Aid central in Clinton's new U.S. diplomatic plan

WASHINGTON (Reuters) - The State Department will set up new offices to oversee international energy affairs and scrutinize illicit financial networks as well as dramatically scale up its USAID development arm under a new plan developed by Secretary of State Hillary Clinton.

Secretary of State Hillary Clinton speaks at a U.N. Security Council meeting on Sudan at U.N. headquarters in New York, November 16, 2010. REUTERS/Brendan McDermid

Clinton began rolling out her long-awaited revamp of U.S. diplomatic strategy on Wednesday, meeting lawmakers to discuss the “Quadrennial Diplomacy and Development Review” (QDDR) that is expected to be formally announced later this year.

“An initial overview of our proposed recommendations was presented to members of Congress and we’ve asked for their feedback,” State Department spokesman P.J. Crowley said.

Much anticipated by development experts, the QDDR nevertheless faces an uncertain future in Congress, where Republicans are eager to drive home a budget-cutting message following their strong showing in November elections.

The plan’s centerpiece is a strengthening of the U.S. Agency for International Development (USAID), which Clinton hopes to revitalize as the world’s premier development agency.

The department should prioritize energy policy by setting up a new Bureau of International Energy Affairs, and focus more on illicit financial networks by extremist groups and rogue states through a new Special Coordinator for Sanctions and Illicit Finance, the review said.

The draft review says that U.S. ambassadors overseas must be prepared to work as “CEO’s” of multi-pronged activities by a number of U.S. agencies including USAID, while operations in Washington must also be re-tooled to encourage cooperation.

USAID itself must also grow and adapt, and will be charged with implementing U.S. global efforts to improve public health and fight hunger, both initiatives which call for tens of billions of dollars in future spending.

To do this USAID -- which shrank sharply over the past 20 years -- must triple mid-level hiring and find new ways to leverage science and technology, the draft says.

The draft calls for a new Bureau for Crisis and Conflict Operations to take the lead on crisis response and prevention, and says the State Department and USAID must in future develop joint strategic plans to cope with long-term challenges such as those in Iraq and Afghanistan.

While aid experts have been largely encouraged by the new U.S. focus on development, some have voiced concern that the two objectives may become muddled and that reporting lines may leave State Department officials with the upper hand.

“We agree that diplomacy and development should be coordinated and complement one another, but the two should not be confused as the same thing,” said Todd Shelton, senior policy director at InterAction, a U.S. alliance of non-governmental organizations.

Reporting by Andrew Quinn; editing by Cynthia Osterman