May 16, 2019 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs George Ingram, Lester Munson, and Tessie San Martin.
The Modernizing Foreign Assistance Network is pleased that the Appropriations Committee of the U.S. House of Representatives has crafted a State and Foreign Operations budget that rejects the Trump Administration’s suggested massive cuts. However, MFAN urges Congress to strengthen some crucial aid effectiveness provisions as the budget process continues.
The FY20 House Appropriations bill funds foreign affairs nearly 4% above FY19 enacted levels, significantly above the President’s request. This overall budget increase is critical to face mounting challenges around the globe and to continue to advance American interests. Additionally, MFAN is glad to see:
- USAID Operating Expenses and Capital Investment Fund increases. Increasing these funds over enacted FY19 levels is a welcome adjustment. These are essential for aid effectiveness and support USAID’s efforts to drive innovation, attract and retain skilled development talent, oversee program implementation, improve transparency and accountability, evaluate results, and apply a strong learning agenda for future programming. However, the effectiveness of these initiatives would be further realized by adjusting the amounts to MFAN’s suggested $1.46 billion and $225 million, respectively.
- Support for Monitoring and Evaluation. MFAN is pleased to see continued support for monitoring and evaluation of U.S. foreign assistance programs in the committee report, including setting requirements to further disaggregate data, establishing M&E practices for the new Development Finance Corporation, and updating evaluation metrics and publication of evaluations of aid to Central America.
- Increase in Administrative Expenses for the U.S. Development Finance Corporation. Increasing Administrative Expenses compared to the President’s request will allow the new U.S. Development Finance Corporation (DFC) to more effectively utilize new mandates and tools. The Corporation must be equipped with qualified professionals to manage development impact expectations, accountability, transparency, and environmental and social due diligence operations. It will be especially important that the Office of the Chief Development Officer and the Office of Investment Policy or its successor be fully staffed.
While MFAN is pleased to see support for these issues, the bill could improve in the following areas:
- Lacks language on Domestic Resource Mobilization (DRM). DRM is considered an increasingly effective tool for partner country self-reliance. Positive report language was included in several prior appropriations bills and the directive in the FY19 House and Senate reports requiring relevant agencies to develop a domestic resource mobilization strategy. This mandate must be carried through and strengthened to maintain progress in development finance.
- Inadequate resources for equity investments at the new Development Finance Corporation. MFAN encourages Congress to maximize the potential of the bipartisan BUILD Act and new Development Finance Corporation through proper resourcing. To fully utilize its equity authority, equity investments of the DFC should be counted in terms of net present value for scoring purposes, which would significantly expand the Corporation’s ability to fully utilize its authority without creating undue liability to taxpayers.
As the FY20 appropriations process continues, MFAN encourages adjustments in funding for USAID Operating Expenses and Capital Investment Fund, strengthening provisions on Domestic Resource Mobilization, and carefully considering the resourcing of the new U.S. Development Finance Corporation. MFAN thanks Chairwoman Lowey, Ranking Member Kay Granger, and subcommittee Ranking Member Hal Rogers for their dedication to American global leadership.
