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| Speaker: | Jim Kolbe, Member, U.S. Congress (R-AZ) |
|---|---|
| Presider: | Andrew S. Natsios, Distinguished professor in the practice of diplomacy; adviser on international development, the Edmund a. Walsh School of Foreign Service, Georgetown University and former administrator, U.S. Agency for International Development |
February 28, 2006
Council on Foreign Relations
Washington, DC
Council on Foreign Relations
ANDREW NATSIOS: Ladies and gentlemen, would everybody please sit down so we can start?
I am Andrew Natsios, and I’m the moderator/facilitator—I’m not quite sure what I am, Jim, but—co-discussant with Jim Kolbe, our guest today. Welcome to the Council on Foreign Relations meeting. If you have a cell phone or a BlackBerry or other wireless device, please turn it off so we do not have a(n) embarrassing incident during the festivities.
This entire meeting is on the record, so you might want to bear that in mind when you ask a question or make a comment. This is supposed to be over by 1:30, so just sort of keep that in mind as we go along. And we would like to, after we have our initial comments, invite Council members to join the discussion. Please wait for the microphone and speak directly into it, because this is being televised, and I think they want to make sure that everything’s captured on tape. So please do wait for the microphone. And then once you get the microphone, please stand, state your name and your affiliation and, while we appreciate your opinions, please keep in mind that we want a question of some kind, or a—or there’s no point in Jim sitting, and I sitting, up here. So do get to a microphone.
REPRESENTATIVE JIM KOLBE (R-AZ): (Laughs.) Well, we might learn something from what we hear.
Jim Kolbe.
NATSIOS: We might, absolutely.
And so what I’m going to do is make some introductory remarks and, you know, I think we both know who both of us are, so I’m not going to give a long introduction to the chairman, my good friend, Congressman Jim Kolbe—who was, I think, the best friend of reform in the Congress around foreign aid, but who genuinely cares about the broader policy issues. There are people in the Beltway who are interested in this in a more parochial sense—and I won’t define parochial, you can assume what that means. Jim is not one of them. He sees this in a broader context, which is, I suppose, why the council invited him.
He also understands the issues, which are quite complex. In some ways, he understands them better than his own staff, which is also a reversal in the Congress. Usually the staff know more than the member of Congress. (Laughter.)
KOLBE: Please don’t tell any of my staff that! (Laughs.)
NATSIOS: No offense to the staff, but I can say these things and get away with it now that I’m in a university.
Let me just make some initial comments. I had a person come up to me—I won’t say who—after the secretary made her week of announcements, because the announcements she made that week are connected to each other. The announcement that Foreign Service officers from State would be moving from Europe to other areas of the world, particularly developing countries. And then, of course, she announced the changes in the structure of foreign aid, and announced my good friend Randy Tobias’s announcement as the president’s nominee for administrator of AID and director of foreign aid for the State Department, a dual-hatted position.
And some people said these were sort of very small changes, they’re not really significant, and I have to tell you I think they’re actually far more important than they appear to be. And the reason I say that is this: During the Cold War, the vital national interests of the United States were seen to be in Europe, which is why we spent so much money building the NATO alliance, training our armed forces or other allies in Europe, because the principal aim of the Soviet Union, in many respects, was to either neutralize Europe or intimidate Europe, earlier in the Cold War when they were relatively weak militarily. This was in the 1950s. And as Europe recovered from the Second World War, grew economically, the common market developed, the NATO alliance became more robust, the Soviet intention was to neutralize Europe.
But the fear of Soviet military power was there, and however you might interpret it, it was the center of attention in the State Department and the Defense Department and the White House, regardless of who was president of the United States or who was in control of Congress.
The Third World was clearly part of the Cold War, but it was a secondary level of interest. It was not at the center of our vital national interests. What the secretary essentially announced a few weeks ago was that the locus of American vital national interests has profoundly shifted away from Europe—not that we don’t care about Europe, but that’s not where the threats are to American national interests. In fact, this is true for the Europeans as well. The threats to their national interests are not in the Atlantic alliance or in the Soviet—the former Soviet states; it’s in the developing world as well. They’re discovering that they have the same problems that we face.
If, in fact, the locus of our vital national interest is shifting geographically, it’s also shifting institutionally away from the nation-state. There are certainly a couple of remaining states like Iran and North Korea that remain concerns. We had a problem with Libya. Libya now has joined the family of nations. We have diplomatic relations. They have given away—or are demobilizing—their chemical and biological weapons. I’m not an expert in that, but they certainly have shifted. That hasn’t happened for these two final countries, and there’s one country left in this hemisphere that’s still a rogue state, but it’s not really a threat to many people anymore.
So real threat to the United States are non-nation-based threats; the criminal drug cartels, which are tied in with terrorist networks, which are tied in with international illegal arms markets, which are tied in to money-laundering rings and human trafficking rings. All what I would call, this is my term, the darker side of globalization. I personally support globalization. I think it’s done far more good than bad. But there is a darker side to the Internet. We know e-mail systems can be used by good people for good purposes, but they can been also used for bad purposes by darker forces. If indeed these darker forces are the principal threat to American vital national interests, then it goes—in terms of this argument I would make—that what happens in developing countries is now of critical interest to the United States in a way that it was not before.
It is interesting to note that some of the countries that had been the greatest success to the United States in the last 50 years developmentally are countries that were on the border of the former Soviet, or Eastern Bloc, empire. The most—greatest successes were the three Baltic states, Poland, the Czech Republic, Hungary. Increasingly, some of our friends in the Balkans are growing; the Romanians, certainly the Bulgarians. The Albanians are even coming along now. Greece and Turkey made their movement toward development decades earlier. But when I went to Greece as a kid in the 1960s, the per capita income was $300; it was a Third World country. It’s now almost $20,000 and it’s a First World country. It has its own foreign aid program. Turkey increasingly is a middle-income country.
And our success stories in Asia are all in the border areas of what was the Soviet—or the communist—presence in Asia, China; and that is South Korea, Taiwan, Hong Kong, Singapore, Thailand, and to a lesser degree Indonesia and certainly Malaysia. Why is it that the greatest successes were all on the edge of this empire? I would argue that the threat of the communist bloc to these countries was so great they instituted the reforms or reform that made development successful and possible. And it’s interesting, the country in Latin America that’s made the greatest progress is Chile, which had the greatest brush with Marxism, other than Cuba.
Why do I say that? Because it appears to me that when our vital national interests are affected, we don’t just use our development institutions like AID. We also use our diplomacy and our military power to ensure those vital interests are protected and our allies that are threatened are successful in the development process.
So I would like to sort of begin this discussion by suggesting that it’s in the interest of developing countries for them to be our vital national interests because I don’t think the foreign aid budget at a high level is sustainable unless we can connect this somehow to something other than a charitable undertaking of a rich country worried about poor countries. My friends in the developing world prefer—prefer—being seen as an ally rather than as a basket case that’s getting charity from us. Heads of state has said to me, Andrew, we want to be in your vital national interests to succeed. Even though it sounds unusual, we want to succeed because it’s in our interest to succeed and your interest, because these darker forces are attacking us just as they’re attacking you.
Having made those comments, I’d like to now introduce Jim Kolbe to either make his own comments and ignore what I just said or react to them.
KOLBE: Well, Andrew, I would never ignore what you said. I’ve long learned that I would do that at great peril, to ignore what you had to say. And Andrew does have good things to say, and he is somebody who has thought a great deal about these issues and has been a real leader on foreign policy and foreign assistance issues reform.
I think I will kind of respond to some of the things you said, and use that as a way, kind of a launching pad just to say just a couple of things, then I know we want to get into more of a discussion and we want to involve the audience in this discussion.
But I would say, first of all, with regard to the secretary’s proposals, I guess I think I’m somewhere between where you are where those who say that they’re really kind of not—they’re insignificant or not too large. I think they’re big, but maybe I’m a little bit sanguine about it—less sanguine about whether or not we’re going to see them enacted into law. So as a result of that, or maybe I just don’t get too excited about them, I think a lot of them are talked about, but I’m not sure how much of it is going to get excited.
I think you’re right in saying that it does represent a shift. What the secretary is doing is saying—is clearly signaling that our foreign assistance programs and our larger national interests are shifting from the locus of Europe and Asia to an Africa-Middle East-Latin America kind of focus. And I think that’s good, and I think that’s something that’s long overdue. But I think some of the other things that are suggested in there—I’m not so sure just exactly—the moving around of accounts and so forth, I’m not too sure how much of that is going to really have a great impact.
There’s no question that our foreign assistance programs are highly fractured and divergent and, in some ways, not very coherent, because we keep adding things in and it’s never clear—we have them in USAID, but we have a lot of it in the State Department and increasingly we see pieces of it over here in Defense. We have the Centers for Disease Control under HHS that has a little piece of this. And so you have pieces of foreign assistance that are everywhere now in the government, and there isn’t a very coherent direction to it. And I think that’s the important thing about having an assistant secretary of State that can provide some overall guidance for that.
The concern, of course, that some people have—I think it’s a legitimate concern—is that that shifts it away from the kind of long-term thinking of development assistance and poverty reduction that is supposed to be the mission of USAID into State Department thinking—what is in the national interest right now, what is it that our security interests are concerned about—and directing our foreign assistance in that direction. But I hope that the assistant secretary of State, and particularly the fact that the person who’s going to head up USAID is going to be the same person as that, will help to bring—pull all these people together in ways that I think need to be started to—brought back together.
You know, the president’s had some very significant initiatives in foreign assistance. The two most—the largest ones which come to mind are, the PEPFAR—the presidential initiative on AIDS—and the Millennium Challenge Corporation. And both of those have been outside of the structure of USAID, and so you’ve added two big new pieces of foreign assistance that are really outside of that structure. Now you have the new malaria initiative as a third one. And I think that bringing these kind of—bringing some direction to that, I think, is very important.
I want to talk about one other thing that Andrew did, and that is, how do we maintain support in the country and, therefore, by extrapolation, from the country in Congress, for a foreign assistance budget? And I think it’s a real challenge to all of us that are in this room that care about this because I think there is a growing concern in Congress about how much of—where our foreign assistance budget is going. There has been a—we’ve supported so far a rather large increase over the last six years in this president’s budget request in foreign assistance; not quite as much as he has asked for, but really a doubling, almost, of that part that is—at least development assistance and child assistance programs have doubled in the last six years. So we’ve had a tremendous increase.
But how are we going to sustain that? And I would argue that the most important thing that we need to do in order to sustain that is to make development assistance sustainable itself. And I think we have to demonstrate that we can do that, and I think the key to doing that is to get outside the traditional box of thinking of foreign assistance, of little programs that we have done through USAID that have been spent in different countries and have had only marginal impact in the long-term sustainability of assistance in these countries.
And I guess where I’m trying to come around to is saying is, I think, in the end we have to talk about opening markets. We have to talk about allowing these countries to have access to our markets. There’s nothing that we can do, in my opinion, that is more important, that can do more to help these countries develop, than to allow them to have an economy that has access to the U.S. economy. We see this all over the world, time and time again, in the developing countries, where they find themselves shut off from access to the markets of Europe, the United States and Japan, or not having at least broad enough or large enough access to those markets. And I think this is the single most important thing we can do, rather than simply appropriating more money, which is another way of saying—one of the reasons that I’ve been such a strong supporter of trade capacity building because I believe ultimately this has been a key component of what we can do to help countries develop and have this kind of sustainable development.
So those are just a couple of thoughts that I have here today as we start off this discussion, but I think we’re headed into a period of some difficulty when it comes to foreign assistance. There’s a bit of a burnout or a fatigue that I think I’m seeing in Congress as we keep sustaining the money that goes to countries like Afghanistan and Iraq for the reconstruction and the efforts that we’re making there, and I think that there’s a lot of people saying, you know, how much more are we going to be able to do in each of these countries, in these front-line countries?
So let me just throw those thoughts out there and turn it back to you, Andrew, for some—
NATSIOS: Let me just make two comments, and then we’ll take questions or comments.
One, just for the record, the proposal of the secretary is not assistant secretary for Randy Tobias or even undersecretary. It’s deputy secretary.
KOLBE: Deputy secretary, I’m sorry. It was deputy. I did know it was deputy.
NATSIOS: Right. The only two people who would outrank Randy Tobias at State would be Bob Zoellick and the secretary herself, so this is a very high-ranking position. And I have been advocating—I advocated at the SID conference—the Society for International Development—and I want to advocate it here—there is a Quadrennial Defense Review that goes on every four years, writes a plan which drives the Defense Department’s budget and Defense Department spending. I think we need a quadrennial development review for the U.S. government, given the diffusion and dispersion of these programs and accounts all over the federal government, with one unifying document with wide participation, that we agree should be the direction for—I would say the next five years because planning process is a little longer—and that that should drive not only the internal programming within federal departments, but also the budgeting process as well. And I think we can learn from some of the planning processes of the Defense Department, to replicate them for an entirely different purpose, but in order to have some coherence to our program because—
KOLBE: But you said development assistance. Are you talking about just development assistance? Are you talking about—
NATSIOS: For all federal departments, of overseas development assistance.
KOLBE: Okay, so you’re talking about democracy programs, you’re talking about a whole range of—
NATSIOS: Including what’s spent by the Defense Department, by the HHS, by Labor, by EPA, by everybody in the U.S. government in the executive branch.
KOLBE: Well, just ferreting out where all that is would be a task in itself. (Laughter.)
NATSIOS: Yes, it would be a task in itself. We actually—the keepers of the figure for ODA is AID, not just for our own spending—I shouldn’t say our—their own spending. I keep forgetting where I am now. (Scattered laughter.) The ODA spending, for example, for last year, calendar ‘05—it’s by calendar year, and it’s actually expenditure levels, not appropriation levels; actual disbursement level was $27 billion, of which only half was spent by AID. So this includes a lot of—but there is a chart in AID that goes to the OECD which is kept by a guy named Bill McCormick, who’s been with AID for many years as (PPC ?)—that determines what is foreign aid and what is not under international definitions. So that’s there.
Let me mention, though, one other thing about the account structure reforms which have not yet been proposed, but which are being discussed seriously, I think, for the ‘08 budget, not—because it was too complicated to get this done for the ‘07 budget. If we do not move away from sector-based accounts that are tied to interest groups in the United States, including friends of mine—I come from the NGO community—it comes—universities and NGOs and contractors and consulting fees and other U.N. institutions that get money out of these budgets toward a(n) approach which is best explained in the white paper of AID that we wrote—that AID wrote two years ago and announced, I think we’re going to fail the development process.
Countries do not develop based on sectors or interest groups within donor countries or international institutions. They develop based on the level of development they’re at. There’s a huge difference between Liberia stage of development—they are a failed state, there’s no other way to put it. They are a failed state. They are developing in a profoundly different way than Ghana is, which is very close by, but is one of the most functional, best-governed African governments right now. It’s a democracy, they have a very rich civil society, and they don’t face the same problems as Liberia because they’re at a different stage of development. The proposal the secretary has talked about privately, the white paper proposals, is to suggest different implementation mechanisms and different approaches to the development process for Mali and Ghana versus Liberia and the Congo.
In El Salvador, which is a highly functional Latin American state, versus Haiti, they are not in the same category, they can’t be treated—but we treat them the same way. We treat them now, in all of our AID programming, not based on the level of development they’re in, but based on sectors tied to domestic constituencies in Europe, in the United States, in U.N. institutions that get a portion of money out of these budgets.
I think that’s a mistake. We need to do away with that system and move to a more developmentally based categorization of countries that will untie a lot of this aid, and programming it more appropriately for what the challenges are in these countries. Because if we don’t do that, I don’t think we’re going to succeed in this new era of increased AID budgets.
KOLBE: But let me just ask you, then, how would you propose that you go about changing that over? I mean, what would be the mechanism for deciding what is—just take a country like Haiti. What is the level of assistance that’s needed there? You do an assessment, a country assessment, and you decide what it is, rather than go through the traditional process that we do now to change the whole mechanism for allocating?
NATSIOS: We allocate based on, essentially, three or four criteria. One is a need-based criteria for our humanitarian programs run by the refugee program office at State and principally by DCHA, Democracy, Conflict (and) Humanitarian Assistance Bureau in AID, and our health account. Our health account and our humanitarian programs are principally allocated by need. The HIV/AIDS account is certainly not distributed based on our geostrategic interest or based on performance. No one gives money to a country for HIV/AIDS because of their performance, but based on need. And that’s appropriate for a certain category of aid, depending on their level of development. I’m suggesting we program the money differently and focus it more on the broad level of development of the country.
The second category we use is performance. We use performance for the MCC and our economic programs. For example, we don’t invest agriculture money in countries that have Marxist economies. I mean, there is a bunch of countries that still have—they don’t call them that, but they’re socialist economies. We don’t pot a lot of agriculture money in AID; it’s a waste of money. We don’t put trade capacity building into countries that don’t have some attempt at liberalization. So some of AID’s budget, and the MCC, is based on performance.
A third basis is purely geostrategic. We would never have had an AID budget the size we have over the last 25 years in Egypt had not been for the Camp David Accord. And so I think we need to make a distinction between how we allocate aid and the level of development of the country as opposed to the sector-based analysis that we do now, which I don’t think is particularly useful.
I had mission directors—when I was AID administrator, I would have mission directors because I had visited, like, 60 countries. I counted them. We kept a chart, 60 out of 80 countries. And mission directors would come up to me and say, Andrew, we’ve been doing this in this sector for 10 years. It’s not working. I don’t want the money. Why are you sending it to me? And the first time I heard this, I was in shock. And I’d go back and I’d say, well, why are we doing this? Is was because we have a sector-based account of X amount of money, we have to allocate it, we have this mathematical formula based on need, and we distribute the money, and they have to spend it.
We had a country, Nepal, in the middle of a civil war. The Maoists are in the gate of the capital city. You know what the biggest account was? The family planning account, when I arrived five years ago. I’m not opposed to family planning. I’m in favor of it at the—in the right country at the right time. The notion of Nepal, because of some need-based formula, should be getting money for family planning as their principal foreign aid program of the U.S. government as the country is about to be taken over by a bunch of Maoist lunatics is crazy. It doesn’t make any sense, and that’s what we were doing.
KOLBE: Let me ask you one other thing here, and then we will do—you were going to be asking me some questions, I think, but I—I’m going to ask you some. (Laughter.) But here’s another—
NATSIOS: I can say outrageous things and get away with it. (Laughter.)
KOLBE: Well, let me ask you—this reform—you know, a lot of our government agencies don’t have separate O&E accounts—that is, operating expense accounts—but rather that they come out as a proportion of the—as an overhead on each of the different programs that they have. What if we did away with O&E in the USAID and made—beefed up the child survival accounts, beefed up the development assistance accounts, and made the overhead a proportion of that?
NATSIOS: I think what we should do, myself, is abolish OE in the field missions.
KOLBE: Why not for the whole department?
NATSIOS: Well, because I think we should control how many people are at the headquarters in Washington. There are too many people here and not enough people in the field, and the reason we have too many people here is because it costs more OE to put someone in the field, and that’s not a good reason not to do it. Development does not take place in Washington, D.C.; it takes place in the developing world.
I have gone to many countries around the world where government officials, without the AID officers in the room, say, Andrew, your money is nice, your programs are nice. You know what the most important thing is? Your officers. They come in to me, I have all these conflicting interests, I’m getting attacked in the news media for making a reform and I have a Foreign Service officer who’s done this for 25 years all over the world, been through this before, who comes in and says, in three countries we took this approach and we actually calmed the criticism of the reforms down and they were successful. If you do it this way, most of our experience is it’s going to fail. That is more useful to me—I’ve had many ministers say this to me—people in civil society, in parliaments, say that is more important than the actual program itself. We treat OE, our operative expense money, as though it’s administrative bureaucracy.
Every AID Foreign Service officer has a master’s degree or a Ph.D. and a technical specialty in a discipline or they wouldn’t have gotten into the Foreign Service in the first place. And they’ve had experience all over the world, and we should see that as part of the program, not as an administrative expense. It is paralyzing AID, it is preventing us from putting the people in the right places. It is—we’ve hired a bunch of contract staff who are not part of the career service because the career service moves every four years and they take lessons learned from one country and they move it to another country, and that is invaluable experience in development that AID has.
Our Foreign Service has been declining for 25 years in size, and I think it’s a disaster. This is one of the most serious institutional problems facing foreign aid, and I’m hoping your congressional committee may deal with that issue. (Laughter.) But thank you for raising the issue.
KOLBE: (Laughs.) Okay. Back to you. Shall we go to questions?
NATSIOS: Yes, we shall. (Laughter.) I want to show a little bias toward Georgetown University. Carol Lancaster’s here, former deputy administrator of AID.
QUESTIONER: You’ve saved me the trouble of introducing myself. I’d like to shift this a little bit back towards the presenter and away from the presider. (Laughter.) But both are very good.
I want to join my voice with that of Andrew, saying how sad I am personally to see Congressman Kolbe leave the chairmanship of the Foreign Operations Subcommittee.
KOLBE: Thank you. That’s the right time to go, when you’re sad, rather than saying, gee, Jim, it’s time to leave.
QUESTIONER: Yeah, well, I’ll (get ?) that 20 years from now, I’m sure. (Laughter.)
I wanted to ask a down-and-dirty political question that relates to some of what you all have said. I think it’s probably hard, in a democracy, to sustain significant spending year after year after year if you don’t have a coalition of groups supporting it. And that, I think, probably—probably pertains to foreign aid as well, even though we’ve had a president in the last couple of years who’s been very active and so on.
When I was in AID, we always thought that—we didn’t talk about it much, but we always thought that engine that ran the AID appropriations, especially in difficult times, was economic aid to Israel. That’s declining; it’s gone, practically. I wanted to ask you, Congressman Kolbe, what the new coalition, if there is a new coalition of interests behind AID is, how necessary are they, and what role is the evangelical movement playing in that coalition? Thank you.
KOLBE: Well, good questions; or good related questions, I should say. The aid to Israel is by no means gone, but as a proportion of the total aid package it certainly has declined. But Israel/Egypt continue to be our two largest recipients of aid, if you take out the Iraq—the appropriation for Iraq that we had.
What’s driving AID, I think, today—or what will be the drivers, I should say, perhaps, in the future—will be a coalition that consists of those who are worried about terrorism and believe that we have to be doing things to try to make sure that terrorism doesn’t get a foothold in developing countries. Just having returned this weekend from Indonesia makes me think of that country as one of the key countries that I think we’re going to be very much focused on in trying to make sure that our assistance programs keep that country from being infected more by terrorism than it has already been, and I think that will be the thrust. So I think you’re going to see—and they’ve been doing a lot of—a coalition, obviously, of a lot of conservatives concerned about national security, that can get behind assistance programs when they think that they’re anti-terrorist programs, or they think that it’s directly related to our national security. I think that’s one of them.
I think the second driver increasingly is going to be one that is a, if you will, a principled, moral-driven driver, and that is the issues in Africa. And that primarily is around HIV/AIDS, but many other things. The ongoing civil wars that have plagued places like Sudan and the Congo, I think, and the tragic human dimensions of these problems I think capture the imagination and compassion of a lot of Americans. Probably the events in Rwanda in 1994 were a catalyst for helping a lot of people in Congress as well as outside Congress respond in a way to spur them to say never again; we don’t want a lot of this kind of thing to happen again. So I think there’s a whole range of groups that kind of coalesce around that set of issues there.
That brings in, certainly, the evangelical groups to it, and I think evangelicals are playing a large role and, I think, an increasing role. But I don’t see it in an alarming way in the sense of dominating it, becoming the sole driver, but I think that faith-based organizations in general can play a very significant role. They’ve demonstrated over and over again, in many of these countries, that they can deliver the services in the most efficient, compassionate way with the least overhead cost. And I think time and time again we’ve seen the effectiveness of these—of the programs that these organizations have.
But there again, it comes back to what we were talking about earlier. You still need to have somebody kind at the top overseeing all of this, providing some oversight to be sure there’s some cohesion, that all the people in this program are brought together.
We’ve got a lot of hands up.
NATSIOS: Yes.
KOLBE: It’s Hattie?
NATSIOS: Hattie, sorry. Second deputy administrator. Former deputy.
QUESTIONER: Also no need to identify myself. Neither one of you have mentioned the environment or clean water as an issue that’s relevant here, and I really wonder how you see that. People with an interest in the environment, a sense of how what happens in one continent affects the other, a lot of discussion around water with respect to the Israeli-Palestinian issues, and for good reason. So those are issues relevant with respect to both conflict and perhaps there’s a constituency there, to get back to Carol’s question, for support for foreign assistance.
KOLBE: Well, Hattie , you asked that of both of us, so maybe we’ll both take a stab at that.
But I think there is—if you were to take the one issue that I think has developed a kind of an ongoing constituency for itself, it is the issue of clean water. And I increasingly see more people coming in to see me, talk to me, write me, call me, e-mail me, and groups that testify that are on this issue. It’s surprising to me the number of small NGOs—and a lot of them faith-based NGOs—that are very much involved in this issue. The issue of water in the Middle East, in the Palestinian-Israel-Syria-Jordan, is a bit different than water in Sudan, where it’s finding wells to get enough clean water that people can drink and use for their everyday living. It’s a political question there in the Middle East of how we’re going to divide it up or how we’re going to find other sources of water that could fill the needs there, but it’s very much a political kind of an issue there.
So I do think water and the environment in general are very increasingly important issues, and I think there’s going to be a greater intersection of those in the political realm as we decide how the foreign assistance dollars are spent. I think we’re going to see more emphasis put on that.
Andrew?
NATSIOS: My problem with taking the sector-based approach, which is what that is, is that it is not tied to the development needs of the country. You can’t, for example, deal with clean water in most of these countries unless you also deal with sewage treatment and septic waste and how you deal with waste disposal because the two things are directly connected, as we found out in Iraq. And as we’re finding out in many—many of the developing countries will put those two together. They never discuss that in Washington here when they lobby the Congresses for clean water. They don’t discuss the other side of the issue.
The second issue is there’s a direct relationship between the infrastructure in water and sewage and roads. You know, they told us to build all these thousand schools in Afghanistan, and I can show you pictures of the AID contractor trucks in mud that goes up two feet to the top of the truck. I mean, the trucks are lost, trucks of brick trying to go through areas of Afghanistan that cannot be reached by road normally because they’re dirt roads and they’re mud most of the year, or half the year, in these areas; or through mountain ranges where there are no roads. We can talk about water, but water ultimately is a form of infrastructure, and doing it separate from a road system is a mistake.
So I would prefer talking about infrastructure as a broader category rather than focusing on one issue. Is water important? It is the next source of conflict in the Middle East. It’s a major source of programming for AID in the Middle East.
And by the way, the first area to run out of water is not going to be in the Middle East. You know where it is? It’s going to be in China. It’s about 100 million people are going to run out of water very shortly. The Chinese are very, very concerned about this. There’s huge projects, and I’m not sure they’re going to finish the projects before they run out of the water. They’re going to have massive internal problems around the water issue in China before other people do in other areas of the world.
But if we try to—if we deal with these issues separate from the development of the country broadly, then what we’re going to do is appropriate a fixed amount of money, because everybody loves the environment, and there’s no opposition to clean water in Washington. I don’t know anybody who says dirty water’s a good thing, but there are lots of people in the city—and I won’t mention the groups—who say agricultural development is not a good thing—competes with the United States, it pollutes the environment—we don’t want irrigation, irrigation is terrible for the environment; we don’t want any pesticides and herbicides, even though the United States uses it; we don’t want biotech feed because that could do some damage to the environment. So people actually go quietly and run around the city saying there isn’t a—it’s not a good idea to do agriculture; let’s do something else where there’s no organized opposition, like health, for example.
Do you know of anybody who runs around saying disease is a good thing, we need more disease in the world? Or illiteracy’s a good thing, or dirty water’s a good thing? We are making too many decisions on sectors because there’s no organized opposition, while other sectors that are more important in terms of the development of country get little or no money because lots of people don’t like it.
People don’t like D&G money, democracy and governance money. Organized interest groups think it’s disruptive. There’s a huge policy debate as to whether or not it’s good to spend money in democracy. We’re having that in Washington right now. And countries don’t like the money that aren’t democracies because they see this as disruptive internally.
So what we tend to do is we’re putting more and more money in the areas where there’s no organized opposition here or in the developing world while some of the other more provocative areas, where there are organized interest groups opposed to spending money, we don’t spend it in for the wrong reasons.
Yes.
QUESTIONER: Diana Lady Dougan, CSIS.
This is one of those horrible two-part questions; one substance, one process. Mr. Natsios, I recall when you met with us when I was serving on that congressionally mandated task force on public diplomacy in the Arab and Muslim world.
NATSIOS: Oh, yes. Yes, yes.
QUESTIONER: And we talked about the issue of how much of AID activities are in public diplomacy, and I think you said something like 5 percent or so. And then as we continued the meeting, you started seeing a different definition that we were starting to use on public diplomacy, and you said, well, in many respects everything we do is public diplomacy.
So the—I wish I could say it was an elephant in the corner, but it’s actually a mouse in the corner. We restructured public diplomacy, put it under the State Department a few years ago. The budget has gone down, the effectiveness has gone down, we have been through undersecretaries like water. And on top of it, Karen Hughes is now trying valiantly to do things, but all the photo ops are related to disaster relief and things that are traditionally AID activities.
So my question to both of you is, one, is this move of AID under the State Department, notwithstanding that it’s a deputy secretary versus an undersecretary—how on Earth is it going to have a better fate than public diplomacy had; and then secondly, the substance moving more towards U.S. interests rather than just development assistance, how are those two going to intersect and how should they intersect, both budgetarily and substantively?
Thank you.
NATSIOS: You will laugh at my answer, but listen—what I’m going to say may sound like I’m making a joke; I’m not. In fact, the State Department is coming under AID, not AID under the State Department. The point I was trying to make earlier, some diplomats, traditional diplomats are saying, “We’re not doing what AID—the secretary’s telling us to go out to the rural areas in the countries, learning these languages other than the European; we’re not going to do that. That’s not what we do traditionally.” We know people who spend their careers in Africa do learn the local languages. The fact of the matter is, what Secretary Rice means when she says transformational diplomacy is having the resource of the State Department devoted toward AID objectives.
So I don’t see this at all as AID absorbed into the geostrategic interests of State traditionally. What the secretary is saying is we can’t have all our friends in the developing world fail. They have to succeed. And we need to use diplomacy to help the development process succeed, because the friends that we’ve had that have succeeded have frequently done it not just with AID development programs; where the ambassador calls in, you know, a government official and says, “You know, there’s huge corruption in your department,” or “there’s unrest in this region of the country, you’re going to have an insurgency, let’s work on this together.” That’s a development issue, not just a political issue.
And there’s nothing that has ever been discussed—because I was in all these discussions for the last year with the secretary—where the secretary said we should absorb AID. The AID will remain as a separate, independent institution. The question is, can we begin to use all of our resources, not just AID and State, but other federal departments and the MCC and the HIV/AIDS program in a way that facilitates the broader development of these societies? And I think we can. I don’t think we’ve done it very well so far, but I think we need to reform the system so it does.
Now, to answer your question about public diplomacy, there’s been a rule in the Foreign Assistance Act since 1962 which has not been enforced rigorously. We are now enforcing it with a new branding—we—they are now enforcing it with a new branding campaign, “U.S. aid from the American people,” which is the AID campaign.
It’s not just, though, branding with big signs, it’s to organize communications campaign. Right now there is ads appearing on public television in West Bank and Gaza—not now, before—we’re not doing it now, since Hamas won, but in the last six months they ran 2,000 radio ads, 200 billboards and TV ads on Al Jazeera about the United States spending $1.5 billion in West bank and Gaza over 10 years in development programs.
Why? Because we did a poll—AID did a poll and showed that 5 percent of the Palestinian people knew there was even a development program in West Bank and Gaza. Why? Because the program is relatively invisible because no one’s made any effort at public diplomacy.
Banda Aceh right now, because of a branding campaign, there’s a 50 percent—without any advertising—a 50 percent knowledge by the Acehnese of the AID presence, higher than any other bilateral or multilateral donor. If you ask them about all multilateral institutions, the percentages are lower than the AID percentage because the AID is dominating the reconstruction after the tsunami, and it’s having political consequences that are very good for the United States and the Indonesian government, which is very pro-Western, in Indonesia particularly because of the civil war that had gone on, the insurgency in Aceh for many years.
So there is a public diplomacy consequence to development programs that we should not ignore, and there’s been an organized effort over the last few years to try to integrate this in a way that does not compromise the development objectives but advances American national interests, and, I might add, the interests of our allies around the world.
KOLBE: Let me just quickly add to that. My concern—first of all, on Aceh, certainly branding has been important, but having been there just a couple weeks after the tsunami, a key component of the understanding of the American presence and involvement in that was also the way it was delivered through the USS Abraham Lincoln and the helicopters flying along the coast, because every day the people saw American helicopters delivering food and water and services to the people there, and it had a huge impact on people there.
On the issue of public diplomacy, my concern—this isn’t a direct answer to the question, but my real concern with the public diplomacy is I don’t think we have a lot of direction to what we’re doing. Yeah, I can share your concern, I suppose, about how much money we’re spending, but if we’re spending only a limited amount of money, we better be spending it well. And I don’t think we have a great deal of direction to that program.
Just by way of illustration, the president’s requested in the supplemental appropriation $60 million for Iran, public diplomacy with Iran. Now, that’s like a threefold increase in the broadcasting. I don’t know how much more broadcasting we’re going to do. We already have a large broadcasting program in Farsi. I don’t know how much more we’re going to do, how many more transmitters we’re going to put up, what we’re going to do there.
The point is that as much—try as we might, and ask to get some explanation, they really don’t have an explanation. And so it’s ask for the money and then we’ll figure out a program to go with the money afterwards, and I think it needs to be the reverse of that. So I think we need to have a lot better direction to the public diplomacy program.
NATSIOS: Yes, sir?
KOLBE: That’s the ambassador in front here. Here comes your microphone.
QUESTIONER: Thank you. My name is Fritz Poku, the ambassador of Ghana. And let me first of all—
NATSIOS: I didn’t make those favorable comments about Ghana because you were sitting in the front row.
QUESTIONER: Okay. (Laughs.) Thank you very much for that.
Let me first of all express my thanks and appreciation to the Council on Foreign Relations for bringing such eminent persons, you know, to speak to us this afternoon. I think the dialogue has been quite enriching.
And I am also very happy now, and quite content, to note that when Ambassador Natsios was leading the USAID, there was total consternation in the African community, but now that he can speak as he is doing, being a great advocate not only for developing countries but for Africa, in particular, we are very much gratified, and also for situating the shifting nature of diplomacy and also establishing certain nuances about where the vital interests of the United States actually, you know, lie now.
That is, when you invested in Europe after the World War, it was for a long-term sort of achievement of your vital interests. Now you don’t have any threat from Europe. The (last line ?) of a threat to the interests of the United States, as Mr. Natsios has rightly pointed out, is the developing countries, especially Africa. And then also he establishes the point that Africa, in not so many ways, is not one country, it’s a huge continent with so many countries, and this is something that is something not appreciated. So the establishment of levels of assistance that might be extended to developing countries or, for that matter, African countries is quite relevant and pertinent. But my only concern is the congressmen are not appreciating maybe this shift in the nature of diplomacy, which necessarily might be followed by institutional changes as well. We want to see more people, more diplomats in Africa.
And now it is on this note that I would like to ask Congressman Kolbe what he can do, from what he has seen and heard from representatives like me, to lift his colleagues from this donor fatigue or assistance fatigue? Because I believe that in the long run, it is in the interests of the United States to make sure that African nations do succeed. Now, I am very proud to say that there is an outbreak of peace and stability in Africa. Coups are no longer in vogue. And you have all sorts of development taking place in Africa that really makes investment in Africa quite productive and remunerative.
I thank you.
KOLBE: Well, Ambassador, let me respond to that by just saying that last year the ‘06—the fiscal year ‘06 appropriation for foreign assistance got 394, I believe it was, votes in favor, out of 435. That was the most that had ever been cast for a foreign assistance bill, and it was the largest dollar amount for foreign assistance. So there is a way to get past it, and I think the answer is you have to work in a bipartisan fashion to craft a bill that is one that is reasonable, understandable, and where you’ve made the case with your colleagues about what this does. And I think that we were able to do that. And I would hope certainly in this year to be able to do the same thing. And I hope my successor and the Senate successors do the same kind of thing there in terms of crafting a bipartisan bill. You can get support for foreign assistance.
But much needs to be done on the outside. The groups that are represented here today, the NGOs, and others need to be a part of building that consensus for foreign assistance in the United States. And I think that the key there that we can use is to—is the fact that it is—as I say to people, this is not just about giving away money, this is about money that is in our national interests because a stable democratic society and countries in Africa work to our benefit; they work to the benefit of the United States in many ways—politically, economically and in many other ways. So we can argue on all those bases, I think, that that’s why we need to have a foreign assistance budget. But I think it can be done.
NATSIOS: Jim?
QUESTIONER: Jim Moody with Merrill Lynch. Thank you both for a very interesting and stimulating discussion. Good to see you both again. I wanted—and a little bit on your point about shifting of State Department people to the developing areas of the world, I certainly agree with that. I think it’s long overdue. However, it isn’t just enough to get to them to the countries, you need to get them out of the capital cities and out of these fortresses we call embassies.
I was recently in Pakistan with an NGO. And as an American with an NGO, I was free to go anywhere. I asked—I was going out to the village to visit some of the work we are supporting in this NGO and I asked the consulate general in Lahore to come with me. He said, “Oh, no, no. I can’t do that. I couldn’t do that without approval of Islamabad. The security people make the calls on these, and it would take me probably a week to get that approval.” Well, I was going the next day. So he missed a tremendous opportunity, in my judgment, to go around to these villages and see the work that was going on. And speaking of public diplomacy, the reception was fantastic, which he would have benefitted from, would learn from, and would have contributed to.
So we need to not only get them out of Europe, we need to get them out of the embassies as well.
NATSIOS: Let me say something that, undoubtedly, if there are media here will cause a stir, and I’m going to say it anyway.
In many countries, AID is locked in their missions, and AID goes ballistic. Our offices go—if they can’t leave the mission. They don’t do any development work in the mission. They do it in the field, out in the provinces, in the countryside, in the provincial cities, in the ministries. And because of, I think, an excessive focus—and I want to say this, okay—I respect diplomatic security. They protected me for five years when I traveled abroad. They do a wonderful job.
But there is now an obsession with security because people’s careers will end if there’s an incident. We are going to lose the war against terror, believe it or not, because we are not allowing any risk at all in our—not just the State Department staff, but the AID staff to get out. And I think we need to rethink security requirements in the developing countries.
There’s no risk in Ghana. With all due respect, there’s a lower crime rate in Ghana than there is in the United States. I don’t even know why we have a diplomatic security office if Ghana has a very low crime rate, okay? Why do we—there shouldn’t be any restrictions to going outside of the capital, but there are. And I don’t—it’s not severe in Ghana, but it’s a problem in countries where we’re—we’ve got very high levels of support.
Do you know—you know what the American polls are and have been consistently in Africa? Fifty to 60 percent approval ratings for the United States. We are more popular in Africa than any other region of the world. That is not commonly known in the United States—without any public diplomacy, I might add, okay? And yet it’s hard to get out in some African capitals into the countryside.
KOLBE: We’ll let that one stand.
NATSIOS: I want to ask—Anne—Anne—
KOLBE: Okay. And let’s go—take one in the back, a couple in the back.
NATSIOS: Yes. I’m sorry I’ve ignored—
KOLBE: We’ve been doing all up front here.
QUESTIONER: I’ll ask quickly. Anne Richard, International Rescue Committee.
My boss, George Rupp, is a big fan of the UK model where you have a department for international development at the cabinet level. What do you each think of that idea?
NATSIOS: One-word answer: it’s an excellent idea. (Laughter.)
KOLBE: I don’t think it’s the solution. I don’t think it makes—it’s not going to mean that you necessarily have great development programs as a result of that.
NATSIOS: In the back? One question in the back? Yep, right there. You’re standing right next to her there, there we go.
QUESTIONER: Thank you.
Frances Seymour from the World Resources Institute.
The notice for this event referred to the secretary of State’s vision for transformational democracy, and I wonder if either of you would be willing to comment on that vision, and in particular what you think about the performance of our democracy building assistance now and prospects for the future.
NATSIOS: In many disciplines, such as health, agriculture, education, economic growth, we actually know from a lot of empirical evidence that if you do certain reforms and invest money, donor money in those reforms with the support of indigenous government and leadership, you will get X reduction in the illiteracy rate or improvement in the child mortality and maternal mortality rate or an increase in agriculture production that’s sustainable. We can actually do that.
And we know what to do. The question is getting the resources and, you know, that sort of thing.
We do not know which of the interventions that we’ve been trying over 20 years woven together will result in democratic governance. Now, there are people like Frank Fukuyama, who have I great respect for at SAIS, but I don’t agree with. He says you will never have a formula, it can’t be done. He wrote a whole book on this. He’s wrong, okay?
The fact is right now AID has asked the National Academy of Science, one of the most respected institutions in the country, to review the last 20 years of AID democracy and governance programming in order to determine what worked and what did not work empirically from research data over a very long period of time, and then fashioned, with our political scientists and our historians in the universities and within AID, and the multilateral institutions and the NGO community, a strategy that, should a country wish to begin to democratize, what steps should be taken, in what order and what integrated fashion to do that.
We don’t know that yet. There is no accepted, integrated model for democratization. We have a strategy I announced the week before I left. We’ve been actually testing it for five years. There’s a lot of evidence that some of those interventions work very well, but it’s not an integrated approach yet. It’s an interim strategy until a more empirical evidence can be taken.
But let me just say something, and this is appropriate for all sectoral disciplines, including the environment. Without better governance, it’s going to be a problem getting any of our programs to succeed. Environmental programs, health programs. If we have good governance and stable governance, it facilitates dramatically the success of NGO programs, programs in the ministries, programs of the bank, because ultimately in the long term we’re supposed to get ourselves out of business so developing countries don’t need us, because they’ll be developed. They’ll have their own aid programs, like the Poles do now, or the South Koreans do now.
Okay? So it’s a very appropriate question. And work’s being done on it. It’s not where it needs to be yet, but we’ve at least got a lot of pilot programs and attempts that will tell us something once the studies are complete.
KOLBE: I agree with that. Maybe we should take just one last question. I agree with that, except I think we need to do a lot more in terms of measurements. That’s one of the things I’ve been pushing. I would say Andrew’s done a great job in that, in getting better measurements that are definable, that we can see, in many cases quantifiable, but I think that we have to do that if we’re going to continue to have a consensus for foreign aid, foreign assistance; we have to have—be able to measure what kind of success we’re having.
I guess we’re going to take one final question. Andrew, you get to call on them.
NATSIOS: Right over here.
KOLBE: Okay.
QUESTIONER: Thank you. My name is Nimisha Madhvani, and I’m with the Uganda Embassy here in Washington. I would like to thank you for your comments and also for your recent visit, Congressman Kolbe, to Uganda.
In terms of development assistance, I can speak for Uganda and East Africa. I think your objective to have a coordinated, multisectoral approach would really benefit because we don’t have enough trade capacity, we don’t have enough infrastructure, power, roads, so we need all of these things developed jointly to have agriculture processing, to have clean water, the Lake Victoria programs that we have right now that have problems. And at the same time, this sort of program would help coordinate NGO work in the region and in Uganda and help towards eradicating this problem of terrorism that we’ve got. So I’d like to have your thoughts on that if you have any.
Thank you.
KOLBE: Well, I’ll just say, and I’ll let Andrew get a last word, I guess, in here, but I think you’ve heard that from Andrew here today, and I would agree, associate myself with what he said, that I think a multisectoral approach to the thing is really what is needed, not just thinking of each of these as kind of stovepipes. That’s what you have too much of, this kind of stovepipe thinking. I saw that in each of the subcommittees that I’ve headed, a lot of stovepipes, and you need to get those stovepipes together into one and think of it as multisectoral. And I think that that’s really a key to making development work in these countries.
NATSIOS: Thank you, Jim, for joining us, and for all of you attending. Thank you very much, Congressman.
KOLBE: Thank you very much.
(Applause.)
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