TRANSFORMING STATE TO SUPPORT DEVELOPMENT

Elevating development as a core pillar of U.S. foreign policy requires not just rebuilding USAID into the world’s premier development institution, but also transforming the Department of State to support development. Secretary Clinton recognizes that while diplomacy and develop- ment are each critical in their own right, when they work together they are the basis on unri- valed civilian power to advance U.S. interests. For too long, however, the Department of State has not always been a willing and capable partner for USAID in supporting the development pillar of our foreign policy.

The past decade has already seen significant transformations within the State Department to support development. Missions and operations have shifted, State’s presence in critical front- line countries has expanded, and the Civilian Response Corps, discussed further in Chapter 4, has created a standing civilian capability. And development resources managed by State and USAID under the purview of the Secretary of State have grown from less than $10 billion in FY 2000 to more than $26 billion in FY 2010, an increase of more than 155 percent.

As the United States elevates development, the Department of State’s diplomacy is changing to reflect development’s appropriate status by raising development issues from low politics to high politics. When a Secretary of State advocates as fiercely for food security and women’s rights at the U.N. General Assembly as on proliferation of nuclear weapons; when a Deputy Secretary of State raises issues like polio eradication with leaders of countries like Nigeria and Pakistan; when an Ambassador makes clear that viable, resilient health systems and transparent government

services are our priorities, we improve lives in ways that reinforce almost every aspect of U.S. foreign policy. For development issues to be included systematically rather than sporadically in our diplomacy, diplomats and development professionals must work more closely together, understand much more about their respective professions, and recognize their common mission. State will work to complement—not duplicate—the expertise of USAID. State must embrace USAID’s expertise, include development as an objective of our diplomacy, and provide our dip- lomats with the skills, tools and experience to advance development. Ultimately, we must ensure that our diplomatic and development activities are mutually reinforcing. State will commit to development diplomacy that connects our development and diplomatic efforts in pursuit of our foreign policy and national security objectives.

1. Using Diplomacy to Advance Development

Going forward, State will pursue “development diplomacy” by aligning our development and diplomatic efforts in a shared application of civilian power in pursuit of our foreign pol- icy and national security objectives. Our civilian agencies with foreign affairs expertise have extraordinarily broad and deep access and relationships that can be used to advance our development goals: from presidents and prime ministers, to businessmen, to reporters, to civil society activists intent on transforming their nations. Within multilateral fora, interna- tional cooperation regimes such as the G8 and G20, and regional organizations, diplomatic efforts mobilize international contributions and help create and promote international policy agreements, standards, laws, and regulatory systems that provide the basis for sound political and economic governance.

Development and diplomacy must be mutually reinforcing, across the entire spectrum of engagement and assistance, and must leverage both State and USAID’s distinct compara- tive advantages. Diplomats help shape the global development agenda, with State taking a lead role, for example, on treaty negotiations and other international agreements. USAID uses its technical knowledge and on-the-ground implementation experience. At the coun- try level, development professionals at a number of agencies engage in diplomacy through their direct contact with planning and line ministries for health, education, environment, economy, and other sectors in which we invest development resources. State’s diplomatic leadership helps prioritize development on national agendas. To achieve sustainable de- velopment on, for example, critical health issues, we must move the conversation beyond the health ministry to the finance ministry, the parliament, and up to presidents and prime ministers. Our diplomats will help make this happen.

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We will:

• Build development diplomacy. We will reallocate Chief of Mission time to focus more on development priorities and diplomatic engagements that support those priorities, such as resource mobilization for Feed the Future and Global Health Initiatives. We will use the access that U.S. Ambassadors and mission leadership have to the highest level officials in aid-recipient countries to deliver critical messages in support of our shared development agenda. Finally, State Foreign Service personnel will be eligible to serve as USAID Mission Directors. USAID Foreign Service personnel are already recommended for Presidential appointment as Chief of Mission.

• Improve communication and understanding. Where possible, in-house rotations for State and USAID personnel will be instituted to strengthen the nexus between diplomacy and development. We will expand joint training before deployment and Ambassadors assigned to posts with significant development presence will have responsibility for ensuring development is an integral part of embassy priorities.

• Ensure compatible communications. For State and USAID to communicate, cooperate, and collaborate in the field, both agencies must share compatible communication platforms. Such communication is absolutely essential for USAID to participate in critical conversations that determine policy options, set priorities, and implement programs. We will develop long-term plans to ensure USAID has the necessary facilities to house secure communications and participate in these conversations.

State and USAID will also take a number of other steps to better enhance the support that diplomacy provides to development. We will design negotiation strategies that achieve de- velopment objectives, including our initiatives in health, food security, and climate change. We also will include diplomatic engagement in support of development in the Integrated Country Strategies and Development Cooperation Strategies discussed in Chapter 5. We will use State’s diplomatic influence to establish global standards and norms that address key barriers to development such as corruption, transparency, and poor policy and regulatory regimes. Over time, we will seek to ensure that all State personnel receive training in how to coordinate U.S. government activities with multilateral development agencies; and we will ensure that they recognize the importance of development in their diplomatic efforts, by incorporating development advocacy in performance requirements.

2. Building development diplomacy as a discipline within State

USAID personnel conduct development diplomacy in their interactions with health, plan- ning, education, finance and other ministries. However, to elevate development as a core pillar of our foreign policy, State personnel must have the understanding and incentives to advance development in conversations with heads of state and foreign ministries, among others. While mechanisms exist at USAID to develop guidance and institutionalize best development practices, State does not have a central office or the systems for promulgating guidance on foreign assistance policies and best practices to its operational bureaus. State will take steps to ensure the discipline of development carries over to the degree appropriate into State Department operations. We will:

• Assess and provide the development skill sets needed at State. State will assess the skills and competencies needed by personnel involved in managing development assistance programs or engaging in development diplomacy. For both Foreign Service and Civil Service personnel, development training will be expanded based on this assessment. In building a training curriculum, State will draw on USAID’s expertise and curricula as appropriate and develop necessary training modules and cross-rotational field assignments.

• Establish institutional mechanisms at State to develop and promulgate guidance on best practices and effective management of foreign assistance. The Office of the Director of Foreign Assistance Resources (F), coordinating with USAID’s Bureau of Policy Planning and Learning, will develop guidance on sound project design, management, oversight, and performance evaluation consistent with aid effectiveness principles, both for staff in headquarters and in the field who manage foreign assistance. Where appropriate, State will adopt or build on existing USAID guidance on these subjects. This guidance will be promulgated appropriately at State and incorporated into planning and evaluations of annual strategic and operations plans.

3. Managing Foreign Assistance Resources

In 2006, Secretary Rice reformed how State and USAID allocated foreign assistance resources.  Prior to 2006, foreign assistance was fragmented across multiple bureaus and offices within State and USAID and a holistic picture of our foreign assistance was impos- sible.  To correct these deficiencies, Secretary Rice created the Office the Director of U.S. Foreign Assistance (F), who concurrently held the position of USAID Administrator, to

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strengthen the Secretary’s ability to oversee and coordinate all U.S. foreign assistance by providing strategic coherence among foreign assistance objectives. Thanks to these efforts and subsequent reforms, the Secretary is now able to see an integrated foreign assistance program and coherently manage the allocation and execution of resources.

This Administration has built on these advances, but also taken a different approach to managing foreign assistance.  The Deputy Secretary of State for Management and Resources and a strong USAID Administrator each separately, but also working closely together, play a key role in managing foreign assistance funding and programs.  To reflect these changes, the Office of the Director of U.S. Foreign Assistance (F), will become the Office of U.S. Foreign Assistance Resources (F).  This office will continue to report to the Secretary of State and the Deputy Secretary for Management and Resources and will be led by a Director, an As- sistant Secretary-equivalent senior official, who will manage the integrated State/USAID budget formulation process, review and analyze budget proposals from USAID and from State Department bureaus, approve the use of appropriated funds and changes during the year between major objectives and countries, develop and promulgate guidance on best practices and effective management of foreign assistance, and provide advice and counsel to the Secretary on the resource implications of policy decisions. The new office will also play a strong role in the strategic planning processes discussed in Chapter 5, especially linking strategic plans to multiyear foreign assistance budgets.

Chapter 4:

Preventing and Responding to