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Why Sweden is a Leader in Foreign Aid

 

foreign aid leader

Sweden is a Scandinavian country known for providing an impressive amount of humanitarian aid. Sweden’s foreign aid strategies are both similar and unique to the objectives of other countries. The Organisation for Economic Cooperative and Development (OECD) praises Sweden as a leader in foreign aid because of the nation’s “consistent generous levels of official development assistance” and for “its global development leadership on peace and conflict prevention.”

Sweden’s Foreign Aid Record

The Swedish government has long shown concern for humanitarian issues. In 1975, the country achieved the United Nations’ goal of providing 0.7 percent of the nation’s gross national income (GNI) on official development assistance (ODA). In 2008, Sweden contributed 1 percent of its GNI. This number has continued to escalate and is now at 1.4 percent.

In comparison to other countries, Sweden is the largest donor in proportion to the productivity of its economy. Countries that follow are the United Arab Emirates, which contributes 1.09 percent of its GNI, and Norway, which contributes 1.05 percent. These countries are the only three countries whose foreign aid agenda reserves more than one percent of their GNI.

Equality is a core tenant of the Swedish foreign aid mission. In 2014, Sweden was the first country to implement a Feminist Foreign Policy, a strategy that promotes gender equality and women’s rights. Socially, women in countries receiving aid have been provided with programs on how to prevent and resolve instances of discrimination and abuse. Legally, female representation in the government and in the private sector has improved in these countries as well.

Other long-term foreign aid objectives in Sweden focus on installing democracy, peace and security, health equity and efficient education systems in the countries that lack these necessities.

Sweden’s Foreign Aid Agency

Sweden’s most effective agency that works to downsize poverty and foster development is called Sida, or the Swedish International Development Cooperation Agency. The agency methodically establishes democracy throughout countries in order to achieve these two goals.

Sida provides impoverished countries with humanitarian aid for emergency relief and long-term aid for development. Long-term development is the more intricate of the programs. The Swedish government implements this long-term aid with two principles in mind. First, that varying policy areas need to work together to produce positive development; second, that humanitarian aid should be implemented with the perspective that people are capable and eager to accept change.

As of 2007, Sida has 33 partner countries to which they are currently providing aid. While this number has reduced from approximately 125 since the 80s, the extensive efforts put into individual projects illustrate why Sweden is a leader in foreign aid.

Sida’s Work in Syria

Most recently, Sweden has proven itself as a leader in foreign aid through its dedication to those suffering through the Syrian crisis. Due to the disastrous conflict, there are currently 11.7 million individuals in need of assistance. Many hospitals, schools and markets have been destroyed as well.

Sida has allocated more than SEK 367 million (approximately 37.2 million USD) to humanitarian relief in Syria in 2019. This aid goes directly toward life-saving interventions. Basic needs are given to the country’s most vulnerable individuals who live in refugee camps and other communities. Much of Sida’s aid has also gone to Syria’s neighboring countries who receive the most refugees such as Jordan, Turkey and Lebanon.

Lastly, Sida donates to United Nations organizations present in Syria. The Swedish foreign aid machine has worked closely with the International Red Cross and Red Crescent Movement, as well as UNICEF, to improve the infrastructure required to fulfill the needs of Syrian refugees. These organizations have access to local partnerships scattered around the region that continue to provide health care, education and safe housing to displaced individuals.

What Does the Future Hold?

The Ministry of Foreign Affairs estimates that the number of refugees around the world will increase in the years to come. As this reality materializes, global leaders will only benefit from emulating the Swedish government’s extensive efforts to fund, provide and implement efficient humanitarian aid policies.

– Annie O’Connell
Photo: Flickr

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The Ways How the US Benefits From Foreign Aid to Kyrgyzstan

How the US Benefits From Foreign Aid to Kyrgyzstan
Kyrgyzstan, once part of the Soviet bloc, transformed from a one-party communist state into a republican democracy in 1991. Despite its reforms, though, the country is beset by both extreme poverty and government incompetence. With a significant portion of the population destitute, a thriving illegal narcotics market and ethnic tensions between native Kyrgyz and migrant Uzbeks, American investment in its government and people would see substantive U.S. benefits from foreign aid to Kyrgyzstan in terms of security.

State of Kyrgyzstan

Kyrgyzstan’s location in geographically-isolated Central Asia and its lack of natural energy resources, such as oil and gas, prevent it from emulating the industrial rise of neighboring economic goliaths, Russia and China.

The inherent difficulty of encouraging economic growth, coupled with institutional problems and social disorder, has resulted in high poverty rates in Kyrgyzstan. As of 2010, more than 40 percent of Kyrgyzstan residents live below the poverty line. High rates of homelessness and unemployment have turned many to narcotics.

Factors Leading to Revolution

Trafficking drugs across a long, unguarded border with other Central Asian countries linked to Afghanistan is a profitable enterprise, making it lucrative to those who do not have sustainable incomes. The second-largest city in Kyrgyzstan, Osh, is often referred to as the “drug capital” due to the volume of illegal narcotics that passes through the city near Kyrgyzstan’s southern border.

In 2012, authorities seized at least six tons of various substances ranging from cannabis to heroin. The rampant nature of the drug problem, and the government’s inability to resolve it, was one factor that led to revolution.

In June of 2010, more than 350 people were killed in southern Kyrgyzstan during the Second Kyrgyz Revolution over a variety of issues —  rape, wealth inequality between rural Kyrgyzstan migrants and urban Uzbeks and gang turf wars over the aforementioned drugs were a few. About 66 percent of Kyrgyzstan’s population is Kyrgyz, with some 14 percent identifying as Uzbeks. The violence between the two ethnic groups in the larger frame of regime change displaced hundreds of thousands of citizens and left the region in turmoil.

Ethnic Tension and Cultural Conflict

Poverty is a breeding ground for radicalism. Its perpetuation is often a vicious cycle, wherein poverty causes political instability, resulting in civil wars and terrorism at home and abroad. These conflicts then wipe out much-needed crops and necessary social institutions like hospitals and schools. In Kyrgyzstan’s case, ethnic tension resulted from lopsided poverty and unaffordable utility prices.

It would be a mistake to assume, however, that the conflict between Uzbeks and Kyrgyz is limited to only Kyrgyzstan or Central Asia. In April 2017, an Uzbek born in Kyrgyzstan killed 14 in St. Petersburg, Russia by rail attack. In October 2017, an Uzbek immigrant killed eight in New York by driving a truck through pedestrians. More than 1,500 Uzbeks have joined the Islamic State, ostracized by many of the countries — especially Kyrgyzstan — they once lived in.

This global violence, spawned in part by the ineptitude of a corrupt and autocratic government in preventing the continuance of radicalization, is not in the interest of either the Kyrgyzstan people or the United States. Just as Kyrgyzstan benefits from foreign aid to Kyrgyzstan, the U.S. benefits from foreign aid to Kyrgyzstan.

In the decades since the Soviet Union’s dissolution, subsequent American administrations have supplied aid intended mostly for the Kyrgyz Republic’s agricultural economy and on-the-ground humanitarian efforts. But it can do more — more for its government and more for its people.

U.S. Benefits From Foreign aid to Kyrgyzstan

Earmarking additional funds could support anti-corruption initiatives to dampen the prevalence of drug transport and abuse among the population. Increased investment in Kyrgyzstan’s energy sector could also diminish dependence on foreign energy and stabilize utility prices. A reduction in poverty and boost in living standards would increase income equality and alleviate some of the tension between Uzbeks and Kyrgyz that currently plagues the country, and by extension of terrorist activity, the world.

As terrorism is such a buzzword in American politics today, preventing it would surely be high on most elected officials’ to-do lists. Helping the Kyrgyz Republic overcome its multidimensional poverty — which can prevent terrorist activity and save lives both in the United States and abroad — would increase national security at a fraction of the cost of not doing so.

To reiterate: the U.S. benefits from foreign aid to Kyrgyzstan. The current administration’s plan to drastically cut its designated aid funds would render most, if not all, of these benefits void.

– Alex Qi
Photo: Flickr

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How the US Benefits from Foreign Aid to Dominica

How the U.S. Benefits From Foreign Aid to Dominica
Natural disasters occur globally, and many countries overcome these disasters with the help of foreign aid. Hurricane Maria, a Category 5 storm, hit Dominica on September 18, 2017. USAID has sent assistance to Dominica, which becomes beneficial to the U.S. by building good relations and maintaining a positive reputation by working with other countries in providing foreign assistance to Dominica.

The U.S. Benefits from Foreign Aid to Dominica by Fostering Good Relations

All countries, especially impoverished ones, need help to recover from a natural disaster of Hurricane Maria’s magnitude. The U.S. benefits from foreign aid to Dominica by stepping in and using its power to help, which strengthens relations between the countries. After Hurricane Maria, Samaritan’s Purse, the Pan American Health Organization and the International Federation of the Red Cross, all under USAID, were able to contribute $3.25 million in foreign aid to Dominica.

The U.S. Department of Defense’s Southern Command worked with USAID’s Caribbean Hurricanes Disaster Assistance Response Team (DART) to help repair roofs in Dominica that were damaged by the hurricane. USAID provided plastic sheeting and DART taught a group of local builders how to use the tools provided to fix the damaged roofs properly. Through donations and direct assistance to individuals, the U.S. is building good relations with other countries.

International Collaborations Build a Positive Reputation

The U.S. has worked with other countries to provide water, food and tools to rebuild Dominica immediately after Hurricane Maria hit the island. The U.N. World Food Programme (WFP) contributed about 10 metric tons of food, which fed around 25,000 people in Dominica over three months. By assisting with the WFP’s food distribution, the U.S. benefits from foreign aid to Dominica by using its resources to help impoverished countries, which grows a positive international reputation.

Collaborations with other countries to help provide foreign aid to developing countries do make a difference and help the U.S. maintain a positive reputation. According to Diálogo Digital Military Magazine, the prime minister of Dominica, Roosevelt Skerrit, commented positively on the progress the U.S. and other countries have made. He stated, “We have many allies. Thanks for helping my people, without you, our partner nations, it would not have been possible to get past the first phase of this emergency.”

Countries dealing with poverty and disasters benefit from other countries stepping in to help via foreign aid, and that help allows the affected country to get back on its feet. The U.S. benefits from foreign aid to Dominica through maintaining its positive reputation by doing good for poor countries.

While natural disasters can do great damage to countries dealing with poverty, those countries can also recover promptly with the foreign aid provided by other countries. The U.S. benefits from foreign aid to Dominica by connecting with its people to encourage good relations, as well as ensuring a positive reputation by reaching out to less developed countries in times of need. The U.S. can retain in its positive relationship with the government of Dominica by continuing to support the country, especially when natural disasters hit.

– Kelly Kipfer
Photo: Flickr

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Understanding Why Providing Foreign Aid Helps the U.S.

foreign aid helps the U.S.
Giving, especially in the form of foreign aid, has shown to cultivate meaningful relationships among people and countries, some that lead to rewarding trading agreements amid other benefits. Recent history has particularly exhibited how foreign aid helps the U.S., which is a crucial consideration in the political dialogue surrounding the current foreign aid budget.

Foreign Aid Helps the U.S. with Trade

One valuable return the U.S. has received in its giving of foreign aid to other developing countries has been the increase in American jobs as well as trade. Foreign aid is much like an investment; it helps to forge the foundation needed for low-income countries to build up and become middle-income, sustainable states. Here are some examples:

  1. After World War II, U.S. foreign aid to Japan helped recover Japan’s infrastructure and highly contributed to the success of American companies like Microsoft.
  2. The U.S. now trades and does business with former recipients of foreign aid, such as South Korea, Brazil, Mexico, Vietnam and Thailand.
  3. The President’s Emergency Plan For AIDS Relief (PEPFAR) successfully slowed down the AIDS epidemic and countries that received such aid have, in turn, consumed more American goods. Exports rose 77 percent in Tanzania, 189 percent in Zambia and 241 percent in Ethiopia.
  4. PEPFAR is one of the strong determinants of increases in the trade of pharmaceuticals.
  5. Foreign aid has attributed $46 billion more in U.S. exports and 920,000 more jobs in the U.S.
  6. In 2011, 44.6 percent of U.S. exports went to developing countries.
  7. In Tennessee alone, more than $33 billion in goods and services were exported to foreign countries in 2014 and this trade, in turn, supports over 22 percent of jobs, 830,000 local jobs to be specific.

Foreign Aid Helps with Health

Foreign aid helps the U.S. in preventing global epidemics that could otherwise be much worse. While assisting developing countries with their challenges in health, the U.S. also does its duty to minimize any possible health issues and diseases from traveling overseas or across borders to the U.S. There has been a great number of such instances, such as:

  • The U.S. was the largest funder of a number of health workers stationed in Nigeria with the original goal of polio eradication. The workers were later reassigned and succeeded in countering the infamous Ebola epidemic.
  • The PEPFAR program has helped stop the spread of AIDS by supplying life-saving medicines to over 14 million people.

Foreign Aid Helps with National Security

One of the non-negotiable benefits the U.S. reaps from its giving of foreign aid to developing countries is an improvement in national security. To prevent a third world war, the U.S. created what is now the modern development assistance program to avoid further instability in Europe.

Stability in developing countries is key in preventing future political issues from unfolding. The U.S. has defense agreements with 131 out of the 135 countries that it provides foreign aid to.

The importance of international aid lies in economic benefits, such as trading proliferations, as much as health and national security. As evidenced above, it is clear that there is truth in the fact that foreign aid helps the U.S. just as much as it helps other nations.

– Roberto Carlos Ventura
Photo: Flickr

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How the US Benefits from Foreign Aid to Papua New Guinea

U.S. benefits from foreign aid to Papua New Guinea
Papua New Guinea is a country rich in mineral, agricultural, forestry and fishery resources. The country suffers from weak governance, corruption, limited capacity to deliver basic services, a deterioration of its health system and a concentrated HIV/AIDS epidemic among key populations. 

With the help of U.S. bilateral and multilateral assistance, Papua New Guinea has experienced recent economic progress based around its abundant energy, agricultural and mineral resources. As a result, the U.S. benefits from foreign aid to Papua New Guinea as well.

For the 2017 fiscal year, U.S. aid to Papua New Guinea totaled $9.1 million. The largest areas of focus included strengthening HIV/AIDS services for more at-risk populations ($3.5 million), disaster readiness ($3.5 million) and general climate protection through the Pacific-American Climate Fund ($1.6 million).

Providing the opportunity for stability in impoverished countries strengthens their stability and benefits the U.S. through contributing to trade and foreign relations. 

Trade a Key Way the U.S. Benefits from Foreign Aid to Papua New Guinea

The U.S. benefits from foreign aid to Papua New Guinea through trade relations. In 2016, the U.S. had a trade surplus with Papua New Guinea of $35 million. U.S. goods exports to Papua New Guinea totaled $127 million in 2016, while U.S. goods imports totaled $92 million. Key U.S. exports included machinery and mechanical appliances, cereals and aircraft.

The major U.S. exports to Papua New Guinea are petroleum and mining machinery and aircraft. Imports to the U.S. from Papua New Guinea include gold, copper ore, cocoa, coffee and other agricultural products. 

Additionally, through the U.S.-Pacific Islands Multilateral Tuna Fisheries Treaty, Papua New Guinea is able to access U.S. fishing vessels in exchange for a license fee from the U.S. industry.

Asia Pacific Economic Cooperation

The U.S. benefits from foreign aid to Papua New Guinea through foreign relations. The United States and Papua New Guinea meet through a mutual membership in the Asia Pacific Economic Cooperation (APEC). APEC facilitates trade and investment, economic growth and regional cooperation. It serves as the leading forum in the Asia Pacific community and focuses on developing and strengthening the multilateral trading system, increasing the interdependence of member economies and promoting sustainable economic growth in the region. 

APEC’s work is non-binding, meaning that decisions are made based on consensus and commitments are taken voluntarily. APEC has contributed to the reduction of barriers to trade, such as tariffs, which has led to the expansion of economic growth and international trade in the region.

U.S. Promote Good Governance in Papua New Guinea

In addition to APEC, the United States and Papua New Guinea have a history of close partnership. The two countries work together to combat issues such as improving transparency and good governance, fighting human trafficking, restraining the effects of climate change, protecting fisheries, improving public health and promoting gender equality. The militaries of both the U.S. and Papua New Guinea have a cooperative security assistance relationship that focuses on joint humanitarian exercises and the training of Papua New Guinean military personnel.

Papua New Guinea and the U.S. belong to several of the same international organizations, including the United Nations, the International Monetary Fund, the World Bank, the World Trade Organization, the ASEAN Regional Forum, the Pacific Community and the Secretariat of the Pacific Regional Environment Program.

The U.S. aims to improve countries around the world by supporting them with foreign aid. Countries such as Papua New Guinea have shown that the money provided to them has strengthened their economic conditions, and in turn, the U.S. benefits from foreign aid to Papua New Guinea through trade and foreign relations. 

– Anne-Marie Maher
Photo: Flickr

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A Comprehensive 75-Year History of the World Bank

history of the World Bank
The history of the World Bank is one of change. As the world’s leading development finance institution, the World Bank has established a unique global role over its 75-year existence leading to its modern goal of poverty alleviation. Its longevity and evolution have fostered a bevy of admirers and critics, and its efficacy in achieving its goals has been a cause célèbre for members of the international development community.

How the History of the World Bank Began

The World Bank was formed in 1944 during and because of the ruin caused by World War II. Its original purpose was as a source of financing for the reconstruction of Western Europe, as countries such as France, the beneficiary of the bank’s first loan in 1947, were so devastated that no commercial lender would risk their own capital. As Europe gained its footing and could once again access capital markets, the bank shifted to a global focus including Latin America, Asia and Africa.

However, the history of the World Bank is one of not just an expanding geographical focus but of expanding policy focus. The bank’s initial projects in the 1950s-60s focused on infrastructure and reconstruction, but over the decades this mission has evolved.

The World Bank’s Growing Purpose

The creation of the bank’s International Development Association (IDA) in 1960, with a mission to provide concessional loans and grants to the world’s poorest countries, presaged a shift toward supporting the world’s least developed economies. Bank president Robert McNamara’s pivotal 1973 speech in Nairobi was considered a turning point toward what is thought to be the most important of its many modern mandates: poverty eradication. In 2013, current President Jim Yong Kim described the institution’s twin goals as eliminating extreme poverty by 2030 and promoting income growth among the poorest 40 percent of the world’s population.

To this end, the World Bank has continued to represent a formidable source of financing. Its 2017 annual report totaled commitments of $61.8 billion in loans, grants, equity investments and guarantees to partner countries. For perspective, this is 57 percent greater than the 2019 President Budget for the State Department and USAID of $39.3 billion. The annual report also highlights the diversity of its initiatives, with projects ranging from support of Syrian refugees to cash transfers and nutrition services in

.

Pushback Against the World Bank

However, for an institution committed to a goal as noble as poverty eradication, the World Bank has attracted its fair share of critics. This stems from both the consequences of the Bank’s projects and questions surrounding the relevance of its strategy.

High profile projects have come under fire for decades for their unintended environmental consequences, such as the displacement of more than 60,000 Brazilians after the construction of the Bank-financed Sobradinho Dam in the late 1970s. Bank defenders would acknowledge these failures, but also cite the many safeguards implemented over the years to manage such unintended risks.

Other critics question the Bank’s relevance: in a world where private investors willingly commit over $1 trillion a year to emerging markets, is the multilateral really needed as a backstop? In stark contrast to the 1940s, financing is abundant and capital moves freely in many parts of the world. However, defenders might argue that the World Bank continues to fill financing gaps, as certain arms of the institution, such as the IDA, offer grants and concessional loans to low-income areas that cannot attract private investors seeking a profit.

Criticisms are likely to continue, but among multilateral institutions the size and clout of the World Bank in financing poverty alleviation projects are unmatched. Given its shareholders’ recent approval of a capital increase, the Bank’s financial footprint looks set to continue growing in the near future. The history of the World Bank is one of evolution, and supporters of international development hope its positive influence will continue to shape the poverty eradication landscape.

– Mark Fitzpatrick
Photo: Google

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How the US Benefits from Foreign Aid to Nauru

U.S. Benefits from Foreign Aid to Nauru

Nauru is a small island nation that, on a map, seems like a speck in the ocean. However, there are 10,000 people that live here, and a dire situation faces the population. As the world faces rising temperatures, island nations like Nauru are in grave danger. According to the Inter-Governmental Panel on Climate Change, sea levels are scheduled to rise between 2 and 3 feet this century. If greenhouse gas emissions are not slowed, sea levels could rise even faster, which would lead to a devastating situation in Nauru producing thousands of refugees and the loss of a homeland.

The current U.S. administration has been slashing budgets for foreign aid, and many have condemned this nationalistic approach to global poverty. The International Rescue Committee has called the proposed cuts “counterproductive and ill-timed,” especially in the face of global instability due to climate change. Considering the ways in which the U.S. benefits from foreign aid to Nauru, these cuts seem counterproductive.

President Trump banned the provision of U.S. funds to countries supportive of Georgia’s “Russian Occupied Territories” in 2017. Since Nauru recognized these territories as independent, it is losing U.S. funding in a time of dire need. The U.S. has historically provided direct assistance to Nauru in the form of water-tanker trucks and aid for Nauru’s law enforcement. Many are urging the U.S. government to reconsider, as countries like Nauru are in extreme need of aid.

The fact of the matter is that when the U.S. provides foreign aid, it boosts national security and helps the global economy. The U.S. benefits from foreign aid to Nauru, as, according to the Bill and Melinda Gates Foundation, everyone is better off when there are more middle-income countries in the world.

Shared prosperity prevents global epidemics and war, and promotes U.S. exports because more countries can afford them. In addition, it promotes global stability and improves the mindset of Americans in a humanitarian manner. Another way that the U.S. benefits from foreign aid to Nauru is that it will prevent a refugee humanitarian crisis, as is happening in Syria.

More specifically to this country, the U.S. benefits from foreign aid to Nauru by the provision of seafood stocks to U.S. fisherman. Nauru is home to the world’s largest sustainable tuna fishery. The fishery is a global leader in tuna conservation, and it provides a product that many U.S. consumers enjoy. If Nauru is not provided aid, world tuna stocks will greatly deplete, which would be destructive to this industry.

The World Bank strongly champions the benefits of foreign aid to Nauru in relation to fish stocks, and addressed this topic in conjunction with increasing economic returns and sustainable management. If there is targeted investment, an extra $300 million could be netted without depleting fish stocks. This aid would greatly improve Nauru’s economy, creating benefits for U.S. exporters and fishermen.

The facts are clear: Nauru needs help, and it needs it now. Experts are condemning current U.S. policy that prohibits aid. The good news is, by providing funds to Nauru, the U.S. is also benefitting itself.

– Jillian Fox
Photo: Flickr

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How the US Benefits from Foreign Aid to Armenia

How the U.S. Benefits from Foreign Aid to Armenia
Ever since Armenia gained independence from the Soviet Union in 1991, it has shared a mutually beneficial relationship with the U.S. As a country attempting to recover from widespread poverty and corruption, the benefits Armenia receives from organizations like the United States Agency for International Development (USAID) are clear. Yet, the U.S. benefits from foreign aid to Armenia are significant in their own right.

Some of these benefits include increased stability and independence so that Armenia can resist Russian pressure and have closer ties with the Euro-Atlantic community. Both politically and economically, the U.S. has much to gain from cultivating greater stability and economic growth in Armenia.

Achieving Government Stability

Since Armenian independence in 1991, the government has struggled to maintain a stable democracy the Armenian people can trust. Fortunately, USAID is working with both the government and citizens to build trustworthy institutions that work for the people. By creating stability in the region, the U.S. benefits directly from Armenian foreign aid by gaining a trustworthy political ally in the region that champions U.S. ideals and supports U.S. goals. These are a few ways USAID is helping to achieve this goal:

  1. Media for Engaged Civil Public Project
    One of the backbones of a strong democracy is a trustworthy media that properly informs its public. This program plans to set up a healthy media as well as media watchdogs to prevent excessive bias.
  2. Engaged Citizenry for a Responsible Government Project
    USAID is helping to increase activity in local government and create an engaged public. Many Armenians are uninformed about their government or do not believe they can make a difference. This program aims to change that.
  3. Local Government Reform Activity
    By helping to decentralize the Armenian government, USAID is helping to create natural checks and balances in the system and give power back to local areas.

These are just a few of the ways USAID is helping Armenia achieve a sustainable government. The U.S. plans to give just over $3 million for “Democracy, Human Rights, and Governance” as well as “Peace and Security” in 2019. In return, the U.S. benefits from foreign aid to Armenia through gaining a strong ally in the region that is trustworthy and stable.

The U.S. Benefits from Foreign Aid to Armenia by Developing a Trade Partner

With greater economic stability in Armenia, the country becomes a reliable trade partner for the U.S. While GDP growth in the country has steadily been on the rise in recent years, there is still progress to be made. In 2019, more than $3 million will be allocated through USAID for the express purpose of economic development. Some of the ways USAID plans to use this money to help Armenia are:

  1. The Partnership for Rural Prosperity Program
    Despite consistent GDP growth, Armenia still struggles in the disparity between urban centers and rural areas. This project aims to alleviate this gap by providing economic opportunities to rural regions, improving access to markets and reinforcing infrastructure.
  2. Agribusiness Teaching Center
    This program aims to educate the Armenian public on agriculture and agribusiness while conducting research to help local farmers. As a hub for agricultural knowledge, this center will provide a strong foundation upon which to build an agricultural community.
  3. Tax Reform Project
    This program hopes to create a more accessible dialogue between the lawmakers deciding tax rates and the citizens paying them. It also hopes to reform the tax code in a way that makes it easier for citizens to start small businesses.

Through these programs and others, foreign aid to Armenia is helping to develop a powerful ally that can work with the U.S. as a mutually beneficial trading partner. Programs such as these contribute to a strong trade relationship between the two countries, with the U.S.-Armenia Economic Task Force being an indicator of how well the relationship has developed.

Overall, the U.S. benefits from foreign aid to Armenia are numerous and significant. By investing in the people of this developing country, the U.S. gains a political and economic partner while helping alleviate poverty and corruption.

– Jonathon Ayers
Photo: Flickr

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United Kingdom Affirms How Aid Creates Markets

aid creates markets
As public sector debt in developed countries continues to rise, foreign aid has become a target for activists and policymakers seeking to cut spending. The aid budget of the United Kingdom is no exception, with critics claiming that spending on foreigners is wasteful and contrary to national interest.

The country’s Department for International Development (DFID), responsible for administering overseas aid, has rejected calls for cuts in spending by emphasizing that aid creates markets that will ultimately consume British goods and provide higher returns for British investment.

National Debate Over Aid Spending

As one of six countries to reach the United Nations target for international aid spending of 0.7 percent of gross national income, the U.K. is a major contributor to worldwide aid spending. The leadership role the country plays in international aid was bolstered by the passing of a 2015 bill that enshrined the spending target into law, committing the country to sustaining current levels of spending as a share of the economy’s size.

However, in a political environment where nationalist sentiment is rising, exemplified by the 2016 Brexit referendum, prominent U.K. politicians have called for a reduction in foreign aid spending. Jacob Rees-Mogg, a Member of Parliament of the Conservative Party and potential future party leader, has said that with the government budget running a deficit, aid levels are an insane and a costly mistake.

Facing this criticism, Penny Mordaunt, the recently appointed head of DFID, has pushed back, contending that the aid is a moral obligation that also serves British interests. In an April 12 speech laying out her vision for U.K. aid, Mordaunt said that improving global health, security and income is linked to British prosperity and that promoting these goals abroad provides lasting benefits for the U.K.

Notably, Mordaunt emphasized that aid creates markets through the development of economies and human capital, citing DFID’s work in sub-Saharan Africa as having created jobs and growth, benefiting recipient countries but also benefiting British companies by creating new consumers.

Private Sector Partnerships a Key Way That Aid Creates Markets

Mordaunt’s speech also explained how aid creates markets in conjunction with the private sector. Aid will be directed to help African companies to acquire loans through British financial markets, encouraging British investors to direct more capital to the region and spurring economic development. By proposing an aid plan in which British investors could achieve higher returns, DFID is hoping to illustrate another channel through which an aid budget is mutually beneficial to both the donor and recipient countries.

Critics have cautioned of the dangers of conflating national and foreign interests in aid work. In response to Mordaunt’s speech, Tamsyn Barton, chief executive of an international development network representing NGOs called Bond, told Devex that aid programs focused on serving national interests are inherently less effective than those focused on the primary goal of improving conditions in affected countries.

Mordaunt does clarify that aid will not be conditional, stating in her speech that tied aid is bad for U.K. competitiveness and for the recipient nations, but observers such as Barton have warned that this distinction should be made explicit.

Even a country such as the United Kingdom, which has enshrined its commitment to foreign aid in law, faces pressure from domestic critics to redirect this funding home. In highlighting how aid creates markets that benefit the home country, Mordaunt and the DFID are seeking to show that the decision between spending at home and spending abroad is a false dilemma.

– Mark Fitzpatrick

Photo: Flickr

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How the US Benefits From Foreign Aid to Niger

How the US Benefits From Foreign Aid to NigerIn a January 2018 report, Reuters writes of Niger’s increasing issues with terrorist activity. The report states that Nigerien military personnel were attacked by suspected Boko Haram militants “in an area plagued by attacks by the Islamist militant group during its eight-year-old bid to create a caliphate in and around its Nigerian base.”

In recent years, attacks such as these have plagued Niger and lead to growing extremist activity. In the case of Niger, Boko Haram has been the largest opponent of the Nigerien government’s forces. 

How Does the U.S. Benefits From Foreign Aid to Niger?

The United States provides foreign aid to troubled African countries such as Niger, and in addition to significantly aiding their foreign partners, the U.S. also benefits from foreign aid to Niger. The United States has invested heavily in curtailing extremist activity across the globe. According to the State Department, “U.S. foreign assistance to Niger plays a critical role in preserving stability in a country vulnerable to political volatility, and food insecurity and regional instability.”

As the United States ratchets up counter-terrorism activity, countries like Niger become major partners who promote U.S. initiatives. The State Department goes further to mention that Niger’s agricultural sources are at risk due to continued droughts and conflict. Currently, the country faces a food crisis as crops continue to disappear. U.S. policy aims to strengthen African nations against extremist groups, and with their continued support, this is how the U.S. benefits from foreign aid to Niger. 

What Does Funding for Niger Do?

Niger is projected to receive $34 million in foreign assistance from the U.S. for Fiscal Year (FY) 2019. Forty-four percent of that total sum is being invested in Nigerien health. One hundred percent of the health investment is geared towards fighting malaria, which has affected a significant portion of the population.

An additional 5 percent of the funds are being earmarked for peace and security. However, economic development and promoting democratic values are also being largely focused on.

Alleviating Poverty in Niger

Describing the poverty crisis in Niger, the World Bank’s statistics show that roughly 44 percent of the population lives in poverty. In fact, from 1960 to 2016, Niger’s population exploded from roughly 3 million people to 20 million! As the population continues to grow, the current food crisis deepens. During the drought of 2010, the U.N. wrote that 17 percent of children were actually malnourished.

While the situation may seem dire, U.S. assistance to Nigeria has yielded positive results. Prior to 2014, close to 50 percent of Niger’s population was living on less than a dollar a day. Niger has also entered into an assistance program — the Security Governance Initiative (SGI). 

By joining the SGI, Niger has become an important target for U.S. foreign assistance programs. Adding another strong partner in Africa is how the U.S. benefits from foreign aid to Niger. If the Nigerien government successfully addresses the food crisis and adopts democratic values, Niger’s poverty crisis could possibly be addressed for good.

For now, the U.S. continues to inject aid assistance into the Nigerien treasury in an effort to promote stability — stability which the United States desperately needs. These are just a few of the reasons how the U.S. benefits from foreign aid to Niger. 

– Colby McCoy
Photo: Google