Brookings Receives $2 Million Grant for Initiative on How to Reduce Global Poverty

The Brookings Institution announced today a $2 million grant from Richard C. Blum, chairman of Blum Capital Partners, L.P., San Francisco, to support a new Global Poverty Reduction initiative.

“Dick Blum’s generosity and vision could not be more timely,” said Strobe Talbott, the president of Brookings. “His support will enable our scholars to accelerate and focus their research in a crucial area of public policy.”

The Global Poverty Reduction initiative will involve directors of all three Brookings research programs—Economic Studies, Foreign Policy Studies, and Governance Studies—and a number of Brookings scholars with expertise in economic development and poverty reduction in developing countries. The project will be led by Carol Graham, vice president and director of Governance Studies and co-director of the Center on Social and Economic Dynamics.

“The Bush administration’s recent commitment to increase U.S. foreign aid by $10 billion over the next three years through the Millennium Challenge Account (MCA) was a welcome step, and one that will create an opportunity for public debate on America’s foreign assistance policy for the first time in decades,” said Graham. “It will allow for a re-thinking of fundamental issues related to global poverty reduction.”

“The Millennium Challenge Account has the potential to transform the way America engages developing nations on poverty and development. But the current proposal raises as many questions as it answers,” said Brookings Senior Fellow Lael Brainard, who holds the New Century Chair in Economic Studies and Foreign Policy Studies at Brookings. “The Global Poverty Reduction initiative will enable Brookings scholars to bring fresh analysis and research to bear on these questions, which are central to the globalization debate.”

With the Millennium Challenge Account as an immediate opportunity to address some of the crucial needs of the developing world, the new Brookings initiative will examine several issues related to foreign assistance. These include:

• How can the increased funding for the MCA account—which will be managed by a new Millennium Challenge Corporation reporting to the Cabinet—be used as an opportunity to expand and improve U.S. foreign assistance efforts, as well as increase their coordination with those of the multilateral institutions?
• How can public and congressional support for U.S. foreign aid be generated and sustained when the country is faced with increasing budget constraints at home?
• Given their existing mandates, how can multilateral institutions such as the International Monetary Fund and the World Bank better respond to complex problems in developing economies—such as those related to governance failures and to contagion in financial markets? How can these institutions support the increasing contributions of actors such as civil society and information technology?
• How can trade and investment be harnessed to foster stable growth and poverty reduction, as well as provide better safety nets to mitigate the effects of periodic downturns on the poor? What are the means for encouraging developed nations to lower their trade barriers and reduce subsidies to domestic enterprises over the long term?
• How can education investments reach the poor? How can the plight of girls, who have unequal access to education in many countries, be addressed? To what extent is public frustration and extremist political behavior a result of inadequate education systems and related lack of employment opportunities?
• How can the Peace Corps and similar volunteer programs become a greater force for development? Could more countries participate as both recipients and/or providers of volunteers?

The Brookings Global Poverty Reduction initiative will explore these and other questions about U.S. foreign assistance in a manner that both informs and helps frame the public and congressional debates. The first phase of the project will focus on the immediate questions posed by the new MCA account, and will be directed by Lael Brainard. This effort will involve close collaboration with Steve Radelet and other experts at the Washington, D.C.-based Center for Global Development, which is directed by Nancy Birdsall and which is a key player in the debate on the MCA and other important development issues.

Richard Blum has been involved in a number of philanthropic organizations that address poverty and development issues. He is the founder and chairman of the American Himalayan Foundation, an organization that promotes health care, education, cultural preservation, and environmental projects throughout the Himalayan region. He is also a director of the Carter Center, co-chairman of the World Council on Religion and Peace, and a regent of the University of California. In addition, Blum is involved with institutions that assist the homeless, promote human rights, and protect the environment. He is married to California Senator Dianne Feinstein.

Commenting on his support for the new Brookings initiative, Blum said: “After September 11, it became clear that fighting terrorism includes dealing with its root causes—mainly poverty and lack of education. Today, there are 3 billion people that live on $2 dollars or less a day, yet the United States only allocates 0.55 percent of its budget to foreign assistance. In real dollar terms, this is less than $11.6 billion, down from $40 to $50 billion comparable dollars or roughly 15 percent of the budget spent during the Marshall Plan after World War II.”