CEPR Research Associate Jake Johnston writes for AlterNet this week:
Over the past few decades, the U.S. Agency for International Development (USAID) has seen its staff level drop significantly at the same time as the amount of money under its discretion has rapidly increased. Over this time, USAID has stepped up its reliance on for-profit contractors to fill the void. The result, as Hillary Clinton stated in her confirmation hearing (USAID is part of the State Department), is that USAID has “turned into more of a contracting agency than an operational agency with the ability to deliver.”
To be sure, there are efforts are underway to slowly fix this. In the meantime, the status quo reigns, with perhaps nowhere serving as a better example of the pitfalls than Haiti. Since the devastating earthquake in January 2010, USAID has awarded some $450 million in contracts – with 70 percent of them going to DC-area contractors, the so-called “beltway bandits”. The largest USAID contractor in Haiti (and the world, for that matter), Chemonics has received some $177 million of this total. With such a large amount of resources going to one company, you might expect there to be vigilant oversight and strict guidelines. Unfortunately, you would be mistaken.
The USAID Inspector General released a report last week that shines some much-needed light onto the operations of USAID’s largest contractor. The report looks at the $53 million dollar Haiti Recovery Initiative run by Chemonics, the follow-up program to a $39 million program that began right after the quake. Among the findings in the audit: projects were “not on track”, the monitoring and evaluation system was weak and arbitrary, there was a lack of community involvement in project planning and they failed to get the appropriate environmental approvals before undertaking potentially damaging projects. This isn’t the first time Chemonics has been criticized for their work in Haiti . The same Inspector General found a host of similar problems with the original $39 million contract the year before, yet USAID turned around and gave Chemonics another $50 million anyway.
The same process had already played out before in Afghanistan. After USAID awarded a $100 million contract to Chemonics for work in the agricultural sector of Afghanistan, a 2005 Government Accountability Office report found significant problems with the program. Yet despite the documented problems, just like in Haiti, the next year USAID turned around and gave the same contractor another $100 million. The Inspector General also found numerous problems with that program.
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