President Donald Trump has pledged to swing his budgetary axe at U.S. foreign aid, with cuts and freezes in various areas of foreign spending. One CNN commentator said this decision “sends an icy wind through the corridors of humanitarian agencies around the world.” But the President and American people have a right to examine where their taxpayer dollars go and how they’re spent.
Foreign aid shouldn’t merely make Americans feel good; it must be justifiable, and Americans should get their money’s worth. The U.S. has a right to attach transparency and accountability to each dollar its gives.
In his speech before the Joint Session of Congress, President Trump said, “We spend $6 trillion in the Middle East, and we have potholes all over our roads.” He was speaking in broad terms mostly about military spending, but whether you like Trump or not, his remarks reflect Americans’ frustration. They are wary of U.S spending abroad and want to know what they got in return for the $43 billion they spent on foreign aid in 2015.
My native Afghanistan ranks as the biggest beneficiary of U.S. aid by far, when you combine economic and military assistance. It’s clear the United States aims to win hearts and minds with its generosity. But as a U.S. government contractor working in Afghanistan for the last eight years, I have seen runaway spending but no significant positive change.
The U.S. has thrown more than $700 billion into the Afghan military quagmire during the past 16 years, according to the Congressional Research Service. What has that bought? Increased corruption and no tangible results, according to the watchdog agency Comparative International Governmental Accounting Research. Security is worse than it was in 2001, when the U.S. overthrew the Taliban.
John Sopko, inspector-general for the Afghanistan reconstruction effort, said the huge influx of foreign assistance since 2001, paired with poor oversight and an ill-advised willingness to work with unsavory characters, created a situation of “endemic corruption” that was an “existential threat” to the country.
U.S. spending in Afghanistan has become a bonanza for big contractors, the military-industrial complex and their Afghan accomplices.
A recent analysis published in The Economist leads to the conclusion that foreign aid is most effective when spent on well-governed, albeit poor countries – but that isn’t where it always goes.
Foreign aid certainly helped transform South Korea and Taiwan into free-market success stories, and it also helped vanquish the scourges of smallpox and polio. These positive results encourage nations to give more handouts to the needy.
In 2012, Western countries gave $1.17 billion to Malawi, which could have made a big impact on the small African country. But within a year, corrupt officials, businessmen and politicians pinched at least $30 million from the Malawian treasury. A bureaucrat investigating the thefts was shot three times (he survived, somehow). Germany said it would help pay for an investigation; later, burglars raided the home of a German official and stole documents relating to the scandal.
Aside from waste and corruption, foreign aid creates a culture of dependency. Most would agree that donating money to a good cause is helpful, but in some cases, foreign aid has undermined local economies and prolonged wars.
A 2005 United Nations report called for the doubling of foreign aid to poor countries as a means to reduce poverty, yet one year later, the Nobel Peace Prize was awarded Muhammad Yunus, a for-profit banker who gave loans, rather than aid, as a means of change. His policy was that “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.”
He was following in the footsteps of the late economist Peter T. Bauer, who wrote, “Development aid, far from being necessary to rescue poor societies from a vicious circle of poverty, is far more likely to keep them in that state ... Emergence from poverty requires effort, firmly established property rights, and productive investment.”
“It’s very intuitive,” said Arvind Subramanian, economist and advisor to the Indian government. “More resources means more money for investment and, therefore, more growth … But I think certainly one can say that there is no compelling evidence that aid actually does promote growth.”
Instead of raining cash on a developing country, the U.S. could offer more scholarships to students. The lack of an educated and skilled populace is a main component of dependency. Imagine if that $700 billion already spent by the U.S. in Afghanistan – instead of going toward weapons and corrupt contractors and administrators – had educated Afghan students who could be utilizing their skills right now to build their economy and country.
If President Trump’s populist movement brings any benefit at all, it might be his businesslike approach to a problem: if the way we handle foreign aid isn’t working, try something else.