USAID/Pakistan Mission Director Robert J. Wilson recently conducted the first in a series of regular briefings with members of the local press since his arrival in May. Issues included the impact of the Kerry-Lugar assistance to Pakistan bill currently before the U.S. Congress, some explanation about the Agency's overhead costs, and a preview of some new projects that USAID is anxious to begin. Excerpts:

Introduction

Good afternoon. My name is Bob Wilson, the Mission Director of USAID/Pakistan. I'd like to offer you a few opening remarks, then I'd be glad to take your questions.

USAID first provided assistance to Pakistan in 1951, shortly after independence. We were active for several decades before the program temporarily closed down, then re-started in full force in 2002. Since then, we have committed to providing more than $3.4 billion in resources to Pakistan.

Those resources have been allocated in the areas of health, education, economic growth, democratic institutions, and infrastructure development. Following the earthquake of late 2005, we began an active reconstruction and rehabilitation program to revitalize infrastructure in the earthquake zone and beyond that has carried on to this day.

Over the next several years, we expect to see a significant increase in those resources. To put it into perspective, we foresee levels of more than a billion dollars annually over the next five years, so you can see the amount of resources will go up dramatically and significantly.

We hope to keep working in the areas we feel are critical to our partnership with Pakistan, and where we can be the most supportive. Health, education, and economic growth will remain as significant elements of our portfolio, and we will also continue to support democratic institutions, civil society, and hopefully greater levels of media-related programs.

Kerry-Lugar Bill

However, all of that growth depends on the generosity in the legislation before our Congress. You've heard about the Kerry-Lugar enhanced partnership between Pakistan and the United States. We certainly hope we get the resources under discussion because we think we can use them to good effect, but it all depends on the legislative process. Certainly President Obama has spoken often and sincerely about the need to strengthen our partnership, and change it from a "transactional" one to one he refers to as "supporting our mutual interests."

Civilian development - in economic and social areas - is a key to that partnership. The signals being given by legislation and in President Obama's statements certainly emphasize civilian priorities. The President talks all the time about the need to beef up joint efforts on education and health and job creation: things people want to see. We're taking our programming cues from the Administration and the Congress. We have a team here working flat-out all the time to make this happen.

We're in an intense programming mode. We've had consultations with officials of the central and provincial governments to go over our budget allocations, and will continue to do so, on a regular basis with our Pakistani government counterparts.

Managing Assistance

To manage these higher levels of assistance, we are going to have to continue to staff up once we complete the programming process. We will need more contracts and grants officers, program monitors, and people to develop and sustain the relationships we have with our counterpart organizations and institutions. We want to open new offices in Lahore and Karachi, and expand our existing office in Peshawar. This is to manage the anticipated growth of the portfolio, and also build relationships, which is very important.

We are actively looking for ways with which we can pass more resources through local organizations, including government institutions. Currently we are conducting financial and technical capacity assessments of several local institutions with the idea that they might qualify as recipients of our funding.

We are doing this not because everybody's complaining about how much we spend on American contractors, but because it's good development policy. We want to develop local capacity, and I believe everybody is firmly committed to at USAID.

Q&A

Question: You say USAID has given $3.4 billion in assistance to Pakistan since 2002. What kind of impact has this money had? Can you share any substantial results with us?

Pakistan is a huge country, with a budget of more than $30 billion a year. Considering the size of the economy, $3.4 billion is not that much money in relative terms. Having said that, we can point to results in capacity development and technical advances, in systems advances, in people trained, and in lives saved, which is extremely important.

One example is in the earthquake zone. We responded quickly with food and non-food items and emergency medical treatment to the affected people there. We weren't the only ones, obviously, but we made a significant initial contribution, and followed this up with reconstruction assistance, helping to build schools, roads, health centers, and other facilities.

We also supported re-establishment of livelihoods through agricultural assistance, and worked on education and health system reforms. Through this all, we sought to bring project management closer to the affected communities, and engage with those communities with feedback mechanisms for those management systems.

When I visited these projects, the impressive thing was less the bricks-and-mortar of a fancy new school than the engagement of people through parent-teacher associations, active involvement of the community in the health facilities, and a change in the way those services were delivered, organized and directed. The staff's capabilities were enhanced significantly. Through all this, we were part of a team with the government of Pakistan in the leadership role.

We've also done a lot of work in the Malakand area, and surpassed most other donors on response to the IDP situation through food and shelter support, non-food items, and medical assistance. We're now considering budget support for income needs of the affected populations.

The effects are both direct and indirect. One of the most significant indirect effects is in knowledge and capacity among professionals and professionals in their respective fields, exposing them to new and different ways of doing things.

In education, we work extensively with teacher training institutes, increasing the number of teachers with enhanced knowledge of educational techniques. The same is true for health immunization programs, health workers' training programs, as well as provision of pharmaceutical supplies, management system reforms, and infrastructure upgrades.

We also have the largest Fulbright scholarship program in the world here to assist Pakistanis seeking higher education in the United States. We'd like to do an impact assessment on the impact these American-educated Pakistanis have had on their society.

Question: There has been some indication that the Kerry-Lugar bill will attach conditions on funding rather than giving it to the government of Pakistan. You prefer to give it to NGOs, and you want to increase your staff for this purpose. Can you comment on this?

No, I don't think the bill says that. It says: here is the range of things we can do and the recipients we could work with. It makes a specific mention of the Congressional interest in the development of local capacities, which means channeling resources through those institutions, and putting them in a leadership role in the execution of projects.

Our interpretation is that the bill sends a clear signal to work closer with Pakistani institutions. We're not going to be neglecting any local institutions that have the capacity to implement programs that we're supporting.

We're going to have to qualify them, though. We need to make sure they've got capabilities to manage our funds - with controls in place to assure us that the U.S. taxpayers are getting the maximum effect for the dollars they are donating.

We've got to be collaborative with Congress on our budget support mechanisms, however. We're talking now with the government about channeling money directly to the Benazir Income Support Program and the IDP Income Support Program.

Question: Are you going to be facilitating improvement of delivery methods and mechanisms within Pakistani institutions?

We're going to try. Let's take the NWFP (North West Frontier Province) for example. Its government does not receive direct funds from the U.S. government now, but rather indirect funds through NGOs and contractors in response to the IDP situations. The NWFP government is interested in managing our funds. They have spent a lot of time to identify priorities, formulate projects, and develop a budget, and want us to support that process. We agree with what they're doing and think it should be that way.

Previously, such close alignment has not been as evident. We would like to make clear that we are behind their priorities. What we need to do is to qualify the [institutions] to manage our funds - that they've got the accounting, audit, monitoring and reporting systems in place. And if they don't have that capacity, there are ways we can support them to get it, either through training, or to bring in an audit firm to assist them. Working with the U.S. government is not that easy, I'm afraid.

Question: There is a perception that money spent by USAID is returned back to the United States through hiring firms that use most of the funds for their establishment costs and other expenditures not for development. It's said that half of the funds of USAID goes to other areas than to the Pakistani people. Is this right?

There have been many recent statements in the press that give an extremely high figure. It is nowhere near the level that has been quoted. But having said that let me also say that all projects have administrative costs. It's not like the overhead goes into a pocket just to enrich somebody. Overhead represents the cost of complying with the bureaucratic requirements of the U.S. government, such as reporting, and monitoring and other controls. Reporting alone is really onerous.

When NGOs and other firms submit proposals, they include estimated costs to meet these requirements. It's the cost of doing business. You don't get away from it by going "local" versus international. If you go local, you can get away from some of the high world prices, such as the cost of bringing Americans here. In many cases, their expertise is needed. That's not to say that there's not a huge capacity here in Pakistan, and we want to tap into that.

We recognize this concern, which is why we are going through a deliberate qualification process so we can work with more Pakistani firms. However, there is no way to completely get away from overhead even when we provide support directly to the government. Whether we're building a school or training health workers, for example, expenses such as providing staff support, logistics, and housing are inevitable. We're always looking for ways to get as much maximum direct impact as possible.

Question: Now that they are largely pacified, Swat and Malakand are awaiting reconstruction. How is USAID going to manage these things?

It's very exciting. The document the government has presented [on resettlement of IDPs and reconstruction] provides a visionary program of reforms and developments in the Malakand region. For an outsider, it's impressive. After I read it, I shared it with my staff as an example of the kind of documents we want to see. They talk about security, services, touching all the buttons that are so important - the interaction with populations, the closeness and responsiveness of an expanded governmental presence.

It looks good on paper. We want to do what we can to help them realize that vision. We are looking for them to help fund elements of that program, perhaps working on the many schools that require repair, or constructing temporary alternative facilities. We recently got approval for $20 million for this effort and we're starting to move in those regions. The involvement of the local communities serves as a model for other areas. It's what we're here for, to support that kind of development.