US Foreign Aid

            The United States government describes its goal in providing foreign aid as wanting to, “[further] America’s foreign policy interests in expanding democracy and free markets while improving the lives of the citizens of the developing world.”[1] Of course, as with most things in life, it isn’t quite that simple. In order to determine if foreign aid is practical, it is necessary to analyze the factors that allow and inspire foreign aid, of which the first and most obvious is whether the US is fiscally capable of providing aid, and the second, co dependent upon the first: whether the money committed will beget measurable gains for the US. A second factor is time. If the US were to wait five years, would the money become more lucrative? (That is to say, would a dollar go further five years from now.) Would five years add enough money to US coffers to make a given type of foreign aid more feasible? Lastly, it is necessary to consider the entire concept of foreign aid, and whether the concept itself is practical.   

            To begin with the first factor, consider the money that the US has available. According to President Bush’s budget for FY 2008 (October 07-September 08) expected outlays are currently 2.7 trillion dollars, while current receipts are only 2.6 trillion dollars[2]. This leaves a 244 billion dollar gap between what the government expects to receive and what the government plans to spend. Keep in mind, this is a 244 billion dollar deficit built in to the budget, and does not include any extra expenditures which were not planned at the time of the budget. In short, the United States budget allows for more spending than intake.  This has been the case since 2002, and before that from 1970-1997[3]. So far, the now multi-trillion dollar debt has been ignored by those appropriating money, other than sporadic attempts to balance the budget. Balancing the budget does not refer to eliminating the accumulated debt, but to changing the yearly deficits into surpluses (which would, eventually, eliminate the debt). President Bush’s current budget-balancing plan relies heavily on program cut backs that, due to excessive lobbying, are very unlikely to get through congress. So, unless either taxes are hiked to an extreme degree (which would cause other economic problems and eventually lower the tax money that the government is receiving), or government spending is given a hefty restructure (unlikely, for aforementioned reasons), the budget is not going to be balanced any time soon, much less the national debts repaid. All I have to say on that note is that countries aren’t going to wait to be repaid forever; at some point (even if it’s centuries away) the US is either going to have to curtail its spending, or risk getting cut off by lenders.

            However, throughout the duration of these debt incurring years, the US has always given away between 3% and .5% of the GDP, the peak being in the 40’s, and the trough being the more current years, starting from about 1995[4]. As of 2005, that meant that every one of the 220 million US adults between the ages of 18 and 65[5] were giving 20 cents per day[6] to foreign countries.  This seems fairly affordable, but when combined with other taxes, the numbers add up. Both 2008 presidential candidates promise to maintain or lower taxes on most of the people, which means that finding much more money through taxes is not going to happen. Furthermore, the money currently being spent of foreign aid could be put towards balancing the budget, if it is not achieving its goals of helping average citizens and democratizing other countries.  

            To delve into the mysteries of how our aid money is being spent, let’s first turn to Egypt. The poor citizens in Egypt hate the United States. Why? Because the US gives their repressive government money, which they see as support. President Mohammed Hosni Mubarak’s Egypt receives about 2 billion in USAID dollars each year[7]. His country is most definitely not a democracy, and there isn’t a strong movement on his part for a democracy either. In fact, when a democratic movement gets too powerful, its leaders are jailed, as in the case of Saad Eddin Ibrahim[8]. When the rare protest forms, it is also squashed, and brutally[9].  As for improving the lives of its citizens? According the United Nations Development Program, Egypt has an HDI rating of .708, which is very poor, even putting Egypt in the bottom 35% of countries. While the average GDP is over 4,000 dollars per person, this has more to do with oil, and less to do with people being free. Egypt, in spite of its foreign aid, is obviously ignoring pleas to grant its citizens rights and democracy. If the leaders of Egypt find it too hard to stop murdering their citizens when they try to democratize, or to leave the press be alone, they could at least vote with the US in UN discussions. Yet, Egypt votes against the United States 79% of the time[10]. Egypt is literally unwilling to lift a hand to do anything to deserve the foreign aid they receive; its President has not even tried to comply with US wishes. As the US is giving Egypt 2 billion dollars per year for absolutely nothing, the money would be better spent on the debt.

            The United States also gives money to many countries in Sub-Saharan Africa, totaling nearly 6 billion dollars[11], with results that are much the same. The problem with saving Africa, something that many countries agree needs to be done, is that simply sending money doesn’t help, and sending military aid just engenders hard feelings amongst African leaders, as they don’t want military assistance from countries outside the African Union[12]. To be fair, setting up a democracy in Africa was always a long shot. Money sent to African countries was first and foremost supposed to provide the citizens themselves with food, medicine, and the means to support themselves[13]. However, “if the West were to cancel [the aid], normal Africans wouldn’t even notice,” because, “huge bureaucracies are financed (with the aid money), [and] corruption and complacency are promoted.”[14] The starving citizens themselves never see so much as a penny. In fact, in the case of Africa, the money does more harm than good, as the local “authorities” use the money to buy more arms to harm their people. As aid to Africa is obviously having a minimal effect, and at that a negative one, the US should, as an African economist put it, “please just stop… for God’s sake.”14

            As I don’t have time to separately analyze each of the 150 countries that receive varying degrees of US foreign aid, let’s look at the general situation. Countries receiving US foreign aid vote against the US 74% of the time10. For almost every country, there is no upward trend in the freedoms of their people[15].   None of the countries receiving US foreign aid are full democracies, and none of them have taken steps to improve that standing[16]. In the United States today, foreign aid consists of throwing money into a black hole without anything to show for it. Unless the US demands results, the entire of system of foreign aid might as well be abandoned. Any country will take free money, and the US doesn’t do anything to communicate that the money the given is not free.

            Returning to the original factors that make up foreign aid: capability, gain, time, and usefulness, it should be noted that the US foreign aid system, as it stands today, is worthless. While the country is currently capable of providing aid, that may not last, and as the US has gained nothing from any of the countries that it sponsors, there is no reason to stretch our thin budget thinner to continue the program. The future isn’t predicting vast amounts of money looking for a purpose, and even if a golden egg did appear, throwing it towards a failing country isn’t going to solve anything. This is evidenced by the fact that no matter how much money a given country is currently receiving, its unsuccessful results remain the same. Putting that entirely aside, foreign aid is useful, but not in the way it is currently being utilized. 

            Fixing foreign aid would be difficult. Countries have gotten used to their handouts, and asking to see results in exchange for US money might be seen as an attempt to manipulate other countries. Yet in spite of the controversy it might cause, there needs to be an exchange. The specific exchange doesn’t matter; the US could ask countries receiving aid to vote with them, buy US defense products, or grant their citizens basic freedoms, but without reciprocity the system is doing absolutely nothing (other than draining US pockets and lining those of foreign dictators). The alternative to fixing the foreign aid system is giving it up entirely, and while this might be great for balancing the budget, the US does need allies, on occasion. In short, the system can’t be abandoned, but it also needs to endure serious reconstruction to earn its continuance.

 

 

 

Marina H Lee

 

 

 

 

Sources

 


 

[1] http://www.usaid.gov/faqs.html#q7

[2] http://www.whitehouse.gov/omb/budget/fy2008/summarytables.html

[3] http://www.gpoaccess.gov/usbudget/fy06/pdf/hist.pdf pg.26

[4] http://fpc.state.gov/documents/organization/31987.pdf pg. 14

[5] http://www.census.gov/Press-Release/www/releases/archives/population/001703.html

[6] http://articles.latimes.com/2005/aug/31/world/fg-aid31

[7] http://fpc.state.gov/documents/organization/31987.pdf pg. 12

[8] http://www.america.gov/st/democracy-english/2008/August/20080805164900esnamfuak7.732791e-02.html

[9] http://www.time.com/time/world/article/0,8599,1193622,00.html

[10] http://www.heritage.org/Research/InternationalOrganizations/bg2171.cfm

[11] http://www.royalafricansociety.org/index.php?id=414&option=com_content&task=view

[12] http://www.globalresearch.ca/index.php?context=va&aid=6138

[13] http://www.usaid.gov/locations/sub-saharan_africa/

[14] http://www.spiegel.de/international/spiegel/0,1518,363663,00.html

[15] http://www.undp.org/

[16] http://www.economist.com/media/pdf/DEMOCRACY_INDEX_2007_v3.pdf

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4 Responses to US Foreign Aid

  1. […] Original post by marinalee […]

  2. […] is going? The budget is a crucial and inherent problem (for more on the budget, see my post here: second paragraph), complete with built in harms and promises of greater devastation if it is not addressed. In order […]

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