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From: Biniam Tekle (biniamt@dehai.org)
Date: Tue Feb 22 2011 - 13:54:37 EST
"Ethiopia is the largest aid recipient in Africa. Unfortunately, reported
Tom Porteous, the London Director of Human Rights Watch: “multi-billion
dollar programs funded by the World Bank and others have been politicized
and manipulated by the Ethiopian government and are used as a powerful tool
of political control and repression.”
http://blogs.forbes.com/dougbandow/2011/02/22/foreign-aid-or-foreign-hindrance/
Foreign Aid, Or Foreign Hindrance
Feb. 22 2011 - 10:33 am | *0 views* | *0 recommendations* | *0
**comments*<https://mail.google.com/mail/html/compose/static_files/blank_quirks.html#post_comments>
By DOUG BANDOW
[image: USS Normandy Provides Aid in
Haiti]<http://www.flickr.com/photos/28650594@N03/4303429549>
Image by DVIDSHUB via Flickr
The federal budget deficit will run a record $1.65 trillion in 2011. So why
does Washington continue to subsidize foreign governments?
The House Republicans appear determined to reduce spending, and one of their
targets is foreign “aid.” This year the State Department would lose 16% of
its budget; humanitarian aid would drop by 41 percent.
Secretary of State Hillary
Clinton<http://www.forbes.com/profile/hillary-clinton> warns
of catastrophe<http://www.nytimes.com/2011/02/15/us/politics/15congress.html>:
“Cuts of this magnitude will be devastating to our national security, will
render us unable to respond to unanticipated disasters and will damage our
leadership around the world.”
She cited the recent political upheaval in Egypt: “We need the resources to
do the job; otherwise we will pay a higher price later in crises that are
allowed to simmer and boil over into conflicts.” She also pointed to work
in Afghanistan and Iraq to argue that the proposed reductions would be
“detrimental to America’s security.”
Even some conservatives stand with Secretary Clinton on this issue. For
instance, Jennifer Rubin, the *Washington Post’s* in-house blogger on the
right, termed Sen. Rand Paul (R-KY) a
“neo-isolationist<http://voices.washingtonpost.com/right-turn/2011/01/during_the_2010_campaign_i.html>”
for proposing to cut what amounts to international welfare.
But despite Secretary Clinton’s extravagant claims, there is little evidence
that foreign assistance advances U.S. interests. After all, if America
writing checks — more than a trillion dollars worth since the end of World
War II — made the world a better place, the globe should be at peace, the
poor should be fed, and the Second Coming should be history.
Consider Egypt. Secretary Clinton argued that events in Egypt require
Americans to subsidize the new military rulers. For what purpose? The U.S.
provided some $30 billion to Egypt over the last three decades but the
country remains poor and undemocratic. Indeed, underwriting the corrupt
Mubarak dictatorship helped turn Egypt into popular volcano.
The Obama administration has proposed spending $8.7 billion in Afghanistan,
Pakistan, and Iraq next year. Yet the results of assistance programs in
these three nations are no better than in Egypt.
Pakistan has been on the U.S. dole for *decades*. Tom Wright of the *Wall
Street Journal* reported last
month<http://online.wsj.com/article/SB20001424052748703583404576080113980804354.html>:
“The ambitious civilian aid program is intended in part to bolster support
for the U.S. in the volatile and strategically vital nation. But a host of
problems on the ground are hampering the initiative.”
The problems run deep. Alejandro Quiro Flores and Alastair Smith of New
York University charged that
<http://www.foreignaffairs.com/articles/67017/alejandro-quiroz-flores-and-alastair-smith/pakistans-flood-of-cash?page=2>“The
aid dynamic is similar to that of Pakistan’s war against insurgents: as
long as the United States is willing to pay Pakistan ever more to eradicate
extremists, Pakistan will not decisively defeat them; the graft that
counterterrorism aid brings outweighs the political cost of some continuing
violence.”
The waste, inefficiency, and corruption surrounding humanitarian projects in
Afghanistan and Iraq are legendary. It doesn’t matter if these conflicts
are perceived as getting better or worse. Aid officials will always
advocate an increase in funding because the situation is getting better or
worse.
At least there is a security argument for trying to buttress allied
governments in war. What of the $27 billion in so-called development
assistance requested for next year? Since the end of World War II the U.S.
and other wealthy nations have spent trillions of dollars trying to raise
poor nations out of poverty. These outlays have had no discernible impact
on Third World economic growth.
No doubt some projects in some countries have provided some benefits. But
the detritus of failed development projects litter the globe. Detailed
cross-national studies find neither correlation nor causation between aid
and growth. Indeed, generous financial transfers to corrupt dictators often
have impeded necessary reforms. Political elites in foreign countries
disagree on many things, but all want to preserve their power and position.
Observed Flores and Smith: “Autocratic governments’ disregard for public
welfare is exacerbated by international relief assistance.”
After decades of failure aid advocates claim they now are doing better.
President George W. Bush created the Millennium Challenge Corporation to
reward governments with good policies. The MCC currently is running $7.2
billion worth of multi-year programs in 20 countries. Yet, reported
the *Washington
Times*<http://www.washingtontimes.com/news/2010/aug/22/countries-on-us-lists-for-corruption-aid/>last
August, the agency: “is giving billions of dollars to nations
upbraided by the State Department for corruption in government.”
Of Senegal, observed J.P. Pham of the National Committee on American Foreign
Policy: “We have a government that did everything right, up until they got
themselves into the queue to get a grant from MCC. They know the metrics
[on corruption] will lag by a few years.” Senegal once was considered a
democratic and economic “leader in West Africa,” said former deputy
assistant secretary of state Todd Moss, but “What we’ve seen is a very steep
and worrying decline in the last couple of years.”
The World Bank also has emphasized better governance. Yet, reported Mary
Anastasia O’Grady<http://online.wsj.com/article/SB10001424052748703915204575103823901466194.html>of
the
*Wall Street Journal*: “In the midst of the financial turmoil that rocked
the international capital markets …, the World Bank proudly announced a new
$250 million ‘assistance package’ for [El Salvador]. A few months later a
scandal erupted over why a similar amount of money was never accounted for
on the government’s books.”
Aid incentives are all wrong. Observed Tate Watkins of the Mercatus
Center: “Systematic foreign aid creates opportunities for corruption,
cultures of dependency, and disincentives to development. The aid faucet
misaligns incentives between donors and recipients, making it extremely
difficult to turn off the flow.”
Even money targeted at humanitarian needs has a disappointing record.
Disasters like the earthquake in Haiti typically open the aid spigots. To
what result? Six months later in Haiti, reported the *Wall Street
Journal*<http://online.wsj.com/article/SB10001424052748703609004575355112899172210.html>,
“the process of reconstruction appears to have come to a halt.”
Aid groups acknowledge that progress has been limited at best. Reported the
*Washington Post*<http://www.washingtonpost.com/wp-dyn/content/article/2011/02/01/AR2011020102030.html>:
“The effectiveness of the NGOs is now being questioned, by the groups
themselves, and especially by Haitian leaders who complain that NGOs have
become a parallel government hobbled by poor coordination, high turnover and
a lack of transparency.”
At times assistance programs have been perversely harmful. U.S. “Food for
Peace” shipments, used to dump farmers’ domestic surpluses, is notorious for
ruining local farmers and thus undermining local production. This problem
continues in Haiti. On returning from a private aid mission, Don Slesnick,
the mayor of Coral Gables, Florida, complained: “We were saddened to see
rice bags travel no more than 20 yards from the gates of the distribution
site before ending up in the back of a pickup truck presumably headed for
the black market. To our further dismay, we returned home to read news
stories that those very same donations were undercutting Haitian rice
farmers who needed income to support their own families.”
Ethiopia is the largest aid recipient in Africa. Unfortunately, reported
Tom Porteous, the London Director of Human Rights Watch: “multi-billion
dollar programs funded by the World Bank and others have been politicized
and manipulated by the Ethiopian government and are used as a powerful tool
of political control and repression.”
Worse is Somalia. Even the United Nations gives aid in this tragic nation a
failing grade. Reported the *New York Times* last
year<http://www.nytimes.com/2010/03/10/world/africa/10somalia.html>:
“As much as half the food aid sent to Somalia is diverted from needy people
to a web of corrupt contractors, radical Islamist militants and local United
Nations staff members, according to a new Security Council report.”
It’s déjà vu all over again, as Yogi Berra observed. Two decades ago
President George H. W. Bush intervened in Somalia to help deliver food.
Michael Maren worked with private organizations and later concluded:
“Separately we’d arrived at the conclusion that the relief program was
probably killing as many people as it was saving, and the net result was
that Somali soldiers were supplementing their income by selling food, while
the [insurgent force] — often indistinguishable from the army — was using
the food as rations to fuel their attacks into Ethiopia.”
Government should get out of the aid business. There are limited instances
when financial transfers might supplement or even substitute for defense
expenditures, but the Cold War is over. The U.S. is the sole superpower and
faces no global rival.
Most of America’s allies, including regional powers Israel and Turkey,
should have graduated from U.S. assistance years ago. Most Third World
nations are tangential at best to American security. The more than $5
billion annually to support foreign arms sales is largely a subsidy for U.S.
weapons producers.
While it’s hard to criticize humanitarian aid properly delivered, private
money spent by private organizations is the best way to help those in need
around the world. Any assistance from Washington should be focused on
temporary disasters where the U.S. government has unique logistical
advantages—such as using an otherwise unemployed aircraft carrier to assist
tsunami victims.
As for development assistance, American officials should focus on
accelerating economic growth in America and easing access of other nations
to the international marketplace. That means reducing trade barriers.
For instance, the U.S. limits sugar imports from Caribbean. Pakistanis
would benefit far more from lower textile tariffs than from additional
subsidies to their ineffective government. One of the most important
roadblocks to international trade liberalization is American and European
agricultural subsidies.
Despite this abysmal record, the Obama administration is resisting cuts in
domestic “foreign aid” programs, has contributed to increased World Bank
outlays, and joined other industrialized nations in calling for more
International Monetary Fund lending.
Secretary Clinton should listen to her own rhetoric: “It’s time for a new
mindset for a new century. Time to retire old debates and replace dogmatic
attitudes with clear reasoning and common sense.”
One of those dogmatic attitudes is assuming that foreign “aid” really acts
as assistance rather than hindrance. For too long aid advocates have
camouflaged program failures with platitudes: aid is used to “maintain
American leadership around the globe,” “invest in global development,” and
demonstrate that America is “paying attention” to other countries. However,
leadership means husbanding resources, setting priorities, and acknowledging
limitations. Development requires good policies, not international
welfare. Attention is worth paying for only if it yields positive results.
Washington should stop throwing good money after bad even if we were living
in bountiful economic times. With the country drowning in red ink,
Washington must cut every unnecessary program. Misnamed foreign aid is a
good place to start.
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