Weak Dollar Crimps Humanitarian Work The decline of the U.S. dollar has been detrimental to the ability of American aid agencies to provide assistance overseas. Michael Rewald, a director of the humanitarian group CARE International, discusses the impact of the weak dollar.
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Weak Dollar Crimps Humanitarian Work

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Weak Dollar Crimps Humanitarian Work

Weak Dollar Crimps Humanitarian Work

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Here's one more effect of the falling U.S. dollar. You've already heard that it's a lot pricier year for tourists from the United States to get hotel rooms or dinner in Europe. U.S. consumers pay more for products we import from overseas. And here is how it affects aid agencies.

We've called up Michael Rewald; he's vice president of international operations for the humanitarian group CARE International.

Welcome to the program.

Mr. MICHAEL REWALD (CARE International): Thank you very much.

INSKEEP: How does the dollar affect you?

Mr. REWALD: Well, CARE works in 70 countries around the world, and a large percentage of our funding comes from U.S. sources, either the U.S. government or private donations. And we convert of all that money into local currency. As the dollar devalues, then the amount of local currency we get when we exchange is reduced, and we have to adjust our programs accordingly.

INSKEEP: I'm thinking about those old commercials that said you can help someone in another country for a price of a cup of coffee a day. Are you saying with the cheaper dollar now it would be the price of a cup of coffee plus a bagel maybe?

Mr. REWALD: Yeah. I mean that's one way of looking at it. And we - we try to make our money go as far as we can, but the reality is that we're getting less bang for the buck at the moment.

INSKEEP: How does that affect some countries where you've been most active?

Mr. REWALD: Well, it means that we have to readjust our programs. For instance, in Haiti we have HIV-AIDS program that's funded by the U.S. government. It's got a budget of about $1.3 million a year and the purchasing power has gone down considerably, about 10 percent, which means we have to reduce our activities and we can't supply the services at the scale that we originally planned.

INSKEEP: The U.S. dollar has fallen in value against the currency of Haiti?

Mr. REWALD: That's right. Right now it's about almost a 10 percent devaluation in terms of what we can purchase in local currency compared to what we could a year ago.

INSKEEP: And of course, the U.S. Congress gave you your funding probably a year ago or five years ago, and that hasn't change, so it's like you've had a budget cut.

Mr. REWALD: Yeah. We - a lot of our projects for three or four years in duration, we put our budget together at what we think will be the value of the dollar, and if it decreases, then we're caught in a bind.

INSKEEP: Well, let's get down to the ground level. In Haiti, what are you doing to make up the 10 percent funding cut?

Mr. REWALD: Well, we're trying to reduce costs as best we can. One thing we've done is we've reduce our staff members, because that's one of our largest costs in a lot of our programs. We hire a lot of local people, so we've had to reduce our staff levels, and we've had to reduce activities in terms of what we distribute to people. We've had to reduce the rations, et cetera.

INSKEEP: Now, you said the U.S. dollar has fallen about 10 percent compared to Haiti's currency. Of course that's small compared to its drop with some other currencies. You've got these Asian currencies that have climbed dramatically, for example. Are you even more affected in those countries?

Mr. REWALD: Yeah. In India, for example, we had a real problem there as well. We've had to really make some adjustments in our program in India and some of the Asian countries. You're right. But it's across the board, in Africa as well.

INSKEEP: Does this also get harder because like many aid agencies you're trying to buy goods locally rather than buying them in the United States and shipping them in? You're trying to help the local economy but that means your costs are even higher.

Mr. REWALD: That's absolutely correct. We're trying to purchase as much as we can locally. We hire as many staff as we can from the countries you work in. So it does - it makes it more difficult. If we were buying in the U.S., it wouldn't affect us that much, but we don't do that very much anymore. We try to buy locally whenever possible.

INSKEEP: Is there any strategy for you to avoid this kind of problem?

Mr. REWALD: Well, we have to be, I think, better at our budgeting when we draw project proposals. In the past, we've always felt that the American dollar was very strong and we assumed that it would remain that way. Obviously we have to be little more savvy when we drop out budgets in the future. And we're trying to diversify our fundraising, so we are getting a lot more money from the European Union, from European donors and from other donors around the world, so that we're not so totally dependent on the U.S. dollar anymore.

INSKEEP: Michael Rewald is with the Atlanta-based aid group CARE International. Thanks very much.

Mr. REWALD: Oh, thank you.

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