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US isn't stingy, it's
strategic
By Tom Barry
Uncle Sam is not Ebenezer Scrooge. The US
government is the world's largest foreign-aid
donor, contributing economic assistance to more
than 150 countries. The US is also the largest
national source of humanitarian and emergency
relief aid. Before President George W Bush took
office in 2001, the US government was providing
foreign nations with nearly as much development
aid and humanitarian assistance as did France,
Germany and the United Kingdom combined.
When Jan Egeland, United Nations under
secretary general for humanitarian affairs, called
the US "stingy" last week in the wake of the
tsunami disaster, he affirmed the belief of many
that the Bush administration was not only arrogant
and aggressive but also lacking in compassion and
generosity. The failure of the president to make a
personal statement of support and condolence until
three days after the tragedy - and the paucity of
the US initial commitment of emergency
humanitarian aid - gave widespread credence to the
charge that the US is not a good global neighbor
but rather a self-centered Scrooge.
Egeland was quick to note that his measure
for generosity was not total aid but economic aid
as a percentage of national income or gross
domestic product (GDP). A decade ago at the Earth
Summit in Brazil, the US and the rest of the
developed world promised to increase aid levels to
at least 0.7% of national income. "If the foreign
assistance of many countries is now 0.1 or 0.2% of
national income, I think that is stingy," said
Egeland.
Can the US$45 billion US economic
and military aid budget of 2004 - roughly three
times what the administration of president Bill
Clinton allocated in 1997 - be described as
"stingy"?
How does the US economic-aid
commitment as a percentage of national wealth
compare to the other 22 large aid donors? The
latest comparative figures from 2002 place the US
- with its 0.13% commitment - dead last behind
Italy and Greece with their 0.2% contributions of
national income. If military aid is included, the
percentage jumps to nearly 0.2%.
Only five
countries have met or exceeded this promised 0.7%
benchmark set a decade ago: Denmark, Norway,
Sweden, the Netherlands and Luxembourg.
As
a percentage of national income, US foreign aid
has steadily and dramatically dropped since 1949.
Not since the Alliance for Progress years of the
John Kennedy administration has the economic-aid
budget exceeded 1% of annual GDP. According to an
April 2004 report by the Congressional Research
Service (CRS), even with the increases in US aid
commitments since 2001 (excluding the nearly $25
billion committed to Iraq), current aid levels are
among the lowest in a half-century of US
foreign-assistance programming.
Post-Cold War blues
During the
Cold War, US foreign aid enjoyed what aid
reformers now call "policy coherence". As the CRS
analysts rightly point out in their recent report,
until the 1990s "the underlying rationale for
providing foreign aid was the same for all US
foreign policy - the defeat of communism".
During the 1990s the US government was
hard-put to find a new rationale to support Cold
War aid levels. No longer could foreign aid -
either economic or military - be justified as part
of the Cold War against the advance of communism.
The Clinton presidency settled on the concept of
promoting "sustainable development" as the core
principle of US foreign assistance, which proved
to be a hard sell to the US public and Congress.
This new difficulty in explaining how US aid
served US national security and national
interests, combined with the administration's
determination to balance the budget, resulted in a
gradual decline in foreign assistance.
In
the last years of Clinton's tenure, foreign aid
started to climb again - not out of any new
congressional or executive-branch determination to
foster sustainable development, but to complement
US military operations in Colombia, Haiti,
Bosnia-Herzegovina and Kosovo.
If one
looks solely at the changing allocations of US
foreign assistance, the Clinton years seem the age
of austerity and the Bush administration in
contrast appears generous. Starting in fiscal
2002, economic aid began a steady and dramatic
rise - rising $4.3 billion over 2001. By 2004 the
US government's economic aid commitments had risen
to historic levels - rising to levels not seen
since the post-World War II years with the
Marshall Plan for European reconstruction.
Depending on how you view foreign
assistance - total aid or as a percentage of
income - Uncle Sam is either generous or a miser.
But a narrow focus on dollar amounts and
percentages misses the bigger picture of the
changes in US economic aid in the past several
years. What cannot be debated is that US economic
aid is increasingly strategic.
The
administration's "global war on terrorism" is the
main determinant in the distribution of economic
aid - not development needs, not humanitarian
disasters, not hunger or the increasing numbers of
the world population living on a dollar a day or
less. In providing a new rationale for US foreign
aid, the "war on terrorism" has provided a new
policy coherence that integrates foreign
assistance with foreign and military policy. When
the officials of the State Department and the US
Agency for International Development (USAID)
justify their aid requests before congressional
committees, they stress that aid is part of the
country's national-security strategy. The "war on
terrorism" has replaced the war on communism as
the underlying rationale for foreign assistance.
That makes selling increasing foreign-aid budgets
much easier on Capitol Hill and has restored a
bipartisan consensus in support of USAID programs.
Guns and butter
The 2004-09
strategic plan produced by the State Department
and USAID defines "security" as the main goal of
US foreign assistance. The strategic plan aims to
"align diplomacy and development assistance" with
the president's National Security Strategy of
September 2002 - the document that lays out the
case for preventive war and for building the
capacity for global military intervention.
Increasing equitable development, reducing
poverty and hunger, and protecting the global
environment don't figure into the strategic goals
and objectives of this strategic plan. Instead,
the main priorities are Arab-Israeli tensions,
stabilizing Iraq, restructuring the "Muslim world"
to increase democracy and economic freedom,
stabilizing Afghanistan, North Korea,
India-Pakistan tensions, drug eradication in the
Andean region, strengthening alliances such as the
North Atlantic Treaty Organization, and reforming
the United Nations. Further down on the list of
priorities for USAID and the State Department are
the AIDS crisis; food security, particularly in
crisis countries such as Sudan, Iraq, Ethiopia and
Afghanistan; and providing "accountable"
development assistance through the new Millennium
Challenge Account.
Responding to a spate
of criticism in the 1990s that US economic aid
lacked a strategic coherence, USAID over the past
few years has addressed that criticism head-on by
its determination to make foreign assistance
coherent with US national-security strategy. This
challenge to establish "policy coherence" was also
addressed in the January 2004 USAID Commission
report, "US Foreign Aid: Meeting the Challenges of
the 21st Century", written in part by
neo-conservatives from the right-wing Hudson and
Hoover think-tanks. The paper calls for greater
"selectivity" in US foreign assistance based on
two criteria: "relevance to US national security"
and "greater aid effectiveness".
Selective and strategic
One has
only to look at the major recipients of US
economic aid to grasp the policy coherence with
national-security strategy. But this new
selectivity based on security imperatives can also
be seen in the significant rise in economic (and
military aid) to what USAID calls "front line"
states in the "war on terror" - those like Poland
that joined the "coalition of the willing" in the
Iraq occupation, countries in Central Asia that
have opened their countries to US military bases,
and others like Indonesia that are regarded as key
allies in containing Muslim militancy.
Starting in 2002, the executive branch
began to underscore the "war on terrorism" as a
top foreign-aid priority. According to the
Congressional Research Service, the State
Department now highlights the amount of US
assistance going to some 30 "front line" states in
the terrorism war. Aid to Pakistan, for example,
jumped from $1.7 million in 2001 to $275 million
in 2004.
Leading the list of top
economic-aid recipients in 2004 was Iraq, which
received $18.5 billion - more than the total USAID
budget prior to 2002. Next comes Israel ($2.6
billion), followed by Egypt and Afghanistan, both
of which received approximately $1.8 billion.
Other top recipients were Colombia, Jordan,
Pakistan, Peru, Bolivia, Turkey, Sudan and
Indonesia.
Additional top recipients of US
aid in 2004 were Sudan and Liberia as part of US
conflict-resolution and humanitarian-aid
initiatives, along with Uganda, Ethiopia and
Kenya, reflecting Bush's $15 billion Global AIDS
Initiative in Africa.
Clearly, the Bush
administration was slow on the uptake to see the
strategic implications of tsunami disaster relief.
But the strategic and public relations benefits of
US humanitarian aid in largely Muslim countries
such as Indonesia are now recognized. Although
Washington and US society desperately need some
favorable public relations, the US government's
apparent use of its aid efforts in Indonesia to
solidify working relations with the Indonesian
military (TNI), including the use of US
helicopters by the TNI, may only contribute to
strengthening the position of the highly abusive
military forces in that conflicted nation.
Selective and effective
Foreign
assistance is one of the most flexible instruments
of US foreign policy, since it can be used
alternately as a carrot and a stick. Countries
that cooperate with the US national-security
initiatives - no matter their record on such
foreign-aid objectives as democracy, human rights,
or good governance - receive aid as carrots.
In addition to aid selectivity measured by
national-security goals, USAID has established its
own criteria of "effectiveness" when evaluating
how development funds should be spent. In the
past, USAID has used its project funding to foster
such goals as privatization, economic
liberalization, and austerity.
The World
Bank's 1998 report "Assessing Aid" concluded that
a "good policy environment" is an essential
precondition for effective development assistance.
The Bush administration has taken up this theme
with a vengeance with its much-vaunted Millennium
Challenge Corporation. Established after the 2002
Monterey Conference on Financing and Development,
the $5 million in promised development funds are
available only to countries that meet strict
preconditions - including a commitment to free
trade, cooperation with US foreign-policy
initiatives, and no-holds-barred economic
liberalization, as well as national treatment for
US investors. In other words, instead of
conditioning new aid to agreed-up reforms,
countries need to meet US-imposed political,
economic, and governance conditions in advance of
new aid commitments. Largely as a result of this
onerous pre-conditionality, the government
corporation has been hard-put to find countries
who have met the challenge of satisfying all the
US requirements.
A long-running measure of
the effectiveness of US aid has been its ties to
US exports and technical assistance. According to
USAID, 81% of its procurement comes from US
sources. This falls short of the 87% US
procurement rate for US military aid. That figure
would be 100% if it were not for a special
provision that allows Israel to use US military
aid to buy from its own military contractors.
Promises, promises
A few days
after the criticism of penny-pinching in its
tsunami disaster aid, the administration increased
its promised aid from $15 million to $350 million.
However, unlike the supplemental aid packages it
has secured for Iraq and Afghanistan
reconstruction aid, this $350 million doesn't
represent an increase in the economic-aid budget,
but rather is a commitment that is not backed by
available resources. If the US is to deliver on
its promise, it will either have to draw disaster
aid from other accounts, ask Congress for
supplemental aid, or go into the next fiscal year
with a budget deficit. Because of US strategic
priorities, US humanitarian aid and emergency
disaster assistance - which represents 12% of
total foreign and military aid - is largely used
in conjunction with US humanitarian interventions
and in conflict zones where US national-security
interests are at stake. As the US global reach
expands, the need for associated humanitarian aid
also increases, thus compounding US budgetary
pressures.
There is good reason to doubt
whether the promised $350 will be anything more
than just another broken promise by the Bush
administration. The Bush White House has
established a record of promising large sums of
aid to reduce poverty, to fight the human
immunodeficiency virus (HIV) and AIDS, and to help
governments that are helping themselves with good
governance and economic reform. The Millennium
Challenge Corporation has failed to deliver any of
the promised $5 billion, although the account
continues to whittle down its resources in studies
and evaluations that are establishing exactly what
a "good policy environment" means with respect to
US foreign, economic and military policy.
At first glance, a country's generosity in
foreign aid seems a good measure of whether the US
or any other nation is a good global neighbor.
Certainly the high percentage contributions of the
Nordic and other Western European countries make
them immune to charges that they are stingy.
Moreover, these same leading aid donors don't tie
their aid to their own products and technical
assistance.
But foreign aid is not always
an unqualified good, especially when it comes from
a country whose aid strategy is so closely tied to
its global war strategy and to its neo-liberal
economic policies.
Tom Barry is
policy director of the International Relations
Center, online at www.irc-online.org. He is the
author of books on US economic aid including
The Soft War: Uses and Abuses of US Economic Aid
in Central America (Grove Press).
(Published with permission from the International Relations Center
)
(Copyright IRC, 2005. All
rights reserved.) |
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