With billions of dollars dedicated to saving the economy and millions of American jobs lost, it is probably a bad time to discuss foreign aid. How can the United States justify sending money abroad when people are struggling financially at home and are increasingly worried about the country's growing debt? The bottom line, however, is that foreign aid is in America's own interest. Even during an economic downturn, there are humanitarian, diplomatic, economic, and security reasons for improving and increasing foreign assistance.
Well-run programs improve global health, economic development and governance, and reduce the chance of future conflict. On his 100th day in office, President Barack Obama said that foreign aid is important because "we can advance our national interests more effectively by showing that we are interested in the well-being of the people of other countries."
The effects of the Great Recession are not confined to rich countries. Developing countries — the governments often least able to provide domestic stimulus packages — are expecting remittances and foreign direct investment to fall. In April, the World Bank and International Monetary Fund estimated that 55 to 90 million more people will be trapped in extreme poverty this year because of the financial crisis.
The United States can help. Foreign assistance that saves lives, alleviates hunger, fights diseases, and creates opportunities is in everyone's interest. Today's humanitarian concerns are often tomorrow's disasters, and aid costs less before crises erupt.
Refurbishing U.S. Image
The wars in Iraq and Afghanistan, along with President George W. Bush's tough rhetoric and foreign policy, tarnished America's image abroad. Providing short-term relief followed by long-term investments can improve the country's favorability. For better or worse, money talks. The Pew Global Attitudes Project found that Indonesians viewed the United States more positively after Washington responded generously to the tsunami in December 2004 (U.S. favorability grew from 15% in 2003 to 38% in 2005 but decreased slightly in 2006 and 2007).
Aid is not a vanity exercise. An unpopular government or leader complicates diplomatic efforts and compromises America's ability to lead. If the United States is respected around the world and seen as a defender of human rights and open societies, diplomacy becomes easier. Foreign assistance that is well communicated to international audiences will help the U.S. achieve its own goals.
Aid programs can also improve the business environment in developing countries by reducing corruption, building infrastructure, establishing rule of law, and fostering good governance. This not only allows local business to thrive, but also enables American businesses to expand in a globalized world and creates valuable export markets. While traveling in Accra, Ghana over the weekend, Obama emphasized that it is in America's interest to support sustainable democratic governments, limit corruption, train a skilled workforce, and promote trade and investment because when "people are lifted out of poverty and wealth is created in Africa, new markets will open for our own goods."
As international demand for energy resources rises, the United States will need to ensure access to raw materials. Energy security relies on a diverse supply of oil. Nigeria is Africa's largest producer of oil and a major exporter to the United States. The continent's most populous nation and second biggest economy, however, is saddled with insecurity in the Niger Delta and overall corruption. Fighting in the Delta has reduced the country's oil output by more than 20%. Through development and diplomacy, Washington should push for peace in the Niger Delta and prevent backsliding in anticorruption initiatives.
Aid and National Security
The post-9/11 paradigm (it arguably began earlier) of justifying all foreign policy priorities in terms of counterterrorism and immediate national security concerns means that issues of global health, poverty, hunger, and good governance are sometimes ignored or forgotten. The broader benefits of foreign aid are lost in translation. But if assistance needs to be justified in terms of U.S. national defense in order to ensure funding, so be it.
The effects of poverty, hunger, disease, instability, and climate change spread beyond borders and threaten others, including Americans. Transnational threats are by definition global concerns. Piracy off the coast of Somalia is a recent example that garnered international media attention. The dangerous waters are a symptom of the problems on land. And although it's arguably been overstated in the past, the threat of this failed state becoming a safe-haven for international terrorists is real.
In 2007, Defense Secretary Robert Gates said that "the most important lessons from our experience in Iraq, Afghanistan, and elsewhere has been the decisive role reconstruction, development and governance plays in any meaningful, long-term success." Gates believes more resources should be devoted to America's "soft power" to reinforce its "hard power."
Answering the Critics
Dambisa Moyo writes in Dead Aid that "across the globe the recipients of this aid are worse off; much worse off. Aid has helped make the poor poorer, and growth slower." Broadly speaking, critics argue that aid is inefficient, distorts markets, creates dependency, and does not reach the intended recipients. Critics emphasize aid's shortcomings and compare the broad ambition of ending poverty with the reality.
These critics are right in many respects. There are problems with how foreign assistance is delivered. And aid alone cannot solve all problems — other aspects of development including trade and business development are crucial. But the conclusions are often wrong. The critics largely ignore the benefits of aid. Foreign assistance has demonstrated success in improving education and health. Aid programs helped eradicate smallpox and more recently, over two million people living with HIV/AIDS received antiretroviral treatment through the President's Emergency Plan for AIDS Relief (an initiative started by Bush in 2003).Without aid, some countries would not have the resources to construct roads, provide essential medicines and educate the workforce.
The examples of failure mean that aid should be improved and modernized, not ended. Even William Easterly, the most frequently cited critic of foreign aid, wrote in his latest book that aid agencies "can do many useful things to meet the desperate needs of the poor and give them new opportunities."
Over the years, the delivery of U.S. foreign assistance has been militarized and fragmented across over 20 different agencies. Development programs lack clear strategy and attainable goals. There is growing recognition that America's aid programs are out of date and need to be reformed. From Gates to members of Congress, many agree that changes should be made to ensure the money reaches those most in need and achieve U.S. objectives.
In May, Senator John Kerry (D-MA), chairman of the Senate Foreign Relations Committee, said, "Development and diplomacy have to retake their rightful place alongside defense at the heart of American's foreign policy." He pledged to introduce two pieces of legislation with Senator Richard Lugar (R-IN), including an initial foreign aid reform bill. The chairman of the House Foreign Affairs Committee, Howard Berman, introduced a bill in April calling for a national strategy for global development. While these actions demonstrate momentum, leadership from the president is needed to achieve results. The Obama administration faces many competing political priorities, and reform will take time. But such reform is essential.
Polls repeatedly indicate that the American public drastically overestimates that amount of money spent on aid. In reality, aid accounts for less than one percent of the federal budget. Development needs to be balanced with defense and diplomacy. In conflicts, development efforts should complement military strategies and diplomatic engagement. In emergency situations and low-income countries, development programs will strengthen diplomacy and diminish the chance of war. With this in mind, aid is an essential aspect of America's "smart power" approach to foreign policy.
David Kampf is a writer, analyst, and Foreign Policy In Focus contributor based in Washington, DC. Recently, he directed communications for the United States Agency for International Development and President's Emergency Plan for AIDS Relief in Rwanda. He writes for the Foreign Policy Association's blog on rising powers and is a columnist for Asia Chronicle.
