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USAID FY2011 Budget Seeks to Balance Strategic Priorities and Global Initiatives April 6, 2010

Posted by Guest Blogger in Analysis.
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Each Tuesday BFAD features a guest blogger- these are experts from a variety of backgrounds writing about what they know best.  This week features Larry Nowels, an independent consultant with the Hewlett Foundation, ONE, and the US Global Leadership Coalition and former Specialist in Foreign Affairs at the Congressional Research Service.

By Larry Nowels

It is hard to imagine that Congress will fully fund USAID’s FY 2011 request given domestic spending essentially frozen and considerable attention focused on rising deficits.  Consistent with a large overall boost in International Affairs spending, the FY2011 budget request for programs managed by USAID would grow by nearly 15% over enacted levels for FY2010.  The $18.8 billion proposed for USAID activities, including some co-managed with the State Department, is $2.4 billion higher than current funding.  The FY2011 request may, in fact, wind up smaller than appropriations for this year with over $3 billion in USAID supplementals pending for additional FY2010 resources for Afghanistan, Pakistan, Iraq, and Haiti.

Most likely, difficult decisions and problematic trade-offs will confront lawmakers as the budget moves through the appropriations process later this year.  One of the key issues will be balancing resources between two of the major priorities in USAID’s FY2011 proposal: assistance to the frontline states (Afghanistan, Pakistan, and Iraq) and resources for key Presidential global priorities on health and food security.

Frontline States. USAID seeks $5.2 billion for Afghanistan, Pakistan, and Iraq, nearly $1.6 billion more than in the base FY2010 appropriation, representing roughly two-thirds of USAID’s total proposed increase for FY2011.  The request meets President Obama’s plan to triple non-military aid for Pakistan but goes considerably beyond adding $1 billion for Afghanistan that had been the expectation earlier in 2009.  Moreover, Afghanistan and Pakistan would receive an additional $1.8 billion in FY2010 supplemental economic aid managed by USAID under the pending proposal.

Global Health Initiative. Last year, the Obama Administration issued the outlines of a $63 billion, six-year health plan that aims to broaden the Bush signature President’s Emergency Plan for AIDS Relief (PEPFAR) program to other health investments, including maternal and child health, nutrition, and health system strengthening.  USAID’s health budget for FY2011 is $2.6 billion, nearly $600 million higher than FY2010.  [USAID partners with the State Department and Health and Human Services for a total Global Health Initiative budget of something over $9.5 billion government-wide.]  The largest increases in USAID’s health request are for maternal and child health (+48%) and neglected tropical diseases (more than double FY2010 amounts).

For HIV/AIDS, however, the USAID budget is flat at $350 million and overall, PEPFAR grows by a modest 4%.  AIDS activists have expressed concern about the relatively small growth for FY2011 and question whether the Administration will be able to stay on track for meeting expanded goals of the second phase of PEPFAR.  More fundamentally, many in the global health community wonder whether the President can fulfill his $63 billion global health pledge when budgets for the final three years of the Initiative will need to average about $12 billion per year.

Food Security. In 2009, President Obama committed the United States to a $3.5 billion contribution to a $20 billion, G20 global food security initiative.  The $1.8 billion request for FY2011 would fulfill the U.S. pledge with much of the funding managed by USAID.  The $1.55 billion USAID agriculture and nutrition request is 62% higher than FY2010.  The Administration, however, has been slow in providing Congress with details on the Global Food Security Initiative.  Unless lawmakers are convinced that the plan represents a good investment for building and sustaining agriculture capacity in developing countries, this could be an area of USAID’s budget that is trimmed.

Cuts for a Few USAID Programs. Not all areas of USAID’s budget grow for FY2011 and in some cases, the cuts would fall on high Congressional priorities:

  • Basic education resources would drop to $843 million (-9%).  While much of the reduction comes from Pakistan, where education funding the past two years has built a large pipeline, it is anticipated that basic education in Africa will remain roughly flat for the third straight year.
  • Water and sanitation, a development sector that Congress has significantly ramped up in recent years, would remain the same in FY2011 at $315 million.  Jordan, the West Bank and Gaza, Afghanistan, and Pakistan would account for roughly one-third of the total.
  • Microfinance, another Congressional priority, would fall to $230 million, 9% less than this year.

Rebuilding USAID Staff Continues but at a Slower Pace. Two years ago, the Bush Administration launched an effort to double Foreign Service Officers at USAID in three years to over 2,000.  For FY2011, USAID seeks nearly $1.5 billion in operating expenses, 6% higher than this year.  While this would allow the Agency to add another 200 FSOs, it will delay the goal of doubling new officers until at least FY2012.  USAID, however, plans to invest more in recruiting mid-level professionals, a human resource gap created by an aging work force and the inability to fill positions in years past.

Challenges Facing USAID’s FY2011 Budget Request and the Years Ahead. While the current constrained budget environment will certainly place major obstacles in the way of fully funding the 15% increase sought by USAID this year, the challenges are likely to become even more acute in subsequent years.  The same overall resource pressures are likely to remain beyond this year, but will be coupled in FY2012 with additional demands on the total international affairs budget, within which USAID receives its allocation.  Nearly every multilateral development bank will seek new replenishments next year and funding to meet Administration pledges on global health and climate change will need to expand rapidly.

To address these growing demands, OMB projects that development and humanitarian assistance resources will need to grow by 21% in FY2012 above an already substantial FY2011 request.   USAID’s budget will be a big part of this debate and the success of strengthening the civilian side of the U.S. Afghanistan strategy, fulfilling several Presidential global initiatives, and rebuilding USAID itself will, to a large extent, depend on the outcome of budget decisions this year and beyond.

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