New aid chief lays out plans to fix USAID

As the entire development community was trying to gauge the impact of the ascension of Rajiv Shah to the top position at the U.S. Agency for International Development (USAID), the nominee himself gave the most detailed look yet into his intellectual identity as he gets ready to step into the fray.

In a long list of detailed answers to questions submitted in advance of his Senate Foreign Relations Committee testimony Tuesday, Shah weighed in on a number of substantive issues while deferring to the ongoing reviews at both State and the NSC when it came to matters related to the structure of USAID and its relationship with the State Department.

Shah will report to directly to Secretary of State Hillary Clinton, not Deputy Secretary of State Jack Lew, he wrote in the answers, obtained by The Cable. But it’s not yet determined if he will have control over the “F bureau” at State, 60 percent of which is staffed by USAID personnel, he said. That will be determined by State’s ongoing Quadrennial Diplomacy and Development Review (QDDR) and the NSC’s Presidential Study Directive on Global Engagement (PSD-7).

Regardless, Shah wrote that he believes USAID needs the capacity to plan budgetary requirements and monitor and evaluate performance, a reference to the restoration of an intellectual brain trust inside the agency following the gutting of such capabilities under the Bush administration.

Insiders tell The Cable that the PSD will recommend that USAID once again have a policy-planning staff, but that actual control over funds will likely not be returned to the agency, remaining under the control of State, specifically in Lew’s shop.

“It is critical that we rebuild all types of capacity at USAID, including policy expertise,” Shah wrote to the committee. “I believe USAID must be able to inform policy decisions, develop strategies, and implement programs effectively and efficiently.”

Shah said he believes the secretary of state should be the link to the Office of Management and Budget, with input from USAID. He did not comment on whether USAID should have a seat at the table at high-level meetings such as principals meetings, deputy meetings, and NSC meetings, deferring to the PSD and the QDDR.

Shah said he will cochair the QDDR and represent USAID in the PSD, if confirmed.

The PSD process is said to be well ahead of the QDDR in terms of progress. According to sources briefed on the status, the PSD will be near complete by the end of the year. The process was extended by a number of weeks to allow Shah time to get briefed up and then make his own contributions to the process, these sources said.

The QDDR, however, is not expected to be complete until summer or fall 2010. Interim results could be released early next year, but there is a sense that State is looking towards the formation of the fiscal 2012 budget rather than trying to focus on the fiscal 2011 budget, which is being developed now. Critics of that approach fear that State is too slow in forming its plans for reorganization, resulting in a risk that State will be relatively weaker than other government actors if battles over certain related issues can’t wait until State gets the QDDR together.

At the start of Shah’s confirmation hearing, committee Chairman John Kerry, D-MA, tried to pin down Shah on what he thought about how USAID should be linked to State, but Shah declined to weigh in.

“This is part of a larger struggle over the shape and direction of our country’s global development efforts,” Kerry said. “Our aid program is in need of a course correction.”

Ranking Republican Richard Lugar, R-IN, asked Shah what could be done in the near term to fix USAID, which Lugar said has been suffering a long decline.

“I believe quite a lot can happen immediately,” Shah said, stating that policy planning and other intellectual functions such as improving evaluation of programs can be improved sooner rather than later.

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