US Agency for International Development Support for Infrastructure

US Agency for International Development Support for Infrastructure AGC Federal Contractors Conference Washington, DC May 9, 2007 Outline • USAID, EGAT, I&E, and ES • Infrastructure for Economic Development – USAID – Foreign Governments – Private Partners • Opportunities for Partnerships – The Global Development Alliance (GDA) – The GDA Business Model 2 Organization • • • • • • • • Foreign Assistance Act of 1961 Decentralized federal government agency Foreign Policy guidance from the State Department Less than 0.5% of the federal budget 8,500 employees worldwide (about 2,000 USAID/W) Headquarters in Washington, DC Geographic and Functional Bureaus Field offices in over 100 countries – – – – Sub-Saharan Africa (AFR) Asia and the Near East (ANE) Latin America and The Caribbean (LAC) Europe and Eurasia (E&E) • Working relationships with about 4,000 US business firms and 3 NGOs USAID-Assisted Countries FY 2007 USAID Workforce Washington 1,867 23% Overseas 6,250 77% New USAID Missions Afghanistan Iraq Sudan Yemen Djibouti Cyprus Pakistan East Timor Thailand (regional) 4 Strategic Objectives • • • • Achieving Peace and Security Governing Justly and Democratically Investing in People Promoting Economic Growth and Prosperity • Providing Humanitarian Assistance • Promoting International Understanding • Strengthening Management Capabilities 5 Range of Programs Peace and Security: • • Post-Conflict Reconstruction Crop Substitution (counter narcotics) Economic Growth: • • • • • • • • • Small Business Loans Trade Capacity Building Agricultural Productivity Infrastructure Development Support for Economic Reforms Anti-Trafficking in Persons Food and Humanitarian Aid Disaster Response HIV/AIDS and Infectious Disease Governing Justly and Democratically: • • • • • Democracy, Elections and Independent Media Local Governance Judicial Strengthening Child Survival and Maternal Health Education Humanitarian Assistance: Investing in People: 6 Activities • Focused on: – Democracy, conflict prevention, and humanitarian assistance (DCHA) – Global health (GH) – Economic growth, agriculture and trade (EGAT) • Long-term, sustainable, and equitable economic growth • US foreign policy objectives 7 The Guiding Principle of Foreign Assistance “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation, and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.” Secretary of State Gen. George Marshall June 5, 1947 at Harvard University 8 The Goal of Foreign Assistance “Advance freedom for the benefit of the American people and the international community by helping to build and sustain a more democratic, secure, and prosperous world composed of well-governed states that respond to the needs of their people, reduce widespread poverty, and act responsibly within the international system.” Joint Strategic Plan 2007-2012 Department of State and USAID Source: http://www.state.gov/documents/organization/82819.pdf 9 The Transformation of Foreign Assistance Development Defense Diplomacy 10 EGAT Bureau • • • • • • • • • • • • Assistant Administrator (AA/EGAT) Women in Development (WID) Program Analysis, Implementation, Communications and Outreach (PAICO) Economic Growth (EG) Poverty Reduction (PR) Education (ED) Development Credit (DC) Natural Resources Management (NRM) Environmental Science Policy (ESP) Agriculture (AG) Professional Development and Management (PDAM) Infrastructure and Engineering (I&E) 11 Office of Infrastructure and Engineering • Energy (E) • Information and Communication Technology (ICT) • Engineering Services (ES) − Technical support to Missions − Owner’s engineers − − − − − Civil Mechanical Environmental Industrial Chemical − Contract administration − Partnerships with private sector 12 Increased Interest at USAID • Recent research showing infrastructure is critical for: – Increasing growth (Calderon and Serven, 2003) and productivity (Escribano and Guasch 2004, Guasch and Kogan 2002) – Reducing inequality (Calderon and Serven 2003) and poverty (Estache & Foster 2002) • National Security Strategy – Unleashing the Power of the Private Sector (p 37) – Making Foreign Assistance More Effective (p 38) • Establishment of I&E 13 Definition of Infrastructure The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons. Source: − Lukasik, S.J.; Greenberg, L.T; and Goodman, S.E., (1998) – Protecting an invaluable and ever widening infrastructure. Communications of the ACM, 41.6, p 11-16. 14 Operational Definition of Infrastructure • Public utilities: – – – – Power Communication systems Water and wastewater Gas • Public works: – Transport infrastructure including highways, secondary roads, rural roads, railroads, urban transport, ports and waterways, and airports – Major dam and canal works for irrigation and drainage – Educational and health facilities – Agriculture and food supply chains – Public buildings and national icons 15 Infrastructure and Public Goods Characteristics of Public Goods: must have the following two characteristics: – Non-excludable: it is not possible – or it is very costly – to exclude users. Examples include rural roads but not highways – Non-rivalry: consumption by one user does not reduce the availability to others. Examples include traffic signaling but not urban roads during peak hours 16 Types of Goods Exclusion from consumption Yes Private goods (i.e. power generation and distribution) Club goods (energy transmission, toll roads) No Common goods (i.e. groundwater, city streets and urban roads) Public goods (i.e. rural roads, lighthouses, traffic signals) 17 Competition in consumption (rivalry) Yes No Characteristics of Infrastructure • Crucial for economic growth, poverty eradication, and international development • Interrelated networks • Natural monopolies – Economies of scale, scope and density • Not necessarily public goods – No exclusion and no rivalry in consumption • Significant investments • Possibility of private intervention • Provision of essential services to a broad range of users • Critical pricing issue for cost recovery • Requirement of government intervention • Governance and transparent regulation 18 The Global Development Alliance • Mobilize ideas, efforts and resources through alliances • Link US foreign assistance with private firms and NGOs • Address jointly defined development challenges • Incorporate a broad diversity of resources • Leverage funding and pooled efforts 19 The GDA Business Model • • • • • • • • • New resources, ideas, technologies and/or partners Fairness and transparency Clearly established interests and objectives of each party Involve local ownership, local leadership and beneficiary participation Lasting alliances are living, changing entities Due diligence process before entering into alliance arrangements Alliances seek, at least, a 1:1 match Approximately 400 worldwide active alliances About $5 billion leveraged funding (~ 1:3 match) 20 US Foreign Assistance Year 1970 2006 Public Sources of Funding (%) 70 15 Private 30 85 21 Prototype List of Projects – FY 2007 Tsunami Reconstruction – A tsunami caused massive damage in many countries in Asia. USAID is assisting in the reconstruction effort. Humanitarian Assistance to Lebanon – Humanitarian, reconstruction, and security assistance to Lebanon to help rebuild and strengthen the democratic Lebanese government. Avian Influenza Response – USAID is working to ensure an effective and coordinated approach to this economic and public health threat. HIV/AIDS – The U.S. government is the world leader in responding to the global pandemic of AIDS and has made the fight against HIV/AIDS a top priority. Helping the Sudanese People – This is a time of challenge and opportunity, and USAID is helping with reconstruction, humanitarian and food assistance. Preparing Regulators for the Regional Central American Electricity Market – Through this partnership, USAID has sponsored activities that helped strengthen the Central American regulatory commissions. Assistance to Afghanistan – Helping build a safe, stable society that meets the needs of its people and eliminates an environment that breeds terrorism. Helping Rebuild Iraq – USAID has been helping Iraqis reconstruct their country Earthquake Reconstruction in Pakistan – Delivering basic humanitarian assistance to survivors, with a focus on rebuilding schools, and health facilities. Somalia Complex Emergency – USAID is monitoring the situation in Somalia and working to address emergency needs of conflict-affected populations. 22 Partnerships – The Global Development Alliance For further reference: 1. GDA – Annual Program Statement FY 06 2. GDA Report: Public-Private Alliances for Transformational Development (September 1, 2006) 3. Tools for Alliance Builders (Current version: September 10, 2004) Sources: http://www.usaid.gov/our_work/global_partnerships/gda/ http://www.usaid.gov/our_work/global_partnerships/gda/gda_showcase.html 23 Contact Information Alvin Newman, PE, Ph. D. Chief Engineer ANewman@usaid.gov 202/712-1977 Luis Velazquez, PE Senior Engineer LVelazquez@usaid.gov 202/712-5314 www.usaid.gov http://www.usaid.gov/our_work/economic_growth_and_trade/ http://gemini.info.usaid.gov/directory/dirSearch.cfm 24