U.S. foreign aid is not well understood, to put it mildly.
It is an important tool in achieving our objectives in our relations with other nations. Any benevolent or altruistic motives are secondary.
But the public highly overestimates its costs to the Treasury and misunderstands its limitations as a foreign policy tool. So it always is controversial. Such controversy comes to the fore in situations like the ones we face in Egypt and Afghanistan. It thus bears some explanation.
The aggregate number, about $55 billion for economic and military assistance combined during fiscal year 2013, sounds big. But that is only 1.5 percent of all federal spending, and only one-third of 1 percent of gross domestic product. Yet, surveys repeatedly show the general public estimates that foreign aid makes up about a third of the federal budget.
At the height of the Marshall Plan of assistance to Europe after World War II, aid was 12 times as great a proportion of GDP, and during the Cold War 1960s, four times.
Comparing aid to other major spending programs provides additional context. Total defense spending is 12 times, Medicare nine times and Social Security 15 times as much as that for aid.
Where the money goes has varied over time. The concentration of recipients follows foreign policy priorities. In the decade after WWII, most went to Western Europe. Once Fidel Castro came to power and scared us about communist influence in Latin America, large amounts went to that region.
As the Vietnam War ramped up, we spent a lot on that nation and gave substantial amounts to other Southeast Asian nations deemed vulnerable, including the Philippines, Indonesia and Thailand. South Korea and Taiwan got substantial funds due to their front-line status against China and North Korea. The same was true for Turkey and Iran (under the Shah), both of which had long borders with the Soviet Union.
Over the past four decades, the focus has shifted to the Middle East, principally Israel and Egypt, and, more recently, to Southwest Asia, largely Iraq, Afghanistan and Pakistan.
Since the 1977 Camp David agreements that ended open belligerence between Israel and Egypt, those countries have gotten large annual payments, essentially bribes to remain at peace. For many years, aid to Egypt alone exceeded that to all the rest of Africa combined. Right now the top five are Afghanistan, Israel, Iraq, Pakistan, and Egypt.
Aid to these countries, adjusted for inflation, has declined over time, but continues in the proportion of two-thirds to Israel and one-third to Egypt. Because Egypt’s population is so much larger, the per capita amounts are about $400 for Israel and $18 for Egypt. Per capita GDP in the two nations, adjusted for “purchasing power,” are about $29,000 and $7,000. In both cases, military aid makes up the bulk of the program.
So what do we get for all of this? The answer is foreign policy influence, although the degree to which that translates into any effective ability to change anything is limited. One might think the large amounts given to Israel would give the U.S. some say in issues like settlement building in the West Bank. But the amount is small relative to the overall Israeli economy and support for Israel in the U.S. Congress great enough that no U.S. president, Republican or Democrat, has ever had much luck in this regard.
Similarly, despite $2 billion per year, or $9 per person, given to Pakistan, split about equally between military and economic assistance, that nation continues to surreptitiously support some of the groups we are fighting in Afghanistan.
So why not cut them off? And why didn’t we cut off Egypt when Mohamed Morsi, of the Muslim Brotherhood, came to power through imperfect elections? Should we cut it off now that he has been toppled by a military coup with the support of some of the civilian sectors most supportive of democracy.
The answers are somewhat similar to Dear Abby’s classic response to queries about whether or not to get a divorce: “Are you better off with him or without him?”
We can give aid to Pakistan and have some influence with its government as a whole and with its military in particular, or we can cut aid, have even less influence and perhaps see that country fall into the embrace of China. We also would lose important supply routes and fly-over rights to land-locked Afghanistan. Sustaining our current war there through the Central Asian Republics to the north and through Russia would be extremely difficult, if not impossible.
Similarly, we can and perhaps will cut off aid to Egypt. In this case, the options are complicated by a U.S. law requiring us to halt aid whenever a civilian government is overthrown by the military. But as with Pakistan, the question of whether it is better to have more influence with aid or less influence without is key.
In neither case do we really give a toot about the well-being of these nations’ general populaces. The issue is how best to achieve our foreign policy objectives. And our geopolitical rivals, Russia and China, will always consider fishing in troubled waters when it suits their foreign policy aims.
Should we be entirely cynical then about our aid programs? No. While much aid has had little effect on improving living standards because it was administered by incompetent or kleptocratic governments, like the 32-year reign of Mobuto Sese Seko in what was then Zaire, a small fraction of it has been of enormous importance in improving health and nutrition around the globe. (We felt we needed Mobutu as a bulwark against communist regimes to his south.)
The relatively minuscule amounts that have gone to agricultural research centers like the International Rice Research Institute in the Philippines or to Norman Borlaug’s International Center for the Improvement of Corn and Wheat in Mexico probably have done more to improve human well-being than anything else in history. And many health programs, including those to eradicate smallpox and polio, have been very effective.
On the immediate question of Egypt, the Obama administration will find some way to finesse the statutory cutoff requirement. Any other administration would do the same. U.S. foreign aid isn’t pretty, but it is a practical necessity.