GENEVA — America has always thought of itself as a generous country, and it is.
Some Americans are even convinced that the U.S. has been overly generous in carrying the lion’s share of the burden in provding development aid to poorer countries, and many wonder whether it can afford to continue to give so much amid the global economic downturn.
But when aid dollars are considered on a per capita basis, the truth is America ranks at the bottom of the list of the wealthiest countries in the world. And in recent years an international campaign has been mounting for the wealthiest countries, particularly America, to dedicate a higher percentage of their gross national income to aid for the develping world.
So one of the deceptively difficult foreign policy issues that Barack Obama will face as president is what to do about all this. If the Obama administration seeks to live up to the international call for a higher percentage of wealth to be dedicated to aid for development, it will need to begin by helping Americans develop a more realistic image of themselves in the world.
And it will have to encourage them to give more development aid at a time when the country is hurting in a way it has not since the Great Depression.
Some advisers close to the Obama administration are going so far as to recommend that a cabinet level post— a secretary for international development — be created to focus purely on development issues.
So how do we understand the ranking system that so contravenes America's perception of itself?
First of all, the U.S. does provide a huge amount of aid. It provides just over $22 billion dollars in official development aid—just under a fourth of the total amount of world development aid. And it gives more in total dollar terms than any other country in the world.
As Robert Glasser, Secretary General of CARE International, put it, “that is because it has the largest economy.”
But the Center for Global Development’s (CGD) latest index on actual commitment to development, ranked the U.S. 17 out of 22 countries — just behind France, and barely ahead of Switzerland. The CGD, a non-profit think tank dedicated to monitoring aid for developing countries, bases the ranking on how much the wealthy countries help poorer countries build prosperity, good government and security.
A major criticism of U.S. foreign aid is that Washington ties its help to sales of U.S. goods and services. There is also cynicism that it bases its decisions on whether to provide the aid on geopolitical interests, dumping billions on countries like Iraq and Afghanistan that are simply too politically unstable for long range development to have much of a chance.
Another complaint is that American aid donations are all too often tied to earmarks connected to domestic politics.
Michael Keating, Executive Director of the Africa Progress Panel, a new initiative chaired by former UN Secretary General Kofi Annan, points out that financial aid is only one part of a basket of initiatives needed for genuine development. America is frequently criticized for giving with one hand, and taking back with another.
“If you are giving millions of dollars in aid, but cut a country off economically by creating prohibitive tariffs or blocking immigration and remittances,” Keating says, “You are defeating your purpose.”
At the Millenium Summit in September, 2000, the U.S. and other wealthy countries promised to increase their aid contributions to 0.7% of their gross national incomes. Virtually the only countries that have matched that kind of commitment are Norway, Sweden, Denmark, Holland and Luxembourg. The U.S. is currently commiting a minimal 0.16% of its gross national income to development. The Bush administration actually doubled development aid during its eight years in office, and made important contributions to fighting HIV/AIDS, but a sizeable chunk of the development funding has gone to Iraq and Afghanistan.
The financial crisis has also had a perverse impact. The crisis has sent the dollar soaring in relation to other currencies, which have effectively dropped in value. Nick Van Praag, director of external relations at the UN’s High Commissioner for Refugees, notes that only a fourth of the contributions to the UNHCR’s budget is in U.S. dollars, while more than 50% is in euros, British pounds and Scandinavian kroner. Even though the UNHCR’s dollars are gaining in value, it is losing much more on the relative decline in other currencies.
“If every country contributes the same amount that it did last year,” says van Praag,”We will have $100 million less than we did last year.”
The UNHCR is encouraging member countries to step up and contribute more, but it is unlikely that the pleas that will result in UNHCR maintaining the same fundings levels as before.
At stake is not merely a budget item, but actual life and death issues for millions of people.
Peter Piot, the outgoing head of UNAIDS, points out that a cut in current aid to provide retroviral drugs to some two million HIV/AIDS sufferers, constitutes a death sentence. CARE International’s Glasser says that that is what nearly happened when one major donor announced that it was pulling out of a CARE program on AIDS. Luckily CARE’s country director was able to find alternative funding.
An excuse often made for the poor showing of U.S. official aid is that a large proportion of American development aid comes directly from public donations channeled through privately operated non-government organizations such as World Vision, Save the Children and CARE. The Gates Foundation, which has led the fight against HIV/AIDS in many countries is a prime example.
“The social pact is much more privatized in the U.S. than it is in European countries,” says Nick Stockton, Executive Director of the Humanitarian Accountability Project. “In Europe,” Stockton says, “the assumption is that the parliamentary process will allocate your money from taxes on your behalf.”
The process of turning the responsibility for international development over to privately run NGOs reached its peak under Ronald Reagan.
While there are a number of arguments for having NGOs do a chunk of the work, but the effect has been to separate some of the most powerful efforts by Americans from any visible connection to the U.S. government. As a result, says CARE International’s Glasser, “America’s moral capital is punching way below its weight.”
As the combined forces of population explosion, climate change and diminishing resources increase, development aid is beginning to be seen as much of an issue of security and international stability as one of generosity. Many Europeans fear that a cut in development funding will lead to a new flood of immigration from the poorest countries. Terrorism is another threat. “It is a sense of injustice, rather than impoverishment, which gets people to risk their lives,” says Keating, “but it is when economic development is so unequal, that that sense of injustice arises. “
While poor people don’t automatically turn into terrorists, intense poverty provides a reservoir of potential volunteers, who are disaffected, have little to lose, and who are easy for terrorists to manipulate. UN officials in Geneva are already talking about a crescent of crisis that stretches from Pakistan through the Gulf and across to the Mediterranean. With the attack in Mumbai, that crescent is extending into India.
The irony about American foreign aid is that much of it has been justified as enhancement of national security and yet the way it has been carried out has seemed to have the opposite effect. Tying aid to political or military objectives, such as the war in Iraq or Afghanistan, has made the rest of the world suspect our motives. Trying to involve the Pentagon in aid projects has had an even more damaging effect on America’s prestige.
There is increasing concern also that there is no clear strategy or set of priorities underlying American giving. USAID, which previously managed much of the major U.S. foreign assistance operations, has been reduced in staff and budget by nearly half. Much of the legislation directing U.S. aid dates back to the 1960s and the cold war.
The world has changed dramatically since then, but successive administrations have failed to keep pace. With that in mind, experts at one end of the spectrum are recommending that a cabinet level post— a secretary for international development — be created to focus purely on development issues. Britain has already gone that route as has Norway. With the financial crisis still not resolved, there has been speculation that Obama may have to spend his first year in office simply trying to restructure and focus U.S. goals and priorities for foreign assistance, before increasing the amount of money that actually goes into the system.