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U.S. Foreign Aid in Developing Countries


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U.S. Foreign Aid in Developing Countries

Over the past 40 years, the United States (U.S.), via the coordination of the Agency for International Development (AID), has provided several developing nations with billions of dollars in aid. Assistance is distributed within the following categories: bilateral development, economic assistance supporting U.S. political and security goals, humanitarian, multilateral economic contributions, military, the Millennium Challenge Corporation, and the Global AIDS Initiative. With so many great programs that offer economic and military assistance, my goal is to determine if any metrics have shown a positive impact within developing nations.

Why does the United States give foreign aid? Idealists view foreign aid as a contemporary form of Rudyard Kipling’s ‘White Man’s Burden” whose goal was to uplift those worse off than ourselves out of poverty.

The White Man’s Burden by Rudyard Kipling

“…Take up the White Man's burden--
The savage wars of peace--
Fill full the mouth of Famine,
And bid the sickness cease;
And when your goal is nearest
(The end for others sought)
Watch sloth and heathen folly
Bring all your hope to naught.….”

While Kipling may have been optimistic, reality shows that foreign aid is a necessity. Foreign aid goals include 1) security by fighting terrorism in the United States and abroad, (2) a financial gain by promoting exports, and (3) humanitarianism. Metrics have not provided a true depiction of the effect of foreign aid in developing countries. The twenty-first century has commanded a renewed interest in the politics among onlookers. Bono, Brad Pitt, and George Clooney have made global headlines due to their advocacy of debt relief. Their concerns and notoriety has surpassed the government and made everyday citizens aware of the impact or lack of impact that foreign aid provides. Foreign aid is comprised of either grants or loans. The loans, administered by the International Monetary Fund (IMF), feature low interest rates, extended repayment terms, and grace periods. Aid can be dispensed as money, military assistance, agriculture, goods, food, economic planning, medical assistance, etc.
The aspirations of providing aid outwardly always seem to be a noble deed, but has it been truly successful? Developing countries restrict private international appropriation of loans. With dissimilar exchange rates, foreign investment is also discouraged. It has been discovered that with so many obstacles, developing countries devise policies and programs, based on greed, that undermine the residents and tend to cause the local economy to plummet even further.
Foreign has become a crutch for developing and third world countries. Global donors have discreetly discouraged the recipient countries to rely on the assistance rather than use it to foster their growth. U.S. foreign aid has a tendency to hurt instead of help these countries.
When we think of third World, Africa is the first area that comes to mind. We are barraged by the media of all the malnourished Africans who can barely stand up due to the lack of resources. During the 1960s, AID launched several aid programs for independent developing countries within the African continent. $100 million was allocated to help Africa with a primary focus on large-scale industrial projects. It was thought to bequeath a long-term payoff of infrastructure sans funding from private investors. By the mid-1960s, the fifty states that make up Sub-Saharan African were independent and aid grew to $950 million. “Zambia, Kenya and Malawi, all independent by 1964 had, on average received about $315 million each by the end of the decade. Statistical records from the 1960s are scant, and estimates of the miles of tarred road and railway track, the number of bridges and airports, that aid helped build remain unclear.” The most significant gain was the erection of a hydroelectric dam located between Zambia and Zimbabwe. Food production declined and the few newly built roads and bridges were shoddy. In the 1970s, the promise of a brighter future began to dwindle. By the end of the 1980s, the per capita income fell lower than it was in the 1960s. The agricultural programs did not benefit the local farmers and thousands of people starved. The problem with the agricultural programs was the lack of business training to disburse the food production. Understanding this oversight, the Mils Mopti project was formed in Mali in 1976. It, too, was to increase food production, but this program also included marketing. Within this program the farmers were given all the tools and resources to generate a successful working farm; i.e., fertilizer, equipment, grain, update applicable research, warehouses, and even helped to build better roads for travelling. The farmers and the country were extremely optimistic with the potential outcome, but it failed miserably. The equipment broke, buildings collapsed, the water supply became contaminated, some warehouses and roads were either never built or completed. The continued support was not there and the farmers who were able to produce crops were not paid fairly by the government. They were left to see their hope sink into an abyss. In 1979, the Mils Mopti project ended.
The more programs that were introduced, the worse off the Africans became. The government became more involved with the administration and facilitation of these programs and began hiring people as civil employees. There was no oversight from those global countries that provided them with foreign aid. They were left on the honor system and it soon became dishonorable. The misappropriation of funds and goods became the goal for the administration. The benefactors were exploited if they wanted to procure any of the aid. It was reminiscent of the mafia. “Every year, since 1995, Transparency International has published a Corruption Perception Index (CPI). Using surveys reflecting the perceptions of business people and country analysts, the CPI ranks over 100 countries, from 0 to 10, the most corrupt to the least.” Today, so many of the countries that should have flourished have been forgotten. It has been left up to celebrities to shed light on them for the world to take any type of interest in them.
Foreign aid was not only ear-marked for the third world, but for assisting allies. In 1982, the U.S. provided financial aid to Israel to assist with their invasion into Lebanon, also known as the Lebanon War. The goal of the war was to destroy the Palestinian Liberation Organization (PLO) military and denounce it as a political organization. The U.S. supported Israel’s mission, plus there was a plan create new economic policies. As a result of this war, a 400% inflate rate manifested and Israel was reported as having committed acts of aggression against Lebanon opposing international law. One of the most long lasting outcomes was from Osama bin Laden. It has been reported that bin Laden was videotaped stating that he was inspired to attack the buildings in America because we supported the attack on Lebanon; whereupon, several buildings toppled in the capital during the invasion. Unfortunately, he kept his word and the U.S. suffered greatly.
Foreign aid is a global venture. Asia, known for being proficient farmers, needed irrigation for outer, less developed areas. In 1980, the U.S. provided tens of millions to build new irrigation systems called the Lower Citanduy project. Before completion, the system was plagued with cracked levees and structural blockage. It took millions more to help repair the damage, create a maintenance plan, and actually start working. It took sixteen years to come, but it was revered as successful. Yes and No. It steps were put in place prior to installation, many of the hurdles would have never surfaced. It cost more in foreign aid than originally planned, plus the time left the farmers unable to produce food. Upon completion the farmers refused to utilize it even though the government had used parts of their land to build it. The irrigation system was for the city as well as the farmers. Non-farmers benefited from the new system, but the farmers lost even more. The government forced them to absorb some of the cost of the maintenance.
Government-to-government aid is a more plausible term than Foreign aid since it has proven to help the government by snowballing the private sector and the citizens of the recipient countries. Some regions have refused aid because they do not the corrupt leaders and the donor countries to profit off their unfortunate situation without ever having the ability to share in the proposed expansion and benefits to their livelihood. While an overwhelming number of countries welcomes foreign aid because by accepting this form of “hand out”, they are able to retain their own funds for other aspirations.
Today, due to the current recession, foreign aid has been notably reduced. 2011 saw a decrease of 3% in donor aid. Systematically, each year brings about an increase and this is the first drop since 1997. “In 2011, members of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) provided USD 133.5 billion of net official development assistance (ODA), representing 0.31 per cent of their combined gross national income (GNI). This was a -2.7 % drop in real terms compared to 2010, the year it reached its peak. In 2011, the largest donors were the United States, Germany, the United Kingdom, France and Japan. Denmark, Luxembourg, the Netherlands, Norway and Sweden continued to exceed the United Nations’ ODA target of 0.7% of GNI. In real terms, the largest rises in ODA were registered in Italy, New Zealand, Sweden and Switzerland. By contrast ODA fell in sixteen DAC countries, with the largest cuts recorded in Austria, Belgium, Greece, Japan and Spain. G7 countries provided 69% of DAC ODA; European Union (EU) countries, 54% of DAC ODA. The United States continued to be the largest donor by volume with net ODA flows amounting to USD 30.7 billion, representing a fall of -0.9% in real terms from 2010. As a share of GNI, ODA was 0.20%, a decrease from the 2010 level of 0.21%. US bilateral ODA for Africa rose to a record level of USD 9.3 billion (+17.4%), and its aid to LDCs amounted to USD 10.0 billion (+6.9%). Looking ahead, the OECD-DAC Survey on Donors’ Forward Spending Plans for 2012 to 2015 suggests that global CPA may rise somewhat (6% in real terms) in 2012. However, this is mainly because of expected increases in soft loans from multilateral agencies funded from capital replenishments during 2009-2011. From 2013, global country programmable aid (CPA) is expected to stagnate, and could thus confirm earlier findings that it takes several years from the onset of a recession for the full impact to be felt on aid flows.”
The history of U.S. Foreign Aid has provided an enjoyable way of life for many government leaders. Unfortunately, the chosen benefactors of the assistance programs are no better off. Going forward new parameters must be outlined in the aid programs to insure proper administration. Take the politics out of the politician and revert back to the original mission of humanitarians. All government(s) should be by the people and for the people.
U.S. Foreign Aid may have altered the way of life in some developing countries but is has not augmented their capability of becoming self-sufficient at that greater standard of living. Several countries receiving aid are consistently doing less than expected. Their boost in food sources and agricultural sectors has floundered. Foreign aid has shielded government leaders and administrators from impetus of plights of their own economies. It has been recorded that not one country receiving aid within the past two decades has advanced from being a developing nation to a viable and competitive Industrial nation.

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