December 20, 2013
In a positive step towards greater transparency of U.S. aid programs in Haiti and worldwide USAID has released new data on its use of local country systems. However, the content of the data itself also raises questions about USAID’s commitment to greater local procurement in Haiti and the speed at which the agency is achieving its goals.
In 2010, USAID launched USAID Forward, an ambitious reform agenda which called for increasing the use of “partner country systems” in order to strengthen local capacity and to raise the “percentage of total dollars through direct contracts with local private businesses.” In Haiti, however, previous CEPR research has shown that an extremely low percentage of funds have gone to local institutions since the earthquake: less than 1 percent out of the $1.3 billion obligated. Despite this, in September 2012, USAID Administrator Rajiv Shah told the Miami Herald that the goal is to have 30 percent of USAID funds going to local Haitian organizations by 2015.
The newly released data from USAID, though only covering the 2012 fiscal year, reveals just how far the agency still has to go to reach its goal. In 2012, USAID obligated nearly $210 million for programs in Haiti, but according to its own data, just 5.4 percent of this went directly through local country systems. This compares unfavorably with the rest of Latin America and the Caribbean, as well as with the rest of the world. Overall, USAID obligated just over 14 percent of its funds through local systems while the figure for Latin America and the Caribbean was 11.3 percent.
In his interview with the Miami Herald, Shah also stated that prior to the earthquake, less than 9 percent of USAID funds were going through local systems, but that “we’re over the pre-earthquake level now.” The data released by USAID seems to directly contradict this.
USAID has since lowered their goals for local procurement in Haiti. In October Beth Hogan of USAID testified during a Congressional hearing concerning U.S. foreign assistance to Haiti. In response to questions from Rep. Barbara Lee about why so little of USAID’s funds go to Haitian organizations, Hogan acknowledged that “It’s much too low” but that USAID has “a target of getting to 15 percent. And even getting to 15 percent is going to be difficult because of the low capacity.” Hogan added that while “very little of our money goes directly… to Haitian institutions” USAID has “spent 50 million (dollars) through grants and subgrants and subcontracts to Haitian institutions.” Yet, there has been no systematic reporting of subcontracts and subgrants on the part of USAID. That may soon change.
On December 12, the U.S. House of Representatives passed the Assessing Progress in Haiti Act of 2013, introduced by Rep. Barbara Lee and cosponsored by 34 other legislators, including the leadership of the House Foreign Affairs Committee. The bill, as passed by the House, calls for the Secretary of State to report to Congress on “the amounts committed, obligated, and expended on programs and activities…by sector and by implementing partner at the prime and subprime levels.”
After the passage of the bill, Rep. Barbara Lee stated, “The Haitian people have continued to demonstrate resiliency, strength, and bravery despite the tragic events that have occurred. It is beyond time that in turn, Congress supports Haiti to ensure that relief and reconstruction funds in Haiti are effectively spent to maximize their long term impact.” The congresswoman added, “Almost four years after one of the most catastrophic earthquakes in history, we have very little accountability and oversight in the recovery efforts, and we need to change that.”
