For over fifty years, USAID has been addressing the needs of those living in extreme poverty overseas, promoting stable, self-sustaining democracies and advancing security and prosperity on a global scale.
Founded by President John F. Kennedy in 1961, USAID, or United States Agency for International Development, works in over 100 countries to address a wide array of prosperity goals. These include advancing food security and agriculture, improving global health, providing humanitarian assistance and protecting human rights, among other objectives.
Despite its humanitarian efforts, USAID has garnered some criticism over the past few years. First and foremost, critics and watchdogs have claimed that USAID policies and actions are often more focused on advancing U.S. policy interests than global humanitarian interests.
In particular, a 2010 study by two Harvard and Yale economics professors found that the size of U.S. food aid shipments are determined more by the size of U.S. crops than they are by recipient need. Moreover, the study found that about half of the funding for food aid was allocated for shipping, often for American cargo ships.
Additionally, a 2012 study by the Center for Economic and Policy Research examined contracts issued by USAID for the 2010 relief effort in Haiti. It found that only .02 percent of these contracts went directly to local Haitian firms, while over 75 percent of the contracts went to American firms. One of these firms has received up to $173.7 million from USAID since the Haitian earthquake. However, the data provided does not track local subcontracting and grant making, which may or may not be significant.
Amidst these and a variety of other allegations against USAID involving wasteful or misplaced spending, the U.S. government has made some concerted efforts in the past few years to reform USAID.
Beginning in 2010, President Obama and former Secretary of State Hillary Clinton launched USAID Forward, an ambitious reform effort aiming to increase USAID’s transparency and provide more efficient, effective service.
In particular, USAID Forward incorporates rigorous evaluations for each new program undertaken, investments in new innovations to aid in sustainable development, better risk assessment tools and transparent fiscal reports.
In addition, USAID Forward has significantly increased its public-private partnerships and is working more directly with local governments, the private sector, civil society and academia.
The Agricultural Reform, Food and Jobs Act of 2013, passed in early 2014, also included some major food aid reforms. Specifically, the bill placed greater emphasis on improving the nutritional quality of food aid products, ensured that sales of agricultural commodity donations do not adversely affect local markets and created a new local and regional purchase program, among other reforms.
The Obama Administration has additional food aid reform goals in mind, including reducing the volume of commodities subject to cargo preference legislation, increasing cash donations and “providing greater flexibility in procuring commodities in local and regional markets.”
– Katrina Beedy
Sources: USAID, Reuters 1, Reuters 2, FAS, Reuters 3, Hagstrom Report, CEPR, Business Week, GovTrack