Fixing aid critical to bolster U.S. leadership

By Lesley Wroughton and Susan Cornwell - Analysis

WASHINGTON (Reuters) - As President Barack Obama moves to rebuild America's global leadership, he faces growing calls to revamp the way the country hands out foreign aid and make U.S. assistance more strategic and effective.

Leading Democrats and Republicans say they want to rewrite legislation governing foreign aid that dates back nearly 50 years. Development experts describe the current system as ineffective, chaotic and underfunded, spread among more than 20 agencies and 50 programs with no clear lines of authority.

In addition, the Bush administration's reaction to the September 11 attacks refocused U.S. aid to allies in the war on terrorism, with the lion's share going to Iraq and Afghanistan. The Defense Department has taken on roles performed previously by the main development agency, USAID, which has lost influence, funding and staff.

Rep. Howard Berman, a senior Democrat who heads the House of Representatives Foreign Affairs Committee, vows to press for a new Foreign Assistance Act of 1961 signed by President John F. Kennedy.

"We need to massively clean up that law, but even more importantly, achieve certain goals which I would put as restoring the capacity of our assistance programs and our diplomatic programs," he said.

Berman said USAID had become severely understaffed and lacked the technical expertise to tackle the complex nature of threats facing the world, such as climate change.

"We have both militarized and privatized our diplomacy and our foreign assistance, because we don't have enough skilled personnel to play the role that historically they played," Berman told Reuters.

CHANGING GUARD