WASHINGTON – Today, U.S. Senator Chris Coons (D-Del.), member of the Senate Foreign Relations Committee and Chair of the State and Foreign Operations Appropriations Subcommittee (SFOPS) that funds the U.S. Agency for International Development (USAID), discussed a series of topics with USAID Administrator Samantha Power in a SFRC hearing on USAID’s 2022 Budget Request.

Citing his recent trip to Guatemala, and a visit to Raices de Amor, a shelter for trafficked youth, Senator Coons said, “one of the inspiring aspects of that visit was that it was a locally developed and run program.” He continued, “I'd be interested in hearing what you think is a possible strategy for increasing the localization of our assistance programs. Devoting a larger share of development assistance funds to supporting initiatives implemented by local partners, and what role additional staff would have in making that possible.” Administrator Power responded that the USAID is off to a good start with the New Partnerships Initiative and the Local Works initiative, but must continue to work to lower the barrier to entry for smaller local organizations.

Regarding the role of the Development Finance Corporation (DFC) in international development, Senator Coons said, “I'd be interested in your views on how you ensure that the DFC remains focused on development, and what your role will be in strengthening the DFC as we expand its capacity to compete on behalf of the United States in partnership with the private sector against the increasing influence that China is having around the world.” Administrator Power responded that the orientation of leadership at the DFC is “to meet these needs in developing countries recognizing that that is going to be profitable for everybody over time.”

Full audio and video available here. A transcript is provided below.

Sen. Coons: Thanks, Chairman Menendez, Ranking Member Risch, and in particular Administrator Power, thank you for your testimony and for your continued service to our nation. I am pleased to see the Biden administration’s budget request for USAID includes investments to address the ongoing COVID-19 global pandemic and to bolster our ongoing role in global health, foreign assistance in the Indo-Pacific – specifically to counter China's influence there and in other regions of the world – and demonstrates our commitment to fighting climate change. And I look forward to working with you to improve the effectiveness of USAID. Like Senator Johnson, as he was just describing it, I too have just returned from Guatemala and have a number of questions about how we are going to effectively deliver assistance in a way that will bend the curve of a number of challenging developments there. I visited a shelter for trafficked youth, as did you in your recent trip. And one of the inspiring aspects of that visit was that it was a locally developed and run program. Our assistance to that particular initiative did not require funding to go through a governmental agency, it goes directly to an NGO. So, Administrator, I'd be interested in hearing what you think is a possible strategy for increasing the localization of our assistance programs. Devoting a larger share of development assistance funds to supporting initiatives implemented by local partners, and what role additional staff would have in making that possible. And I might, and perhaps this is motivated by that trip, recommend piloting that in a region, for example, Central America, where we lack credible national government partners in development.

Administrator Power: Yes, I mean, this is – your last point about lacking important government partners is an important complement, I think, to the exchange I just had with Senator Johnson. I mentioned violence and economic despair, but the governance and corruption trends are really going in the wrong direction, requiring us to think very creatively about how we steward these resources, that we hope, again, that you'll be generous enough and that the American people be generous enough to provide in order to deal with those causes of despair and migration that can be tackled within the region. So the question you pose on how to strengthen our relationship with local partners can sound a little bit abstract, a little bit wonky, a little bit sort of inside foreign assistance, like a perfect Samantha Power, Chris Coons exchange. But it's so important because as I tried to say briefly in my opening statement, it is the essence of whether the development we do is going to be sustained over time. And because we USAID want, and you all as well, and the President want to move quickly. Often, there's just a lot of gravity pulling us toward very large, often U.S.-based contracting partners that may deign to enlist local partners as part of the overall contract or grant. But fundamentally, the investments are not made in that internal capacity and that ability to have the accounting capacity, the ability to comply with USAID regulations, which many of which are in place in order to be responsive to the need for oversight that you have. So the shorter answer is, I think we're off to a good start with the New Partnerships Initiative and the Local Works initiative, which both, again, I think came out of a partnership between USAID and Congress. I think that we need to try to lower the barriers of entry because it is so onerous to work with USAID for these small local organizations. And we need to invest in the internal capacity those organizations have to meet the legitimate oversight questions and challenges that we absolutely have to retain in order to do our jobs as stewards.

Sen. Coons: Well, I look forward to working with you on tackling USAID’s procurement process, the challenges, both in terms of regulations and staffing that you face in terms of trying to be flexible so that you can better respond to changing circumstances such as we're seeing in Ethiopia or Afghanistan or Haiti, where developments challenging changes in circumstances require more than just disaster aid but require us to change prioritization or strategies around development. If I might – just a quick last question, Mr. Chairman. The Development Finance Corporation is a new tool that through its loan programs can reduce the cost of financing development by leveraging private sector resources, and the Senate just passed an important bipartisan bill that supports the expansion of the DFC’s lending authority to enable our competition with China – something Chairman Menendez, Ranking Member Risch really championed through this committee. I'd be interested in your views on how you ensure that the DFC remains focused on development, and what your role will be in strengthening the DFC as we expand its capacity to compete on behalf of the United States in partnership with the private sector against the increasing influence that China is having around the world.

Administrator Power: I know I probably don't have time really to respond in detail, but just to say that, you know, as a kind of Rip Van Winkle here, who was gone for four years, and now is back in government, I do think the enhanced capacity you all have given the DFC is, you know, from my standpoint, you know, the newest freshest tool in the toolbox. Your continued message that this is a development finance institution is really important. I didn't have a chance, Mr. Chairman, when you were asking about the sort of full set of tools in the toolbox on COVID developing vaccine manufacturing capacity in Africa, where they're importing 99% of vaccines, DFC has just announced a big deal with J&J in South Africa with other international financing bodies. So again, multilateral-izing what we do, and that's going to bring more than 500 million doses online coming from South Africa by the end of 2022. I think that's just the beginning. And certainly, my impression, and as the Vice Chair of the DFC, my impression is that that is very much the orientation of the leadership of DFC. To meet these needs in developing countries recognizing that that is going to be profitable for everybody over time.

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