Countries to be allowed a say in foreign aid usage

The Obama administration will share control over U.S. foreign aid with recipient countries, ending Washington’s longtime policy of “dictating” to those nations how to spend the money, Secretary of State Hillary Rodham Clinton said Wednesday.

The administration also will move toward an investment-based approach to rewarding aid, with rigorous political and economic criteria, she said.

“We are adopting a model of development based on partnership, not patronage,” Mrs. Clinton said in a speech at a Washington think tank. “In the past, we have sometimes dictated solutions from afar, often missing our mark on the ground. Our new approach is to work in partnership with the people in developing countries.”

The secretary’s remarks are certain to ignite a heated debate about the role foreign governments — mostly in developing countries — should play in deciding how to spend American taxpayers’ dollars.

Traditionally, Washington has made all such decisions and had tight control over spending, mainly out of concern about corruption in Third World countries. It has also disagreed with local governments over the best use of the money.

“Some might say it is risky to share control with countries that haven’t had much success developing on their own,” Mrs. Clinton said. “But we know that many countries have the will to develop, but not the capacity. That’s something we can help them build.”

Mrs. Clinton assured her audience at the Peterson Institute for International Economics that the administration will work with partners that “have demonstrated a commitment to development by practicing good governance, rooting out corruption and making their own financial contributions to development programs.”

“The American taxpayer cannot pick up the tab for those who are able but unwilling to help themselves,” she said.

Mrs. Clinton has said repeatedly since becoming secretary of state last year that development should be an equal part of U.S. foreign policy with defense and diplomacy. The administration plans to increase the number of employees at the U.S. Agency for International Development (USAID) and reduce its reliance on contractors, which has grown significantly in recent years.

During his 2008 election campaign, President Obama promised to double U.S. foreign aid to $50 billion by 2010.

“In the past, we invested in many programs across many fields, spreading ourselves thin and reducing our impact,” Mrs. Clinton said Wednesday. “Going forward, we will target our investment and develop technical excellence in a few key areas, like health, agriculture, security, education, energy and local governance.”

Mrs. Clinton added that, in the future, aid will gradually give way to investment, based on the model adopted by the Millennium Challenge Corp., which was established by the George W. Bush administration and “focuses on countries that have met rigorous criteria, from upholding political rights and the rule of law to controlling inflation and investing in girls’ education.”

“Through aid, we supply what is needed to the people who need it,” she said. “But through investment, we seek to break the cycle of dependence that aid can create by helping countries build their own institutions and their own capacity to deliver essential services. Aid chases need; investment chases opportunity.”