Chapter Nine

Foreign Aid: September Eleven andDebates into the Twenty-First Century

Many African countries suffer from feeble cabinets, paltry systems of policy making, and erratic decision making at the top.1

[T]he CIA chief in Pakistan…[was a] small, well dressed man with a deferential manner and an intellectual bent.2

With Mr. Bush pressing other countries to knock down their trade barriers and expand open markets, his approval of an 80 percent increase in farm subsidies - with all the advantages that confers on American grain exports - is viewed as a move in the opposite direction.3

Maybe you just had to assert the obvious: that this was a war, that this was the Green Zone, and that this was America.4

…the U.S. government went into Iraq with scant solid international support and on the basis of incorrect information - about weapons of mass destruction and a supposed nexus between Saddam Hussein and al Qaeda’s terrorism - and then occupied the country negligently.5

Aid is not development; it doesn’t do diddley-squat.6

1 Robert Klitgaard, Tropical Gangsters: One Man’s Experience with Development and Decadence in Deepest Africa (New York: Basic Books, 1990), p. 147.

2 Bob Woodward, Plan of Attack (New York: Simon & Schuster, 2004), p. 242.3

? Elizabeth Becker, “Raising Farm Subsidies, U.S. Widens International Rift,” New York Times (June 25, 2002), p. A5.

4 William Langewiesche, “Welcome to the Green Zone,” The Atlantic Monthly, (November, 2004), pp.61-88. Quote, p. 88.

5 Thomas E. Ricks, Fiasco: The American Military Adventure in Iraq (New York: The Penguin Press, 2006), p. 3.

6 Michael Maren, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity (New York: The Free Press, 1997), p. 182.

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George W. Bush and Unilateralism

The Bush Premises and September 11

Foreign aid levels had plunged in the mid-1990s from $12 billion in 1993 to $9 billion in 1996. George W. Bush, when he arrived in the White House in January of 2001 had no plans to change these amounts and appeared to have modest ambitions on foreign policy.7 He would be a domestic president. He and his advisors talked about “a more ‘humble’ America that didn’t tell countries how to conduct themselves inside their borders.”8 The prospective president did not appear to a have much knowledge of international relations being unable to name several world leaders during the election campaign. During the campaign, George W. Bush had stated “I don’t think our troops ought to be used for what’s called nation building.”9 Bush, in his debates with Al Gore, had argued against interventions in places such as Bosnia and Somalia and promised that there would be no more state building on his watch.

President Bush and his advisors argued against nation-building as intrusive of other states and as burdensome to a United States that should think more nationally rather than globally. While international trade and security were important issues, democracy, governance and institutional development were not. After the January 20 inauguration, however, there were shades of a neo-isolationism in the early Bush Presidency which would in the wake of September 11 revert to a unilateralism that had long been evolving within neo-conservative foreign policy circles.

Condoleezza Rice, his national security adviser, and in the second administration, his Secretary of State, initially was viewed as a realist rather than an ideologue in terms of foreign policy. Rice made a compelling argument that the United States could not afford to involve the U.S. in developing country nation-building efforts because that would “degrade the American capability to do the things America has to do.”10

In a general sense the Bush administration viewed international relations as a mixture of economic and military power.11 In looking at the Middle East, the Bush administration saw it in regional terms as part of an internal war within Islam. This meant that the characteristics within a single country were less important than the totality of that conflict.”12 What little attention was paid to foreign aid focused rhetorically on an expanded role for faith based organizations in international development activities and a concern about health programs that promoted birth control or tolerated abortion.

7 Bob Woodward, State of Denial: Bush at War, Part III (New York: Simon and Shuster, 2006), p. 16.

8 David E. Sanger, “Hawk Sightings Could Be Premature,” New York Times, (November 21, 2004), p. 1.

9 Ricks, Fiasco, p. 25.

10 Quoted in Sanger, “Hawk Sightings”.

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On September 11, 2001 planes struck the Twin Towers in New York City and the Pentagon near Washington D.C. A fourth plane crashed near Shanksville, Pennsylvania. September 11 was a wake up call for both the Bush administration and the country in terms of foreign aid as in so much of U.S. public policy. As a result of September 11, 2001 foreign aid and military assistance spending would over time begin to increase precipitously. It would also stimulate the Bush administration towards a greater interest in foreign interventions, shift the country towards unilateralism and restore nation-building, democracy and governance to prominence in foreign aid. Most importantly it would lead the U.S. towards its most serious military and foreign policy disaster since Vietnam. Change in both military and foreign policy would have significant implications on U.S. foreign aid policy.

The September 11 attacks on the U.S. had three effects upon the American people. First there was a surge of patriotism. Secondly, popular attitudes after September 11 evolved for some into “an unseemly inferiority complex” in terms of international relations.13 Thirdly, the U.S. after September 11 began to stray significantly from its founding ideals particularly in terms of constitutional rights.14 U.S. foreign policy became what one commentator called a “condominium of power,” a model based in part on the international rule of law and international institutions or alternatively, if that failed, the use of unilateral coercive economic or military action.15

According to Bob Woodward, prior to September 11, 2001 the U.S., though it had “inconceivable scenarios, [for countries all over the world] had no plans for Afghanistan, the sanctuary of bin Laden and his network.”16 The Bush administration, in its zeal to attack the Taliban and bin Laden, declared a “crusade” in the aftermath of attacks on the U.S., a word which had extremely negative connotations in the Islamic world.17 U.S. policy in a post-September 11 world, according to Woodward,

was all consistent with Bush’s belief that he [was] an agent for change - that he must state a new strategic direction or policy with bold, clear moves. And

13 Hertsgaard, The Eagle’s Shadow, p. 19.

14 Ibid., p. 20.

15 Joseph N. Weatherby, et. al., The Other World: Issues and Politics of the Developing World (New York: Longman, 2000), p. 320 and p. 328.

16 Bob Woodward, Bush at War (New York: Simon & Schuster, 2002), p. 25.

17 Ibid., p. 94.

11 Woodward, State of Denial, p. 406.

12 Ibid., p. 84.

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because it would be the policy of the United States, the only superpower, the rest of the world would have to move over, would adjust over time.18

To the Bush administration, the intervention in Afghanistan and later Iraq had become part of the “moral mission of the United States.”19

After September 11, within the Bush administration, the “ideological opposition to any participation in what is called nation building…disappeared.”20 The declared goal of the Bush administration was to “support the growth of democratic movements and institutions in every nation and culture.”21 Nation-building came back onto the foreign aid agenda. Because of its renewed zest for intervention, the civilian leadership in the Bush administration, who sometimes were labeled neo-conservatives, micro-managed the interventions in Afghanistan and particularly Iraq. Many of the neo-conservatives, such as former Deputy Secretary Paul D. Wolfowitz, were “essentially idealistic interventionists who believed in using American power to spread democracy.”22

For policy makers in the U.S. State Department, after September 11 an important tool was the promise of “a generous package of aid and debt relief” for allies such as Pakistan who helped in the war against bin Laden.23 As David Sanger put it, “The president has now committed himself to some of the largest nation-building efforts since the Marshall Plan, from Iraq to Afghanistan and perhaps, if his vision is realized, elsewhere in the Middle East.”24

Iraq: Return to the Quagmire

The Iraq war from the beginning was to be executed as a U.S. only unilateral invasion unlike the Gulf War or Afghanistan.25 The U.S., in invading Iraq, to use Woodward’s words, “would be taking down a regime, would have to govern Iraq, and the ripple effect in the Middle East and the world could not be predicted.”26

18 Ibid., p. 281.19

? Ibid., p. 131.

20 Carlotta Gall, “More G.I.’s to Go to Insecure Afghan Areas to Permit Aid Work,” New York Times, (December 22, 2003), p.A8.21

? Woodward, State of Denial, p. 378.22

? Ricks, Fiasco, p. 22.

23 Ibid., p. 115.24

? David E., “Hawk Sightings Could Be Premature,”, p.1.

25 Woodward, Plan of Attack, p. 96.

26 Woodward, Plan of Attack, p. 270.

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The issue in a post-September 11 foreign policy world was the extent to which the U.S. was going to be able to “Americanize” its intervention in Iraq and foreign aid programs in the Middle East. Moreover, the political nightmare of Vietnam haunted many in the Bush White House.27 Though there were elements of a governance policy in Iraq that might prove useful, there was a strong concern among critics of U.S. policy such as Larry Diamond that the Iraq model ultimately would be a negative one.28 In situations of conflict one cannot operate without the military, but that often skews the reconstruction process. Internationally, as a result of the U.S. invasion and occupation of Iraq, “[g]lobally, fear and distrust of the U.S. government increased.”29

Bush, according to Bob Woodward, never did create a political development plan for post-invasion Iraq, an issue that concerned many of Bush’s military and civilian advisors.30 This was confirmed by a pre-war British memo, which expressed concern that the U.S. lacked any plans to occupy, reconstruct and govern Iraq. Bush administration officials were virtually silent on Iraq’s post-war future despite British expressed concern that the occupation of Iraq would be a major nation-building exercise.31 In Iraq, according to Bob Woodward:

Much has been made of the lack of planning that preceded the invasion, but it was…[international] isolation afterward that turned out to be as great a problem …. The occupation [was] characterized by a lack of institutional memory and expertise. Moreover, though there [were] some specialists involved, and a few non-native Arabic speakers, for ordinary officials no knowledge of the region [or the language was] required.32

The Iraq intervention, among other things, illustrated that foreign policy decisions face historical barriers between idealism and realism and as Woodward has pointed out, “Intelligence services…don’t do a very good job trying to understand the soft side of societies - how well the government is working and the fundamental attitudes of the people.”33 The Bush administration

27 Bush at War, p. 59.

28 See for example his essay, “Foreign Aid in the National Interest- The Importance of Democracy and Governance,” in Louis A. Picard, Robert Groelsema and Terry F. Buss, Foreign Aid and Foreign Policy: Issues for the Next Half Century (Armonk NY: M.E. Sharpe, forthcoming, 2007).

29 Thomas E. Ricks, Fiasco: The American Military Adventure in Iraq (New York: The Penguin Press, 2006), p. 430.30 Ibid., p. 42, p. 148, p. 281-283 and pp. 270.

31 David E. Sanger, “Prewar British Memo says US Lacked Postwar Plans,” New York Times (June 13, 2005), p. A10.

32 Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 62 and p. 65 respectively.

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to its critics was not prepared after the end of the first phase of the Iraq war to undertake nation-building on a large scale.

Those recruited to work in Iraq soon became part of the problem. In Iraq, “there were a lot of young people who came in, particularly in the governance and policy area. [They were very] nice, very personable people - nothing against them. But they had no knowledge whatsoever of Iraq, very very little of the region, and absolutely no prior experience in post-conflict operations.”34 Within the Bush administration, decision-makers did not understand the massive undertaking they had taken on in Iraq. By the end of 2002, officials in the Pentagon had begun to recognize that planning for post war Iraq was “all screwed up.”35

The American occupation of Iraq from the beginning was strange; there was an unreal quality to the U.S. presence. There were conflicts between the military, USAID and the State Department over the management of assistance.36 Communication and consultation was non-existent. There was also a sense of isolation within the American headquarters in Iraq, the infamous Green Zone. In the Green zone, “[o]n the inside were the Americans who if anything were too secure - spoiled by wealth and national power, self-convinced, and softened by the promise and possibility of safe lives.”37 William Langewiesche has quoted a Green Zone resident who noted: “People came to the CPA [Coalition Provisional Authority], never spoke to an Iraqi, and just launched these projects.” Langewiesche went on, “For related reasons, once the projects were launched there was a tendency within the Green Zone to believe that therefore progress had been made - often despite strong evidence on the outside that it had not.”38

There was never a philosophy of occupation developed within the Defense Department even though by the end of 2006 the U.S. had been in Iraq longer than the U.S. fought in World War II. The U.S. stumbled “blindly into Baghdad.”39 Rather it was assumed by the White House Deputies committee who had responsibility for planning that a lengthy occupation would be routine and peaceful. Iraqi’s people would greet the U.S. troops with their bubble gum and chocolate bars in much the same way the people of post-war Europe had done. Within the Department of Defense, there was an assumption that the occupation could be worked out as they went along. It was not an issue that was referred to the leadership of the Department or the

34

? Ibid., pp.61-88. Quote, p. 74.

35 Woodward, State of Denial, p. 101.

36

? Jane Perlez, “Pentagon and State Department In Tug-of-War Over Aid Disbursal,” New York Times, (April 1, 2003), p. B7.37 Ibid., pp.61-88. Quote, p. 62.38

? Both quotes from Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 82.

33

? Ibid, p. 281.

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Executive branch. On the ground problems would be addressed only when the U.S. opened up an office of post-conflict reconstruction in Baghdad.40

The occupation of Iraq was a throw back to an earlier time. Iraq, as a place, as an occupied country and as an image in the occupiers’ minds, contained “romantic elements of foreign adventure as well - of colonial plantations and compound life, of military posts throughout the world, and of the war that swirls just outside the gates.”41 During the first year of the occupation the Iraq proconsuls, Jay Garner and Paul Bremer had the “responsibility for all of the tasks normally run [in the U.S.] by national, state and local government.”42 Even within the Bush administration, there was fear of what Stephen Hadley, the Bush second term national security advisor, called “the imperial option.”43 According to an administration critic:

There were excesses, as might be imagined. The hiring of the senior CPA staff was steered by Donald Rumsfeld and his conservative deputies at the Pentagon, who, by insisting on rigid agendas, effectively ruled out some of the more worldly officials and diplomats who might otherwise have been willing to intervene. In their place came zealous amateurs, often from the private sector, whose chief qualifications seemed to be their Republican credentials and their eagerness to get involved. To their credit, most of them eased off the ideology once they faced the practical realities of Iraq. They muddled through and sometimes got something done before getting out; they left no marks. A few of the most zealous, however, refused to back down, and, indeed, upon arriving in the Green Zone seemed to think of Iraq as a living laboratory, a testing ground for their ideas.44

In Iraq, the Green Zone became a significant problem for the military, the Foreign Service and foreign aid officials alike.45 It soon became clear:

The decision to install the occupation government in the center of the city and to base it in the very same buildings that had been used by the recent dictatorship was a serious blunder - one of several such blunders rooted in the arrogance of Yankee know-how, and in the strange failure to anticipate the end of the honeymoon, and the hostility that even enlightened invaders would soon elicit.46

Except for some in the State Department, the other principals in the White House and the Department of Defense were more interested in war than in humanitarian assistance, support for democratic governance or economic development.47 The Defense Department’s initial answer to the humanitarian issue was to get USAID to make a series of strategically placed airdrops.48

Neither USAID officials nor its contractors were able to get outside of the Green Zone in order to begin developing policies.49 Within the Department of Defense, “[w]eeks into the war, more and more paper was flying around Rumsfeld’s office and the Pentagon about how to organize the aftermath.”50 However, as Woodward points out, Rumsfeld and his colleagues at the Department of Defense just were not interested in the occupation and simply could not recognize that they faced a task of full blown state building.51

Defense Secretary Rumsfeld originally did not want the U.S. committed to nation-building and Bob Woodward quoted President George W. Bush as saying, “I oppose using the

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military for nation building. Once the job is done, our forces are not peacekeepers.”52 In reality, however the Defense Department after September 11 became firmly involved in the nation-building process in a number of countries including the botched effort in Iraq which led to Iraqi collapse into full scale civil war by 2006.

Major Isaiah Wilson, a researcher for the U.S. Army’s Operation Iraqi Freedom Study Group assessed the U.S. planning process in Iraq in 2006 and concluded that because “of the failure to produce a plan…the U.S. military lost the dominant position in Iraq in the summer of 2003 and has been scrambling to recover ever since.”53 With the end of the military invasion, “what [the U.S.] didn’t plan for was the possibility that hundreds of thousands of soldiers would just go home, that the workforce to rebuild the country would melt away.”54 Then the real conflict began. By the end of 2006, the U.S. had virtually lost control of Iraq and the reconstruction efforts were largely sidelined.55

Iraq and Foreign Aid

Foreign aid to Secretary of Defense Donald Rumsfeld, who had his supporters within USAID, was entirely about feeding people. Governance and development were secondary to the maintenance of control. Afghanistan with its international coalition began to reconstruct itself through U.S. and other bilateral and multilateral donors. Though there was a resurgence of Taliban resistance in the southern part of the country, Afghanistan foreign aid policy remained firmly multilateral in its scope. Initially, under George W. Bush, U.S. foreign aid spending patterns remained what they had been over the past decade. By early 2002, “American aid spending stagnated at about $10 billion…. As a percentage of the American economy, it [had] fallen from nearly 3 percent in 1946 to 0.1 percent.”56

After September 11, under George W. Bush the foreign aid budget surged, “fed by concerns that impoverished and failing societies could offer breeding ground or havens for terrorists.”57 On November 3, 2001 as Congress neared completion of a “$15.1 billion foreign aid spending bill, it [walked] a tightrope between staying true to long-held positions and showing support for several autocratic regimes that are cooperating with the U.S. war on terrorism.”58 In assessing the Bush administration at the beginning of his second term, Elizabeth Becker noted that Congress was ready to increase foreign aid to the world’s poorest nations by nearly $2 billion. This would be the biggest increase in development assistance since 1962, thee year after President John F. Kennedy created the Peace Corps, USAID and established Alliance for Progress in South America.59

Iraq and Afghanistan, not surprisingly, were high on the list for additional foreign aid monies. However, traditional foreign aid recipients were also affected. In 2002, “[t]he United States announced that it planned to spend more than $1 billion over the next four years to improve water efficiency on farms and in factories, to provide electricity to the poor, to help communities combat deforestation and to ease hunger in Africa.”60

In the aftermath of the U.S. invasion, there were concerns that the U.S. would win the initial conflict in Iraq but lose the occupation and peace. At the outset, it was foreign aid which was expected to ensure the peace. This was not to be and these dangers, warnings at the time,

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were not heeded.61 In March of 2002, the Bush administration made its foreign aid pledges bigger, more urgent and more up front and center than it did in Bush’s first year in office and the President said he would ask Congress “to increase American aid to poor nations by 50 percent over the next three years to $15 billion in 2006, and to try to start the money flowing within months, not a year or two.”62 According to Bob Woodward, post-September 11 “American values, democracy and human assistance programs [were] the softer side of Bush’s agenda.” 63

Over time, the attacks on the Pentagon and the World Trade Center attack, and the downing of the plane in central Pennsylvania were to change U.S. approaches to foreign policy and foreign aid. The changes were at least partly fiscal. The 2002 foreign aid program contained proposals by President Bush to increase spending to fight AIDS and reduce hunger overseas; this would raise foreign assistance to more than $18 billion by the 2004 fiscal year.

U.S. interventions in Afghanistan and later Iraq (as well as earlier Bosnia and Kosovo and in several states in Northeast and West Africa) began to promote processes of institutionalization, democratic governance and of the rule of law. After September 11, President George W. Bush redefined his foreign aid policy in terms of reducing poverty and ending repression with statements about moral and strategic purposes. These would include “[d]emocracy, free markets and the rights of women.”64

Yet, despite the surge of foreign aid funding, a number of traditional foreign aid areas were still on the chopping block. To quote Elizabeth Becker again, “In one of the first signs of the effects of the ever tightening [2005] federal budget…the Bush administration has reduced its contributions to global food aid programs aimed at helping millions of people climb out of poverty.”65 To its critics, the Bush administration was less concerned about LDC poverty alleviation and development, and more concerned about national security needs.66 There was a fear that “long-term development and poverty reduction goals, the traditional concern of USAID, will be overwhelmed by the demands of shorter-term strategic considerations….”67

There were calls for new spending to support democracy and governance and to ensure transitions to secularism particularly in the Middle East and Northern Africa. However, there continued to be significant resistance in Congress to increasing the foreign aid budget. Over a year after September 11, according to Paul Blustein, “congressional appropriators appear[ed] poised to approve hundreds of millions of dollars less than the president requested for foreign assistance next year.”68

In 2005, the Bush administration, asked for $2.8 billion for the HIV/AIDS fund and announced that it was “gearing up to meet the president’s goal of $15 billion [in foreign aid] over five years, though some Congressional Republicans concede[d] that budget deficit concerns [would] probably scale back both initiatives.”69 By 2006, the proposed foreign aid budget was over $20 billion. USAID alone handled $14 billion. In 2007, the Bush administration proposed a foreign aid budget of $23.7 billion. With much of that money aimed at combating the AIDS virus and creating a new economic development program, Africa would be the main beneficiary of this latest expansion in foreign aid activity.70 HIV/AIDS and the Millennium Challenge Account became the two major priorities of the Bush administration in its second term.

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The Iraq Fiasco

According to critics of the Iraq program, no money had been pre-identified for democracy and governance prior to the beginning of the U.S. invasion. Elisabeth Rubin, speaking of people in Hilla, Iraq, made the point: “This is a country of 23 million people, and we’re there with no plan for what we’re going to do. So we just started figuring it out ourselves.”71 In 2003, the Director of USAID, Andrew S. Natsios estimated that the rebuilding of Iraq would cost U.S. $1.7 billion. By the middle of 2006, the U.S. had spent over $250 Billion.72 The situation could verge on the ridiculous according to Rachel Roe, who was a reservist and a lawyer who was rebuilding the legal system in Najaf. One legal specialist “showed up in the palace in Baghdad looking for the head of democracy and human rights to see what’s the plan and found some 21-year old political appointee who had no idea what was going on.”73

U.S. personnel in Iraq lacked the language skills and cultural sensitivity to perform their duties effectively and had “little experience with complex overseas interventions to restore and maintain order….”74 According to Thomas Ricks, the “U.S. civilian occupation organization was a house built on sand and inhabited by the wrong sort of people….” 75 The Iraq bureaucracy had declined in terms of capacity during the occupation. International support for Iraq from Europe or the oil producing states can at best be described as tepid. Tragically, after three and a half years of occupation, the Iraq Study Group would conclude in late 2006 that the “Iraq government is not effectively providing its people with basic services: electricity, drinking water, sewage, health care, and education.”76 The coordination of reconstruction between the senior management of the Department of Defense, the State Department and USAID remained ineffectual.

Humanitarian and development concerns remained secondary. Mid-level planners from USAID had to convince the military that they should specify “no air strike” sites in Iraq such as health clinics, water plants and the electric grid. They also advocated humanitarian aid for food and relief after the invitation.77 USAID officials were not entirely successful in either of these requests. According to William Langewiesche, speaking of the U.S. administrators in Iraq:

It is true that most of the rank and file [in the beginning] had supported the invasion, and continued to believe that they were contributing to the struggle against terrorism, but they were not ideologues so much as ordinary, overconfident, mildly presumptuous college graduates - freshly scrubbed Americans of the sort who inhabit Washington, D.C., nestling up to power.78

In the Iraq occupation, the Bush administration faced three problems: 1) they had to find payment for public sector employees; 2) they had to rapidly issue contracts for economic development and reconstruction; and 3) the occupation administration had to reconstruct the security forces. According to Bob Woodward, the administration in effect punted on all three. Three years after the invasion of Iraq, the three core problems of security, service delivery, and infrastructure and governance had not been solved. The public service remained dysfunctional and most social and economic development projects had come to a complete halt.79

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Governance and oil did not mix well in Iraq. According to Jonathan Weisman, in the debate on the 2004-2005 budget “Senate Republicans proposed…to convert nearly half of President Bush’s $20.3 billion Iraqi reconstruction program into loans underwritten by that nation’s oil, and even some of the president’s sharpest defenders said Congress [was] likely to significantly change the administration’s vision for rebuilding Iraq.”80 For the next several years, even in the context of the collapse of security in Iraq by 2007, many in Congress and some in the administration continued to assume that oil revenues would fund the U.S. occupation of Iraq.

By 2005, U.S. aid to Iraq, most of which flowed through the Defense Department, was pegged at $21 Billion. This assistance was targeted at “governing and developing a democracy, help to provide essential services such as electricity, water, sanitation and schools; help to strengthen the economy, assist in strengthening the rule of law and civil rights; increase international support and communicate to Iraqis and promote a ‘free, independent and responsible Iraqi media.’”81 It was a wish list for U.S. foreign aid around the world.

As late as 2006, some Republicans in Congress continued to talk about using Iraq’s oil money to rebuild the country. According to David Firestone, “In explaining how it proposed to spend $20.3 billion to restore a civil society to Iraq, the administration has prepared a virtual travelogue of the country’s descent into destruction and chaos.”82 Sensitivity over democracy was high in Iraq. According to Dana Wilbank:

White House officials were steamed when Andrew S. Natsios, the administrator of the U.S. Agency for International Development, said [in 2003] that U.S. taxpayers would not have to pay more than $1.7 billion to reconstruct Iraq - which turned out to be a gross understatement of the tens of billions of dollars the government now expects to spend. Recently, however, the government has purged the offending comments by Natsios from the agency’s Web site.83

Despite these failures and USAID efforts to direct support for long term social and economic development there was increasing resistance in the U.S. Congress for provision of reconstruction support. The Iraq Study Group concluded that technical assistance support for Iraq was essential and recommended that U.S. economic assistance be increased to $5 billion per year.84

Coming out of Iraq was a contracting model, a U.S. Defense Department process that would be transferred to another plane (in terms of scale) in smaller countries. The Iraq intervention took outsourcing to its limits. As part of the occupation process, the

The military’s reliance on [Iraqi and overseas] civilians to serve as interrogators and translators in Iraq is now so great that many people are being sent abroad without complete background investigations or full qualifications for the positions…. Once on the job, [in Iraq] several experts said, many of the contractors are barely supervised.85

As a result, not surprisingly, there was widespread waste and corruption in Iraq contracts.86

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Contracting in Iraq became analogous with the Civil Operations and Rural Development Support Program (CORDS) - the hearts and minds strategy which provided social services and infrastructure support to rural dwellers Vietnam.87 Increasingly the government’s business was done through sole sourcing, without any threads of competitive bidding. From a foreign aid perspective, U.S. allies had to assure delegates at a two-day conference of international donors in New York that the billions of dollars in U.S. foreign aid contracts financed by Iraq’s oil revenue would be put out to competitive bidding.88

With the influx of aid, there were increased dangers and threats to foreign aid contractors in Iraq as well as Afghanistan and in other parts of the Middle East. In Iraq, the bulk of the foreign civilian deaths were contractors and “[t]he chaotic nature of civil conflict is a major reason aid workers face greater danger more often.”89 According to Elizabeth Rubin, discussing another Iraq casualty:

In a way [Fern Holland’s] story slipped effortlessly into a parable about American exceptionalism. Headstrong, reckless, idealistic, Americans have always believed in the power of will - that one man or woman with enough faith and tenacity can at some moment pull off his or her vision.90

Eventually, a great majority of foreign aid workers in Iraq, fearing they had become targets of the post-war violence, “quietly pulled out of the country…, leaving essential relief work to their Iraqi colleagues and slowing the reconstruction effort.”91 By the end of 2006, relief, reconstruction and development efforts had come to almost a complete stop.

Contemporary Debates

Unilateralism vs. Multilateralism

At the end of the twentieth century, despite the end of the Cold War, there were more than 27 conflicts in 26 locations throughout the world. These civil conflicts forced choice on the U.S. All but two of these 27 were civil war conflicts; moreover several of them involved what came to be called “terrorist movements.” In the last half of the twentieth century, while impulses of isolationism remained, the United States tended to bounce on an issue by issue basis between multilateralism and an “isolation” like interventionism that sometimes has been referred to as unilateralism. To quote Mark Hertsgaard:

American elites sometimes talk of our nation’s isolationist tendencies, but the correct adjective is unilateralist. The United States has hardly shunned overseas involvement over the years; we simply insist on setting our own terms.92

The story of foreign aid in a post-September 11 world really starts with Somalia, its links to Osama bin Laden, and the evolving unilateral role that the U.S. first carved out for itself at that time and then temporarily abandoned.

After the collapse of the Somali government in 1991, the United States and the United Nations intervened in Somalia. In addition to the temporary intervention of the U.S. military, the

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international intervention in Somalia (1993-1995) brought in hundreds of international NGOs, which then were told to develop grants programs to fund thousands of local NGOs to deliver humanitarian assistance. The intervention in Somalia began in support of the humanitarian assistance program but ended in confrontation with Somalia warlords.93

“Blowback” was a CIA term “for how foreign policy can come back to haunt a country years after in unforeseen ways.”94 Blowback as a phenomenon defined the U.S. intervention, and later the abandonment of Somalis, and the impact that the Somalia debacle would have on U.S. foreign policy for the next decade leading to the capture of Somalia by Islamic fundamentalists and a U.S. sponsored Ethiopian intervention. Blowback, which as a term was immediately applied to the “Blackhawk Down” tragedy, was a term applicable to U.S. humanitarian assistance and foreign aid as well. Nowhere was this pattern more clearly defined than in the months after September 11, 2001. Somalia, as would be the case later in Iraq, was an international intervention which went quickly awry. According to Michael Maren:

The violent events that occurred [in Somalia] in 1993 were not an aberration; they were, in fact, foreign aid carried out to its logical extreme. Foreign aid run amok. The desire to help had - as it almost always does-become the desire to control. In a routine foreign aid situation there is [a] local government, even a corrupt local government, to check the tendency of aid organizations toward control. There is a point at which the interests of the aid organizations clash with the interests of the government.95

The incident, which has come to be known as “Blackhawk down,” was such an exercise of control and representative of an overreach by the United States without sufficient force available, into a part of the world that U.S. policy makers did not understand.96 By 1993, the Americans had become totally isolated from the Somalis that they had come to save.97 Shortly after the Blackhawk down massacre of nineteen U.S. soldiers the U.S. announced that it would withdraw from Somalia, a development which later came to be seen as a victory for Osama bin Laden and his al-Qaeda movement.

After ten years of chaos, the warlords and an orphan interim government (virtually unsupported by the U.S. and international community), were overthrown by a group known as the Islamic Court Union whose leader, Sheikh Sharif Sheikh Ahmed, declared on June 2, 2006, that he would bring the Islamic revolution (with its declared conflict with the United States) to Somalia. Three days later the Islamic Court Union declared its control over Mogadishu and Central Somalia, an area with more than half the total population of the country. In December of 2006, the U.S. sponsored an Ethiopian intervention to restore the provisional government to power.

Bin Laden has been linked to a series of other events during the 1990s, beginning with the first bombing of the World Trade Center on February 26, 1993. Bin Laden was also alleged to be involved in the 1998 U.S. embassy bombings in Dar es Salaam, Tanzania and Nairobi, Kenya, and is said to be linked, directly or indirectly, to the 2000 USS Cole bombing, the Bali nightclub bombings, the Madrid and London train bombings, as well as bombings in the

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Jordanian capital of Amman and in Egypt's Sinai peninsula. Most importantly, bin Laden attacked the U.S. on September 11, 2001.

After September 11, 2001, the reaction of the United States increasingly has been to strike back when its interests are threatened, refusing to accept international criticism, and in effect talking back to the United Nations.98 To Robert Kaplan, “A great philosophical schism has opened within the West, and instead of mutual indifference, mutual antagonism threatens to debilitate both sides of the trans-Atlantic community.”99 The problem became more than a polemic, according to David Sanger, “The prevailing view focuses not on the dangers, but on the limited options for doing anything about them.”100 Unilateralism allowed the U.S. to both rebuff its critics and take action against its adversaries.

In reality, according to observers of the second Bush administration, there was a plan for unilateralism among Bush administration officials influenced by the so-called neo-conservatives who dominated foreign policy (Bush himself, Vice-President Dick Chaney, Secretary of Defense Donald Rumsfeld and Deputy Secretary of Defense Paul Wolfowitz among others) that was independent of September 11, 2001. The decision was not cluttered or haphazard; it was a deliberate choice. According to Rick Barton, a former official in the Clinton administration, “There was a clear choice [within the Bush administration] - unilateralism, occupation and change in the Middle East.”101 Iraq was the focal point. After September 11, observers predicted a deepening disorder throughout the world.102 As William D. Hartung has put it, perhaps with a modicum of exaggeration:

George W. Bush has adopted an aggressive, unilateralist foreign policy that reflects unbridled imperial attitudes not seen since the peak period of direct U.S. interventionism in Latin America in the early decades of the twentieth century.103

Labeled by its advocates and critics alike, as neoconservative unilateralism, Bush’s vision of foreign policy included “an ambitious reordering of the world through preemptive and, if necessary, unilateral action to reduce suffering and bring peace.”104

This does not mean that there were no debates within the Bush administration. There were “deep ideological schisms that had rent Bush’s national security team throughout the first term….”105 The Department of State, headed by Secretary of State Colin Powell, tended to be more multilateral in their world view and cautious about military intervention. Unilateral pressures intensified, however, after September 11, 2001. By the early twenty-first century, “U.S. unilateralism [had become] simply the other side of the coin from U.S. isolationism.”106

Further, military intervention wherever it occurred led to increased foreign aid intervention, a pattern which was clearly illustrated both by the U.S. intervention in Iraq and NATO involvement in Afghanistan. Since the Al Quada attacks, many policy makers in the U.S. have assumed that only America could solve the political and security problems of the world and increasingly the term unilateralism came to be debated by pundits and academics alike.

Some aggressive unilateralists have argued, in the context of the likes of Osama bin Laden, that there must be a new form of imperialism that will bring parts of the world again

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under Western control as a part of the war on terrorism.107 The issue raised by Somalia, Afghanistan, Iraq and other late twentieth century crises, for Niall Ferguson, is whether or not in the early part of the twenty-first century there is a need to re-order the world in a way that replicates at least some elements of the Empire model.108

For the United States, the choice after September 11 became a unilateral approach to international order or a return to some form of collective leadership. As Ferguson, a radical unilateralist has put it, “The hypothesis…is a step in the direction of political globalization, with the United States shifting from informal to formal empire much as late Victorian Britain once did.”109 Ferguson has argued that the U.S. should take up this global burden but fears that the American Empire “lacks the drive to export its capital, its people and its culture to those backward regions which need them most urgently and which, if they are neglected, will breed the greatest threats to it’s [and the world’s] security.”110 Critics of unilateralism and aggressive multilateralism suggest that these conditionalities smacked of colonialism.

Pulling Back from Unilateralism

There had been political opponents to the Iraq intervention within the Department of Defense, the military and most importantly the Department of State and it was made clear that opponents of the invasion would quickly be replaced because the White House wanted all senior positions in Iraq to be filled with U.S. Republican Party loyalists. Loyalty was the key. The Pentagon would claim that political considerations were not a factor in replacing professional USAID and State Department officials with administration loyalists. The mainstream press remained skeptical. In the wake of the intervention in Iraq and the revelation that he was mislead on the presence in Iraq of weapons of mass destruction, and absent a plan to rebuild the country, Secretary of State Colin Powell concluded that the war had “gone sour.”111

Despite the threat of military intervention, U.S. foreign aid influences after September 11 remained to a large extent informal or soft, exercised through economic, cultural and in some cases military means rather that through formal institutional (or colonial) structures.112 Foreign aid policy was central to that process. Colin Powell as Secretary of State had been somewhat protective of USAID at times filling non-career slots in the agency with career officers, most of whom held traditionalist views of foreign aid in economic development, humanitarian and governance terms.113

During the second Bush administration, at least to down to the Congressional elections in November of 2006 when the Republican party lost control of both the House and the Senate, “the United States [has exercised] power unimpeded by partnerships, alliances and rules - and without apology for its imperial status.”114 In the five years after September 11, U.S. unilateralism has become increasingly rigid, and part of what one writer has called “a neo-imperial agenda.”115 In both foreign aid and security terms this neo-imperialism of

[a]llying ourselves with repressive regimes, overriding human rights conditionalities on U.S. aid, violating the conventions of international law, and standing behind a policy of “regime changes” and first strikes are all acceptable means in Bush’s endless war against evil.116

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Unilateralism already has a retro feel, however, as the U.S. moves haltingly towards a post-Iraq world. Instead of unilateralism, the world will require more “‘internationalism’ than before, and the novel experience of cooperating widely with associates who are no longer satellites or dependents - as well as with the enemy of the past forty years.”117 Particularly, in a post-September 11 world:

The United States has a strategic problem: its war on terror, unlike its long fight against Communism, is not universally seen as the pivotal global struggle of the age. Rather, it is often portrayed abroad as a distraction from more critical issues - as an American attempt to impose a bellicose culture, driven by the cultivation of fear, on a world still taken with the notion that the cold war’s end and technology’s advance have opened unprecedented possibilities for dialogue and peace.118

There is a role that the cool thinking of academics and intellectuals can play in foreign aid and foreign policy process rather than in policy implementation. According to Edward Horesh, as early as 1981, “The proper role of academics in development studies…is to analyze economic and social conditions in less developed countries, not to take responsibility for increasing the rate of economic growth in those countries.”119 Horesh goes on, “An academic social scientist cannot take a direct hand in policy making and simultaneously remain an academic because ‘academic research is general whereas policy is usually specific and in addition requires…knowledge of the institutions and processes in which it is to be applied.’”120

After 2004, as the U.S. had become bogged down in Iraq, multilateralism began to make a comeback. As Glenn Kesler noted in late 2004, “Secretary of State Colin L. Powell [departed] on a weeklong trip to consult with an alphabet soup of European multilateral institutions and confabs, carrying a message that the second-term Bush administration [was] ready to work closely on forging what officials have dubbed ‘effective multilateralism.’”121 Foreign aid became a part of this shift as alternatives to unilateral intervention were proposed.122 Jane Perlez has put it this way:

On the theory that ignorance and poor education are among the reasons that young people are drawn to radical Islam, the Agency for International Development has been revamping its programs in Muslim countries in the last two years to spend more on schools and less on other things, including family planning.123

Within a few months of the U.S. invasion of Iraq, the presumption of a long-term occupation, the basis of U.S. action until that time, had gone. The Bush administration rapidly moved the timetable forward on the electoral, the constitutional processes and on the installation of an Iraqi government. However, despite this, and the commitment to obscene amounts of foreign aid assistance, the U.S. had become embroiled in the proverbial quagmire in Iraq as the U.S. public became disenchanted with U.S. military and financial intervention in what had become a three sided civil war.

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After the tragedy of the Iraqi invasion a number of critiques of unilateralism began to appear. The idea now was to limit American casualties, or the perception of them, and to “‘accelerate’ the handover of sovereignty to Iraq by the end of June [2004] - an adequate four months before the U.S. elections.”124 There was increasingly a “[r]eluctance in even defining the situation…perhaps the most telling indicator of a collective cognitive dissidence on part of the U.S. Army to recognize a war of rebellion, a people’s war, even when they were fighting it.” 125

The declining security situation neither allowed for foreign aid support at a level which would stabilize the country nor allow the U.S. to withdraw its forces.

Criticism of the war became largely but not exclusively a partisan one by 2004. Democratic Presidential Candidate John Kerry both “faulted President George H. W. Bush for assembling a Persian Gulf War coalition that amounted to a ‘Pax Americana,’ [though the Gulf War was clearly a multilateral intervention] and criticized the incumbent president for bungling the war in Iraq by failing to enlist the United Nations and key allies in the enterprise.” 126 John Kerry, the then

124 Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 87.125

? Ricks, “Army Historian Cites Lack of Postwar Plan,” p. A18.39 Stewart Patrick, “An Integrated U.S. Approach to Preventing and Responding to State Failure: Recent Progress and Remaining Challenges,” (Unpublished Paper, Center for Global Development, April 19, 2006), pp. 1-9.

40 Woodward, State of Denial, p. 91.41 Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 65.

42 Woodward, State of Denial, p. 112.

43 Quoted in Woodward, Plan of Attack, p. 297.

44 Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 73.

45 See Rajiv Chandrasekaran, Imperial Life in the Emerald City: Inside Iraq's Green Zone (New York: Alfred A. Knopf, 2006) for a further discussion of this. 46

? Langewiesche, “Welcome to the Green Zone,”pp.61-88. Quote, p. 62.47 Woodward, Bush at War, p. 160.

48 Ibid., p. 163.

49 See Derick W. Brinkerhoff, “Building Local Governance in Iraq-Limits and Lessons,” in Picard, et. al., Foreign Aid and Foreign Policy.

50 Woodward, State of Denial, p. 270.

51 Ibid, pp. 270-272.

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presumptive Democratic presidential nominee, [though he voted for the Iraq resolution] repeatedly slammed President Bush for what he call[ed] a “go-it-alone” foreign policy. The line of attack comes naturally. Throughout his nearly 20 years in the Senate, the Massachusetts Democrat has expressed a deep commitment to negotiation and international institutions as a way to advance U.S. interests.127

The debate should have been between multilateralism and unilateralism. Much of the international community saw Afghanistan differently from Iraq. Michael Massing has put it this

52 Ibid., p. 220 and p. 222. Quote: p. 237.53

? Thomas E. Ricks, “Army Historian Cites Lack of Postwar Plan,” Washington Post, (December 25, 2004), p. A18.

54 Woodward, Plan of Attack, p. 343.

55 Three books define the magnitude of the Bush administration failure in Iraq between 2001 and 2006. They are Bob Woodward, State of Denial: Bush at War, Part III (New York: Simon and Shuster, 2006); Thomas E. Ricks, Fiasco: The American Military Adventure in Iraq (New York: Penguin Press, 2006); and most significantly James A. Baker III Lee H. Hamilton, et. al. (The Iraq Study Group), The Iraq Study Group Report: The Way Forward - A New Approach (New York: Vintage, 2006). 56

? Joseph Kahn and Tim Weiner, “World Leaders Rethinking Strategy on Aid to Poor,” New York Times, (March 18, 2002), p. 4.57 Robert McMahon, “Transforming U.S. Foreign Aid,” Council on Foreign Relationshs Publication no. 10176 (New York: Council on Foreign Relations, March 17, 2006) www.cfr.org/publications/10176.58

? Dan Morgan, “Foreign Aid Tied to Terror Fight,” Pittsburgh Post-Gazette ( November 3, 2001), p. 1.

59

? Elizabeth Becker, “With Record Rise in Foreign Aid Comes Change in How it is Monitored,” New York times, (December 7, 2003), p. 6.60

?Rachel L. Swarns, “U.S. Shows Off Aid Projects At U.N. Development Meeting,” New York Times, (August 30, 2002), p. 5.61

? Ricks, Fiasco, pp. 72-73.62

? Tim Weiner, “More Aid, More Need: Pledges Still Falling Short,” New York Times, (March 24, 2002), p. 5.

63 Woodward, State of Denial, p. 127.

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way, “In contrast to Afghanistan, where reconstruction has been carried out under aegis of the United Nations, in Iraq it has been led almost exclusively by Americans - and not Americans…with long records of working with the international community in alien environments.”128 The intervention in Afghanistan, from its beginning, had a strong international coalition, albeit led by the United States.

Iraq had been from the beginning an American operation. There was, according to Colin Powell, a particular Bush White House machismo “that targeted any criticism of the administration or suggested weakness.”129 From a European perspective, as the French foreign minister, Dominique de Villepin, is said to have put it, “The struggle was not so much about Iraq

64

? Woodward, Plan of Attack, p. 132.65

? Elizabeth Becker, “U.S. Cutting Food Aid That Is Aimed at Self-Sufficiency,” New York Times (December 22, 2004), p.A3.

66 McMahon, “Transforming U.S. Foreign Aid,” p. 2.

67 Larry Nowels and Connie Veillette, “Restructuring U.S. Foreign Aid: The Role of the Director of Foreign Assistance,” CRS Report for Congress ((Washington D.C.: Congressional Research Service, RL33/491, June 16, 2006), p. 10.68

? Paul Blustein, “U.S. Aid Plan Comes Up Short,” Washington Post, (June 22, 2003), p.A22.69

? Christopher Marquis, “New System Begins Rerouting U.S. Aid For Poor Countries,” New York Times, (February 22, 2004), p. 1.70

? Becker, “With Record Rise in Foreign Aid Comes Change in How it Is Monitored,” p. 6.71

? See Elizabeth Rubin, “Fern Holland’s War,” New York Times Magazine, (September 19, 2004), p. 71.

72 Ricks, Fiasco, p. 209.73

? Rubin, “Fern Holland’s War,” p.70.

74 James A. Baker and Lee H. Hamilton, et. al., The Iraq Study Group Report: The Way Forward-A New Approach (New York: Vintage Books, 23006), p. 92.

75 Ricks, Fisco, p.202.

76 Baker and Hamilton, The Iraq Study Group Report, p. 20.

77 Woodward, Plan of Attack, p. 277-278. 78 Langewiesche, “Welcome to the Green Zone,” pp.61-88. Quote, p. 74.

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as it was about ‘two visions of the world.’”130 According to Robert Kaiser, “The [Iraq] war has damaged the good name of the United States in every corner of the globe, has cost unanticipated scores of billions [all of it borrowed] and now threatens long-term damage to our Army and National Guard.”131

Human Security, Democracy and the Governance Problem

Jan Egeland of the United Nations has argued that there has been “a global trend of declining support for humanitarian efforts around the world.”132 Neglect for genocide in Rwanda and in Darfur are only the latest examples of this. Increasingly, debates about the nature of

79 Woodward, State of Denial, p. 384.80

? Jonathan Weisman, “GOP Senators Seek to Make Some Iraq Aid a Loan,” Washington Post, Oct.2, 2003, p. A4.

81 Woodward, Bush at War, p. 410.82

? David Firestone, “Congress Gets a Hot Potato: Bush’s Detailed Program to Rebuild Iraq,” New York Times, (October 5, 2003), p. 12.83

? Dana Milbank, “White House Web Scrubbing,” Washington Post, December 18, 2003, p. A5.

84 Ibid., p. 25-27 and pp. 86-87.85

? Joel Brinkley, and James Glanz, “Contractors in Sensitive Roles, Unchecked,” New York Times, (May 7, 2004), p. A12.

86 See Glenn Kessler and Bradley Graham, “Rice’s Rebuilding Plan Hits Snags,” Washington Post ((January 15, 2006), p. A 24. See also James Glanz, “Auditors Find Widespread Waste and Unfinished Work in Iraqi Rebuilding Contracts,” New York Times (January 31, 2006), p. A12.87

? Massing, “Appoint the Best to Iraq, Not the Best-Connected,”, p.B4.88

? Colum Lynch, “Potential Iraq Donors Seek Greater Accountability From U.S. on Oil Plans,” Washington Post, (June 26, 2003), p. A16.89

? Karl Vick, “Aid Work in Growing Danger; Foreigners Targeted in Conflict Zones,” Washington Post, (May 23, 1999), p. A19.90

? Rubin, “Fern Holland’s War,”, p.74.91

? Ian Fisher, and Elizabeth Becker, “Aid Workers Leaving Iraq, Fearing They Are Targets,” New York Times, (October 12, 2003), p. 6.

92 Hertsgaard, The Eagle’s Shadow, p. 71.

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foreign aid, “may delay a solution for the “pre-eminent moral and humanitarian challenge of our age.” These were the words of a United Nations panel chaired by Ernesto Zedillo, the former president of Mexico, a panel that included Robert E. Rubin, the former Treasury Secretary.133

UN official Egeland went on, “Humanitarian aid workers who are impartial and needed to save thousands are often caught in the political crossfire. Terrorists and others are targeting us.”134

Humanitarian aid became increasingly important after 1985 as both ethnic conflict and the economic pressures of structural adjustment led to state collapse in parts of Asia, the Middle East, Central America and most importantly in sub-Saharan Africa. By 1996 U.S. emergency aid was increasing and took “10% of the total aid budget; in 1991 it [had been] only 1.5%.”135 After

93 Michael Maren, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity (New York: The Free Press, 1997), p. 166.94

? Hertsgaard, The Eagle’s Shadow, p. 80.

95 Ibid., p. 218.

96 Mark Bowden, Black Hawk Down: A Story of Modern War (New York: Penguin, 1999).

97 Ibid., p. 236.

98 Ian Christie Clark, “From Crisis to Renaissance at UNESCO—Can the Struggle be won without the USA?” Newsletter of Americans for the Universality of UNESCO, Vol.. IV, Issue 3 (September 4, 1988), p.13.99

? Robert Kagan, “A Tougher War for the U.S. is One of Legitimacy,” New York Times, (January 24, 2004), p.A 19.100

? David E. Sanger, “Hawk Sightings Could Be Premature,” New York Times, (November 21, 2004), p. 1.101

? Rick Barton, “Failed and Failing States: Exploring New Directions for International Development,” Paper Presentation (Washington DC: George Washington University Development Management Network Workshop, October 30, 2004).

102 Carol Lancaster, Transforming Foreign Aid: United States Assistance in the 21 st Century (Washington, D.C.: Institute for International Economics, 2000), p.58-59.

103 William D. Hartung, “Military,” Power Trip: U.S. Unilateralism and Global Strategy after September 11, John Feffer, ed., (New York: Seven Stories Press, 2003), p. 60.104

? Woodward, Bush at War, p. 341.

105 Karen de Young, “Falling on His Sword,” Washington Post Magazine (October 1, 2006), pp. 13-27. Quote p. 14.

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September 11, a number of donor countries, including the United States, began to put human rights conditionalities into their foreign aid programs136 and since September 11, a major focus of U.S. foreign aid, at least in rhetorical terms has been democracy and governance.137

Humanitarian concerns over time have led donors to increasingly support human rights, the rule of law and democracy and governance programs.

David Reiff has explained the emphasis on human rights in 1996 in this way, “From the civil wars in Somalia and Bosnia to the current crisis in Zaire, it has been the international aid agencies who have most strongly and consistently called for military intervention in humanitarian disasters.”138 Increasingly, conflict resolution and human security issues have been

106 Watanabe, “First among Equals” in What Does the World Want from America?, p. 15.107

? Deborah Scroggins, Emma’s War: An Aid Worker, A Warlord, Radical Islam, and the Politics of Oil- A True Story of Love and Death in the Sudan (New York: Pantheon Books, 2002), p. 351.

108 Ferguson, Empire109

? Ibid., p. 368.

110 Ibid, p. 370.

111 De Young, “Falling on His Sword,” p. 15.

112 Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (New York: Basic Books, 2003, p. xv.

113 Woodward, Plan of Attack, p. 156.

114 Tom Barry, “How Things Have Changed,” in Feffer, ed., Power Trip, p. 30.

115 See John Feffer, “Introduction, in Feffer, ed., Power Trip, p. 18-27 and Barry, “How Things Have Changed,” in Feffer, ed., Power Trip, p. 28 for quote.

116 Barry, “How Things Have Changed,”in Feffer, ed., Power Trip, p. 36.117

? Stanley Hoffmann, “What Should We Do in the World?” Atlantic Monthly, (October 1989), p. 96.118

? Roger Cohen, “An Obsession the World Doesn’t Share,” New York Times (December 5, 2004), p. 1.119

? Edward Horesh, “Academics and Experts or the Death of the High Level Technical Assistant,” Development and Change, Vol.12, No.4, (October 1981), p. 611.120

? Ibid., p. 612.

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a part of the discourse on foreign aid. In March of 2002, “President Bush…proposed a three-year $5 billion increase in American foreign aid to poor nations that support human rights, adhere to strong systems of law and have open markets.”139

At the same time, those areas most in need of assistance are sometimes excluded from traditional foreign aid. In 2003, the province of Aceh, Indonesia, “where the United Nations estimates that 100,000 people have been displaced as a result of fighting there, is without any foreign aid workers because Indonesia has refused to give them permits, say officials with the United Nations and other organizations.”140 According to Mary B. Anderson, “When

121

? Kessler, “Revived Policy Traveling Abroad,” p.A17.

122 David E. Sanger, “In Global Shift, Bush Rethinks Going It Alone,” New York Times (March 13, 2006), p. A1 and p. A6.

123 Jane Perlez, “Enlisting Aid to Education in the War on Terror,” New York Times, (October 12, 2003), p.12.

126

? Glenn Kessler, “Engagement is a Constant in Kerry’s Foreign Policy,” Washington Post, (March 21, 2004), p. A1.127

? Ibid., p.A1.128

? Michael Massing, “Appoint the Best to Iraq, Not the Best-Connected,” Washington Post, (July 6, 2003), p. B4.

129 DeYoung, “Falling on His Sword,” p. 26.130

? Kagan, “A Tougher War for the U.S.,” p. A19.131

? Robert G. Kaiser, “A Foreign Policy, Falling Apart,” Washington Post (May 23, 2004), p. B4.132

? Nora Boustany, “An Insistent Appeal for Aid to Africa,” Washington Post, (December 22, 2004), p. A18.133

? Kahn and Weiner, “World Leaders Rethinking Strategy.”134

? Quoted by Boustany, “An Insistent Appeal for Aid to Africa,” p. A18.135

? “Falling Fast,” Economist (June 22, 1996), p. 44..136 Harden, Africa, p. 9.

137 McMahon, “Transforming U.S. Foreign Aid,” pp. 1-5.

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international assistance is given in the context of violent conflict, it becomes a part of that context and thus also of the conflict.”141

The Office of Transition Initiatives (OTI) was established in the early 1990s and was overtly concerned with conflict resolution and the political change processes. The goal was to begin to support institutional development within the OTI framework. Prior to this time, political development, governance and reforming of political elites often had been a neglected element of foreign assistance. OTI focused on what the Clinton administration called fragile states. The goal of OTI was to ensure rapid on the ground presence in troubled, fragile or collapsed country situations and with it a unique organizational culture and flexible budget.

OTI was given special crisis waiver authority to fund its operations, the authority to make overtly political interventions and to intervene, particularly where there is ethnic conflict, in regional centers away from the capital city.142 A particular concern was to work directly with indigenous, non-urban, non-governmental organizations. Robert Rotberg has called OTI the “special forces of development assistance…, gave it an overall positive review and concluded that the organization has proved itself to be “nimble, imaginative and innovative.”143 The program was not without its weaknesses. OTI has suffered from tight budgets and a very limited permanent staff. Sustainability of OTI has been a problem. Operationally OTI can function in a particular country for less than three years. Contractors, grantees and their staffs have not always been comfortable with the OTI mode of operation with its short lead time, its indeterminate goals and its short life span.144

Later a separate Office of Conflict Resolution was created within USAID in the wake of September 11, 2001. According to Andrew S. Natsios, the then Director of USAID who established the Office, “The nation-building challenge that follows…[the donor] switch to

138

? David Reiff, “Intervention Has a Price,” New York Times, (November 14, 1996), p. A17.

139 Elizabeth Bumiller “Bush Plans to Raise Foreign Aid and Tie It to Reforms,” New York Times (March 15, 2002), p. 5.140

? Jane Perlez, “Indonesia Bans Foreign Aid Workers From Embattled Province,” New York Times (September 21, 2003), p. 8.

141 Mary B, Anderson, Do No Harm: How Aid Can Support Peace-or War (Boulder, CO.: Lynne Rienner, 1999), p. 1.

142 Office of Transition Initiatives: A Decade of Transition-1994-2004 (Washington D.C.: U.S. Agency for International Development, 2004), pp. 3-4.

143 Robert I. Rotberg, “The First Ten Years: An Assessment of the Office of Transition Initiatives,” (Paper Prepared by the Befer Center for Science and International Affairs, Kennedy School of Government, Harvard University, 2005), pp 1-3.

144 Ibid, pp. 3-6.

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peacekeeping is daunting.”145 It was Natsios’ goal to target fragile and collapsed states.146 In the transition process, “[l]awlessness, spotty oversight and ethnic strife all have vexed past rebuilding efforts, according to audits and reports by public and private institutions.”147 Paul Lewis has put it this way, “The scope, cost and complexity of peacekeeping operations were [and are] likely to grow as more countries find themselves in the grip of violence, famine and civil war.”148

OTI was designed to alleviate the political transition problem in chronically unstable countries. According to Rick Barton, OTI’s first Director, the Office of Transition Initiatives was created to pull failed and failing states back from the brink of collapse. The program represents, “the current best hope for development in many states. There is much denial in foreign aid/foreign policy circles regarding how we got into a situation like this [reconstructing states] but it is there and must be addressed.”149

Conflict resolution was an essential first step to democratic governance of course and a Center for Democracy and Governance (later an Office) had been established in USAID in 1994. An early weakness in the developmental approach to foreign aid was that historically it tended to ignore the political processes and ignored the legitimate political concerns of recipient country political leaders. According to Edward Horesh:

[t]he point is rather that the political leadership found legitimation for their own policies from the prevailing opinions of the development profession which gave intellectual respectability to the monopolization of power by the state and the pretensions of ruling political parties.150

The concern for political development was not new. Throughout the Cold War, “aid allocations - by bilateral and multilateral donors - were dominated by politics - both the international politics of the Cold War and the internal politics of aid agencies.”151 According to an a USAID advisor in 1987, “Together, the three measures under the category of political issues

145

? Joe Stephens and David B. Ottaway, “Postwar Reconstruction Efforts Have Had Dicey History,” Washington Post, (April 28, 2003), p. A13.

146 “Conflict Mitigation and Management Policy,” (Washington, D.C.: U.S. Agency for International Development, April, 2005), pp. 1-7.147

? Ibid.148

? Paul Lewis, “Panel Predicts Growing U.N. Peacekeeping Role,” New York Times, (February 27, 1993), p. A4.149

? Rick Barton, “Failed and Failing States.”150

? Horesh, “Academics and Experts,” p.614.

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are designed with the assumption that an assessment of political climate and political will to carry out reforms is essential to ultimate success and survival of any major policy reforms.”152

The record of USAID in democracy and governance was spotty. A 1987 USAID survey of Zaire virtually ignored the governance environment and the U.S. officially labeled Zaire as a state transitioning to democracy down to the end of the Mobutu regime.153 There often was resistance to policies that purported to expand democracy. The former Zaire experience was exaggerated but not unusual. In Egypt, critics in 2004 complained that, “contrary to Bush’s pronouncements, U.S. aid - nearly $2 billion per year over the past two decades - has propped up an unpopular government, its army and police, and helped suppress democracy.”154 According to Steven A. Holmes, “The hard reality is that in the last few years, American financial aid to the fledgling democracies of Central America - and to much of the rest of the world - has fallen, as if off a cliff.”155

By the late 1980s, donors had begun to focus on basic human rights and democracy and governance issues. Ironically, this occurred at a point where structural adjustment, public sector reform and privatization were the order of the day and LDC leaders might long for the day, in the height of the Cold War, when they had a political impact on donor policy. Donors began to push for democratic processes at the same time that they required state systems to contract. According to USAID, “Democratization is an essential part of sustainable development because it facilitates the protection of human rights, informed participation, and public sector accountability.”156

Democratic governance came to be a part of the set of conditionalities required by the international community as part of the policy reform process.

By 1990, USAID began to encourage outside input on democracy and governance issues. According to one USAID official, “I thought you [the author] would be interested from an academic perspective at least. Understand the administrator has initiated outside groups to get

151

? Assessing Aid: What Works, What Doesn’t, and Why (Washington, DC: The World Bank and Oxford University Press, 1998), p. 40.152

? Vondal, “Improving Non-Project Assistance,” p.26.153

? Patricia J. Vondal, “Improving Non-Project Assistance Through Better Social and Institutional Analysis: Suggestions from Africa Bureau Experience,” (Washington D.C.: U.S. Agency for International Development, December 1987), p. 10.154

? Glenn Frankel, “Egypt Muzzles Calls for Democracy,” Washington Post (January 6, 2004), p. A12.155

? Steven A. Holmes, “A Foreign Aid of Words, Not Cash,” New York Times (December 5, 1993), p. 5.156

? “Building Democracy,” USAID’s Strategies for Sustainable Development, (Washington, D.C.: U.S. Agency for International Development, 1996), p.2.

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into the discussion and Ok’ed our sharing these papers.”157 This was refreshingly different than earlier policies which had been largely in house and marked secret or confidential. Military and security issues have become part of the overall process impacting on governance, as well as the movement toward economic and social development. Measuring the impact of governance programs was difficult. Quantitative performance indicators, a prerequisite for USAID’s evaluation process have long been a problem with regard democracy and governance of course.

Not all foreign aid recipients supported the democracy emphasis. As Glenn Frankel pointed out, “Egyptian officials, who have always wielded a veto over which private organizations are allowed to receive U.S. aid, are unhappy about an American proposal to earmark $20 million for democratization.”158 There were different meanings to governance democracy of course. For some it remained policy reform and economic freedom. As a senior USAID official put it in 1991, “Successfully implemented, [public sector reforms] will have a bigger impact on democratization than anything else. In fact this will replace most of our ‘democratization’ efforts. No bourgeoisie, no democracy.”159

Essential to foreign aid success, was working out “a mutually acceptable balance of reciprocal control,” between donor and recipient, over the political process.160 If reciprocal control was a concern, then in the future “the truly radical thing for the United States to do is to invest its resources and its credibility not in individual leaders but in the fledgling attempts…to build institutions of law and accountability.…”161 This is the meat of democracy and governance. In Africa for example, the declared goal of the foreign aid community was to focus on political stability, democratic governance and conflict resolution combined with the development of the continent’s economies.162

There have been differences about the importance of democratic governance between those who stress political freedom and those who argue for economic liberitarianism. According to Howard French, “Where these two schools of thought come together is in the need for foreign donors to give greater encouragement to countries where real democratization is taking place -

157

? Jeanne North, Cover Note to USAID Documents Given to Louis A. Picard, (n.d., 1991).158

? Frankel, “Egypt Muzzles Calls for Democracy.” 159

? Samuel W. Shoen “USAID Africa Bureau; Strategic Analysis and Recommendations for the 1990’s,” (Working Draft, Sept.9, 1991), p.11.

160 George Liska, The New Statecraft: Foreign Aid in American Foreign Policy (Chicago: University of Chicago Press, 1960), p. 19.161

? Bill Berkeley, The Graves Are Not Yet Full: Race, Tribe and Power in the Heart of Africa (New York: Basic Books, 2001), p. 240.

162 Francis Kornegay, Chris Lansberg and Steve McDonald, “Participate in the African Renaissance,” in What Does the World Want from America? International Perspectives on U.S. Foreign Policy Alexander T. J. Lennon, ed. (Cambridge, Mass.: MIT Press, 2002), p. 50.

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places…where ‘the poor are more empowered and where this induces governments to provide more basic services’.”163

With an increased emphasis on democracy, the foreign aid “catch phrase [has become] ‘good governance.’ Without it, experts say, aid is often wasted.”164 Yet, often, according to one critic, some bureaucrats in USAID’s Office of Democracy and Governance talk “as if democracy were just a piece of technology, like a water pump, that needs only the right instillation to work in foreign climes”165 In emphasizing governance, especially in the Middle East, the Bush administration believed “focus must be on national structures.”166 Critics of the U.S. foreign aid policy on democracy and government accused the Bush administration of being “hubristic, messianic, [and] imperialistic” particularly when the actual money committed to the Middle East for democracy and governance was very little.167

The Middle East remains the great challenge in terms of democracy and governance. Introducing democracy and governance in the Middle East has proved a considerable challenge particularly in the Levant. Elections, critics suggest, are mainly held to impress donor countries and to prove to the donors that the recipient country is doing the right thing. As Stephen R. Weisman has put it, “The United States, Europe and Arab countries are considering greatly increasing - maybe even doubling - aid to the Palestinians on the condition that they and Israel take certain steps toward reducing their conflict, U.S. and Palestinian officials say.”168

Decentralization has long been an important component of the democracy and governance emphasis. According to Howard French, “Many donors say they want to encourage decentralization and reinforce democratic practices, to which most lenders have paid only lip service in the past.”169 “In sum,” according to Raymond Hopkins, “within broad policy guidelines, the management of global political problems, especially those of a non-military nature, resides primarily in decentralized, partially-connected networks of executives in both national governments and private multinational business.”170

As the last decade of the twentieth century ended, a major debate about civil society groups focused on the relationship between civil society and political society, and whether or not

163 Howard W. French “Donors of Foreign Aid Have Second Thoughts,” New York Times, (April 7, 1996), p. 5.164

? Barbara Crossette, “Givers of Foreign Aid Shifting Their Methods,” New York Times, (February 23, 1992), p. 2.165

? Michal Ignatieff, “Who Are Americans to Think that Freedom Is Theirs to Spread?” New York Times Magazine (June 26, 2005), p. 47.166

? Barton, “Failed and Failing States,” 167

? Ignatieff, “Who Are Americans,” p. 42 and 44. 168

? Steven R. Weisman, “Increase in Aid Discussed,” Pittsburgh Post Gazette (December 17, 2004), p. A8.

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the former is a pre-requisite to the latter. Do civil society groups foster democracy or do they advocate a very narrow set of special interests of persons that are economic in nature? Much foreign aid reached NGOs whose advocacy work was social and economic and did not focus on political or human rights. In some situations, these special interest groups could gain the potential for exercising an inordinate influence over society. From a governance perspective:

To supporters, the groups – better known in the diplomatic world as NGO’s, or nongovernmental organizations - are essential to Africa’s burgeoning democracy, giving communities the money and power to take part in their own development and circumvent ineffective or corrupt governments. To critics, they are new colonialists who instill dependency among Africans, and their contributions to Africa’s development are hard to measure.171

As the millennium approached, the international governance system was characterized by “heightened interdependence, overlapping national interests, and borders permeable to everything from terrorists and technology to disease and democratic ideals.”172 Technical assistance had been internationalized. From a governance perspective, there were a “growing number of human rights and aid workers from third world countries who [were] playing an increasing international role along with workers from Western nations. Major human rights operations in Cambodia, Guatemala and Haiti in the 1990’s have included workers from the third world…”173

Trade and Investment Debates

Despite the lack of support in the private sector or the business community for foreign aid and the annual legislative battle over foreign aid, the foreign aid program has survived because there is a modicum of humanitarian concern within the broad electorate which is reflected in both the executive branch and in a bipartisan coalition of supporters in Congress. However, political leadership has also been quick to see the commercial advantages of international assistance.174 Many donor nations, including the U.S., had long had a policy of tying aid to purchases from the donor country.175 For many critics, foreign aid had become “an expenditure designed to further objectives of foreign and commercial policy.”176

Trade liberalization, policy reform, and democratic governance as a package, has constituted a third stage of foreign aid (1983-2006) following an emphasis on growth and industrialization in the 1950s and 1960s and an emphasis on economic redistribution and basic needs in the 1970s.177 As early as 1970, according to a Presidential report on foreign aid, “development of the private sector in developing countries can be encouraged by appropriate domestic policies, by foreign investment, and by an adequate infrastructure and public

171

? Onishi, Norimitsu, “Nongovernmental Organizations Show Their Growing Power,” New York Times, (March 22, 2002), p. 5.172 Albright, Madame Secretary, p. 429.173

? Seth Mydans, “U.N. Aide Left Legacy of Asia Role on Rights,” New York Times, (February 12, 1997), p.A5.

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services.”178 This came to mean that there was “a need in the developed world to create new markets for goods and services in developing countries and to increase trade with them in order to create more job and growth opportunities within the developed countries.”179

Foreign aid recipient country officials have taken increasing note of the special interests that were favoured in U.S. foreign aid, particularly those revolving around agricultural trade. Under aid regulations, U.S. shipping was favoured, there were buy American clauses in almost all aid projects, food gifts reduced U.S. surplus agriculture, and there were special provisions for the protection of U.S. small business and agriculture. It should be kept in mind that since the beginning of the modern foreign aid period, agricultural interests were very successful in carving out special privileges, particularly in provisions that were intended to encourage the export of U.S. surplus agricultural commodities.180 In the end, if foreign aid means international cooperation, “[t]his cooperation has two essential aspects: the creation of a vast economic area, in which trade is as free as possible, and the granting of development aid to the associated countries, mainly by means of [funds] specially set up for the purpose….”181

“Trade not Aid” became the slogan of the 1990s among many critics of foreign aid. The African Growth and Opportunity Act passed and signed in 2000 provided a system of preferential access to U.S. markets for selected African goods. It was, according to Paul Theroux, a charitable idea which assumed that African countries could not compete on their own and without preferential treatment.182 However, the African Growth and Opportunity Act did not remove the restrictions on LDC trade with the United States. According to Michael Prowse, “By increasing the public sector’s political power, they may sometimes inhibit the emergence of beneficial market and trade relationships.”183 These market and trade reciprocities have not yet evolved between LDCs and the U.S. (and other more developed countries.

Trade policies in many ways are central to the development debate. As Elizabeth Becker noted in August of 2002, “In May, President Bush signed the $190 billion 10-year farm bill that will continue to give the nation’s biggest farmers $19 billion in subsidies, perpetuating a Depression-era program of direct financial aid to encourage production of grain and cotton.”184

The trade off [was] clear and the U.S. had conditions: “If the United States is to open its wallet, poor nations must open their markets.”185 However, opening U.S. markets to LDC products is another matter. According to Becker, “Further complicating aid programs is a debate at the World Trade Organization over concerns that the United States has used food aid to dump

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surplus commodities in foreign countries where the supply has undercut local [LDC] farmers’ earnings.”186

Given the realities of U.S. food policy, with regard to the nature of the debate between business development and trade vs. education and health, “it is also one that illustrates an expanding ideological consensus on the need to address poverty, disease, famine and conflict in Africa - as well as the remaining gulf between left and right about how best to do it.”187

Moreover, a chief complaint from LDCs has been that the rich nations are not consistent on the issue of trade liberalization.188 In the end, “less hypocrisy on the trade front wouldn’t hurt.”189

Ultimately, from a trade perspective, the “worst trade barrier [was] the $300 billion in agricultural subsidies given to farmers in the world’s wealthy nations….”190 Increasingly, as David Sanger has pointed out, “the problem is in establishing freer trade, something the West has promised but that has not materialized.”191

BoxThe Lynchpin

A lynchpin project for USAID - Equity and Growth through Economic Research (EAGER) - came into place in 2001 early in the administration of George W. Bush. As a project, “EAGER seeks to accelerate economic growth with equity in Sub-Saharan Africa by effectively applying research results to public policy. Unlike past efforts, EAGER has tried to produce research results that can actually be used by decision-makers by using research methods and researching topics that interest both local researchers and policymakers.” According to USAID, “In order to ensure that African perspectives and expertise are incorporated in design and implementation of USAID, EAGER legal, economic, and social policy studies, [seek] to promote African ownership of policy findings, and to assist in the development of local analytical capacity; all EAGER research involves collaboration between consortium-member institutions and African researchers, through local institutions or as individuals.”192

Despite the critics, the claim that donors can manipulate foreign aid for direct political or economic gains in terms of trade and commerce remains perhaps somewhat exaggerated. There is little evidence to suggest that foreign aid does much overtly (in any quantifiable way) to support a donor country’s commercial or trade policy in any single situation.193 As Mosley notes, quoting the Organization for Cooperation and Economic Development, “It is improbable that aid tying provides significant macro-economic benefits to any donor’s domestic or balance of trade aggregates.”194 Nor is there much evidence that foreign aid can provide political leverage within an LDC or that it can influence economic development or be used as an instrument of export promotion. However, it is a matter of perception and the blurring of lines between commercial policy and the impact of protective tariffs which has influenced the debate around trade and aid.

Because of northern tier trade barriers, according to Tim Weiner, “hundreds of millions of people in poor countries who grow food for a living are frozen out [or perceive they are frozen out] of rich countries’ markets by ‘the greatest trade barriers’ in the world, the ones imposed by

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rich nations….”195 Weiner goes on, “The United States today spends twice as much directly subsidizing American agribusiness than it does aiding needy nations.”196 The debate is both rhetorical and real but most importantly it has become part of a belief system internationally. According to Elizabeth Becker, “They [LDCs] complained that one minute the United States says it wants developing countries to rely on free trade rather than handouts, the next it enacts a law, which they say is the biggest impediment in the free trade of food, the one commodity all these countries produce.”197

It was and remains tariffs and subsidies that are the problem and increasingly “[i]nternational development experts [on this issue have] expressed disappointment, saying G8 members failed to acknowledge that their domestic agricultural subsidies, particularly the massive farm bill that Bush recently [2002] signed, take far more money away from Africans by impeding exports than the rich nations dole out in foreign aid.”198 The United States, Japan and the European Union are all guilty parties. In the end, however, “[d]istinguishing aid from export subsidies isn’t easy.”199 In Europe, “[e]xports from the associated states to the Community have risen less on average than their exports to other countries, and there has been a similar trend for their imports.”200 According to David Sanger, in March of 2002, then “Secretary General Kofi Annan of the United Nations warned Mr. Bush and other leaders of the industrial world, ‘We can no longer continue to give with one hand and take with the other.’”201

The specific problem has been that “U.S. unions…oppose any duty-free access for Africa under any conditions - but they don’t want to say that.”202 As Tom Webb has pointed out, “In caves and giant warehouses, the U.S. government is storing mountains of powdered milk that taxpayers were required to buy, even though nobody is sure what to do with it all.”203

Speaking of trade and investment issues, Thomas Friedman has long argued that there is no justification for denying African states duty free access for their textiles, clothing and other basic commodities. As Sebasian Mallaby has put it:

If Bush aspires to lead the world by the power of America’s example, he should aim for nothing less than the top spot in the index. Or to put the same point more bluntly: If he is prepared to risk troops in the name of human advance, surely he should be ready to offend the protectionists who oppose trade and the nativists who hate immigrants and all the other interest groups who oppose making the world stable.204

LDC trade and industrial leaders make it clear that duty free access to U.S. and other Western markets was much more important than foreign aid. According to one international union leader (Ebrahim Patel) as part of a broad strategy for promoting development, “[we] support the concept of duty-free access for Africa in textiles and apparel.”205 “As with all the poorest economies of the world, one way to raise our development quickly is for you to give us preferential access to your markets.”206 As the U.S. and other developed countries have approached trade questions,

wealthy nations [such] as the United States continue to press the developing world to open its markets to free trade and turn over public utilities, such as water and

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electricity, to private companies to curb environmental abuses and improve basic service delivery…. [P]oor countries say their efforts have been undermined by the industrialized world’s hypocrisy and corporate approach.207

A problem with foreign trade from a developing country perspective is that the rivalry between France and the United States before and increasingly after September 11, 2001, in large part has been related to commercial and foreign aid rivalries. France has long influenced multilateral aid and is often criticized as sole sourcing to favored French contractors. As a result multilateral loans have high interest rates and overall costs are twice what they would have been awarded through competitive international bids.208 To reiterate, as Jean Chretien of Canada, the then Prime Minister (1993-2003), has argued, developed states “must drop their trade barriers to African textiles, footwear and farm products.”209

Millennium Challenge Account

George W. Bush was the first President since John F. Kennedy who developed a new plan for foreign aid, the Millennium Challenge Account. Under the Millennium Challenge Account, the U.S.

planned to increase foreign aid spending by 50 percent over three years beginning in the 2004 fiscal year. The proposal would raise development assistance to $15 billion, from $10 billion by 2006…and would not decrease it thereafter.210

The new plan was to include an initial $5 billion development fund that would disperse grants for antipoverty projects

The Millennium Challenge Account plan, which Mr. Bush announced at the 2002 United Nations International Conference On Financing for Development in Monterrey, Mexico, was largely based on the work of two economists, Craig Burnside and David Dollar. After completing an elaborate statistical analysis, the authors concluded that foreign aid did in fact promote economic growth, as long as the recipient government had solid fiscal, monetary, and trade policies in place. Their article, entitled “Aid, Policies and Growth,” was published in the American Economic Review in 2000.211

Bush’s proposals were historic in concept but that would not be so in practice if they were not implemented. According to Jamie Drummond, Executive Director of DATA (Debt, AIDS, Trade Africa), an organization founded to promote debt relief, aid and trade fairness to Africa.212 “The fact is,” Paul Blustein noted, “the president made a $10 billion, three-year promise called the Millennium Challenge Account” - a program to target new aid to poor countries with sound policies - ‘and a $15 billion, five-year HIV/AIDS initiative, and he’s received a lot of justified applause.’”213

What was new about the Millennium Challenge Account (MCA) was the division of countries according to the quality of their economic policies and democratic governance patterns. The assumption of those who designed the MCA was “in good-policy countries, aid, [if it is significant,] reduces poverty; in bad-policy countries, it doesn’t.”214 Foreign aid to poorly

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managed countries would not promote economic or social development but would rather focus on policy reforms and governance. Countries with bad policies not simply be left to their fate. By no means, the authors argued: donors can still help by spreading knowledge of “a technological or institutional sort” in support of democratic governance and policy reform.215

Within the Bush administration, the theory behind the fund is that aid works well only in nations that embrace principles such as the rule of law, open markets, and allocation of budget resources to health and education.216

In announcing the MCA, President Bush, pledged $5 billion for the Account annually. This meant that if “fully financed, the Millennium Challenge Account would reflect close to a doubling of the American aid that goes primarily to promote development in poor countries….”217 The result when established would be a federal corporation, separate from

169

? French, “Donors of Foreign Aid,” p. 5.170

? Raymond F. Hopkins, “The International Role of ‘Domestic’ Bureaucracy,” International Organization, vol.30 no.3, (Summer 1976), p. 413.174

? Edward K. Hamilton, “Toward Public Confidence in Foreign Aid,” in World Affairs, vol. 132, no. 4 (March, 1970), p. 287-304. Quote, p. 291.

175 Ibid., p. 210.176 Paul Mosley, Overseas Aid: Its Defence and Reform (Brighton, UK: Wheatsheaf Books, 1987), p. 85.

177 Stephen Browne, Beyond Aid: From Patronage to Partnership (Aldershot, UK: Ashgate Publishing, 1999), pp. 29-30.178

? Rudolph A. Peterson, et.al, “U.S. Foreign Assistance in the 1970s: A New Approach,” Report to the President from the Task Force on International Development, (Washington D.C.: March 4, 1970), p.19-20.179

? Clay Wescott and Abdul Magid Osman, “International Resources and Policies,” (United Nations Development Programme, 1992), p.2.

180 John D. Montgomery, The Politics of Foreign Aid: American Experience in Southeast Asia (New York: Praeger, 1962), p. 130-131.181

? “How the European Community is Helping the Developing Countries,” European Development Aid (Brussels: Commission of the European Communities, n.d.), p. 8.

182 Paul Theroux, Dark Star Safari: Overland from Cairo to Cape Town (New York: Houghton Mifflin, 2003), pp. 188.183

? Michael Prowse, “The Twilight of Foreign Aid,” Financial Times, (September 28, 1992), p.30.

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USAID, “to administer its proposed fund for countries that adopt sound economic policies and attack corruption….”218 In establishing the MCA, the

Bush administration deliberately sidestepped the normal route of giving the money to the United States Agency for International Development and, instead, created a new program called the Millennium Challenge Account, which require[d] poor nations to meet criteria of good government to receive aid.219

In 2002, according to the Washington Post, “The Bush administration’s Africa initiative…[was to] provide the first measure of its new Millennium Challenge Account, an

184

? Elizabeth Becker, “A New Villain in Free Trade: The Farmer on the Dole,” New York Times (August 25, 2002), p. 10.185

? Weiner, “More Aid, More Need,” p. 5.186

? Becker, “U.S. Cutting Food Aid That Is Aimed at Self-Sufficiency,” p. A3.187

? Richard W. Stevenson, “2 Stars of Rock and Heavy Policy Seek Answers to Africa’s Poverty,” New York Times, (May 22, 2002), p. 1 and 4.188

? Dirk Olin, “Washington Consensus,” New York Times Magazine (May 25, 2003), p. 21.189

? Ibid., p.22.190

? Elizabeth Becker, “World Bank and I.M.F. Say They’ll Send Experts to Iraq to Investigate Postwar Needs,” New York Times (April 14, 2003), p. 3.191

? David E. Sanger, “G-8 Adopts African Aid Package, With Strict Conditions,” New York Times, (June 28, 2002), p. A10.

192

? All quotes from “Equity and Growth through Economic Research (EAGER),” Collaborating Institutions Page, www.eagerproject.com/partners.html. Accessed May 23, 2001.198

? Karen DeYoung, and DeNeen L. Brown, “G-8 Approves an Aid Package for Africa,” Washington Post (June 28, 2002), p. A19.199

? “Linking Exports to Aid,” New York Times, (October 19, 1993), p. A14.200

? “How the European Community is Helping the Developing Countries,”p.24.201

? Sanger, “G-8 Adopts African Aid Package, p.A10.193 Mosley, Overseas Aid, p. 220.

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expansion in the nation’s foreign aid program that the president [had] announced….”220

Assuming that it was based solely on economic criteria, performance and governance, the fund would be “the closest to a development purist’s model for aid that the United States has ever attempted.”221 According to the MCA program statement:

The MCA is a partnership built on several key principles - including a focus on sustainable growth, country ownership, inclusiveness, accountability, and emphasis on results - that will be reflected throughout the development and implementation of MCA programs.222

194 Ibid., p. 228.

195 Weiner, “More Aid, More Need,” p. 5.196 Ibid.197

? Becker, “A New Villain in Free Trade,” p.10.202

? Thomas Friedman, “Africa: Aid or Harm?” New York Times, (March 28, 2000), p. A27.203

? Tom Webb, “Growing Powdered-Milk Surplus Is Blamed on Price Support Policy,” Washington Post, (August 20, 2003), p. A19.204

? Sebastian Mallaby, “Visions of U.S. Aid,” Washington Post, “(April 19, 2004), p. A19.205

? Quoted by Thomas Friedman, “Africa: Aid or Harm?” p.A27.206

? Quoted by Thomas Friedman, “Africa: Aid or Harm?” p.A27.207

? Jon Jeter, “Rich, Poor Further Apart as Earth Summit Nears,” Washington Post, (August 25, 2002), p. A22 and p. A23.

208 Blaine Harden, Africa: Dispatches from a Fragile Continent (Boston: Houghton Mifflin Company, 1990), p. 209.209

? Clifford Krauss, “Chretien is Hoping to Aid Africa by Mobilizing Rich Nations,” New York Times, (June 23, 2002), p. 5.210

? Joseph Kahn, “White House Adds Billions to an Increase in Foreign Aid,” New York Times, (March 30, 2002), p. 4.

211 See a discussion of this by Daphne Eviatar, “Do Aid Studies Govern Policies or Reflect Them?” New York Times (July 26, 2003), p. A17. See Craig Burnside and David Dollar, “Aid, Policies, and Growth” American Economic Review Vol. 90, No. 4, (September 2000), pp. 847-869.212

? Blustein, “U.S. Aid Plan Comes Up Short.”

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Thus, according to the Millennium Challenge Corporation (MCC) which had been set up to manage the fund, “When President Bush promised to channel billions of dollars in aid - but only to countries that were committed to ‘ruling justly, investing in their people and encouraging economic freedom’ – it was an extraordinary example of how an idea hatched by scholars could wend its way into mainstream politics.”223

The original idea was that the MCC would be small and be driven by eligible LDC priorities. The explicit goal was that the MCA was “designed to be independent of State [the State Department] and USAID, with as little bureaucracy as possible.”224 The independence was deliberate. Paul Blustein has put it this way:

Secretary of State Colin L. Powell pushed hard for keeping the fund under his purview, according to sources familiar with the debate, but a compromise was reached in which he will chair a board consisting of other Cabinet-level officials who will make the final recommendations to the president about the countries to receive funding.225

213

? Blustein, “U.S. Aid Plan Comes Up Short.”214

? “Making aid work,” Economist (November 14, 1998), p. 88.215

? Ibid.216

? Paul Blustein, “Bush to Call for New Foreign Aid Agency,” Washington Post (November 26, 200), p. A4.217

? Christopher Marquis, “New System Begins Rerouting U.S. Aid For Poor Countries,” New York Times, (February 22, 2004), p. 1.218

? Blustein, “Bush to Call for New Foreign Aid Agency.”219

? Becker, “With Record Rise in Foreign Aid Comes Change in How it is Monitored,” p.6.220

? “Mr. O’Neill’s Opportunity,” Washington Post, editorial, (June 14, 2002), p. A24.

221 Brainard, “Compassionate Conservatism,” p. 155.222

? “Guidance for Developing Proposals for MCA Assistance in FY 2004.”223

? “Guidance for Developing Proposals for MCA Assistance in FY 2004,” (Arlington, VA Millennium Challenge Corporation, April 29, 2004).224

? Glenn Kessler, “Reinventing U.S. Foreign Aid at Millennium Challenge Corporation” Washington Post (August 10, 2004), p.A17.225

? Blustein, “Bush to Call for New Foreign Aid Agency,” p. A4.

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However, because of the limited capacity of LDCs to plan using U.S. government formulas, there was a danger that MCA would “revert back to the current USAID model, whereby the U.S. government relies on an army of U.S. consultants and nongovernmental organizations to design the project and submit proposals.” 226 The MCC explained, “In some instances…the next step may be for MCC to help the country identify appropriate technical assistance to further develop the proposal.”227 Shortly thereafter, USAID began to identify potential consultants who could assist in the project development process. Some contractors were engaged to assist in the preparation of MCC and LDC documents. The rules were not always clear, and were subject to change. The MCC warned that the

submission of a proposal by an eligible country does not guarantee that MCC will finalize a Compact with such country or fund the country’s proposed program. MCC will evaluate proposals and make investment decisions based on a variety of considerations, including how well the proposal has demonstrated the relationship between the proposed program and economic growth and poverty reduction.228

Following its review of an eligible country’s proposal, the MCC would then contact the country’s designated representative to discuss next steps in what was likely to be a long, difficult process.

The standards were strict but could change over time as political needs intervened. According to James Dao, “Mr. Bush…reiterate[d] that the increase in aid…will be contingent on the recipients’ undertaking a range of economic, political and social reforms.”229 The idea was that “[u]nder the plan [for the MCA], the administration would give more aid to a smaller number of countries that can pass a rigorous set of ‘performance’ criteria.”230 By the end of 2002, however, the criteria appeared to change, giving more opportunity to make awards to middle income, politically strategic countries such as South Africa, Russia, Jordan, Peru and Columbia.231 This would allow the administration to use the account for political or security purposes to strategically important countries.232

229

? Elezabeth Bumiller, “On the Eve of Latin Trip, Bush Ties Aid to Reforms,” New York Times (March 21, 2002), p. 7.230

? Dao, “With Rise in Foreign Aid.”

231 Brainard, “Compassionate Conservatism,” pp. 151.

232 Ibid., p. 158.

226 Brainard, “Compassionate Conservatism,” pp. 249-169.227

? “Guidance for Developing Proposals for MCA Assistance in FY 2004.”

228 “Guidance for Developing Proposals for MCA Assistance in FY 2004.”

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Congress initially was lukewarm to the new proposal. According to Elisabeth Becker, “Republican lawmakers had to be convinced that new aid money would not be misspent by corrupt foreign governments. Corruption was a particular concern in the conflict prone Balkans.”233 Adam Zagorin put it this way, “According to Benjamin Gilman, chairman of the House International Relations Committee, widespread graft threatens to destabilize Bosnia and indefinitely postpone the departure of 6,000 U.S. peacekeepers from the troubled Balkan nation.”234 As Eric Schmitt pointed out, “Sen. Jesse Helms, R-N.C., the most powerful critic of foreign aid in Congress, said…that he would champion an increase in international assistance - but only if all future U.S. aid was funneled to the needy through private charities and religious groups instead of a government agency.”235

In the planning for the MCA, “Congress directed AID…to focus its efforts on a few countries with potential for growth and commitment to economic reform; to concentrate resources on certain vital sectors, such as agricultural production, health, voluntary family planning, and education; and to consider the impact of development on the environment.”236

However, over the next few years the design process was slow, and to its critics, flawed.237 It was not until 2006 that the Millennium Challenge Corporation (MCC) became fully operational with eleven signed compact agreements with some $1.6 billion in programs. However, by January of 2006, only $19.5 million had been dispensed.238

The size of the Millennium Challenge Account changed overt time as well. According to James Dao, the “president’s budget will call for allocating $1.3 billion to Millennium Challenge in 2004, $2.6 billion in 2005, and $5 billion annually after that.”239 In 2004, “the board of the new Millennium Challenge Account met for the first time to lay the groundwork for grants that President Bush…promised will total $5 billion annually by 2008. In the first year, perhaps just 15 nations will win awards.”240

The delay in allocations had begun to cause some concern. According to Paul Blustein, writing in mid-2003, “Bush proposed the Millennium Challenge Account 16 months ago…. There’s been some progress on the legislative front, getting bills marked up in the House and Senate, but in terms of getting the program running, there’s been almost nothing….”241 By FY07, the MCC was said to have a total obligated budget of just over $6 billion and had

236 Raymond W. Copson, Brenda M. Branaman and Ted S. Dagne, “Africa: U.S. Foreign Assistance Issues,” CRS Issue Brief, (June 2, 1992), p. 4.

237 Lael Brainard, “Compassionate Conservatism Confronts Global Poverty,” Washington Quarterly (Spring, 2003), pp. 149-169.

238 Michael A. Fletcher and Paul Blustein, “With New Leader Foreign Aid Program Is Taking Off,” Washington Post (January 31, 2006), p. A15.239

? Dao, “With Rise in Foreign Aid,” 240

? Marquis, “New System Begins Rerouting U.S. Aid For Poor Countries.”

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requested, still the money was moving slowly the MCC had requested the expenditure of only $3 billion for that fiscal year

Though the well respected businessman, Paul Appelgarth, was the “chief executive of a new enterprise, Millennium Challenge Corporation, his tiny hovel is at the end of two rows of cubicles with no reception area in an Arlington office building. The staff, seven people at the beginning of the year, has expanded to 42 in six months and is due to grow to 200 in a year.” 242

Staffing for the fund was eventually capped at 100 people on limited term appointments.243

Very quickly however it appeared that the MCA initiative would fall short of expectations.244 Evidence suggested that there would be both duplication with USAID and mission drift. As Lael Brainard pointed out, “The preparatory work and…contracting for, monitoring, and evaluating MCC programs would suggest a troubling misalignment of USAID staff’s incentives and responsibilities as well as heavy MCC dependence upon USAID” in implementing the program in the field.245

By 2005, the MCA faced severe cuts in its proposed budget, halving it. These cuts were due to the burgeoning deficit and the out of control expenses for Iraq and Afghanistan. The Millennium Challenge Corporation Director had resigned after one year. In what can only be called an understatement, the Bush administration admitted that the grant making process was extremely slow. Almost none of the money had been spent, other than for administrative costs. However, one program official cynically claimed that it didn’t matter since “the program [was] as much about good government as about dispensing financial assistance.”246 Only by 2006, were MCA programs coming into place.

Transformation Diplomacy,USAID and the Department of State

In late 2005 and early 2006, there was a great deal of discussion within the United States Agency for International Development about the future of foreign aid. Rumors abounded that USAID would be restructured, linked to U.S. military activities and folded into the Department of State, thus ending its forty five years as an independent agency. The new department located in State would be headed by a Deputy Secretary of State for Foreign Assistance who would also, at least in the short run, serve as USAID Administrator. According to rumors, it would be shorn of much of its economic development functions and would be directed away from long term planning to short term goals such as targeting conflict resolution, coordination with U.S. security objectives, and transitional assistance. The rumors portended at least the possible end of more than a half a century of U.S. economic and social development assistance activity.247

241

? Blustein, “U.S. Aid Plan Comes Up Short.” 247

? This information was taken from "Notes from an Interaction Meeting on Restructuring" with USAID Director Andrew Natsios, December 14, 2005. The material was provided to the author by a colleague who has asked for anonymity.

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Some of the rumors were true. From a policy perspective, the institutional changes reflected the new international environment within the U.S. foreign policy community. Ultimately this would bring foreign policy and foreign aid much closer together and link both to defense and security concerns. While much of traditional foreign aid would continue (at least in the short term) there would be a renewed focus on regime change, governance and security issues and over time a decline in interest in economic and social development.

Within the Bush administration the muffled critics of U.S. Iraq policy such as then Secretary of State Colin Powell were concerned that the consequences of Iraq might bode ill for U.S. foreign policy. The now famous analogy was that of the potter’s barn where the philosophy was if you broke it it’s yours. The U.S. was going “to be owning this place,” Powell is said to have commented and the U.S., he went on, would have to assume the aspirations, hopes and all the troubles and fears of the people of Iraq.248

Eventually, a planning cell on the transition in Iraq, the Office of Reconstruction and Humanitarian Assistance was set up in the Defense Department.249 In the Department of State, an Office of Coordinator for Reconstruction and Stabilization was created. Nation-building came back on the agenda, but under Rumsfeld it was to be managed by the Department of Defense. The problem according to the Director of National Security in the Defense department was that senior officials in Defense with their independent fiefdoms liked big concepts but, “[t]hey don’t do implementation.”250 As late as mid-2005, critics argued Iraq was still not ready to receive foreign aid.251

By 2006, central to the debate about international assistance was whether and/or when should USAID as a coordinating mechanism for foreign aid ultimately disappear? For several years, there was an autonomous HIV/AIDS office which fell outside of USAID and finally there was the Millennium Challenge Corporation which organizationally was completely independent from USAID and was designed to transfer major financial resources to a select number of democratic pro-growth and free trade oriented LDCs. In all there are 18-20 plus foreign aid accounts, some in the Department of State, and some in USAID, plus assistance programs (including non-military programs) in the Department of Defense.

Andrew Natsios, the then Administrator of USAID, announced his resignation effective January 13, 2006, allegedly in protest against the decision to incorporate USAID into the State Department. Secretary of State Condoleezza Rice, in a speech to Department of State and USAID officials, announced on January 19, 2006 that a gradual process was beginning that would integrate USAID into the Department of State and more closely link up foreign policy, and foreign aid with Defense Department priorities. There were a number of foreign aid components already operating outside of the Agency for International Development at the end of 2006.

Natsios was replaced by Randall Tobias, who had headed the USAIDs Office, one of those units that had been excluded from USAID control.252 He wore two hats, also being appointed, within the U.S. State Department as Deputy Secretary of State and Director of Foreign Assistance as well as Administrator of USAID. It was not entirely clear what role he would play in coordinating the foreign aid units outside of USAID’s span of control.

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Secretary of State Rice spoke of “Transformational Development” that included reforms in governance, human capacity and economic structures. The purpose of this initiative was to build capacity for reconstruction and stabilization. Under Rice’s transformational development policy, the United States goal was to promote “fundamental changes in governance and institutional capacity, human capacity, and economic structure that enable a country to sustained further economic and social progress.”253

The 2002 U.S. National Security Strategy paper had defined three security pillars: defense, diplomacy, and foreign aid.254 The Rice doctrine sought to “build and sustain democratic, well governed states that will respond to the needs of their people and conduct themselves responsibly in the international system.”255 The strategic framework created five categories of countries:

1. Rebuilding countries: These included collapsed, fragile (though the term was not used), and post-conflict states;

2. Transforming countries: These are low and middle income states with the potential for meeting Millennium Challenge Corporation performance criteria;

3. Sustaining Partnerships: These are countries with higher incomes, who have “graduated” from foreign assistance, with economic, trade, and security relationships with the U.S. beyond foreign aid;

4. Reforming Countries (relabeled “Restrictive Countries”): These are made up of authoritarian countries ineligible for government to government relationships where the U.S. can only work through NGOs;

5. Developing countries: These are lower and middle income countries that are not able to meet MCC performance criteria.256

Critics of transformation diplomacy and the transition paradigm abound. Thomas Carothers criticizes the assumption that LDC states are moving away from authoritarianism toward democracy, an assumption that he says is often made by donors. Instead, many LDCs remain in a “gray zone” for long periods of time, neither heavily authoritarian nor moving towards democracy. The move towards democracy, he argues, is characterized by an “extremely gradual, incremental process of liberalization.”257

Ultimately, at issue in the organizational and policy reforms introduced in 2006 by Secretary of State Condoleezza Rice is whether the changes at USAID are the death toll for the U.S.’s traditional processes of foreign aid, what one critic calls “a kind of “water torture” which was to be replaced by Secretary of State Rice’s self styled transformational Diplomacy.258 The end of the traditional foreign aid mission implicitly assumes that anti-poverty funds have been

256 See Nowels and Veillette, “Restructuring U.S. Foreign Aid, pp. 7-8 for a discussion of this.

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ineffective and should be terminated to be replaced by funding that promotes U.S. strategic and political interests.

The Department of Defense goal was to create civil and military transition teams in the field, based on models developed in Afghanistan that would play an increased role in post-conflict situations. The model for control in Iraq was the Afghanistan model of regional security teams of military and civilians, with each team consisting of State Department officials, a USAID representative and one or more military officers.259 These “Provincial Reconstruction Teams” were created by U.S. Ambassador Zalman Khalizad, an Afghan-American first in Afghanistan and later, in Iraq when he moved there in 2005.260

In Afghanistan and Iraq, regional or provincial reconstruction teams, were already functioning largely outside of the USAID system (a model that seems likely to be replicated). By March of 2006, it was clear that there would be increasing linkages between the State Department and USAID on the one hand and the Department of Defense on the other. Nation-building reforms came out of the “debacle of post-war planning for Iraq.”261 “Provincial Reconstruction Teams [involved] political and economic experts, aid workers and engineers who would go into the 18 provinces [in Iraq] set up posts, and help in the rebuilding.”262

In the field, USAID and the State Department have had difficulties in staffing the civilian slots in the Provincial Reconstruction Teams.263 There were also financial constraints, particularly in Iraq, which delayed their implementation and there were quarrels between the Department of State and the Department of Defense over their control.

The foreign aid budget had increased from $10 Billion in 2000 to $27.5 billion in 2006 in part because of the introduction of the transition model. However, the reforms to this point were little more than a set of “modest stove-piped efforts.”264 The merger of USAID and State was gradual; Carol Lancaster has said that it reflects a kind of “merger by stealth.”265 The Assistant Secretary of State for Foreign Assistance who now doubles as Administrator of USAID had only limited authority over foreign aid portfolios outside of USAID. It had only a limited assessment and informational coordination for the accounts in the Department of Defense, the Millennium Challenge Corporation, and the AIDS Office. The Director had no oversight responsibilities over the Departments of Agriculture, Health and Human Services, Labor and the Treasury.266

There remained much duplication of effort in foreign aid. An additional USAID problem is that programs and projects have too many restrictions. Officials cannot deploy the money flexibly. To what extent will foreign aid be increasingly militarized and linked to U.S. political goals? Where will the leadership role in nation-building be located, within civilian or in military institutions? The Department of Defense’s foreign aid role has expanded in areas of post-conflict reconstruction, counter-terrorism, anti-narcotics efforts, and humanitarian assistance. The extent to which the reform process would continue after the December, 2006 resignation of Defense Secretary Donald Rumsfeld, and the collapse of support for the Iraq war was not immediately clear.267

Conclusion

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Throughout the 1990s, under structural adjustment, the U.S. and other donors increased support to promote, in their bilateral programs, politically sensitive, restrictive and intrusive policies to encourage conservation measures such as energy efficiency, renewable energy and forest management.268 Such proposals often advocated policies would not be acceptable to the U.S. and other countries at home. As Severine Rugumamu has noted, “the institutional and organizational capacities of the recipient states [came to be] considered as critical intervening variables in explaining the aid relationship.”269

Despite the acceptance of structural adjustment by many LDCs, by the mid-1990s foreign assistance levels had plunged. In the wake of September 11, U.S. policy makers were concerned that impoverished people, fed by fundamentalist religions and living in failed states, would offer sanctuary and become a breeding ground for terrorists. As a result foreign aid surged with allocations more than doubling in ten years.

The fallout from September 11 demonstrated the limits of multilateralism in foreign aid and foreign policy terms in the United States. There was still an absence of a clear strategy to deal with the some 50 or so weak and fragile states.270 With a new Administrator of USAID in early 2006, the concept of fragile states was dropped as concern increased with short term conflict resolution. The fragile and collapsed states metaphors may have reminded the political leadership too much of the problems in Iraq and Afghanistan.

In late 2006, the Iraq story remained unfinished. Mid-term elections had returned the Democrats to power in the House of Representatives and the Senate. The popularity of the President was at an all time low, 33 percent or less. There were serious debates in the press about whether or not George W. Bush was the worst President the U.S. had ever had. The Iraq Study Group had released its devastating critical report.

And yet, despite all of the criticism, focus remained on the military failure. Much more needed to be understood of the consequences in terms of foreign aid in the post-September 11 era. Unilateralism had at least for the moment been debunked. But could the U.S. return to the multilateralism that had allowed it to muddle through the Cold War.

Under the Rice doctrine, there appeared to be very little commitment of involving USAID beneficiaries in the development of policies. There remained few mechanisms to monitor and evaluate foreign aid in terms of impact rather than output. However, there was a general agreement about the basic premise of reform of foreign aid and nation-building; that is that institutions matter.271

The changes occurring in U.S. foreign aid at this time (early 2007) have made this an opportune moment to examine foreign aid issues from a policy perspective. That has been the goal of this chapter. The concern in this book has been that ultimately there have been both policy problems and a lack of political, and even at times ethical clarity, that have plagued technical assistance and foreign aid over the past sixty years and may continue well into the next century. These are rooted both in the evolution of foreign aid policy but also in the ideological and cultural assumptions that were the antecedents of state to state foreign aid as they developed

271 Patrick, “U.S. Foreign Aid reform,” pp. 12-15.

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prior to and in the wake of the Second World War. Much of this baggage continues to be carried into the twenty-first century.

233 Elizabeth Becker, “With Record Rise in Foreign Aid Comes Change in How it is Monitored,” New York times, (December 7, 2003), p. 6.234

? Adam Zagorin, “More Losses in Bosnia; This Time It’s Aid Money,” Time (September 20, 1999), p. 18.235

? Eric Schmitt, “Helms Stipulates Private Channels for Foreign Aid,” Pittsburgh Post-Gazette, (January 12, 2001), p. 1.

242

? Glenn Kessler, Glenn, “Reinventing U.S. Foreign Aid at Millennium Challenge Corp.” Washington Post (August 10, 2004), p. A17.243

? Brainard, “Compassionate Conservatism Confronts Global Poverty,” p 156.244

? Ibid., p. 162.

245 Ibid., p. 164.

246 See “Chief of ‘Millenium’ Aid Fund is Quitting,” in New York Times (June 16, 2005), p. A5 and Celia W. Dugger, “Bush Aid Initiative for Poor Nations Faces Sharp Budget Cuts and Criticism of Slow Pace,” New York Times, (June 17, 2005), p. A8.248 Ibid., p. 270.

249 Woodward, Plan of Attack, p. 42, p. 148, p. 281-283 and pp. 413-415.

250 Quoted by Bob Woodward, Ibid., p. 321.

251 Despite the Claims of the Iraqi government. See James Glanz, “Iraq is Ready for Foreign Aid, Minister Says,” New York Times (June 20, 2005), p. A 10.

252 See Steven R. Weisman, “Rice to Group Foreign Aid in One Office in State Dept.,” New York Times (January 19, 2006), p. A8.

253 White Paper on U.S. Foreign Aid Policy-2004, p.14

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Endnotes

254 The National Security Strategy of the United States of America (Washington D.C.: U.S. Government Printer, September, 2002), p. 5.

255 Robert Nolan, “In Focus- The Rice Doctrine: A Look at ‘Transformational Diplomacy,’” (Unpublished Paper, Foreign Policy Association-Global Views, January 26, 2006).

257 Thomas Carothers, “The End of the Transition Paradigm,” Journal of Democracy, vol. 13, no. 1 (January, 2002), pp. 5-21. Quotes p. 15. See his debate with Gerald Hyman of USAID on this. Gerald Hyman, “Debating the Transition Paradigm: Tilting at Straw Men,” Journal of Democracy, vol. 13, no. 3 (July, 2002, pp. 26-32. Hyman argues that USAID really does not use a transition paradigm with an overemphasis on elections, as Carothers claims, but rather they see the move to democracy in realistic perspective, with increased focus on the development of civil society, institutions, local government, anti-corruption, and conflict resolution. While the USAID bureaucracy may have a more sophisticated view of democratization, the political rhetoric over the six years since September 11, clearly has assumed a transition framework.

258 William Fisher, “The End of U.S. AID,” Jordan Times (February 2, 2006), www.menafen.com.

259 Woodward, State of Denial, p. 334, 389 and 340.

260 Ibid, p. 421.

261 Patrick, “An Integrated U.S. Approach…to State Failure,” p. 2.

262 Woodward, State of Denial, p. 421.

263 Patrick, “An Integrated U.S. Approach to…. State Failure, pp. 1-9 and McMahon, “Transforming U.S. Foreign Aid,” pp. 1-9.

264 Patrick, “An Integrated U.S. Approach to…State Failure” p. 5.

265 See Stewart Patrick, “U.S. Foreign Aid reform: Will It Fix What is Broken?” (Working Paper, Center for Global Development, September, 2006), p. 10.

266 Patrick, “U.S. Foreign Aid reform, p. 11”

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267232 See Patrick, “U.S. Foreign Aid reform,” p. 8. The predominance was especially visible in Iraq and Afghanistan. See also Robert McMahon, “Transforming U.S. Foreign Aid,” Background Paper: Council on Foreign Relations (Washington, D.C. Publication 10176, March 17, 2006), www.cfr.org.

268 Weatherby, et. al., The Other World, p. 44.

269 Severine M. Rugumamu, Lethal Aid: The Illusion of Socialism and Self-Reliance in Tanzania (Trenton, N.J.: Africa World Press, 1997), p.13.

270 “Fragile States Strategy,” (Washington D.C.: U.S. Agency for International Development, January, 2005), pp. 1-18.

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