US Poised for Radical Reform of Foreign Aid

By Guy Dinmore
The Financial Times

Wednesday 18 January 2006

The Bush administration is expected to announce on Thursday a controversial restructuring of its foreign aid system under Randall Tobias, a retired pharmaceuticals executive who currently heads the US global Aids programme.

Mr Tobias will be named the new head of USAID, the state aid agency with a $14bn (£8bn) budget, replacing Andrew Natsios, who resigned last week. Mr Tobias will also be appointed to the newly created position of deputy secretary for development as Condoleezza Rice, the secretary of state, pursues what she calls her assertive strategy of "transformational diplomacy".

The Bush administration wants its multibillion-dollar aid programmes to serve its foreign policy goals better. Critics are worried that by in effect merging USAID into the State Department, the agency will lose some of its independence, and development will become purely politicised.

Ms Rice was expected to announce the changes on Thursday, officials said, following a keynote speech to George-town University on Wednesday in which she sketched out a "sweeping and difficult" transformation of US diplomacy and its institutions.

As part of those changes, 100 US diplomats will be transferred this year from Europe and Washington to countries including China, India, Nigeria and Lebanon. Hundreds more will follow over five years. A senior official compared the shift to the Pentagon's drawdown of forces from Europe after the cold war.

"In the 21st century, emerging nations like India and China, and Brazil and Egypt, and Indonesia and South Africa are increasingly shaping the course of history," Ms Rice said.

The US global posture did not reflect these changes, she said, noting that the US had nearly the same number of diplomats in Germany, with a population of 82m, as in India, with 1bn people.

Ms Rice said the US needed bold diplomacy to achieve the mission set out by President George W. Bush in his second inaugural address a year ago of supporting democratic institutions worldwide with the "ultimate goal of ending tyranny in our world".

She defined diplomacy as seeking "to change the world itself", not simply reporting on it. Drawing on the lesson of Afghanistan and how it provided a haven for al-Qaeda, Ms Rice said she had an "expansive vision" for the State Department's new office of reconstruction and stabilisation, mandated to deal with post-conflict situations.

"Should a state fail in the future, we want the men and women of this office to be able to spring into action quickly," she said.

The US, she said, would also put new emphasis on regional and transnational strategies to deal with terrorism, weapons proliferation, drugs smuggling and trafficking in people and disease. Regional partnerships were a foundation of the US counter-terrorism strategy, she said, listing Indonesia, Nigeria, Morocco and Pakistan as key partners in combating the "the ideology that uses terror as a weapon".

Diplomats had to get into the field, she said, noting that there were 200 cities with more than 1m inhabitants but no US diplomatic presence. "This is where the action is today, and this is where we must be," she said.