March 1, 2006

Religion and International Development: A Conversation with Andrew Natsios

Pew Forum on Religion & Public Life Washington, D.C.

There is growing recognition of the increasingly important role religion plays in U.S. foreign policy, including decisions regarding development aid and humanitarian assistance. What role is religion playing in international development? How are domestic religious groups and faith-based organizations influencing U.S. development efforts overseas, particularly policies regarding religious conflict, family planning and the fight against HIV/AIDS? How do U.S. aid organizations interact with religious publics in developing nations in the Middle East, Asia and Latin America? What is the role of faith traditions in the development of Third World countries?

Andrew Natsios experienced these issues first-hand as administrator for the Agency for International Development during one of the most tumultuous periods in recent history. In addition to overseeing programs to assist victims of famine and natural disasters worldwide, he also was involved in U.S. efforts to rebuild Afghanistan and Iraq. Natsios discussed these issues at a recent Pew Forum event.

Speaker:
Andrew Natsios, former Administrator, U.S. Agency for International Development

Moderator:
Luis Lugo, Director, Pew Forum on Religion & Public Life


LUIS LUGO: I’m Luis Lugo, director of the Pew Forum on Religion & Public Life. This luncheon is part of an ongoing series we have here, bringing together journalists, policy leaders and others to discuss timely topics at the intersection of religion and public life.

We’re very pleased to have Andrew Natsios with us today. As many of you know, Andrew recently joined Georgetown University’s School of Foreign Service as distinguished professor in the practice of diplomacy and advisor on international development. Before that, he was administrator of the U.S. Agency for International Development for five years during one of the most turbulent periods in recent U.S. history, beginning, of course, with 9/11. While at USAID, Andrew oversaw efforts to assist victims of the Asian tsunami, provide humanitarian aid in Sudan, and rebuild Afghanistan and Iraq, all extraordinarily difficult challenges. Couple that with having arrived at the agency at a time when, frankly, it had declined somewhat in capacity and standing over previous years.

In many, perhaps all, of these challenges he faced at USAID, Andrew had to confront the prominent role of religion. Religion was a factor in terms of development efforts on the ground and the various countries in which he was working. It was a factor in dealing with U.S. government agencies and how they understood, or did not understand, the role of religion on the ground. And it was a factor in the role of religiously based advocacy organizations in this country with respect to foreign aid policy. So religion was everywhere to add, and probably complicate, his life in some significant ways.

We’ve invited Andrew to come and speak to us about religion’s role in international development and humanitarian assistance, and to perhaps share his insights on how well equipped the U.S. government agencies are, at this point, to deal with this important and growing factor in world affairs.

ANDREW NATSIOS: Thank you very much. I normally used to say when I was speaking when I was AID administrator that I would make one egregious indiscretion in every speech extemporaneously. I would vary from the text. And I was always afraid that someone would report one of these indiscretions, but they never did for some reason, maybe because I was relatively on the second tier of policy people in the administration. So people would laugh at them but not ever write them down, thank heavens. (Laughter.) Hopefully, that will continue so I can say whatever I think and not be afraid of the consequence. But now I’m a professor and, actually, professors do say whatever they think. There isn’t usually a consequence to it.

I would like to talk a little both from a domestic point of view on the role of organized religion and from an international point of view and make some arguments and observations.

Just to give you a little bit of my own religious background so you can see how varied it is – it’s a little chaotic actually – I was baptized in the Greek Orthodox Church, as almost all Greeks are. It’s part of the custom and the tradition. And when we moved to a small town in New England there was no Greek church even close by. There were three churches in town: a Baptist, a Congregational and Catholic. Because of the ethnic tensions in Massachusetts, where I should have gone was the Catholic Church, which is much closer to the Orthodox Church. But I was sent to a Congregational church.

The Congregational church was the least offensive to my parents and my grandparents, and I almost became a Congregational minister when I was a young man, along with Andy Card, who was one of my closest friends in the state legislature in Massachusetts. I was pretty conservative theologically within the Congregational or Puritan pilgrim tradition of that church in Massachusetts. I went to Georgetown, a Jesuit institution, so I have great respect for the Catholic tradition. I came here and joined a very conservative Calvinist Presbyterian church, where I stayed for nine years because the Congregational churches here were simply too much for me to take theologically.

And at the time I was at the Presbyterian church I worked at World Vision, and at the end of my five-year tour with World Vision I decided to go back to the Orthodox Church where I came from and remain a member of the Antiochian Orthodox Church – not the Greek Church; the Antiochian is the Arab Orthodox Church It goes back literally to 40 A.D. I go to that church because the Divine Liturgy is sung in English. I don’t speak Greek very well, particularly Hellenistic Greek, which is how the liturgy is still sung. So I go to an Arab Orthodox church because the liturgy is entirely in English. And 70 percent of my congregation consists of converts to orthodoxy. The rest are from the different ethnic orthodox churches like the Greeks, the Ukrainians and the Russians. So I’ve got enough of my own ethnic group in the church to feel comfortable, but I can understand the liturgy.

So now that I’m orthodox, I’m not really in all of these other debates that are going on with the evangelicals or the Catholics. We do not change much in the Orthodox Church. Much of the church is as it was in the 4th century, which is how I like it. (Laughter.) I’m a little divorced from these debates, so I’m actually speaking a little as an analyst or academic – a committed Christian but an orthodox Christian in a different tradition – very different, actually, from the Western church.

My time at World Vision was quite interesting because I didn’t know much about the evangelical church in the United States, and I assumed lots of things that turned out not to be true. For example, while virtually all evangelical churches, black or white, are pro-life and are conservative theologically, there is, nevertheless, a large tradition of centrist, even leftist theology within evangelical churches in the United States now, right now – not just in the black churches, and not just a few intellectuals. People think of the religious right as representing the evangelical church. That’s really not accurate. That’s a particular subset of the evangelical church.

There are 48 evangelical NGOs [nongovernmental organizations] in the United States. They have their own association (most people have never heard of it unless they are in the evangelical church) called the Association of Evangelical Relief and Development Organizations [AERDO], and of the 48, maybe four are conservative politically. The rest are all centrists, and some of them are pretty far out on the left. When I was at World Vision I tried to convince the Jesuits and the evangelicals that Catholic social teaching is very similar in many, many respects to what they call holistic theology within the evangelical church on social justice issues. But they use different language and there is no hierarchy, so the Catholics have real trouble understanding who represents the evangelical church. Who are the bishops, or is there an association? And these churches are free-standing, for the most part, and so the Catholics have a conceptual problem understanding how this all works, I think, in a hierarchical sense.

We began some talks between the Catholics and the evangelicals in a humanitarian and developmental sense that were actually quite productive in the field. The national World Vision offices now have their own board of directors. Many of them have Catholic bishops sitting on the board, which is quite confusing to the Vatican and to the Catholic Church in the U.S. – why a Catholic bishop in Ghana or in the Philippines would sit on the board of what is the premier evangelical NGO, with $2 billion a year and thousands of employees worldwide (the largest NGO in the world right now).

I’ve talked to a number of Catholic priests and Protestant pastors in Africa and they say, we know the Protestant Reformation took place, intellectually, but really it has no relevance here. I’ve been to Catholic masses in Africa and they sound like revival meetings in the United States. These are not American priests in Africa; these are African priests in African parishes. I was the only white in the entire church, and it was quite extraordinary to see this. And these were not 45-minute masses; these were two-hour masses because the sermons were half-an-hour long.

The evangelical and mainline churches have a lot of tensions in Africa but it’s less so, interestingly enough, from my experience at least, among Catholics. You would never have Catholics in the United States sit on the National Council of Churches, but there are church associations in Africa where all of the Protestant denominations and the Catholics sit together, and they’re very powerful.

I learned a lot of this as I was going through my experience in World Vision. It was an interesting experience because you were supposed to sign a statement of faith, which was written by Billy Graham and a lot of the evangelical leaders in the late 1940s. And I had problems with it, because, even though I was a Presbyterian at the time, I was starting to move away from the Protestant Church. It said the only source of truth in the church is scripture. And I responded that I believe tradition and the hierarchy are secondary sources, even though there is no hierarchy in most Protestant evangelical churches. I said that in my church there is an association and we believe they have some claim on carrying the tradition forward. In the Orthodox and Catholic Church, of course, the hierarchy is very powerful in terms of the teaching authority of the church, but also in terms of the church fathers from the early church and the theological works.

When I was at World Vision I realized it is an enormously powerful source of influence in Washington that had not been used. Most Republican legislators are very nervous about annoying the evangelical church in the United States. And we had two big controversies while I was at World Vision. One of them was the State Department’s attempt to absorb AID, which those of us in the development community were appalled by – I was particularly outraged by it. We organized the evangelical NGOs and they sent a letter to Congress, including my party, and said, if you do this we are going to be furious; don’t do this. I had trouble getting a couple of people to sign the letter. I don’t even know if I have it anymore, but it was very interesting. Some very conservative evangelical leaders within the NGO community signed this.

The second thing that we did was during the North Korean famine. Food was being used as a weapon and both parties were actually responsible for the policy, which was, if you cooperate in the negotiations, we’ll give you food; if you don’t, we’re not going to feed you – in the middle of a famine that was killing 2.5 million people. Once again, we used AERDO and we sent a letter. We wrote a fairly inflammatory letter to the Congress and they all cited one last evangelical leader who said he could not sign it; he said he didn’t like the North Korean government. I responded that I despised the North Korean government, but they’re not the ones dying in the famine; poor people were dying in famines. Those are the people who always die in famines. Why would you punish poor people who never elected their own government for something that they have no control over? And he signed the letter.

The letter was sent and the Republicans in Congress decided it is not a good thing to annoy these 48 evangelical NGOs; then we had the mainstream NGOs in the interaction community, and we actually changed the policy. It was a little late; two-and-a-half million people died. But we did change the policy. I had Republican legislators call me up to say, we got the message, Andrew – everybody is pulling back from this view that food aid can be used as a weapon of diplomacy. When President Bush ran in 2000, he announced that food aid would never be used as a weapon of diplomacy during his administration, and I might add, he carried that out. And I was charged, since I was a big advocate of that position, with carrying it out. We carried it out rigorously during that time.

I think there is evidence that the church in the United States, both the Catholic, Protestant, less so the Orthodox Church, but increasingly the Muslim community and certainly the Jewish community, can influence policy, particularly when there is a profound moral issue involved. When I went to AID I decided: first, I’m going to make sure I talk to these people on a regular basis. I’m going to put some of the people from the community into positions of authority in AID, which I did do, and the White House of course endorsed this. Second, I made a determination that whenever I traveled to the developing world I would ask to meet with the religious leaders. It was a very interesting experience because even within AID, that works with networks around the world: NGOs, women’s groups, farmers’ cooperatives, universities in the developing world and professional associations. And they work with the religious institutions all over the world, and they’ve been doing this for 45 years. The Faith-Based Initiative of the president is not new for us. Without evangelical, Catholic, Jewish and, increasingly, Muslim NGOs, we would not have been able to do a lot of our work in many countries around the world. One of the best Muslim or Islamic NGOs is the Aga Khan Foundation, which AID has contributed to for many years. They are technically one of the most proficient in the world, and one of my favorite NGOs.

So I made this determination when I traveled; I’ll tell you about two countries I visited. One country was in Africa and the ambassador was a good guy – he’s a Ph.D. and an Africanist. He said, Andrew, why would you do this? You’re putting Pentecostal, Catholic, Anglican and Muslim leaders in the same room at lunch at my house. I have never done this. No one has done this. In fact, they have never met together before. I said, well, I think it’s about time they do.

We had a discussion about how HIV/AIDS was ravaging their congregations and the mosque. And the man representing the Muslim community was the president of the Muslim Doctors Association of this country. The interesting thing was the tension in the room was not among the Muslims. Muslims were 20 percent of the population of the country. It was between the pentecostals and the Anglicans. That was the theological tension. I could see it going on at lunch. I was troubled by it. But by the end of it the ambassador said, this is the best conversation I ever heard. It was a wonderful conversation because they didn’t realize that they’re all active in this area. They are all worried about HIV/AIDS because when parents die, you know who they go to first. They don’t go to the NGO community in this African country. The government ministries are not that functional. They don’t go to the government. They go to the mosque and the church for the children. Who is going to take care of the children?

And they said, we’re completely overwhelmed by orphans. They don’t know what to do with them all. They don’t have any money; they are poor parishes and congregations. We had a very interesting conversation and started a whole effort to try to give very small grants – $5,000 or $10,000 to parishes and congregations, Islamic and Christian, in Africa to deal with the HIV/AIDS issue. When I was in Ethiopia, I met with the patriarch of the Ethiopian Orthodox Church, a church that goes back 1,700 years, and with the chairman of the council of imam of the Muslims. Of course, 40 percent of Ethiopia is Muslim. This is a form of Islam – very Sunni but Sufist – very, very pacific. And in the Ethiopian highland villages that are mixed, the Orthodox will help the Muslims build their mosques and the Muslims help the Orthodox build their churches, literally. There was an old tradition going back 600 or 700 years.

The imam told me that gradually, people from Sudan were coming in. They were burning churches down in order to cause conflict. I asked, what did you do? They said, we’ve thrown them all out of the country. We don’t want them here. We get along very well with our Orthodox friends. And the patriarch told me the same thing about the Muslims: We don’t want these people causing trouble.

In Ethiopia they are helping us in an important way to spread the message on HIV/AIDS. And AID organized a patriarchal tour for the Ethiopian patriarch, and he visited villages in very remote areas and spoke to both Muslim and Christian audiences, asking them where their children were at night and if they were faithful to their spouses; it’s a traditional Orthodox theology. However, it had an effect in many villages. I am told the patriarch is revered in the Muslim community.

We let him speak as he wanted to speak. Now the priests, imams and mullahs are passing out literature we have produced over the years. This goes back to the ’90s; this is not a new thing. And whenever I go, I visit them again, and they welcome us. We have given grants to their NGOs and it is working very well.

Because of concerns about the human trafficking and child-stealing trade in Bangladesh and some of the neighboring countries, AID was asked by the embassy to design a course in development for the school of mullahs, the Islamic-Koranic school that trains all the mullahs for the mosques. It’s a 98 percent Muslim population. We did that, and it was actually a very popular course. It is still being taught. We have trained approximately 5,000 mullahs at this point in fish farming, preventing child and maternal mortality, agriculture and your basic village development issues. I visited the Koranic Center a year ago; and this imam stood up and was yelling – he was so angry. He was talking about the human traffickers stealing their children and that we had to stop them. I asked one of the Muslim leaders next to me why this man was so upset? He said it was because the man’s nine-year-old daughter disappeared one day. They were in a border area, and they thought that she had been kidnapped into one of the brothels. She’s a nine-year-old kid. It turned out that in fact she hadn’t been kidnapped. There was a storm and she got lost and was safe with a friend in a neighboring village.

But he realized then that everybody was at risk, so he organized the mullahs in three provinces and border areas to give sermons every Friday against the human traffickers – in how to identify them. And I guess it has wiped out the human trafficking trade in those three provinces. They do not go in there. It’s extremely dangerous for human trafficking, particularly of children, to even walk in those provinces because the mosque is now organized against them.

Now, when people get upset and ask why we are doing these programs – well, it is a community organization. Who are the leaders in most of these traditional villages? The religious leaders. We have Buddhist monks help us stop the brothel trade in children, in Cambodia, from several of the most powerful temples and pagodas in Cambodia. They’re in there with us at the grassroots level, stopping this kind of trade. And AID is mostly very sympathetic to working with these groups. They do it, and they’ve been doing it for a long time; but certainly it is much more politically acceptable to do it now.

The State Department and AID have a lot of Foreign Service officers who are originally missionary kids. They come from the religious traditions. So it is very interesting to me that even they are a little nervous discussing any of this in Washington because it is regarded as a secular city. I asked them, how long have you guys been working with the faith community? They said, we’ve been doing it for decades, Andrew, but we never talk about it in Washington because within the federal system there is a separation of religious institutions from the state and we do not really want people to know that we have been doing this because people might be offended by it. And I said, well, it’s okay to do it now, and I think we need to offer some lessons learned and to try to deal with this in a more organized way from a programmatic standpoint. These religious communities in failed states or fragile states are the only organizing principle in these societies, and they actually can help us, particularly if we talk with them on a regular basis.

I was in Macedonia and I asked the ambassador, who was very sympathetic, to arrange a meeting with the four religious communities: the imam of the Albanian Muslim community, who represents, I think, 25 percent of the population and the archbishop of the Macedonian Orthodox Church, who was a young man; he was in his mid-40s – for an archbishop, that is very young. They had one Jewish community with a rabbi, a leader who used to run the services, who would come from Sarajevo down to the meeting to lead it. We also had a Macedonian Methodist pastor attend. And we had President Trajkovski, who was killed in a helicopter crash a few years ago. He was the president of the country and a Methodist pastor. One of the reasons he was elected is because he did not threaten the Orthodox or (laughter) the Muslim community because the Methodists are such a small percentage of the population. I actually joked with him about that and he said, well, Andrew, maybe there is something to that.

These four men had never been in the same room together at one time. At the time, Macedonia was about to blow up because of ethnic conflict and we were doing everything we could developmentally to try not to have this happen. We didn’t want another Kosovo or another Sarajevo; we just didn’t want this to happen. And the first hour of the two-hour meeting they were polite to each other, and then they got into it. But no one yelled, no one got angry, no one used bad language or made accusations, but they did get the stuff out on the table about how the Orthodox are treated by the Muslims and how the Muslims are treated by the Orthodox, and the Jews and the Protestants tried to mediate this debate.

When the meeting ended the ambassadors said, this is very useful, Andrew, to have this. They had a reception for me later, and we noticed the four of them came to the reception, but they stood over on the edge of the crowd and talked for four hours during the reception among themselves. They were very animated, but, again, we did not hear any bad things happening. Later they decided to work out a resolution that they were going to make public – and they finally didn’t. I won’t tell you why; it was kind of a sad story. But they worked out a religious tolerance statement that the four of them were going to issue for their respective religious communities, and they agreed to start meeting on a regular basis, which they have done. And whether it helped calm that the situation down or not, it certainly didn’t make it worse. I think it did help calm it down. And the fact that they had never met before and that the venue of this meeting was the AID administrator in the AID mission with the American ambassador was a little unusual, but nevertheless something worth discussing.

So anyway, I tell that as a final story because I’ve had some of my most memorable experiences as AID administrator doing these sorts of unexpected things with different communities not traditionally known as relief and development organizations.

MR. LUGO: Thank you. This perhaps raises some broader questions about how we might think in this country about public diplomacy more broadly and not just within the development context but within the overall work of the State Department and so forth. I’m sure Katherine Marshall, who has worked on these issues in a parallel institution, the World Bank, has some interesting stories along those lines she could share.

CARYLE MURPHY, THE WASHINGTON POST: I’d just like to know a little background on the policy of giving grants or financial help to religious-based groups that do development work. I don’t recall any domestic uproar over this in the same way there has been uproar over funding domestic faith-based groups. Has AID always funded religious-based groups?

MR. NATSIOS: Yes, we have. In fact, it’s very interesting because many of the religious traditions do hire people from their own tradition – some of them overtly, and some of them I’ve asked, do you do it? Yeah, we do it. We don’t have a statement of faith, but we only hire people from our denomination or our tradition. And many people only apply from our tradition to our organizations. That is an interesting part of the 1964 Civil Rights Act. I asked the staff, how can we do this legally, because we’re not supposed to discriminate? The 1964 Civil Rights Act states that faith-based groups are exempt from the prohibition on religious discrimination in hiring.

And so the AID regulations are silent on the issue. They do not say it is okay to do this but they do not say you are prohibited.

So these issues have come up before and I think we respect the tradition, and they know what the limits are. Everybody in the community knew what the limits were.

CARYLE MURPPHY: How did you address that problem?

MR. NATSIOS: Of proselytizing?

CARYLE MURPHY: Yeah.

MR. NATSIOS: We told them they couldn’t do it. And most of the NGOs, including World Vision, now have a rule that any proselytization, even with private money, is against the rules of the organization, because in Christian tradition there is no Jew or Greek or woman or man or slave or free. It’s in one of Paul’s letters and in World Vision, which is very conservative theologically. If it says it, that’s the way it is, and therefore there cannot be any discrimination in any assistance to any person because St. Paul said you cannot do that. And that is the benefit, by the way, of having an intellectual basis that is very old to what you do.

We had problems in some churches. I won’t tell you which countries. But the women were not treated very well in the countries where we had World Vision missions, and we simply went through the scriptural references. And some people resigned from the organization. They said, we’re not going to follow these rules because we’re men and we’ve run this country and we’re always going to run it, and women are not equal to us. And World Vision said, well, in our tradition they are, so you have to make a choice. You either change your attitude or you have to leave. And they left. And there was a training program in these countries that had a view of women that was very much at variance with scripture and tradition, and it changed the organization in those countries profoundly.

So it can be very useful as a developmental mechanism when you have revealed truth saying something is the case. Some people in the United States denigrate this, but I would argue that the tradition is much more powerful on the reverse side. If you took the word “poor” and did a computer search of the Old Testament, it would be almost as big as the number of pages in the scripture. And the teaching in the Old Testament and the New Testament on these issues is very powerful. It’s just not discussed.

The other thing that’s happening that I did not mention in my conversation is this: The evangelical church is evolving. The Protestant church I was in 10 years ago, you mentioned human rights and people would say you are a liberal conspirator. Now, in evangelical churches, very conservative evangelical churches – these are not the churches on the left – you say human rights and they say, we are for human rights because that is what we have to be for. They started out with discrimination against people because of religious persecution. That was the first issue. It was their introduction to human rights.

The second issue was human trafficking, which is really not a denominational issue, but they said, this is an outrageous thing. It is completely unacceptable. One of the heroes in the evangelical church was a member of British Parliament who gave speeches for 30 years against slavery, [William] Wilberforce. He is an iconic figure within the evangelical NGO community for his crusade against slavery in the 19th century in Britain. Congressman Frank Wolf loves Wilberforce.

The new issue is no longer just human trafficking. They called me last year and asked if I knew the conditions of the prisons in the Third World? I said, yes, I have been in some of them; they are horrific. I went to a prison with 10,000 men in it, who were accused of committing the genocide in Rwanda. Some of their toes were falling off and they had been there for years without a trial.

They said, that is the next thing we are dealing with. They tend to want to go on crusades. I explained that there are ways to approach criminal justice reform in a constructive way so we do not alienate everyone. But many are into this now … they call me up, and they are dragging in people from other communities. Of course it is a problem. But in poor societies the first requirement is not to help people in prisons. The people in the society are just as poor, but the prisons are horrendous in many developing countries.

E.J. DIONNE, THE WASHINGTON POST: I have three questions so you can skip whichever ones you want. The first is just following up on Carol’s question, which is, could you talk about what changed and what was continuous with the Clinton years in this area in terms of dealing with religious groups. I will ask all three.

The second is the way in which you talk about Islam because clearly when you are in Cambodia or Bangladesh or India, it is a very different beast. It is a very different sort of tradition. And I’m curious what we can learn from that diversity within Islam that is useful. And the third was just a personal question. I am just curious what the effect of all of this inter-religious dialogue that you have been engaged in has had on your own faith, which now I can ask you since you’re not a public official.

MR. NATSIOS: It’s very interesting. I told Brian Atwood, a good friend of mine, who himself was a committed Catholic, the head of AID during the first-six years of the Clinton administration, that he was making a mistake by not talking to the evangelical NGOs. They are with him on a lot of this stuff. They are pro-life, but many of them do birth control in their programming. World Vision does family planning as long as it is voluntary and as long as there is no abortion involved and no coercion.

You ought to be talking to them. He had a person on his staff who had been in Congress, who was his chief his staff. I think he is a practicing Methodist, and he said, I am going to make this my issue. So he brought a major evangelical NGO that is very conservative politically. I’m not going to mention the NGO. But the CEO is a major national figure.

And he cultivated him, gave him his first AID grants and emergencies, and they did a very good job. In fact, they are a very fine NGO right now. They have done some excellent work technically. Their budget used to be $30 million; now it’s more like $150 million. And the experience has changed the CEO. The CEO made one of the most powerful statements in the evangelical church on the HIV/AIDS issue, saying that it is an embarrassment that we have not dealt with this issue before; we need to deal with it right now because people are dying, children are being orphaned, and we have been silent on this and need to speak about it now.

The change has been in USAID trying to recruit new members. And that was a problem because the groups that have been getting all of this money for all of these years knew how to work the system. Some of the newer institutions, regardless of their tradition, do not understand how to do an AID grant and make it competitive. So we have a training program now in their Office of Faith-Based and Community Initiatives to attempt to train mostly indigenous NGOs that come out of these traditions, but also some American groups. There is a black pentecostal church. They have their own NGOs now. Two black pentecostal churches, big, big churches that have more than one church. The presidents of the church said, we are forming our own NGO; we need some help from you guys. And I said, you are going to get some help from us but we have to go according to our procurement process, which we train them in.

MR. DIONNE: Would that be Church of God in Christ?

MR. NATSIOS: That is exactly one of them and another one was the African Methodist Episcopal Church, which is an old, mainline black church. But I was the keynote speaker at their annual NGO dinner. The guest speaker was my favorite African leader, former President Konare of Mali, who is the president of the African Union or the executive director of the African Union, a charismatic, powerful figure in African politics.

He was the guest speaker and I got to introduce him. But the fact that they invited us to come … they get a lot of money from AID and they have NGO programs all over Southern African … and all sorts of different traditions, and they like AID. The change we are trying to make is in recruiting new partners, because in all areas, AID has a certain fixed number of partners and I was very upset that we were excluding new groups. This has nothing to do with just faith-based groups. It is new secular NGOs and secular contractors that were also excluded. You know, we can’t just do business with the same people all of the time. So we opened the place up.

We got the Global Development Alliance with 300 new partners from the business community and foundations that we never had before. They put $3.7 billion into these partnerships; we put in $1.1 billion. Before I left, the Kennedy School of Government just awarded us the Lewis and Clark Award for Innovations in Government on this partnership. So we try to do this elsewhere – not just in this area, but we did focus on this area because I thought it could be such a powerful force.

The diversity of Islam is a very interesting issue. Mullah Fayaz was a friend of mine. He organized 1,300 mullahs in Afghanistan to attack the Taliban in the Mosques. He is a Pashtun from Kandahar. His father was the first mullah assassinated by the Russians during the invasion. I met Mullah Fayaz every time I went. He was a very holy man. The Taliban tried to blow up his mosque twice. They assassinated him just before I left office.

Friday afternoons, 1,300 mullahs would protest and shout that the Taliban had no business in their country and that they were destroying Afghanistan. And he said, I am organizing a jihad against Taliban and against al Qaeda. He organized this six months before anybody knew it. He had grown up with Karzai and Karzai was at risk from these same groups. But the religious community comes out of the Sufi tradition. The first people the Taliban executed on a mass scale in the late1990s were the old Sufi families, the brotherhoods that went back a hundred years. In every country I visit where I meet Sufis, they tell me that we don’t get it, that Sufis are Americans’ best friends. Now I know what that means, but a lot of people don’t understand the Sufi tradition. The great majority of Sufi leaders want a civilized, peaceful relationship with the church and with the West, and many believe in democracy.

Many of the leaders of the religious parties in Turkey come out of the Sufi tradition. There is an imam who is the leader of 12 million Sufis in Nigeria. AID sponsored a religious dialogue conference with the king of Morocco that Ken Hill and I went to a year-and-a-half ago.

The conference was chaired by the great-grandson of Mahatma Gandhi. We had Buddhists there, we had a Catholic theologian, we had two Orthodox rabbis who were theologians – very interesting group of people from abroad. But the imam came from Nigeria. He said, I’m trying to hold the line, Andrew, but, you know, there are a lot of people out there trying to stir things up and have the two communities attacking each other and I am holding the line.

But he is an imam out of the Sufi tradition. I have had Sufi leaders come up to me in Nigeria and say, you need to talk to us; we are at the vanguard. The extreme elements of the Salafadist tradition and of al Qaeda hate the Sufis everywhere in the world. They try to execute them, to assassinate them, and to destroy them. I thought we ought to at least be talking with the leaders, because they are our bridge to a democratic Islamic world in my view over the very long term. And there are a lot more of them than there are of these other people

MR. LUGO: That is the “clash within a civilization.”

MR. NATSIOS: It is the opposite of what [Samuel P.] Huntington said. Has my faith changed? It has changed, yes. I was drawn to read the works of my friend, Jaroslav Pelikan, who wrote a book called Jesus Through the Centuries. I have read that book five times. It’s one of my favorite books. And it’s about Christ in the history of the culture. And he converted from the Lutheran church. He edited of Martin Luther’s collected work.

When he announced he was becoming an Orthodox Christian, about two months before I did, I was kind of surprised. He was a great figure in the Lutheran Church. His work led me to contemplative Christianity, and that is when I decided to go back to the Orthodox Church, which I am very happy in.

Has it changed? Yes, it has, because as this change was going on personally with me, I was going into famines, genocides, civil wars and some horrible stuff. The only way I was able to deal with it emotionally was through my faith tradition.

Going to where the Rwandan genocide was taking place, you wonder what it means to be human. You go to Afghanistan or you go to the North Korean famine, where 2.5 million people died. You have to have some theological basis – at least I did, or a philosophic basis – for answering some very basic questions about our humanity, and the church helped me do that. It remains the case.

JODY HASSETT SANCHEZ, POINTY SHOE PRODUCTIONS: You mentioned Wilberforce. I can think of several staffers, evangelical or Catholic lawmakers’ staffs right now who have put up some significant roadblocks for USAID’s funding of NGOs on the ground in places like India, who are trying to reduce the sex/love issue simply because of the distribution of condoms.

MR. NATSIOS: Well, that is one thing, but we gave a $10,000 grant to some local Indian NGO that supposedly wants the legalization of prostitution and so now there is a huge investigation going on.

MS. HASSETT SANCHEZ: I just wondered if there is –

MR. NATSIOS: It is not helpful to go on these search-and-destroy missions against USAID partner organizations.

MS. HASSETT SANCHEZ: To the extent that everyone claims to be worshiping the same god and wanting the same end, is there any – now that you have a little distance – is there another way to think about this or approach it?

MR. NATSIOS: Well, look, I did not agree with the Clinton administration policy of general condom distributions. They were distributing condoms to eighth-grade kids. That is not what you should be doing in high school or in grade school. In a traditional society, the church, the mosque, the Buddhist temple or in Judaism, they should be talking about waiting. And when the left attacks us for saying that, it disturbs me a little because there are some minimums that we ought to be looking at in terms of what messages we are giving.

So we focused on condom distribution on at-risk populations: street kids, prostitutes, truck drivers, miners who are away from their families. Someone from the White House – a very senior person who is a close friend of mine, a devout Christian – he was listening to all of this crap because they were complaining about USAID. I am very conservative; I’m pro-life – very conservative theologically. In some ways, the Orthodox Church is more conservative than the evangelical churches.

And I really found this very offensive, very offensive. And this senior official went to Africa and he asked evangelical pastors and Catholic priests, do you find what AID is doing really objectionable? And they said, no, we agree with the idea. We told them to do it. He went all over three countries and asked them; they all said the same thing: People are dying here. In our country, people have three or four wives. That is the tradition. And I’m talking about Christians now. (Laughs.)

There is a president of a major African country who has 28 wives overtly, and he is a devout Baptist and an evangelical. He has 28 wives. He doesn’t have HIV. The fact of the matter is, if the husband gets HIV/AIDS, he is going to give it to a much larger number of people, and if children are born then there is a high risk of them getting the disease as well. I think we, on the left and the right, take our domestic religious wars and our culture wars and we transport them to the Third World.

Abortion is illegal in almost all African countries. I think there are one or two African countries where it is legal. It is illegal in almost all of Latin America with, I think, two exceptions. So this whole debate over abortion, it is against their laws, and they are not going to change their laws. I can tell you; the Africans are not changing their laws on abortion. They are very, very emotional on this subject.

The Europeans and the Americans go in, groups not necessarily associated with governments and they press this secular thing, but in fact they are deeply religious societies. Peter Berger has written something on this; the argument he makes is that the West is basically an island of secularism, particularly Europe, when the rest of the world comes from a religious tradition – regardless of what the tradition – whether it’s animism, Catholicism, Islam, Buddhism, Hinduism or Confucianism.

If you are really developmentally mature, you don’t go into another country and trash their culture because you’re not going to be very successful in the development process if you do that. Both the left and the right do this, and they have done it to AID. I have received letters attacking us simultaneously from the left and the right on the same policy.

On HIV/AIDS, we were accused of being … by the left, The New York Times attacked us for being … is The New York Times here? I’m sorry I’m saying this – for being stooges of the religious right, and then we had the right attacking us for being stooges of the left. And there is disinformation about how much money we are spending on abstinence and faithfulness – it’s garbage. It is so intellectually dishonest.

I have asked one of them, why are you saying things you know are not correct? The law is very clear on how much money we spend. It’s 6 percent on faithfulness and abstinence programming, and much of that goes to secular organizations to do the work, which is what some of the religious right is upset about. Six percent is not 90 percent of the program.

In Europe I gave a lecture to the House of Lords and they all think we’re giving half of our money to faith-based programs. We couldn’t give that much money. What would we spend it on? Did I answer your question?

MS. HASSETT SANCHEZ: In terms of exporting American religious and cultural ideals, what do you make of someone like Rick Warren, who is going to create a “purpose-driven nation” in Rwanda, and has made it very clear he doesn’t really care about the nuances of diplomacy?

MR. NATSIOS: He actually has come back I think, hasn’t he?

MS. HASSETT SANCHEZ: It’s an ongoing project, though, as I understand it.

MR. NATSIOS: Is it? Okay. I’m not sure. He came in to see me once and I don’t know the status of the work he is doing, so I don’t want to comment on an individual project. I don’t know what is happening now.

ALAN COOPERMAN, THE WASHINGTON POST: If I understand correctly …. The Bush administration policy on funding of faith-based groups works like this: The group is engaged in an inherently religious activity – indoctrination, worship, or proselytizing. That activity must be separated in time —

MR. NATSIOS: That is correct.

MR. COOPERMAN: – or place, from the activities that are funded by the government.

MR. NATSIOS: That is correct.

MR. COOPERMAN: So when you were at USAID, how did you implement that? How much time or how much place? Did you have specific regulations on that for NGOs working abroad, receiving government money?

MR. NATSIOS: Yes, there is a policy on it, but most of the people we did business with have been doing this for 40 years. And the NGO community already has policies in place. There is a specific policy that thousands of employees of World Vision have been trained in.

I actually went out – when I was vice president of World Vision, not when I was at AID – and looked to see if there was any violation of this. I found once in a very remote area in the middle of the civil war in the Congo and they are passing out food and they are passing out Bibles at the same time as AID food. I was with World Vision, and I got up and said this has got to end right now; this is outrageous.

I tried to stop it and the people in the village got very upset. They said, this is a Christian village; we were Christians before you came here. We are passing the Bibles out because someone else paid for them and because there is a community meeting here. People were already Christians. They were mostly Catholics, by the way, not Protestants. In fact, they were all Catholics; the entire village was Catholics.

They said, we want the Bibles because we are suffering in this village refugee camp and we want these for our children. Why are you objecting to this? I said, I thought someone was requiring you to take this is if you wanted the food. And they said absolutely not, and they sang some hymns on their own. They were Catholic hymns; they weren’t even evangelical hymns. So I stopped asking questions. I realized I had offended them by doing this. That is the only instance I found in five years.

MR. COOPERMAN: At World Vision or —

MR. NATSIOS: World Vision, which is the largest evangelical NGO.

MR. COOPERMAN: You say there is a policy. What is indeed the policy? How much time and how much space?

MR. NATSIOS: Policy of what?

MR. COOPERMAN: In how to implement that regulation. It has to be separated in time or place. How much time? How much place?

MR. NATSIOS: Well, it’s just a general policy. So there is no quantification of it. But the groups we work with understand what it means. It means you do not condition any assistance. If you have religious activities, you can do it after hours, but if you’re working on a grant, you can’t use that time to do religious activities. But if someone who works for a religious NGO wants to go to go a church on Sunday or teach Sunday school, I’m not going to tell them that they can’t do that, even a secular NGO or a faith-based NGO.

MR. COOPERMAN: If you had a group that was passing out food and they were doing it in one tent in a refugee village, and they had a second tent a hundred feet down and they passed out literature – same time but separated. Would that have passed your muster?

MR. NATSIOS: I don’t know. I haven’t gone into it. I have to say, in most of these circumstances, these issues don’t really come up because you’re being shot at in Darfur. A faith-based NGO is not spending a lot of their time trying to convert Muslims. They are not very successful at that anyway, so they don’t bother doing it.

The Catholics are there and the evangelicals are there too. The evangelicals have a rule and, generally, World Vision has this rule: In Muslim countries you take a very low profile in terms of even their own devotions within the World Vision staff because they hire many Muslims. They are very quiet in those circumstances.

Again, I don’t want to say this to you, but I can say this to you. Alan, right now – I don’t know you at all – but you are now doing what I just criticized. You are transferring the culture wars of the United States to the developing world and it just doesn’t work; it’s not helpful. That is not the problem we are facing in most of these countries.

MR. NATSIOS: If you are going to start parsing legality and all of that stuff, I am sure someone can find a problem somewhere. But the great bulk of the religious NGOs we work with – Muslim, Christian, Jewish, Buddhist – understand why they are getting the grant… to carry out certain social-service programs, human rights programs … and they are not to use that to convert people or to make it conditional. The missions are very conscious of this because they know the sensitivity of it and that the AID could get sued.

I have got to tell you something that happened with me with the left attacking us. We published 40 million copies of the curriculum for the schools, grade one through 12 for all subjects except theology in Afghanistan. We have been doing it now for five years. You know how all of them start? “In the name of God the most merciful.” It is an Islamic culture. And I told the minister of education, we are going to take this out. And he said, if you take it out I am not distributing the book.

It’s not theological stuff and it’s not converting them because everybody is a Muslim to begin with. So we actually got called up by a group that is very well known and they said, we are going sue you. I said, you sue us and we’ll shut down the whole education program because the only people doing this are us right now. There were 1.2 million kids in schools when we arrived in Afghanistan, 6 percent of whom were girls. We now have 4.6 million children in schools. They are reading the curriculum.

I had 10 people review the curriculum, five women and five men who were journalists and intellectuals – Afghans who read the entire curriculum 10 times to make sure there was nothing ethnically offensive in them, nothing religiously offensive in them, nothing biased in them. They all start with that, though, and I should leave that stuff in. They didn’t sue us, I have to say. I have to thank them for not doing that.

But, again, that was transferring a domestic American issue to a country that went through hell, where millions of people died. The country was traumatized. And AID gets shot at all of the time by both sides, and I just don’t think it’s very helpful. It doesn’t have anything to do with the context that we had to deal with in Afghanistan at the time.

MR. DIONNE: Could I just defend my colleague’s question here because I think that what he is getting at even for people like me, who are very sympathetic to a lot of this stuff, is that the enforcing regulations in this area must be very difficult. I think that is part of what Alan is getting at. It is one thing to say we have regulations that say X, Y or Z. How in the world can you do you enforce it when you obviously don’t want to waste a lot of time enforcing a regulation like this because your main interest is in feeding hungry people or healing AIDS. Yet it is a regulation on the books.

I think it’s an interesting question. What is the meaning of that regulation in practice? And I think that is (at least if I’m interpreting part of what Alan was saying) a serious question. If there are time and place restrictions, what does that actually mean for somebody on the ground in one of these countries?

MR. COOPERMAN: Furthermore in the wake of the tsunami, I can show you websites of numerous groups that talk about the distribution of Bibles along with their —

MR. NATSIOS: Yeah, but none of those groups had —

MR. COOPERMAN: – not conditioning it.

MR. NATSIOS: – any money from AID.

MR. COOPERMAN: None of them are getting —

MR. NATSIOS: No. Look at them. The groups that said those offensive things – we had never even heard of before, let alone being AID grantees.

MR. DIONNE: So how do you enforce it and how much time do you —

MR. NATSIOS: One of the reasons AID doesn’t like new partners is because you have risks, not just of a violation of this rule, but a violation of the rules. They don’t know how to keep financial management records. I had one guy, a senior officer in AID say, Andrew, you are going to get us into a lot of trouble … we are going to have the auditors in here. These weren’t even faith-based groups – they don’t know how to keep the records right. We had them in here in the ’80s. It hurt AID.

How do you enforce these regulations? I said, we are using the same groups for 15 years to do all of our work and there is a view that there is a wall around the agency and we are not engaging new organizations. I want to engage more developing-country organizations because too much money is being spent in the United States.

But there is a big risk in that, because most of these institutions that we deal with in the Third World are not American, or even European. They don’t understand all of these things. We train them, we have training sessions, and frequently, what we will do is have a Western NGO or contractor mentor a new NGO. It could be a local women’s group or a farmer’s cooperative or a local NGO and we train them in what the rules are, how you do this, what is acceptable, what is not acceptable. There were some out of one faith tradition that we had problems with and we simply cut the funding off. They were Islamic NGOs and they had other agendas.

Are there issues? Yeah, there are issues. It is mostly, I have to tell you, not with Christian NGOs because most of them have been around a long time and they understand the church-state rule. The question has emerged in some places where they have used indigenous organizations that do not understand that concept. But these are very small grants – $10,000 or $15,000. Sometimes you give them food to distribute.

But in Darfur, for example, there are a couple of Islamic NGOs we have been working with. Actually, I have talked with them at length. One of them is from Turkey. They are very competent; they seem to be doing the work well. But the Africans in those camps, who are all Muslims (everybody is a Muslim in Darfur), said the relief workers are Arabs. I said, actually, they are not Arabs; they are from Turkey.

He said, they are Arabs. They are all together and they are the ones who committed the genocide against us. We don’t want them giving food in this camp. You have to get them out of here. I said, well, we need them because there is no one else in this part of the camp. We had a big debate about it. There was a riot the next week and they basically burned the whole NGO HQ down because, even though all of them are Muslim, they say the Muslim NGOs coming in here are Arab NGOs and they are in here because they are a front for the Sudanese government.

So there are (chuckles) sensitivities within the Muslim community in Darfur right now because of the African-Arab split that are very emotional. We had to actually protect some of the NGO workers, who my staff said were doing a good job. And there is no evidence they were doing anything inappropriate with the money, but the suspicion was very high.

What I am suggesting is you have got to contextualize this. The most important thing is that there be a field presence of AID officers on the ground who watch what is happening. DART [Disaster Assistance Response Teams] has been in Darfur for two years now at great personal risk. One of our young ladies was shot through the face. She was targeted – a 23-year-old-girl. She lost her eye. She almost died – the only DART team member in history who has ever been targeted. They are our Marines on the frontlines of humanitarian response.

I guess I am being contentious with you. I just get tired of five years of these issues when what we face in the field has very little to do with the debates that go on in Washington. My biggest frustration was the “beltway politics.” Both parties of all ideologies deal with a whole bunch of issues that are really of peripheral importance in the field to the kind of stuff we had to do and the problems we dealt with. And our officers look to me to protect them from this kind of stuff, and I could do it up to a point, but then.

MR. LUGO: No, no, no. This is good.

MR. NATSIOS: I’m sure it’s good for you. A lot of people are going to read this stuff. (Laughter.)

MR. LUGO: Well, that is why you’re here. (Laughter.)

JIM LANDERS, DALLAS MORNING NEWS: You and I had a brief conversation in Pakistan in November about the strange bedfellows at the 10th refugee camp we had seen that afternoon.

MR. NATSIOS: Was this up near that mountain we went to? One of them was the al Rashid Trust, a Pakistani organization that is an al Qaeda supporter and had set up shop in this tent camp before anybody else, I think. Yes, I remember.

MR. LANDERS: They had their own madrassa; they had segregated themselves away from the rest of the community, and the women that they were looking after were not allowed to be seen by others in the camp.

MR. NATSIOS: Do you know why that happened? You and I know, but maybe –

MR. LANDERS: Well, it seems that they got there first and then the Pakistani Army came in behind them and said this is best place —

MR. NATSIOS: But do you know why they went there first?

MR. LANDERS: No.

MR. NATSIOS: Because they didn’t do anything on the tsunami, and bin Laden’s poll ratings collapsed in Indonesia. He went from 58 percent to 26 percent.

MR. LANDERS: But doesn’t he say he is not poll-driven? (Laughter.)

MR. NATSIOS: That is right. The United States polls went from 13 percent, which was an average poll, up to 56-58 percent after the tsunami. They do read polls in al Qaeda. And they said, we’re not going to make this mistake again. That is what they did. I saw the reports on it. My staff was telling me, you know who is here? I said, don’t tell me – bin Laden NGOs are here.

MR. LUGO: Our website does get polls downloaded from undetermined regions in Pakistan (laughter). We were wondering where that was coming from. Who was so interested in our poll findings? (Laughter.) But this helps shed some light on it.

MR. NATSIOS: And we are not giving any grants to them. I just want to say that so it is clear, okay? (Laughter.)

MR. LANDERS: This is a pragmatic situation. There are a lot of different people here in this refugee camp trying to help everyone from Cuban doctors and nurses to al Rashid to USAID to Médecins Sans Frontières. That camp is probably still there and it’s going to be there for a while longer. What are the long-term consequences of being in bed together, so to speak, of trying to help these people?

MR. NATSIOS: I would use another term. (Laughter.)

MR. LANDERS: What about that, though? What about this long-term association that goes on, and the competition that is obviously there between what they are trying to convey to people and what you are doing?

MR. NATSIOS: It is very real in an operational sense in the field. Our officers are very nervous about it, not just in Pakistan, but every other place we work in around the world. There is a cultural war going on. It is not the one going on in the United States; it’s a different kind of war. It is a war within Islam itself. What al Qaeda sees is all Westerners. But the very secularized NGOs are horrified at the thought of ever being associated with any church. From al Qaeda’s standpoint it means Christianity if you’re from the West, even though most of the NGOs are militantly secular. In fact, many of the Western NGOs are hostile to the church.

So you have these odd things happening, but you deal with it. You rely on the good judgment of your field staff; you carefully choose who you send. There are training programs that are conducted for these people, and the longer they are around, the more experience they have, the more they develop a set of doctrines. We developed a set of doctrines in the 1990s in civil wars, where there is a lot of violence that we didn’t have before. Before the ’90s we really didn’t have that many civil wars we had to work in. There was a massive increase in this kind of civil unrest, and we were working in the middle of them and a lot of people were getting killed.

So we have a set of strategies and training programs for security. Now, there is a lot of discussion about how we are going to deal with this new challenge, which is not just violence; it is targeted violence that is based on another ideological agenda. The violence of the ’90s was basically criminal violence of people kidnapping a relief worker to get money or shooting someone because they are angry about something – not for ideological or theological reasons.

MARK O’KEEFE, RELIGION NEWS SERVICE: Back to the issue of proselytizing.

MR. NATSIOS: Yes.

MR. O’KEEFE: At the beginning of the war in Iraq, Franklin Graham was real open about his intentions to go into Iraq with his humanitarian group, Samaritan’s Purse, and proselytize without receiving any federal money, to my knowledge. And of course that was not perceived very well. The concern was that among Muslims it would be seen as the conquering military force followed by the conversion force. With the benefit of hindsight, what impact if any did that have, and what is happening on the ground in Iraq right now in terms of perceptions of what this is all about? As you just mentioned, some Muslims view everything in the West as Christianity, and it is perceived as ultimately —

MR. NATSIOS: There were threats made against mainstream religious NGOs that were doing very good work, not even touching proselytization. They had to leave. I will not mention the NGOs because it’s a security risk in other areas. I don’t think there are many faith-based NGOs left from the West in Iraq. If there are, I am not aware of them. They are not doing any work on the ground. They put a little post office box up in the U.N. headquarters, say they are there, but there is actually no presence, they have no staff and we don’t give them any money. That is an accountability issue within the NGO community in the United States. They don’t belong to InterAction [American Council for Voluntary International Action] and they don’t belong to AERDO, and I have seen them. But they are really not causing big problems on the ground because they just don’t have a field presence, and they don’t know how to do this work, I might add.

MR. O’KEEFE: How did you deal with that as a public relations challenge, getting the word out that, no, we are not the same thing; we are separate, yet we are getting some money.

MR. NATSIOS: During the early turbulence in Iraq, in the fall of 2003, the headquarters of an NGO in Iraq that has a very large program AID-funded program was trashed and all of their equipment was stolen in this village. The local sheik was outraged. The first thing you do in an NGO is go make friends with all of the village and religious leaders, whoever they are. You are supposed to integrate yourself in the community and that is your protection.

So he went in and he asked, what happened here? He said, I thought we had made friends with you guys? Look what you did. The sheik personally paid for the reconstruction of the facility and he actually bought some of the equipment to replace what had been damaged or destroyed. He apologized to them. I think they went after the people who did it, but the protection of most NGOs is the good work they do. And over time, if you are there for a while, people in the village will protect you; and that is what happened in this particular case.

I can give you many, many instances of village people surrounding an NGO – the men actually physically surrounding an NGO to stop an attack on the NGO if there is a civil war going on or unrest … even instances in Pakistan of the NGOs being protected.

So this does happen. If you have enough time and you integrate yourself into the community, and you get ownership in the community, people will say, this is not CARE’s or World Vision’s project — this is our project. The ownership is supposed to be about making it theirs. And when you attack it, you are attacking the village; you are not attacking the NGO that comes from abroad to help us; it’s our project. That is the theory, and in many cases it actually does work that way.

ADAM GARFINKLE, THE AMERICAN INTEREST: I would like to ask a question linking two things you said earlier. You made a comment in passing about how much money is actually spent in the United States from USAID monies. It is a huge percentage of what is spent here – the buy-American stuff is grandfathered from the ’30s into … we all know about this. Then you mentioned also —

MR. NATSIOS: I shouldn’t probably tell you the place –

MR. LUGO: Go ahead. …You’re among friends here.

MR. NATSIOS: I signed a whole bunch of orders changing the rules before I left – the procurement rules. I told the Europeans this notion of free trade for NGOs puts at a disadvantage the local NGOs because they can’t compete with Western NGOs.

MR. GARFINKLE: This is where I’m going.

MR. NATSIOS: The new rule is – it’s going to take a while to go into effect – when bids are done, they are deliberately going to solicit local organizations in the country in which the work is being done or any of the contiguous countries in the border area.

MR. GARFINKLE: This is where my question is going because you also said that there is a problem sometimes working with indigenous groups.

MR. NATSIOS: There is.

MR. GARFINKLE: Because they don’t know the rules. But of course the problem – and it’s not just with faith-based groups, but it’s with a lot of things that USAID has done over many, many years – is that when you’re dealing in dollars and you’re hiring Americans and you go into these places to try to help people, what you’re doing inadvertently in many cases is undermining local human capital, the development of local human capital.

If you think about that argument seriously, you have to ask the question: For all of the short-term help that USAID and other countries proffer in help, what sort of long-term harm might you be doing by undermining development? So how can we —

MR. NATSIOS: – deal with that?

MR. GARFINKLE: Deal with that, yes?

MR. NATSIOS: There is a series of prudent critiques of AID that go back many years, and let me tell you what the critiques are because I have written an article on this for Frank Fukuyama’s The American Interest.

MR. GARFINKLE: Yeah, that is where he is.

MR. NATSIOS: I’m hoping you’ll print this article, so I’m glad you’re here.

MR. GARFINKLE, THE AMERICAN INTEREST: Bring it on, Andrew. (Laughter.)

MR. NATSIOS: The reason I raise it is this: Do the implementation mechanisms all of us use… the World Bank uses… have political implications to them? People criticizing AID want all of these characteristics of a good AID program optimized simultaneously. They want everything done immediately.

When I started, the European Union had a 4.4-year backlog of spending. They had $44 billion of unspent money. There was a huge scandal in Europe over it. USAID is the fastest dispersing AID agency in the world – multilateral or bilateral. We fixed the system. You know how you fix it? You create a bunch of contracts and NGOs that can move very rapidly and get things done.

Then they wanted an American flag on everything. There was heavy pressure on me to create visibility. So we created a brand: USAID from the American People. It goes with our logo; it’s on everything now. We did a branding campaign in West Bank and Gaza. We did a poll, and 5 percent of the Palestinian people knew we spent $1.5 billion in West Bank and Gaza in the last 10 years. You know why? Because our partner organizations never advertise where they get the money from.

I was in rural Paraguay and a contractor (not an NGO) that gets money from AID had me and the ambassador in the back of the room with 300 local leaders to tout this wonderful project he did that we designed. We tell him what to do, and he gets all the credit for it. And I finally said, this is not going to happen again. There is a new rule now. We have a branding campaign with regulations and a graphic book. Public diplomacy counts.

We did an advertising campaign with 2,000 radio ads, TV ads and billboards in West Bank and Gaza. It’s 55 percent now, with a high recognition rate and a very high approval rate. A group of Palestinian women before the recent election went to see Condi Rice and they said, AID is everywhere. We know you are not just in here to pressure us politically you are helping us with water projects, health projects and more. And she said, said this is having an effect in the community.

We are doing the same kind of campaign in Aceh, which, by the way, is a very conservative Muslim area as well. And we are going to do the same thing in Afghanistan, because we have done a huge amount there and no one knows about it because of the branding thing. So it is important.

You can’t brand budget support. One way of getting all of the money into the country and spending in the country is to give a check to the ministries. The Europeans are moving to do much of their aid through budget support. They have $44 billion of unspent money because most of these ministries do not have the absorptive capacity to spend that money; so it doesn’t get spent.

MR. GARFINKLE: They have the capacity to steal it, which they often do —

MR. NATSIOS: That is the second thing that happens. The third characteristic everybody wants is no money stolen under any circumstances – zero tolerance for corruption. I said, fine; you want zero tolerance for corruption, then we can’t give it to any local groups and we certainly can’t give it to ministries in the Third World. We put almost no money through any government ministries any more. You know why? Because of the corruption issue.

But are we building the capacity we should? In my view, in the view of the developing country government, we are not. We are building a lot of capacity in local civil society. We are not in the governments. Now, we are in a new world. What is the threat to the United States? Failed and fragile states. Why are they a threat? They allow all sorts of very bad groups to function because the central government has no control outside the capital city in a large number of these countries – not just the ones in the headlines.

How do you build capacity? You do local contracting through the ministries. You know what we used to do in the Cold War? We put AID procurement officers in the ministries and those were their offices; they watched the procurements to make sure no one stole the money. We also installed the accounting system and taught them how to do it.

We stopped doing that in the late ’80s. I think we have got to go back to it now in certain countries under certain circumstances. AID is now redesigning its implementation strategy so, depending on the level of development of the country, we will begin to do some host-country contracts in the way we used to do it 30 years ago. By the way, there is nothing new. All of this stuff … we did it 30 years ago. We stopped doing it; we are starting to do it again.

I reinstalled a whole bunch of systems that were unplugged 15, 20 years ago, because we now need them in a different way than we needed them in the Cold War. You cannot optimize all of these characteristics of implementation mechanisms simultaneously. You have to make a choice. Is public diplomacy the most important thing? Is speed most important? Is the accountability issue most important – because if it is, do you use the AID system now?

The AID system has less corruption in it than almost AID agency in the world. Are the overhead rates higher because of our partner organizations? Yes, they are higher. When I arrived, 80 percent of the budget was being spent in the United States. In other words, I don’t mean literally spent, but 80 percent of the money was going through organizations that were based in the United States. It is now below 50 percent, so it is dropping.

And most mission directors don’t want 80 percent of USAID funding to go through American-based organizations. They are offended by it. I gave a talk to them when we had them in a year ago and I said we are shifting to the old strategy.

I have to tell you what is happening, however. All of the constituency groups are saying, wait a second; you are not giving the money to us? We are going to go to Congress. Where do you think all of these earmarks and directives that have tied AID up in knots are coming from? When we ask for more money for operating expense so I can hire more Foreign Service offices to do the procurements in the field, guess who opposes more operating expense money for AID?

Operating expense money is to hire our own staff so we don’t have contractors doing everything. You can’t get any money for operating expenses. You know why? It took me a little while to realize it … they are all running around in the universities, the NGOs, the contractors saying we don’t want more AID officers, that means we are not going to get the business.

Our career staff, by the way, wants this fixed. They are more emotional than I am because they watch this every day. We started to fix it and we have changed the procurement system. It’s gradually evolving, but let me tell you, it is going to be a fight.

MR. GARFINKLE: PL-480.

MR. NATSIOS: PL-480. We tied food aid to Title II for 55 years. It has to be purchased in the U.S. We purchased 30,000 tons of wheat after 9/11 locally in Central Asia. There was a famine developing before 9/11 in Afghanistan because of five years of drought and civil war and people were dying. So we started an AID effort.

We received $125 million from the president within 48 hours after 9/11 to start a huge relief effort. And I said, I am spending money locally because this is not under Title II. I am going to buy food in the area and distribute it because we can do it in two weeks and 40 percent of the cost of food is transportation; we won’t have to spend money for transportation.

The Wheat Council, congressional committees, people at OMB became very angry with me. Thank heaven for Congressman Kolbe. He called everybody in and said you get out of his way or I’m going to go after you publicly – pounded his fist on the table; they all ran for cover. And I accused them publicly, I think in the paper, of starving poor children in the middle of a civil war. We didn’t have any more trouble after that. (Laughter.)

MR. LUGO: You learned your politics in Massachusetts, didn’t you? (laughter.)

MR. NATSIOS: That is what happened. I’m telling you what happened. We purchased 20,000 or 30,000 tons of wheat and we didn’t have a famine in Afghanistan. Last year I had six Republican senators from the farm states agree to this compromise … a 25 percent local purchase. And when the NGOs opposed the Bush proposal on this, the senators switched their position. They asked, how do we defend this? They are supposed to be the keepers of the moral law. How can we defend our position to the farm lobby?

MR. DIONNE: What was their interest?

MR. NATSIOS: The NGOs do what is called monetization. They take American food, sell it locally, get the cash and use it for their development programs. So 75 percent of Title II is for relief, 25 percent is for development programs.

If we gave them cash to go buy food, they are not going to go sell the food they just bought in the country. That doesn’t make any sense. So they knew the monetization was going to be at risk. CARE has now announced it will not do any monetization with any food again … its new policies. This debate caused a convulsion in the NGO community, which it should have. The other NGOs privately told me they are reconsidering their opposition to the local purchase reform proposal. I think they are going to be with us now. You know what they tried to do the day I left? Two federal agencies went to OMB to get the 25 percent out of the budget before it was announced. They waited until I left office. So I called up and I said, you’re not going to do that.

MR. GARFINKLE: You look shocked. I’m shocked that you look shocked. (Scattered laughter.)

MR. NATSIOS: Well, guess what happened? Josh Bolton said, Andrew, I think this is a neat idea; we are going to put it back in, and they did. It’s in the budget for ’07. I will tell you … the worst, the most difficult, is the maritime industry. I don’t know how they have much power given the size of that industry, but they apparently do. So we will see what happens.

I gave a speech on this to the Coalition for Food Aid in June of last year. It is on our website. It is a wonderful speech. We worked on it very hard and went through the arguments developmentally. You know what is happening in Afghanistan? In 2002 we had the best wheat crop in the history of the country because we put in new seed varieties that were extremely productive and also drought resistant.

Wheat prices collapsed to 20 percent of their normal level. They were not harvesting the wheat crop because the price was so low. And the same year, we imported 300,000 tons of USAID food for the relief effort because people were still displaced. You know what the farmers did the next year? They started growing poppy. They said we can’t make any money in wheat; we are going to go to poppy.

John Mellor, who is one of the great agricultural economists in the country and a friend of mine said, Andrew, if you had bought the stuff locally you could have moved the price up to the normal level and no one would have switched to poppy, or very few would have. I used that in front of this group meeting in June and there was stunned silence in the room. It was very interesting to me.

Barney Frank took my speech – Barney and I served in the legislature together. We don’t always agree; in fact we frequently disagree – and he put it in the Congressional Record when the congressional committees killed the 25 percent change. He said he was embarrassed as a Democrat that his party was not supporting the president on this issue.

MR. GARFINKLE: This is the same thing that happened in Somalia when excessive amounts of grain, especially rice, were delivered; all of the local food prices collapsed and they started growing pot.

MR. NATSIOS: That is exactly correct.

MR. GARFINKLE: So this is not new.

MR. NATSIOS: We are trying to fix it, but there are constituencies. (Laughter.) There are domestic wars.

MR. LUGO: Thank you so much, Andrew. This has been very interesting. We just hope the academy doesn’t ruin your feisty spirit. I doubt that it will. Thank you all for coming and we will see you at the next Pew Forum luncheon. Thank you.

(Applause.)