Ambassador Tobias, I join in welcoming you to our Committee.

We in the Congress are all, understandably, very involved with issues related to Iraq, Afghanistan and the war against Islamist extremist militants, but this hearing today may well be one of the more important hearings this Committee will hold during this Congress, and I hope that there will be more such hearings on our foreign aid programs and their funding over the coming months.

Perhaps this hearing will mark a turning point with regard to our Committee’s engagement with the overall issue of reforming our foreign assistance framework and programs.

This is a time when the Secretary of State is warning that our aid has to be provided in the most effective manner possible in order to prevent the rise of so-called “failed states” that can serve as sanctuaries for terrorism.

Some may think that, if you have a problem in helping people in other countries, you can simply provide more money.

Funding is indeed important, but many other factors play a crucial role in determining whether our foreign aid programs attain success or end in failure.

Those factors include the design of the actual programs; the structure and objectives of the agencies that oversee those programs; the way those programs are evaluated, and, indeed, the very intellectual concepts that underlie the whole foreign aid framework.

Mr. Ambassador, among the fundamental questions that relate to the objectives that you are pursuing is the efficient and effective application of foreign aid funds.

The Congress has always expressed --- and always will express --- its concerns and preferences regarding our overall foreign aid effort through the creation and funding of accounts and programs intended to focus on specific problems and regions.

The question is whether the objectives your office seeks, using its own systems of coordination, analysis and evaluation, will be achievable in light of those congressional preferences -- or whether the systems you and your staff are creating will prove less effective over time as the Congress continues to insist on its prerogative to revise and redirect programs and accounts in ways it prefers.

Ambassador Tobias, I want to also take this opportunity to note some other very curious facts about our overall foreign aid framework and the programs built around it.

First, we continue to operate under the framework of the Foreign Assistance Act of 1961 – an authorizing act that is over forty-five years old.

1961 was a very different time.

It was a time when many impoverished countries had only just emerged from long periods of colonial rule and we were in a Cold War competition with communist ideology.
 
The foreign aid framework of the 1961 Act was based on the theory of “development” that had gained acceptance after World War II.

Our predecessors sought to respond to the communist model of state-dominated economic planning that was then luring countries emerging from colonial rule.

Today, the Foreign Assistance Act of 1961 still provides the intellectual underpinnings of our programs today, but the world has changed remarkably.

--- Economic “globalization” has grown by leaps and bounds.

--- Many countries that were once called “developing” have used trade and free market mechanisms to lift themselves into the higher ranks of world economies.

--- Colonialism and the Cold War are far behind us, and the war against terrorism is now the preeminent challenge.

And yet, the philosophy of “development” – programs created under planning processes done by international aid agencies – continues to be cited as the preferred approach under which our foreign aid programs should operate.

My second observation is that the 1961 Foreign Assistance Act also stated the need to bring all of our foreign aid programs under the oversight of a single foreign assistance agency and created that organization – the United States Agency for International Development.

President Kennedy pushed for the creation of the Agency for International Development, because he felt that we had too many different agencies involved in foreign assistance.

Here is what he said:

“…no objective supporter of foreign aid can be satisfied with the existing program – actually a multiplicity of programs. Bureaucratically fragmented, awkward and slow, its administration is diffused over a haphazard and irrational structure covering at least four departments and several other agencies.”

Yet, today, we see that our foreign aid programs are, once again, spread across many government agencies.

Some see that situation as, again, proving the need to centralize our foreign aid administration, but perhaps this diffusion of aid programs is telling us something different.

Perhaps, we should consider whether such a broad dispersal of aid programs is and will be a fact of life and that we need to find a new way to deal with that.

I am not saying that I agree with that, but consider this:

Would we today seek to prevent the Centers for Disease Control from working directly overseas on infectious diseases?

Would we today seek to prevent the FBI and the DEA from doing anti-crime and counter-narcotics assistance programs overseas?

Would we today seek to prevent the Defense Department from doing assistance programs in war zones?

If such increasingly-specialized foreign aid programs have a tendency to spread across many of our government agencies, shouldn’t we seek a better way to coordinate those agencies and their programs, support them, and evaluate them, rather than simply seeking to create yet again an agency of centralized control?

However, rather than taking the approach of eliminating or eviscerating the United States Agency for International Development, as some have proposed,  can we, instead, find a way to reorient USAID to play a new role in an era that is far removed from the 1950s and 1960s?

Along those lines, should the new office that Secretary Rice and you, Ambassador Tobias, have created at the State Department, also move beyond overall evaluation of programs at State and AID and the top-down coordination of those programs, and into a broader mode of operation that encompasses all US Government programs?

Some would argue that effectively melding assistance programs into policy requires more in-depth coordination than can be done through inter-agency procedures that are not binding on the many agencies involved.

Finally, on some broader issues, I believe we should ask whether official summits, big proposals, and ever-bigger funding are better approaches, than simply asking that poor man or woman in that impoverished village what small programs have worked to make their lives better.

 
We should question why it is that we keep making loans to corrupt governments – loans intended to help their citizens – then forgive those loans later when the monies have been wasted.

We should ask if there are programs we could support that would use business acumen and US government seed money to address some of the most pressing problems of our time.

Mr. Chairman, I don’t know what the answers to all of these questions might be.

I do think that this Committee is well-advised to hold a series of hearings to explore them, however, and I appreciate the opportunity to hear from Ambassador Tobias today on his views on foreign assistance reform.