Leveraging USAID through Private-Sector and Military Partnerships
May 2017
Leveraging USAID through Private-Sector and Military Partnerships Greg Huger
The U.S. Agency for International Development (USAID) has worked for more than half a century to help improve the lives of people around the world as an essential component of U.S. foreign policy. Throughout much of its history, the agency had primary responsibility for funding these efforts. But today most of the resources—financial and otherwise—available for the stabilization and development of fragile states come from the private sector and U.S. military. Having been relieved of most of the primary funding burden, the agency over the last couple of decades has begun to redeploy its financial and technical resources, and use them instead to ensure that private-sector and military efforts in fragile states are effectively mobilized for sustainable impact. By working in fragile states with local and international private-sector partners—and when appropriate, pursuing its efforts in cooperation with the military—USAID has gained the ability to better engage with populations to identify and address the root causes of instability, and thereby design better, more sustainable initiatives that can provide long-term solutions. This sort of leveraged USAID engagement also can help furnish early proof of concept for stabilization and development initiatives. In effect, USAID’s trajectory has shifted in such a way that it now generates the best outcomes toward accomplishing its mission by serving as a catalyst for collaboration. By assuming this function in a cooperative setting, USAID can apply its knowledge to identify approaches that lie outside the experience of its private-sector and military partners. USAID’s role as catalyst also helps to ensure that each of the major players in a given theater of stabilization and development accomplishes its main mission in a way that has the most impact in addressing the societal issues that underlie causes of poverty and conflict. This paper examines some examples of successful initiatives that bear out this approach; it also lays out the rationale for building on these efforts and completing USAID’s transformation into a catalyst agency.
2 | Greg Huger
An Evolving Mission In the wake of the post–World War II Marshall Plan, which helped to rebuild the devastated nations of Europe, a series of successive U.S. agencies—the Mutual Security Agency (MSA), Foreign Operations Administration (FOA), and International Cooperation Administration—directed international development efforts aimed at building and strengthening capitalism-based economies, with the goal of reducing the threat of communism and creating new markets for the United States. MSA and its FOA successor were responsible for the development and administration of both military and economic assistance, and operated within the Departments of State and Defense. With the abolition of FOA in 1955, its functions were split, with economic assistance oversight transferred to the State Department under a new International Cooperation Administration, and military assistance assigned to the Defense Department. Finally, in 1961, when Congress passed the Foreign Assistance Act and President John F. Kennedy signed an executive order creating USAID, the administration of social and economic development programs for the first time were successfully centralized under a single agency. While the 1950s style of economic development assistance underwent a decade of significant expansion throughout the 1960s, in succeeding years USAID has continually refined its mission and strategy to match the needs and objectives of the day. The 1970s, for example, ushered in a shift in strategic focus that emphasized the provision of aid directed toward “basic human needs” such as food and nutrition, health, education, and human resources development—adding a new dimension to U.S. assistance. In the 1980s, under President Ronald Reagan, USAID adjusted its tactics to accomplish its mission by using market-based solutions to strengthen institutions of developing nations, with a move toward larger programs aimed at building up agriculture and expanding domestic markets. Reflecting the administration’s predilection for private-sector-based methods, USAID during the Reagan years also began to direct more efforts through private voluntary organizations (PVOs), which obtained private financial support for a significant share of the funding. Successive administrations, as well as the demands of historical events, have continued to leave their mark on the agency. As sustainable development came to the fore in the 1990s, USAID began to customize programs to more closely match each recipient country’s specific economic needs. During this period, the agency also began to make greater use of nongovernmental organizations (NGOs) to strengthen its presence in some regions. A decade later, USAID adjusted its tactics to reach further into the private sphere through the cultivation of new nonprofit and private-sector partnerships designed to address the growing demand for aid and expertise to restore the war-torn institutions of Iraq and Afghanistan. Those
Leveraging USAID through Private-Sector and Military Partnerships | 3
efforts, which included programs to support the rebuilding of the nations themselves, brought the agency full circle to the post–World War II period, when the Marshall Plan emerged to provide developmental assistance to address a full spectrum of human, economic, and institutional needs. Over a half century, USAID incorporated and retained the strongest and most successful elements of each of these approaches, as witnessed by the agency’s most recent mission statement: “We partner to end extreme poverty and promote resilient, democratic societies while advancing our security and prosperity.”
Best of the Best As USAID’s mission statement implies, partnerships have emerged as some of the most effective tools at the agency’s disposal. Three categories of partnership-based foreign aid implementation consistently generate superior results, and each depends on the collaboration of groups whose vision and goals contain shared elements that allow them to make common cause to achieve mutual objectives. These three types of initiatives include private-sector partnerships, partnerships within local communities, and partnerships based on civilian-military cooperation. Under USAID’s oversight, these cooperative programs, by addressing practical social and economic concerns at the societal level, establish working relationships in beneficiary nations that provide the foundation for the mutual trust necessary for the open and effective dialogue required to advance U.S. foreign policy. Partnership programs also serve an important role in providing proof of concept. These programs—which after the early stages of USAID support are designed to become financially selfsufficient—then can be replicated on an increasingly broader scale, at each level of implementation further enhancing economic security and national stability.
Private-Sector Partnerships USAID has been instrumental in cultivating the formation of numerous indigenous private-sector development initiatives in fragile states. By providing both seed funding and ongoing technical assistance, the agency has been able to ensure the long-term growth and success of financially sustainable, home-grown programs directed by local leaders who have a keen understanding of the issues faced by their communities. One of the greatest benefits of these programs is the “thought partnership” that develops over time between USAID and the private-sector party—a mutual understanding and shared perspective on evolving challenges and opportunities that can help point the way toward solutions that encourage peace and prosperity. The Foundation for Social and Economic Development (FUSADES), founded in the midst of conflict with USAID support in El Salvador in 1983, is a clear example of a locally directed initiative that has
4 | Greg Huger
enjoyed long-term success and grown over time to play a key role in the development of national policy. The organization, which was created by a group of Salvadoran professionals, develops public policy proposals aimed at improving the social and economic well-being of all Salvadorans, and has offered up a number of development proposals that have been incorporated in government programs. For most of its existence, FUSADES also has worked to build a new economic base for the country through its support of micro, small, and medium-sized enterprises, and through its efforts to solicit foreign investment and develop export opportunities. As I can attest from my own work with the organization, FUSADES’s three-decade record as a promoter of Salvadoran development—as well as its steadfast support of democratic institutions— has earned it a solid reputation in the public mind that continues to serve it well today. While many serious problems persist in El Salvador, FUSADES remains an important and well-respected thought center fully capable of remaining on the forefront of policy development. USAID, which funded many of the group’s initial programs, continues to maintain an active relationship with the organization. As noted above, partnerships often serve to establish proof of concept. One USAID private-sector partnership that is enjoying particular success is the Farm Service Center (FSC) model, first piloted under the Feed the Future program over a four-year period in Moldova. Funded by USAID grants and in-kind contributions from grantees, which leveraged USAID investment five to one, FSCs are locally owned retail farm supply and service centers that equip and provide training to small-scale farmers and rural entrepreneurs. These one-stop centers—which sell agricultural inputs such as fertilizers, feed, and seeds; offer technical training, machinery, and veterinary services; and furnish access to credit—help to move rural communities away from subsistence farming, while increasing food security and boosting economic opportunity and resilience. The centers have proven to have an outsize economic effect that cascades through surrounding areas. This is clearly proven in Moldova, where privately owned FSCs have prospered and grown far beyond the basic enterprises initially made possible through USAID-support. In fact, the nation’s 85 independent FSCs—organized as the business cooperative Agrostoc—together comprise the second-largest private agribusiness in the country, helping to increase the production and income of 1.3 million Moldovan farmers. The FSC model, which has been replicated in Afghanistan and Georgia, is now being actively deployed across Ethiopia. Private-sector partnerships such as the FSC development program—and similar agro-dealer and machinery service center models—allow USAID to go beyond the role of grant-maker and observer, and instead become actively engaged in building the individual private enterprises that
Leveraging USAID through Private-Sector and Military Partnerships | 5
provide long-term strength, resilience, and stability to local economies and communities. This closeness also helps to create an environment conducive to positive diplomatic engagement in support of well-targeted economic reform.
Partnerships with Local Communities Another kind of successful USAID partnership approach mobilizes the resources and expertise of local communities and organizations to pursue economic development objectives that lay the groundwork for subsequent social and economic reforms. One such USAID partner organization is the Alexandria Business Association (ABA), which works to promote the interests of the Alexandria, Egypt, business community. The ABA/Small and Micro Enterprise Project, a partnership initiative jointly funded by ABA and USAID and launched in 1990 to provide microfinance services to small entrepreneurs in the area, has become a model for best practices in microfinance. The program—which after two years generated enough income to become self-supporting—today not only provides loans, but also nonfinancial offerings such as business and technical training, and marketing services. The project also furnishes clients with technical assistance sourced from USAID and other international organizations, as well as consultancy services focusing on microcredit scheme design, performance measurement, impact tracking, and other topics. The success of ABA/SME has far exceeded its original mandate. While the project initially was designed to focus on manufacturing and processing, it now also serves enterprises focused on trade, services and agriculture. Furthermore, other organizations in Egypt have designed similar programs developed along the lines of the ABA/SME model—helping to elevate the economic well-being of communities outside the scope of the project. The success of the initiative is reflected in the numbers. As of March 2017, ABA/SME operated 61 branch offices employing 1,370 staff—and had dispersed nearly 1.7 million loans to more than 663,000 members over the life of the project.
Civilian-Military Cooperation USAID’s work frequently takes place in fragile states. When those states are also theaters of activity for the U.S. military, the agency works cooperatively with the Defense Department to ensure that their mutual goals are served, and that duplicative efforts are avoided. This third kind of partnership—civilian-military cooperation—also is designed to coordinate international development with defense efforts. This coordination ensures that the efforts work in parallel in a manner that most effectively mitigates the economic and social conditions that lead to conflict and failed states.
6 | Greg Huger
To that end, USAID works with its Office of Civilian-Military Cooperation (CMC) to ensure that the policies, planning, programming, and outreach efforts of both parties align in a way that best advances U.S. foreign policy. CMC oversees the synchronization of DOD and USAID efforts. In terms of policy development, the office facilitates the exchange of feedback between the two parties on policies and strategies that affect USAID interests, and regularly convenes a steering committee drawn from USAID regional and technical staff to work on policy development. CMC also facilitates training courses designed to familiarize DOD with USAID, and vice versa, and offers additional DOD-hosted training opportunities to USAID staff. To further enhance the collaborative process, USAID and DOD also participate in a personnel exchange of foreign service, civil service, military, and technical professionals to bolster access between the agencies. All of these practices together help to accomplish cooperation on the three levels—communication, coordination, and collaboration— specified in USAID’s official policy governing its interaction with DOD. Because the two agencies are more frequently working close to one another while pursuing different, discrete objectives, this program of civilian-military cooperation has proven increasingly valuable as USAID and DOD find themselves side by side in a growing number of fragile states. Over the last 15 years, USAID has further refined this system of cooperation based on the lessons learned in theaters of military activity in Iraq and Afghanistan. The work required to fulfill the first contract USAID awarded in April 2003 under the Iraq Infrastructure Reconstruction Program, for example, needed to be performed in a dangerous postconflict environment. Getting the project underway required close cooperation with the U.S. military. With military support, USAID and its prime contractor, Bechtel, convened public meetings to enlist qualified Iraqi subcontractors to perform most of the work. The use of local workers was essential, not only to restore employment and economic health, but also because Iraqi workers could travel and work more safely in the country. The military also helped provide liaison with local communities and trade groups, allowing USAID to enlist broader support for the reconstruction program. This civilian-military cooperation permitted workers to quickly restore more than 1,200 schools in time for the start of the new school year in October 2003, for example, as well as rebuild other critical facilities such as medical clinics and fire stations, At the height of the effort, projects performed under the program employed as many as 40,000 Iraqis, with Iraqi subcontractors performing about three-quarters of the work. USAID and DOD have become increasingly effective in successfully replicating this cooperative process in other areas of mutual activity, including the Philippines, Colombia, and the Sahel.
Leveraging USAID through Private-Sector and Military Partnerships | 7
The Path Forward Policy experts from across the spectrum agree that development aid has joined diplomacy and defense as an essential component of our effort to advance U.S. national security priorities around the world. As the initiatives described in this paper demonstrate, partnerships have emerged as some of today’s most efficient and cost-effective international development investments, and these projects have established themselves as valuable and necessary instruments in the nation’s foreign policy—and national security—toolbox. This paper has cited just a few examples of the power of partnerships, but the concepts underlying these models have been validated not just in El Salvador, Egypt, and Moldova, but also in many other countries where USAID conducts its activities. That’s why we must build on these successes and continue to invest in additional partnerships. They provide significant leverage on USAID resources and help the larger investments of military and business engagement build sustainable progress in fragile states. In the case of private-sector and community partnerships: •
Initiatives closely engage and empower local individuals, businesses, and communities to build trust and commitment.
•
Success is aided by partners’ understanding of regional needs and the local culture.
•
Programs are designed to become self-supporting long-term efforts.
•
Successful programs are customizable and can be replicated quickly.
•
Because of all of these characteristics, especially the emphasis on engagement, the partnerships are particularly suited to fragile states.
In the case of civilian-military partnerships: •
The population focus of civilian efforts sustains the gains of the military campaign and creates the basis for longer-term progress.
•
“Investment” consists primarily of orchestrating communication, coordination, and collaboration to the mutual benefit of their respective missions.
•
Agencies build trust by learning one another’s culture and operational methods.
•
USAID and DOD leverage new interagency functionality largely from existing resources.
8 | Greg Huger
In all cases: •
Objectives are achieved faster and more effectively.
•
Partnerships make efficient and effective use of available funding to create long-term stability.
As poverty and political and environmental stresses threaten to turn more of the world’s poorest regions into flashpoints of conflict, we are obliged to use the fastest and most effective means at our disposal to bring peace and prosperity to those regions. USAID’s time-tested partnership models can help accomplish that mission. That is why we must continue to fund USAID at levels that will allow the agency to provide the staff and seed money necessary to introduce the social and economic benefits of partnerships with the private sector and the U.S. military in the growing list of fragile states that may otherwise serve as breeding grounds for conflict.
Acknowledgments This report is made possible by general support to CSIS. No direct sponsorship has contributed to its publication.
About the Author Greg Huger is an international development and business consultant in Arlington, Virginia. Earlier, he served with the U.S. Agency for International Development as mission director in Ukraine, deputy mission director in the Federally Administered Tribal Areas and Khyber Pakhtunkhwa in Pakistan, and senior development officer for Regional Command East in Bagram, Afghanistan, and in El Salvador, Egypt, and the former USSR. He had long-term corporate assignments with Deere and Company, Bechtel National Inc., and Unocal Corporation in Colombia, Spain, Iraq, Myanmar, and Indonesia. He holds a B.A. from Georgetown University. This report is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). © 2017 by the Center for Strategic and International Studies. All rights reserved.
Leveraging USAID through Private-Sector and Military Partnerships Greg Huger
The U.S. Agency for International Development (USAID) has worked for more than half a century to help improve the lives of people around the world as an essential component of U.S. foreign policy. Throughout much of its history, the agency had primary responsibility for funding these efforts. But today most of the resources—financial and otherwise—available for the stabilization and development of fragile states come from the private sector and U.S. military. Having been relieved of most of the primary funding burden, the agency over the last couple of decades has begun to redeploy its financial and technical resources, and use them instead to ensure that private-sector and military efforts in fragile states are effectively mobilized for sustainable impact. By working in fragile states with local and international private-sector partners—and when appropriate, pursuing its efforts in cooperation with the military—USAID has gained the ability to better engage with populations to identify and address the root causes of instability, and thereby design better, more sustainable initiatives that can provide long-term solutions. This sort of leveraged USAID engagement also can help furnish early proof of concept for stabilization and development initiatives. In effect, USAID’s trajectory has shifted in such a way that it now generates the best outcomes toward accomplishing its mission by serving as a catalyst for collaboration. By assuming this function in a cooperative setting, USAID can apply its knowledge to identify approaches that lie outside the experience of its private-sector and military partners. USAID’s role as catalyst also helps to ensure that each of the major players in a given theater of stabilization and development accomplishes its main mission in a way that has the most impact in addressing the societal issues that underlie causes of poverty and conflict. This paper examines some examples of successful initiatives that bear out this approach; it also lays out the rationale for building on these efforts and completing USAID’s transformation into a catalyst agency.
2 | Greg Huger
An Evolving Mission In the wake of the post–World War II Marshall Plan, which helped to rebuild the devastated nations of Europe, a series of successive U.S. agencies—the Mutual Security Agency (MSA), Foreign Operations Administration (FOA), and International Cooperation Administration—directed international development efforts aimed at building and strengthening capitalism-based economies, with the goal of reducing the threat of communism and creating new markets for the United States. MSA and its FOA successor were responsible for the development and administration of both military and economic assistance, and operated within the Departments of State and Defense. With the abolition of FOA in 1955, its functions were split, with economic assistance oversight transferred to the State Department under a new International Cooperation Administration, and military assistance assigned to the Defense Department. Finally, in 1961, when Congress passed the Foreign Assistance Act and President John F. Kennedy signed an executive order creating USAID, the administration of social and economic development programs for the first time were successfully centralized under a single agency. While the 1950s style of economic development assistance underwent a decade of significant expansion throughout the 1960s, in succeeding years USAID has continually refined its mission and strategy to match the needs and objectives of the day. The 1970s, for example, ushered in a shift in strategic focus that emphasized the provision of aid directed toward “basic human needs” such as food and nutrition, health, education, and human resources development—adding a new dimension to U.S. assistance. In the 1980s, under President Ronald Reagan, USAID adjusted its tactics to accomplish its mission by using market-based solutions to strengthen institutions of developing nations, with a move toward larger programs aimed at building up agriculture and expanding domestic markets. Reflecting the administration’s predilection for private-sector-based methods, USAID during the Reagan years also began to direct more efforts through private voluntary organizations (PVOs), which obtained private financial support for a significant share of the funding. Successive administrations, as well as the demands of historical events, have continued to leave their mark on the agency. As sustainable development came to the fore in the 1990s, USAID began to customize programs to more closely match each recipient country’s specific economic needs. During this period, the agency also began to make greater use of nongovernmental organizations (NGOs) to strengthen its presence in some regions. A decade later, USAID adjusted its tactics to reach further into the private sphere through the cultivation of new nonprofit and private-sector partnerships designed to address the growing demand for aid and expertise to restore the war-torn institutions of Iraq and Afghanistan. Those
Leveraging USAID through Private-Sector and Military Partnerships | 3
efforts, which included programs to support the rebuilding of the nations themselves, brought the agency full circle to the post–World War II period, when the Marshall Plan emerged to provide developmental assistance to address a full spectrum of human, economic, and institutional needs. Over a half century, USAID incorporated and retained the strongest and most successful elements of each of these approaches, as witnessed by the agency’s most recent mission statement: “We partner to end extreme poverty and promote resilient, democratic societies while advancing our security and prosperity.”
Best of the Best As USAID’s mission statement implies, partnerships have emerged as some of the most effective tools at the agency’s disposal. Three categories of partnership-based foreign aid implementation consistently generate superior results, and each depends on the collaboration of groups whose vision and goals contain shared elements that allow them to make common cause to achieve mutual objectives. These three types of initiatives include private-sector partnerships, partnerships within local communities, and partnerships based on civilian-military cooperation. Under USAID’s oversight, these cooperative programs, by addressing practical social and economic concerns at the societal level, establish working relationships in beneficiary nations that provide the foundation for the mutual trust necessary for the open and effective dialogue required to advance U.S. foreign policy. Partnership programs also serve an important role in providing proof of concept. These programs—which after the early stages of USAID support are designed to become financially selfsufficient—then can be replicated on an increasingly broader scale, at each level of implementation further enhancing economic security and national stability.
Private-Sector Partnerships USAID has been instrumental in cultivating the formation of numerous indigenous private-sector development initiatives in fragile states. By providing both seed funding and ongoing technical assistance, the agency has been able to ensure the long-term growth and success of financially sustainable, home-grown programs directed by local leaders who have a keen understanding of the issues faced by their communities. One of the greatest benefits of these programs is the “thought partnership” that develops over time between USAID and the private-sector party—a mutual understanding and shared perspective on evolving challenges and opportunities that can help point the way toward solutions that encourage peace and prosperity. The Foundation for Social and Economic Development (FUSADES), founded in the midst of conflict with USAID support in El Salvador in 1983, is a clear example of a locally directed initiative that has
4 | Greg Huger
enjoyed long-term success and grown over time to play a key role in the development of national policy. The organization, which was created by a group of Salvadoran professionals, develops public policy proposals aimed at improving the social and economic well-being of all Salvadorans, and has offered up a number of development proposals that have been incorporated in government programs. For most of its existence, FUSADES also has worked to build a new economic base for the country through its support of micro, small, and medium-sized enterprises, and through its efforts to solicit foreign investment and develop export opportunities. As I can attest from my own work with the organization, FUSADES’s three-decade record as a promoter of Salvadoran development—as well as its steadfast support of democratic institutions— has earned it a solid reputation in the public mind that continues to serve it well today. While many serious problems persist in El Salvador, FUSADES remains an important and well-respected thought center fully capable of remaining on the forefront of policy development. USAID, which funded many of the group’s initial programs, continues to maintain an active relationship with the organization. As noted above, partnerships often serve to establish proof of concept. One USAID private-sector partnership that is enjoying particular success is the Farm Service Center (FSC) model, first piloted under the Feed the Future program over a four-year period in Moldova. Funded by USAID grants and in-kind contributions from grantees, which leveraged USAID investment five to one, FSCs are locally owned retail farm supply and service centers that equip and provide training to small-scale farmers and rural entrepreneurs. These one-stop centers—which sell agricultural inputs such as fertilizers, feed, and seeds; offer technical training, machinery, and veterinary services; and furnish access to credit—help to move rural communities away from subsistence farming, while increasing food security and boosting economic opportunity and resilience. The centers have proven to have an outsize economic effect that cascades through surrounding areas. This is clearly proven in Moldova, where privately owned FSCs have prospered and grown far beyond the basic enterprises initially made possible through USAID-support. In fact, the nation’s 85 independent FSCs—organized as the business cooperative Agrostoc—together comprise the second-largest private agribusiness in the country, helping to increase the production and income of 1.3 million Moldovan farmers. The FSC model, which has been replicated in Afghanistan and Georgia, is now being actively deployed across Ethiopia. Private-sector partnerships such as the FSC development program—and similar agro-dealer and machinery service center models—allow USAID to go beyond the role of grant-maker and observer, and instead become actively engaged in building the individual private enterprises that
Leveraging USAID through Private-Sector and Military Partnerships | 5
provide long-term strength, resilience, and stability to local economies and communities. This closeness also helps to create an environment conducive to positive diplomatic engagement in support of well-targeted economic reform.
Partnerships with Local Communities Another kind of successful USAID partnership approach mobilizes the resources and expertise of local communities and organizations to pursue economic development objectives that lay the groundwork for subsequent social and economic reforms. One such USAID partner organization is the Alexandria Business Association (ABA), which works to promote the interests of the Alexandria, Egypt, business community. The ABA/Small and Micro Enterprise Project, a partnership initiative jointly funded by ABA and USAID and launched in 1990 to provide microfinance services to small entrepreneurs in the area, has become a model for best practices in microfinance. The program—which after two years generated enough income to become self-supporting—today not only provides loans, but also nonfinancial offerings such as business and technical training, and marketing services. The project also furnishes clients with technical assistance sourced from USAID and other international organizations, as well as consultancy services focusing on microcredit scheme design, performance measurement, impact tracking, and other topics. The success of ABA/SME has far exceeded its original mandate. While the project initially was designed to focus on manufacturing and processing, it now also serves enterprises focused on trade, services and agriculture. Furthermore, other organizations in Egypt have designed similar programs developed along the lines of the ABA/SME model—helping to elevate the economic well-being of communities outside the scope of the project. The success of the initiative is reflected in the numbers. As of March 2017, ABA/SME operated 61 branch offices employing 1,370 staff—and had dispersed nearly 1.7 million loans to more than 663,000 members over the life of the project.
Civilian-Military Cooperation USAID’s work frequently takes place in fragile states. When those states are also theaters of activity for the U.S. military, the agency works cooperatively with the Defense Department to ensure that their mutual goals are served, and that duplicative efforts are avoided. This third kind of partnership—civilian-military cooperation—also is designed to coordinate international development with defense efforts. This coordination ensures that the efforts work in parallel in a manner that most effectively mitigates the economic and social conditions that lead to conflict and failed states.
6 | Greg Huger
To that end, USAID works with its Office of Civilian-Military Cooperation (CMC) to ensure that the policies, planning, programming, and outreach efforts of both parties align in a way that best advances U.S. foreign policy. CMC oversees the synchronization of DOD and USAID efforts. In terms of policy development, the office facilitates the exchange of feedback between the two parties on policies and strategies that affect USAID interests, and regularly convenes a steering committee drawn from USAID regional and technical staff to work on policy development. CMC also facilitates training courses designed to familiarize DOD with USAID, and vice versa, and offers additional DOD-hosted training opportunities to USAID staff. To further enhance the collaborative process, USAID and DOD also participate in a personnel exchange of foreign service, civil service, military, and technical professionals to bolster access between the agencies. All of these practices together help to accomplish cooperation on the three levels—communication, coordination, and collaboration— specified in USAID’s official policy governing its interaction with DOD. Because the two agencies are more frequently working close to one another while pursuing different, discrete objectives, this program of civilian-military cooperation has proven increasingly valuable as USAID and DOD find themselves side by side in a growing number of fragile states. Over the last 15 years, USAID has further refined this system of cooperation based on the lessons learned in theaters of military activity in Iraq and Afghanistan. The work required to fulfill the first contract USAID awarded in April 2003 under the Iraq Infrastructure Reconstruction Program, for example, needed to be performed in a dangerous postconflict environment. Getting the project underway required close cooperation with the U.S. military. With military support, USAID and its prime contractor, Bechtel, convened public meetings to enlist qualified Iraqi subcontractors to perform most of the work. The use of local workers was essential, not only to restore employment and economic health, but also because Iraqi workers could travel and work more safely in the country. The military also helped provide liaison with local communities and trade groups, allowing USAID to enlist broader support for the reconstruction program. This civilian-military cooperation permitted workers to quickly restore more than 1,200 schools in time for the start of the new school year in October 2003, for example, as well as rebuild other critical facilities such as medical clinics and fire stations, At the height of the effort, projects performed under the program employed as many as 40,000 Iraqis, with Iraqi subcontractors performing about three-quarters of the work. USAID and DOD have become increasingly effective in successfully replicating this cooperative process in other areas of mutual activity, including the Philippines, Colombia, and the Sahel.
Leveraging USAID through Private-Sector and Military Partnerships | 7
The Path Forward Policy experts from across the spectrum agree that development aid has joined diplomacy and defense as an essential component of our effort to advance U.S. national security priorities around the world. As the initiatives described in this paper demonstrate, partnerships have emerged as some of today’s most efficient and cost-effective international development investments, and these projects have established themselves as valuable and necessary instruments in the nation’s foreign policy—and national security—toolbox. This paper has cited just a few examples of the power of partnerships, but the concepts underlying these models have been validated not just in El Salvador, Egypt, and Moldova, but also in many other countries where USAID conducts its activities. That’s why we must build on these successes and continue to invest in additional partnerships. They provide significant leverage on USAID resources and help the larger investments of military and business engagement build sustainable progress in fragile states. In the case of private-sector and community partnerships: •
Initiatives closely engage and empower local individuals, businesses, and communities to build trust and commitment.
•
Success is aided by partners’ understanding of regional needs and the local culture.
•
Programs are designed to become self-supporting long-term efforts.
•
Successful programs are customizable and can be replicated quickly.
•
Because of all of these characteristics, especially the emphasis on engagement, the partnerships are particularly suited to fragile states.
In the case of civilian-military partnerships: •
The population focus of civilian efforts sustains the gains of the military campaign and creates the basis for longer-term progress.
•
“Investment” consists primarily of orchestrating communication, coordination, and collaboration to the mutual benefit of their respective missions.
•
Agencies build trust by learning one another’s culture and operational methods.
•
USAID and DOD leverage new interagency functionality largely from existing resources.
8 | Greg Huger
In all cases: •
Objectives are achieved faster and more effectively.
•
Partnerships make efficient and effective use of available funding to create long-term stability.
As poverty and political and environmental stresses threaten to turn more of the world’s poorest regions into flashpoints of conflict, we are obliged to use the fastest and most effective means at our disposal to bring peace and prosperity to those regions. USAID’s time-tested partnership models can help accomplish that mission. That is why we must continue to fund USAID at levels that will allow the agency to provide the staff and seed money necessary to introduce the social and economic benefits of partnerships with the private sector and the U.S. military in the growing list of fragile states that may otherwise serve as breeding grounds for conflict.
Acknowledgments This report is made possible by general support to CSIS. No direct sponsorship has contributed to its publication.
About the Author Greg Huger is an international development and business consultant in Arlington, Virginia. Earlier, he served with the U.S. Agency for International Development as mission director in Ukraine, deputy mission director in the Federally Administered Tribal Areas and Khyber Pakhtunkhwa in Pakistan, and senior development officer for Regional Command East in Bagram, Afghanistan, and in El Salvador, Egypt, and the former USSR. He had long-term corporate assignments with Deere and Company, Bechtel National Inc., and Unocal Corporation in Colombia, Spain, Iraq, Myanmar, and Indonesia. He holds a B.A. from Georgetown University. This report is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). © 2017 by the Center for Strategic and International Studies. All rights reserved.
