The Foreign-Aid piece by Pincin and Brenberg connected strongly to my perception of the US role in international
development. Marian Lawson said
that “US foreign aid is intended to be a tool for fighting poverty, enhancing
bilateral relationships, and/or protecting US security and commercial
interests.” Although some US foreign aid has had a positive impact, too much
emphasis for US aid is being placed on US security and commercial interests,
the bureaucratic bullshit that Pincin and Brenberg elude to.
Pincin and Bernberg show how tied-aid programs are
influenced by the interests of lobby groups and politicians who have commercial
objectives in mind. Food aid
programs are required by law to use a certain percentage of US-grown food and
US ships with US employees…not a bad deal considering this amounts to billions
of dollars of revenue. These same
programs could be done at a fraction of the cost if special-interests were not
in mind, which would obviously lead to less cost to US tax-payers and more
positive impact on the developing country.
Such a system is a web of collusion between
elected-politicians who back up powerful industries and companies in exchange
for political support. Collusion
between industry and government has a deeper history in foreign aid that I
relate to a book, "Confessions of an Economic Hitman", by John Perkins. In this book, Perkins wrote about his
profession as an international consultant that basically had two steps:
- Perkins would travel to a developing country, offer them a huge loan to improve their infrastructure, and provide wildly exaggerated projections for the returns on investment.
- Then US companies “would move in and build the pipelines or the drilling platforms or the power stations, the economy would fail to grow anything like as fast as predicted, the country would default on its loan, and so find itself in hock to the US in perpetuity”.
Lawson refers to these types of projects in her article when
she described how many foreign-aid
programs are harmful to countries, by fueling corruption and creating
dependence on the aiding country.
The author advocates the use of impact
evaluation rather than performance
evaluation, that measure social indicators of improvement (literacy,
poverty,etc.) rather than tangible indicators (schools, textbooks,etc.). However, impact evaluation, as explained by Lawson, might not be worth the
extra costs needed to carry them out.
What do you think? My
personal opinion is that these measurements could, in the end, prove to be too
arbitrary and potentially useless.
How can the US effectively measure and predict the literacy rate in
countries that have little institutional power to collect such information? How do we know these numbers will not
be skewed by people such as Perkins, who have underlying financial motives?
In a world where it is obvious that the rich continue to get
richer and the poor continue to get poorer, how can these problems be
solved? Should US foreign-aid be
put on hold until all bureaucratic bullshit is raked out? Should we just accept this as our fate
and grab at the opportunity to benefit while exploiting those who are less
privileged? Personally, I like to
believe it is in human nature to maximize self-interest, but it is still within
our ability to do this without screwing everyone else over.
Space_Cowboy, you bring up some very interesting viewpoints that seem to paint a very corrupted view of financial aid. You note that food aid programs must use a percentage of U.S.-grown food, ships, and employees which happens to generate billions of dollars in revenue for the U.S. Keeping with this point, you say that these services could be exponentially cheaper if “special-interests were not in mind.” Although your argument is valid, I argue that without “special-interests” a lot of foreign aid projects would not be done in the first place. It is these special interests that cause people to mobilize and act to create these campaigns in the first place. Although some interest groups receive kickbacks, I am sure that more often than not, these groups are appropriately allotting their money and received revenue.
ReplyDeleteYou also bring up some interesting points about the funding of the war. The claim that the money the U.S. spends on war can provide “clean water, adequate diets, sanitations services and basic education to every person on the planet,” as John Perkins suggests, however, seems extremely naïve. I am not sure that I buy into that claim, and I wonder if there are any statistics to back it up.
You present a rather interesting diagram that asserts, “At least $5 trillion has flowed out of poorer countries to the West since the mid 1970s, much of it to offshore accounts.” This is an interesting statement but I wish the diagram would have been more precise in its charting of the flow of money. It feels to conspiracy theory based.
I am not under the impression, however, that the U.S. is this pure nation that does no wrong. I just believe that you perhaps do not give the U.S. enough credit, and use these sources to downplay the good that the U.S. actually does do. And to answer your question about whether US foreign-aid should be put on hold until “bureaucratic bullshit is raked out,” I do not think it should be stopped. I rather have people attempting to do good deeds, even if the process is it tainted. Raking out the bureaucratic influence will take a long time, and pausing foreign aid until then could prove detrimental. Now that I am thinking about it, I am not sure if the bureaucratic things can ever be fully separated from foreign aid just because the process of giving U.S. money will always be highly politicized. The onus should be put on NGO’s to step up and make it clear that aid given can be devoid of politics, but even then NGO’s are tied into the government.
You know, it's kind of funny that Max brings up "Confessions of an Economic Hitman." Today (or rather yesterday- it's late and I suffer from chronic insomnia- if 'suffer' is the right word) Anastasios, one of my classmates in my Civil Wars class, brought up the same book. One of the things Max didn't mention is that in addition to the carrot of loans, Perkins offered the 'stick,' too. Bluntly, he told leaders and political elites of potential client countries that if they didn't take the money, they'd just be waxed, and we'd find somebody who *would* take the money.
ReplyDeleteThat said, it's a cruel world. We have interests, and not just in the realm of security. Whether we particularly like ethically suspect involvement with other nations or not, the fact remains that we, as a people, tend to really, REALLY like cheap (to us) goods. Clothes, cars, food, you name it. We also like to make a buck when and where we can. On top of that, the way our system of governance is designed, politicians DO have to answer to their constituents.
In that regard, both corporate and individual farms have major sway over what Representatives and Senators support. (Side note: check out what committee Debbie Stabenow, D-MI heads up)As a result, we have things like farm subsidies that were (initially) designed to help out mom and pop farms by utilizing government purchases of food to stabilize food prices whenever there was a drop in those prices. Grand theory. Practice works a little differently, though. Most of the money goes to corporate farms, who in turn sell their product not only to Uncle Sam, but also to third world countries at much cheaper prices than indigenous farms/companies can compete with. Effectively, this closes out foreign competition in the food market.
Yet this is a good thing- for us. It's still economical to provide food stamps, so our poorest don't starve to death. At the same time, the food bought directly by the government is shipped to soup kitchens who use it to feed the homeless.
So what's the answer? Honestly, I couldn't tell you. On the one hand, what we do is pretty shitty. On the other, who should we as Americans, or more accurately our politicians, care more about? Us, or Them?
I suppose I could get into influence and power projection, too, but I've gone on long enough.
Arnold, you make a great point that many of these projects would not be possible without “special interests”. Although they are making a large profit, these philanthropies would not exist without them. I agree with you that US foreign aid should continue even though it is tainted, but the fact that it is tainted is a red flag and should not be ignored. You don’t acknowledge that government foreign aid oftentimes leads to dependency and corruption in the country that is receiving aid (Lawson). Rather than sticking to the original goals of aid, it has primarily been motivated by commercial and security reasons. This has resulted in a negative effect on other countries and a growing hatred of the US--- government involvement is primary motivation of terrorism. I am not saying that government foreign aid is inherently bad, but if decreased, it may not be as detrimental as we all tend to think.
ReplyDeletePete, thanks for mentioning the “stick”. If anything, this sounds the most conspiracy theory but it really can’t be denied that several foreign leaders have been assassinated by the CIA in the interest of US industry and security.
In regards to the fact that aid provides cheaper goods…it often overlooks the costs. The US spends insert high number of dollars everyday to ensure that oil exporters are cooperating, when we could be focusing more effort on the promotion of new energy. Look at Germany, they’re already running on 25% renewable energy and well on their way to being independent of oil.