The Future of U.S. Government Involvement & Funding for Family Planning & Reproductive Health Programs in the Evolving U.S. Aid Architecture

volume 3, issue 1

March 25, 2008

by Craig Lasher

Over the last two years, the architecture of U.S. foreign assistance has undergone an unprecedented restructuring. At the same time, a congressionally-mandated commission on poverty-focused development has issued its report; a Senate staff delegation has conducted an extensive overseas fact-finding mission; and numerous nongovernmental organizations, think tanks, and presidential campaigns have issued policy prescriptions on the future of U.S. foreign aid. In all of these efforts, insufficient attention has been paid to the implications of actual and proposed changes in the U.S. foreign assistance program to the future priority and funding of family planning and reproductive health (FP/RH) care overseas—highly successful and cost-effective programs that have received U.S. government funding since the 1960s.¹

This research commentary first describes the recent developments in U.S. foreign assistance architecture and examines the implications of policy shifts for FP/RH. The commentary analyzes funding trends for FP/RH and proposes levels of U.S. funding for FP/RH that would meet U.S. financial commitments to achieving the goal of universal access to reproductive health care by 2015 adopted by 179 governments, including the United States, at the 1994 International Conference on Population and Development.

U.S. Aid Architecture and the Implications of the Foreign Assistance Restructuring Process

During the early years of this decade, the architecture of the U.S. foreign assistance program was composed of a bilateral aid agency—the U.S. Agency for International Development (USAID), established in 1961 during the Kennedy administration—and voluntary and assessed contributions to multilateral institutions, principally to the United Nations and the World Bank. Soon after the inauguration of President George W. Bush, this traditional model was combined with a plethora of presidential initiatives. The most notable and well-funded of these initiatives are the multi-billion dollar President’s Emergency Plan for AIDS Relief (PEPFAR), created in 2003, and the Millennium Challenge Corporation (MCC), founded in 2004.

In January 2006, the U.S. government’s foreign assistance landscape grew considerably more complex with the introduction of a major restructuring scheme, christened “transformational diplomacy” by Secretary of State Condoleezza Rice.²

Transformational diplomacy is the culmination of an effort by the Bush administration to define and institutionalize its own foreign aid philosophy. Ironically, one of the primary objectives of the restructuring has been to bring government-wide coherence and coordination to a fractured foreign assistance program that the Bush administration has itself deliberately fostered through the proliferation of over 20 presidential initiatives focused on discrete high-profile issues with political or diplomatic salience. Many of these initiatives are largely funded and managed outside USAID and the pre-existing aid architecture.³

The stated goal of transformational diplomacy is “helping to build and sustain democratic, well-governed states that will respond to the needs of their people, reduce widespread poverty and conduct themselves responsibly in the international system.”⁴ In reality, the new strategic framework to implement the vision of transformational diplomacy emphasizes short-term national security and democracy promotion objectives to the detriment of long-term development and poverty reduction efforts. Tellingly, the reference to poverty alleviation in the definition of the overarching goal of transformational diplomacy was added only after the fact in response to complaints from civil society about its absence.

Where Do Family Planning and Reproductive Health Programs Fit in Transformational Diplomacy?

Global health in general and FP/RH in particular are layered-down in the list of priorities within transformational diplomacy. The health program area falls underneath “investing in people,” one of the five programmatic objectives in the new strategic framework along with “peace and security, governing justly and democratically, economic growth, and humanitarian assistance.” FP/RH is one of eight program elements (along with HIV/AIDS, tuberculosis, malaria, avian influenza, other public health threats, maternal and child health, and water supply and sanitation) within the health program area.⁵

This rigid strategic framework—comprised of over 100 pages of detailed descriptions of each program objective, area, element, and sub-element—was reported to have been a response to Secretary Rice’s frustration at not being able to get an answer on how much U.S. foreign aid was being spent on democracy promotion. Unlike many other development sectors, the USAID Office of Population and Reproductive Health has always been able to supply a detailed accounting of its project portfolio in each country, due in large part to the intense scrutiny and political controversy that the program has been subjected to during various presidential administrations since its founding over 40 years ago.

Joint State Department and USAID functional committees defined the components of each of the five objectives. The FP/RH program element is described in a 2007 State Department document with the following definition:

Expand access to high-quality voluntary family planning (FP) services and information, and reproductive health (RH) care. This element contributes to reducing unintended pregnancy and promoting healthy reproductive behaviors of men and women, reducing abortion, and reducing maternal and child mortality and morbidity.⁶

An earlier definition of the purposes of FP/RH programs had referenced “mitigating adverse effects of population dynamics on natural resources, economic growth, and state stability” as an additional benefit of the FP/RH programs, highlighting the important linkages between demographic trends and enhancing national security, promoting economic growth, and preserving the environment—three historic rationales for USAID involvement in the population field. However, all three were, inexplicably, left out of the final program element definition.

The New Pre-Eminent Role of the State Department

As the restructuring process has proceeded, the State Department has assumed the pre-eminent role in foreign aid program prioritization and allocation of funding, leading to a much diminished role for USAID. This change has been accelerated by the creation of the Director of Foreign Assistance (DFA) position at the State Department (with the rank of Deputy Secretary). The DFA also serves as the USAID Administrator. Some long-time observers, both inside and outside government, have described the restructuring process and the changes in the organizational chart as accomplishing a de-facto merger of USAID into the State Department.⁷

Development assistance proponents have long argued for the independence of USAID in order to insulate foreign aid decision-making from the short-term political and diplomatic considerations of the State Department. FP/RH advocates and programmatic experts have consistently called for an allocation of the scarce available funds among countries based on the documented unmet need for reproductive health care of their populations rather than their geopolitical significance to the United States. Nevertheless, even before the advent of transformational diplomacy, country allocations for FP/RH were sometimes distorted by the need to beef up the foreign aid amounts to U.S. friends and allies. With the State Department assuming greater control of the allocation process, this tendency will likely be magnified.

Despite intentions in favor of a more field-based approach, the restructuring process has been centralized, Washington-driven, and top-down with a questionable amount of real consultation and participation by mission and embassy staff on the ground in many cases. Overall country funding allocations were set by Secretary Rice in a process that was not transparent or consultative.

Under the restructuring, the role of the ambassador in coordinating the U.S. foreign assistance portfolio in country is in theory greatly enhanced, which could be a positive development under the leadership of a strong, well-informed and interested diplomat. As a result, requests from developing country governments for additional assistance for FP/RH programs from the United States could assume even greater importance and become critically important for indigenous advocacy strategies.

As much as USAID may be maligned in Washington for being bureaucratic and slow in responding to new challenges, USAID mission staff play an irreplaceable role not only in carrying out USAID’s own long-term development and health programs but in backstopping a number of MCC and PEPFAR country programs due to their experience, country knowledge, and contacts in the host nation and in advising the ambassador on all foreign assistance questions.⁸

How Do PEPFAR and MCC Fit—or Don’t?

In contrast to USAID, the funding for PEPFAR and MCC is not controlled by the Director of Foreign Assistance at the State Department, who is charged with providing guidance to all international affairs programs across the U.S. government. The Director of Foreign Assistance has only a coordinating role with regard to PEPFAR, MCC, and foreign aid programs in other cabinet departments or agencies, such as contributions to the international financial institutions housed at the Treasury Department or export promotion activities.

Through different institutional and governance structures, both PEPFAR and MCC report to the Secretary of State. PEPFAR is administered by the Office of the Global AIDS Coordinator (OGAC) within the Office of the Secretary of State. MCC is an independent government corporation with a CEO and a board of directors chaired by the Secretary of State and composed of statutory (Secretary of State, Secretary of the Treasury, and the USAID Administrator) and private sector members appointed by the President and the bipartisan congressional leadership.

The massive amounts of funding that have been pumped into PEPFAR since its creation in 2003—an estimated $18.8 billion through 2008⁹ —are completely distorting the balance within the U.S. government’s global health portfolio, harming USAID’s traditional public health programs in the FP/RH, child survival and maternal health, and infectious disease sectors by squeezing available funds and luring away many of the trained health care workers. In one startling example of the magnitude of funds being allocated to PEPFAR’s 15 focus countries, the amount of the President’s FY 2008 budget request for HIV/AIDS assistance to Kenya alone is more than the entire budget for USAID family planning and reproductive health programs worldwide.¹⁰

Given the implications for existing development programs and for the future of USAID, the MCC has been met with less than ringing endorsement in some quarters of Congress and the development community. FP/RH advocates are particularly concerned by the lack of attention paid to the needs of women and girls and the disregard for the relevance of the UN’s Millennium Development Goals (MDGs). Those concerns remain although MCC has instituted a gender policy and added a natural resource indicator to its country eligibility criteria. However, spending on health and social sector projects in MCC countries has been largely nonexistent to date, as the majority of country compacts with a few notable exceptions have focused on large infrastructure projects and reform of financial systems.

Restructuring and the Policies of Other Donors

The foreign assistance program restructuring under transformational diplomacy has also confirmed the U.S. government’s rejection of the trend among all other major donors, such as European governments and the World Bank, in moving away from vertical support for specific development programs like FP/RH in favor of channeling aid through broader mechanisms, such as general or sector budget support, that leave the allocation of the funding provided largely up to the countries themselves.

One country example of U.S. exceptionalism in the funding mechanisms it employs to deliver its foreign assistance is Tanzania, where most multilateral organizations and every other bilateral donor except the United States provides unearmarked financial support to the Tanzanian government in support of its national health strategy through either a health sector basket fund or general budget support. USAID participates in the development partner dialogue at the country level, but its financial contribution for reproductive health programs is separate and vertically funded.¹¹

In the health sector in particular, it is important to note that the decision not to employ these broader financing mechanisms is not merely philosophical or a result of the recent restructuring but dictated by a legislative restriction that prohibits “nonproject assistance” to supplement developing country government health budgets, included for the last five years in the annual foreign aid funding bill.¹² As explained, the congressional rationale is that “the provision of cash grants as general budget support for governments is no longer an appropriate development tool, given current funding constraints,” but it also demonstrates the continuing domestic political imperative for members of the U.S. Congress to be able to direct and document how U.S. taxpayer funds are spent.