Cutting Foreign Aid: How the Tea Party Is Hurting America

“We must address the root causes of terrorism to end it for all time. I believe putting resources into improving the lives of poor people is a better strategy than spending it on guns.” – Muhammad Yunus

Today I went to visit a large-scale maize farmer in Wamale, thirty minutes outside of Tamale, the capital city of the Northern Region in Ghana and home to a predominantly Muslim population.  We had a discussion in the home of the village chief, who farms 200 acres of land.  On the wall of his palace (or compound), is a 2010 calendar with a picture of Ayatollah Khomeini on it and a poster about how to plant maize properly, with the insignia of USAID at the bottom.  This is an interesting test case into the relevance of soft power.

With the new cuts from the US federal budget, the most politically-expedient entity – foreign aid – is slated to get the axe.  There is an interesting back and forth discussion between two experts on the subject – for and against – at NPR.  In an article titled “Cutting Foreign Aid Doesn’t Help,” Joseph Nye makes the case that slashing the aid budget is a bad idea:

It sounds like common sense, but smart power is not so easy to carry out in practice. Diplomacy and foreign assistance are often underfunded and neglected, in part because of the difficulty of demonstrating their short-term impact on critical challenges. The payoffs for exchange and assistance programs is often measured in decades, not weeks or months. American foreign-policy institutions and personnel, moreover, are fractured and compartmentalized, and there is not an adequate interagency process for developing and funding a smart-power strategy. Many official instruments of soft or attractive power — public diplomacy, broadcasting, exchange programs, development assistance, disaster relief, military-to-military contacts — are scattered around the government, and there is no overarching strategy or budget that even tries to integrate them.

The obstacles to integrating America’s soft- and hard-power tool kit have deep roots, and the Obama administration is only beginning to overcome them, by creating a second deputy at State, reinvigorating USAID, and working with the Office of Management and Budget. Increasing the size of the Foreign Service, for instance, would cost less than the price of one C-17 transport aircraft, yet there are no good ways to assess such a tradeoff in the current form of budgeting. Now, that progress may be halted.

Now, over to former UN ambassador Ken Adelman, who thinks that the “soft power” impact of foreign aid is overrated:

The truth is that many effective exchange programs spring from hard power budgets, not those of soft power. During those recent dicey days in Egypt, we read daily reports of military-to-military, U.S.-to-Egyptian contacts to keep the situation there peaceful while easing President Hosni Mubarak out. Top Pentagon leaders — from the defense secretary to the chairman of the Joint Chiefs of Staff on down the line — were in touch daily with their counterparts, colleagues, and classmates from U.S. military academies, urging them to act responsibly. We don’t know what impact those contacts had on the Egyptian military brass’s decision to send Mubarak packing, but we do know it ended in success — a model of “the United States’ ability to positively influence events abroad,” as Nye would put it.

I didn’t hear of similar activities from soft-power agencies — past diplomats, USAID directors, agricultural-aid types — with their Egyptian counterparts. The only diplomatic initiative that got any public attention involved the gifted former U.S. ambassador to Egypt, Frank Wisner, who was suddenly dispatched to Cairo at Clinton’s request. But he, or she, made a real hash of it, for just as Obama had finally realized that Mubarak must go, Wisner publicly announced that Mubarak must stay — at least for a while, to provide stability in any transition. Not exactly a case study in smart power.

In Adelman’s budget, he refers mostly to the main recipients of aid from the US government – Israel, Pakistan, and Egypt.  I don’t know enough about our strategic interests and the use of foreign aid, but it makes sense that the three largest recipients are all in the Middle East.  There is nothing about Africa, Latin America, or Southeast Asia in there.  But that is probably because our strategic interest in those regions is decidedly less.  Though, as a recent Economist article points out, the case for taking a financial interest in Africa is currently being made forcefully by China, which is currently engaged in taking the continent for all that it is worth (in terms of raw materials).

Contrary to what my previous post would have some readers believe, I feel that aid and diplomacy are critical elements of our national security apparatus and important in terms of stability and defense.  And maybe it is the idealist in me that believes that, even though there are many structural policies in the Western world that are hindering progress in other countries, particularly with regards to agriculture, I think smart aid – money that is used in a sensible way, as in market facilitation and the ADVANCE project – can make a positive impact on the countries it is supporting.  And, in doing so, foster good will and create stronger trading partners.  Though Adelman disagrees with that premise:

Put bluntly, this aspect of soft power — foreign aid, by far the biggest in dollar terms, amounting to some $30 billion a year — may not constitute much power at all.

The reason has to do with peculiar aspects of human nature. Giving someone a gift generates initial gratitude (often along with quiet gripes about why it wasn’t bigger). The second time, the gift generates less gratitude (and more such griping). By the third iteration, it has become an entitlement. The slightest decline engenders resentment, downing out any lingering gratitude.

But to soft-power advocates, this misses the point. Economic development aid isn’t about gratitude. It’s about, basically, economic development.

Does it work, though? It isn’t clear that the main recipients of U.S. foreign aid over the past 50 years — again, the likes of South Vietnam, Egypt, Pakistan, Afghanistan — developed all that much. And what development may have happened there could be due to other factors.

Traditional foreign aid has the fatal flaw of going to, or through, governments. That spurs corruption; see big-time African aid recipient Zaire, with Mobutu Sese Seko leaving office a Warren Buffett-sized billionaire. Plus, we all know that government doesn’t create economic wealth or prosperity. Private businesses do, even in a strong-government country like South Korea in the 1970s and China today. Foreign aid raises governments’ role in a realm where it should generally be lowered.

Sure, that is true.  Aid needs to be used in a sustainable way.  Throwing money at a problem doesn’t help, particularly if it is through the wrong channels.  But I’ll remain an optimist and say that cutting foreign aid, particularly when it represents less than 5% of the total defense budget in the country, probably will end up hurting us in the long run.

One thought on “Cutting Foreign Aid: How the Tea Party Is Hurting America

  1. Gusti

    Funny, I don’t remember taikng out a loan and giving it to congress to then give to the likes of China, Mexico, Russia, Cuba, Venezuela, etc. and some hundred and fifty other countries. $20mil/year (A YEAR!) goes to Cuba. Why?! I’m not allowed, but my tax dollars are?THIS, is why America is in a $14,000,000,000,000 debt hole. AND, it ain’t because We-the People, spent it. So Mr. Geithner, please do not insult us and open your mouth without first deciding to speak? the truth. MAN UP!

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