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In my earlier Where We Send Money post, I collected some facts about where the US government is sending aid, but didn’t say too much about those facts. Here are a few thoughts.

USAID says that we are sending out foreign aid in order to further US policy interests and improve the lives of people in the developing world. However, the effect (and I believe the intention) of much of our foreign aid is really to subjugate developing countries to US business interests. There’s much more on this subject in the excellent book Confessions of an Economic Hit Man. In this book, John Perkins describes how he and others created totally fake economic analyses and used covert threats to convince developing countries to accept loans from the US. They spent the money hiring US companies to build unnecessary infrastructure, and the countries ended up with these “improvements” in exchange for large quantities of debt. The vast majority of very poor people in these countries received no benefit at all from the “aid”, and became even worse off when their governments were later forced to adopt new policies (such as cutting budgets for education and public health care) in order to put more money into paying off their debts.

I do not want to say that none of our foreign aid is going towards helping people — certainly, if we send food to hungry people in Africa, some of the food will likely go to people who would otherwise have nothing to eat. However, I believe that not much of the foreign aid money is actually helping people, and that this trend needs to be reversed.

So, I will continue with my research and see if I can more fully substantiate my beliefs. Stay tuned!

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Much of the assistance money that the US government sends out to the world goes through an agency called USAID.Their web site has a wealth of information on who we are sending money to, and why. Here are some interesting facts. Note that I have used the abbreviation M for millions, and G for billions (i.e. metric abbreviation for Giga, or 10 to the 9th power), and the numbers in [brackets] are references (see list below).

• The two goals of US foreign assistance are to further US foreign policy interests (democracy and free markets) and to improve the lives of people in the developing world [1].
• USAID works in the following areas: Agriculture, Democracy & Governance, Economic Growth & Trade, Environment, Education & Training, Global Health, Global Partnerships (which means: trying to get private individuals and corporations to give foreign assistance), and Humanitarian Assistance. [2]
• Non-governmental entities (American citizens and companies) give four times as much foreign assistance money as the US government. [3]
• The USAID annual budget is about 0.5% of the total US government budget [1], which is to say, their budget request was around $7.6 G in 2005 [4].
• That budget number seems strange to me, since they apparently spend more than that on aid. For instance, in 2004 USAID programs sent out $11.2 G in loans and grants. Other agencies also spent money on overseas assistance, including the Department of Agriculture (food aid primarily), the State Department (HIV/AIDS, anti-terrorism, anti-narcotics), and the Peace Corps, for a total of $26.6 G in 2004. [5]
• In 2004, the US government sent aid to the following regions (some of the total was “unspecified”, which is why the numbers do not add up, and I’ve also specifically listed countries that received at least $100 M in aid): [5]
  • Middle East: $8.5 G (Iraq $6.4 G, Egypt $664 M, Israel $555 M, Jordan $400 M, West Bank $137 M)
  • Sub-Saharan Africa: $3.9 G (Ethiopia $433 M, Sudan $474 M, Uganda $222 M, Kenya $176 M, Liberia $138 M, South Africa $126 M, Nigeria $125 M, Congo $119 M, Angola $118 M, Tanzania $101 M)
  • Latin America & Caribbean: $2.2 G (Colombia $648 M, Peru $275 M, Bolivia $178 M, Haiti $158 M)
  • Asia & Oceana $2.8 G (Afghanistan $1.5 G, India $172 M, Philippines $168 M, Indonesia $157 M, Pakistan $155 M)
  • Europe & Eurasia $2.4 G (Russia $1.1 G, Serbia $235 M, Kosovo $110 M, Kazakhstan $107 M)
• The top 10 countries (by total dollar amount) receiving US foreign assistance in 2004 were (in order): Iraq, Afghanistan, Russia, Egypt, Colombia, Israel, Sudan, Ethiopia, Jordan and Peru [5]
• The top 10 countries (per capita) receiving US foreign assistance were: Marshall Islands ($775 per person), Palau ($742), Micronesia ($571), Iraq ($268), Israel ($92), Jordan ($76), West Bank/Gaza ($63), Djibouti ($54), Afghanistan ($53) (see Foreign Aid Spreadsheet) [5,6]

References:

1. About USAID page
2. USAID Our Work page
3. USAID Global Partnerships page
4. USAID 2005 Budget Summary page
5. USAID “Greenbook” (Overseas Loans and Grants, Obligations and Loan Authorizations Report)
6. US Census Bureau’s Global Population Profile, 2002

Note: A new version of the spreadsheet is now available.

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My main reason for starting this blog was to collect some thoughts and facts about foreign aid, though I will probably put some unrelated posts in the blog as well.

Basically, I have been generally dissatisfied for many years with the effects on the world of US foreign policy and foreign aid, and suspicious about our government’s motivations in that arena. At the end of 2005, I read a very thought-provoking book about US foreign aid policy, called Confessions of an Economic Hit Man, by John Perkins, which had some startling stories in it that confirmed my suspicions about what was really going on. Soon after reading that book, I went on a six-week trip to Nicaragua, where I saw some of the effects of US foreign aid, as well as foreign aid from other countries to Nicaragua. This was not my first trip abroad or to the less-well-off parts of Latin America, so nothing I saw was really new to me. However, this time I came back from my travels filled with the desire to do something: to make a change in the way the US, World Bank, and related agencies send foreign aid to Latin America (and probably to the rest of the developing world as well, though I know less about that).

But what can one person do? I have no intention (or chance) of becoming a high-ranking official in the cabinet, so I probably cannot have much direct effect on US foreign aid decisions. However, I have the sense (or at least hope) that if people in the US knew what was really going on in the arena of foreign aid, they would want to change our policies, and if enough people wanted to change our policies, eventually the politicians would have to listen to them and do something. So, my thought was that if I were going to try to educate people about what was going on, the first step would be to have some coherent information to give them, and that is what I plan to gather in this blog. It’s a small first step, and maybe it will not change anything, but it is, at least, something that is worth trying. We’ll see how it goes.

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