Redirecting Development Assistance Not Smart (and Certainly Not Smart Contracting)

President Obama unveiled key changes in how the U.S would distribute foreign assistance last week. Not least among the changes will be providing U.S. assistance directly to recipient-nation governments under the presumption such “direct assistance” will build that nation’s economic capabilities faster and better than the use of grants or contracts to development firms and non-profit organizations does today.

However well intentioned this effort may be, it does not account for some of the avoidable risks and obvious dangers attached with making cash transfers to nations that are receiving assistance precisely because they lack the governance structures required to effectively grow their economies, educate their populace and otherwise provide for the poorest of the poor in their nations. Nor is the presumption behind shifting toward direct assistance grounded in fact, as there is no evidence that implementing partners are not effective in achieving U.S. development goals through grants or contracts.

But, as they say on Reading Rainbow, “you don’t have to take my word for it.” Just pick up September’s edition of Service Contractor and you’ll find an in-depth explanation on the risks of direct assistance written by development professional Tonya Giannoni, chief operating officer of DevTech Systems and a tri-chair of PSC’s International Development Task Force.

Guest Blog: PDD on Global Development “Step in the Right Direction;” Sustained Leadership Needed to Ensure Success

By Stan Soloway

Professional Services Council President and CEO

Yesterday, President Obama signed a Presidential Decision Directive on Global Development (PDD) and described a new, unified policy approach to international development in a speech to the United Nations General Assembly High Level Summit on the Millennium Development Goals. PSC and its international development firm members support the elevation of development as a co-equal third pillar of national power, alongside diplomacy and defense. We believe the articulation of a U.S. Global Development Strategy will bring needed coherence and momentum to aid programs that are fragmented and duplicative. In discussions with Obama administration officials, we have supported plans to rebuild USAID as the nation’s leading voice in development issues and as the clear leader of a coordinated “whole of government” approach to foreign assistance.

PSC welcomes the president’s focus on economic growth as the fundamental force that will eventually transform the developing world and we support the president’s call to “use all the tools at our disposal” to achieve complex and difficult development goals. However, U.S. government support for greater “country ownership” should not be read as a code phrase for a wholesale shift away from the use of U.S development firms to direct assistance to foreign governments and organizations. Design and delivery modes for development projects must still be strategically tied to program goals and must reflect the political, social, economic and governance capabilities of the recipient nations and organizations.