US Benefits from Foreign Aid to Guinea

Guinea is one of the world’s most impoverished countries. More than half of its population lives below the poverty line and 17.5 percent struggle for food security. In 2010, Guinea established its first elected, civilian government. The U.S. benefits from foreign aid to Guinea and its strong economic potential. Assistance with Guinea’s health, stability and effective governance is not only deeply needed by Guinea, but also something from which the U.S. ultimately gains.

Strong Economic Potential

Guinea has rich mineral resources, possessing over half of the world’s bauxite (aluminum ore) reserves. The country is also abundant in high-grade iron ore, diamonds, gold and uranium. The mining sector in Guinea is thus a major part of its economy: about 80 percent of Guinea’s foreign exchanges consist of joint-venture bauxite mining and alumina operations. Compagnie des Bauxites de Guinee (CBG), one of the major two routes for exporting Guinea’s bauxite, is a venture jointly owned by the Government of Guinea, a U.S. company called Alcoa, and an Anglo-Australian company Rio Tinto Group. The other major export force is Chinese conglomerates as well as small and midsize business.

Guinea is also blessed with reliable rainfall, abundant sunshine and natural geography that are favorable for renewable energy. The 240MW Kaleta Dam project, constructed and financed by China, began operating in 2015 and has since more than doubled Guinea’s electricity supply. The country’s climate means that it has great potential for commercial agriculture as well.

Investment Friendly

Pressed to improve development, Guinea has been increasingly open to foreign investment. The country’s government has been depleted of financial resources to improve the economy, especially since the Ebola outbreak in 2014-2015. Meanwhile, enterprises in Guinea are in need of more credit than is available.

In 2016, the government launched a new website via the Investment Promotion Agency of Guinea (APIP). The website is meant to promote transparency and help make investments more smooth. The APIP also offers services to foreign investors, including creating and registering businesses, helping with access to benefits of the new investment code, providing information and research studies to interested investors, etc.

The Guinea government does not allow any foreign investor to own media in the country, but besides that, there are no restrictions discriminating against foreign investors. The U.S. also helped a group of foreign investors in Guinea and the government of Guinea form a liaison in 2015.

Barriers to Overcome

While Guinea has extremely investment-friendly laws, the enforcement of those laws needs a stable political environment and a reliable legal system. It is worth noting the country had its first democratically-elected government in 2010 after the country’s independence in 1958, but state institutions are still recovering from two years of rule by the military junta. It’s also faced a number of security and socio-economic vulnerabilities.

Guinea has a disproportionately large military with serious, deep corruption and human rights abuses. It is also feared by law enforcement because of the potential for military revolt. Even though a panel was formed in 2010 to investigate the violent crushing of tens of thousands of peaceful democracy protesters in 2009, two military commanders that the U.N. revealed to be guilty were able to keep their government positions.

Aid for Stability and Development

U.S. foreign aid would directly address barriers to private sector growth as well as improvement of economic life in Guinea in general. For one thing, the U.S. supported the 2010 election process significantly, which has greatly improved the country’s development prospects.

U.S. foreign aid was restricted in 2008 and 2009 due to the rise of the military coup at the time, but restrictions were lifted after the country’s political transformation. Aid from the U.S. helps improve democratic practices, governance, security sector reform, regional peace and stability, etc. These aspects of society are essential for the alleviation of poverty and the establishment of a solid economic infrastructure. A peaceful Guinea is also viewed as significant for restraining conflict in a region already plagued by political tension and armed struggles.

The Consortium for Elections and Political Process Strengthening, supervised by the USAID, supported the 2015 presidential election and 2018 communal elections. It strengthened Guinea’s Independent National Electoral Commission as well as civil society organizations in monitoring the domestic election.

Ultimately, U.S. foreign aid will assist with areas of life in Guinea that in turn presents a great economic potential for the U.S. In other words, the U.S. benefits from foreign aid to Guinea.

– Feng Ye
Photo: Google

US Foreign Health Assistance Programs Change Lives

The beginning of the 20th century saw the United States begin to take its place at the forefront of the international stage. Fast forward to the middle of the century and the end of WWII and the United States took its place as a world superpower. With this newfound responsibility, the government of the United States began to do more to secure the safety and health of citizens of any nation in its sphere of influence.

Key Aspects of U.S. Foreign Health Assistance

• U.S. foreign health assistance began with the Foreign Assistance Act of 1948, better known as the Marshall Plan. The plan’s goal, which it accomplished successfully, was to economically rebuild a war-torn Europe. This included hospitals and universities to train doctors.
• The United States Agency for International Development (USAID) was founded in 1961 by President John F. Kennedy as a tool to better aid allied countries and countries teetering on the edge of the West and Communism. The organization also brought all of President Eisenhower’s foreign assistance programs under one agency.
• U.S. foreign health assistance in the USAID is under the jurisdiction of The Bureau of Global health. For 55 years, the Bureau for Global Health has worked towards strengthening health systems, combating HIV/AIDS, combating other infectious diseases and preventing child and maternal deaths. Past Presidents have each had a hand in improving the operation and mission of the Bureau for Global Health.
• Between 2000 and 2015, Presidents George W. Bush and Barack Obama both introduced plans to combat malaria and HIV/AIDS. An estimated 6.2 million malaria deaths were prevented around the world.

Global Development Alliances

The USAID Bureau for Global Health is not alone in its fight — Global Health Development Alliances have partnered with USAID since 2001 to provide U.S. foreign health assistance around the world. These partners come from the private sector, and strive to both open new markets and help the local populace in need.

Private medical companies involve themselves in the alliance program — such as “The Utkrisht Impact Bond” led by Merck for Mothers and UBS Optimus — along with other large companies to target infant and maternal mortality in the Rajasthan region of India. Their program currently reaches up to 600,000 people and aims to save 10,000 mothers and children by 2020.

Multilateral and Bilateral Efforts

From 2006 to 2017, the U.S. foreign health assistance programs received a budget increase from $5.4 billion to $10.7 billion. Bilateral efforts comprise 80 percent of the U.S foreign health assistance budget, and one of these efforts is the Family Planning and Reproductive Health Program run by USAID.

The program combats HIV/AIDS, prevents child and maternal deaths and reaches 24 countries on three continents. By 2020, USAID’s goal is to educate 120 million women and girls with family planning information, commodities and services.

Multilateral efforts by the United States government include participation in and funding given to, organizations such as the World Health Organization (WHO) and other multi-government organizations and charities. Unfortunately, the budget request for U.S. health foreign health assistance programs was set at $7.9 billion.

The United States Peace Corps

The United States Peace Corps was founded by President John F. Kennedy in 1960. Its goal then and still today is to help people around the world with the support of the United States government. By helping people in need, Peace Corps Volunteers spread goodwill about the United States and educate people about U.S. citizens and culture. They are probably best known for their English teaching program, but they also specialize in health initiatives.

Such initiatives include participating in programs initiated by Presidents Bush and Obama that reduce people’s exposure to, and number of cases of, malaria and HIV/AIDS. As part of their cooperation with USAID in 2012, the Peace Corps launched the Global Health Service Program to draw the attention of trained health professionals to countries in need.

Members of this program have a one-year service time rather than the usual two years. These volunteers not only help patients in the country, but they also pass on their knowledge and experience to sustainably help these populations in the future.

Center for Disease Control

In 2016, the Center for Disease Control (CDC) was granted $427 million from the United States Congress to participate in combating f HIV/AIDS, malaria and other infectious diseases, as well as promoting immunization and emergency response. The CDC was also granted $10.9 million to participate in recovery efforts in Haiti.

On January 10, 2010, Haiti was hit by a 7 magnitude earthquake. Since then, the CDC has helped the citizens of Haiti in various ways — stopping the spread of infectious diseases through the Haitian health system, educating the Haitian people about the spread and treatment of these diseases and helping the Haitian government reconstruct their health systems. The latter aid is a program first for the CDC.

International Aid Changes Lives

U.S. foreign health assistance has been a major help to many struggling people and countries around the world. Millions of lives have been changed for the better and saved because of the United States’ efforts.

Unfortunately, the budget request for U.S. health foreign health assistance programs was set at $7.9 billion. Although cuts will have to be made in staffing and funding around the world, men and women will not stop trying their best to work with the U.S. government and make a difference.

– Nick DeMarco
Photo: Flickr

Illustrating How the U.S. Benefits From Foreign Aid to Senegal

Since 2001, the United States has consistently provided foreign aid to Senegal. Washington’s contributions have continuously been above $30 million per year and peaked at $141 million in 2014. As a result, this financial support has had significant impacts on the developing nation.

Combined global aid has improved Senegal’s agricultural efficiency by shifting losses into profits of over $300 million per year, enhanced water access to over 140,000 people and increased access to secondary education by over 75 percent. GDP has increased from four to nearly 15 billion.

How the U.S. Benefits from Foreign Aid to Senegal

Such improvements may seem praise-worthy from a charitable standpoint. Foreign aid, however, is not just a one-way street. In fact, the U.S benefits from foreign aid to Senegal. In one way, foreign aid can be seen as a macro-level investment by a government into an underdeveloped market. Foreign aid is unique in that the risk-level is nearly negligible given that the intent is not to see a personal return on the investment, but rather to accelerate growth to meet basic humanitarian needs.

Despite the moral and seemingly charitable nature of foreign aid, it can pay dividends to the provider in the future. As the receiving state experiences economic growth and stabilizes over time, it becomes more able to establish economic moats and reciprocate the help it received. This is typically though not exclusively seen through an increased ability to trade.

Education

According to the Department of Commerce, current U.S.-Senegal trade relations are limited. While U.S. exports have gone up roughly 90 percent from 2006, U.S. exports to Senegal support only about 900 jobs as of 2015. That number, however, could rise significantly through increased foreign aid in education.

As more individuals become educated and start businesses that leverage increasingly efficient agricultural resources or other products, more jobs and growth could materialize as ‘what goes around comes around’ in giving back to aid nations. Increased trade with Senegal in the future could help the U.S. receive money given as aid back into its economy.

Economic and Political Stability

The U.S. benefits from foreign aid to Senegal by also bolstering economic stability so that it may develop into an emerging market. After the U.S. started providing foreign aid, the IMF in 2015 reported that Senegal’s financial soundness metrics suggested that it was stronger than West Africa as a whole.

The democratic state has also improved politically in the years since foreign aid started. Given the key transfers of peaceful power and the absence of violent conflict, the World Bank has regarded Senegal as one of the most stable states on the continent. Positive ratings have been helpful in slowly pushing Senegal onto the world stage as a prospective future power and perhaps, one day, a true regional hegemon in West Africa.

Investing in Senegal

Today, the nation’s political and economic harmony has drawn talks and the interest of private investors. Senegal’s “Plan Sénégal Emergent” is a new policy framework that seeks to combine social justice with good governance and economic growth to stimulate development. The purpose, as the name suggests, is to establish Senegal as an ‘emerging market’ by 2035.

An emerging market is a state that features characteristics of a developed market, but has not gotten there just yet. Such markets have potential for high growth and profitability – drawing the attention of the world’s financial companies.

While the road ahead seems long and arduous, President Macky Sall remains optimistic that his country can work towards achieving the goal. Foreign aid and a demonstrated domestic interest in maintaining stability show that Senegal wants to be a model for pioneering change in West Africa.

Lucrative Give and Take

The U.S. benefits from foreign aid to Senegal if this happens. Emerging markets are known for high growth opportunities that can be lucrative. Current examples of such markets include states such as China, India and Brazil, which have made big waves in the financial world. Senegal, as a result of development from foreign aid, hopes to be next. Investors could be able to capitalize on growth opportunities in a developing nation, which would materialize benefits to U.S. citizens.

With several nations still struggling with similar issues, there is still work to be done. The Senegal case-study shows that there is a need for foreign aid, and the argument for it is no longer exclusive to just global altruism.

– Mrinal Singh
Photo: Flickr

Importance of and Improvements in Foreign Aid Transparency

The success of foreign aid is often shadowed by misconceptions and myths ranging from effectiveness to large overestimates of how much money is spent on aid every year. In an effort to combat some of these myths, foreign aid transparency has become a central issue both globally and domestically. Understanding where funds are being spent is important to donors and citizens as will be explained below. Keep reading for a few facts about foreign aid transparency and where you can find more information on how your nation’s dollars are being used to provide aid to the developing world.

Why Transparency Matters

Transparency includes knowing how much money is spent, where it is spent, who spends it and the overall impact and results. Global foreign aid transparency matters because as nations try to reach the Sustainable Development Goals, this measure will act as the foundation for aid effectiveness and accountability. Aid transparency is important to donor and recipient governments as well as civil society. As citizens who pay taxes, it is reassuring to know exactly where foreign aid funds are being spent and this transparency encourages greater support for foreign aid.

In order to coordinate aid efforts and prevent donors from spending more funds in certain areas and less in others, transparency is key. When donor countries and nonprofits share what they have already spent or are planning to spend, other donors can coordinate their funding off of these numbers and reduce overlap. It is important for donors to research and discuss their funding plans with other nations to achieve greater impact with their limited resources.

Recipients of aid benefit from transparency as well because it is often difficult to know how much aid is given and where it is spent in their own countries. This, in turn, makes it more challenging for governments to decide how much of their own budget to spend on certain problems. Additionally, when aid recipients are not able to show foreign aid money in their budgets or plans for the country, it is much more challenging for citizens and parliaments to hold leaders accountable and corruption can become an issue.

Increasing Accountability with the Aid Transparency Index

One way transparency has improved in recent years is through Publish What You Fund’s Aid Transparency Index. This organization uses research and advocacy to improve transparency mainly through the International Aid Transparency Initiative (IATI). The IATI commits donors to publish all foreign aid data under a common standard that can be compared and accessed easily.

The 2018 Aid Transparency Index was recently launched on June 20. It is the only independent measure of aid transparency among major development agencies and governments making it a valuable tool for foreign aid. This year’s index evaluates 45 countries on a scale from very good to very poor transparency.

This organization uses a relatively complex and detailed methodology for monitoring transparency and scoring agencies. For the most recent Index, 35 indicators were selected that drew upon IATI standards and whether they were upheld. These indicators were then weighted and split into five categories. Organization planning and commitments to transparency are 15 percent of the score, finance and budgets are 25 percent, project attributes, development data and performance are equally split into 20 percent of the score as well. The website also includes a comparison chart on how agencies have improved or declined and extensive reports explaining the Index’s findings.

How to Evaluate a Country’s Transparency

The Index is one very detailed way citizens of major donor countries can easily check their country’s score and whether or not their aid agencies are being transparent. One must simply click on the agency they are interested in to view scores in each category, how they have changed in recent years and recommendations for years to come.

Besides the Index, for individuals in the U.S., there are currently two separate dashboards for USAID and the State Department to share where aid dollars are spent. These can be found at ForeingAssistance.gov and Foreign Aid Explorer. This year, the U.S. was included in the “good” category on the Aid Transparency Index meaning there is still room for improvement.

In 2016, Congress passed the Foreign Aid Transparency and Accountability Act (FATAA) that established requirements for these agencies to publish foreign assistance data. One final provision suggested that USAID and the State Department combine their data into one dashboard by the end of the fiscal year 2018. It is yet to be seen whether this will happen or not but it could be one way of boosting U.S. foreign aid into the very good category for next year’s index.

These are some of the ways that aid transparency has improved in recent years and why it is such a crucial issue for donors, recipients and civil society.

– Alexandra Eppenauer
Photo: Flickr

The Current State and Progress of Global Infrastructure

One of the key challenges facing developing nations is the lack of available infrastructure. Proper infrastructure can help a country build itself up by improving health, transportation, energy, education and a myriad of other vital institutions. Global infrastructure initiatives are a vital form of potential aid that can improve the quality of life for developing nations.

How Energy Infrastructure Helps Emerging Countries

USAID currently works around the world to improve the infrastructure of developing nations. In Afghanistan, the organization helped develop a national electric company that reduced energy loss in the country from 60 percent to 35 percent. Likewise, in the Philippines, USAID was integral in providing energy to 13,000 rural households via solar and hydroelectric plants. Similar projects are taking place in countries such as Jordan, Vietnam and the Ukraine.

Infrastructure is important to a country’s development because without it growth becomes difficult. Without the energy to power development projects of their own, foreign aid ends up catalyzing a nation to empower itself. By providing clean water, countries can save on healthcare costs and invest in other issues. This makes infrastructure one of the most cost-effective ways to invest in the future of a country.

How It Can Be Improved

Unfortunately, there’s a gap between infrastructure development funding needs and its availability. Erecting fundamental structures and corruption are both costly and difficult projects for governments to overcome.

In order to combat these issues, some experts have suggested acquiring funding from the private sector so as to help aid some of USAID’s massive energy project proposals. The theory is that by selling projects to private contractors, governments can cut costs and prevent corruption. However, others such as W. Gyude Moore suggest that actions like these do not resolve the core issues. In either case, it will take a combination of private investors and foreign aid to solve the problem for good.

According to Moore, there are a few key things to keep in mind while thinking about global infrastructure.

Global Infrastructure

1. Not Every Country is the Same: It seems obvious, and yet current global infrastructure planning could do a better job of differentiating between countries. The G20 Global Infrastructure Hub Pipeline aims to help alleviate this problem by providing investors with comprehensive data on each project. With unique and accurate information, investors will be able to better match their skills and resources with each project.
2. Private Investment is too Risky in its Current Form: With imperfect information and little standardization, many investors stay away from global infrastructure initiatives unless they can be guaranteed a profit from governments; this issue is then also combated by the G20 Global Infrastructure Initiative. By providing comprehensive information, investors can better prepare for their jobs, thereby reducing costs for themselves and the governments they work with.
3. Different Types of Infrastructure are More Profitable than Others: While energy infrastructure attracts a large number of investors, more fragile sectors like water and transportation do not. Part of USAID’s infrastructure initiative is to help build these important systems. In Jordan, these efforts supported a water treatment plant that now provides clean water to two million citizens.

While tough challenges do exist for foreign infrastructure in the future, progress can be made via a combination of foreign aid and private sector investment. USAID is currently working to help foreign governments establish infrastructure, and the G20 Global Infrastructure Hub Pipeline helps investors make informed decisions. While there is always more that can be done in regard to global infrastructure, this is a promising start.

– Jonathon Ayers
Photo: Flickr