FOREIGN AID: HOW MUCH IS ENOUGH?
September 29, 2002
The United States is frequently criticized in the United Nations and around the world for not spending enough of its gross domestic product on foreign aid.
Whereas other developed nations earmark 2 to 3 percent of GDP for aid to developing countries, the U.S. devotes less than 1 percent of GDP to development and humanitarian projects in the Third World. So is the criticism justified? Not necessarily.
The current issue of Foreign Service Journal magazine features several articles on America’s foreign aid programs, focusing on the U.S. Agency for International Development, which administers such programs overseas. In a lead article, USAID Administrator Andrew Natsios defended his agency, claiming that “the opportunity to effect real, substantive change in the developing world has never been brighter.”
Natsios explained that the Bush administration’s New Compact for Development, unveiled by the president at Monterey, Mexico, last March, will increase total U.S. foreign assistance from $10 billion to $15 billion over the next three years to recipients that commit themselves to good governance, the sanctity of contracts and free markets, and the Rule of Law.
Countries that promise to root out corruption, uphold human rights, and invest in better health care and schools will be eligible for the new program. Those who seek our assistance must also adopt sound economic policies that foster sustained development through free enterprise and entrepreneurial programs and projects. That’s a tall order for many Third World nations, where corruption and political repression are endemic.
Natsios conceded that our bilateral aid programs “haven’t produced the results we would like,” nor have “the multilateral development banks we support produced enough measurable successes for the resources we’ve expended in the developing world.” In other words, we haven’t gotten our money’s worth, which helps to explain why so many American voters — and the politicians they elect — oppose foreign aid.
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Also writing in Foreign Service Journal, Doug Bandow, a Cato Institute scholar who served in the Reagan administration, made the case against foreign aid. Noting that “nearly a quarter of the world’s population lives on less than one dollar a day,” Bandow observed that “ever since the Cold War, much U.S. assistance has been political and military, dedicated to buying and subsidizing friends.” So while thousands of children starve to death in Africa, the bulk of our foreign assistance goes to Egypt and Israel.
“Even during the Cold War, (when) most aid was extended for development purposes,” Bandow wrote, “the result (was) an expensive wasteland strewn with spectacular failures. For instance, Zaire received some $8.5 billion from a multitude of sources between 1970 and 1994, but imploded six years ago.” The Zaire program was so bad that ex-President Clinton’s AID administrator, J. Brian Atwood, acknowledged that “the investment of over $2 billion of American foreign aid served no purpose.” But that didn’t stop the Clinton administration from promising $50 million of our federal tax dollars to Congo dictator Laurent Kabila despite the latter’s “authoritarian tendencies and the atrocities committed by his military.”
Even more serious are charges leveled against USAID earlier this month by longtime Washington Post foreign correspondent Jackson Diehl. “Egypt is AID’s biggest client,” he wrote, “with a budget of $655 million for this year and $615 million requested for next. At least $25 million of that annual bonanza is supposed to be spent on promoting democracy … yet not a dollar is going to the independent Egyptian groups that are trying to advocate democratic reforms for (President) Mubarak’s rotting autocracy.”
Instead of promoting democracy, Diehl continued, the Mubarak regime arrested the director of the Ibn Khaldun Center, which seeks democratic reforms, and forced the Center for Legal Studies on Human Rights to close down for lack of funds. Neither of these groups received any U.S. aid money, nor did the Egyptian Human Rights Organization, “another group perpetually under pressure from Mubarak’s police.”
“So where do all those (U.S.) dollars go?” Diehl asked. “Well, in the past several years, $12.5 million has been spent on computers and computer training for the Egyptian Parliament, a rubber-stamp body that … was fraudulently elected.” And another $17.8 million was budgeted for “‘raising the quality of judicial decision-making’ by the very kangaroo court system Mubarak used to throw … a host of democracy advocates into prison.” You get the idea.
What changes do Bandow and Diehl recommend in order to remedy this deplorable situation? Bandow thinks “it’s time to stop wasting the taxpayers’ money and to look for new strategies (such as market reforms and trade promotion) to ease the agony that afflicts so many of the world’s peoples.” For Diehl, “Stopping the gravy train for Mubarak’s obedient judges and sycophantic legislators would be a modest blow for the cause of democracy.”
Having worked with large USAID programs in Colombia and Peru, I can testify that they are often bloated and inefficient. I recall a case in Peru where AID commissioned a $250,000 study to determine whether a regional anti-narcotics seminar was feasible. Meanwhile, we — the U.S. Information Service — organized such a seminar at a cost (to American taxpayers) of approximately $5,000 by securing additional financing from Andean governments and the private sector. Conclusion: We shouldn’t spend more money on foreign aid until we’re sure it’s accomplishing the desired purposes: saving the poorest of the poor and promoting democracy and free enterprise.
Guy W. Farmer, a semi-retired journalist and former U.S. diplomat, resides in Carson City.
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