Episode 115: Foreign Aid

On today's episode: What is foreign aid, and how much money does the U.S. spend on it? Is it purely humanitarian, or is it strategic? And how do we know if foreign aid actually works? Addressing these issues with us is Brian Atwood, senior fellow at Brown University’s Watson Institute and former Administrator of USAID. 

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Virginia Prescott: [00:00:00] I'm Virginia Prescott and this is Civics 101, the podcast refresher course on the basics of how democracy works. Before we begin today's episode, a quick reminder for teachers and students. The deadline is fast approaching for our student contest. The winning student or students will coproduce a Civics 101 episode on a topic of their choosing. You can go to Civics 101 podcast dot org slash contest for details. OK, onto the show. Today: Foreign aid.


[00:00:51] The United States spends something to the tune of 40 billion dollars a year to aid other countries. That's more than any other nation spends and while only about 1 percent of the federal budget that's not pocket change. So what exactly are we spending all this money on and why are we doing it. Joining me is Brian Atwood senior fellow at Brown University's Watson Institute. He's a former administrator of the U.S. Agency for International Development commonly called USAID. Brian welcome to Civics 101.


Brian Atwood: [00:01:21] Thank you very much Virginia.


Virginia Prescott: [00:01:22] So what exactly is foreign aid?


Brian Atwood: [00:01:25] Well there are two aspects of it. Perhaps the most important is the long range aspect which is to help others help themselves. It's called development assistance or development cooperation.


[00:01:36] And the other aspect of it is humanitarian relief. Humanitarian relief basically saves lives after earthquakes are natural disasters and or conflict. And so a lot of people sort of conflate the two and say it's all humanitarian and in one sense it is but the development aspect is has a mutual benefit not only for the country we're helping but also for us because it brings stability that brings some degree of prosperity hopefully it solves transnational problems. It contributes to our national security. So there's no question that you can argue that the American taxpayer benefits from our foreign aid program just as the recipients do.


Virginia Prescott: [00:02:23] So there are national security or strategic goals and also humanitarian strategic goals. Have I got that right?


Brian Atwood: [00:02:30] That's right. The humanitarian aspect of course has become much larger in recent years because of the increase in population the increase in natural disasters some of it related to climate change some of it related to human conflict in these poor countries which is one of the aspects of poverty that cannot be denied there. When you are living on the edge the tendency is to to associate with your ethnic group or your religious group and to manifest your concerns by taking it out on someone else. So the preventive aspect of foreign aid by investing in helping these people see a better life where they live also contributes to the prevention of crises that would later involve our military possibly.


Virginia Prescott: [00:03:27] How roughly does that breakdown monetarily, economic development aid and versus security aid?


Brian Atwood: [00:03:34] Well I think the economic development aid is security if you look at it from the longer perspective President Bush was the first to basically announce that we had a 3-D national security policy which means defense diplomacy and development.


[00:03:53] And so to the extent that you're preventing crises in the long term contributing to stability and prosperity you're basically contributing to our national security. So all of it is really can be argued in that sense is national security. The humanitarian side these situations will get much worse if people are in conflict as we now see in Syria. They're bound to want to leave and go to other countries they cross the Mediterranean they come into Europe they destabilize European political systems they create a reaction which is the populist nationalist reaction and the anti immigrant feelings in Europe which don't help anyone.


[00:04:41] And so trying to keep these people happy at home is a very important aspect of national security.


Virginia Prescott: [00:04:48] Which Countries Get foreign aid?


Brian Atwood: [00:04:52] Well mostly the poorest countries. It's the it is true that some of the middle income countries that are now doing well economically still have huge pockets of poverty but they are increasingly able to contribute to development themselves. And this is I think an important aspect for your listeners which is what I would call burden sharing that over the years the United States which took the lead in the Marshall Plan and with the Point Four program that President Truman announced we were the only ones providing foreign aid in the early days mostly in Europe. But nowadays there are some 27 countries 28 countries that are called donors that are contributing to the approximately 150 to 160 billion dollars of official development assistance that's being provided. So these are obligations that the global community feels that it has not only to a more stable and peaceful world but also to the interests of the individual countries.


Virginia Prescott: [00:05:59] Which countries do you get the most aid from the U.S?


Brian Atwood: [00:06:02] Unfortunately it's countries like Afghanistan and Iraq. Israel gets resources as well not as much anymore because their economy is doing very well. These are countries that are not necessarily the poorest but they're the most conflict ridden. And there is a need to move in not only with humanitarian assistance but also to try to stabilize areas after they have after the war is over. And that's not over yet in Afghanistan but to the extent that we can help the Afghan government strengthen itself then maybe we can bring our troops home at some point in time.


Virginia Prescott: [00:06:49] You mentioned the Marshall Plan this was the plan to rebuild Europe and really designed to blunt the rising in France of communism that time. How is the purpose of foreign aid shifted since then?


Brian Atwood: [00:07:02] Well in those days we were basically helping countries that had been democracies that had been successful economies but had been sort of operating within their own borders. And the purpose of the Marshall Plan was to encourage the integration of Europe so that we wouldn't have any more wars. We had two world wars basically started in Europe. And so the idea was to not only provide the resources they needed to get back on their feet but also to insist that they create industries that were broad enough to go across borders and the trade rules and and the rest that would strengthen Europe as a whole and the European Union was one result. NATO is another result.


[00:07:47] But the purpose of foreign aid today is really to look at the poorest countries in the world and this was the idea that President Truman had which came about at the same time as the Marshall Plan. It was the fourth point in his inaugural address which is that Americans have an obligation as a rich country to help poor people. And that was sort of a reflection of American values very much a reflection of the values of small town American by the name of Harry Truman. But it's certainly something that we can be proud of it's part of our so-called soft power. It is. It is. It uses people maybe like yourself Virginia. I know we're involved in some USAID programs but also universities and non-governmental organizations even American corporations and others that that can contribute and have done over the years. It certainly helped the standing of the United States in the world to a very large extent.


Virginia Prescott: [00:08:50] Foreign aid has been a political football tossed back and forth for some time. Now some economists would argue that foreign aid does not actually spur economic development in countries. Others argue that it does. So do we have evidence that the money being spent is really making a difference?


Brian Atwood: [00:09:09] You have to be thinking about the transnational problems that impact on your town for example infectious diseases in the recent weeks here and I'm sure in New Hampshire as well you've had some really bad weather a lot of that is attributable to climate change.


[00:09:24] These are transnational problems and the only way to solve them is to help for example countries that don't have a health care system developed so that they don't have diseases like HIV AIDS and ebola or malaria or dengue disease that actually comes into the United States the largest budget within the U.S. government is the military and increasingly we're using the military. Just think of where we've been using it recently. I mean in Iraq and Afghanistan very poor countries where the situation becomes so dire that there's no other solution. And that cost a lot more money than the less than 1 percent that we spend on foreign aid.


Virginia Prescott: [00:10:07] So what I'm hearing from you Brian is that the effects are not necessarily easy to measure.


Brian Atwood: [00:10:12] They're easy to measure in some fields. We know the number of people that receive at least a primary education we can count the number of people that have been inoculated. It is a lot more difficult to understand what the impact of contributions of foreign aid are to the development of an economy. But if you are basically working on the micro economic systems such as a customs system the tax system the banking system the export import laws of a country you're helping that country develop the systems that it needs to sustain economic growth. And it's more difficult to know whether or not it's because they discovered oil or because they have microeconomic systems that are working and functioning. But clearly there is a benefit to these countries derived from the knowledge and the resources they receive in foreign aid.


Virginia Prescott: [00:11:09] But how do you Brian would think that U.S. aid could be improved in order to make that more effective. Well I'd like to see USAID working in the poorest countries. I do think that it's time now for the middle income countries to carry their own load.


[00:11:27] I I think that we should be working in fragile states that are likely to break apart and go into civil war or to send refugee flows into the Western world that will be terribly would be bad for everyone. So I think the focus should be changed. I I do think that we're working in too many middle income countries that could basically fund their own programs where their tax dollars. And there's a real movement for what they call domestic resource mobilization to help countries develop tax systems that are efficient and non corrupt so that they can use these resources for their own development.


Virginia Prescott: [00:12:13] The Trump administration has suggested cutting foreign aid funding based on support for the U.S. that measured largely by votes in the U.N.. Is there any precedent for this linking U.S. aid to pro quote unquote pro U.S. votes in the U.N?


Brian Atwood: [00:12:33] Oh it's been done. People who really don't understand the purpose of foreign aid or the benefits over time have been tempted to be angry because someone voted the wrong way on a particular issue at the United Nations and this certainly seems to be the case today. President Trump is not known for his knowledge of foreign policy or or development policy. And so it's too tempting to send a tweet out saying well if they're going to vote against us it's. But foreign aid isn't a gift it isn't a gift to another country it's has mutual benefits and we've got to think about it in those terms. It doesn't do any good to get angry and say you know we're going to tie this to your vote so your posture on a particular issue.


Virginia Prescott: [00:13:23] What would slashing aid mean for the U.S. and the countries to which we provide aid?


Brian Atwood: [00:13:30] The one thing one thing it means is that other countries are going to say OK if the United States isn't going to be a leader then we're not going to increase our foreign aid programs. I mean you mentioned before that the United States provides more aid than any other country but we provide less as a percentage of our gross domestic product than any other country by far. If you look at that list of donors that I mentioned earlier we're at zero point one percent whereas the U.N. standard for foreign aid is zero point seven percent of your GDP per capita. So the United States hasn't really been the number one donor given our large economy. And there are so many benefits that I'm not suggesting that we go to zero point seven percent because that would be a 10 fold increase in our foreign aid program. I'm just suggesting that what we do now is adequate and it is adequate to encourage others to share the burden.


[00:14:30] And if the overall amount of money that is being put into official development assistance falls from its current 150 billion dollars to under a hundred or whatever it's going to have a major impact on the seven point five billion people that live on this earth.



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