The Foreign Service Journal, October 2011

O C T O B E R 2 0 1 1 / F O R E I G N S E R V I C E J O U R N A L 47 tinuing to provide foreign aid is under new attack from polit- ical leaders seeking to shrink the deficit by reducing federal spending. This is a good moment to ask the sharp questions that Capitol Hill budget cutters are already posing: • Does foreign aid really help poor nations to develop? • Are aid funds spent on wise and workable programs? • How can civilian aid workers and programs succeed in combat zones? • Have aid funds been commandeered by U.S. lobbies, congressional earmarks and rivalries among State, USAID and the Millennium Challenge Corporation? Certainly some U.S. aid programs have produced huge successes. South Korea is one of more than a dozen countries that have “graduated” from aid re- cipients to fully functioning economies able to allocate their own foreign aid to those nations still in need. The East Asian mir- acle saw U.S. aid help “tigers” like South Korea, and cubs such as Thailand and Indonesia, make huge progress during the 1970s and 1980s. Programs promoting family planning, vaccinations, ed- ucation, scholarships to U.S. uni- versities, roads and agriculture all received assistance. U.S. aid programs also helped former communist coun- tries like Poland, the Czech Republic and Hungary rebuild their free market systems, join the European Union and grad- uate from aid. At the same time, India — a beneficiary of the 1960s Green Revolution in hybrid wheat seeds, which tripled yields and ended famine — still has the largest number of mal- nourished children anywhere in the world. The abandon- ment of socialist policies in the early 1990s led to more rapid growth and the emergence of a enormous middle class. But because India is so huge (it is expected to surpass China as the most populous nation on earth in a few years), its massive problems cannot be resolved without resources far beyond any donor agency’s budget. Moreover, even as countries like Egypt, Pakistan and Mozambique continue to receive U.S. assistance, they have not been able to provide basic services to growing popula- tions. Our aid makes possible clinics, schools, small business loans, agricultural training, water management, sewage sys- tems and other benefits. But those gains are overshadowed by growing populations and by the unwillingness of recipient governments to tax their own wealthy and middle class and spend that money on development. Helping Other Countries to Help Themselves Still, such examples are not as straightforward as they might appear. Aid recipients in East Asia and Eastern Eu- rope were relatively easy to help, for those societies had long traditions of valuing education and commerce, enforcing con- tracts and engaging in international trade. U.S. programs supported the development of banking and credit systems, spurring production and job creation. As a result, small farm- ers in Thailand made that country the world’s top rice ex- porter, while Volkswagen built factories in the Czech Republic. But in other countries, U.S. food aid flooded markets with wheat and corn, driving down local prices and leaving farm- ers in debt. For this reason, many experts have long opposed the congressional requirement that U.S. food aid be bought from American farmers and shipped on costly, U.S.-owned ships, pointing out that compliance can eat up as much as half the value of the as- sistance. On May 5 John Norris and Connie Veillette of the Center for Global Development, a Washing- ton think-tank (www.cgdev.org), put out a policy brief describing “how the new Congress could save more than $500 million an- nually by eliminating unnecessary regulations currently in place that are incredibly wasteful and anticompetitive, and make it harder to carry out effective development programs abroad.” The CGD brief calls for ending cargo preference for U.S. food aid and eliminating monetized food aid — agricultural products given to nongovernmental organizations, which then sell them abroad and use the proceeds to fund development projects. Norris and Veillette also recommend cutting U.S. agricultural subsidies for exports, which undercut foreign farmers who do not have subsidies. In their view, U.S. law- makers can save at least $1.5 billion a year in this way. U.S. aid experts have for many years asked Republican and Democratic administrations to seek from Congress the right to use about $250 million of the more than $1 billion in an- nual U.S. food aid funds to buy produce in local markets near the sites of famines and hunger. This would stimulate local regions to produce more crops and shorten the time and lower the cost to deliver the food. But only a small percent- age of food aid is used this way, due to opposition from the U.S. farm lobby and U.S. shipping companies. The CGD brief also supports eliminating all earmarks on foreign aid accounts —a recommendation that addresses one The rationale for U.S. foreign assistance is under new attack from political leaders seeking to reduce federal spending.