 Okay folks, we're going to get started. I'm Dan Rundy. I hold the Shrier Chair here at the Center for Strategic and International Studies. We're here to talk about redefining U.S. foreign assistance strategy for middle-income countries. I think it's a timely topic given the context that we're in. We have a very interesting panel that you have the biographies in front of you. I won't go through them, but just suffice to say that we have some friends and colleagues on this panel. We have Carol Peasley from SEDPA and a former Senior Foreign Service Officer. We have Heather Conley, who had a distinguished career at the State Department and is also a colleague of mine here at CSIS and runs our Europe program. Also have Yvonne Veiboda, who's the Executive Vice President at the German Martial Fund, and prior to that ran the Balkan Trust for Democracy for the German Martial Fund, a pooled trust fund or pooled fund that you'll hear about in a few minutes. And then we also have Steve Feldstein, who's on Capitol Hill Center for Relations Committee. So I'm going to change places. I'm going to sit down here at the table, and I'm going to hand the podium over to my colleagues. Thank you. Carol, I'm going to ask you to go first. Oh, okay. Yeah. We agreed we're going to sit. Yeah, we agreed we're going to sit, because it's a friendly audience. Right. So we're going to sit. Okay. Thank you very much, Dan. It's a pleasure to be here. As Dan mentioned, I had a very lengthy career with USAID, and I saw the effort to graduate or to move into middle income strategies from various platforms. Just an introductory remark. In 1977, I was the primary drafting officer for a strategy for USAID to phase out of Costa Rica by the end of fiscal year 1980. We identified a series of development and poverty indicators. We expected to be met by that date, and recommended closure of the USAID mission if, when those indicators were achieved. We also spoke about the need for sort of continued long-term partnerships between the U.S. and Costa Rica. We expected the strategy to provoke discussions in Washington, but we did not expect it to lead to the exact opposite of what we proposed. The result of our recommendation was an expanded USAID program and mission that grew by leaps and bounds as a result of our recommendation to close it. So I still joke that I was responsible for one of the least effective documents in the history of USAID. For a second. Right. But it did get me thinking about some important issues. Then in the 1980s, I was in Thailand when we moved towards a middle-income strategy. And we're focusing that USAID program on the most marginalized of the poor and on a series of middle-income issues, environmental protection, food safety, private sector development. And then again in Russia in 1999 to 2003, again, faced the issue of graduating an aid program or at least moving certain parts of it, phasing out certain parts of it to a changing Russia. So I've seen the question of foreign assistance in middle-income countries several times. But Dan has really not asked me to talk about those experiences today, but to focus on my experience in the Africa Bureau in the early to mid-1990s when USAID decided to close some 20 USAID missions worldwide. I think eight to ten of those were in Africa and they ranged from Botswana, which was an emerging middle-income country, to Chad and Niger, two of the poorest countries in the world. I might add that Costa Rica was one of those identified in 1994, and I think it ultimately did close in 96 or so. So only 17 years after or 16 years after we had recommended it. I think that just about anyone who had been involved in that process in the mid-1990s would say it was not well done and that lots of mistakes were made. And I guess the one benefit of mistakes is that that helps to learn lessons for the future so you do it better. And what I'd like to do is to just summarize a few of those. First, even though the momentum for closure of aid missions may start at the top of the agency, and it could be the administrator or head of policy or management, the decisions need to be made on a consensual basis. And that starts within USAID itself. In 1994 it was an extremely centralized process and basically decisions were dictated. And we in the Africa Bureau were simply presented a list of USAID missions for closure in dates by which the closures needed to be completed. There was no prior discussion and we then spent countless hours in huge amounts of energy arguing and negotiating changes. It just isn't a good way to go about making such an important decision. This leads directly to the second lesson. The decisions to close USAID missions must be carefully coordinated with the State Department. We in the Africa Bureau and back in 1994 were in fact instructed not to talk to the Africa Bureau and the State Department and not to let them know in advance which countries were involved. Needless to say this created a lot of ill will and all of us had to expand again extraordinary amounts of time and energy trying to recover relationships with state colleagues and secrecy made it all more difficult. I think just part of this flipping it over to the other side is the need to plan graduations or closures over a multi-year period. A long-term strategy needs to be worked out in collaboration with the State Department and the host country. And in most cases the relevant congressional committees. Programs need to be designed to end in a rational way. Otherwise there's no hope of sustainability and investments don't realize the gains that were originally justified those investments. And also there needs to be some thought about post closure mechanisms. Precipitous closures lead to wasted program resources and to ruptured relationships with host countries. Another lesson is to be honest about the reasons for closures. Don't claim graduation when it's not the case. I still have nightmares about meetings to close our usaid missions in Chad and Niger two of the poorest countries in the world. Some people in the center were trying to use the graduation word. If missions are being closed because countries are poor partners figure out some way to say that in a palatable way. If they're being closed solely for financial reasons that should be said. And then in fact if that is the reason maybe there are other alternatives to reduce costs besides closure. And perhaps most importantly one needs to recognize that cost savings do not occur immediately. In fact there are substantial costs in the short term to closing missions especially when they are not planned when it hasn't been planned over a multi-year a multi-year period. And in fact the decision is done on an accelerated basis. These costs include the early transfers of direct hire staff. They include severance pay for foreign service nationals. The disposition of offices and equipment. The costs of terminating grants and contracts early. All the time of Washington staff and other TD wires to help close out the books and projects. They're also incredible costs to develop closure plans. There are countless details that need to be built into this process including the analysis of local labor laws and negotiations with host country governments. Substantial time has to be devoted to preparing those closure plans and to gaining consensus on how to move forward. And there may well be cost savings over time but it could be years before they are indeed felt. And and some of those savings even get eroded over time as alternative programs and structures get built. I would simply point out that how many times the Usaid mission in Panama, Tunisia, Morocco, Thailand, and Botswana have been opened, closed, and opened. And the costs are substantial if you don't really think it through carefully at the at the outset. And that's really are some of the lessons that I certainly learned in 1994 and I look forward to the discussion. Thank you. Thanks Carol. I specifically asked Heather to be on this panel given her experience at the State Department and Carol was talking about the need to coordinate closely with the State Department and oftentimes a lot of the resistance to closing a specific mission comes from the State Department because of concerns about damaging the bilateral relationship if it's done the wrong way. So I'll hand over the floor to you Heather. Well thank you so much Dan, Carol, Yvonne, Steve. It's great to be with such great colleagues here. When Dan asked me to speak I kept saying sure you want me to speak to this audience on this topic. So Carol I think I will relate my stories I think by way of introducing this topic and I just want to say one note of self-interested advertisement. I think CSIS is really doing a huge amount of work reconceptualizing development, how it intersects with diplomacy and Dan's part of a great team that we're assembling here so it's a privilege to be part of this great family and in this space. I'm sort of the beginning and the end that at least was my my two stints at the State Department. I began my career at the State Department in the coordinator's office that coordinated all U.S. government assistance to the former Soviet space and this of course a State Department led coordinated office was controversial at the time. Many of our AID colleagues were not enthusiastic about this construct. At the time Deputy Secretary Larry Eagleberger was very insistent both for the Eastern Europe program, the SEED Act, and then eventually Congress approved the Freedom Support Act that the political sensitivities of this particular assistance program demanded a State Department led effort. The coordination I will tell you was extraordinary. Twenty U.S. government agencies from the Trade and Investment Agency, Department of Agriculture, Health and Human Services, it was an extraordinary time as we were working towards the Freedom Support Act, the congressional interest, the congressional focus, we were doing nuclear non-proliferation, privatization, technical aid, humanitarian aid, it was sweeping and it was something that quite frankly a huge amount of focus and interaction. It's hard for me to imagine that next year will be the 20th anniversary of the Freedom Support Act. Of course I was a child when I first started working on this project but we're at this now for 20 years in different ways with some success and some lack of success but it was a thrilling project to be a part of. When I returned to the State Department in 2001 I had the privilege of working in the European Bureau and overseeing Northern and Central Europe and I was at the point of watching our Central European aid missions close and I don't recall at the time although I'm sure there was a lot of concern from USAID. We were creating regional offices, the Budapest office was focusing obviously on the Western Balkans which was still a very robust program. The complaints that I received were from our ambassadors in the field and the ambassadors were saying listen we're losing a vital tool to continue to develop our relationships with this country and most particularly with civil society as a whole. The ambassadors didn't even have a small pot of funds to support very small seminars or reaching and helping develop a small NGO that was trying to put on a seminar and it was very frustrating to them and what they then turned to was public diplomacy dollars full brides and things focusing on those exchanges but the pot was diminishing and so I pulled an interagency group together to look at this. We understood the missions were closing what resources were available to us and I was arguing that if the United States did not remain visible and active and engaged in Central Europe we were largely going to lose the policy benefits of a hugely successful 15-year assistance program. Here's what I was told. This region is a success. Your mission has been accomplished and we're very focused on the Middle East Partnership Initiative thank you very much and that's where all our funds will be going and while I conceded all three points I felt it was extremely short-sighted and so what I'd like to do is just sort of share my own thoughts of where I think we need a new paradigm here and I'm not necessarily speaking about pure development per se. I'm talking about how the United States maintains, deepens and strengthens its relationship within a country and regionally. The first rule is our work is never done. All democracies in whatever phase they're in are in a work in progress although democracies generally progress in the right direction we have to acknowledge that they backslide and I'm watching Central Europe in certain areas backslide right now. If the U.S. government has already made a profound investment in this country why in the world are we walking away from it? Whether we think it's done or whether we have other priorities and we're taking away funds and regional experts we must continue to invest. We just have to be very creative and innovative and think about how we invest, invest anew. My frustration with the U.S. government leadership model in any particular country it feels like we only have two speeds. Speed one our way or get out of our way. Speed two over to you we're done here we have more pressing obligations. This is our approach in the western Balkans and I'll let Yvonne talk about that a little bit. We need to find the third speed which means active U.S. engagement and involvement in a country in a region but we're not necessarily leading it we're partnering and we may be partnering with the private sector we may be partnering with civil society we're not necessarily the leaders but we're not leaving or seeding the field. As I mentioned I'm really not talking about development I'm talking about relationship management and USAID it through its excellent development work allows us to have a full and complete relationship with many countries. We get to talk to health ministers and agricultural ministers we're out ministers we're out in the field we're touching local society and I tell you what that's helping our reporting cables that's helping us understand the complexities in a country when that leaves we can't touch and feel anymore. I'm in full disclosure I'm a strong believer in a more integrated development and diplomacy model not to influence or contaminate in any way our excellent development work but to make it much more enduring to make it more strategic and so as I see the the U.S. foreign policy leadership model needs to adjust itself to some new realities our influence is less and we can't control everything anymore but what this demands is that U.S. leadership through our embassies through the interagency community it demands a networked relationship model where the U.S. is engaged but perhaps is not the leader in fact maybe using its leverage and allowing others to lead. So this is a very different way we do things we're a very centralized model and many times we don't allow our the field and our embassies to lead us to guide us in that so I think we're talking about an absolutely a new design and in part that was what many of us were hoping that the QDDR did was sort of reframe redesign what American development diplomacy and I would include public diplomacy in that what that means in the 21st century I think we're we're making some tentative steps I would argue with the events the last three weeks in Egypt it argues not for tentative steps but for very bold steps and looking at this redesign of U.S. leadership around the world. Thanks Heather. Yvonne had talked about we've heard about visible active engagement hold on to the gains partnering new realities networked relationship model this sounds like the Balkan trust for democracy maybe you could tell share a little bit about that and how that was created and who the partners are. Thank you very much Dan it's a real pleasure to be here with Carol Heather and Stephen on this panel and I think the the topic is absolutely not only timely but important not only given the events in the Mediterranean area in Egypt, Tunisia and other countries but also as as both Carol and Heather was saying you know how does one maintain the established levels of democracy civil society and avoid backsliding. The Balkan trust for democracy which I had the honor of running for seven and a half years until a few months ago until I moved here to Washington is I think exactly a type of new design a type of new institution that we are looking for all together and this was I would say a kind of moment of leadership at USAID at the German Marshall fund putting together 10 million dollars from each side along with the CS Mott Foundation from Flint Michigan so it was a it was a private public initiative and investment to create a 10-year trust to support democracy in all of the Balkan countries not only the western Balkans. I think it was there was a lot of foresight there all the USAID missions were still in office but I think what the initiative understood clearly as again Carol and Heather have said that there's a dimension a temporal dimension here that's very important democracy will not happen overnight and secondly even when we have the trappings of the beginnings of a consolidation of democracy there will be need to support and sustain those actors who are doing the hard work of advocacy watchdog activities and in fact if you talk to people in the region whether it's offices that have been closed like in Bulgaria Romania or Croatia or in those that already exist there's a fear that as European monies which are of course the most significant ones in the region come in there won't be money small monies for those important watchdog and advocacy activities because a lot of the EU funds actually come through governmental channels even those going to civil society and so the fear is that actually those voices will simply be shut off and because there isn't sustainability of the civic sector in many of these countries there won't be any monies for these people to apply for and thus there is true fear I was just talking to a senior advisor to a prime minister of one of the countries who's also a think tanker before he was in office and he said he will probably go back there when he was out of office and that was exactly what he said you know there are American governmental and private funders who are leaving and they are afraid that they will be left high and dry so the Balkan trust I think was a model and is a model it has another two years of its 10 years to run it's a sinking USAID endowment but there will be monies left over from GMF and the foundation to carry on and I hope we will do so this model was then replicated in the Black Sea region with the same people and institutions involved the Black Sea trust for regional cooperation and a smaller version of it devoted to Belarus the fund for Belarus democracy what is interesting about these is that US monies whether governmental or private leveraged European monies the model was deemed successful by many accounts we received the global development alliance award when Dan was at USAID and that's maybe why I'm here today but more seriously we leveraged about an additional quarter of the monies from governments governmental donors in Europe and this was one of my goals as I took the leadership because this is a transatlantic initiative so when we talk about new designs innovative approaches we need to understand that there are other actors in the field they may be friendly actors they may be bigger actors and you know this raises the the horribly dick to question of the coordination between all of those in the field but what I want to say in stress is that we need to work with those others if for no other reason than to understand what they're engaged in how they're working and whether there are gaps that we need to feel like in the short story that I told you about the the think tanks and advocacy groups who are fearful that they will be left without any resources to continue these activities I think these are all pertinent lessons as we think of North Africa at this moment and there was even talk as Dan will recall about four years ago about creating a North Africa trust along these same lines we never got there maybe this is a time to rethink that idea and I think when we're thinking about these ways of acting we need to understand that there will be different types of action so you will have the European Union a huge donor very kind of the juggernaut cumbersome you know doing everything from infrastructure to governmental reforms to administrative reforms in health education and other things but also to civil society and then the nimble actors who have the quick flexible approach such as some private donors or in this case the Balkan trust for democracy that was able to and is able to respond very quickly to turn around a project in two months time to respond to a need that's coming from below so listening to the local actors is extremely important this is not donor driven in any sense of the word but responds and keeps its ears on the ground and is a very lean operation there are eight people in that office in Belgrade who disperse about three to four million dollars a year in small grants and small pots of money I would agree are extremely important it doesn't matter how small they are if there is an ambassador or a an embassy that can give out for an event seminar you know some kind of a small advocacy it's extremely important because it is a sign of trust one and secondly that there is an understanding that these societies these groups need help however developed or middle income or even above middle income they may seem and it has been alluded to we have had backsliding in a number of european new member states NATO and EU countries and I think that is a lesson that we must somehow digest in finding ways in which we can keep abreast of the need to be there and to help sustain and just one final concluding word it needs a little more development but there is a lot to do in helping develop local philanthropy in these countries again the economic situation even before the crisis was not allowing for it but there have been steps made in a number of these countries and I think that there are ways in which aid and development support can be targeted to helping retrieve some old practices because there was for philanthropy in all of these countries in the 19th century earlier 20th century and then of course corporate giving which I think is another important way in which some of these retreats of funding can be supplemented thank you Yvonne I'll just make a couple of comments on that and thank you again the I was at the Brussels forum last year at the honor of being invited and the presidents of Croatia and Serbia were meeting it had just met prior to that meeting and it was a direct result in my mind for it was clear to me because of the grant making and the support that had been going on cross-border between Croatian Serbia they knew each other they were comfortable with each other their advisors knew each other and so it's these sorts of these sorts of diplomatic gains that you want to see happen that were direct results of several years of investment on the part of the Balkan trust for democracy there's this issue of local philanthropy needs to be supportive I think this is one of the things that as if and when we have to close out a mission this is one of the areas that needs to be thought about as if they're gonna if USA or the US government is going to pick three or four areas one of the areas on a sustained basis the architecture of local giving the Luso American Foundation was set up in the 1980s with monies used by from the United States government to pay for the rent on the Azores Air Force base in the country of Portugal actually Frank Carlucci who was then ambassador in the 1970s in Portugal negotiated the agreement he has an affiliation here with CSIS and it has about a hundred million this is a there's sort of a it's between fifty and a hundred million euro endowment it's been existing just 25 years it has three areas of focus it's on science and technology between the United States and and Portugal US Portuguese cultural ties and third is triangular cooperation between Portugal the United States and Lusophone Africa it also happens to be based on this this topic about philanthropy it's one of the large players in Europe the European philanthropy movement was the founders of the European Foundation Center which is sort of the Council on Foundations of the philanthropy movement in 1990 in Europe so this this issue of local philanthropy as an ongoing interest and is in one of the if you can only pick two or three things to focus on this would be one of the things in each country to leave behind they're very you have very sophisticated and willing givers in countries like Brazil or Panama as as Ivan's alluding to there's a history of this in places like Serbia so there this is something to focus on in terms of as you think about what are some areas of focus well my I leave the last word to my friend Steve Feldstein who's from the Senate Foreign Relations Committee Steve you've heard about austerity but don't you the austerity of driving this but don't do this too quickly you've heard about investments in relationships investments in development you've heard of this the about ongoing relationships ongoing interests that we have in country but also working with other partners if we end up doing this we can work with philanthropy we can work with European donors we can work with host country governments what's the view from the Senate Foreign Relations Committee well thanks Dan and and I'm also happy to be on this panel with Heather you've gone and Carol this is uh I think a really apt and important topic and one that I think in some ways has sort of snuck up upon us fairly recently both in terms of you know the changing budget climate that we're in a lot of discussions that are taking place even today on the House side and soon on the Senate side and also in light of recent recent announcements by USAID and Raj in particular and even today Mark Fierstein announcing Panama and Guyana in his hearing with Senator Menendez so I think this is a very appropriate and important topic for us to to consider one thing that Carol mentioned which actually kind of brought me back a few years I had a chance to travel to Chad in Niger and at that time when I when I went to both those countries I wasn't aware of the actual history to the mission closings and so I remember landing in Chad and and talking to different USG officials government officials and so on saying why don't we have an aid mission here this is ridiculous we have a burgeoning humanitarian crisis both you know within Chad and outside on the border in Sudan huge you know sort of security governance issues all around this is this is crazy and then you know having sort of talked further and found out more of the history you know it makes you wonder sometimes do we too hastily engage in this sort of exercise especially sort of in the name of cost cutting which may or may not actually be something that ends out being the the long-term result same thing with in Niger a year later I went out there as well and same sort of issues there's you know certainly a strategic interest that has become more prominent I think that by the time I was there something like the third poorest country per capita GDP in the world so huge developmental need and you know again sort of makes you makes one question and and pay a lot of scrutiny to I think the the mission closing process so I mean I would start with just a couple points you know first of all as we're looking at the process today you know I would sort of issue a word of caution as we approach it I think first of all there have been some announcements I think some of the announcements have taken place really as a way to sort of preempt what are anticipated reductions in a way to sort of you know change the narrative of that conversation at the same time there are a lot of lingering questions first of all we don't I personally don't know beyond three countries I think out of the seven that were announced to be closed you know I don't know what the other four even are so I would assume at least in the broader public that's also unknown that's that's disturbing and I think that's something that needs to be consulted and dealt with transparently sooner rather than later even among the countries that we do know we know very little at this point timelines and Carol was talking about sort of a multi-year phasing out approach is something that is not known you know whether there will be some sort of legacy institutions like Yvonne was speaking of again that's unclear maybe certainly more plausible in the case of Panama than Guyana some of the other programs that we have a big PEPFAR program for example in Guyana and I want to speak a little more about Guyana in a second but you know again how that will be transitioned is another big question mark and so what we have at the moment are announcements without a real sense of of either direction or process and I think I don't think it's too late by any means I think right now is is the appropriate moment for USAID the USG other stakeholders to really to be in to engage in these sorts of conversations but I think that moment can pass too quickly and we'll lose the opportunity and then we'll have I think you know political issues and bad will towards how this is going so I would you know urge that this process happen fairly soon and then you know I think in general as we think about what such a process would look like I've had a chance to talk both to other old you know senior old USAID officials different colleagues and I don't mean old and I mean experienced I mean experienced it's only only meant in a positive way and to consider what are some of the criteria that we should bear in mind as we think through the mission closing process I mean I think first of all the first question is you know why why do we even consider this and cost savings is a primary factor you know again you know what are the cost savings what kind of cost benefit benefit framework are we looking at and what kind of time period you know number two a consideration of the importance of the country to us interest is something that we can't divorce from from these questions despite the fact that some might consider a USAID mission to be much more on the development side I think with the sort of paradigm that we're looking at in terms of national security and developing a part of that we have to think about what the national security imperatives are for the US in the given country number three the regional context thinking about what our regional interests are and and so you know if you look at the broader regions say WHA versus NEA you know there are different components that we need to be aware of and different stability factors and other engagements that may be mutually supporting looking at the overall development level the country and the trends and so you know that includes looking at Ida statistics MCC indicators the UN human development indicators and really trying to get a get a gauge on on what we're considering with when it comes to the country where what its trajectory is how much we've invested in it and where we realistically hope to see the country go at least as our engagement continues looking at what other donors are doing what we anticipate they'll do once we leave what kind of gaps they will fill but also bearing in mind that oftentimes other donors have followed the US lead and when we've pulled out it as has oftentimes left a vacuum that other donors have not filled in thinking in general about our development objectives in a given country you know when we anticipate those objectives we will be achieved how much have we already invested will it be ongoing programs to administer and I think really at this point including the USAID's new evaluation office in this discussion is something that would be important obviously timelines as I've mentioned and then looking at post-closure options beyond that and finally thinking about the political dimensions and that that's not only you know sort of a Capitol Hill discussion but but it is something that that I think we have to bear in mind in that you know there are places that tend to have more of a of a voice and and more of a constituency among certain members and that can play out in different things I think it's also interesting in terms of the issue of who arbitrates and how these decisions decisions are made within the USG to think a little bit about the state aid relationship and I would think at this point right now that USAID sort of unilaterally closing missions may not be as plausible or feasible as it once was I would be surprised if this wasn't something that was fully done at least in consultation and coordination with state partners let alone a broader array of actors especially on the Hill but I could be wrong and then I I do think also it's important to think about the endowment and legacy issue and I think you know different countries present different challenges and so you know on the one hand if you look at sort of different legacy plans for Bulgaria Croatia and Romania you you have a certain set of issues and I think it's there's a clear path to sort of how that can be effectuated the one of the endowments that has gotten a lot of attention in the last few years is Egypt and I think that as a case in point presents a whole different set of factors I think you know for one there's been a very lukewarm attitude on the Hill towards a potential endowment for Egypt although it was something that was eventually included in appropriations as recently as 2010 for the first time but you know there's there's the the issue on the one hand of Egypt sort of making very clear that you would like to have an endowment with no conditions no conditionalities and on the other hand I think at least sort of during the Mubarak era a lot of ambivalence about the governance human rights record and other demoxy factors and whether having an endowment that we would put in an equal amount together with the Egyptian government but essentially allow a much greater degree of control by that government is something that's in the best interest of the United States or human rights community or the demoxy community in general so that's you know again I think there's a different there's a different conversation depending on the context finally I wanted just to to talk a little bit about Guyana in particular since you know we only have a few countries right now to think about and since you know I found it interesting that the the topic of this of this get together is sort of middle-income countries well Guyana I think is an interesting one to consider especially because one of the first ones name Guyana is not a middle-income country it's per capita GDP is 1,420 in the latest statistics I saw if you look at USA's description of its program in Guyana it describes a place that faces many quote development challenges vulnerable economy rising crime poor security continued out migration HIV AIDS prevalence rate of 2.5 percent human trafficking and a political climate that threatens the country's ability to consolidate democratic governance well it doesn't sound to me that that this on the face of it is the type of sort of graduated middle-income country that we're otherwise talking about whether it's the Baltics or something else and yet here we are at a point facing sort of the imminent closure of that country we also know that there are ongoing large programs that have taken place the MCC threshold program funded to 6.7 million and focused on the fiscal policy indicator also you know looking obviously at the PEPFAR programs as well and so when looking at that you know one one would hope first of all that there's a longer multi-year timeline in place you know certainly I don't know the cost savings that would come from placing these programs in a regional a regional context but but I would assume it's something that will still continue to bring a fairly amount of a large amount of costs the truth of the matter is for the region that assistance dollars have been declining and are and most likely will continue to decline for the foreseeable future and so that in some ways plays into the decision well you know do we continue a large program in a country that is smaller than some of the others that isn't as of large strategic import as of Colombia as even a Brazil as an El Salvador for example and and so and then finally you look at the political dimensions you know unfortunately there isn't a huge constituency on the hill or a huge community in general that that is able to advocate for it so you know there you have I think in a nutshell a lot of the issues that we need to carefully grapple with and think about both in a country like Ayanna but more broadly on this issue I mean my last sort of point on on on the broader issue is that I think we do at least from the committee standpoint need to consider their intake and and think about this in a very careful way that it is not something at all that I think those who who really sort of focus on the substance issues on the committee are completely comfortable with in terms of saying this is a foregone conclusion that I think we need to work out the details in the process transparently and understand what the answers are to many of these lingering key questions that are come about when when thinking about the implications of closing missions thanks thanks Steve one of the topics that's that hasn't been touched on I just wanted to ask the the panelists if they could if they'd be interested in touching on the topic is is a use of various approaches or instruments towards leaving a country there have been in doubt there are discussions about what are called endowments there's discussions of there's been some mention of sinking funds there are also oftentimes existing institutions that have been set up bilateral institutions oftentimes that already exist there's also been some discussion about putting in development attaches on the ground in a number of number of countries where they don't necessarily need resources so much as advice in some in some context and not all and then there's also been the discussion about how do we support countries as they develop their own foreign assistance plan AID just signed an agreement with ABC which is the Brazilian Aid Agency Brazil has a 30 million a year foreign assistance program primarily in Lucifone Africa and AID is partnering with them I suspect the reason AID and ABC are working together is because of the strength of AID's Foreign Service Nationals many of the Foreign Service Nationals from Brazil who've worked with AID for a long time and understand AID have oftentimes migrated over and worked in countries like Angola and Mozambique and are able to do the crossover and understand both Brazil the United States and and the local country my strong suspicion is they're a handful of FSNs who've been involved and put piecing those together as my my suspicion so various instruments various approaches may I just would open up that I'd ask that one question the panel then I'll open it up to the broader audience some people could talk about instruments that they've seen or that they that they think have worked or pieces of pieces of that in various countries and from a success standpoint well I mean I think Dan all of the instruments you mentioned are are very important ones and just goes back again to the point and I thought Steve said it very well you need to to do all this very carefully and to plan over a multi-year period to move towards exiting and then thinking about what it is that you're leaving I think endowments are a wonderful instrument and I think they are relatively inexpensive actually and yet they have very little political support and I battled many many times in AID to try to justify endowments and and we were not able to go forward with them so I think that is something very very important I would add one other thing and again I think it's an example of when you really position a program for exit or graduation or exit you can think about what kinds of partnerships you want to help to create as part of that exit and I think one and one that I've seen many many places it's when AID in the past did a lot to support the development of universities and developing countries often there were technical assistance arrangements and partnerships developed with equivalent U.S. higher education institutions and those partnerships continue today 20 and 30 years after U.S. AID put money into those contracts so I think if it's part of an exit you help to develop those kinds of relationships you leave something that is very valuable behind and and just lastly because I think in Russia the steps that the AID mission there has taken to to work really over the past 10 years increasingly to work directly with Russian civil society organizations and to help strengthen them help to position them for private funding and and also in the process maintaining their links to some of their U.S. parents and I would give one absolutely fantastic example of the urban institute that went into Russia in the early 1990s to provide technical assistance on housing policy and housing reform issues they realized the quality of the Russian staff that they had recruited to work with them they decided to have a secondary purpose of that project became to create the Institute of Urban Economics a Russian NGO that operates very similar to the urban institute it is now a very strong Russian NGO that is providing technical assistance throughout the former Soviet Union on World Bank loans and all kinds of things and it has maintained its close professional working relationship with the urban institute and those are exactly the kinds of relationships you want to see as aid exits a country really in the central European context and speaking of the endowment the Polish American Freedom Foundation the Hungarian American Scholarship Fund again these are these are great legacy tools and really focusing on civil society and getting to that next generation and quite frankly that when I talk about building an enduring relationship with a partner country it's really about next generational issues and and that's really I have to tell you that when the exchanges go away when that deepening and strengthening goes away we really lose the next generation of leadership if I can just if I may I thought a couple of Steve's comments were so important as he was talking about you know really framing I think a fantastic approach to how you how the government US government thinks about ending an aid mission I was thinking you know we're so we're so focused on advocating a whole of government approach to the development agenda it's it's a whole of government decision making process when it comes to these types of issues no longer can one agency simply own this the the prerogatives are too great so Steve I love that and your question about what are other donors doing and donors following US leadership I've been focusing a lot of my attention on the European economic crisis and what it is doing to member your zone members and the wider EU on their development agenda and we're seeing very different things right now on the one hand the UK has ring fence diffid but they are changing their approach and strategies in some respects and what we're seeing in the European context is a much widening and broadening of the definition of what development is it's much more in the national security rubric they want that Afghanistan security and development counted in fact the Netherlands have been strongly advocating that the OECD be much more expansive on its definition of what their development assistance they're trying to you know readjust a lot of figures that they're not going to be able to meet MDG commitments that they've they're not going to be able to meet by a 2015 time measure so we are seeing lots of dynamism in the donor community quite frankly as the dynamism is occurring right now as we're watching it in Washington this is something we really have to monitor because it's not just what the US is doing it's what others are doing and we can just see a real collision here of donors exiting and really having some unforeseen consequences so Steve thank you for raising that I thought it was a great point Ivan you've seen a number of different instruments at the German Marshall Fund what some thoughts about approaches well just to give you a little more detail about the Bulgaria fund I think that was a case in point as Steve mentioned when USAID was closing down Bulgaria Romania and Croatia the leadership of USAID Bulgaria realized that they were leaving an unsustainable civil society and that there was a dire need to continue a lot of projects in which there was 15 years of USAID investment and that if they simply cut and left a lot of these projects would simply go nowhere so they decided to put aside two and a half million dollars as they were leaving they shopped around to see who could do the disbursement of these funds and to make a long story short they came to the Balkan trust and so we for three years worked fully defined framework given by USAID on supporting both those projects that they had established or helped from and then left us leveraged to look for ourselves and I think we did accomplish a mission it this is just closed down we finished the final year of monitoring and what we saw with a very detailed analysis of the impact of how many people were touched by these projects that the additional funds that were leveraged that it was a true success and hopefully this is one instrument that could be used in other countries where USAID will be will not be there I think another one is as as emissions are closed again with those actors who have been supported not only by USAID but other other donors have a huge repository of knowledge and experience and these can be used in third countries and we have seen some of that leveraged you know speaking for Serbia a number of whether it was the youth groups that were fighting against Milosevic who were then active in Georgia and Ukraine they're actually in Egypt today who used kind of this was the early period of using the internet technologies all this stuff this was we're talking about the kind of late 90s where radio internet were an extremely important tool to fight the authoritarian regime of Milosevic so another would be an NGO that has I think reached the heights of the best possible practices in election monitoring in vote counting cesed from Serbia that also has been used by a variety of US agencies they've gone from Zimbabwe to Russia these are these are kind of the highest level civic institutions and I think there are in other countries these are these are two very good examples that have survived and that have been working for the for the better good of democracy in the region but also globally and I think there are ways in which other such institutions can be used as we move forward I would like to simply second the idea of the university and the academic context I mean if if you're looking at a long term support in developing the leadership of new generations I think this is a terrific tool I know the example of the American University in Bulgaria which is which is a terrific one it draws not only people from the region that draws many more students from Central Asia who see this as a stepping stone and it is a terrific cross fertilization of all sorts it's cultural not only academic and you know the the the monies that were invested of this have repaid many many times over thanks Yvonne yes the one thing I would say again and and sort of looking at the political currents and and what support there is or is not for endowments and other sorts of things I mean I think we have to just be very aware of the country context and that we should consider other alternate models beyond just as simply a bilateral government to government sort of endowment I think when we do that whether it's the university model that's been discussed or other sorts of third-party civil society type of funds or foundations I think that can be a very positive step forward in the sense that you're not linking yourself specifically to a particular government especially one that could change depending on how the politics evolve but you are instead sort of thinking and considering your engagement more in a broader way and more in a broader partnership with the population so I think you know if it's framed in that manner I think there can and should be much more political support on the hill for these types of things and I think that's slightly separated from the endowment discussion that we've otherwise had thanks Steve I'm going to open the floor now to to questions I'd ask that if when people ask the question they identify themselves and also frame their statement in the form of a short question Tom there's a gentleman up here in the front room thank you very much my name is Tarek Ben-Yusef I'm from the embassy of Tunisia and Tunisia is the middle income country and as you know it's been inspiring the whole region I would like to seek your reflection on what kind of assistance what kind of approaches the United States and the international community has to bring to Tunisian which is seeking the international aid as we all know and which is in a democratic transition process and we all know the importance of this democratic transition process not only for the Tunisian but also for the international community for the European Union for the international for the international community in general which could serve as a model no one can deny that because the Tunisian society has all the ingredients for the success of this democratic transition so I would like to seek your your perspective on what kind of approaches what kind of assistance what kind of measure the the international community in general and the United States and the development community can can bring thank you very much thank you I'll take a crack at that and then I'm hoping that the other panelists might make some comments I one of my frustrations when I was in public service was I had hoped to set up a similar trust to the Balkan trust for democracy in the north north Africa I was willing and identified resources but it was there was some some various hoops so that's that's one of those what might have been moments but I think obviously Tunisia is a country that AID quote-unquote graduated you know many years ago from a number because of the macroeconomic indicators etc my I think on the short run it's probably going to be very difficult to set up an aid mission in six months time or nine months time as my guest but I think there are a number of vehicles that could be looked at quickly there's ongoing the MEPI instrument is one that one could quickly move some resources into there are a variety of democracy and governance the organizations that are you supported with US governments there could be a big chunk of money that could go to net and the net affiliated groups and those would be quick ways to get something going it's it's hard to imagine having a full on my personal views it's hard to having imagine having a full on aid mission in in Tunisia but who knows but it seems to me that you could there are a number of other vehicles in which that could be engaged quickly and should be engaged quickly there is a regional platform out of Cairo as well and there I suspect this is going to be a regional program as opposed to a individual bilateral program so I'll stop there maybe my colleagues have other views yeah I really don't know other than to say that I mean this is clearly an issue that regional bureaus deal with all of the time in the african bureau you know with missions in a small relatively small number of countries and yet dealing with an entire continent there are regional platforms and regional programs and I do think that generally speaking there is flexibility within those programs to respond to evolving needs and so I think that's probably the best bet is to be to be talking to the people who manage the regional programs whether it's meppy or regional programs within us aid other comments from others on this yeah I would just ring in on on the the coordination element we've talked about it up here and this is where it's absolutely essential for us europeans others who are contributing to to coordinate themselves and focus I mean my my own experience with with central europe and it's a very you know transformational element you know you see lots of wish list they get circulated people start moving on them there's sort of confusion to it but as much as there can be a convening and really focusing much much of it may be truly technical assistance that you know needing to rethink in the ministries and you're really recalibrating what we saw in central europe we just had you know for for decades senior officials did not have an ability to think through these challenges it's not sort of your traditional assistance it's having someone sit through sit with you and think through the options and the challenges and you know if the europeans are doing this and we're doing that and it gets very confusing so coordination focusing is so critical and I agree for the speed at which using already existing instruments can help speed the process along and best of best of luck and best wishes yeah just to add my two cents to this I think that given the fact that Tunisia is a country where there are so many people educated in the western system France obviously but other countries in Europe there's obviously a repository of knowledge in the civil service in you know in the public administration and so it's a question a bit like Heather was saying you know how do you help those people who know individually to group and to collectively start the reform process I think that the idea of giving net monies and then again using some groups from Eastern Europe who have gone through transition whether on economic issues governance issues and I would add anti-corruption I think that's that's the key tool that's obviously been one of the grievances in all of these events and a lot of work has been done not to say that you know there have been magical solutions but at least there are mechanisms various types of transparency mechanisms that can be put in place and then simply being there and supporting those who are actually pushing this and of course there will be a lot of inertia you know it's hard to change state institutions let alone reform universities and things like that but I think if one starts early enough and there's a demonstration of the willingness to support and to be there for the longer term I think then there's a possibility that one actually gets to where one wants to go yeah I would say just you know in general I think there's sort of a dual track approach that might be worth considering I mean I think certainly there are some shorter term issues with regard to sort of immediate you know transition issues with political parties and so on that probably deserve attention sooner rather than later I know just as a parallel for example that the administration has is preparing has prepared a package for Egypt that's fairly significant that has been notified to the Hill and I expect similarly the same sort of thing to happen with regard to the region but I think I do think that we have to to be sort of prudent about the longer term institutional needs there's again a huge depth already within Tunisia and and I think complimenting that you know figuring out you know from Tunisian side you know where where what are our priorities where deficiencies that we identify where could we use technical assistance and so on and then coming together in that form and figuring out how that looks is probably worthwhile to do in a more longer term framework just we were just having a discussion about the that this is the this there may be an opportunity here similar to the one Soviet Union fell that to engage volunteer organizations as well so there may be opportunities for for some of that as well other questions other comments yes please Abby I work at USAID in the Europe and Eurasia Bureau so we talked a lot about relationships and well nodding relationships and influence and a lot of intangibles and how do you square that circle with this at least proceed focus or need to focus on delivering results having numbers how many toilets were distributed in Haiti that sort of thing it's like when I when I read reports about we provided technical assistance and the government was able to draft policy that enabled them to get an IMF loan it doesn't seem that that really moves members of congress or at least we're told it doesn't so how do we how do we make this happen if it just seems to us or we're told that we won't get support from the the money purse Karen what you want to talk about yeah no no no it's very ironic because we had a brief conference call on Tuesday and actually we raised this question among ourselves and we didn't have any answers but we but other than to say that it is a dilemma and that that in a sense it to my mind it it it separates out development and I think that Heather when we talked on the phone you used there's there's there are resources used to build to engage and to build relationships and there are resources used to be used to achieve specific developmental results and people need to be able to differentiate the purpose of the resource and and I think it's a long slog to try to get there but I think we have to just my sense is on democracy and governance or civil society development those are particularly difficult or challenging sectors to measure impact and I may actually may ask Yvonne I'm sure you were put on the spot many times on this topic around how do you measure democracy and governance or civil society achievements and something like the Balkan trust for democracy I'm sure this this came up often I was afraid you'd ask that yes we we've basically been grappling since day one on finding measures on how the monies that are used impact and as Dan said I can only repeat I mean these are things that are very difficult to measure I would say that in in the case of Central and Eastern Europe and Balkan countries there was an easy measure if I can put it that way it was how these countries were advancing towards EU and NATO membership I mean that was a huge benchmark you know the the benchmarks of both NATO and the European Union were such that I simply said you know if we see that after every year that we've done our work these countries have made two or three or four steps that means we're built in there somewhere with our very humble resources as opposed to others and I think that's you know it's not flippant to say that I think that there's a very serious element which of course didn't preclude the fact that we had to do our measuring and that we actually then found out in a number of ways for example doing advocacy projects you know how much of that advocacy actually trickled into legislation in a variety of parliaments in the creation of institutions for example the creation of a of a civil society office in in parliaments in the region or civil society offices in governments or for example when we did reconciliation projects in in the Balkan region where the war had occurred in the 90s you know how many times did these people meet what came out of those meetings what was there a follow-up beyond the project and we often saw that in fact that an engaged project did leave those results and that there were networks that had been established where there were none prior to that situation and then also the even softer projects you know dialogues between Albanians and Serbs for example just the mere fact of having them meet was already a success let alone the substance of the discussion especially among young people realizing that they were up against the same challenges you know unemployment having a diploma that's worthless because the job market is such wanting to leave but you know not being able to because there weren't visas at the time etc so I think that you know you can measure it I would say that the danger is if one only is devoted to that and then one loses actually the energy to do the real work which is going out there meeting these people and actually working with them in the field you know my own view there's just an excessiveness of audit evaluation metric metric metric and while I'm a huge proponent of you know return on investment and let's not keep running down a road that's not producing results this is my sort of my my my call for an absolutely new way of thinking about this because we've so now I mean I think that the auditing requirements right now are just so daunting in a way we're sort of auditing for our audits for a purpose so I think the pendulum needs to come back a little bit sort of a return to common sense but we as Carol was saying I think the only way you do it is you have to separate out and what we're doing is we're building relationships not for the metrics of the the fiscal year but we're building 20 30 year relationships so the young colonel or the young lieutenant who will be in the next 20 years the head of the armed forces the the young university student who will someday become the foreign minister or lead civil society and things like that that's what we that's the investment in the relationship and in the country and we're moving away from that and I think it's showing I think our our contacts are are are limited or becoming more limited it's a very different process and we've relied on the development agenda to sort of make up for that lack of deep engagement that we once had and I think we need to return that but it's bringing better balance and I say that looking at Steve knowing very much that the congress should demand a return on investment of taxpayers funds but I think we need to have a more balanced more long-term national security perspective by counting how many cell phones are in Afghanistan right it gives us one sense of some progress perhaps but it can't be what we're relying on for our own long-term engagement with the country thanks I don't disagree at all with with what I've heard and you know I think in general there's a misconception that congress is sort of wants to see more and more of these sort of output-based metrics and indicators as a way of knowing that programs work frankly you know I don't think knowing that we built X amount of schools in Pakistan last year really tells us much of anything it doesn't tell us whether there were actually people in those schools whether they were taught what they were taught and so on I think it's a very misleading thing it actually gives us a false sense of security in terms of thinking that our taxpayer dollars have impact when in fact it tells you little to nothing about the development impact so I would say first of all you know in some ways to bureaucracy tends to perpetuate itself and I think Andrew Nazius has a interesting paper out about that from cgd I advise you although take a look at it but you know someone reacts 20 years ago in congress for maybe someone misinterpreted and all of a sudden you have an edifice that's built up what I would say is that yes I think the pendulum has swung too far in terms of measuring every single output on the other hand I think there is a need to at least understand what the broader impact is even if we do look upon it in a long-term lens fine you know even if we understand that a relationship or an exchange that's built won't give you an output right away you know I think at the same time you know there is a need to sort of tie it causally to some broader objective and if we can sort of go down that pathway and have a renewed conversation on that I think that's certainly worthwhile to do I think we should put all this on the table and this is part of the foreign aid reform agenda in general you know the notion that we need to free up our development professionals to do to do the work that that's necessary and have oversight and make sure that that they're conforming to broader priorities but not tie them down so that it's only about responding to reports woman in the middle row there good afternoon Caroline Brealy also from USAID my question I like a lot of things that I've heard you've made very good points about don't just pull a plug right away think about legacy think about the broader national security questions and yet if I were sitting where the administrator sits at this particular moment I don't think I'd be really comforted by a lot of what I've heard this afternoon it doesn't it's on a completely different plane from being pushed by OMB to phase out the preparation for E&E by 2013 the republican study group saying let's just axe AID's OE account completely if you were sitting where he is sitting what would you and bearing in mind your experiences what would you do I'll take a crack at that and one of the reasons administrator right my my sense is is that I think my thinking in putting this together was to come up with a thoughtful a thoughtful response to what's going on out there that there's a lot of forces going on there I actually think that the tempo of what I think it's going to be a faster tempo than we would like and so I think this is in the ideal I think what I think it's but I do think many of the things that what I've heard today are the sort of the things that a lot of this is still operationalized are things that can be that can be done I think it's going to be there's going to be more than I suspect it may end up being more than seven and I think it may suspect it may be faster but it seems to me don't throw the baby out with the bath water to the extent you can do it to you know to the extent that it requires a an accelerated pace I'm not saying that's the ideal situation what are some of the things you can do to sell don't to say to hold on to some of these relationships and how do you do it in a way that brings in other partners and does it in a way that doesn't hurt the bilateral relationship so that would be my my this would this would be my my my quick answer to that question we can have a discussion offline if you want to you know I think what Steve began his remarks and talking about the need to communicate and the need to have have some thought a well laid out thought process around what your intentions are I think for me and we held an event a year and a half ago as the QTDR was was starting and Steve came to a lunch and I remember and and the hill and AID at that moment this is before Dr. Shahzarebo we're not really communicating they weren't even talking in fact we sat them around the tables the first time they were even communicating about some of the basics of it so in part I would rather than sending my thoughts and prayers because this has got to be an incredibly challenging moment between Haiti what's going on and you know in the Middle East and now a sort of budget assault but it's really over communicate with congress because now is the time there are national security imperatives and have a well thought out plan to say this is my rationale you can disagree with the rationale you can tell me there's three other things that you think are more important but we can have a discussion about that I think too sort of the trigger of oh my gosh we got to get out in front of this we have to it's it's it's secretary gates it's let's do preemptive cuts so maybe they won't cut us more so AID just tried to pull the secretary gates and in some respects it sounds to me without knowing all the all the details let's be thoughtful here as Carol was mentioning we have a terrible history of in out in out up down do this do that people are relying on our leadership globally and they're taking our cues from us we can't be that knee jerk we have to be quick I agree with you speed but thoughtful and over communicate with the hill not just the converted that's whom I think the administration tends to speak to now it's time for a conversation difficult as it may be with those who are are very much against us I know secretary have been doing that it's these are tough conversations with senator Kirk and others who are going to be very strong voices on this but I that is my sense that it would behoove the administration to not get out ahead on the cuts but get out ahead on the community you know helping people understand what's at stake here and do it thoughtfully okay one last we're going to be careful sorry yeah I'm just seeing there's a number of hands I'm going to get get Mr. Gaiosa is going to get the last word and because then we need to wrap it up so Tom the gentleman in the middle row Antonio Gaioso I am a refugee from USAID and the State Department I agree with the panel that there's a need for conversation I I work in ITCA remember ITCA coordination agency I call it the Talido might agency because it had no powers of any kind but the point is that there's a conversation that is missing with the US public when you ask a common person in the in Washington even in Washington what does AID do or they take 20% of the GDP or the budget what does it do they don't know there's generic ignorance and none of the administrations in the last 30 years has taken that task to say we're going to explain to you carefully what is that this is all about and why it's almost like the health care bill do you know what the health care bill has for you probably not everyone is fighting and yet now what we have is a worst-case scenario we have the coffee party we have the tea party we have all of these parties and they want to kill AID because it's a waste of money in Switzerland don't you think that that should be a primary objective before or while we talk with each other thank you let me just I'll take the moderate's prerogative and just respond briefly to that and say thank I do think that there does require a public education of what foreign assistance does but I think it has to be tied to a variety of interests that the traditional development community may not want to tie it to so it's things like national security or business interest or trade or keep I think or it's a second it's sort of a secondary it's not it's not the immediate thought when we talk amongst ourselves in the development community I'll put it that way I do think my other reason for having this conversation is to begin to have an adult conversation about what are we going to do in this budget environment we can we can wait we can wait for some someone else to make the decisions for the development community or we can get ahead of it and have some thoughtful alternatives because this is going to be coming one way or the other and I think I don't I think that so I'll stop there I want to thank the panel and I hope some of you will stick around and to chat with the audience thanks very much