USAID Administrator Rajiv Shah to Step Down

After nearly five years of heading the United States Agency for International Development, one of the Obama administration’s most charismatic and well-liked bureaucrats is leaving his job next month, Foreign Policy has learned.

Rajiv Shah, a Detroit native and a 42-year-old son of Indian immigrants, will inform his entire staff on Wednesday morning of his decision to step down as USAID administrator on January 30. His next move remains a mystery, though many have speculated at a run for Congress or a jump to private sector development work.

“I’m not prepared now to talk about my next steps,” Shah told FP in a phone call on Tuesday. “I will continue to stay focused during the transition in ensuring that USAID remains a results-oriented, evidence-based humanitarian enterprise.”

Known for his bouncy demeanor and boundless enthusiasm, Shah’s tenure has been most notable for the dramatic changes made in how USAID delivers foreign aid — particularly in weaning Washington off of its dependence on large development contractors.

“Instead of simply doling out assistance, which has been the USAID model from day one, he tried to change it,” said Peter Pham, director of the Atlantic Council’s Africa Center.

At the same time, Shah managed the agency’s $20 billion budget when corruption and waste continued to plague U.S. efforts in Afghanistan and a number of embarrassing and poorly-designed democracy-building programs in Cuba jeopardized the aid agency’s reputation.

Through it all, Shah managed to maintain a glowing reputation on Capitol Hill, even among the most ardently conservative Republicans.

“What I like most about Raj is he makes it easy for people of different political backgrounds to support him,” Sen. Lindsey Graham, a hawkish Republican from South Carolina, said last week.

Speaking at a dinner organized by the U.S. Global Leadership Coalition (USGLC), a group that advocates for a strong foreign aid budget, Graham marveled at Shah’s ability to defend USAID’s budget at time of heightened partisanship and ever-tightening fiscal constraints. “If you can convince Tom Coburn [that foreign aid] is a good deal, you should open up your own shop,” Graham said, referring to the famously conservative Oklahoma senator.

Over the years, the structural changes Shah implemented at the agency have had a dramatic ripple effect on the recipients of foreign aid spending.

Rather than dropping billions of taxpayer dollars into sprawling programs designed to reduce poverty, USAID pivoted to directly funding foreign development groups, offering loan guarantees to local banks and launching contests aimed at solving specific global challenges.

“I give him a lot of credit for that, especially in launching science contests that provide seed money for innovation,” said Pham.

One particular example of this is the Ebola Grand Challenge, an idea Shah cultivated at his old job at the Bill and Melinda Gates Foundation. The contest challenged inventors to develop medical equipment and technology for front-line medical workers in West Africa and recently distributed $1.7 million to three contestants.  One of the winners — a team from John Hopkins University — designed a new protective suit that has a battery-powered cooling system and is easier to take off — both innovations that are said to greatly reduce the risk of transmission to the medical worker.

“Shah steered USAID through important reforms, bringing an effective evidence-based approach to the agency,” said USGLC president Liz Shrayer.

Still, Shah has struggled to defend the agency’s disastrous projects in Cuba, which include launching a now-defunct social media site to encourage Cuban youths to revolt against the Castro regime, attempting to co-opt Cuba’s vibrant hip-hop scene and an HIV prevention workshop that served as a front to recruit political activists — all activities that many aid experts say compromised the global perception of USAID as a humanitarian arm of the U.S. government.

“This is dumb, dumb, dumb,” said Sen. Patrick Leahy, chairman of the Senate Appropriations subcommittee that oversees USAID. “It’s not something that should be done through USAID. They do a lot of great things around the world. … This is not one of them.”

Despite those criticisms, Shah maintained that USAID was fulfilling its dual role of fighting extreme poverty and supporting “resilient democratic societies” around the world.

“As you know, our focus has been on supporting civil society in Cuba and other closed spaces around the world,” he told FP. “It’s difficult to support civil society in places where societies are closed.”

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