurting our Nation in the long run.

The British system has recognized this explicitly. They have both

the Department of Foreign Affairs and then the Department for

International Development. So they have explicitly taken both challenges on within the structure of their executive branch. We have

not done that. We don’t have a department for international development.

But I would argue that what this strategy should do is explicitly

give USAID the function of taking on the long term challenges.

Have them take on the health care challenges, take on the unemployment challenges, the desperation challenges, and the lack of

literacy.

In a place like Afghanistan, probably more than half of the population can’t even read. So here we are trying to convince folks of

a certain world view that supports our foreign policy when they

can’t even read information that we distribute in the country. So

you have to take on that level of issues.

So my argument would be to create a strategic plan embedded

in the Foreign Assistance Act that does take into account the priorities of the Congress and the administration but gives USAID the

task of eliminating illiteracy, eliminating disease, and making sure

that people have access to credit around the world so they can get

a decent job.

I would agree with what Mr. Bilbray said earlier. This can’t all

be a Government function. We need to work directly with people,

with private sector organizations, as well as Government.

Those would be, we could go into more detail, but those would

be what I would consider the core elements of a long term strategic

plan for our foreign aid program.

Ms. WATSON. Mr. Walsh.

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Mr. WALSH. I would simply add that these strategic aspirations

need to be properly resourced. If you speak to these, getting microfinance to the villagers and what have you, you need to have mechanisms and a staff that can actually do that. So I just plead that

you don’t neglect the resourcing aspects of this strategy. Thank

you.

Ms. WATSON. Dr. Melito.

Mr. MELITO. I would add that USAID’s management structure is

sort of very decentralized when it comes to overseas. They don’t

have a good handle of the staff levels overseas. Actually, they can’t

even really control them very much in terms of certain staff functions overseas. So if it does something at headquarters in a strategic manner, it needs to confront the decentralized leadership it has

overseas.

Ms. WATSON. Mr. Ingram.

Mr. INGRAM. I would just add that I think there are a couple of

aspects of the global development strategy that are important.

First, there should be a focus on local capacity building. Almost

all of our programs should focus on helping the people in-country

own the programs that are being carried out and buildup their own

capacity.

Second, I think there should be an emphasis on innovation and

risk taking. I would love to see a message sent from the Congress

to the managers of our foreign assistance programs that we expect

you to take risks. We don’t expect corruption and misuse of money,

but we expect you to take programmatic risks and to find those

new, innovative interventions that are going to make a difference.

Ms. WATSON. Your testimony said that USAID’s technical tools

are lacking like georeferencing systems, the ability to teleconference, the ability to call in security assets, and so forth. How can

USAID improve in this area?

Mr. KUNDER. The Agency has, in my view, a strange appropriations account structure vis-a-vis the Congress. That is to say it is

given what are called program funds, the money to actually run the

health care programs, the education programs, and so forth, and

then given a separate operating expense budget. This has been a

series of decisions over the last decades, both by the administrations and by the Congress under both Democratic and Republican

leadership on both sides.

In my view, we have simply under-resourced the organization.

The operating expense budget has resulted in an 80 percent decline

in staffing. The argument I was making, Madam Chair, is that I

don’t think that we need a million people running foreign aid. I

think it should be a relatively small, highly trained cadre of people.

But that is why I made the point that if we are going to put 1,300

people in Stuttgart, Germany just for AFRICOM headquarters, we

certainly need more than 1,000 officers scattered around the entire

world because you do have to get out and talk to people.

But the particular point I was making is that if we are going to

send these officers out to the field, they need world class technological systems. If they find a disease in a village, they should be

able to take a blood sample, plug it into their computers, transmit

the data back to headquarters, and find out what is going on. It

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ber of officers by giving them the technological capability that they

need.

That is something that, because of year after year having very

constrained operating expense budgets at USAID, I would agree

with Mr. Walsh, they simply don’t have the technological edge they

once did. These were the folks who brought the world the green

revolution back in the 1970’s. They were at the technological cutting edge at one point. As Mr. Ingram just said, they are no longer

there. That is what I was arguing in my testimony. We need to reinvest in these people.

Ms. WATSON. Thank you.

Let me just throw this out to Mr. Ingram. You are a former Capitol Hill staffer with years of experience in the Foreign Affairs

Committee. It is my understanding that you were the principal

lead staffer on a massive rewrite of the Foreign Assistance Act over

a decade ago. What is the single most important factor or element,

in your opinion, that needs to be included in a successful Foreign

Assistance rewrite?

Mr. INGRAM. Thank you, Madam. I think it starts with getting

broad ownership in rewriting the act. When we tried to rewrite the

act, and we did 20 years ago in the House Foreign Affairs Committee, it passed the House but we never garnered the interest or the

support of the Senate or the administration. I would love to see

this next rewrite started with a joint drafting committee by the

House, the Senate, and the executive branch.

I think your committee getting interested in this, getting other

committees interested in it, will broaden the ownership and involvement of Members of Congress to create a critical mass that

would allow you to get this through final enactment.

I think the other quick thing I would say is that the congressional leaders in this need to set out a vision and the principles for

what they expect to be in this act. I use the example of the Millennium Challenge account where the President set out a clear vision

with parameters on what was going to be in it. The players, both

in the Congress and in civil society, stayed within those parameters

and kept certain negative aspects out of that legislation.

Ms. WATSON. Thank you so much.

I now recognize our ranking member, Mr. Bilbray for his 5 minutes.

Mr. BILBRAY. Thank you.

Mr. Kunder, thank you very much for pointing out this issue that

we need to understand the end game. I guess one of the things that

those of us in the First World forgot was the great struggles that

we have had in the last century of eliminating infant mortality. Infant mortality being eliminated or reduced substantially, we

thought it was a great thing. But we did that and didn’t develop

the economic backbone to be able to support an economy to support

the increased population. Then we are upset about how many people are starving in the Third World. So I think outcome does matter.

Any of us that grew up in neighborhoods like I grew up in know

that you only want to live in a Government built society if the private sector society isn’t available. I think public housing is a good

example. None of us would wish that on somebody unless it was

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just a last ditch chance. So I think we have to remember that outcome is a strong social/economic structure for the community wherever we are working.

I have a question for you. We have how many agents in Africa

right now?

Mr. KUNDER. We have 460 American foreign service officers.

USAID does one very excellent thing around the world. That is, if

you were to go to one of our offices in Africa, we hire a lot of African technical experts. So that is a feature, but I am talking about

the 460 USAID American foreign service officers across Africa.

Mr. BILBRAY. I have an Australian cousin so actually it worked

with the American side of this thing. What do we have in Central

America right now? Do you have any idea what we have south of

Mexico and north of Colombia?

Mr. KUNDER. Less than that, sir.

Mr. BILBRAY. Substantially less?

Mr. KUNDER. One of the unfortunate aspects when you squeeze

the staffing was that we actually diverted staff to Asia and Africa

because that is where the terrorist threat was. One of the horrible

outcomes is we have stripped our staff from the western hemisphere.

Mr. BILBRAY. Madam Chair, I only bring this up because this

really has been an issue, that we have ignored our own backyard.

Just in the last 2 months, we have lost two governments that were

very pro-United States and very pro-private investment. They have

gone totally south on us because we sort of ignored our friends in

our own backyard. So I just wanted to raise that as we raise this

issue.

I hope that there is an awareness that a lot of the challenges we

have in the United States are directly related to Central America.

We just look totally past it. The Bush administration did it, too. We

talk about Colombia and talk about Brazil, but my God, it just

seems like we totally ignore countries like Nicaragua, and El Salvador, and Costa Rica, and Panama.

Let me go over to Mr. Walsh. I have a question for you. What

happens when a non-profit ends up claiming to have planted crops

to get a grant and they certify their grant? In fact, let me say this

because young people are here. We all know that in Alexandria if

somebody said, I planted almonds in Alexandria, you would give

the address. They are at this location. Most young people don’t

know that in the Third World, there are no addresses. In fact, most

of the time, there are no street names except for highway names.

We know how you would identify in it Alexandria. How would you

identify a field in Kandahar?

Mr. WALSH. I understand that in places like Afghanistan and

southern Sudan and many places where the NGO community is

working, they rely on GPS data. In fact, I believe that the Office

of Foreign Disaster Assistance has routinely requested that kind

information because the refugee camps are oftentimes moving and

such. So they have tried to capture that data, although I cannot

say that it is comprehensive and complete. I can give you more detail.

Mr. BILBRAY. That obviously is the kind of new technology we

not only should be using but that we have to use. What you run

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into, Madam Chair, is you run into somebody who will get a grant

and get credit for it, and they will actually have photos of somebody else’s orchard field plugged in as the documentation. As you

pointed out, there is this issue of we want to know was the arborist

who planted the trees made in America, but nobody ever goes out

to see if the trees were ever planted in the field at the GPS location

they pointed out.

I am glad to hear you say that because that is one of those great

breakthroughs we have had. Around the world, one of the biggest

problems is you don’t know how to tell somebody how to get somewhere because they don’t have addresses. The great thing is now

the GPS location, those two lines of five digits, are going to be our

addresses in the future. It is a great breakthrough. I am glad to

hear you say that.

The big question I have, though, and I will say this again, Mr.

Walsh, is I think that the amount of money we threw in Afghanistan in the non-profits was a very large amount for how much oversight we had. How can we crack down on this? A good example was

in 2008, we had USPI charged with conspiracy and fraud in connection to services rendered in Afghanistan. What does the Inspector General have to do to make sure that we eliminate that kind

of fraud in our programs? We talk so much about the for-profit

problems, but it is almost as if somebody files and becomes a nonprofit they are exempt from all the temptations that apply to forprofit.

Mr. WALSH. In fact, I would offer that the non-profit world is

sensitive about the care with which they manage not only the taxpayers’ money but the donations that they receive from private citizens. They have a track record of preserving that and managing

that as effectively as they can because it is one thing to have a disallowance in an audit under a grant with USAID, but it is another

thing to have in the paper that the donations that are going to this

organization are being used to finance a tennis court in Kandahar

or something like that. That kind of publicity doesn’t work for

these NGO’s. They are very careful about how they spend the

money.

Now, having said that, we recognize that there are always going

to be risks. So their challenge has been to manage risk in a highly

compliance oriented environment and also a very risk adverse environment where not only do you have the issues that I mentioned,

but also the auditors that are there and the investigators that are

more than eager to look for malfeasance and such. They are very

self conscious about this.

Their challenge is trying to do it in the same sort of resource constrained environment as USAID. They have pressures on their

overhead, they have pressures on their direct costs, and they are

trying to do, basically, development on the cheap as well everybody

else.

Afghanistan is a huge challenge. I believe it was moving quickly

and probably they weren’t fully resourced on the operational side.

So you are just going to have these kinds of vulnerabilities.

Mr. BILBRAY. Let me just tell you that from my personal observation, not just as Congressman but as somebody who spent some

time in the Third World with the locals, that the non-profits tend

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to stick in their faces even more than the government operations.

The feedback is that you have non-profits that are using resources

in a manner that the locals see as flaunting just huge amounts of

wealth. I just found a lot of resentment for the non-profits.

I think the problem is, because there may be non-profits managing here in the United States, they are not spending enough time

down looking at exactly how the money is being spent out in the

Third World. The people on the front lines, the citizens of these

Third World countries, they see it right along. They see it when

some young kid goes by in a huge yacht with a big non-profit name

across it. They are saying, you know, my God, that could be 100

pongas used to help to feed 10 villages.

So that concern of oversight is something that I think that we

have not focused enough on, that non-profit oversight. I hope to be

able to see us do that.

I would like, and this is what I was saying when I started this

off, I would really, really like to ask how we help this new administration avoid those pitfalls and focus on that. I think that too many

of us have had the problem that with for-profit we had a certain

mind set, and for non-profit, we had a separate mind set. I think

we need to put it back together and understand the potential for

problems exist in both of these vehicles. We need to make sure we

have the oversight.

You have real problems here and we can talk about that in the

future, about your transition with your experience. We can put up

tag teams where you have experienced guys and new guys going

in so there is a learning process. The way we phaseout law enforcement is we always made sure that we tried to put the more experienced officer with the less experienced officer so that gets transferred through use.

I yield back, Madam Chair.

Ms. WATSON. Thank you.

I now recognize Mr. Connolly.

Mr. CONNOLLY. Thank you, Madam Chairwoman.

It seems to me in listening to the testimony that we sort of have

three broad problems with USAID. One is, what is its purpose and

what is its mission in the post-cold war era? The second is its capacity, that it has been hollowed out. The third is sort of that it

is an orphan. To whom does it report? Is it an adjunct of the State

Department or is it a free standing agency? We have sort of gone

back and forth over the decades as to what is the proper model. Let

me start with that third piece for a second.

Secretary Rice created the Office of DFA. I last was up here 20

years ago and I worked with George Ingram and I worked with

Margaret and some others on the Foreign Aid Bill. In fact, I think

we were the last crowd to pass a foreign aid authorization bill. I

don’t understand what motivated the Secretary to create this Office

when you had a USAID Administrator. How did it work? What is

the relationship between the USAID Administrator and the DFA?

Should we change that as we are looking at this overhaul?

Mr. Ingram? Any of you can answer but I will start with George.

Mr. INGRAM. Thank you. I think administrations for 20 years

have been coming up with new programs and new initiatives and

have looked at USAID and said, that is a mishmash; I am not sure

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what it is and I don’t know if it can manage this so I want a new

entity to manage it. This has gotten out of hand over recent years.

The Director of Foreign Assistance was created in the State Department, as I understand it, because the Secretary could not obtain the knowledge she wanted on what was happening in democracy. So she said, we are going bring together the information and

consolidate. What happened was it turned into not just an information center, but a decisionmaking center. Decisions were taken

from the field and from USAID and put in this Washington-centric

entity that was unfortunately removed from what was going on in

the field.

The second problem with it is that it really only had jurisdiction

over a large part of USAID and part of the State Department, but

not over a lot of foreign assistance that other agencies do nor even

parts that the State Department does.

So absolutely the effort to reform, to consolidate, and to streamline needs to include the Office of the Director of Foreign Assistance. The State Department clearly needs the capacity to look at

foreign assistance from a strategic point of view and from a foreign

policy point of view, but it needs to, as it did in the 1960’s and

1970’s and even 1980’s, I would argue, respect the role of the implementing organization to set the policies and to manage the programs.

Mr. CONNOLLY. Mr. Kunder.

Mr. KUNDER. Sir, first of all I basically agree with what George

said. Secretary Rice famously asked one meeting about how much

money we are giving to Pakistan. The folks from the International

Narcotics and Law Enforcement Bureau raised their hands and

said what they were doing. Then the folks from the Bureau for Democracy, Human Rights, and Labor raised their hands and said

what they were doing. And USAID raised its hand. She finally

pounded her fist and asked, well, who has the total number. Of

course, the answer was nobody did.

So it was, as George said, seen as a reform where we can get all

the numbers on the right page and have some clear cut hierarchical system for allocating the resources. I think what has happened, sir, is that two things have gotten confused here. One is a

perfectly natural desire to have transparency in the budget. As

George said, you can create a budget shop that adds up all the

numbers and makes sure they all add up. That has gotten confused

with a bureaucratic tendency on the part of the State Department,

which has been at least in the last 8 years buffeted by DOD, to pull

aid ever closer to itself.

Part of that is, in my view, misguided efficiency moves: Wouldn’t

it be better if we had one paper copier Lilongwe, Malawi rather

than two? Some of it is just small bureaucratic thinking. Part of

it is that State has felt overwhelmed by DOD and probably the biggest thing that they have going for them to have a face, a visibility,

is a humanitarian implement though USAID.

So I think two things have gotten unfortunately confused in this

whole DFA process. That is my interpretation, sir.

Mr. CONNOLLY. Let me just ask a followup to that. One of the

concerns I have always had about that kind of consolidation within

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cy, or at least it once was an operational agency, they actually did

things, Mr. Bilbray pointed out that in the local government we actually do things, we build things, we provide services and so forth,

whereas State Department is a policy shop. So you now have an

operational agency coming ever closer within the bosom of an agency that frankly isn’t operational in that sense. I just think that is

a clash of cultures that doesn’t work very well.

Mr. INGRAM. I think we would absolutely agree with you.

Mr. KUNDER. Sir, I had the honor of serving in the U.S. Marine

Corps and for 200 years the U.S. Army said, it would be a lot more

efficient if we just moved the Marine Corps into the Army. I felt

the same way at USAID. There are always some budgetary reasons

why we can save a few dollars but unfortunately what you do is

undercut our Nation’s foreign policy toolbox by bringing these organizations together.

Mr. CONNOLLY. Mr. Chairman, my time is up. I hope we will

have another round because I have a lot more to go into. But I certainly would hope that on our agenda and on the Foreign Affairs

Committee’s agenda, as we look a rewrite of Foreign Aid, with the

best of intentions we have to look at sort of the structure that we

are inheriting. It doesn’t seem to be very functional.

Mr. HODES [presiding]. Thank you.

I recognize myself for 5 minutes. In reading the GAO report and

talking about the difficulties with overseeing the A&A process, I

note the growth from $5 billion to $11 billion. What I want to ask

about is this: In the ideal world, if you could fashion our international assistance and development efforts from scratch, what

model would we best follow? Would it be a model where we were

supervising contractors, a model where the agency in whatever

form, assuming in an appropriate form, itself undertook the operations, or some form of both? Mr. Melito, do you want to start?

Mr. MELITO. I am hesitant to say what is the best model because

I don’t know if there is a best model. I do want to stress, though,

that whatever model you choose, you need to implement it fully

and take oversight very seriously.

When we began work, USAID had only four individuals responsible for overseeing all of the contracts and assistance agreements

worldwide. At that time, it was $10 billion overseen by four people.

That was their evaluation function. The IG at the time said that

they were basically only able to visit nine missions overseas over

a 3-year period. So I don’t think USAID had any capacity to say

that it was able to control its money, to know that its systems were

in place, or that it actually had any assurance that any particular

regulations, any concerns it had over the proper use of money, were

actually implemented. That is not to say that it wasn’t, that money

was stolen or anything, just that they had no way of assuring that

itself.

So I would say that whatever model you choose, please make

sure that oversight and evaluation is a part of that model. I do

think there is recent evidence that USAID is taking that seriously.

They have pushed up that staff from four to nine. But it is $11 billion and 60 percent of it occurs overseas. But I am not sure what

the right number is and I am not sure exactly how they are going

to do that. But it is not yet the priority it needs to be.

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Mr. HODES. Are there any other thoughts from the panel? Mr.

Walsh.

Mr. WALSH. Yes, I would like to offer that one of the challenges

the U.S. Government has in general is in sustaining a technical

edge because it is very expensive to invest in the training and to

take people offline considering the work force. So the best model

would be, in terms of achieving or utilizing technical excellence, to

rely on the commercial or the private sector. Then, hopefully, the

expectation is that the Government would have the ability to define

the requirement and monitor accomplishment. But the technical

excellence is usually in the private sector. It is sort of more efficient to sustain that.

Mr. HODES. Mr. Ingram.

Mr. INGRAM. I would just say that you answered the question

yourself when you said both at the end. USAID needs a larger

number of better trained and skilled staff who have the technical

capacity and experience to design programs and to manage and

oversee programs that are carried out in the field by non-profit and

for-profit organizations that have more detail specific expertise.

They also, you need to understand that with that expertise of

USAID staffers, they spend a lot of time engaging with their counterparts in developing countries in ministries and other institutions. That is part of the development process. In that, USAID staff

needs to be sufficiently knowledgeable that they can transfer information to those senior officials that they are dealing with.

So they play both. They design the projects and oversee them but

they also provide advice.

Mr. HODES. Mr. Kunder.

Mr. KUNDER. Sir, I thank you for asking that question. This is

what I spent a good bit of my time wrestling with the last 7 years.

My view is that clearly there has to be some balance between

making use of the enormous capacity in the American private sector in universities, private businesses, and so forth and on the

other hand having enough people internally, as Dr. Melito is saying, to oversee this. Because if you don’t know what you are talking

about, then the private sector is going to snooker you sometimes.

So I think the pendulum has swung a bit too far on the side of not

having enough oversight within the Government. That is why Dr.

Melito is talking about these pathetically small numbers, four versus nine. Come on, we have to get serious about this. We are managing billions of dollars of the taxpayers’ money.

We have a locust plague reliably every 17 years in Africa. We do

not need to have world class entomologists on staff waiting for 17

years. When we need them, we should hire them from the private

sector. But certainly we need people on staff who can oversee the

technical specialists that we hire.

Right now, the pendulum has swung way too far and we don’t

have enough bodies to oversee the taxpayers’ dollars.

Mr. HODES. Thank you. I yield back both my time and the gavel.

Ms. WATSON [presiding]. The ranking member and I were just

discussing how best to manage because it is management, I think,

that is really important. I really feel that the non-profits, the people on the ground that have been there in the villages and so on,

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let us take Africa, for instance, can relate better to the circumstances.

But in some places they might be too young and in some places

they might be too irrelevant. I do know that in more traditional societies, you really have to go to the chief. At my station, it was

Aman Marqui [phonetic], someone who could really interpret.

Could I hear some comment about that?

I don’t think one pattern fits the global environment if we are

going to restructure. I think we have to go region by region. I

would like to get some response from any of you who would like

to speak to that. How do we manage these programs? How do we

supervise them and who should?

Mr. WALSH. I would offer that there are many different approaches among the NGO’s as to their intervention and how they

relate to the villages and what have you. There are some that have

numerous expatriates, for example, operating from the country

level down and they may have a presence in the village. There are

others where they don’t, where they have purely local nationals

managing the country office and they just have headquarters staffing them.

I think everybody who has worked in development and has been

out to those villages realizes, we hope, and appreciates that one of

the skills that you have to bring is the ability to relate effectively

with the villages and the beneficiaries. So every organization that

is engaged in these sort of activities is operating a little bit differently or is structured a little bit differently, but I hope that they

would have that standard of effective engagement with the beneficiaries. If there are exceptions to that, I don’t have an explanation.

Ms. WATSON. Dr. Melito.

Mr. MELITO. The model that USAID uses is a hybrid model of

using a number of individuals hired in the country that are providing the services as well as a cadre of international, American-led

staff. It works very well in certain cases. In some instances, it

doesn’t work well at all.

Part of my other work is looking at food assistance. We were

struck when we visited Zambia a couple of years ago that for the

projects that we were visiting, no American USAID official had visited there in several years. It turns out that there had only been

nine monitors for food assistance for a $2 billion budget worldwide.

So there were concerns with timeliness. We had also cases where

food basically had rotted. So definitely there were concerns we were

raising.

Part of what we were finding was that there was not a good information flow from the field back to headquarters on how to address these things. So there needs to be the right balance between

having permanent staff who can monitor as well as people hired in

the field who actually have good working knowledge.

Ms. WATSON. Mr. Ingram.

Mr. INGRAM. There is a whole section of my statement where I

talk about the importance of analysis. It is not just having different

operating mechanisms by region. It is by whether or not you are

working at the community level or the national level. It depends

upon whether or not you are in a middle income country or you are

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in Sudan or Somalia. So what you have to do is, before you get involved in an activity, you have to be very careful in analyzing the

dynamics in that community, in that country, in that situation.

Then gear your interventions according to is the decisionmaker the

chief; is the decisionmaker the church in that entity; do you need

to bring community organizers in there just to bring the community together to begin with to see what their interests are. So you

have to have multiple mechanisms. But it starts with good analysis.

Ms. WATSON. I am going yield to the ranking member, Mr.

Bilbray.

Mr. BILBRAY. To followup on this, Mr. Ingram, a good example

is when we send somebody in and an NGO feels, OK, we are in Afghanistan so we will go into Kabul and hire somebody to be our

liaison. If you send somebody from Kabul into Kandahar to talk to

a Pashtun and not go to the chief, the chief now sees that the agent

that we are using is a competitor to his authority. That creates a

whole new dynamic that creates a lot of problems. We have seen

this happen again and again. We take our First World mentality

and try to apply it there.

I was just telling the chairwoman that one of the first things you

do in a Polynesian or Micronesian island is to go and meet with

the chief of the island so you get permission. Even when you go to

places like the San Blas Islands in Panama, you always go to the

elder. We bypass that to a large degree because we have gone to

Kandahar and think that an Afghan is an Afghan is an Afghan.

How do we avoid this in the future? I am open to comments on

that. If you think this is a wrong observation, I would encourage

you to state it.

Mr. WALSH. I would say that in my statement, I emphasize the

need to improve the technical capacity of USAID. I also should

have said that we need to improve the cultural knowledge and the

regional knowledge of the staff, and to improve their language capabilities.

I think a mistake we have made, both when we went into Iraq

and when we went into Afghanistan, is we didn’t listen to some of

our old hands who had been around those parts of the world for

20 and 30 years and really knew the culture and the political dynamics. We need to spend more resources and more time planning

on some of that cultural and political analysis.

Mr. BILBRAY. Mr. Walsh, how much of this could have been,

though, the State Department’s and the military’s concept in Afghanistan of wanting to reinforce the authority of the central government because there had been such a lack of central authority

in Afghanistan? How much of this could have been a direct, conscious effort at strengthening the new government rather than trying to work with the traditional structure?

Mr. WALSH. I simply don’t know the circumstances. But I would

offer that most of the people who work with these NGO’s are country directors that have been there in programs oftentimes for 5, 10,

or 15 years. So I have no explanation as to why there was a cultural disconnect. More often than not, the NGO’s have been there

before USAID showed up and before there was an intervention.

They should have some cultural sophistication but there are no

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guarantees on that. But I don’t know to what extent the politics

that drove it.

Mr. KUNDER. Mr. Bilbray, to defend my USAID colleagues a little

bit, I think they fully well understand that an Afghan is not an Afghan is not an Afghan. The problem in my view, respectfully, has

been one of resources. Twenty years ago, when USAID sent somebody upcountry in Laos they spoke Lao. They probably had been

trained in all the kinds of things you are correctly pointing out in

terms of cultural awareness and anthropological mapping and all

that. The reality is, with the breakup of the Soviet Union, USAID

was sent into a lot more countries in central Asia. We went into

more countries, as Dr. Melito pointed out, and handed more dollars

to programs in more program areas, the environment and so forth,

while the whole time the staff was shrinking by 80 percent.

With all due respect, the kind of assignments we made were if

we had a warm body, we sent him to Anbar Province or Ghazni.

We didn’t have the time to give them the language training. So to

me, the question you are raising, and it is a very profound question, is directly related to the resourcing issue.

USAID needs more staff because then they will have time to do

the language training and the cultural awareness training. You are

pointing out a critical point. But you give them 1,100 officers

around 85 countries and with the demand right now, we need more

people in the PRTs in Afghanistan. We need more USAID officers

to advise our military officers. Well, do I have time to send them

to Pashtun training? Of course not. I mean not me anymore, but

the guys who are there now. Anyway, I see this as directly related

to the resources, sir.

Ms. WATSON. Mr. Hodes, do you have additional questions? Then

we will have Mr. Connolly. Mr. Hodes.

Mr. HODES. Thank you, Madam Chair. I want to talk a little bit

about the problem of coherence and vision. Throughout the testimony of the panel, it is clear to me at any rate that not only do

we need a coherent national security strategy but one in which development assistance and our smart power is integrated as an essential part of an overall national security strategy. Within the

realm of our assistance and aid, it strikes me that we need to establish priorities and come up with a coordinating vision that will

guide our efforts.

One of the things that I note is the spread of our development

efforts across the governmental agencies with 53 percent USAID

and the rest spread through multiple agencies. So somebody in a

foreign country who wants to deal with a development issue may

go to the Agriculture Department for one thing, the Department of

Energy for another, and may come to USAID people for another.

How do we get a handle on this in the intervening time, starting

now, between where we are and ultimately where we want get to

with the rewrite of the bill and all that? What do we do now in

order to get a handle on this and start coordinating our development efforts amongst all these governmental agencies? Is that an

impossible idea? Mr. Kunder, do you want to start?

Mr. KUNDER. Sir, it is a very critical question. I would point out

that the answer to it lies in part in what Mr. Ingram said. U.S.

foreign policy and U.S. foreign aid are coordinated partially in

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Washington and they are coordinated partially at our embassies

around the world. So you have to address it, I would argue, at both

ends.

I have argued, and I have touched on this in my statement, that

we need to create a new set of coordination mechanisms. That is

why I mentioned that I didn’t think the genie could be put back

in the bottle. You can’t tell the Energy Department, in our

globalized world, that they have nothing to do with the international arena and have to stay here. Of course they are going to

be involved. EPA is going to be involved. CDC is going to be involved.

So my view is that you would create under the USAID Administrator a new administration development coordination council

where each of the Assistant Secretaries from the relevant domestic

departments would attend. There would be some shared information. We would establish across the Government strategic goals.

Then at the country level you would have, again under the USAID

mission director in that country, you would write a country strategic plan. What are the United States of America development objectives in this country? Is it family planning; is it education; is it

health care? Then all of the Government agencies present in that

country would be working together toward that set of goals.

So my view is that both in Washington and in the field we need

to create, and I would say this should be put into the rewrite of

the Foreign Assistance Act, some new set of coordination mechanisms that simply don’t exist now. When the Foreign Assistance

Act was written, we didn’t have this kind of globalization of the domestic departments so we didn’t perceive the need for these kinds

of mechanisms. Today, we desperately need such new coordination

mechanisms.

Mr. HODES. Are there any other thoughts from the panel? Mr.

Ingram.

Mr. INGRAM. Let me just use your question to make a point because Jim answered your question nicely. That is, and I think you

recognize it in the way you posed the question, that coordination

an important, useful, second best solution. You first consolidate as

much as you can so that like programs are brought together under

common management and then you don’t have the coherence problem. Those programs that aren’t core to USAID or the development

function, or that you decide should remain independent, they get

coordinated. But if you consolidate as much as possible that makes

rational sense, then you have less of a coordination problem.

Mr. HODES. Taking off from what you said, do you know adequately what all the programs are? Is there a central repository of

this knowledge that says here are all the programs that need to be

either consolidated and/or coordinated? Do we know what all the

programs are, Mr. Melito?

Mr. MELITO. I would suggest that we do not know. I would say,

though, we have an ongoing study on U.S. efforts to fight global

hunger. We have thus far identified 10 different U.S. agencies

which have that as one of their missions. We have a lot of work

ahead to see exactly how they overlap, how they differ, how they

coordinate. But that was a surprising number for us that there

were 10 agencies.

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Mr. HODES. So it strikes me that the first question is, let us get

a handle on what all the programs are and which agencies are

doing what. That seems to be job No. 1.

My question about a coordinating council is that in order first to

deal with the consolidation issue, I am not sure that a coordinating

council is the body that could deal with the consolidation issue. So

it strikes me that there needs to be some responsibility—and tell

me if I am wrong—maybe in the State Department or maybe somewhere else, but some responsibility at a top level to order the review and consolidation of various programs across agencies. Then

we can deal with the coordination as the second step.

Am I on track with that?

Mr. INGRAM. Yes. I would say that you have to raise it to the

highest levels of Government. That mandate has to come from the

Congress and the President.

Mr. HODES. OK, thank you. I yield back.

Ms. WATSON. Mr. Connolly.

Mr. CONNOLLY. Thank you, Madam Chairwoman. If I could have

my 2 cents, I think we need to be loud and clear that the lead development agency of the U.S. Government is USAID. It is not the

EPA; it is not CDC; it is not the Department of Labor, though they

may all have pieces of it. The lead agency has to be USAID or its

successor. Otherwise we are floundering around and we lack the

coherence my colleague, Mr. Hodes, just referred to.

I want to go back to mission for a minute. I know Mr. Ingram

and his colleagues are involved in trying to rewrite the Foreign Assistance Act to make it more coherent. I was intrigued, Mr.

Kunder, with your suggestion that maybe what we need to do is

focus on a task. Let us end malaria; let us end illiteracy. That has

a certain attraction to it.

But let me ask this: Certainly Congress is as guilty as anybody,

since the forming of foreign assistance as we know it, in encrusting

the Foreign Assistance Act with multiple purposes. Biodiversity, I

can remember was one that I was part of myself. All of them are

noble causes and I don’t know how you resist that.

Does it make sense to have a more streamlined agency that is

focused on a handful of things and only those things? Or do we

need to preserve the flexibility to understand that in the real

world, USAID and/or its successor agency is going to serve a multiplicity of purposes?

Mr. KUNDER. Sir, I have suggested that if we were a business,

we would have gone out of business a long time ago because we

have tried to stay in every business sector known to mankind. We

have 50 or 60 different kinds of programs around the world including, literally, mountain gorilla habitat. You can’t do that. You have

to operate in the real world, as you correctly point out.

My view is that such a strategy would have to have three elements. First, you would have to define some of the broad strategic

objectives like the Millennium Development goals or like ending illiteracy, just some very broad strategic objectives. Second, you

would have to supplement that with some sort of opportunities

fund because things are going to pop up that nobody can foresee

and there are going to be political pressures to contribute to some

multi-lateral effort to take on a new disease. You can’t hamstring

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the whole problem so you need some sort of supplementary opportunities fund. Third, you need to refresh the system every couple

of years.

I have testified that I would respectfully recommend that if the

Congress is going to rewrite the Foreign Assistance Act, they build

into it something like the Department’s of Defense quadrennial defense review. You can’t say now and forever the answer is illiteracy

or now and forever the answer is malaria. But what the Defense

Department does is manage an interagency quadrennial review of

the current strategic threats. Then we reorient our defense programs to those strategic threats. But at least we achieve a consensus every 4 years. I think such a flexible model might be applicable

to the foreign aid arena as well.

Mr. INGRAM. Representative Connolly, as you have pointed out,

I think the Congress is part of the problem. I don’t know how to

get around that part of the problem because most of those congressional interests in specific areas, as you say, are quite legitimate

and important. You also have a problem on the ground in that

every country has different interests.

But what does come to the fore for me is that when you look at

the history of foreign assistance and you look at where the successes are, the successes are where USAID, where the U.S. Government, or where the international community has tackled a particular problem for 10 years. Look at the green revolution, oral rehydration, and polio. That leads you to the direction to choose a

few priorities and focus our resources on those. But development is

much more complicated and much more complex than tackling a

few clear problems.

I guess if I had my druthers, I would like to see a foreign assistance program that tackles five global problems with 70 or 80 percent of our assistance devoted to tackling those in public/private

partnerships for 10 years. Then the other 30 percent, or whatever

percent you choose, goes to deal with a lot of these other more complicated human aspects of development.

Mr. CONNOLLY. I have two points about that. The problem is,

with the best of intentions, the way bureaucracies work. If you

don’t write it into the law, we don’t do it. We generally don’t act

flexibly. So if you list that these are the 10 things we are going to

do, by God, if an 11th comes up that isn’t 1 of the 10, we are not

going to do it even if we should be. So I think that is potentially

a problem with that approach, but it may be worth it.

Mr. INGRAM. Can I respond to that?

Mr. CONNOLLY. Certainly.

Mr. INGRAM. As you will note, the Foreign Assistance Act is 700

pages. I would suggest to you that most of what is in the Foreign

Assistance Act is not followed by the bureaucracy. In fact, it is so

complicated and so complex that people in the bureaucracy seldom

pick it up. When you come to rewriting the Foreign Assistance Act,

keep it short and sweet and put in there what you really care

about and what you really care about making the bureaucracy accountable for.

Mr. CONNOLLY. Yes. Although I know you know this, having

helped write the Foreign Assistance Act, the problem with foreign

aid is that it is an orphan up here. So one of the reasons it is so

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barnacle encrusted is because you are trying to pull together a coalition of support. If biodiversity is important to this Member of

Congress, we will put it in if we can get his or her vote.

I have a final question, Madam Chairwoman, if I may. You characterized USAID as a risk averse culture. Mr. Ingram, I heard you

talk about the need for Congress to show some flexibility in actually encouraging risk. I think there are a lot of reasons, perhaps,

why we have evolved into a risk adverse culture. But let me ask

you, Dr. Melito, aren’t you part of the problem?

In my own experience, when I wrote the Foreign Assistance Act

on the other side of the House, I often would get audit reports from

GAO or from the IG that were very thoughtful and really helped

illuminate problems. But sometimes we got some that frankly took

no cognizance of how difficult this work is, no cognizance of the fact

that you are in a work environment that may be engaged in a civil

war or huge natural disaster or just adverse conditions that boggle

the mind. They are doing the best they can and the fact that they

didn’t produce eight widgets, they only produced seven, is not quite

the ding you think it is. Training auditors and IGs to actually understand this working environment I think is a challenge. I just

wondered if would comment on it.

Mr. MELITO. GAO places balance and fairness as a very high priority of ours. I stress with my staff, we go in country and part of

why we go in country is not just to see what is going on but actually to really appreciate more how difficult this is. I think we do

a very good job of that. Part of what we are trying to do, though,

is to help maximize the effectiveness of these programs and also

get the most for the taxpayers’ money. It is a very difficult balance

that we are trying to achieve. I think that we have a very productive and very positive working relationship with USAID.

Mr. KUNDER. Could I say something very briefly, sir? I agree

with George that the message does have to come from the Congress. I have no problem with the work that GAO does and never

did. But if you are a USAID officer and you are sent off to Afghanistan, you are seeing what is going on. First of all, the size of our

own internal Inspector General staff has increased every year.

Then on top of that, the Congress has created both the Special Inspector General for Iraq and now a Special Inspector General for

Afghanistan. You are just being told by the Congress—our people

are highly intelligent—you are being told to be cautious.

There is nothing wrong with being cautious. I am going to say

something because I really believe this deeply: Considering the environments USAID officers work in—and I know there are occasional scandals because I dealt with every one of them in the last

7 years—but by and large, we are giving the taxpayer a level of

oversight in these kinds of difficult environments that is comparable to what we are getting in the city of Alexandria where

somebody just pulled $170,000 from the parking meters. You can’t

catch everything. But the problem is the message is clearly one of

don’t take any chances. And you can’t succeed in Afghanistan without taking some chances.

Ms. WATSON. It appears that might be a vote. We are checking

on it. I think that the ranking member has one final word. I will

go to the ranking member.

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Mr. BILBRAY. Thank you. Mr. Ingram, there are two different

kinds of consolidations that we need to talk about. In 1948, there

was the concept that all aviation should be controlled by the Air

Force. Maybe the Marine Corps didn’t need it anymore because airplanes are airplanes. But the tasks for those airplanes were different. That is why to this day we have close support within those

ground based operations and the Naval operations aren’t consolidated. So we get into that. We have hit it now with the unmanned

vehicle. The Air Force doesn’t like them but the guys on the ground

love them.

Let me sort of throw out to you the concept of using the outcome.

Rather than literacy in a country that doesn’t read the Qur’an because they can’t translate it into their native tongue, a task that

I think we ought to be looking at in Afghanistan is the elimination

of the opium economy and the return to the orchards of the 1950’s,

1960’s that the opium economy ended up destroying. Because, let

us face it, you don’t worry about your orchards if you don’t think

you are going to be alive in the next couple of months.

But that would include the use of biological herbicides and the

appropriate way of using those herbicides, as the destruction of the

opium crop over a period of years rather than a total destruction

to where people start realizing the Americans are killing their

crops. Let me talk to you about this. Let us just say that the

Armed Forces went in and wiped out the opium crop the way that

some people are purporting while our USAID pack is there. The

children of Afghanistan are learning that Americans and their

country are destroying daddy’s crop rather than seeing that Americans in Afghanistan are helping dad plant the new orchard that is

going to feed them in the future.

Do you see how this isn’t as simple? Because if we were tasked

with this transformation, the military application and some of the

non-USAID activities have to be totally coordinated with that aspect. I point that out. I think that is the kind of goal, not looking

at literacy in itself in isolation, but the outcome of a new economy.

Do you think the coordination could be brought under a thing

like the Director for Foreign Assistance working with the Department of Defense in that kind of coordinated activity or do you think

that we need to leave some of this out of a coordinated effort like

the Director of Foreign Assistance? Is that the person you were picturing as being the czar or are you talking about creating a new

czar for this oversight?

Mr. INGRAM. No, I wasn’t thinking about creating a czar. I was

thinking about putting as many of the development functions of the

U.S. Government in, let us say, USAID with a global development

strategy that cuts across the whole U.S. Government and probably

gets lead by the NSC, USAID, and the State Department. They

lead the formulation of that. But it includes the military in there,

and EPA, and CDC, and whatnot in formulating a broad global development strategy.

Then when it comes to a country like Afghanistan, it is really

under the direction of the Ambassador and his appropriate senior

folks in Washington who have to drive the U.S. foreign policy interests in that country. If it is the elimination of opium, then you need

to put together a U.S. Government-wide strategy, part of which

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might be the military and a large part of which might be helping

with the economic and social evolution and dynamics, which would

come under the rubric of USAID. But not all of that might fall

under the expertise of USAID. You might have to get EPA involved

in there. If there was a health component, you might have to get

CDC.

So it is not that you fold everything into USAID. It is that

USAID is the Government agency that has the expertise and

knowledge for how you carry out development programs in a country in terms of social, economic, and political development. It then

reaches out to the rest of the U.S. Government and pulls it in as

their expertise and experience are needed.

Mr. BILBRAY. Madam Chair, I appreciate this hearing. I guess

the challenge to the successors of Mr. Walsh, I really think—you

know, I spent 18 years in local government and I learned one

thing, which is that the way to bridge the huge gap between the

theory of how you think things are going to work and how they are

actually going to work is to actually implement them on task orientation so you learn that there are little things, like support aircraft are needed by the Marine Corps—I think the two challenges

we have are one in Afghanistan and the other in Central America.

How do we use our aid to replace the drug economy and the lack

of economy in certain parts of the world and be able to transition

it?

We have to learn by doing and keep that flexibility because the

outcome is what matters, not the structure or the process. I think

that we need to be able to modify that process. The only way to

know if it is working or not is seeing if you are moving toward the

outcome.

I think our problems right now in Afghanistan and in Latin

America are reflective of the fact that we need to get more to the

outcome rather than just following a procedure. Right now, your argument is so compartmentalized there is no way to follow the ball

because it bounces in too many different locations.

Thank you very much, Madam.

Ms. WATSON. Thank you so much. Our time is really winding

down. We have a ceremony in Emancipation Hall that many Members want to attend. So let us do this: We are going to have to have

a subsequent hearing. I am going to have the staff send you a

memorandum because I would like to hear more about what we do

in high threat environments. How do we have programs? What

kind of programs can we have? I would like to know how we work

in the Peace Corps with these programs and so on. But we are

going to put in writing a memorandum to you. You can respond

and we will include those in the record.

We will have a followup hearing because I think we were just

getting into the meat of the restructuring. There is a tremendous

need for restructuring and reorganizing so that we don’t duplicate

so many of these efforts that we are trying to make.

If we are going toward peace, if we are moving into that era, how

do we do it? We will specifically ask you these questions and you

can write back. We will make them a part of the record and then

we will followup and have a final hearing.

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With that, the meeting is adjourned. Thank you so much for your

testimony.

[Whereupon, at 10:53 a.m., the subcommittee was adjourned.]

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