Foreign Aid, Foreign Wastes


Relaxed USAID rules forbid purchase of food aid, vehicles, pharmaceuticals from all except U.S.

Previously USAID was required to ‘buy American’ everything

A Haitian woman carries rice from USAID through a market in Leogane, Haiti. The rice was bought from U.S. suppliers and shipped on U.S. carriers. Previously, such women vendors carried Haitian rice, but Haiti’s rice farming industry has been decimated, 1st by cheap subsidized Arkansas rice during the Clinton years and 2nd by introduction of cholera into the main region where rice is cultivated (Photo: AP/Lynne Sladky).

Editorial comment. The Haitian earthquake has done much to show well meaning people that the purpose of U.S. aid is not to help the recipient countries but to assist politically-connected U.S. companies and organizations.

In this scheme, countries like Haiti, Afghanistan, and the Democratic Republic of the Congo (DRC), are merely places through which political paybacks get laundered. In fact, USAID, the U.N., and other foreign “helpers” merely give their wastes to those whom they aid. Here are a few examples of US wastes that were offered as aid:

  • Lots of unfortified rice purchased from Arkansas farmers,
  • Genetically modified (GMO) seeds rejected by European Union countries but bought from Monsanto,
  • Vaccines lots proven to be useless or dangerous but bought from Big Pharma.

One would be hard put to find a more fitting metaphor than cholera for the aid given and its end result. Indeed cholera has appeared in Haiti, Afghanistan, and the DRC.

The following article contains all the information needed to deduce what really takes place with US “aid”, although the article trumpets that USAID will no longer buy exclusively American but merely whispers that the old contracts were hugely inflated and the new rules do not extend to U.S. funded food aid, U.S.-made motor vehicles, or U.S.-patented pharmaceuticals.

One need not be clairvoyant to predict that USAID will try to generate more hunger, disease, and protest so as to devote a greater proportion of its budget to food aid, pharmaceuticals, and military vehicles.

Dady Chery, Editor
Haiti Chery

USAID Local Haitian & Haitian-American Partners

These are our local Haitian Partners and amount they received as an award before.:

Names                                                                                         Amount

Haitian Firms

ECA                                                                                          90,000.00
PAGS                                                                                      130,000.00
PAGS                                                                                        15,000.00
MEROVE PIERRE                                                                740,208.00
ECA                                                                                        303,890.00
JURIMEDIA                                                                          300,000.00
NATRANS                                                                               60,000.00
ECOMAR                                                                                 63,000.00
LFHH                                                                                      800,000.00
AMCHAM                                                                              238,420.00
IICA                                                                                         250,000.00
GHESKIO                                                                             2,940,000.00
Diquini ADVENTIST HOSPITAL                                          990,000.00
HAITIAN COMMUNITY HOSPITAL                                   400,000.00
OFATMA HOSPITAL                                                              400,000.00
ST-DAMIEN HOSPITAL                                                        577,000.00
ST-DAMIEN HOSPITAL / SR JUDITH DOHNER                400,000.00
GHESKIO                                                                                   50,000.00
Richard Frechette, St Damian Hospital                                        4,000.00
GHESKIO                                                                                 599,938.00

Haitian-American Firms

CEEPCO                                                                                   626,000.00
CEEPCO                                                                                9,200,510.00
CEEPCO                                                                                   379,000.00
PHS Group Inc                                                                       3,785,331.00
PHS Group Inc                                                                       2,638,740.00
Technoserve                                                                           1,000,000.00
CEEPCO                                                                                   380,000.00
Health Through Walls                                                               345,624.00


USAid now free to buy goods from companies in poor countries

By Claire Provost
The Guardian

Revised procurement regulations mean that firms in developing countries can, for the first time, be granted contracts from the US agency for international development

The US agency for international development, USAid, will no longer have to “buy American”, thanks to a policy change that will open up the agency’s contracts to firms in developing countries and could herald a significant shift in how the world’s largest aid donor does business.

Pallets of food, water and supplies at the airport in Port-au-Prince in January 2010, as part of the response to the earthquake in Haiti. The US has always followed a policy of tied aid (Photo: Candice Villarreal/US Navy/USAid)

The US, which spent $30.4 bn in official development assistance in 2010, is known for its policy of “tied aid” – foreign aid that must be spent on goods and services purchased from companies in donor countries.

But last month, USAid revised its procurement regulations. The new rules, which come into effect on Monday [Feb 13th], will allow the agency to purchase most goods and services from developing countries, with notable exceptions including

  • US-funded food aid,
  • motor vehicles
  • US-patented pharmaceuticals.

“We want to work with a broader range of partners and increase competition,”

said Lisa Gomer, who is leading the procurement reform. She said the agency’s broader reform effort, called USAid Forward, represents a

“different philosophical approach to development”.

Historically, the US aid agency was required to source its supplies from American companies and could only “buy locally” on an ad-hoc, case-by-case basis. Critics said this led to USAid paying higher prices for crucial goods and services, and that “buying American” hobbled local economies and did little to end dependence on foreign aid.

Gomer said shrinking staff numbers combined with increasing aid budgets over the last decade pushed contracting officers to follow a “path of least resistance”, opting to employ large, experienced contractors at the expense of developing relationships with smaller firms.

In 2011, a small group of US-based companies and consultancies, including Chemonics International and John Snow Inc, together made billions in USAid funded contracts.

Top 20 Vendors for FY 2011 (Foreign Governments Excluded)

Vendor FY 2011
1 World Bank Group 1,000,800,783
2 Chemonics International, Inc. 735,599,989
3 World Food Program 724,454,393
4 Partnership for Supply Chain Management 417,726,429
5 John Snow, Inc. 387,360,155
6 Development Alternatives, Inc. 308,665,874
7 The Louis Berger Group, Inc. 264,436,926
8 Family Health International 258,599,838
9 FHI Development 360, LLC. 254,394,449
10 International Relief and Development 245,985,009
11 ABT Associates Inc. 244,620,469
12 Management Sciences for Health 220,295,202
13 Research Triangle Institute 218,319,556
14 ARD, Inc. 196,989,122
15 Creative Associates International, Inc. 196,851,005
16 Internation Organization for Migration 181,501,525
17 Catholic Relief Services 179,608,363
18 UNICEF 152,392,353
19 Population Services International 143,106,073
20 Pact, Inc. 132,709,317

Top 20 Benefiting Countries (Obligated Program Funds) for FY 2011

Country FY 2011
1 Afghanistan 1,438,596,449
2 Haiti 970,910,372
3 Kenya 498,728,751
4 Jordan 460,251,837
5 Pakistan 393,000,846
6 Tanzania 371,859,231
7 South Africa Republic 348,995,068
8 Nigeria 336,053,916
9 Democratic Republic of Congo 265,018,524
10 South Sudan 264,407,305
11 West Bank/Gaza 245,378,605
12 Iraq 242,860,393
13 Zambia 229,272,026
14 Uganda 221,891,934
15 Colombia 192,362,083
16 Israel 190,526,897
17 Indonesia 182,565,755
18 Ethiopia 182,143,079
19 Mozambique 175,572,408
20 Liberia 168,738,471

Top 10 Bureaus that Obligated the Most Program Funds for FY 2011

Bureau FY 2011
1 Africa (AFR) 4,105,005,991
2 Democracy, Conflict and Humanitarian Assistance (DCHA) 2,452,316,525
3 Global Health (GH) 2,098,030,688
4 Latin America and the Caribbean (LAC) 1,632,896,762
5 Office of Afghanistan and Pakistan Affairs (OAPA) 1,549,114,682
6 Middle East (ME) 1,136,701,096
7 Asia (ASIA) 849,969,063
8 Economic Growth, Agriculture and Trade (EGAT) 519,397,103
9 Europe and Eurasia (E&E) 487,698,159
10 Bureau for Food Security (BFS) 125,070,274

Obligations for Top 25 Program Areas for FY 2011

Program Area FY 2011
1 3.1 – Health 5,589,663,711
2 5.1 – Protection, Assistance and Solutions 2,045,054,767
3 4.5 – Agriculture 1,013,194,362
4 2.2 – Good Governance 953,754,766
5 4.4 – Infrastructure 690,006,767
6 3.3 – Soc. & Econ Services & Protection for Vulnerable Populations 570,647,789
7 3.2 – Education 523,008,584
8 6.2 – Administration and Oversight 503,649,915
9 4.8 – Environment 493,207,985
10 1.6 – Conflict Mitigation and Reconciliation 421,749,900
11 4.3 – Financial Sector 340,434,876
12 4.1 – Macroeconomic Foundation for Growth 261,193,235
13 2.4 – Civil Society 260,750,780
14 4.6 – Private Sector Competitiveness 217,258,347
15 1.4 – Counter-Narcotics 212,079,000
16 2.1 – Rule of Law and Human Rights 189,265,830
17 2.3 – Political Competition and Consensus-Building 180,626,325
18 6.1 – Program Design and Learning 127,363,345
19 4.7 – Economic Opportunity 108,321,072
20 5.2 – Disaster Readiness 106,263,764
21 4.2 – Trade and Investment 91,687,245
22 1.1 – Counter-Terrorism 42,666,866
23 1.3 – Stabilization Operations and Security Sector Reform 29,427,713
24 1.2 – Combating Weapons of Mass Destruction (WMD) 19,000,000
25 1.5 – Transnational Crime 10,961,625

In 1993, the US congress ruled that American foreign assistance could buy goods and services from developing countries, but USAid did not update its procurement policies.

“The letter of the law has actually given USAid a lot of flexibility in contracting and procuring locally,”

said Gregory Adams, Oxfam America director for aid effectiveness.

“The problem is, due to general political pressure, they’ve had some very conservative rules in what they do with that flexibility.”

Adams says some large companies are likely to lose business if USAid’s procurement reforms are fully implemented, and that there’s “likely to be push-back”. But Gomer insisted the new approach will save USAid money in a time of tightening budgets.

Scott Gilmore, executive director of the US non-profit Peace Dividend Trust, says

“using aid dollars is a very wasteful way to create American jobs”,

and praised USAid leadership for breaking “the deathgrip” of the large American companies, which have come to dominate work with the agency.

Gilmore said he hopes the decision to open up USAid contracts to developing countries will encourage other donors to follow suit.

“If USAid can get behind spending locally, it eliminates excuses for everyone else.”

The new rules do not extend to US-funded food aid. Under federal law, the vast majority of American food aid must be bought from US suppliers and transported on US ships. Also exempt from the new regulation are motor vehicles, which must be made in America, and US-patented pharmaceuticals, which can only be manufactured outside America with express permission from the patent holder. The procurement changes do not extend to other US agencies that spend foreign assistance.

“We’d love to see USAid be bolder on these things but we also understand you need to walk before you can run,” says Adams.

As part of the wider USAid Forward reform, the agency says it will work to increase the number of contracts awarded to small, disadvantaged, and women-owned businesses in the US, and will take steps to engage more directly with small non-profits both in the US and abroad.

Adams stressed that proof of the agency’s priorities will come in how reforms are implemented.

“Ultimately it’s not about what the rules say on how much aid is tied or untied. The real measure of success is how much money is actually spent in a partner country.”

The UK formally “untied” all development assistance in 2001, with the justification that “tied aid reduces value for money”, and tends to lead to inappropriate and expensive projects that do little to tackle the needs of the poorest. But, according to Eurodad, a network of European NGOs, 44 out of 54 UK aid-funded contracts in 2007 went to British firms.

Download PDF of USAID’s new rules

Sources: The Guardian | Haiti Chery (Editorial note, addition of USAID data)

Related readings:
Where the Devil Did the Reconstruction Money Go?
Aid as a Trojan Horse. On the Anniversary of the Haitian Earthquake
Cholera Vaccines Unnecessary, Ineffective, Expensive, and Dangerous


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