Types of Foreign Aid

America’s foreign aid budget for 2016 is expected to be around $37.9 billion. The goals of American foreign aid involve a mixture of strategic and humanitarian efforts. Therefore, the types of foreign aid the government administers are aimed at addressing a variety of issues.

Various initiatives are represented by five different categories, as outlined by Congressional Research Service:

  1. Bilateral Aid is aid given by the U.S. government directly to another country. According to the Congressional Research Service, it is designed to “foster sustainable broad-based economic progress and social stability in developing countries.” In other words, bilateral aid focuses on long-term development that fosters human rights and political and economic freedoms.
  2. Economic Aid Supporting U.S. Military and Political Objectives’ primary purpose is to meet U.S. economic, political or security interests. Funds provided under this category can be used for development projects or as cash transfers to help a recipient country stabilize its economy and service foreign debt. By helping nations fund development projects and stabilize their economies, the U.S. government hopes to achieve greater success in addressing national security issues such as terrorism, weapons proliferation and drug trafficking.
  3. Humanitarian Assistance is given in response to natural disasters and problems resulting from conflict zones in failing states. Unlike development assistance programs, which are often viewed as long-term efforts, humanitarian aid programs are generally devoted to addressing emergencies. For example, humanitarian aid includes providing protection and assistance to refugees and internally displaced persons and the delivery of emergency food aid.
  4. Multilateral Aid, although less common from the U.S., combines aid from multiple donor nations to finance multidimensional development projects. These initiatives are implemented by international organizations, like UNICEF or the World Bank.
  5. Military Assistance aims to help U.S. allies to acquire American military equipment and training. An example of one of these programs, administered by the Department of State, is Foreign Military Financing. This grant program enables governments to receive American military equipment. Two major recipients of this FMF grant are Israel and Egypt.

While the types of foreign aid are varied, the most important part of any U.S. foreign aid program, as Texas Representative Kay Granger appropriately noted, is that it be “carefully guided and targeted at a specific issue…it can and must be effective.”

Taylor Resteghini

Sources: Borgen Project, Center for Global Development, Congressional Research Service, U.S. Foreign Assistance
Photo: Global News