Good morning.  First I want to thank the Hudson Institute for convening this important event, and for your continued leadership in advancing new ways of thinking about policy.

As you just heard, I’m the Director of the Office of U.S. Foreign Assistance Resources.

At the core I work on behalf of the Secretary of State to promote strategic, coordinated, and effective U.S. foreign assistance.

That means I’m accountable for the $30+ billion dollars a year—mostly at the State Department and USAID—that Secretary Mike Pompeo uses to support the Administration’s policies, while also making sure those resources are actually effective in moving those policies forward.

Now if you are like my grandmother, you may have a negative reaction to the term “foreign assistance”.  But as I frequently tell both my grandmother and my staff, foreign assistance is just a tool.  In and of itself, it is neither good nor bad.  It is one approach that we use in concert with others, such as diplomacy, to use to advance specific strategies or policy objectives.

Strategically thinking about how we use the tool, when we use it, and where we use it, that’s what’s going to determine if foreign assistance is good or not.

But even if foreign assistance is tied to a policy objective, it is also not inherently effective, as I’m sure you are all well aware.

We need to understand on an ongoing basis, whether this assistance is actually doing what we need it to do.  This requires simple performance data.

This information not only ensures we are actually making progress against our objectives, but eventually helps us tell a better story to my grandmother, and every other grandparent in America, about the impact of our work and the effectiveness of assistance.

In thinking about foreign assistance, it’s important to acknowledge that over the past twenty years or so, the world has radically changed—we have seen the rise and impact of new challenges, new donors, and new technology, all of which have a serious impact the effectiveness of U.S. foreign assistance.

This is seen most acutely when it comes to fragile states, which I’m defining broadly as countries at risk of going into conflict, are in conflict, or coming out of conflict.   The number of countries experiencing high levels of fragility and conflict have grown significantly in recent years.

In 2016, 37 countries were experiencing armed conflict, more than any other time in the last 30 years.

The United States and the rest of the donor community are desperately trying to better understand how to address fragile states and work in conflict-affected areas.  The days of doing development in a stable and safe country are going away.

Roughly 50% of all U.S. foreign assistance today goes to fragile states, with 70% of USAID assistance going to these countries.  Globally over $70 billion of all official development assistance is being spent in fragile states.

And nearly all donors are doubling down in these spaces, for a very simple reason: weak and poorly governed states give rise to a host of challenges not found in countries at the same level of development: conflict, terrorism, crime, humanitarian crises, and pandemics.

These challenges spill across borders.  They demand even greater attention and resources.  And they ultimately threaten regional or even global peace and security.

Furthermore, with limited resources, these challenges are crowding out more traditional and sustainable development; making the task of building self-reliant partners more difficult for the United States and our fellow donors.

This challenge becomes even more complicated when you factor in that we are in an era of “Great Power Competition,” with the rise of malign donors.  Many fragile countries are facing increasing political and economic pressures to partner with these new actors for short-term gains that can cause long-term challenges.

For example, China is taking advantage of these pressures and the countries’ vulnerability, providing loans in exchange for strategic access to economic resources and infrastructure.  In doing so, China is fueling unsustainable debt, unfettered mercantilism, and enabling backsliding in the respect of rule of law, all while promoting its model of political censorship and surveillance.

The bottom line is that fragile states are both incredibly important and incredibly challenging.  It is essential for us to review our business models and ensure our efforts are matching the challenge by making our assistance more coordinated, more targeted, and more strategic.

With all the tools to foster coordination—from Chief of Mission authority to the National Security Council—coordination of the U.S. Government in this arena might seem like a given.  But I assure you that it is not.  Especially when dealing with money, which is at the heart of foreign assistance, fragmentation is a problem.

Just like in physics, entropy is real in the federal government.  With 22 federal agencies responsible for foreign assistance, unless coordination is prioritized, each organization will drift apart from each other.

This unfortunately has happened with our efforts to respond to fragile and conflict-affected states, but we are making real and concrete process to fix this coordination challenge.

Take our humanitarian assistance response as an example.  Fragility and conflict have given rise to historic levels of displacement and humanitarian need.  Today an estimated 71 million people are forcibly displaced worldwide, the highest number in recorded history.

The international community is mobilizing resources in response.  U.S. humanitarian assistance levels alone grew by 41 percent in the past five years alone.

Unfortunately, our humanitarian structures were built decades ago when natural disasters—drought, floods, hurricanes, earthquakes—were the main driver of humanitarian needs.  Today, response to man-made crises far outpace those to natural disasters and our system has been slow to adapt.

Our humanitarian work has historically been bifurcated between USAID and State, with State focused on refugees and USAID focused on internally displaced persons or IDPs.

This breakdown made sense as refugees were often fleeing war and seen as a long-term challenge, and IDPs were often fleeing natural disasters that fit more into USAID’s comparative advantage.

However, with the rise of complex crises around the world, the distinction between refugees and IDPs is fading, and the need for greater coordination is paramount.

Today, State and USAID are in the same region, responding to the same challenge, with slightly different, but related populations.  In response, the Administration has made it a top priority to ensure State and USAID are working together to address these challenges.

We are focused on ensuring co-budgeting, co-planning and seamless implementation across refugee and IDP populations. These process reforms will create immediate efficiencies in the system, ensure we have limited gaps or duplications, and that we maintain our moral leadership around the world focused on fixing the underlying challenge.

Another key aspect of renewed focus on better coordination can be seen through the U.S. Government’s response to address the conditions that fuel these crises in the first place.  So many of the current crises are caused by ongoing violent conflicts and instability.

Durable solutions depend upon addressing these causes.  For this reason, the State Department, USAID, and the Department of Defense made a renewed commitment to work on stabilization, starting with a common definition.

We now collectively define stabilization as a political endeavor involving an integrated civilian-military process to create conditions where locally legitimate authorities can peaceably manage conflict and prevent a resurgence of conflict.

Starting in 2017, the three agencies came together to maximize the effectiveness of our efforts to stabilize conflict-affected areas.  This Stabilization Assistance Review, the SAR, studied lessons from past mistakes and outlined principles for effective stabilization, and clear roles and responsibilities for the organizations.

The final SAR report outlined a new framework for more carefully targeting and sequencing U.S. foreign assistance in these environments based on our collective interests, rigorous analysis, and partner burden-sharing.

At Secretary Pompeo’s direction, we are now implementing the SAR’s recommendations.  U.S. country teams are completing interagency stabilization plans in eleven priority countries – ranging from Afghanistan to Libya to Mali to Somalia.  We will continue to update and institutionalize these plans.

We are also revalidating U.S. interests and scoping achievable goals in these environments.  We cannot ignore how our adversaries and competitors are seeking to gain advantages in fragile states.

For example, China, Russia, and Iran are using instability in key parts of the Middle East and Africa to build patronage networks, access resources, and gain long-term influence.

Moving forward, we will use these new interagency plans to better align resources to the clearly-defined political goals and stabilization objectives.

In addition to working better together, the U.S. government must embrace and resource better solutions.  My organization is keenly focused on how the United States can better assist fragile states to become more secure, more resilient, and less at risk of violent conflict and other threats to their stability.  We call this strategic prevention.

Recent analysis shows that greater investments in conflict and violence prevention can provide significant cost-savings.  In fact, one analysis suggests every $1 invested in prevention will provide $16 in cost-savings over time.  That’s an investment worth pursuing.

Furthermore, a recent study by the University of Pittsburgh found that every $10 million spent on certain USAID democracy programs increased that country’s Electoral Democracy Index by a third of a point.  This effect is approximately 2.5 times greater than if there had not been USAID democracy assistance.  That’s also an investment worth pursuing.

Over the past year, my office completed the Strategic Prevention Project: an assessment of how foreign assistance resources can better support strategic prevention in fragile states.  The Department released the final report publicly in July.

The Project rightfully found that more money does not inherently equal more stability.  As I mentioned at the beginning of my talk, foreign assistance is just a tool.  Depending on how, why and when it is used—in addition to how it relates to diplomacy–it can be good and effective, but it can also be the opposite.  What matters is how that assistance is structured, delivered and monitored.

The Project identified three key areas where foreign assistance can reinforce strategic prevention, all of which are connected to the work of DRG, or democracy, rights and governance.  This also makes sense as DRG is often seen as the cornerstone of all sustainable development.

First, research shows that societies are at much higher risk for violent conflict and instability if they have groups who are excluded from political processes and lack access to justice.

These same factors also make them susceptible to external political subversion.  Foreign assistance can promote more inclusive political systems and increase social cohesion.

Second, government checks and balances and the rule of law are essential for countries’ stability.  Foreign assistance can strengthen the resilience of fragile states’ institutions from political and economic shocks.  This includes threats that may come from external actors.

Third, foreign assistance can strengthen groups that can help build and support rule of law in their societies.  This includes elements of the private sector.  It also includes women and youth leaders.

On this note, the Administration is working to implement the Women, Peace, and Security Strategy as well as the Women’s Global Development and Prosperity Initiative.

While the Strategic Prevention Project identified specific examples of assistance making a difference in each of these three areas, overall, it found that most of our assistance to fragile states was not appropriately focused on these areas.

Building on this Project, my office will insist we incorporate strategic prevention into our assistance planning for fragile states, while setting up better conversations with Capitol Hill, as most of our assistance is heavily earmarked.

We will begin to incorporate analysis of instability risks and resiliencies into our assistance decision-making.  We will also work to provide our teams in the field with better tools for designing and implementing conflict-sensitive programs.

So far, I’ve discussed the need for better coordination and better solutions by the U.S. government as it relates to foreign assistance in fragile states, but my final point is also the most critical.

Again, U.S. foreign assistance is just a tool.  Even if we are strategic and aligned, it will never be enough to solve all the world’s challenges: we cannot and should not try to go it alone.

Ultimately, it is national and local leaders themselves, not the U.S. government, who are both accountable and responsible for determining the future of their own countries.  We believe that the best development is locally-led.

We do not want countries to be dependent on external aid forever, and most countries don’t want to be dependent upon it.

The United States should play a supportive role, but it cannot want success more than the host country if true stability and prosperity is to occur.

We seek to promote strong, self-reliant nations that can become enduring economic and security partners, with the host countries themselves leading their own development.  This is part of what differentiates the U.S. and our allies from the Chinese model of assistance.

In this regard, I am proud of the work USAID is doing – under Administrator Green’s leadership – with the “Journey to Self-Reliance.”  USAID is reorienting its approach to better support governments to develop the capacity and commitment for enterprise-driven and sustainable development.

This includes a greater focus on mobilizing public and private revenue streams and strengthening local capacity.  This is the kind of approach we ultimately seek in our assistance to fragile states.

As we pursue these objectives, we are also aware of the need for partnerships among the rest of the traditional donor community.

This means working closer together with the Australians, Japanese and European allies, among many others, on aligning efforts and collaborating when possible.

Burden-sharing is a pivotal aspect of our approach.  It is not just a buzz word, but critical to leveraging partnerships and producing results.

The United States must seek mutually-beneficial partnerships that ultimately share burdens fairly.  We must hold our international and local partners to high standards.

I have no illusion that any of the work I identified today will be easy or straightforward.  We face some very complex challenges in fragile states and conflict-affected areas today.  Our policymakers and our national strategists face tough policy choices amidst evolving contexts.

As they make those choices, our job is to ensure that our foreign assistance is responsive, agile, and adaptive.  We must continue to assess and scale what is working and identify what is not, continuously refining and targeting our approaches.

And most importantly, we must remain resolutely focused on advancing America’s interests and national security.

I look forward to engaging with all of you as we continue to grapple with these challenges.  We need your support, your ideas, and your partnership as we deliver strategic, coordinated and effective foreign assistance on behalf of the American people.

Thank you for your time, and I look forward to the discussion.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future