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U.S. embassy staff hang a banner on a truck loaded with humanitarian aid before it is sent to Lebanon from Amman, Jordan August 31, 2006. The United States, through the Agency for International Developments (USAID), donated 700 metric tons of wheat to the World Food Program for immediate release and transport to Lebanon, according to the U.S. embassy in Amman. REUTERS/Muhammad Hamed  (JORDAN) - RTR1GUQC
Brookings Now

What “America First” means for US foreign aid

Molli Ferrarello

When President Trump unveiled his budget proposal in May, one thing was clear: “America First” meant fewer funds for foreign assistance. The president is pushing to reduce foreign aid by up to 37 percent and there are reports that some officials in the administration are seeking to merge USAID with the State Department.

Many lawmakers disagree with Trump’s stance on foreign aid and are finding constructive ways to push back. A bipartisan task force of former State, AID, and congressional staffers that is reporting to two U.S. senators—Republican Todd Young of Indiana and Democrat Jeanne Shaheen of New Hampshire—is now fighting against the proposed budget cuts.

Is the U.S. really taking on a heavier burden of the world’s needs? What does U.S. foreign aid accomplish and what would happen under the drastic cuts President Trump proposes? In recent work, Brookings experts have dispelled myths about foreign aid and explained why development assistance is important for recipient countries as well as for U.S. security.

HOW MUCH DOES THE US REALLY SPEND ON FOREIGN ASSISTANCE?

There’s a misconception about U.S. spending on foreign assistance. While public opinion polls suggest that Americans believe foreign aid makes up roughly 25 percent of federal spending, it actually makes up a mere one percent of the federal budget.

In a Brookings Unpacked video, Senior Fellow George Ingram, who is part of the bipartisan task force on foreign aid, says this misconception could be responsible for the belief that other countries aren’t doing as much as the U.S. when it comes to foreign aid.

Another myth is that foreign assistance is largely unpopular among Americans. Polling over the past 25 years reveals that up to 75 percent of Americans support foreign assistance programs.

Presidents George W. Bush and Barack Obama both championed foreign assistance programs and the last Congress passed eight foreign aid bills with strong bipartisan support.

As Ingram explained, Republicans Sen. Marco Rubio and Rep. Ted Poe and Democrats Sen. Ben Cardin and Rep. Gerry Connolly sponsored The Foreign Assistance Accountability and Transparency Act of 2016 to improve the effectiveness of foreign aid programs. The legislation, which increased monitoring, evaluation, and reporting on the outcomes of foreign aid programs, highlighted the bipartisan push for an effective approach to development, and the value the U.S. places on foreign assistance.

Less encouraging was the passage this week by the House Financial Services Committee of a World Bank Accountability Act of 2017. The bill requires that a slew of conditions be met by the Bank, otherwise a portion of the funding for the International Development Association (IDA), the part of the World Bank that provides concessional funding for poor countries, will be withheld.  Even if IDA funds aren’t withheld, the level of support requested by the Trump administration is low. While the legislative process is far from concluded, this latest legislative gambit is not good for U.S. interests in the Bank.

WHY IS FOREIGN AID IMPORTANT?

Foreign assistance programs have bipartisan support for many reasons. Ingram explained that support crosses party lines because it “advances three fundamental U.S. interests: it keeps us safe, it meets a moral imperative, and it builds economic prosperity.”

In an attempt to justify the steep cuts to foreign aid, Director of the Office of Management and Budget Mick Mulvaney referenced how the expense may not make sense to a family living in Grand Rapids, Michigan, (or elsewhere in the United States). In response, Visiting Fellow Marcela Escobari explained why foreign aid does in fact affect the family in Grand Rapids: It helps keep them and all Americans safe.

“War is expensive,” Escobari wrote. “Combating terrorism from failed states is expensive. Foreign aid is the cheapest insurance policy we can buy as a country.”

DOES FOREIGN AID REALLY WORK?

Health-based aid programs have saved millions of lives. Nonresident Senior Fellow Steve Radelet provides some statistics on the impact of foreign aid on global health outcomes:

  • Malaria mortality has declined by nearly 50 percent since 2000, saving almost 7 million lives.
  • Tuberculosis infections have fallen by 25 percent.
  • The world is on the brink of eradicating polio.
  • Four million fewer children die from diarrheal diseases each year than they did three decades ago.

Aid is not the only factor at work in these achievements, but it has played a major role in bringing lifesaving interventions and vital disease prevention to the developing world. Also, as Senior Fellow John McArthur and his co-author Krista Rasmussen pointed out in “What would US cuts to the UN look like?,” America’s funding also supports more than 30 U.N. entities that take on tasks ranging from peacekeeping to civil aviation coordination to child health and food aid.

In a 5 on 45 podcast, Ingram also credited foreign aid with bringing more than 1 billion people out of extreme poverty, eradicating smallpox, and cutting infant and child deaths in half.

While it is clear that U.S. foreign assistance has an important immediate impact on the health and well-being of some of the world’s most vulnerable people, is aid effective in the long-run?

As a continent, Africa receives roughly 20 percent of America’s foreign aid spending. Angelle Kwemo, managing director of Africa of Washington Media Group and founder of Believe in Africa, discussed the complicated relationship between the U.S. and aid recipients. She noted that, while some development assistance programs have had lasting results in stimulating local economies and promoting self-sufficiency, others have helped cultivate a culture of dependency.

Laurence Chandy, a former fellow in the Development Assistance and Governance Initiative at Brookings, further noted in a piece he co-authored with Brina Seidel and Christine Zhang that U.S. foreign aid isn’t always cultivating the benefits it intends. Chandy and his co-authors wrote that fragile states are especially susceptible to foreign aid causing harm.

One of the greatest criticisms of aid, forcefully made by Nobel Laureate Angus Deaton, is that it undermines the social contract that holds countries together by inserting donors into the relationship between states and citizens. In fragile states, a relationship that is already an Achilles heel risks being made weaker.

PURSUING SUSTAINABLE DEVELOPMENT

From the enormous gains in health and poverty reduction to enhancing U.S. security, foreign assistance has proved crucial for the United States and world at large, but there is room to improve.

Souleymane Coulibaly, a lead economist at The World Bank, noted the importance of empowering aid-recipient countries to build strong regional ties to make the most of development aid. He wrote that, as a continent, Africa suffers “on a permanent basis from the triple disadvantages of low economic density, long distance to markets, and deep divisions,” and that a regional approach to development by the international community and recipient nations could change that.

“AMERICA FIRST” AND THE FUTURE OF FOREIGN AID

Ingram outlined 10 elements for an effective Trump foreign aid program before the 45th president was inaugurated, and they remain relevant despite potential cuts in funding.

Ingram suggested the Trump administration continue efforts started under Presidents Bush and Obama to reform foreign aid and use evidence-based strategies to better focus development resources. He also recommended the president leverage his private sector experience to engage with business and scale up aid programs.

The Trump administration can also achieve a successful foreign aid strategy by keeping USAID and the State Department separate, Ingram said. Effective development requires a different set of expertise, with a greater focus on long-term effects than diplomacy, which often deals with the immediate. While the two agencies must work in collaboration, merging USAID and State diminishes the role of both.

Secretary of State Rex Tillerson recently initiated a “Listening Report,” surveying State and USAID employees on a range of concerns, including the agency reorganization exercise directed by the OMB. The survey showed concerns over merging the agencies and reinforced that they should be separate, but aligned. The Trump administration should heed the concerns of these career professionals to retain productive approaches to both foreign policy and assistance.

According to Ingram, the Trump administration’s appointee to lead USAID, Mark Green, has “near resume-perfect experience,” to lead the agency toward greater transparency and accountability. In recent years, USAID has worked to make aid data more available to Congress, partner countries, and taxpayers, heightening the agency’s responsibility to make evidence-based decisions on how it uses resources. Green served on the board of the Millennium Challenge Corporation, an exemplar of aid data transparency.

When discussing President Trump’s budget proposal, OMB Director Mulvaney said, “the overriding message is fairly straightforward: less money spent overseas means more money spent here.” But, as Ingram and others have noted, foreign assistance isn’t just about assisting struggling economies. It’s crucial to upholding longstanding American values and keeping the U.S. safe. “America First” doesn’t have to mean turning our backs on the developing world.

On July 31, Global Economy and Development at Brookings will release a new set of papers on foreign aid for the Brookings-Blum Roundtable.

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