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U.S. Benefits from Foreign Aid to Mauritius

After becoming independent from Britain in 1968, the country of Mauritius began a diplomatic relationship with the United States that is still important today. Mauritius, a small island nation in the Indian Ocean, has become one of Africa’s most developed and stable economies, transforming itself from an impoverished country dependent on sugar to a middle-income nation with a diverse economy. Throughout this period of growth and success, the U.S. has been an important partner and has seen great benefits from foreign aid invested in Mauritius. There are three main ways the U.S. benefits from foreign aid to Mauritius.

Maritime Security

One of the biggest priorities for U.S. foreign aid in Mauritius is maritime security: keeping the Indian Ocean safe from piracy and crime. Maritime security allows for safer trade routes and prevents terrorism that could potentially spring up in the area.

Mauritius is one of the only countries in the region with a strong program for maritime protection and has been an important player in U.S. efforts to keep the Indian Ocean secure. U.S. foreign aid in Mauritius provides security officers with training that deals with counterterrorism methods, seamanship, forensics and maritime law enforcement. Without such measures in place, shipping and trading on the high seas, which have benefited the U.S. and Mauritius, could be more challenging.

Trade and Economic Growth

Mauritius is an example of how foreign aid is a form of investment. As the U.S. used foreign aid to develop Mauritius’ economy and improve trade relations, more and more U.S. businesses invested in Mauritius and experienced great results. The U.S. and Mauritius have a bilateral trade and investment agreement and are active trading partners.

As one of Africa’s most developed economies, Mauritius has engaged in many trade agreements and embraced free-market opportunities, some of which were only made possible with U.S. foreign assistance. In 2016, for example, the East Africa Trade and Investment Hub (funded by USAID) and Mauritius’ Board of Investment signed a Memorandum of Understanding to work together in investment promotion activities. The Hub also agreed to help Mauritius take advantage of trading opportunities with the U.S. and incentivize trade in the nation.

Since Mauritius’ has grown to an upper middle-income country and U.S. brands are purchased commonly in this new market, more than 200 companies and products from the U.S. do business in Mauritius. The U.S. exports agricultural and industrial machinery, jewelry and medical instruments to Mauritius and benefits from Mauritius imports such as textiles, precious stones, processed fish and sugar. Bilateral trade between these two countries is currently valued at $337 million.

Diplomacy and Political Stability

An important sector of U.S. foreign assistance is democracy, human rights and governance. Although Mauritius is already a multi-party democracy, foreign aid to Mauritius is still used to secure future democratic peace and stability in Mauritius and throughout Africa. Political stability in Africa is beneficial to the U.S., as unstable African countries that lack strong governments sometimes become havens for terrorism, threatening national security.

One way that foreign aid is used to foster diplomacy with Mauritius is through exchange programs such as the Young African Leaders Initiative (YALI). This program, started by President Obama in 2010, is an important U.S. effort to invest in future African leaders. The YALI program’s goal is to educate and network young African leaders to work for a peaceful future in Africa.

Since 2010, 66 Mauritians participated in the YALI program in the U.S. and then returned to their country to start new businesses, organizations and programs. There are also Mauritians involved in the YALI Regional Leadership Center in South Africa. These centers act as hubs throughout Africa that enhance leadership skills and teach young people to play important roles in their communities. There are about 1,300 members from Mauritius in the YALI Network, which continually provides online resources for young leaders to learn the skills and connections needed to bring change to their communities and stability to their countries.

These examples demonstrate how the U.S. benefits from foreign aid to Mauritius and the importance of this partnership both now and in the future.

– Alexandra Eppenauer
Photo: Flickr

russian sanctionsCurrent U.S. sanctions against Russia began in 2014 as a response to the Russian annexation of Crimea in Ukraine.

Sanctions are generally an economic tool, though they may also include political or diplomatic measures. Modern economic sanctions have become increasingly sophisticated and are often targeted against narrow groups or even individuals instead of entire nations.

Economic sanctions have a spotty history of effectiveness regardless of how they are applied. They have had an effective political impact in isolated cases, like the heavy sanctions against South Africa’s former apartheid government. However, there are many counter-examples. The U.S. maintained sanctions against Iraq and its ruling Ba’ath party for over a decade after the 1990 invasion of Kuwait.  Those sanctions appeared to create no significant policy changes from Saddam Hussein’s government, but had a severe effect on the quality of life in Iraq.

10 quick facts about the current sanctions against Russia:

  1. The Russian sanctions mainly target the energy industry. U.S. energy companies may not do business with Russia, nor may they transfer oil or gas drilling technology to Russian agents. U.S. banks are prohibited from issuing long-term loans to Russian companies for energy-focused projects.
  2. The U.S. Department of the Treasury is the responsible agency for overseeing economic sanctions on behalf of the U.S. federal government.
  3. The European Union (EU) gets approximately 3o percent of its natural gas from Russian suppliers, making sanctions a difficult process for EU nations.
  4. The EU joined the U.S. in levying sanctions against Russia in September 2016 following the downing of Malaysian Airlines flight 17 over eastern Ukraine in July 2016. The flight was carrying 206 EU nationals.
  5. Russian sanctions have resulted in more than $1 billion in losses to ExxonMobil, the company formerly headed by U.S. Secretary of State Rex Tillerson.
  6. The International Monetary Fund estimated that the Russian GDP could be 1.5 percent lower in 2016 due to sanctions.
  7. The U.S. Congress passed additional sanctions against Russia in July 2017, reacting to evidence that Russia intentionally interfered in U.S. elections processes in 2016. The updated sanctions bill, signed into law in August 2017, constrains the power of the U.S. President to unilaterally reduce or remove Russian sanctions.
  8. The Russian sanctions affect dozens of specified Russian companies and government organizations, and include specific individuals in high-ranking positions in the intelligence and defense ministries.
  9. Since the imposition of Russian sanctions, the ruble has declined over 50 percent in value relative to the U.S. dollar.
  10. Sanctions have reportedly contributed to a sharp uptick in the number of Russians living in poverty (from 15.5 million in 2013 to 19.8 million in 2016). One foreign policy expert speculated in the Chicago Tribune that sanctions have even contributed to a decline in the Russian population.

Economic sanctions, despite their occasional success, have gained a reputation for harming the most vulnerable members of a targeted nation while often not having the intended effects on its government. North Korea would perhaps be the best modern example of this situation. It remains to be seen whether the current sanctions against Russia will change the behavior of its government without placing an undue burden on the population.

– Paul Robertson

Photo: Google

Foreign Aid
On March 16, 2017, President Trump released his new proposed budget, which includes cuts of 28 percent to the base budget for the State Department and USAID, along with 37 percent cuts to the Overseas Contingency Operations Fund. This fund aids in disaster response and emergency needs to many struggling and developing countries. These budget cuts will provide a notable increase in military spending by $54 billion next year.

The new proposed budget will undergo substantial changes before it can be passed through Congress, but the skepticism that lies within President Trump’s budget primarily revolves around defunding foreign aid. Trump’s new proposed budget will serve as a guide for Congress, which will draft its own budget.

President Trump claims a desire to maintain support for U.S. diplomacy, which he views as a major asset to the State Department. In fulfilling campaign promises, including spending money at home rather than in other countries, defunding foreign aid could lead to severe consequences for U.S. diplomacy.

Specifically, the major concerns of this budget are that it will cut deeply into U.S. diplomacy and hurt the following three efforts: combatting terrorism, providing American jobs through developing world markets and aiding those who are experiencing hardships in developing countries.

  1. In order to combat terrorism, the U.S. must tackle the tough economic and political problems that enable terrorism to thrive in developing countries. Although a well-funded military is important for U.S. national security, foreign aid is a less costly method to protect the interests of all Americans. Foreign aid helps developing countries invest in law enforcement to manage terror within their borders. It also helps teach farmers new and innovative techniques so fewer people will starve. Aid is also used to make long-term investments in the global economy.
  2. Foreign aid has a substantial impact on the U.S. market by creating American jobs. Many of these countries offer the greatest trade growth potential, which makes it imperative to cultivate these markets. In order to benefit from the potential trade agreements that would create American jobs at home and abroad and further enhance the global economy, the U.S. must turn struggling and developing countries into potential consumers.
  3. The U.S. has always been at the forefront of providing humanitarian relief to developing countries, but defunding foreign aid takes the U.S. out of these efforts in creating a stable and peaceful world. Recently, Secretary of State Rex Tillerson stated that other countries must step up to provide the missing share of disaster relief for these struggling countries.

Currently, the U.S. provides less than one percent of its federal budget for foreign aid, which is low as a percentage of its economy, but large in dollar amounts. This illustrates how the U.S. can truly impact the lives and economies of many developing countries.

In pressing President Trump to reconsider his proposed budget cuts, the International Affairs Budget includes programs that consist of U.S. State Department activities and global efforts that promote global stability and ensure the safety of all Americans. This budget includes humanitarian relief efforts, trade and economic relationships and building health clinics and schools in developing countries.

In its support of combating terrorism, creating American jobs and aiding the struggles and hardships felt throughout many developing countries, the International Affairs Budget invests in not only the future of other countries but also has a lasting impact on American lives.

Brandon Johnson

Photo: Flickr