Foreign Aid: How It Works

Every year, the United States spends more than $30 billion on foreign aid. This figure appears to be substantial, but comparatively on average, Americans spend more than $45 billion on pet care and more than  $30 billion on candy each year. Foreign aid accounts for only less than one percent of the federal budget. However, foreign aid is the combination of both diplomacy and development in other countries. The actual budget for poverty is only 0.55 percent of the federal budget.

Poverty is not only a concern in developing countries. Developing countries’ economies have direct effects on the world economy; if developed countries want to grow their incomes and expand to other parts of the world, erasing global poverty is the first step to achieve these objectives.

The objective of foreign aid is to fight poverty and to spur or speed up the growth of economies in developing countries. Foreign aid activities vary from providing clean water, helping local farmers, and supporting the healthcare systems, to increasing education level for the people in poverty. If the global economy is stable, the human race can help one another to reach higher goals.

Even though the success of foreign aid is different from country to country, the most successful stories generally come from countries that have low corruption levels and good political policies. In this sense, diplomacy plays an important role in helping these countries develop policies that will attract investment from around the world.

By increasing education levels and decreasing child mortality rates, foreign aid will help produce skilled workers who are ready to capture the opportunities in the promising but challenging environment.

The foreign aid budget is heavily influenced by the legislature, so legislators need to be aware of the real situation and garner support from the public. Our duty as American citizens is to bring these matters to the attention of legislators and give them our support for a better life, not only for poor people, but ultimately for all of us as Americans.

Phong Pham

Sources: OXFAM America, NYT, The Guardian
Photo: New Security Beat