THE U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT STATES ITS CASE

Today's post-Cold War world offers the United States an historical opportunity to help people around the world improve their lives, while securing American leadership in a prosperous and peaceful world. The time is now:

	To bolster democracy in the former communist bloc.
	To help the poorest of the poor empower themselves in Africa, Latin America and Asia
	To heal the starving child and educate the village woman.

With the collapse of the USSR and the end of superpower competition, problems of development have emerged as the dominate force in global politics. Poverty, hunger, disease, oppression and environmental damage increasingly affect the affairs of nations across the globe.

These problems have replaced the specter of nuclear war as the new strategic threats to the United States. Failing economies and authoritarian regimes adversely affect world trade and global political stability. Disease and polluted air are not contained by national borders. Spiraling population growth leads to environmental degradation, increased migration, unemployment and poverty.

Foreign assistance has an important role to play in U.S. foreign policy at this critical juncture of history.

A people to people approach

Since 1961, the U.S. Agency for International Development (USAID) has been helping people to help themselves. In addition to humanitarian assistance, USAID's work concentrates on four areas - all interrelated - and all crucial to achieving U.S. foreign policy objectives. improving health and population conditions; protecting the environment; promoting economic growth; and supporting democracy.

A federal agency, USAID is based in Washington, DC, but derives its strength from its field missions abroad. USAID staff work with teachers, farmers, microentrepeneurs, nurses and other members of the local community in four regions of the world: (1) Africa, (2) Asia and the Near East, (3) Latin America and the Caribbean, and (4) Central and Eastern Europe and the New Independent States of the former Soviet Union.

To promote development, USAID works in close partnership with other U.S. government agencies, U.S. business, other developed nations, private voluntary agencies, indigenous non-governmental organizations, international agencies and universities.

A small price to pay for progress

The United States allocates less than 0.5 percent of its federal budget to USAID programs abroad, compared to 17 percent for defense and 21 percent for social security. This translates to approximately $30 per year for the average American taxpayer, or about 60 cents per week. Compared to other developed countries, the United States budgets the smallest percentage of its gross national product to overseas development assistance.

1) Isn't foreign assistance just throwing money away?

Absolutely not. Foreign assistance programs work in America's best interests and are a sound investment in creating the markets of our future, preventing crises and helping advance democracy and prosperity around the globe.

Foreign aid creates U.S. jobs and advances American economic well being. It is far less expensive for the United States to implement development programs and prevent crises than to pay the costs of failed development through military operations, peacekeeping efforts and humanitarian relief.

2) How does foreign assistance help Americans? Shouldn't we just spend the money here at home?

Foreign assistance has helped create some of this country's most dynamic markets for exports, and the trade that has resulted from foreign aid has had payoffs far higher than the initial costs of sending American expertise abroad. Over the past decade, USAID has targeted $15 million in technical assistance for the energy sectors of developing countries. However, as a result of this commitment, and longstanding U.S. efforts to push developing nations toward privatization, U.S. assistance has helped build a $50 billion annual market for private power. U.S. firms are capturing the largest share of these markets, out competing Japan and Germany. America can not afford to give our competitors free run of these rapidly growing economies. Private power generation, which replaces inefficient state-run companies, provides a high rate of return for the United states. For example , in Indonesia, a $3 million investment by USAID in support of privatization of the energy sector, has led to a $2 billion award to a U.S. firm for Indonesia's first private power contract.

Foreign assistance is an investment. It combats global problems that increasingly impact the lives of Americans like the spread of AIDS, environmental degradation and rapid population growth rates.

3) Isn't it true that no countries ever graduate from foreign assistance, and that our aid just perpetuates dependency for the nations we give money to?

Most Americans are surprised when they hear a list of some of the graduates of U.S. foreign assistance programs -- France, Spain, Portugal, South Korea, Taiwan, Italy, Germany and others. Newly prosperous nations like Costa Rica, Thailand, Chile, the Czech Republic and Botswana have graduated from foreign assistance programs within the past few years.

Foreign assistance programs since the Marshall plan have successfully created some of our closest allies and best trading partners. Many of these nations have gone on to become donors themselves. One measure of the success of U.S. foreign assistance programs can be found in South Korea -- the U.S. now exports more to South Korea in one year than we ever gave that country in foreign assistance during the 1960s and 70s.

4) Why don't we just put all the money that USAID gets into the Trade and Development Agency and the Overseas Private Investment Corporation programs?

TDA and OPIC are natural compliments to USAID programs. TDA and OPIC focus on creating export opportunities for American businesses in the near term. USAID focuses on creating an enabling environment for U.S. trade and investment in developing countries in the long term. USAID operates in many countries that are not ready for TDA or OPIC assistance because they lack commercial codes, banking systems and sound public institutions.

USAID is creating the markets of the future for the United States, markets that will be vital to America's economic health ten and twenty years from now. By establishing fair business codes, viable commercial banks and reasonable tax and tariff standards in developing countries, USAID fosters the stable and transparent business standards that U.S. companies, as well as TDA and OPIC, must have to operate in a country. USAID helps create the institutional framework for business that must be in place to attract American investment and trade.

5) Isn't it true that USAID is badly managed and wasteful?

No agency in the U.S. government has been a more active leader in Vice President Gore's National Performance Review than USAID. USAID has undertaken sweeping improvements as part of reinventing government that include: announcing the close-out of over 26 overseas missions; eliminating 90 organizational units in Washington, cutting back 70 senior staff positions; reducing total staff by over 1200; completing an agency- wide reorganization and "right sizing" effort to streamline the agency; introducing reforms to open up USAID's procurement process; reducing project design time by 75%; and developing a new electronic acquisition and procurement planning system that replaces 65 different systems and will standardize terms, eliminate tons of paperwork and expedite contracting.

6) Why does the United States spend so much on foreign aid? Isn't it a huge percent of our budget?

U.S. spending on economic and humanitarian assistance abroad makes up less than one half of one percent of the federal budget. About the same amount is annually dedicated to foreign military assistance. In constant dollar terms, U.S. foreign assistance levels are at their lowest levels in over 50 years. The U.S. foreign assistance spending, when considered as a percentage of gross national product, is the lowest of all major donors.

7) Doesn't the United States carry the heaviest load when it comes to foreign assistance? Why don't other nations help out?

In the 1940s and 1950s this was the case; it is not anymore. U.S. foreign assistance spending makes up only about 17 percent of total donor contributions for development. Japan, despite its small size and smaller economy, dedicates more to foreign aid than the United States. In recent years, France and the Netherlands combined to contribute more to foreign assistance than did the United States.

8) Has foreign assistance accomplished anything?

U.S. foreign assistance programs have a long and distinguished list of accomplishments. Here are just a few examples. More than 3 million are saved every year through USAID immunization programs. Oral hydration therapy, a low cost and easily administered solution developed through USAID programs in Bangladesh, is credited with saving tens of millions of lives. Investments by the U.S. and other donors in better seeds and agricultural techniques over the past two decades have helped make it possible to feed an extra billion people in the world.

Eighty thousand people and $1 billion in U.S. and Filipino assets were saved due to early warning equipment installed by USAID that warned that the Mount Pinatubo volcano was about to erupt in 1991. USAID-sponsored energy efficiency experts working in Almaty, Kazakhstan helped local officials put in place improved systems that drastically reduced pollution and led to more than a million barrels of fuel oil being saved in just a three month period.

9) Aren't we just propping up dictators with foreign assistance dollars?

Just the opposite is true. Promoting democracy and American ideas abroad are central goals of U.S. foreign assistance programs. USAID administrator Brian Atwood has been very clear that he will only work with nations that are good partners in development. Atwood has driven the message home in the last several years by announcing the closure of several USAID programs in countries that had failed to embrace the principals of good governance.

USAID support for democracy has proven very effective. There were 58 democratic nations in 1980. By 1995, this number has jumped to 115 nations. USAID provided democracy and governance assistance to 36 of the 57 nations that successfully made the transition to democratic government during this period.

10) Aren't most Americans opposed to foreign aid?

Recent polls reveal that a majority of Americans think that up to 20 percent of the federal budget is spent on foreign assistance. When told the actual percentage of the budget spent on foreign assistance (less than one half of one percent spent on economic and humanitarian assistance), an overwhelming majority of Americans say that those spending levels must be maintained or increased.

Prepared for the Local Libraries: Global Awareness Project, a
partnership of the American Library Association and Global Learning, Inc.,
with support from the U.S. Agency for International Development

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