U.S. foreign aid hinders more than it helps

07 March, 2011 | By DOUG BANDOW (The Japan Times)
--------------------------------------------------------------------------------
    SEATTLE — The United
    States will run up a record
    $1.65 trillion deficit in
    2011. Yet Washington
    keeps subsidizing foreign
    governments. House
    Republicans have targeted
    foreign aid. This year the
    State Department would
lose 16 percent of its budget; humanitarian aid would drop by 41
percent.

Secretary of State Hillary Clinton warns of catastrophe: "Cuts of this
magnitude will be devastating to our national security, will render us
unable to respond to unanticipated disasters and will damage our
leadership around the world." Moreover, the proposed reductions
will be "detrimental to America's security."

Even some conservatives stand with Clinton on this issue. For
instance, Jennifer Rubin, The Washington Post's in-house blogger
on the right, termed Sen. Rand Paul, a Kentucky Republican, a
"neo-isolationist" for proposing to cut what amounts to international
welfare.

Despite Clinton's extravagant claims, there is little evidence that
foreign assistance advances U.S. interests. The U.S. provided some
$30 billion to Egypt over the last three decades, but the country
remains poor and undemocratic. Indeed, aid to the corrupt
Mubarak dictatorship helped turn Egypt into popular volcano.

Pakistan has been on the U.S. dole and performing disastrously for
decades. The waste, inefficiency and corruption surrounding
humanitarian projects in Afghanistan and Iraq are legendary. What
of the $27 billion in so-called development assistance requested for
next year? These outlays have had no discernible impact on Third
World economic growth.

No doubt some projects in some countries have provided some
benefits. But there is no correlation between aid and growth.
Indeed, generous financial transfers to corrupt dictators often have
impeded necessary reforms.

Aid advocates now claim to do better. President George W. Bush
created the Millennium Challenge Corporation to reward
governments with good policies. Yet, reported the Washington
Times last August, the agency "is giving billions of dollars to nations
upbraided by the State Department for corruption in government."

The World Bank also has emphasized better governance. However,
reported Tom Porteous, the London director of Human Rights
Watch, "multibillion dollar programs funded by the World Bank and
others have been politicized and manipulated by the Ethiopian
government and are used as a powerful tool of political control and
repression." Aid incentives are all wrong.

The international dole has created long-term dependency and
discouraged reform. Even humanitarian aid has a disappointing
record. Six months after the earthquake in Haiti, reported the Wall
Street Journal, "the process of reconstruction appears to have come
to a halt." U.S. "Food for Peace" shipments, used to dump farmers'
domestic surpluses, are notorious for ruining local farmers and thus
undermining local production. This problem continues in Haiti.

On returning from a private aid mission, Don Slesnick, the mayor of
Coral Gables, Florida, complained: "We were saddened to see rice
bags travel no more than 20 (meters) from the gates of the
distribution site before ending up in the back of a pickup truck
presumably headed for the black market. To our further dismay, we
returned home to read news stories that those very same donations
were undercutting Haitian rice farmers who needed income to
support their own families."

Worse is Somalia. Reported the New York Times last year: "As
much as half the food aid sent to Somalia is diverted from needy
people to a web of corrupt contractors, radical Islamist militants and
local United Nations staff members."

Two decades ago Michael Maren worked with private aid
organizations in Somalia and concluded: "Separately we'd arrived at
the conclusion that the relief program was probably killing as many
people as it was saving, and the net result was that Somali soldiers
were supplementing their income by selling food, while the
[insurgent force] — often indistinguishable from the army — was
using the food as rations to fuel their attacks into Ethiopia."

Washington and other industrialized nations, like Japan, should
reconsider the aid business. Financial transfers rarely are necessary
for the West's defense. The Cold War is over and America's allies,
including regional powers Israel and Turkey, should have graduated
from U.S. assistance years ago.

Most Third World nations are tangential at best to American or
allied security. While it's harder to criticize humanitarian aid, private
money spent by private organizations is the best way to help those
in need around the world.

As for economic development, officials in wealthy industrialized
nations should focus on improving their own economic policies and
easing access of other nations to the international marketplace.

Despite foreign aid's abysmal record, the Obama administration
continues to back the program. Clinton should listen to her own
rhetoric: "It's time to retire old debates and replace dogmatic
attitudes with clear reasoning and common sense."

One of those dogmas is the assumption that foreign "aid" acts as
assistance rather than hindrance. With America drowning in red ink,
Washington must cut unnecessary programs. So must its friends and
allies. Misnamed foreign aid is a good place to start.

Doug Bandow is a senior fellow at the Cato Institute. A former
Special Assistant to President Ronald Reagan, he is the author of
"Foreign Follies: America's New Global Empire" (Xulon Press).

-------------------------------------------------------------------
Doug Bandow is a senior fellow at the Cato Institute. A former
Special Assistant to President Ronald Reagan, he is the author of
"Foreign Follies: America's New Global Empire" (Xulon Press).

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