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Government Leader home > August 2005 issue
August 2005; Vol. 1 No. 3
Partnership Imperative: Profusion of Partnerships: A dizzying spectrum of alliances helps USAID foster global growth
By Christopher M. Wright
Other stories on the Partnership Imperative are:
To say that the Agency for International Development is into public-private partnerships in a big way would be an understatement.
Through its Global Development Alliance, the agency has put together more than 300 alliances to solve development problems in 65 countries since fiscal year 2002, many of which include foreign governments.
“Public-private partnerships offer us the ability to more effectively do our jobs and be good stewards of the taxpayer dollar,” said Dan Runde, acting director of the Global Development Alliance Secretariat at USAID.
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| | We have to have a certain level of comfort before we go ahead with a partnership. —Agency for International Development’s Dan Runde | |
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The agency has put about $1.1 billion into these alliances and is leveraging an additional $3.7 billion from non-USAID resources, he said.
“We work with a wide spectrum of partners—diaspora groups, philanthropists, companies and faith-based institutions, for example,” he said.
In an era of globalization, many actors outside the government have development knowledge and country expertise. The alliance partners bring to the table “technology, resources, new ideas, reach, creativity—any number of additional assets we didn’t have,” Runde said.
USAID forged an alliance with Chevron to consolidate the peace in Angola after years of civil war. After finding that many former soldiers wanted to return to their villages and farm, officials co-funded a project to help jump-start agriculture in Angola.
“It’s in its third year and we’ve benefited more than 100,000 families,” Runde said.
The alliance also started a micro-finance bank to assist small and medium-size enterprises and rebuilt an agricultural vocational training school.
Philanthropic partners include the Case Foundation, founded by Steve Case of America Online fame, to bring information technology to schools in Jordan. GDA has partnered with the Bill & Melinda Gates Foundation on nutrition, AIDS, tuberculosis and malaria projects.
GDA also combined USAID’s project management experience in agriculture with the coffee-market expertise of Starbucks and other alliance partners to assist specialty coffee growers in Mexico and elsewhere.
The holy grail of development is sustainability or, as Runde put it, “creating the change that allows for ongoing perpetuation of the activity.”
For the coffee program, the alliance offered “the ultimate carrot, which is for agricultural cooperatives to actually be able to sell their product to a company like Starbucks,” Runde said (see sidebar).
GDA, conceived in 2000 by career Foreign Service officers and supported by former secretary of State Colin Powell, has partially transformed how USAID does business and delivers foreign aid.
The agency had done some public-private partnerships on a small scale in the past, but GDA has systematized the approach, turning it into one of the main tools in USAID’s toolbox.
Implementation has required some realignment of agency functions like procurement and human resources. Attitudes had to be adjusted, workers trained and resources redirected.
Importantly, selected employees were given GDA tasks as part of their regular, assigned duties. “It takes time and effort to build these public-private partnerships and that requires that you consciously make available the people to help you do that work,” Runde said.
In addition, the effort needed a central locus of expertise on partnership building—in this case, Runde’s office—as well as champions in both regional and field offices. A point of contact is provided in each field office worldwide.
“When outside folks want to talk to somebody about doing a public-private alliance in Zambia, there’s somebody on the ground to help shepherd that,” Runde said.
Despite the success so far, USAID has learned that forming public-private partnerships takes a lot of time and can be difficult.
“It requires understanding outside partners’ constraints—what they can do and what they can’t do,” Runde said. It’s time-consuming to get agreement among alliance partners on what the problem is and the right approach to take.
The agency chooses its alliance partners carefully. “We have to have a certain level of comfort before we go ahead with [a partnership],” Runde said. “It’s important to do your homework.”
For example, the agency subjects nongovernmental organizations to a preaward audit intended to ferret out the potential for misuse of public funds. The agency’s due-diligence protocols have successfully prevented any fraud from occurring thus far, Runde said.
USAID’s public-private approach is “light-years” ahead of other aid agencies, Runde asserted. And he may be right.
GDA was one of 18 finalists for a 2005 Innovations in American Government Award, sponsored by the Ash Institute for Democratic Governance and Innovation at Harvard’s Kennedy School of Government and administered with the Council for Excellence in Government.
The Global Development Alliance “has been a major catalyst for bringing private networks and resources to the forefront of U.S. international development assistance,” said Stephen Goldsmith, director of the Ash program.
GDA’s ascendancy has brought in- quiries from other entities seeking alliances, including the World Bank, the United Nations Development Programme and half a dozen other countries with foreign assistance programs. “There’s a huge opportunity here for the development community to grasp,” Runde said.
Moreover, the lessons are transferable to other government agencies that have a development component to their work, Runde said.
“Working with foundations, diaspora groups and companies requires some changes in how we approach our work, but we’ve been able to demonstrate successes with this model, and our colleagues in government can learn from that,” Runde said.
Brewing up success in the partnership market
Creating and expanding market is perhaps the clearest example of what a public-private partnership can do that government cannot do alone.
The Global Development Alliance has entered into a series of alliances with partners like Starbucks, Seattle’s Best Coffee, Conservation International and the Specialty Coffee Association of America to assist more than 1,000 small coffee producers in Mexico, Peru and other Latin American countries. USAID provides partial funding and Conservation International promotes water and soil conservation as well as pesticide reduction among participating farmers.
Starbucks, for its part, is acting in enlightened self-interest by showing social responsibility while building a market for its products. Starbucks provides financial assistance and loan guarantees for affordable credit programs, co-funds projects to improve agricultural productivity and steers agricultural cooperatives in developing countries toward varieties that will do well in the world market.
Avoiding commoditization was important in a time when global overproduction took world coffee prices below 70 cents a pound. Specialty coffee growers, in contrast, received an average $1.20 from Starbucks in fiscal 2004, thus substantially increasing their income.
In recent years, Starbucks has bought millions of pounds of coffee directly from Global Development Alliance cooperatives. The coffee appears in Starbucks stores under Shade Grown Mexico and other brand names.
—Christopher M. Wright
Other stories on the Partnership Imperative are:
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