U.S. Global Leadership Coalition » Joel Paque

Competing in the Global Marketplace

Joel Paque — Thu, 02 Feb 2012 23:53:33 +0000

What do American businesses need to compete in today’s global marketplace? A recently released report by the Department of Commerce, entitled “The Competitiveness and Innovative Capacity of the United States,” looks at the factors that have spurred U.S. economic growth in the past, and that could help jump start a new era of competiveness for the future. The report finds three areas where the federal government is essential to increased competitiveness and provides recommendations for how to improve each of these areas:

Federal support of research and innovation;
Education; and
Modern infrastructure

However, the report only briefly touches on another set of government tools essential to this conversation—the role of diplomacy and development in increasing U.S. competiveness abroad.

Half of U.S. exports today are to the developing world, and trends reveal those markets will grow at a far faster pace than many of our more traditional partners. China, Europe, Brazil, and India all recognize the future of the global economy is in the developing world, and are investing heavily in becoming the economic partner of choice across Africa, Asia, and South and Central America. Success in these emerging and developing markets is central to the future of American economic competitiveness.

In a recent report published by the Council on Foreign Relations on U.S. Trade and Investment Policy, a task force of trade and foreign policy experts outlined seven pillars to make the U.S. more competitive. While some of the proposals focus on domestic challenges like those in the Commerce report, the CFR task force goes further and acknowledges that the government can play an important role in creating and supporting an environment conducive to U.S. exports. For example, the authors highlight the value of “Greater efforts to promote exports through more competitive export financing and a more active government role in supporting U.S. overseas sales.” These activities are largely funded by the International Affairs Budget–the Export-Import Bank (which provides export financing) and the State Department (which promotes U.S. businesses and a good business environment).

American businesses need a wide array of tools to succeed in these new environments, and the International Affairs Budget supports essential government programs to help U.S. businesses compete abroad. These programs promote American exports and investment, support economic reforms overseas to open markets, contribute to the development of stable, democratic societies governed by rule of law, and help grow the number of middle class consumers through poverty alleviation programs–all of which are essential for U.S. companies to thrive. While investments in research, education, and infrastructure are also essential component of competiveness, we mustn’t overlook the other tools required to help make sure the latest U.S. innovations and products are able to access the fastest growing markets.

An Opportunity in Egypt

Joel Paque — Wed, 21 Dec 2011 21:51:35 +0000

Uncertainty about Egypt’s future is high these days, with political violence marring the parliamentary elections less than a year from the initial events that led to the removal of Hosni Mubarak. Policymakers and experts alike are wondering how the United States can support democratic and peaceful progress, even as they recognize the limitations imposed by the financial crisis. With over 80 million people and the largest non-oil dependent economy in the Middle East, Egypt presents a critical opportunity to advance U.S. economic interests.

The new government’s political composition, commitment to greater democracy, and disposition towards the West in general and U.S. in particular will likely take time to crystallize. In the meantime, the question of U.S. assistance to Egypt, and the leverage it can provide in encouraging a transition to a stable democracy, is one worth asking. The final FY12 budget includes $1.3 billion in security assistance in addition to $250 million in already pledged economic assistance to Egypt, similar to the amount of aid the U.S. provided before the removal of Mubarak. However, this aid now comes with conditions that free and fair elections be held, and that progress is made towards the transition to a civilian government.

While the future of Egypt is ultimately in the hands of its citizens, U.S. assistance can play an important role in helping to influence both the political and economic future for the country. How we balance the “carrot and stick” of current and future aid packages could help the continued transition from military to civilian rule, as the bulk of current aid goes directly to the military. If the Secretary of State and Congress are not satisfied with the speed and process of the transition, the Egyptian military stands to lose the funding and security assistance programs.

Security assistance isn’t the only tool for the U.S. to help influence the direction of events. While the private sector may be justifiably weary of investing in uncertain environments, a window still exists when U.S. government assistance could help alleviate some of this risk, advance U.S. interests, and help U.S. businesses tap into new markets. Last March, the United States announced it would commit $2 billion of economic assistance through the Overseas Private Investment Corporation (OPIC), which provides political risk insurance for American businesses to invest in the developing world and thus helps them gain entry to emerging markets. In November, OPIC approved a $150 million loan guarantee to Citibank to work with Citadel Capital, the largest private equity firm in North Africa, to back investments in the North Africa region, primarily in Egypt.

With the public weary of the military-led “regime change”, Egypt provides an opportunity for the U.S. to use its full array of foreign policy tools through diplomacy, economic development, and security sector programs that will help build allies with the new governments in the Arab Awakening countries. Now is not the time to step back. Instead, the U.S. can and should be proactive in engaging and supporting the transition to a stable, more inclusive Egypt.

MCC and the Arab Awakening

Joel Paque — Thu, 01 Dec 2011 22:20:40 +0000

It is less than a month until the first U.S. presidential primaries, but the past few weeks have seen momentous elections in some of the Arab Awakening countries, including Egypt, Tunisia, and Morocco. Two of these countries, Tunisia and Morocco, have partnered with the Millennium Challenge Corporation, which seeks to spur policy and governance reforms through assistance dollars tied to eligibility criteria and country ownership. Morocco and Tunisia represent two different types of MCC programs—threshold grants and compacts. While there is still much uncertainty surrounding the future of both countries, they serve as examples of how the MCC, and U.S. assistance more broadly, can help foster policy reforms and economic development.

Morocco signed an MCC compact agreement in 2007 focusing on a number of activities aimed at increasing economic growth and opportunity. While Morocco’s MCC agreement, which went into force in 2008, focused mostly on economic development programs, MCC Compacts take into account factors such as Rule of Law, Control of Corruption, and Civil and Political Rights when conceiving and implementing programs. The openness to reform demonstrated by the signing of the MCC compact, combined with the various projects implemented under the compact have shown that the model does work. Morocco’s elections were not without some controversy; however, they do represent significant strides towards a more free and representative process, especially amidst the turbulent and difficult movements sweeping the rest of North Africa.

Tunisia, which underwent far more dramatic change in last spring’s revolts, is currently being considered for a Threshold Agreement with the MCC. Threshold Programs are smaller grants awarded to countries that come close to passing these criteria and are firmly committed to improving their policy performance. In announcing the eligibility of Tunisia for a Threshold Agreement, MCC CEO Daniel Yohannes said, “Tunisia’s ability to sustain its democratic transition is linked to the progress it makes on its economic transition. MCC is looking forward to partnering with the Tunisians on a policy reform-based program to identify and address binding constraints to economic growth.” While the new government must forge its own path forward, the incentives of future assistance will hopefully encourage the policy reforms necessary to sustain momentum towards a more free and democratic future for the people of Tunisia.

We are not even a year removed from the upheaval of the Arab Awakening, but already there have been positive signs that freer and more open governments may emerge in Morocco and Tunisia. Time will tell if the Tunisian people embrace the kinds of reforms required in the MCC Threshold Agreement for the long term, but the role assistance programs can play in encouraging reform and strengthening democratic principles it should not be underestimated at times of uncertainty. We are facing a historic moment of opportunity in North Africa and elsewhere in the Middle East, and the U.S. should continue to use all the tools of national security to support the spread of democracy, and in turn a more stable, and safer world.

Debate Response Sheet

Joel Paque — Wed, 16 Nov 2011 16:07:45 +0000

During last weekend’s Republican Presidential candidates’ debate, Governor Rick Perry sparked controversy by saying, “the foreign aid budget in my administration for every country is gonna start at zero dollars.” His proposal was endorsed by some of the candidates and provoked reactions in the media in the days following that highlighted the critical role that foreign assistance plays in advancing U.S. national interests.

GOP Candidates

Governor Jon Huntsman, Jr.: “There are certain areas that I would argue are in America’s interests and if they’re in America’s interest we get some return on that invested dollar. And I think we have– you know, it’s fair enough to say we have got to start with a zero based budget approach but let’s also be smart enough to say that we do as people get a certain return through foreign aid. We have to carefully identify what that return is, explain it to the American people. But to say we’re just going to wish it all away I think is a political sound bite.” — From an interview on CBS Face the Nation

Senator Rick Santorum: “They’re pandering to this anti-foreign aid element out there. And I ask this question all the time when I’m in meetings. I ask people what percentage of the federal government is in foreign aid, and usually you get ‘20, 30, 40, or 50 percent’. When I tell them it’s less than half a percent, people are shocked! When I tell them how important it is to prevent military action, to prevent the expenditure of funds, to prevent America from getting involved in things that it shouldn’t be, foreign aid is valuable in that regard… So I think this was a low light in that debate.” — From an interview on MSNBC’s Morning Joe

Congress

Senator Marco Rubio (R-FL): “I think we need to examine all of our foreign aid and make sure it makes sense — there’s never been a good time to waste money, but … on the other hand the foreign aid we put out is a very small part of our overall budget, and an important part of it.” — From an interview on FOX News

Former Administration

Five Former Secretaries of State: “As former Secretaries of State from both Democratic and Republican administrations, we urge you to support a strong and effective International Affairs Budget. We believe these programs are critical to America’s global leadership and represent strategic investments in our nation’s security and prosperity.” — Letter to Members of Congress

Admiral James Loy, former acting Secretary of Homeland Security: “The issue isn’t starting at zero, but where you end. When used strategically, foreign assistance advances our national security. And retreat in today’s world is not an option.” — Statement following Debate

Michael Magan, former Special Assistant to the President on the National Security Council: “Candidates missed an opportunity last week to explain to the general public the leadership role the United States must continue to play in the world we live in today. They were too afraid someone would ask, “Why are you spending money overseas and not at home?” None of them were prepared to discuss in simple terms the benefits we derive as a result of U.S. foreign assistance. I think the American public would continue to support foreign assistance programs if they knew the positive impact is has not just abroad, but in relation to our long-term national interests.” — Blog for Foreignpolicy.com

Expert Commentary

Jamie Fly, Foreign Policy Initiative: “Governor Perry said that his foreign-aid budget for each country would start at zero, a notion that may be a good talking point, but in reality makes little sense. Foreign aid accounts for less than one percent of the federal budget and is an essential part of American efforts to advance our interests in the world.” — Article for National Review Online

Max Fisher, Atlantic Magazine: “The idea that the U.S. should zero out its foreign aid has gotten by far the most attention of any comment from this debate, mostly as it would include resetting aid to Israel, which most GOP candidates have been falling over one another to most hawkishly advocate for protecting. Pro-Israel groups are already registering their unhappiness. But the backlash against this idea goes far beyond Israel, as it seems to misunderstand the entire idea of how foreign aid works. Don’t take my word for it — read The Economist’s exasperated walk-through on why foreign aid is a transaction, not a gift, and how “resetting” our financial arrangements in dozens of countries would be somewhat like Bank of America “zeroing out” all of its loans and investments every single year. In other words, it would be a disaster from which it would take years or decades to recover.” — Article in the Atlantic

The Economist: “Nobody would be willing to sign a contract with these agencies if they knew the agencies were going to zero out their budgets and potentially eliminate the relevant programme next year. But for some reason, the leading Republican presidential candidates think it would be a good idea to do this with foreign aid. It is not clear to me why they think anyone would be willing to work with an American foreign-aid establishment that was unable even in principle to make any plans lasting longer than one year. Would you put your organisation’s time and energy into working with an American aid initiative on higher education, agricultural extension, medical system capacity-building, epidemiology and disease intervention, climate-change mitigation, transportation enhancement, or anything else that could only promise a one-year budget? You’d have to be a fool.” — Article on Economist.com

Cuts to Diplomacy and Development Limit American Influence in the Arab Spring

Joel Paque — Tue, 01 Nov 2011 16:00:17 +0000

With the recent elections in Tunisia and end of the war in Libya, the peoples in North Africa have an opportunity to build a hopeful future that values the principles of freedom and liberty. At the same time, the U.S. has an opportunity to promote democracy and stability, and avoid the rise of regimes as unfriendly to the U.S. as those that have been deposed. While their futures must be determined by themselves, if the United States does nothing to help promote stability and build new allies in this strategic region, it could become a lost opportunity to spur democracy in this strategic region.

Unfortunately, the development and diplomacy tools that enable the U.S. to assist Libya and the other Arab Spring nations are now facing disproportionate cuts in Congress. The current budget negotiations in Congress include as much as a 20% reduction of our International Affairs programs in non-war areas over just two years – the steepest cuts since the height of the Cold War.

Leaders in the Executive Branch, from both parties in Congress, and from the military have voiced concerns about the impacts of these cuts on the U.S.’s ability to respond to the Arab Spring and the transition to civilian leadership in Iraq and ensure a positive outcome for U.S. interests.

Bipartisan Concerns about Cuts to Development and Diplomacy

Military Leaders

- General James Mattis

- Admiral Mike Mullen

- General David Petraeus

Members of Congress

- Congressman Berman (D-CA)

- Congressman Rohrabacher (R-CA)

- Senator Blunt (R-MO)

- Senator Graham (R-SC)

- Senators Graham (R-SC), Kirk (R-IL), McCain (R-AZ), and Rubio (R-FL)

- Senator Kerry (D-MA)

- Senator McCain (R-AZ)

- Senator Lieberman (I-CT)

- Senator Lugar (R-IN)

- Senator Rubio (R-FL)

Administration / Former Administration

- President George W. Bush

- Secretary of State Hillary Clinton

- Secretary of Defense Leon Panetta

- Former Secretary of State Condoleezza Rice

- USAID Administrator Raj Shah

Military Leaders

General James Mattis Commander, US Central Command

“As the transition to civilian leader in Iraq, it is essential that the State Department be sufficiently resourced to solidify relationships between the United States and Iraq for the future.” –Testimony before Senate Armed Services Committee, March 1, 2011

Admiral Mike Mullen, former Chairman, Joint Chiefs of Staff

“The diplomatic and developmental capabilities of the United States have a direct bearing on our ability to shape threats and reduce the need for military action. It is my firm belief that diplomatic programs as part of a coordinated strategy will save money by reducing the likelihood of active military conflict involving U.S. forces.” Letter to Senate Majority Leader, May 21, 2010

General David Petraeus, Director of the CIA

“The bottom line is that I stated that this category of funding… is so essential to building on the hard-fought security gains that our troopers sacrificed so much to achieve. This category of spending is really a national security funding issue, not just an issue of foreign assistance. Without that construction of governance and development on the foundation of security achieved by our men and women in uniform, you cannot consolidate your gains.” – Testimony before House Armed Services Committee, March 16, 2011

Members of Congress

Senator Roy Blunt (R-MO)

“The President laid out a plan for an AID program for some Middle Eastern countries whose internal stability is challenged by recent events. The plan would consist of a combination of grants, of loans, of debt forgiveness, and the President’s plan, I believe, has merit and there is value to a robust role for the United States to support certain governments at a critical time.” – From a speech on the Senate floor, May 19, 2011

Senator Lindsey Graham (R-SC)

“When it comes to forming an Egyptian democracy, we must keep in mind the basic institutions of democracy are virtually non-existent right now. There is much work to be done in forming viable political parties and the basic foundations of democratic institutions. It will take them time to build capacity. And from the United States perspective, it is in our own national security interests to assist them, where appropriate, in the forming of democratic institutions and a civil society. […] Finally, one of the lessons to learn from these recent events shows us how vital it is to build effective communications and relationships throughout the world. For the past 30 years we have spent American tax dollars to build relationships between the United States and Egyptian military. This long relationship bore at least some measure of fruit during the recent crisis when the Egyptian military remained loyal to the people of Egypt – not its ruler. This should serve as both a reminder and an example of why the United States must always resist the temptation to disengage from the world.” – From a statement to the press, February 11, 2011

“…[I]f we can support the Arab Spring, China and Russia are going to think, will it come here?

This is the best opportunity in my lifetime to put dictatorships, secular and theocratic, under scrutiny and under pressure. That takes money, it takes diplomacy, it takes international effort, and on some occasions it takes military force.” –From a speech at the Carnegie Endowment of International Peace, June 15, 2011

Senators Lindsey Graham (R-SC), Marco Rubio (R-FL), John McCain (R-AZ), and Mark Kirk (R-IL)

“It is in our national interest for Libya to consolidate the gains of its revolution, and in the critical months ahead we must deepen our support for the Libyan people.” –Wall Street Journal op-ed, October 7, 2011

“Americans have had their disagreements over the U.S. intervention in Libya, but the sources of those disagreements are now fading into history. What remains is an enormous opportunity for the U.S. to build a partnership with a democratic and pro-American Libya that contributes to the expansion of security, prosperity and freedom across a pivotal region at a time of revolutionary change. This is a worthy goal that should unite Democrats and Republicans, Congress and the president, America and our allies. Libyans will build their own nation. But they desire and deserve our support. And it is in our interest to help them succeed.” –Wall Street Journal op-ed, October 7, 2011

Senator John Kerry (D-MA)

“…just as we did in Eastern Europe immediately after the fall of the Berlin Wall, I think we have the ability to play a hugely constructive role in what happens and how events unfold in the Middle East and we can affirm the values of democracy as well as serve the larger strategic interests of our friends and allies, and of the people of these countries as well as ourselves by seizing this moment and recognizing the opportunity that it presents. And that is why I am working with Senator McCain and Senator Lieberman on legislation to support these new and fledgling democracies in that region.” –Senate Foreign Relations Committee hearing, March 17, 2011

Senator Joseph Lieberman (I-CT)

“Senator McCain and I were in Tunisia and Egypt a couple of weeks ago, and one of the messages we got, particularly from the young people who have been at the head of this remarkable uprising in these two countries, was: Don’t stand by. Please, America, don’t stand by and let Qadhafi bludgeon his own people who are asking for the same rights and opportunity and freedoms we have been asking for. If you do, it will end the movement of freedom and opportunity across the Arab world.” – From a speech on the Senate floor, March 14, 2011

Senator Richard Lugar (R-IN)

“A second element, closely connected to the first, is strong support for economic modernization. In the short run, that means helping Egypt and Tunisia, for example, to navigate past significant difficulties created by political turmoil and the temporary collapse of tourism. But that also means thinking boldly and ambitiously about how we can promote genuine long-term modernization. We strongly support the Enterprise Fund that you, Mr. Chairman, and Senators McCain and Lieberman have proposed. Secretary Clinton just announced that the Overseas Private Investment Corporation, OPIC, will provide up to $2 billion to stimulate private sector investments in the Middle East and North Africa. It is also crucially important to consider trade liberalization initiatives for key Arab States in transition, ideally in cooperation with the European Union. In the process we can help encourage intraregional trade and integration in a region in which both are in short supply. We can help produce private sector jobs desperately needed to keep pace with demography and expectations. And we can help spread the benefits and opportunities of economic growth across Arab societies rather than just to a narrow circle at the top.” –Senate Foreign Relations Committee hearing, March 17, 2011

Senator John McCain (R-AZ)

“These young people appreciate our assistance with their elections, but what they want most from America is our investment, our support in creating jobs. For this reason, I strongly support the new economic assistance initiatives that the President announced today – from debt forgiveness, to the announcement of Free Enterprise Funds, to the proposed expansion of the European Bank for Reconstruction and Development.” – From a speech at the U.S. Institute of Peace, May 19, 2011

Senator Marco Rubio (R-FL)

“Just in the past year, in the Middle East – the region whose governments have been most resistant to freedom – we have seen the first stirrings of democratic upheavals. We do not know how the Arab Spring will ultimately turn out, but it has already proven one thing: that no faith, no ethnicity, no region, and no people are immune to the fundamental desire to control their own destiny. As dissidents and freedom fighters battle dictators around the world, they look for support to the greatest democracy in the world. And America must answer their call.” – From a speech at the Jesse Helms Center, September 13, 2011

Representative Howard Berman (D-CA)

“Across the Middle East and North Africa, as we have all noted, we are witnessing a transformational moment. These countries will need external support as they undertake successful transitions to democratic governments.” –House Foreign Affairs Committee hearing, March 1, 2011

“The recent democracy movements across North Africa and the Middle East have demonstrated not only the benefits of our security assistance, but also the importance of contingency funds for a flexible response. Countries that descend into chaos and anarchy provide breeding grounds for extremism and training grounds for terrorists. Just a small investment in supporting stable and peaceful transitions to democracy could yield far greater gains for U.S. national security than billions for developing new weapons.” –House Foreign Affairs Committee hearing, March 16, 2011

Representative Dana Rohrabacher (R-CA)

“If we were not engaged [in Libya], there would be no motive for those people on the ground to confront radical Islam on sight… I hope that we understand that this is in our interest to stand with those that are struggling for freedom and a democratic government.” – House Foreign Affairs Committee hearing, March 31, 2011

Administration / Former Administration

President George W. Bush

“It is clear that it takes time for freedom to take root. And so while these are exciting times, these times also require a degree of patience, particularly from those of us who live in the comfortable lives of free societies. We’ve got to understand that sometimes the seed is planted on rocky soil and it takes time. And one of the dangers for the freedom movement around the world is that the United States grows weary and becomes isolated from the inevitable march of freedom.” –Remarks at the Bush Center on May 26^th, 2011.

Secretary of State Hillary Clinton

“We have an opportunity right now in the Middle East and North Africa that I’m not sure we’re going to be able to meet because we don’t have the resources to invest in the new democracies in Egypt and Tunisia, to help the transition in Libya, to see what happens in Syria, and so much else…And we’re going to make the best case that we can that American power is a power for the good, that it has helped to liberate hundreds of millions of people around the world, that it has helped to enhance the opportunities for people and to give young girls and boys the chance to live up to their own God-given potential.” From an interview at the National Defense University, August 16, 2011

“This budget also strengthens our allies and partners… It helps Egypt and Tunisia build stable and credible democracy, and it supports security assistance to over 130 nations. Now, some may say, Well, what does this get us in America? Let me give you one example. Over the years, these funds have created valuable ties with foreign militaries and trained in Egypt a generation of officers who refused to fire on their own people. And that was not something that happened overnight. It was something that happened because of relationships that had been built over decades. ” – Testimony during House Foreign Affairs Committee hearing, March 1, 2011

Secretary of Defense Leon Panetta

“…I really do view the Arab spring as a monumental moment in terms of the politics of the politics of the Middle East and the future of the Middle East. I think the reality is that the changes that are taking place, people coming together to try to seek the same kind of rights and opportunities and freedoms that others enjoy in this world and to eliminate dictatorships that have prevailed there, all of this I think is a good sign for the future….And it doesn’t mean that it’s not going to challenge the United States and other countries to try to really exercise the right kind of leadership as this takes place. I mean, it’s very important as these changes take place that we allow the people in those countries to take the lead and do this the way they feel is important to achieve, but that we provide whatever support we can — the United States, NATO, our allies, the Arab League, all working together to try to provide a support system as these changes take place.” – From an interview with Charlie Rose, September 6, 2011

Secretary of State Condoleezza Rice

“When the people in the Middle East or in Africa or in Latin America or in Burma, who are still waiting to hear those voice here — the voice of America — it empowers them further. And so it tells me you really do have to take control of your circumstances, but you also need the voice of the powerful with you. And there’s no more powerful voice than the United States.” –Remarks at the Bush Center on May 26^th, 2011.

USAID Administrator Raj Shah

“But we mustn’t let that budget scenario mean we shortchange the necessity of expanding democracy, rights and governance. Improving the quality of public institutions, enhancing government accountability, addressing corruption and giving citizens the opportunity to vote out ineffective leadership are all crucial to fighting poverty, eliminating hunger and improving health. Without political reform, we’re not helping to develop countries; we’re delivering services, undermining our chances for long-term success. Therefore, we must be innovative in how we allocate our funding so we can support the governance structures necessary to accelerate and sustain economic empowerment.” – From a speech at the Democracy, Rights and Governance Conference 2.0, June 20, 2011

Support on the Right

Joel Paque — Thu, 29 Sep 2011 20:00:05 +0000

In today’s highly fraught political climate, it is easy to assume that all issues are black and white—especially when it comes to government spending. Every federal dollar is coming under increasing scrutiny, and one area facing some tough cuts right now on Capitol Hill is foreign assistance. However, there exists a long tradition recognizing how essential our engagement and leadership in the world is to our national security. And now there are several new politicians with conservative bona fides who are speaking up in favor of U.S. engagement through our diplomatic and development programs.

Just this week in a speech at the Reagan Library, New Jersey Governor Chris Christie spoke about the importance of American exceptionalism—in between dodging questions of whether or not he would run for President. Governor Christie described why it is important for the U.S. to be investing in all of our tools for national security, saying, “We must be prepared to lead. This takes resources—resources for defense, for intelligence, for homeland security, for diplomacy. The United States will only be able to sustain a leadership position around the world if the resources are there.”

Governor Christie isn’t alone in his beliefs. Senator Marco Rubio, another rising star in the Republican party, spoke earlier this month at the Jesse Helms Center and focused on the role of assistance programs in continuing America’s leadership. He said, “Foreign aid is also an important part of America’s foreign policy leadership. While we certainly must be careful spending money on foreign aid, the reality is that it is a miniscule portion of our overall budget, and is not the reason we have a growing debt problem. If it is done right, and when done in partnership with the private sector and faith-based community, foreign aid spreads America’s influence around the world in a positive way.”

Senator Lindsey Graham has also endorsed the idea that our national security depends on a smart power approach in comments he made last Spring regarding the importance of funding the International Affairs Budget, “The account we’re talking about can make the difference between a safe America or an at-risk America… if you don’t see it as a national security tool, then I think that we are missing the mark as a nation.”

But threats to cut the budget will continue on the Hill. Just two weeks ago Senator Rand Paul (R-KY) introduced an amendment to a spending bill that would have devastated the State Department and USAID budgets, cutting it by a third. The amendment was voted down by a rare bipartisan majority 78-20 in an encouraging sign that members of both parties understand the importance of these programs.

While Congress may have a hard time agreeing on much these days, it’s clear some are looking past the rhetoric and seeing the value in a strong and effective International Affairs Budget. While many issues come down to a difference in political philosophy, the important role our engagement in the world brings to ensuring our national security and continued leadership is clear, and one that transcends today’s sharp political divide.

Beyond Aid in the Global Economy

Joel Paque — Tue, 20 Sep 2011 17:10:39 +0000

Government-to-government assistance programs have changed dramatically since World War II from tools of Cold War diplomacy to instruments to promoting global economic growth. Our current systems of delivering assistance needs to take this new dynamic into account, as do our decisions about funding development assistance. This was part of a message delivered by President of the World Bank Robert Zoellick this week on the state of the global economic recovery.

Zoellick talks about the importance of moving to a world “Beyond Aid,” where assistance programs are conceived of as a way of helping global economic growth, “In a world Beyond Aid, assistance would be integrated with – and connected to – global growth strategies, fundamentally driven by private investment and entrepreneurship. The goal would not be charity, but a mutual interest in building more poles of growth.” This approach from the World Bank is consistent with the Presidential Policy Directive on Global Development released by the Obama Administration a year ago in its focus on economic growth as a means to reduce poverty and, in turn, U.S. economic prosperity.

Assistance from both multilateral and bilateral donors can create opportunities for businesses around the world. Contrary to those who say that growth in the developing world is at the expense of U.S. jobs due to outsourcing, studies indicate that a 10% increase in exports is associated with a 7% increase in employment. Exports support more than 10 million jobs in the United States, and export-related jobs pay, on average, 15% more than the average wage.

So how do we take advantage of these opportunities? The International Affairs Budget of the U.S., representing about 1% of the federal budget, funds investments in opening new markets, fostering stability and democracy, and advancing the rule of law. Our diplomacy and development programs also help millions of people each year live healthier, more productive lives through programs to reduce diseases like malaria and HIV, through increased access to education for young girls, through better nutrition for new mothers and their children. For instance, a UN report found that over 53% of all absenteeism from work in some African countries was related to HIV/AIDS, and health costs per employee have risen as much as five times. Programs like PEPFAR are working every day to reduce the number of HIV affected individuals in these countries, which can help stop this decrease in productivity. While these humanitarian benefits should not be forgotten, as Congress and the President continue to address the deficit while simultaneously trying to jumpstart a sluggish economy, it is imperative that they take into account the economic advantages of maintaining a strong and effective International Affairs Budget.

Reforming Foreign Assistance

Joel Paque — Thu, 08 Sep 2011 18:41:57 +0000

For years, the holy grail of foreign assistance reform has been a re-write of the Foreign Assistance Act of 1961, widely seen to be outdated and cumbersome. After 2008, then-Chairman of House Foreign Affairs Committee Howard Berman (D-CA) began to work on such a reform bill. Control of the House of Representatives switched in 2010 before it was completed, but now-Ranking Member Berman released a draft today intended to contribute to the future debate on reform. While he and his staff know their draft is unlikely to become law, the draft makes a significant step forward in thinking on what such a reform could and should entail.

“Aid is not a gift,” Congressman Berman said in his introduction of the Global Partnerships Act of 2011 today at an event co-hosted by the American Enterprise Institute and the Brookings Institution. “The United States provides foreign assistance because it serves OUR interests. Helping countries become more democratic, more stable, more capable of defending themselves and better at pulling themselves out of poverty is just as important for us as it is for them.”

In today’s climate where most of the foreign assistance conversation is about cutting budgets, the Berman draft bill focuses on the structure and rationale of foreign assistance, driven by fifty years of experience in what makes programs more efficient, more impactful, and more lasting. Berman said he hopes some of the proposals in this bill will serve as the foundation for future reforms or will be taken up in part. Indeed some smaller pieces of reform, such as the recent amendments to the State Authorization bill Congressman Poe made to strengthen monitoring and evaluation, have already garnered bipartisan support.

This draft, while still a far ways from binding legislation, marks an important first step towards making U.S. assistance as efficient as possible. But it is important to keep in mind, as Congressman Berman pointed out, that we do not have the luxury of slowing down our commitment to our current programs, which have already seen improvements through the USAID Forward initiative and the QDDR. In an ideal world we could “hit pause,” evaluate all the necessary reforms, and then resume our investments in development and diplomacy.

But in reality, we face every day threats from weak and fragile states, instability derived from famine and disease, and the threat or terrorism by individuals who have fallen susceptible to radicalization due to the lack of economic opportunities. It is vital that we continue to provide adequate resources to our development and diplomacy programs through the International Affairs Budget while we undertake the process to implement necessary reforms. As Congressman Berman said today, “Today, even more than in 1961, our health, our security, and our prosperity are advanced by a world in which basic human needs are met, fundamental freedoms are respected, conflicts are resolved peacefully and the world’s resources are used wisely.”

American Leadership At A Critical Moment

Joel Paque — Mon, 22 Aug 2011 14:50:41 +0000

President Obama, Congress, the 2012 Republican candidates for President and the American public have all acknowledged that the United States must get our fiscal house in order and reduce the federal budget deficit. But this house cleaning shouldn’t entail shuttering the windows and bolting the door to the world. The recent debt-reduction deal has made clear that spending cuts will represent a significant portion of deficit reduction, but Congress must be cautious that it does not sacrifice the security and prosperity of our future for the savings of today. We are at a moment where effective U.S. engagement could help remake a large swath of the Middle East and North Africa in the wake of the Arab Spring, including Libya and Syria.

Former National Security Advisor Stephen Hadley refers to the Marshall Plan in the Washington Post when making the case that it is in America’s interest to invest in these countries’ transitions to democratic, free market societies. “We know how to help build the infrastructure of democracy: fair elections, political parties, free media and the rule of law. We know how to help stabilize economies, establish free markets and encourage foreign trade and investment that can provide a better economic life,” Hadley writes. The programs that build an “infrastructure of democracy” are funded by the International Affairs Budget, the 1% of the federal budget that encompasses all of our overseas diplomatic and development efforts. These programs can work, as we have seen in the post-war reconstruction of Europe, countries like South Korea (once a recipient, now a donor of aid), and the transformation of former Soviet-bloc countries such as Poland into U.S. allies.

While it may seem easy for lawmakers to target global programs at a time of fiscal introspection, doing so would be short sighted and ignore an opportunity for global leadership that could enhance U.S. interests by bringing about significant change in a region long dominated by authoritarian rule. As Hadley points out, the gears of change are already in full operation, but “our great challenge — and opportunity — is to help the people of the Middle East and North Africa transition to freedom, democracy and prosperity.” The U.S. did not cause these revolutions, nor can we be certain of their ultimate outcome, but the International Affairs Budget provides the programs and assistance that can lead to more open and democratic societies, which in turn lead to more stability and peace. If we invest in these programs, we can help ensure that these changes result in real progress. If we pull back, it may be decades before another opportunity presents itself.

Development is Good for Business

Joel Paque — Fri, 03 Jun 2011 19:23:54 +0000

The role of business in development has sparked much debate recently, but what does it mean? For some it translates into corporate social responsibility, with business helping the local communities abroad as a gesture of good citizenship. Others see the potential for partnerships where the result is good not just for local communities abroad, but for business itself.

USAID recently announced a new Center of Excellence for International Corporate Volunteerism, in conjunction with IBM that will work with corporations who wish to offer international volunteer opportunities to their employees. While this initiative will focus on corporate volunteerism and not investments in the developing world, the private sector has shown an increasing realization that investments in development efforts over the long term help grow the global marketplace for their products. Partnering with the private sector will also allow USAID to deploy expertise more quickly and cheaply, which is especially important in this time of budget cuts.

One management consulting firm recently released a report extolling the “double-bottom-line” benefits of investing in development. Accenture’s “Convergence Economy: Rethinking International Development in a Converging World” report explores the intersections between longstanding development challenges, like global health and economic growth, and corporate interests. It proposes a new and emerging model to address what they call a “convergence” of issues. Accenture defines this, in the context of global development, as “the convergence of issues and interests and, most importantly, of solutions, with an unwavering emphasis on the outputs and impact rather than on organization structures and long-established and often stereotypical roles.” Accenture believes this new approach can help spur real development results by harnessing the expertise and skills of the private sector.

In another example of how development can be good for business, Nestle recently sponsored a forum on the concept of Creating Shared Value (CSV), an approach that brings together governments, NGOs and business leaders for a comprehensive strategy to achieve global development goals. Based on a recent article in the Harvard Business Review, CSV is neither corporate social responsibility or philanthropy but puts the needs of society at the very center of company policy to create both economic success and developmental progress. CSV puts the burden of leadership on business leaders to make the private sector an active participant in meeting global challenges and creating long-term value for all parties. Though public-private partnerships for development are not a new concept, CSV creates longer-term metrics for success and recognizes the changing role of government, NGOs and business. By bringing all parties to the table to develop strategies for the short, medium and long term in development projects, the advantages of each sector are best utilized. CSV is still in its infancy, but this approach outlines a promising framework for businesses to create “long term value, concurrently, for the shareholder and society.”