Fewer than 30 years ago, Croatia gained its independence from Yugoslavia, and now this newly independent country is working to find its place in the world economy. With assistance from the United States, not only can Croatia solidify a position, but also the U.S. benefits from foreign aid to Croatia.
The United States’ Foreign Assistance
The United States currently spends approximately $3.4 million on foreign aid to Croatia, with the largest expense being $1.1 million going to military training, $1 million on foreign military financing, $850,000 on mine and explosive remnants of war, $274,000 on counterproliferation programs and $60,000 on humanitarian and civic assistance. This aid not only benefits Croatia but brings many benefits to the United States, including:
- Alliance in international organizations
- Opportunity for new markets for the U.S.
- Foreign aid to Croatia keeps the U.S. safe
International organizations such as the North American Treaty Organization (NATO), and the European Union (EU) are key institutions in coordinating foreign policy to create diplomatic relations and tie nations together.
Foreign Policy Gains
The United States actively supported Croatia’s induction to NATO in 2009, and Croatia’s inclusion to the EU in 2013. According to the U.S. Department of State, Croatia, as a part of these institutions, has taken part in peacekeeping missions in neighboring countries — a priority that aligns with the U.S.
Interestingly, it is also the sector where $3.3 million of foreign aid to Croatia is spent. The U.S. further benefits from this relationship because it gains an ally that can help implement foreign policy, be an outlet for new trade partners or target worldwide policy goals such as global warming.
Economic Benefits
The U.S.-Croatia relationship also opens new markets for U.S. This is arguably the most prominent benefit to the U.S. One of the goals that the U.S. supported upon Croatia’s independence was developing a market-oriented economy.
This support has so far held true and consistent. U.S. aid to Croatia has helped enable the country in becoming a leading partner is southeast Europe. With Croatia’s induction to the EU, the United States has gained another market opportunity for many overseas industries.
Additionally, the United States has been identified as a potential energy partner, which is particularly important given the current energy crisis in Europe.
Nonprofit Organizations and Global Allies
Foreign aid to Croatia comes not only through official government channels, but also through nonprofit organizations. For example, SOS Children’s Villages International sends humanitarian aid to Croatia from the U.S., with the goal of alleviating poverty and helping children and families flourish in the newly independent country.
This benefits the United States as the aid brings individuals in Croatia out of poverty and into educational outlets and the economy, enhancing economic opportunity for the United States.
Many of the top trading partners with the United States were once, or still are, foreign aid recipients, including China, Mexico and Brazil. While these nations receive less aid now, they still receive U.S. foreign aid and simultaneously act as great trading partners for the United States.
Interestingly, Croatia poses the same opportunity. As the nation develops its economy in a post-war era, there is opportunity for new trade opportunities for the U.S.; such a possibility highlights how the U.S. benefits from foreign aid to Croatia.
But, U.S. benefits from foreign aid to Croatia don’t end there. All of these factors — foreign aid, these relationships and numerous economic opportunities — all work together to keep America safe. Economic opportunity, increased government accountability and lessened poverty help create a more stable nation, and pose a lesser risk to both involved nations.
How the U.S. Benefits from Foreign Aid to Croatia
Foreign aid creates diplomatic ties with other nations such as Croatia, and together can work to stop the spread of disease, terrorism and poverty, all of which pose threats to national security.
In one of The Borgen Project’s articles on the benefits of foreign aid, the organization posits a similar perspective to one referenced by Time Magazine — in a powerful statement by Bill Gates, founder of Microsoft, philanthropist and humanitarian: “[Foreign aid] represents less than 1 percent of the federal budget, not even a penny out of every dollar. It is some of the best return on investment anywhere in government.”
While the relationship between the United States and Croatia is still relatively new, U.S. foreign aid to Croatia is helping a nation to become a world player, while also benefiting the U.S. economically and politically.
– Katherine Kirker
Photo: Flickr
Credit Access In Burkina Faso Is Slowly But Steadily Improving
In Burkina Faso, a landlocked country in West Africa, access to credit is very limited. Around 44 percent of the population lives on less than $1.90 a day, only 15 percent of the population has access to a checking account and a mere seven percent of the population has access to banking services.
But the scarcity of credit access in Burkina Faso is more reflective of the country’s socioeconomic structural barriers rather than a systemic lack of capital. The banking system is regulated by the Centrale des États de l’Afrique de l’Ouest (BCEAO) and is comprised of 12 commercial banks and five specialized credit institutions, and as of June 2011, the majority of these banks met the new capital regional requirement of CFAF five billion.
But credit access is generally concentrated to a few large clients, with collateral requirements and high interest rates of 10-12 percent, preventing the majority of small and medium sized borrowers from participation. Pervasive gender inequality especially exacerbates these high barriers of access for women. Women are typically confined to lower paid informal sector jobs (such as subsistence agriculture) and there is no legislation prohibiting discrimination in access to credit based on gender or marital status.
However, the recent implementation of microcredit initiatives has helped lower these barriers to credit access in Burkina Faso, especially for women in rural areas. One of these programs is part of the Victory Against Malnutrition Project (VIM) that works with 200 villages in the Sanmatenga province and is funded by USAID’s Office of Food for Peace, implemented by ACDI/VOCA, Save the Children and three local NGOs. For example, in 2015 through a partnership with the microfinance institution Caisse Populaire, VIM brought financial agents to the village of Ouintokouliga and offered education and access to financing options.
For village resident Nobila Koroga, access to this additional capital allowed her to buy more animals on her farm which, in turn, generated enough extra produce and additional income to create food security for her household, pay her children’s school fees and cover unexpected issues such as family medical visits. This is especially significant considering that Burkina Faso’s human development index ranking is one of the lowest globally and the country is especially challenged by low levels of education and healthcare.
As Koroga’s experience demonstrates, credit access is a crucial asset in socioeconomic development and empowerment. The government of Burkina Faso has recognized this and is making financial inclusion a priority, as outlined in a recent IMF report.
One of the goals of the government’s four-year National Plan For Economic And Social Development, which went into effect in 2016, is to bring broader banking service utilization rates to 35 percent by 2020. This will begin to be implemented in 2018 through the national inclusion financial strategy, which, alongside further expanding microcredit initiatives, also emphasizes mobile banking and the reduction of administrative barriers.
Additionally, on March 14, the IMF approved a three-year arrangement with Burkina Faso under its extended credit authority, totaling $157.6 million in support of these initiatives. While credit access in Burkina Faso, and banking more broadly, still has a long way to go in terms of inclusion, the success of these international collaborative microfinance initiatives and the country’s broader long-term strategy demonstrate it is embarking on a path toward success.
– Emily Bender
Photo: Flickr
Foreign Aid to Africa: The United States vs. China
President Trump’s proposed foreign aid cuts have sparked a bipartisan effort in Congress to resist them. Among the proposed budgets, foreign aid to Africa has been affected the most, expecting a 35 percent reduction. On the other side of the world, China is constantly boosting its aid package to African countries. Here is a comparison between the U.S. and China’s foreign aid to Africa over the years.
In the past decade, U.S. foreign aid has maintained at a steady level of $32 billion distributed over 200 countries. The Official Development Assistance (ODA) focuses on three regions: Asia, Europe and Africa. From 1980-2012, almost $120 billion went to sub-Saharan countries like Sudan, Ethiopia, Kenya and Congo.
While the overall ODA budget underwent a 17-fold increase from 1960 to 2006, aid to sub-Saharan Africa increased by almost 3,000 percent, from $211 million to $5.6 billion. The U.S. gave out $97.67 billion over 18 years in ODA to sub-Saharan Africa, with infrastructure projects (48 percent of total aid) and humanitarian aid (26 percent) being the top priorities. The health sector was given $6 billion, the agriculture sector received $4.2 billion and $3.5 billion was committed to education.
China has generated tremendous impact on the aid landscape in Africa since its rapidly increased activities. Unlike countries in the Organization of Economic Cooperation and Development, China does not officially disclose its aid information. In a research published recently, AidData, a research lab at William & Mary, claimed China committed $350 billion to foreign aid between 2000 and 2014, running close to the U.S. total of $394.6 billion.
From $210 million in 2000 to $3 billion in 2011, Chinese investment in foreign aid to Africa experienced a dramatic increase. By 2009, China gave about RMB 250 billion of foreign aid to the world, with almost half (45.7 percent) of the total Chinese aid going to African countries.
Driven by natural resources and its own international economic development agenda, China drew an obscured line between investment and development assistance. Angola, Ethiopia, Nigeria, Sudan and many other countries rich in natural resources like oil, gas and minerals are on the top recipient list of Chinese foreign aid.
In terms of aid priorities, like the U.S., China committed aid to infrastructure development, but with different focuses. Between 2000 to 2013, nearly 60 percent of the total aid went to transportation ($29 billion), energy ($25 billion) and communication ($6.9 billion). After China’s arrival in Africa in early 2000, U.S. foreign aid also shifted to prioritize health and education. U.S. spending on the top three sectors for Chinese aid are only at 2.6 percent, 0.8 percent and 0.07 percent of the total ODA amount.
The emergence of China as a major player in the development of African countries did heat up the competition with the U.S., especially in terms of using foreign aid as a venue to strengthen the donor’s power among developing countries.
Chinese development assistance and other transcontinental infrastructure projects to Africa, like $900 billion to the One Belt One Road Initiative, are growing, but the Trump administration aims to slash the foreign aid budget in 2018, especially the aid to Africa, citing corruption as the main reason. The proposed cut encountered fierce opposition in Congress and was deemed simplistic and arbitrary by Senator Patrick Leahy, the Senate Appropriations Committee’s top Democrat.
On the other hand, China is seeking to establish an international development cooperation agency to coordinate its foreign aid, which “gives China an advantage over the U.S. in the approach to managing foreign aid to Africa,” said China Daily in an editorial on Secretary Rex Tillerson’s visit to China.
Congress will continue to challenge Trump’s proposed cuts and the fight against poverty in Africa will continue.
– Chaorong Wang
Photo: Flickr
Addressing Food Security in Pakistan Through Policy Change
The ultimate objective of the new Pakistani National Food Security Policy is to raise the agriculture growth rate to 4 percent per year. Though 4 percent may seem like a minuscule number, it will be no small feat for the Pakistani government to accomplish. The agriculture growth rate has been relatively low over the past decade, averaging about 2.5 percent since 2008. Increasing that number will require a lot of changes to be made.
One issue brought up in the Pakistani National Food Security Policy is the lack of modern technology in the agriculture sector. According to the report, Pakistani farmers do not have access to machinery such as rice transplanters, vegetable planters, fruit pickers and other useful tools that would allow them to run their farms more efficiently and turn larger profits. To mitigate this problem, the new policy will reduce taxes on imports of farm machinery and create incentives for farmers willing to adopt newer technologies.
Another obstacle farmers are having to face is the increasing effects of climate change. Factors like drought and extreme weather fluctuations can have devastating impacts on crops and livestock and leave farmers with nothing to produce. One of the ways the Pakistani National Food Security Policy will attempt to alleviate the effects of this crisis is by investing in biotechnology and the genetic alteration of seeds to better resist drought and temperature changes. The policy will also promote crop insurance schemes and educate the public on which crops are more likely to survive in certain areas.
In addition, the new policy recognizes that many of the resources in Pakistan are not being utilized to their fullest potential. The country’s biggest crop is wheat, which is grown on 40 percent of Pakistan’s land and makes up more than 2 percent of the GDP by itself. However, there has been a global decline in wheat prices over the last few years and the government is thinking twice about having its entire economy rely on the success of one crop. Consequently, the Pakistani National Food Security Policy aims to focus more on cultivating fruits, vegetables, livestock, poultry and fisheries in the future.
Lastly, the policy addresses how unaffordable it has become for Pakistanis to purchase nutritious food. In response to this problem, the government hopes to devote more energy to continuing and creating programs dedicated to reducing poverty and hunger on the local level. Along with the strategies mentioned above to increase profits for farmers, this should be a great help with increasing food security in Pakistan.
It goes without saying that the Pakistani National Food Security Policy is an incredibly bold vision for the country, and it will require a lot of effort on the part of both farmers and the government. However, the fact that Pakistan is actively taking steps to eradicate food insecurity is a sign of hope for its millions of hungry citizens, and such a high goal may be exactly what the country needs.
– Maddi Roy
Photo: Flickr
Economic Development In Iran Could Help Reduce Poverty
Economic development in Iran seems to be on the horizon. The World Bank released a report called “Iran’s Economic Outlook” in which it states that 2018-19 will see an overall economic improvement in the nation as the increase in investments and the reelection of President Hassan Rouhani in May 2017 provides political stability.
Moreover, the GDP growth rate is estimated at 3.6 percent, and the International Monetary Fund projects the Iranian GDP to expand by 3.8 percent in 2018, for a future economic growth of 4.1 percent in 2022. According to many analysts, such unprecedented economic development in Iran is most likely due to the removal of international sanctions over the country’s nuclear energy program in 2016.
Iran’s Economy is On the Rise
Both the World Bank and the International Monetary Fund (IMF) have revealed that Iran has seen a staggering 12.5 percent increase of its GDP in 2016. The increase in oil output was a major factor toward such economic development in Iran, after restrictions on crude sales were removed.
Such economic improvement gives hope for a comprehensive reduction of poverty in Iran. In fact, the Institute for Management and Planning Studies has released a study in which it shows more than 900 figures of what the poverty line in Iran looks like.
Data of Economic Development
This data was collected from over 40 reports released by the Statistical Center of Iran, the Central Bank of Iran and other independent research centers. Furthermore, according to study co-authors and economists Majid Einian and Davoud Severi, 12.31 percent of all Iranians are poor and a total 10.61 percent of urban and 17.03 percent of rural households live in poverty.
According to the Financial Tribune, however, the Ministry of Cooperatives and Labor and Social Welfare draws the poverty line at $159 a month for a household of 3 to 5 members. Interestingly, the economists who led the study chose $61.3 for an individual living in urban areas and $38.6 for each person living in rural areas as the standard to define what living in poverty means.
As the World Bank has reported, Iran managed to reduce poverty to 8 percent between 2009 and 2013. However, the divide between rural and urban is still quite impressive. On average, in fact, poverty in rural areas is three times higher than in urban areas.
Action to Reduce Poverty in Iran
Between 2009 and 2014, the Iranian government took action towards the reduction of poverty by assisting its citizens with universal cash transfer. This action contributed to a economic growth of 1.3 percent of the bottom 40 percent of the population.
As far as other sectors of the economy are concerned, the World Bank foresees a growth of the agriculture at a rate of 4.1 percent in both 2018 and 2019 and of the industrial sector at 4.7 percent and 4.8 percent for 2018 and 2019 respectively, and the services sector is expected to grow at 3 percent and 3.4 percent. With these statistics in sight, the future of Iran’s economic development is promising.
– Luca Di Fabio
Photo: Pixabay
St. Jude Children’s Research Hospital Aids Children With Cancer Worldwide
Every year many families are confronted with the difficult diagnosis that their child has cancer. Researchers at St. Jude Children’s Research Hospital in Memphis, Tennessee are familiar with this harsh reality and are on a mission to bring needed resources to families of impoverished children with cancer worldwide.
According to pediatric oncology researchers, 80 percent of the 160,000 children that are diagnosed with cancer worldwide have limited access to quality care and thus have a lower chance of surviving the disease. St. Jude is leading the way people understand and treat childhood cancer and have established an initiative named St. Jude Global to help spread their valuable resources overseas to reach children with cancer worldwide.
About St. Jude Global
“St. Jude Global, a major expansion of the former St. Jude International Outreach Program, is a strategic initiative led by the St. Jude Department of Global Pediatric Medicine.”
The initiative is composed of researchers and healthcare providers who have brought together resources including quality facilities, treatment protocols and research programs to address the needs of children with cancer worldwide, especially those living in developing and third-world countries.
Collaborations have been established in Central and South America, the Caribbean, Africa, the Middle East, Asia and Oceania, as well as include over 28 countries as current beneficiaries.
Easing the Burden for Families
Over the years, St. Jude’s partnership with international organizations has helped reached vulnerable children in developing and third-world countries and brought progress to the sobering statistic of childhood cancer worldwide. Some of these programs include:
Progress So Far
As a result of St. Jude’s global partnerships with international organizations, thousands of children have benefitted from life-saving treatment.
In China, St. Jude’s collaboration with Beijing Children’s Hospital and Shanghai Children’s Medical Center increased the number of treated patients with ALL in mainland China from 10 percent before the year 2000, to over 90 percent as of 2014.
Furthermore, the Asociación de Hemato-Oncología Pediátrica de Centro América (AHOPCA) has been able to successfully fund treatment for thousands of cancer patients since the year 2000. Although there is still progress to be made with the fight against childhood cancer worldwide, St. Jude Children’s Research Hospital remains a strong force in the efforts to ensure that no child dies of cancer anywhere.
– Lois Charm
Photo: Flickr
Continued Progress for Credit Access in Bolivia
In one respect, the story of credit access in Bolivia has been particularly influential: commercial microfinance. When BancoSol, originally a charity sponsored by Acción Internacional, transformed itself into a microfinance commercial bank in 1992, it became the first chartered microfinance bank in the world.
The transition showed the country that microfinance could function without the largesse of nongovernmental organizations and within a commercial environment. Significantly, by proving this model was feasible, it provided a meaningful lesson for international observers.
Since then, the country has continued to burnish its legacy of credit initiatives in microfinance and beyond. It has consistently ranked highly in the annual Global Microscope, a report prepared by the Economist Intelligence Unit (EIU) that assesses the regulatory environment for financial inclusion in 55 countries.
In 2016, Bolivia ranked thirteenth of 55 and sixth of the 21 Latin American and Caribbean countries included, and in its 2015 report, the EIU highlighted the country’s Financial Services Law (FSL) as a key in moving toward greater financial inclusion. Whether the FSL, enacted in 2013, will achieve all its goals is yet to be determined, but evidence to date suggests the government’s initiatives have had their intended effect.
The law, among other objectives, mandates credit quotas and interest rate caps to encourage lending to designated productive sectors and social housing. This requires banks and other financial institutions to extend a minimum share of their credit toward these objectives at an affordable rate. A 2015 report by the International Monetary Fund (IMF) found that the requirements were spurring progress: total credit reached almost 46 percent of GDP in 2015 from 35 percent in the mid-2000s, and credit directed to the productive sectors and social housing increased 26 percent in the year leading to June 2015.
In combination with elements of the law improving deposit insurance and consumer protection measures, the FSL has laid the groundwork for furthering the expansion of credit access in Bolivia. As the IMF report emphasizes, the Bolivian financial system is fundamentally sound, but the methods employed to increase credit access do not come without risks.
In attempting to lower borrowing costs, interest rate caps can ultimately limit access to credit and hurt bank profitability, while credit quotas can lead to banks’ portfolios becoming over-concentrated and designated borrowers becoming over-indebted, as credit is extended disproportionately to certain sectors. The report stresses that managing these risks will be vital for the country to ensure its expansion of credit is healthy and sustainable.
Overall, from BancoSol’s breakthrough in the 1990s to modern regulatory initiatives, credit access in Bolivia has continued to expand. Given the capability of financial inclusion to economically empower the poor, it is likely to remain an important goal in the country for the foreseeable future.
– Mark Fitzpatrick
Photo: Flickr
How the US Benefits from Foreign Aid to Myanmar
Myanmar (formerly Burma) was once considered an outcast from the international community due to the oppressive, military junta that held power from 1962 until the 21st Century. It was not until 2011 that the nation embarked on their multi-year journey towards political and economic reform. Slowly but surely, Myanmar has begun implementing reforms that work to dismantle its previous, exclusive regimes that were in power for nearly 50 years.
USAID
A big part of Myanmar’s quest for an inclusive, parliamentary democracy and creating a market-oriented economy has been dependent on United States aid. Not only does the U.S. have a commitment to helping Myanmar achieve its gradual liberalization, but there are also a variety of U.S. benefits from foreign aid to Myanmar. Myanmar has immense economic potential, given that they are resource-rich with access to large, growing markets. However, due to decades of systematic corruption, the vast majority of the population have not been receivers of economic prosperity.
One of USAID’s main focuses within its quest to provide foreign aid to Myanmar is the empowerment of small-scale farmers. With agriculture taking up 70 percent of employment, USAID has invested in both agriculture and food security to reduce hunger and poverty.
USAID hopes that these investments in broad-based agricultural growth will not only help Myanmar’s small-scale farmers improve their connection to end markets, but it will also help keep an agricultural epidemic at bay; an occurrence which in turn, helps keep the U.S. economy stable.
Myanmar and Agriculture
The U.S. benefits from foreign aid to Myanmar through this process, as when Myanmar’s agricultural production is healthy and efficient, the U.S. economy has the potential to thrive off purchases of agricultural equipment from U.S. manufacturers.
Currently, Myanmar’s agricultural industry depends on traditional manual labor, and it lack advanced technologies that can add value to their goods. This is why developing Myanmar’s agricultural business is important for the U.S., as when Myanmar is able to produce products like rice, which accounts for 60 percent of their production value, at much quicker speeds, the price has the potential to decrease for U.S buyers.
Rohingya Muslim Refugees
In addition to supporting Myanmar’s agricultural industry, the U.S also contributes nearly $32 million in humanitarian aid to the Rohingya Muslim refugees.
The Rohingya Muslim refugees are a marginalized group forced to seek refuge in camps after the 2012 Rakhine State riots. Their involuntary removable from the predominantly Buddhist nation was a necessary measure to escape the systematic violence and persecution in their home country of Myanmar.
This crisis has greatly jeopardized the U.S.-funded progress Myanmar made in its move away from harsh, military rule to its now democratic state.
U.S. and Internationalism
However, the U.S. benefits from foreign aid to Myanmar in this situation because it help calms international waters. Additionally, the distributed humanitarian aid funds are going a long way in helping these refugees, as it’s supplying food and medicalcare along with sanitation and shelter to a group in desperate need of support.
U.S.-funded aid to Myanmar is a huge factor in helping this developing nation regain full control of its political, economic and social states. Myanmar has already begun to see beneficial provisions that have shifted its connotation as an isolated economy to an invested focal point.
Road of Improvement
There has also been a rise in freedom of speech — in 2015, the country held its first free general elections since 1990. While there is still a continued military influence and weak points in parliamentary politics, the political trajectory of Myanmar is not one set in stone.
Patience is a key factor in allowing Myanmar to carefully and effectively regain control of its politics; it has been a strenuous past sixty years, and peace is not going to come overnight. With the continued help of the United States, both nations are on a likely road of positive improvements.
– Alexandra Dennis
Photo: Flickr
How the US Benefits from Foreign Aid to Croatia
Fewer than 30 years ago, Croatia gained its independence from Yugoslavia, and now this newly independent country is working to find its place in the world economy. With assistance from the United States, not only can Croatia solidify a position, but also the U.S. benefits from foreign aid to Croatia.
The United States’ Foreign Assistance
The United States currently spends approximately $3.4 million on foreign aid to Croatia, with the largest expense being $1.1 million going to military training, $1 million on foreign military financing, $850,000 on mine and explosive remnants of war, $274,000 on counterproliferation programs and $60,000 on humanitarian and civic assistance. This aid not only benefits Croatia but brings many benefits to the United States, including:
International organizations such as the North American Treaty Organization (NATO), and the European Union (EU) are key institutions in coordinating foreign policy to create diplomatic relations and tie nations together.
Foreign Policy Gains
The United States actively supported Croatia’s induction to NATO in 2009, and Croatia’s inclusion to the EU in 2013. According to the U.S. Department of State, Croatia, as a part of these institutions, has taken part in peacekeeping missions in neighboring countries — a priority that aligns with the U.S.
Interestingly, it is also the sector where $3.3 million of foreign aid to Croatia is spent. The U.S. further benefits from this relationship because it gains an ally that can help implement foreign policy, be an outlet for new trade partners or target worldwide policy goals such as global warming.
Economic Benefits
The U.S.-Croatia relationship also opens new markets for U.S. This is arguably the most prominent benefit to the U.S. One of the goals that the U.S. supported upon Croatia’s independence was developing a market-oriented economy.
This support has so far held true and consistent. U.S. aid to Croatia has helped enable the country in becoming a leading partner is southeast Europe. With Croatia’s induction to the EU, the United States has gained another market opportunity for many overseas industries.
Additionally, the United States has been identified as a potential energy partner, which is particularly important given the current energy crisis in Europe.
Nonprofit Organizations and Global Allies
Foreign aid to Croatia comes not only through official government channels, but also through nonprofit organizations. For example, SOS Children’s Villages International sends humanitarian aid to Croatia from the U.S., with the goal of alleviating poverty and helping children and families flourish in the newly independent country.
This benefits the United States as the aid brings individuals in Croatia out of poverty and into educational outlets and the economy, enhancing economic opportunity for the United States.
Many of the top trading partners with the United States were once, or still are, foreign aid recipients, including China, Mexico and Brazil. While these nations receive less aid now, they still receive U.S. foreign aid and simultaneously act as great trading partners for the United States.
Interestingly, Croatia poses the same opportunity. As the nation develops its economy in a post-war era, there is opportunity for new trade opportunities for the U.S.; such a possibility highlights how the U.S. benefits from foreign aid to Croatia.
But, U.S. benefits from foreign aid to Croatia don’t end there. All of these factors — foreign aid, these relationships and numerous economic opportunities — all work together to keep America safe. Economic opportunity, increased government accountability and lessened poverty help create a more stable nation, and pose a lesser risk to both involved nations.
How the U.S. Benefits from Foreign Aid to Croatia
Foreign aid creates diplomatic ties with other nations such as Croatia, and together can work to stop the spread of disease, terrorism and poverty, all of which pose threats to national security.
In one of The Borgen Project’s articles on the benefits of foreign aid, the organization posits a similar perspective to one referenced by Time Magazine — in a powerful statement by Bill Gates, founder of Microsoft, philanthropist and humanitarian: “[Foreign aid] represents less than 1 percent of the federal budget, not even a penny out of every dollar. It is some of the best return on investment anywhere in government.”
While the relationship between the United States and Croatia is still relatively new, U.S. foreign aid to Croatia is helping a nation to become a world player, while also benefiting the U.S. economically and politically.
– Katherine Kirker
Photo: Flickr
Endless Possibilities: Foreign Aid and Credit Access in Djibouti
Credit access in Djibouti is something that activists in the United States have been working to improve for several years. Foreign aid in the form of economic assistance not only boosts the economic health of Djibouti and other foreign markets, but it also provides people with the means to participate in the global economy as well.
Positive Effects of Improved Credit Access
Credit access is a complicated issue that effects several factors including personal wellbeing, access to governmental aid and availability of health resources. Foreign assistance to improve credit access can help countries combat environmental as well as economic issues.
According to the International Monetary Fund (IMF) report, in 2012 a drought in Djibouti resulted in the government requesting access to credit assistance for an environmental crisis:
“The drought in Djibouti has worsened water scarcity, reduced agricultural production and cattle stock, and accelerated refugee inflows. The authorities have requested an augmentation of access under the ECF of 60 percent of quota. As a result of exogenous shocks, financing needs for 2011–12 are expected to be higher than previously projected, despite the pledges from the international community to help Djibouti address the impact of the drought.”
Recovering from Drought
Credit access in Djibouti provided the government with the means to help citizens combat the detrimental effects of the drought in 2012. Foreign credit assistance can also contribute to improving infrastructure and social mobility in the time of an environmental issue. In 2014, a $5.6 million agreement between the U.S. and Djibouti assisted citizens who had been affected by flooding according to a 2014 report:
“The project targets the 25,000 residents of Q7, a flood-prone area in which 70 percent of households have no sewage system. The residents of this neighborhood, the densest in Djibouti City, will benefit from increased access to basic services, urban mobility, flood management, community development activities, and on-site job opportunities.”
Everyday Benefits
The effects of credit access in Djibouti is not limited to government resources. According to the United Nations Development Programme, the establishment of credit unions have affected the lives of citizens who provide for themselves every day. According to the UNDP, credit union members have risen from 1,600 to 3,041 in just six months.
According to Nima Moussa Warfa, the credit union gave her the opportunity to change her living situation. “I used to live over there but as I borrowed money and as my business grew, I was able to build this house,” she said.
The Global Economy
Credit access increases participation in the global economy, improves economic health as well as generates revenue. Credit access in Djibouti would allow tourism and global market participation to contribute to the success of the economy.
Participation in larger market can also improve the economic budget of Djibouti if aid gives the country the resources it needs to be successful. Overall, improved economic health through foreign aid benefits both the assisted country as well as the global economy.
One way this improvement could be achieved is through credit access in Djibouti. For economies and markets that need assistance improving market participation, credit access is a way for people to participate if they do not have the means to do so already.
IMF Loans
IMF loans is one way that foreign credit assistance is provided to countries across the world. The IMF focuses on providing countries with the financial resources it needs to address social and environmental issues, focusing on “crisis resolution.”
The organization states in its 2017 report that “This crisis resolution role is at the core of IMF lending. At the same time, the global financial crisis has highlighted the need for effective global financial safety nets to help countries cope with adverse shocks.”
Improving National and Global Fiscal Health
Foreign credit assistance is something that financial activists work to provide to countries in need across the world as it improves the health of not only the country in need, but the economic health of global markets as well.
It is a form of aid that provides governments with the means to encourage strong health institutions and businesses. In addition, it gives citizens of countries in need of assistance more autonomy over their financial lives. Activists will continue to look for ways to aid those in need, and credit assistance is an excellent place to start.
– Gabriella Evans
Photo: Wikimedia Commons
How the US Benefits from Foreign Aid to South Sudan
A Country Devastated by Conflict
The people of South Sudan are experiencing famine and a huge economic shift due to the cessation of oil exports, a lasting side effect of cutting ties with Sudan. Last year marked the country’s fourth year in civil war, and since then about two million people have been internally displaced and another two million sought refuge in other countries. Approximately 5.3 million people faced severe food insecurity in January of 2018, a 40 percent increase from last year.
The 2013 dispute was a result of tension between President Salva Kiir and ex-vice president, Riek Machar. President Kiir and Machar are part of two of South Sudan’s largest ethnic groups, the Dinka and the Nuer, respectively. The rivalry between the two ethnic groups runs deep; in 2013, Dinka members of the presidential guard attempted to disarm the Nuer members.
This resulted in an eruption of violence across the country, with many Nuers rebelling and seizing oil-producing land and other territory. There were more violent outbursts in July of 2016 and Machar went into exile thereafter. The political unrest has also spurred looting, civilian attacks, rape and torture, among other abuses.
How the U.S. Benefits from Foreign Aid to South Sudan
In addition to moral reasons, there are economic ways in which the U.S. benefits from foreign aid to South Sudan. Studies have shown that the U.S. is one of the highest donors to South Sudan, donating $887.5 million in 2017, although the country only gives about one percent of its budget toward foreign aid.
Another way in which the U.S. benefits from foreign aid to South Sudan is through security. Cutting aid may put the security of the United States at risk as well as jeopardize valuable relationships. Vulnerable states may easily fall under the control of people who do not operate within the best interest of the U.S. Foreign assistance can ward off potential threats. In the case of South Sudan, the country has plentiful oil reserves, which are also of value.
Good relationships with vulnerable states also provide trade opportunity, which may include job opportunities. In 2016, exported goods to South Sudan totaled to about $55 million and imports around $15 million. According to the Office of the United States Trade Representative, U.S. exports of goods to Sudan sustained about 400 jobs in 2015.
USAID’s Humanitarian Work
USAID has been working diligently to alleviate hunger and displacement, provide safe drinking water and begin other initiatives in South Sudan. Its Office of Food for Peace and its partner organizations have responded particularly through food and water intervention, providing assistance to about 1.4 million people per month, as 56 percent of the country’s population faced unrelenting hunger in 2017.
With organizations like USAID and donations from others, innocent civilians caught in violent political crossfire can start to rebuild their lives. By continuing to work toward a peaceful ending to this turmoil, the U.S. benefits from foreign aid to Sudan greatly.
– Camille Wilson
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