U.S. Agency for International Development

The U.S. Agency for International Development (USAID) is a U.S. government agency that has been charged with the provision of technical and other assistance to developing and, more recently, transitional countries around the world. It is an independent government agency, headed by the administrator. The secretary of state (that is, the Department of State) provides foreign policy guidelines and the Agency works closely with the State Department, both in the United States and abroad. USAID missions are often attached to U.S. diplomatic missions and the officials are provided with full diplomatic cover.

USAID's work is focused on the promotion of democracy and furthering of free markets (market economy) and enabling citizens of the foreign countries to make a better living. In achieving the former task, USAID is supporting the U.S. foreign policy goals (promotion of democracy and free markets).

USAID Beginnings

The Agency was set up by an executive order of the then U.S. president John F. Kennedy, following the promulgation of the Foreign Assistance Act, in 1961. It is believed that the roots of USAID are in the post-World War II assistance to Europe, especially through the Marshall Plan, from which a number of countries in the Western Hemisphere that were severely affected by World War II benefited greatly. Similarly, President Harry S. Truman's Point Four program has contributed to the changing perception of the U.S. role in international affairs and rebuilding war-torn Europe.

Upon the completion of the activities under the auspices of the Marshall Plan, the U.S. Congress created the Mutual Security Agency in 1951, and in 1953, the Foreign Operations Administration to consolidate economic and technical assistance on a worldwide basis. In 1954, the International Cooperation Administration (ICA) was established. The newly formed ICA managed aid for economic, political, and social development purposes. ICA was not independent in delivering its tasks and it had been noticed. Also, at those times, major players in the foreign development assistance arena were multilateral donor organizations, primarily the United Nations (UN).

The Mutual Security Act promulgated in 1954 introduced the concepts of development assistance, security assistance, a discretionary contingency fund, and guarantees for private investments. And the 1957 revisions of the Mutual Security Act provided the legal framework for the development of the Development Loan Fund (DLF), which enabled ICA to become a lender as well. However, all the organizations that dealt with international assistance failed to provide for long-term sustained growth; it was necessary to reform the system of U.S. government foreign assistance, and in 1961, USAID was formed and major negative remarks on the position and powers of the previous aid agencies were addressed, making USAID prone to be more successful from the very outset.

Today's USAID

USAID as a government agency is bound by U.S. foreign policy and its work is based on three pillars: (1) economic growth, agriculture, and trade; (2) global health; and (3) democracy, conflict prevention, and humanitarian assistance. USAID supports long-term and equitable economic growth and advances democracy through its work. The Agency's budget is roughly 0.5 percent of the U.S. government budget, but it is seeking new forms of public-private partnership and now works in collaboration with more than 3,500 voluntary and nongovernmental organizations that are interested in the advancement of human conditions in foreign countries and uphold the values promoted by U.S. foreign policy.

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