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Q&A about Poverty Focus development Assistance

1. What is poverty-focused development assistance?
In 2005, the United States provided more than $19.5 billion in aid to countries around the world. Only $9.6 billion of that aid was resolutely focused on reducing global poverty and helping countries build the kinds of institutions that can deliver health care and education to poor people, protect poor people from government corruption, and provide infrastructure?clean water, sanitation, roads, schools, clinics and hospitals?that enable people to improve their livelihoods. The other half of that aid is for political, commercial and national security purposes--for example, support for friends and allies, military assistance and training, and anti-narcotics programs. The primary purpose of this aid is not poverty reduction.
Poverty-focused development assistance is a catch-all phrase to describe those accounts within the U.S. foreign aid budget that most effectively provide assistance to poor countries to meet the challenges of reducing poverty and investing in broad-based economic development.

The programs funded by poverty-focused development assistance try to integrate lessons learned about effective assistance. Some of these programs are engaging local citizens to determine priorities and monitor the implementation of programs. Others are putting more responsibility and ownership in the hands of national governments that have been democratically elected, have demonstrated that they govern well, and have the interests of the people at heart. Most of the programs work directly with the poorest communities?through U.S. and local non-governmental organizations, such as Catholic Relief Services, CARE and Save the Children.
This is not to say that these programs cannot be improved?they can and they should be.
In order to help poor countries reach the Millennium Development Goals, the United States and other rich countries should do much more both in terms of the quantity and the quality of the development assistance they provide (see separate handout for a summary & background on the MDGs).

2. How does poverty-focused development assistance meet the needs of poor people?
The part of the foreign aid budget that provides what Bread for the World considers poverty-focused development assistance is made up of programs that aim to improve and, in many cases, to save lives:
? oral rehydration therapy, vitamin A supplementation and immunization programs that have halved childhood mortality between 1960 and 2000;
? anti-retrovirals?life-sustaining medication?to hundreds of thousands of Africans who have AIDS;
? schools, water wells and rural roads;
? training for teachers and appropriate educational materials; and
? agricultural extension and skills to help poor farmers increase their productivity and diversify their crops.
Poverty-focused development assistance is effective at reaching poor people because:
? It addresses the basic challenges that prevent poor people from improving their livelihoods: malnutrition, illiteracy, poor health and disease, environmental degradation and poor soil quality, the lack of access to land, clean drinking water, adequate sanitation, markets and technology.

? International NGOs with a proven record and decades of experience, such as CARE, Catholic Relief Services, Lutheran World Relief and Church World Service, implement many poverty-focused aid programs.
? There is a high level of community participation in developing priorities and implementing projects, which is crucial for success. For instance, the MCA requires the involvement of local citizen groups in designing, implementing and evaluating the projects that it funds?another way of focusing assistance on the needs of poor people.
3. How can we be sure that money for poverty-focused development assistance is not misdirected by corrupt governments?
Government corruption is a challenge for all aid agencies but donors have been successful in improving the effectiveness of their aid. In those poor countries where government corruption is a big problem, aid agencies, including the U.S. Agency for International Development (USAID), work through experienced nongovernmental organizations (NGOs).
The Millennium Challenge Account (MCA) assistance has a number of safeguards. For instance, the MCA only supports governments that have a proven record on fighting corruption. MCA-eligible governments must demonstrate that they have developed their proposals in consultation with local citizen groups. And once aid has been disbursed, local organizations continue to oversee the implementation of the MCA-approved projects.
Corruption is most likely to occur when aid is given for political and national security purposes rather than development objectives. During the Cold War, much of U.S. aid was given to buy allies. The end of the Cold War lowered official tolerance of corruption and allowed donor countries to make poverty reduction a high priority for the use of aid dollars.
Poverty-focused development assistance can be used to help countries build and strengthen the institutions that combat corruption. The rule of law, the ability to enforce laws, accounting procedures and the technology to implement them effectively are essential for good governance and for countries to accurately account for how they use their aid dollars.
4. Why increase poverty-focused development assistance at a time when the United States has many other priorities and an increasing budget deficit?
The United States is the richest country in history but, in recent years, has accumulated a record budget deficit. This is, for understandable reasons, a concern for many Americans. But the deficit will not be balanced on the minute portion of the budget that goes to poverty-focused development assistance. Currently, less than one-half of 1 percent of the federal budget goes to this type of assistance.
The UN Millennium Project estimates that aid must be significantly and quickly increased in order to reach the MDGs by 2015. It estimates that aid from wealthy countries must be increased by $75 billion each year by 2010. The United States would need to be contributing an additional $25 billion each year, or an additional 1 percent of the federal budget. Even if Congress agrees to fulfill President Bush?s promise to double aid, the United States would not be contributing nearly enough to meet this need.
The $2.5 trillion budget is a moral document that reflects our country?s values and priorities. The budget should promote economic opportunity for people at every income level. It should support and protect the most vulnerable people and those in distress.
From a pragmatic perspective, it makes sense for the United States to do its part to reduce global poverty. In our increasingly interconnected world, poverty in far-off regions can begin to affect us here at home. Infectious diseases know no boundaries. Hopelessness breeds political instability. Poverty-focused development assistance is an investment in a better, safer world.