Last year, President Donald Trump proposed to cut U.S. foreign aid, offering even less money to go towards helping other countries. Any cuts to aid would have a major impact on recipient countries, considering that only about 1 percent of the United States’s federal budget goes to foreign aid. When discussing how much or how little the U.S. should be giving to help other countries, the question is often raised of how the U.S. benefits from foreign aid.

There are a few overall benefits that the U.S. receives when giving foreign aid to countries, such as promoting democracy and good governance, providing access to clean water, improving learning environments and helping end maternal and child mortality. The U.S. has a planned foreign assistance budget of $2 million for Malaysia in 2019. What are the U.S. benefits from foreign aid to Malaysia specifically?

A focus of the Department of State’s relations with Malaysia is promoting peace and security. Within Malaysia specifically, the U.S. hopes to strengthen cooperation on law enforcement, nonproliferation, counterterrorism, rule of law and expand military ties. The U.S. benefits from foreign aid to Malaysia by helping to strengthen regional and global institutions, creating better allies in Malaysia. David Miliband, president of the International Rescue Committee, remarked that global terrorist threats such as ISIS “grow out of poverty, instability and bad governance”. In giving foreign aid to countries like Malaysia, the U.S. benefits by combating major terrorist threats before they can even form, along with creating allies if and when terrorism does develop.

The U.S. Benefits from Foreign Aid to Malaysia Through Unique Manufacturing Partnership

Along with creating strong allies to fight against terrorism, the U.S. benefits from foreign aid to Malaysia as a partner in manufacturing. By promoting economic development through aid, Malaysia can further develop its production services, which provide many advantages and savings for American companies.

In a recent interview, vice president of global electronics company Flextronics Mark Shandley noted that many of the company’s customers felt more comfortable manufacturing their products in Malaysia than in other countries such as China. Shandley noted that this may be because of the “perception of intellectual protection” found in Malaysia, which is notably missing in China. Along with this, he noted that it could be more cost-effective to manufacture in Malaysia. China has a value-added tax, which is charged to non-Chinese companies and can be as high as 4 percent. However, Shandley notes that this is noticeably missing from Malaysia, resulting in lower production costs.

The U.S. benefits from foreign aid to Malaysia by forming close ties between the two countries’ militaries and in the production of goods. U.S. foreign aid helps create partnership diplomatically and helps spread democracy within the country. This, in turn, helps create allies when needed and helps lessen the birth and spread of terrorist groups. Along with this, the U.S. can develop a strong production partnership that may be even more beneficial than the already existing alliance with China. All of these benefits reinforce the advantages of continued foreign aid, in Malaysia and all over the world.

– Marissa Wandzel

Photo: Flickr