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US Non-Security Foreign Aid: The Swamp Of Misguided Good Intentions – Analysis

By

By Dr. Matthew Crosston*

The United States spends approximately 42.4 billion USD per year in foreign assistance. While it is easy to point out that 42.4 billion is actually barely 1% of the overall US budget (4.15 TRILLION USD) and use that figure to try to fight conventional wisdom worry that America spends too much helping other people in other lands solve their problems while not trying to solve its own problems, the real-term reality is that 42.4 billion is a lot of money. Anywhere. To anyone.

It might even be surprising to people to learn that of that 42.4 billion, significantly less than half (16.8 billion USD) is allotted to ‘security.’ Fully 60% of the American foreign assistance budget goes to ‘economic and development’ initiatives all over the world. These initiatives run the gamut of well-intentioned policies, from migration and refugee assistance (2.8 b) to development assistance (3 b) to economic support funds (6.1 b) to global health programs (8.6 b). At face value it is difficult to argue with the theory and philosophy of humanitarian outreach underpinning these financial allotments. But if one begins to scratch below the surface of this humanitarian outreach, layers upon layers of illogic and negligence is revealed. At the very least, the methodology for determining recipients and structures in place for financial oversight seem to be deeply troubled.

This article completely avoids analysis of American foreign aid that is security-based, largely for two reasons. First, as cited above, security-based foreign aid, while getting the wolf’s share of media attention and criticism, is actually far less compared to the more universally praised and justified economic and development funds. Second, while some might find this cynical, there is often a common ‘legal kickback’ mechanism in place with American security-based foreign aid that directly supports the American defense industry. For example, under the current agreement between the United States and Israel, the latter can choose to spend as much as 26% of its security aid on weapons and systems produced within Israel. In essence, a quarter of American aid could be utilized as a direct subsidy to build up native Israeli defense industries. A new agreement, however, comes into effect in 2019 where even that small percentage is eliminated and all American security funds have to be spent by Israel on American defense contractors. This means America has begun to shift this aid-as-defense-industry-subsidy for other countries to its own military-industrial complex. It is, ultimately, destined to be a US governmental welfare program for American defense industries. This is not highlighted so much as a criticism (although it is clear many have issues with this practice), as an acknowledgement that even when American security-based foreign aid is mishandled or used in a way that works against American objectives, it is still ultimately connected to a positive economic purpose back to the United States. The benefit might not be as large or as long-term as the aid is meant to engender, but a benefit nonetheless exists for America no matter what emerges politically and militarily on the ground in these other countries.

There is no obvious direct ‘legal kickback’ explicitly benefiting the United States when it comes to its distribution of economic development-based foreign aid. This means it is arguably more important to watch not only how much money is spent but also to whom does the money go? It is in answering this question that some serious questions and misgivings emerge. Below, the top recipients of American ‘economic and development’ foreign assistance aid were juxtaposed against the respective 2015 Transparency International Corruption Perception Index. The TI Corruption Perception Index ranks 168 countries around the world, measuring the perceived levels of public sector corruption. As TI itself says, ‘public sector corruption isn’t simply about taxpayer money going missing. Broken institutions and corrupt officials fuel inequality and exploitation – keeping wealth in the hands of the elite few and trapping many more in poverty.’ The TI index has up to now been used for evaluating internal processes within given countries, in terms of how domestic institutions and state governance properly (or improperly) represent and protect its people. What this analysis does is tie the CPI directly into the distribution of American economic development-based foreign aid. The reason for this is simple: if a country scores low in terms of public sector corruption, then it is signaling globally that its domestic institutions are structurally engineered to manipulate received foreign aid, especially if it is geared to internal economic development. Arguably, the distribution of such foreign aid should avoid countries scoring low on Transparency International’s CPI. Unfortunately, when it comes to America, the dominant force in distributing foreign aid, this common sense idea is not in play:

TOP RECIPIENTS OF AMERICAN FOREIGN AID DESIGNATED FOR ECONOMIC DEVELOPMENT and CPI rank:

Afghanistan – 166
Pakistan – 117
Ethiopia – 103
Nigeria – 136
Sudan – 165
Kenya – 139 (tied)
Uganda – 139 (tied)
Tanzania – 117 (tied)
Zambia – 76
Mozambique – 112
Ukraine – 130
Democratic Republic of Congo – 147
Malawi – 112
South Sudan – 163
Iraq – 161

It is beyond the scope of this brief analysis to dive into each of the 15 individual cases above. What matters is to note that the AVERAGE Corruption Perception Index ranking of the top American economic development aid recipients is 132 (out of 168). This is horrifyingly low. For those who might be tempted to argue that this makes sense because it is obviously these countries that are in the most need of foreign assistance and guidance, that argument is fatally flawed: when a reminder is given about just what the CPI truly means – structural and institutional prevalence to manipulate, misuse, and exploit opportunities for elite gain – then it is obvious that in these countries all foreign aid inevitably flows through corrupt institutions before having any opportunity to be distributed to the communities most in need. Without strict and relatively oppressive external oversight mechanisms, these monies are de facto destined to be misappropriated or simply brazenly stolen. And studies have long shown the oversight mechanisms in place for the management of American foreign aid is lacking, to be kind.

The unfortunate but unavoidable conclusion is that the majority of American foreign aid, the bulk of which is rarely questioned compared to the more controversial security-based assistance, is currently going to countries structurally engineered at the moment to simply steal it. Perhaps most troubling of all, the current global political environment is focused more prominently on military/security-oriented initiatives and operations. This means it is unlikely any near-term future will witness even an inquiry into constructing a new system for foreign assistance. But a new system is what is desperately needed if the swamp of misguided good intentions is ever going to be drained.

About the author:
*Matthew Crosston
is Professor of Political Science, Director of the International Security and Intelligence Studies Program, and the Miller Chair at Bellevue University

Source:
This article was published by Modern Diplomacy


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Modern Diplomacy

Modern Diplomacy

The Modern Diplomacy is a leading European opinion maker - not a pure news-switchboard. Today’s world does not need yet another avalanche of (disheartened and decontextualized) information, it needs shared experience and honestly told opinion. Determined to voice and empower, to argue but not to impose, the MD does not rigidly guard its narrative. Contrary to the majority of media-houses and news platforms, the MD is open to everyone coming with the firm and fair, constructive and foresighted argumentation.

One thought on “US Non-Security Foreign Aid: The Swamp Of Misguided Good Intentions – Analysis

  • November 1, 2016 at 4:26 pm
    Permalink

    eurasiareview is doing a great job. I usually follow project-syndicate by Bill Gates. Now, I am also following this. The problem is no one in Decision Making positions watch either one and manage our Globalization for the best of the Citizens of this Planet.

    There are only two items that is a major cause for Western Democracies:

    1) BAD Governance – more than 100,000 of them creating a mess everywhere.
    2) Globalization without the support to people. It is a technical thing and the Decision Making people do not know what to do…hence the Braxit.

    There are others…like do a serious Advanced Industrial Ecosystems like or better than China has since 1983.

    BUT, I bet you, no one in the Decision Making Group will read this….let alone do something GOOD.

    Reply

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