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Foreign Aid: The Seen and the Unseen

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Practically everyone in American politics today claims to favor cutting the federal deficit in part by reducing “waste, fraud, and abuse.” At the same time, however, every item in the budget lines someone’s pockets, and that someone can always be counted on to argue — either directly or, more often, through a seemingly disinterested surrogate — that his plainly wasteful, fraud-ridden program is actually of great help not just to the program’s beneficiaries but also to its benefactors, the taxpayers.

With foreign aid, as always, leading the list of programs Americans would slash, it is therefore only to be expected that its defenders would feel the need to convince them that despite all appearances to the contrary, it is a boon to both foreigners and Americans. That is the preposterous argument offered up by the former U.S. senator from Arkansas Blanche Lincoln, a Democrat, and the former Arkansas governor Mike Huckabee, a Republican, in a recent Politico op-ed.

In a masterpiece of conventional thinking and platitudes, Lincoln and Huckabee acknowledge “that Americans today are suffering at home from one of the worst economic recessions in modern history” and “that there might be temptation to cut back on U.S. humanitarian programs and investments abroad.” That temptation must be resisted, they say, because “the cost of cutting back on such programs is not worth it. Not even close. It would affect too many peoples’ [sic] lives and damage American economic and national security interests at a time our world is more interconnected than ever.” After all, they note, foreign aid constitutes less than 1 percent of the federal budget while “literally saving millions of lives and improving the lives of many more millions of people.”

Tell that to the people of Africa, a continent that has been awash in foreign aid for decades with little to show for it except widespread corruption and poverty. As economist Dambisa Moyo wrote in the Wall Street Journal,

Evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It’s increased the risk of civil conflict and unrest…. Aid is an unmitigated political, economic and humanitarian dis-aster….

Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa. Yet real per-capita income today is lower than it was in the 1970s, and more than 50% of the population — over 350 million people — live on less than a dollar a day, a figure that has nearly doubled in two decades.

Despite that dismal record, Lincoln and Huckabee cite Africa as a success story, noting that “six of the 10 fastest-growing economies are in Africa.” But as Moyo pointed out, those African countries that are growing economically are the ones that have freed themselves from dependence on foreign aid, such as South Africa and Botswana — a fact Lincoln and Huckabee acknowledge by approvingly noting that “for the first time, the continent is receiving more foreign investment than foreign aid.”

Even one of the seemingly unalloyed successes of U.S. aid to Africa cited by Lincoln and Huckabee, the delivery of “290 million mosquito nets to malaria-stricken countries,” turns out to be alloyed after all, according to Moyo:

Say there is a mosquito-net maker in small-town Africa. Say he employs 10 people who together manufacture 500 nets a week. Typically, these 10 employees support upward of 15 relatives each. A Western government-inspired program generously supplies the affected region with 100,000 free mosquito nets. This promptly puts the mosquito net manufacturer out of business, and now his 10 employees can no longer support their 150 dependents. In a couple of years, most of the donated nets will be torn and useless, but now there is no mosquito net maker to go to. They’ll have to get more aid.

Lincoln and Huckabee’s column is rife with similar instances of their inability to see beyond the surface to the ultimate effects of their preferred policies. All they see are the apparently good intentions of foreign aid: reducing poverty and disease, providing education, and so on. They can even point to some concrete, positive outcomes of the programs. But they ignore the corruption and dependence that the foreign welfare state, like the domestic welfare state, creates.

 

Breeding resentment and violence

As to corruption, economist Wolfgang Kasper observed in 2006,

A major cause for the rising tide of graft [around the world] is foreign aid. Aid rarely reaches the poor and is rarely cost-effective. Despite assertions by well-paid foreign-aid lobbyists, unconditional foreign aid has failed. Thus, huge aid flows to Africa have only rewarded incompetent despots and kleptocratic elites, whereas absolute poverty has plummeted in India and China, countries which have received comparatively little foreign aid. In countries which derive over half their national budget from foreign aid transfers — as is now the case in many African and South Pacific countries — genuine democracy has no chance.

Meanwhile, governments dependent on foreign aid, rather than their own people, for their budgets have little incentive to reform, Moyo noted:

A constant stream of “free” money is a perfect way to keep an inefficient or simply bad government in power. As aid flows in, there is nothing more for the government to do … and as long as it pays the army, it doesn’t have to take account of its disgruntled citizens. No matter that its citizens are disenfranchised (as with no taxation there can be no representation). All the government really needs to do is to court and cater to its foreign donors to stay in power.

Lincoln and Huckabee also link foreign aid to the talisman of the late 20th and early 21st century, national security. Aid, they opine, can reduce poverty, thereby tackling “one of the root causes of instability, violence, and war.”

Yet foreign aid can just as easily breed resentment and foment violence against Americans. One of Osama bin Laden’s chief grievances against the United States — which is to say one of his motives in coordinating terrorist attacks against Americans — was that Washington was propping up oppressive governments in the Middle East. The United States aided Saddam Hussein in the 1980s, giving him the weapons he used not just against Iranians but also against Iraqis. Today Iraq has a democratically elected government that leans toward Iran and away from America. Egypt has received billions of dollars in aid for decades, both before and during the long reign of ousted dictator Hosni Mubarak. Does anyone think the people would elect a pro-American government?

Finally, Lincoln and Huckabee overlook the fact that foreign aid is both unconstitutional and immoral. The U.S. Constitution nowhere grants the federal government the power to send American taxpayer dollars overseas; and the only way for the government to get money to send overseas is first to take it from taxpayers. As Ron Paul is fond of saying, “Foreign aid is taking money from poor people in this country and giving it to rich people in poor countries.”

In other words, it’s legalized theft on a global scale.

This article was originally published in the March 2013 edition of Future of Freedom.

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    Michael Tennant is a software developer and freelance writer.