This is an archived USAID document retained on this web site as a matter of public record.

Remarks by Don Pressley,
Assistant Administrator, Bureau for Europe & Eurasia

to the Industrial College of the Armed Forces
November 7, 2000

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Thank you. It’s a pleasure to be here today.

As you know, foreign affairs has been in the news a lot lately - from the crisis in the Mid-East and the birth of democracy in Serbia to the tensions in South Asia.

At the beginning of the new century, how the United States reacts to these challenges and others will determine the way we are viewed on the world stage. Like the reconstruction period following World War II, we are today faced with the question of defining how we want to exercise U.S. leadership. Part of this debate concerns the role of diplomacy in this new era; part of it concerns the role of the military - when and where we should deploy troops, and under what conditions, for example. And part of the debate concerns foreign assistance. The debate over the value of foreign assistance has been going on for years, and will likely intensify in the coming months.

Today I’d like to explain what I see as the current rationale, program focus, and operation of the Agency for International Development.

I will, with apologies, emphasize the Europe and Eurasia region, since this is the area I’ve focused on for the past few years.

As you all know, ten years ago, the focus of our national security shifted from the Soviet-Communist threat to international terrorism and regional conflicts, fueled by ethnic, religious, and tribal differences - Bosnia, Kosovo, and Central Africa come to mind. Over the past decade it has become clear that the challenges we will face - and do face - are very different from those of the Cold War. The challenges are different, but not any less difficult - I don’t think anyone would argue that Osama Bin-Laden or Slobodan Milosevic is not dangerous.

Meeting these challenges will take hard work, resolve--and involvement. Indeed, our involvement must be three-tiered: that is, diplomacy, military, and foreign assistance must all play a role.

Today, foreign assistance costs the American taxpayer less than one-half of one penny for every federal dollar spent—that is, less than one-half of one percent of the federal budget. By contrast, foreign assistance accounted for a nickel of every federal dollar at the beginning of the Kennedy Administration, and over a dime during the post-World War II Marshall Plan years - another time in our history when the United States was trying to "shape the peace." Americans knew that the best ways of ensuring peace then was to help our neighbors across the ocean - not only because it was the right thing to do, but because it was also the smart thing to do. And in an era of erupting conflict - from Kosovo to East Timor - foreign assistance can still help ensure peace. Poverty, joblessness, political marginalization, corruption, and the denial of fundamental human rights - all of these create a breeding ground of hopelessness, which can give rise to extremist and terrorist organizations.

These in turn either cause instability themselves or hinder their governments’ ability to take politically difficult but responsible steps toward peace.

Thomas Friedman, the foreign affairs correspondent for the New York Times, has said that, "[what threatens America today is not the strength of Russia, China, Pakistan, or Indonesia but rather] the weakness and potential collapse of all these post-cold-war states."

Or, to put it another way, the 1998 financial crisis did more damage to American markets than did nearly seven decades of Communism. Basically, at USAID, we see economic assistance as being very much in the interests of the United States in two ways:

1. Preventing or limiting problems that can harm our national interests; and
2. Creating opportunities to advance our national interests in the emergence of a more peaceful, prosperous world.

If we look at the problems in the world that can touch us at home, we see that such problems include environmental degradation, endemic poverty, persistent ill health and malnutrition, unsustainable population growth, slow or absent economic growth, oppression, and anarchy.

The problems of development increasingly cause conflict, drive the collapse of civil society, impel economic migration, and threaten economic growth.

If we look at the opportunities side:

• Foreign aid also creates markets for American goods and thus jobs for American workers.
• Developing nations now represent the fastest growing markets for American goods. They are growing ten times as quickly as our traditional markets in Europe and Japan.
• Trade does not simply materialize. The ground must be prepared first.
• Our creation of markets requires support for policy reforms that open markets, educational programs that transfer skills, social programs that help the poor, especially women, become full participants, and democracy building that helps to create a middle class, a free market, and institutions that ensure their vitality.
  
  
• In essence, foreign assistance is an inexpensive investment in our own interest and well-being.
• USAID considers itself, first and foremost, as an organization focused on helping poor countries achieve sustainable development.
• USAID's strategy to carry out this goal is based on the following parameters:
• Partnership with the nations and the people we assist.
• Concentration of programs and resources in countries where help is most needed and where it can make the most difference.
• Maximization of limited financial resources.
• Concentration of all possible U.S. resources--money, food, technical expertise, values, technology, and involvement of ordinary Americans.
• Focus on the effects of assistance within society, not on inputs.
  
  
• USAID has chosen to concentrate its efforts in five areas that are fundamental to sustainable development:
• Broad-based Economic Growth
• Environment
• Population and Health
• Democracy
• Providing Humanitarian Assistance and Aiding Post-Crisis Transitions.
  
  
• Because we always have limited resources and because we most concentrate as noted above, USAID has identified three types of countries in which we believe we can best achieve results:
• Sustainable Development Countries
• Transitional Countries
• Limited Presence Countries

USAID's BUDGET

For the past several years, USAID has managed something on the order of $7.5 billion, which is typically roughly one-third of the budget for international affairs (the so-call 150 account) and, as I mentioned earlier, is less than 1/2 of one percent of the total Federal budget. USAID has an active presence (USAID Mission) in 65 countries.

EUROPE AND EURASIA

Now let me take a minute to talk about USAID’s program in Europe and Eurasia.

In 1989, after the fall of the Berlin Wall, Congress passed the Support for East European Democracies, or SEED, Act, which governs U.S. development assistance to the countries of Central and Eastern Europe. In 1992, after the Soviet Union collapsed, Congress passed the FREEDOM Support Act, which governs assistance to the countries that made up the former Soviet Union. In both these regions, USAID’s programs focus on three areas—the three pillars of any successful society:

• Democracy strengthening, to establish a rule of law as well as honest courts, an independent media, and transparent government policies;
• Economic reform, to build strong fiscal and financial institutions;
• And social sector restructuring, to create targeted health and public welfare programs.

Let me just use the democracy perspective to illustrate the benefits of having such a focus.

We work to strengthen democracy because we know that when people have a sense of ownership in their government, when they are consulted about the speed and direction of reform, two things happen: one, the people - especially the poor and disadvantaged - are more able to influence laws and policy to their benefit.

And two, because the whole process of governing has much greater political legitimacy, the government itself becomes stronger and more sustainable. The spread of democracy benefits America too: for one thing, history tells us that democracies don’t go to war against each other. True democracy - with a strong rule of law, protection of individual rights, and independent courts and media - also creates lasting political stability, allowing for solid economic growth.

Doing these things in countries where the concept of democracy was almost wholly foreign is not easy, but we have had some notable successes, most recently in Serbia. With USAID support the opposition parties, the towns and communities, the student movement all came together; first--to get out the vote, and second--to monitor the election process. As a result, the democratic opposition was able to claim victory - and ultimately, Milosevic was forced to leave office.

Democracy-building benefits America because democratic countries make good trading partners. Over the past decade, for example, exports have accounted for over four-fifths of total U.S. economic growth. U.S. exports to Eastern Europe and Eurasia have nearly tripled in the past decade. Demand for U.S. exports in the countries of Central Europe - countries like Slovenia and Hungary - increased even more, almost fivefold.

USAID also works to provide economic opportunity for people in developing countries, with the result that they can afford the high-quality goods we export.

We know that these efforts are working: in Eastern Europe, for example, we have been so successful at helping countries make the transition from Communism to democracy that this year we ended our programs in eight countries - including Poland, Hungary, and the Czech Republic. In the remaining 19 countries of Eastern Europe and Eurasia, we are working via bilateral assistance Missions, but across the region we are working to create what we like to call sustainable partnerships.

Sustainable partnerships are partnerships between entities - international as well as regional - between nations, between communities, between institutions, and between people. The premise behind creating these partnerships is that not only do we each have a lot to learn from each other, but that there needs to be a variety of mechanisms in place to continue USAID’s work when bilateral assistance programs end.

Some of our most successful partnerships, are, for example, between American utility companies and energy regulators and their counterparts in the E&E region as well as between American hospitals and hospitals in Latvia, or Russia, or Romania. But the E&E region isn’t the only place where we see foreign aid success stories.

Indeed, many of the countries enjoying political stability and high rates of economic growth since World War II - South Korea, Taiwan, and Thailand - have at one time or another been recipients of U.S. foreign assistance.

Of course there have been some disappointments. But the fact is that despite the setbacks, more progress has been made in improving the human condition in the last 50 years - since the idea of foreign assistance took root - than in the past 2000 years.

Of course, combating terrorism and political extremism around the world today clearly requires more than a strong foreign assistance program: as I have said, we also need a strong military and strong, effective diplomacy. But we must also work to give people in developing countries hope for the future by giving them the tools to develop their own capacity to solve their own problems over the long term. This way, we help them make better lives for themselves.

Indeed, long-term peace is possible only if most of the world’s people see the international system as fair - and as the country that profits the most from this system, it is in our best interests to make it acceptable to those who profit from it the least.

Or, as John F. Kennedy once said, if a free society cannot help the many who are poor, it cannot save the few who are rich.

Thank you again

 

 

This is an archived USAID document retained on this web site as a matter of public record.

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