As part of plans to increase the transparency and efficiency of the US Agency for International Development’s (USAID) procurement system, it is proposed to use blockchain technology. This could be part of broader reforms aimed at reducing losses and preventing fraud in international procurement practices.
Modernization of procurement practices
The traditional cost – plus-fixed-reward premium system can be replaced by a mechanism where payments are linked to measurable performance outcomes. In this context, the blockchain will be used to verify the distribution of funds and ensure the transparency of financial transactions.
This will not only reduce losses, but also prevent fraud, while increasing accountability and control over the use of funds. The reforms are aimed at optimizing processes and improving the efficiency of using budget funds.
Changing cooperation with organizations
Priority in future projects will be given to the private sector and non-profit organizations with successful experience in their respective fields of activity. Blockchain will help ensure transparency in the work of new partnerships and strengthen trust between participants in international projects.
This change in the cooperation strategy can contribute to a more efficient allocation of resources and improve the quality of projects implemented.
Global leadership and innovation
Reforms in the USAID procurement system are aimed not only at improving the efficiency of the American economy, but also at strengthening America’s global leadership. The use of blockchain technologies can set American companies apart from their geopolitical competitors, such as China, and help strengthen the US position in international markets and crypto market.
Need for legislative changes
Implementation of the proposed reforms will require significant legislative changes and Congressional approval. The process of reauthorizing the international aid system can be a key step in creating a more transparent and efficient procurement system.
However, the introduction of blockchain technologies in the USAID procurement system also raises issues related to the need for legislative changes and adaptation of the existing regulatory framework. This will require careful consideration and coordination at all levels of government.
Financial abuse at USAID
Earlier, the Department of Public Administration Efficiency identified financial abuses in USAID. Questionable expenditures included workplace diversity programs, projects that are not directly related to the agency’s core goals, and other initiatives that raise questions about their effectiveness and appropriateness.
For example, there have been cases of misuse of funds allocated to irrigation systems in Afghanistan that have contributed to the cultivation of opium poppies. Support for dubious projects was also revealed, such as the production of an opera on a transgender theme and special contraception programs.
In addition, hundreds of thousands of food items were provided to the militants in Syria, and millions of dollars went to the Ecohealth Alliance. These discoveries led to the termination of 83% of USAID programs and savings of billions of dollars.
