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At Clinton Confirmation Hearing, a Glimmering of Possibility for Asset Building in Foreign Assistance

January 14, 2009 - 1:04pm

As all of Washington-- and indeed, the United States, if not the world-- awaits with anticipation President-elect Barack Obama's inauguration next week, a glimmering of possibility regarding a more prominent role for asset-building strategies was evident in Secretary of State Hillary Clinton's confirmation hearing yesterday.  Giving a nod to toward social development, microfinance, and bottom-up empowerment as key elements of a foreign policy strategy, we can't help but suggest how an asset-building framework would enhance the impact of such strategies.

When discussing her foreign policy goals, Clinton noted that world leaders, enmeshed in "the cross currents of the most severe global economic contraction since the Great Depression," have much to learn from that crisis regarding "the consequences of diplomatic failures and uncoordinated reactions."  But she continued:

"Yet history alone is an insufficient guide; the world has changed too much. We have already seen that this crisis extends beyond the housing and banking sectors, and our solutions will have to be as wide in scope as the causes themselves, taking into account the complexities of the global economy, the geopolitics involved, and the likelihood of continued political and economic repercussions from the damage already done."

Where to begin?  Clinton's call to the importance of a "bottom-up" approach to development, "to ensure that America remains a positive force in the world" resonates with the Global Assets Project's work on providing opportunities for savings and wealth accumulation for the poor from the grassroots.  (See, for example, my colleague Jamie Zimmerman's Reform Foreign Assistance proposal, which made the final cut for the Better World Campaign's One Day One "9 for ‘09" contest.)  She continued

"The President-elect and I believe in this strongly. Investing in our common humanity through social development is not marginal to our foreign policy but integral to accomplishing our goals."

In what ways could this bottom-up approach manifest itself, as a part of the U.S. top foreign policy priorities?  As Clinton highlighted in her remarks, microfinance and social development are proving to play an increasingly key-and notably promising- role in poverty alleviation efforts.  Linking this with President-elect Obama's upbringing, and his foreign policy priorities, Clinton poignantly remarked:

"...I want to mention that President-elect Obama's mother, Ann Dunham, was a pioneer in microfinance in Indonesia. In my own work on microfinance around the world... I've seen firsthand how small loans given to poor women to start small businesses can raise standards of living and transform local economies."

Noting that Dunham's illness had prevented her from attending a microfinance forum at the Beijing women's conference in 1995, in which Clinton had participated, passing away shortly thereafter, she observed:

"...I think it's fair to say that her work in international development, the care and concern she showed for women and for poor people around the world, mattered greatly to her son, and certainly has informed his views and his vision. We will be honored to carry on Ann Dunham's work in the months and years ahead."

What might this look like?  If we had any say, it would include a foreign assistance framework that exemplifies a commitment toward incorporating asset-building policies and initiatives.  Be this in the form of child development accounts for education and health purposes, conditional cash transfer programs, or opportunities for microenterprise development, the time is ripe for a U.S. foreign assistance strategy that takes into consideration the crucial nature of accumulating assets in enhancing the well-being of the poor.  Should President-elect Obama, through the work of his Secretary of State, embrace asset-building strategies as a part of his foreign assistance framework, his already historic election could prove to be path-breaking in more ways than one.