Foreign Assistance in the Age of Terror

(A Press Release Issued by USIP)

The Perspective
Atlanta, Georgia

April 30, 2004

The age of terrorism has forced the federal agency charged with extending U.S. assistance around the world to change its operational goals, according to Andrew Natsios, Administrator of the U.S. Agency for International Development. Speaking on Monday at an event co-sponsored with the U.S. Institute of Peace, Natsios said that the war on terror has led the agency to broaden its mandate and move beyond its traditional role of providing development assistance and humanitarian relief.

After undergoing “the most thoroughgoing reassessment of the country’s development mission since the end of the Second World War,“ Natsios reported that USAID is now “responding with a new understanding of the objectives of foreign assistance.” These include: promoting transformational development; strengthening fragile states; providing humanitarian relief; supporting U.S. geostrategic interests; and mitigating global and transnational ills.

According to Natsios, USAID is contributing to the multi-faceted war on terror by working to diminish the underlying conditions in impoverished nations that terrorists seek to exploit. Through programs that reduce the isolation of these countries, provide them with economic opportunity, strengthen their institutions and governance, promote financial transparency, and improve educational systems, USAID is taking on the challenges of what is an unconventional war. In Iraq and Afghanistan, for example, USAID is on the front lines of the war on terror, said Natsios “helping the people…reclaim their societies” and working with them “laying the groundwork for their rebirth,”

Speaking at the same event, James Dobbins of the Rand Corporation characterized USAID as “one of the most essential agencies in any nation-building effort.” He was critical of the decision to give the Defense Department responsibility for reconstruction in Iraq, noting that it has led to the adoption of the wrong priorities. With DoD at the helm, the U.S. is “doing what we know how to do, rather than what needs to be done,” in Iraq, he said. Reconstruction priorities should start with security and be followed by governance and macro economic stability programs, rather than the current focus on infrastructure projects. He recommended that the State Department and USAID be strengthened to assume reconstruction responsibilities. Daniel Serwer, Director of Peace and Stability Operations at the Institute of Peace, recognized that Natsios has turned the agency in the right direction but urged USAID to devote more resources to programs in democracy, conflict management, and rule of law, which strengthen failed and fragile states, but which still represent a small fraction of the USAID FY 2004 budget request.

For additional information, please contact Kay King, Director of Congressional and Public Affairs at the Institute of Peace, at (202) 429-3824 or at The text of the speech will be available at the USAID website at For audio of the event, please visit our website at