U.S. Benefits from Foreign AidSince the end of the Second World War in 1945, the United States has been one of the largest contributors of foreign aid globally owing to its massive economic resources. The country has proved to be an important player and mediator especially in the geopolitics of North Africa and the Middle East.

At the same time, the U.S. benefits from foreign aid include financial, humanitarian and economic benefits like an expansion of trade. Also, given the widespread influence that other key global flourishing economies like China, India and Russia continue to have, it is imperative for the United States to take advantage of its existing assets and finances.

U.S. foreign aid is imperative during economic and political crises or natural disasters. Aid is usually given in the form of bilateral, multilateral, humanitarian, political and developmental assistance, which includes the provision of knowledge, resources, advice and other goods and services. It is managed mainly by the U.S. Agency for International Development (USAID) and the Department of Defense.

However, with the recent rise of populism in the United States, the regressive policy proposals of the Trump Administration and the current international climate, there is a lot of skepticism surrounding the U.S. benefits from foreign aid. The U.S. State Department is concerned with trade, national security, dependency and corruption. Contrary to conventional belief, foreign aid accounts for only 1 percent of the federal budget.

Moreover, another misconception that overlooks the U.S. benefits from foreign aid is that it can potentially diminish economic self-sufficiency for developing countries. Yet, it can be argued that sustainable aid can build a strong foundation for future economic and social progress in countries. Aid of this nature is a worthwhile investment as it has the capability to effectively spearhead poverty alleviation efforts.

The United States can also capitalize on the flourishing growth and development of other expanding economies, especially as growth in the sub-Saharan region is projected to continue to increase. For instance, supporting emerging economies like South Africa could potentially help the U.S. expand into uncharted territory and new markets, especially for consumer and capital goods.

In 2015, U.S. exports to sub-Saharan Africa was $17.8 billion, a 75 percent increase compared to 2005. U.S. trade in goods to the 49 countries in the region generated more than 121,000 jobs in 2014.

In this way, there are U.S. benefits from foreign aid because the country gets access to more trade routes and can improve trading relationships. U.S. businesses and enterprises also gain more outlets for their goods and services.

On another front, health and humanitarian aid account for over 80 percent of U.S. aid to African nations. For example, the country contributes to 35 percent of healthcare funding for malaria. There is significant headway being made in finding important solutions to pressing healthcare concerns among many communities globally.

Additionally, the Department of Health and Human Services is executing a number of healthcare initiatives like the President’s Emergency Plan for AIDS Relief (PEPFAR). The U.S. Treasury is spearheading economic reform in poorer nations with the help of organizations like the Millennium Challenge Corporation, the Peace Corps and the African Development Foundation. As a result, a number of government institutions are integrating and working collaboratively with their counterparts.

To conclude, due to the number of U.S. benefits from foreign aid to African countries, the country will continue to be a staunch supporter of existing and future initiatives. The next few years remain essential for the continued economic growth, development and prosperity for the region.

– Shivani Ekkanath
Photo: Flickr

Foreign Aid to Africa
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