USAID to focus on transferring skills and knowledge

USAID to focus on transferring skills and knowledge

By Sarah Jackson-Han

WASHINGTON (AFP): The U.S. Agency for International
Development (AID), reeling from budget cuts, is shifting its
focus from major spending on infrastructure to transferring
skills and knowledge to developing countries.

AID Administrator Brian Atwood, just back from Japan,
Indonesia, and the Philippines, also hopes to step up cooperation
with Tokyo in stimulating private-sector investment as a
substitute for bilateral or multilateral loans.

Japan and the United States "have now some 200 projects where
we're working together around the world," he told reporters here,
noting that officials from both countries meet to review these
projects twice a year.

Collaborative projects include environmental protection in
Indonesia, preservation of Pacific coral reefs, polio
vaccinations in Asia and Africa, and population-control and anti-
AIDS programs in Indonesia and the Philippines.

But Japanese authorities now estimate the need for
infrastructure development in Asia at US$1.6 trillion, mainly
power plants, telecommunications, roads, and urban renewal
projects.

Aid officials in both capitals know that such large-scale
needs exceed available grants and loans, so they plan to write a
"concept paper" on how to facilitate private-sector investment in
this area.

U.S. and Japanese aid officials will likely discuss these
ideas at an annual meeting on common aid projects in November.

After more than a year of congressional threats to dissolve
the 35-year-old American aid agency or merge it with the rest of
the foreign affairs bureaucracy, Atwood voiced confidence that
"AID is here to stay."

The Republican-run Congress, he said, seems at last to
recognize that unlimited budget-cutting may not be such a good
idea after all.

But with nearly a quarter of its funding cut this year, AID
officials plan to focus now on transferring skills and foreign-
aid expertise, in which the United States has a relative
advantage, and rely more heavily on non-governmental groups to
execute development projects -- and on Japan to help finance
them.

That means fewer U.S.-funded airports and seaports and more
sharing of management, marketing, and technical expertise -- what
one US official described as aid "software" -- with aid
recipients.

"During the 1960s, when AID has a lot of money, we did a lot
of infrastructure work," Atwood said. But with only about $1.7
billion for aid recipients worldwide this year, the agency now
provides more technical assistance in areas such as population,
health, economic growth, and democracy.

Aid officials in and out of government say America's growing
stinginess with foreign assistance has had a chilling effect
around the world, since other countries tend to follow
Washington's lead.

Nor can Japan, coping with economic problems of its own, be
expected to continue raising its foreign aid spending
indefinitely: Tokyo has recently come under domestic pressure to
curb foreign aid, the highest in the world at $14.7 billion last
year.

The United States has meanwhile slipped into fourth place
behind Japan, France, and Germany, in terms of total foreign aid,
the Paris-based Organization for Economic Cooperation and
Development reported in June.

And among donors, Washington gives the least amount of aid as
a percentage of gross domestic product. "These are tough times,"
Atwood said, citing continued budget-cutting layoffs and
demotions.

While U.S. financial backing for large-scale infrastructure
projects will be far scarcer in the future, officials cite the
growing economies -- and surging U.S. imports -- of Indonesia and
the Philippines as evidence that targeted development aid is a
worthy investment.

Under its $432 million in aid for Asia, USAID planned to give
$157.5 million to India this year, $75.2 million to Bangladesh,
$63 million to the Philippines, and $48 million to Indonesia.