| FOREIGN AID During
the Cold War, America spent enormous sums on foreign aid, in part to combat Soviet
influence around the world. That purpose no longer exists, and there is clear evidence
that economic and development aid does little to spur economic growth and prosperity in
developing countries. The United States should:
 | Eliminate U.S. government economic and development assistance to
developing countries and emphasize instead that trade, economic freedom, and foreign
investment are the means of genuine economic development. |
| Abolish the Agency for International Development (AID) and vest
remaining foreign aid programs in the State Department. |
| Continue military assistance when it serves U.S. interests. |
| Continue disaster aid and humanitarian relief on a case-by-case
basis. |
| End most food aid programs, retaining only emergency food aid. |
| End U.S. government membership in and financial support of
international aid organizations that do not serve U.S. interests. |
FOREIGN AID AND THE NATIONAL INTEREST
America's $12 billion-a-year foreign aid program is coming under
increasing scrutiny not only from the American public, but also from Congress. Although
the total amount of foreign aid is a relatively small part of the federal budget, skeptics
argue that the program is a waste of the taxpayer's money. Indeed, there is little
evidence to support the contentions of proponents who argue that foreign aid is always
vital to America's national interest. Moreover, even less evidence exists that this money
actually helps alleviate poverty in less developed countries.
America's foreign aid program consists of three major projects:
| Military and security assistance. This portion of the foreign aid
program is de- signed to promote America's national security abroad. It consists of such
pro- grams as anti-narcotics efforts, joint military training exercises between U.S. and
foreign forces, and grants to foreign countries to purchase U.S. military equipment and
accounts for about 25 percent of the overall foreign aid budget. It is usually the most
effective part of the U.S. foreign aid program. |
| Humanitarian and disaster relief assistance. This program is designed
to aid victims of natural disaster and prevent mass starvation. It accounts for some 15
percent of the foreign aid budget. |
| Economic and development assistance. This aid is supposed to promote
economic growth in less developed countries and makes up some 60 percent of the foreign
aid budget. It is always the least effective part of the U.S. foreign aid pro- gram. |
The Clinton Administration argues that foreign aid is still vital to
support America's interests abroad. Skeptics questioned the merits of the program even
during the Cold War. However, there is little evidence that even then the U.S. received
its money's worth for the foreign aid dollars it sent overseas. For example, during the
Cold War, the U.S. spent foreign aid dollars in such poor countries as Ethiopia, India,
Peru, Somalia, and Tanzania. All of these nations were recipients of U.S. foreign aid for
more than 35 years, but their support for U.S. interests was at best question- able....
THE FAILURE OF ECONOMIC AID
There is abundant evidence that the U.S. foreign aid program does
little to sup- port America's global interests. But there is even more evidence that it
does even less to help countries develop economically. In fact, the data show that foreign
aid often does more harm than good. Consider the following:
| Of the 64 countries receiving U.S. foreign aid for more than 35
years, many as long as 50 years, 36 are no better off today than they were before
receiving such aid. [Figures based on an analysis of long-term recipients of foreign aid
and the per capita GDP in 1965 and 1992 expressed in constant 1987 dollars. Those
countries deemed no better off today than they were in 1965 had growth rates in their per
capita GDP of 1 percent a year or less during the 27-year period from 1965 to 1992.] |
| Of these 36 countries, 21 actually are poorer today then they were in
1965 [Brigid McMenamin, "Environmental Imperialism," Forbes, May 20, 1996, p.
124.].... |
....Development aid should be abolished. It has the potential to do
great harm to a recipient country and is not necessary for development. However, if the
U.S. development aid program continues, such aid should be given only to those countries
advancing their economic freedom; that is, those developing countries which are
privatizing industries, lowering taxes, protecting private property, welcoming foreign
investment, and undertaking similar pro-growth economic policies. Such a U.S. development
aid policy would help ensure that development aid does not subsidize statist and ruinous
economic policies in recipient countries. [See Johnson and Sheehy, The 1996 Index of
Economic Freedom.]
Source: This reading has been excerpted and
somewhat rearranged from Restoring American Leadership: A U.S. Foreign Policy and
Defense Blueprint, published by The Heritage Foundation in 1996.
http://www.
nationalsecurity.org/heritage/nationalsecurity/blueprint |