The majority of U.S. Foreign Aid is managed by the “150 Account.” Function 150 of the Federal Budget contains funding for all U.S. international activities, including: operating U.S. embassies and consulates throughout the world; providing military assistance to allies; aiding developing nations; dispensing economic assistance to fledgling democracies; promoting U.S. exports abroad; making U.S. payments to international organizations and contributing to international peacekeeping efforts. Funding for all of these activities constitutes about one percent of the federal budget. The major agencies in this function include the Departments of Agriculture, State, and the Treasury, the United States Agency for International Development and the Millennium Challenge Corporation.
How much aid does the U.S. give to the world’s poor?
$30 billion goes to programs that assist the world’s needy.
How does that compare to other foreign policy priorities?
$663 billion goes toward military spending.
(Department of Defense)
Did you know? During Hurricane Katrina, 95 countries offered foreign aid to the United States.
The Major Players in Global Do-Gooding
In 1970, the world’s richest countries agreed to give 0.7% of their gross national income as official international development aid. Most rich countries have failed to reach this reasonable goal, but five countries have exceeded the target: Denmark, Luxembourg, the Netherlands, Norway and Sweden. The U.S. is ranked toward the bottom at 0.2%.
“It’s in our country’s best interest to get economic development in every corner of the world.”
– Jeff Immelt, CEO, GE
“The United States has an interest in working with our allies to help the world’s poorest countries grow into productive and prosperous economies governed by capable, democratic, and accountable state institutions.”
– U.S. National Security Strategy
“Foreign aid must be viewed as an investment, not an expense.”
– Rep. Kay Granger (R-TX), State and Foreign Ops Chairwoman
“No national security strategy is complete in the long run without promoting global health, political freedom and economic progress.”
– President George Bush
“Overcoming poverty is not a task of charity, it is an act of justice. Like Slavery and Apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”
– Nelson Mandela
“By doing good, we do well.”
– Rajiv Shah, Director of USAID
“Foreign Assistance is not an end in itself. The purpose of aid must be to create the conditions where it is no longer needed- where we help build the capacity for transformational change in a society”
– President Barack Obama
“The ultimate importance to the United States of our security and development assistance programs cannot be exaggerated”
– President Ronald Reagan
Public Perception vs. Reality
Americans drastically overestimate the level of funding going to assisting the world’s poor and consequently there hasn’t been public outrage over the miniscule funding levels. On average, Americans believe 25% of the federal budget goes to foreign aid, and ironically think it should be “slashed” to only 10%. In reality, less than 1% of the federal budget goes to foreign aid.
“If you don’t fund the State Department fully, then I need to buy more ammunition.”
– General James Mattis
“The programs supported by the International Affairs Budget are as essential to our national security as defense programs. Development and diplomacy protect our nation by addressing the root causes of terrorism and conflict.”
– Former Homeland Security Secretary Tom Ridge
“Strong national security is dependent on having a strong diplomatic arm, a strong development arm, a strong intelligence arm, a strong capability to try to have strong economies in the world. I mean, all of this is related to our national security.”
– Former Secretary of Defense Leon Panetta
“We live in a dangerous world and a world of opportunity. Increasing our diplomatic and development resources is absolutely critical and money well spent to deal with the dangers and seize the opportunities.”
– Former Secretary of State Colin Powell
Listen to the Money Talk…
$73 – Amount per American the U.S. spends on aid.
$1,763 – Amount per American the U.S. spends on defense.
Public Opinion Says…
- 61% say that combating world hunger should be a very important goal of U.S. foreign policy.
- 78% favor helping poor countries develop their economies as a way to fight terrorism.
Foreign Aid by Country
Countries receiving the most aid from the United States (2012)
“It’s not an accident that the U.S. ranks lowest of all major donor countries in the world — that is the share of our income that goes to development aid. Americans will ask whether, because were so generous privately, that makes up the difference. But it doesn’t. We still rank far below other countries … We have no shortage of resources on this planet. If you want to find them, then rein in the military budgets, the tax-free accounts of billionaires or the bonuses of Wall Street bankers. The balance isn’t even remotely correct.”
– Jeffrey Sachs, Economist, Times 100 Most Influential Leaders
IMPACT OF U.S. FOREIGN AID
Below is a small sampling of what the results of foreign aid.
- More than 3 million lives are saved every year through USAID immunization programs.
- Oral rehydration therapy, a low cost and easily administered solution developed through USAID programs in Bangladesh, is credited with saving tens of millions of lives around the globe.
- Life expectancy in the developing world has increased by about 33 percent, smallpox has been eradicated worldwide, and in the past 20 years, the number of the world’s chronically undernourished has been reduced by 50 percent.
- The United Nations Drinking Water Supply and Sanitation Decade, in which USAID played a major role, resulted in 1.3 billion people receiving safe drinking water sources, and 750 million people receiving sanitation for the first time.
- More than 50 million couples worldwide use family planning as a direct result of USAID’s population program.
- In the past 50 years, infant and child death rates in the developing world have been reduced by 50 percent, and health conditions around the world have improved more during this period than in all previous human history.
- Since 1987, USAID has initiated HIV/AIDS prevention programs in 32 countries, and is the recognized technical leader in the design and development of these programs in the developing world. Over 850,000 people have been reached with USAID HIV prevention education, and 40,000 people have been trained to support HIV/AIDS programs in their own countries.
- USAID child survival programs have made a major contribution to a 10 percent reduction in infant mortality rates worldwide in just the past eight years.
- In the 28 countries with the largest USAID-sponsored family planning programs, the average number of children per family has dropped from 6.1 in the mid-1960s to 4.2 today.
- Forty-three of the top 50 consumer nations of American agricultural products were once U.S. foreign aid recipients. Between 1990 and 1993, U.S. exports to developing and transition countries increased by $46 billion.
- With the help of USAID, 21,000 farm families in Honduras have been trained in improved land cultivation practices which have reduced soil erosion by 70,000 tons.
- Agricultural research sponsored by the United States sparked the “Green Revolution” in India. These breakthroughs in agricultural technology and practices resulted in the most dramatic increase in agricultural yields and production in the history of mankind, allowing nations like India and Bangladesh to become nearly food self-sufficient.
- Early USAID action in southern Africa in 1992 prevented massive famine in the region, saving millions of lives.
- U.S. exports of food processing and packaging machinery have increased from about $100 million in 1986, to an estimated $680 million in 1994. This huge increase is due partly to USAID-funded projects that have increased supplies of agricultural raw materials for processing and have given potential processors the information, technical assistance and training they needed to start or expand their businesses.
- Investments by the United States and other donors in better seeds and agricultural techniques over the past two decades have helped make it possible to feed an extra billion people in the world.
Democracy & Self-Governance
- There were 58 democratic nations in 1980. By 1995, this number had jumped to 115 nations.
- USAID provided democracy and governance assistance to 36 of the 57 nations that successfully made the transition to democratic government during this period.
Sustainability & the Environment
- Over the past decade, USAID has targeted some $15 million in technical assistance for the energy sectors of developing countries. U.S. assistance has built a $50 billion annual market for private power. U.S. firms are capturing the largest share of these markets, out-competing Japan and Germany.
Economic Growth & Financial Independence
- Eighty thousand people and $1 billion in U.S. and Filipino assets were saved due to early warning equipment installed by USAID that warned that the Mount Pinatubo volcano was about to erupt in 1991.
- After initial USAID start-up support for loans and operating costs, Banco Solidario (BancoSol) became the first full-fledged commercial bank in Latin America dedicated to microbusiness. BancoSol serves about 44,000 small Bolivian businesses, with loans averaging $200 each. The bank now is a self-sustaining commercial lender that needs no further USAID assistance.
- Millions of entrepreneurs around the world (many of them women) have started or improved small businesses through USAID assistance.
- Literacy rates are up 33 percent worldwide in the last 25 years, and primary school enrollment has tripled in that period.