Washington, DC — USAID Administrator Andrew S. Natsios has flatly denied that U.S. assistance money for Africa is being diverted to Iraq. "The reality is that all of the money we're spending in Iraq - US$2.4bn - was appropriated separately from the regular aid budget in the Iraq supplemental that went through," he said this week.
He was reacting to assertions that assistance flows to Africa will necessarily decline as a result of Iraq's huge needs. "The giant sucking sound heard across the developing world as aid assets are diverted to Iraq and Afghanistan will be most pronounced in Africa, " Princeton Lyman and John Prendergast wrote in an International Herald Tribune commentary published last Thursday. Lyman, a former U.S. ambassador to South Africa and Nigeria, is now senior fellow for Africa at the Council on Foreign Relations, and Prendergast, a former White House and State Department official, works for of the International Crisis Group.
Briefing journalists covering African issues this week, Natsios speculated that the reason for "confusion" on the issue was that "before the supplemental [budget appropriation] went through, we did take funds from the regular AID programs with the agreement from Congress that they would all get reimbursed. Once the supplemental went through, OMB [Office of Management and Budget] gave us back all the money that we had fronted from the regular appropriations."
Concern over cuts
Nonetheless, administration budget requests for Africa in the coming year continue to cause concern. Proposed decreases in "several critical accounts" in the FY2004 budget request for Africa "are very disturbing," say Representatives Donald M. Payne (D-New Jersey) and Tom Lantos (D-California); "They negatively impact Africa's long-term economic and political development efforts."
According to a Congressional Research Service analysis, while economic aid to Africa increases in FYO4 by $4.7m (+0.3%), Africa military/security aid decreases $136m (-23%) and Africa total aid decreases $131m (-6.2%), with peacekeeping programs suffering the largest cuts.
Payne, the ranking member of the House Africa Subcommittee, and Lantos, the ranking member of the House International Relations Committee, expressed their concern in a letter this month to the chairmen and ranking members of the Appropriations Committee and the Foreign Operations Subcommittees. These committees are responsible for giving final shape and approval to President Bush's budget proposals.
"While our international budget priorities now focus substantially on the safety and security of Americans at home and abroad, we must not cut back on our commitment to Africa," said Payne and Lantos in their letter.
Administration officials insist that Africa is not being shortchanged. "The amount of money we're spending in Africa has gone up over two years by almost 35%. It had been stagnant for 15 years and we have increased it and we're not going back on that," says Natsios.
"The budget for Africa for development assistance and health from AID was $792m in Fiscal Year 2001," he said. "This year [FY03] for the Africa development and health budget we will be at $1.62bn which we're actually going to spend... a deliberate plan by Secretary Powell and I and the President," he adds.
Since 2001, most of this growth has been in the two "core" foreign assistance accounts: the Child Survival and Health Fund (up from $344.1m in 2001 to a requested $542.1m for FY04) and Development Assistance (up from $424.1m in 2001 to a requested $498.9m for FY04).
Natsios insists that Payne and Lantos need not worry: "Money has been increased dramatically in a way that has not happened in a very long time." New money will be going to the HIV/Aids fight and into health, he says, and "we've dramatically increased the education budget for Africa, agriculture, trade capacity-building and a huge new environmental initiative."
However, according to sceptical legislators, this seems an exaggeration; disaggregated, the budget numbers do not show quite so much promise. "Despite increases in the President's FY04 request, there are some key cuts, including in the areas of agriculture, democracy, conflict, and humanitarian assistance, and business, trade, and investment," said Payne speaking to an audience at the Andrew Young Lecture Series of the Africa Society of the National Summit on Africa last month.
Money for peacekeeping operations is almost halved from an estimated US$46m this year to a requested $24m for FY04. This is "misguided and inconsistent," wrote Lantos and Payne. They propose $40m for peacekeeping.
Contributions to international peacekeeping also drop - from an estimated $469.4m for this year to a request of $367m for FY04. The two congressmen propose US$400m. "Funding will be needed over the next several years to address longstanding conflicts in West Africa, the Great Lakes Region and other regions yet ripe for destabilization," they point out.
They would not call the increase in money for agriculture "dramatic". It's up from $133.6m for FY03 to a request of $134.1m for FY04. "[This] does not go far enough," say the two congressmen who are proposing an appropriation of $200m.
And in another key area of U.S. official concern, Business, Trade and Investment, the numbers for FY04 drop to $89.2m from the FY03 estimate of $106.2m.
In what are perhaps the two most surprising sets of numbers, Human Rights is chopped to $5.4m from $9.2m in FY03 and democracy and local government funds are nudged downward to $54.0 from the $55.3m estimate for FY03.
The differing interpretations result in part because Payne and Lantos are focused on FY04, whereas Natsios is including 'new money' for the Millennium Challenge Account, the HIV/Aids initiative first outlined in January's State of the Nation address, and other special projects, as well as increases in development assistance over a two-year period. Taken altogether, this does, indeed, represent a boost in the foreign assistance budget. But money given to Global Health and Child Survival, especially in FY04, has depleted other accounts in the foreign assistance program that Payne and Lantos consider "critical".
Worrying trend
It is this underlying trend which troubles Congresswoman Nita M. Lowey (D-New York). While commending Secretary of State Colin Powell for "significant increases" in foreign assistance when he appeared before the House Foreign Operations Subcommittee committee in March, she told him that with most of the foreign assistance increase going to the Millennium Challenge Account, the HIV/Aids plan, the Complex Crisis Fund and the Famine Fund, she feared for "other good work" around the world.
"The primary accounts providing for other health, education, child survival, environment, trade, capacity-building, agriculture and democracy programs have either been straight-lined [kept the same] or cut [reduced] from last year. This translates into a cut in country-level funding in most of the countries in Africa, Asia and Latin America," Lowey told Powell.
Administration officials point to their increased commitment to the HIV/Aids fight and the Millennium Challenge Account (MCA) as a justification for the changes. Some $1.3bn has been proposed for the MCA this year, and over the next three years, US$5bn will go to developing nations working to eliminate corruption and to reform their economic systems. . But to those in Congress who keep an eye on aid flows to Africa, the HIV and MCA initiatives are special programs emanating from the White House, and should not offset reductions in the 'bread and butter' funding annually disbursed through the government's main aid conduit, USAID.
While welcoming the MCA and the new Aids money, as well as two other new projects - the Famine Fund and the Conflict Fund - Payne has expressed concern that the administration is trying to set up a separate foreign assistance structure that bypasses USAID and the Congress, steering funds into projects run directly by the White House.
"I have serious concerns about the goals of the MCA initiative, its eligibility criteria, and the administration of the initiative," Payne said in his Africa Society address. The MCA "will be run by a corporation made up of a CEO and a staff of 100," chaired by the Secretary of State.
But Natsios does not accept that his organization is being sidelined and argues instead that, on the ground, USAID will play the critical role in the MCA; "The office that will administer it is limited to 125-150 people. You cannot spend $5 billion with 150 people."
Furthermore, says Natsios, something more streamlined and less exposed to special interests is needed; sometimes his own efforts have been frustrated by Congress. Take agriculture, up by just $500,000 in the FY04 budget: "We think we should be spending more. And while we have an increase in agriculture, we [proposed] a much larger increase, and that money was [reallocated] to child survival, health, HIV/Aids, environmental programs and education. All of which are desirable, but the proportions are not what we had intended."
"The problem with the current aid program," he says, "is that [foreign assistance] is heavily earmarked by Congress and by interest groups that influence Congress and by diplomacy; and it's not based on performance."
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While "a number of African countries will qualify" for MCA money, said Natsios, a number will not. "But on the list I saw for Latin America, there's about the same number for Latin America as there is for Africa; and about the same number for Asia. So I don't think Africa is shorted any money. The whole idea of this is to discriminate - choose the countries that are best performers - and a lot of people in the developing world don't want that. They believe in solidarity, 'we all should get the same amount of money'; and that's the problem with the aid program right now."
Natsios promises that the more streamlined delivery of assistance by the MCA 'corporation' and CEO will not be abused: "It is accurate to say that there are some controls being put on the way that the money is being spent or will be spent to ensure that it is spent for development purposes and not diplomatic purposes."
'Congress left out'
But using "a corporation set-up to administer $5bn in development funding over three years with no leadership by any development expert is strikingly ironic," says Payne. "Congress is left out of this process in the Administration's proposal. The eligibility requirements and the selection process are also very rigid. Under current guidelines not even a handful of African countries will qualify to receive assistance."
Congresswoman Lowey also challenged Secretary Powell on this issue. "This new framework results from a push to package new funding in the context of presidential initiatives rather than reforming and improving the delivery of aid through the Agency for International Development."
There's no conflict, Powell responded to Lowey, "at least in my mind." While USAID is valuable, he said, "we're looking for new ways of delivering assistance." President Bush was particularly interested in focusing on nations "that have made a firm commitment to democracy, to transparency, to the rule of law, to economic freedom, to empowering men and women... That's the purpose of the Millennium Challenge Account, and it will help other USAID programs that might be underway in those countries as well."
