Global Issues: Development Assistance

(Last updated February 14, 2008) Foreign aid is an important component of  reducing poverty in developing countries. This report 

• discusses (some of) the important developments in foreign aid in 2007

•  provides a basic analysis of  United States foreign aid,,

• and finally reports on debt forgiveness initiatives.

Important developments in foreign aid

The World Bank has not taken corruption seriously enough and has resisted the efforts of anti-graft investigators, an official inquiry headed by former Federal Reserve chief Paul Volker has found BBC News  September 15, 2007 (You will leave this site.)

Statistics of progress in achieving Millennium Development Goals  BBC News  September 5, 2007 (You will leave this site.)

Countries in Latin America are increasingly adopting foreign (and other) policies that vary from US government approaches. For example, Venezuela is using its oil wealth to assist other Latin governments.  The following stories illustrate this development.

Chavez tour ends with energy deals with Argentina and Bolivia. Chavez criticizes the US government for trying to dominate world energy supplies BBC News  August 11, 2007 (You will leave this site.)  Chavez builds his sphere of influence--spends money to counter U.S. Juan Forero and Peter S. Goodman Washington Post  February 26, 2007 (You will leave this site and be required to register [once] with the Post.)

Populism for a price: bankrolling Morales's social initiatives, Chavez steers Bolivia from Washington  Peter S. Goodman Washington Post August 3, 2007 (You will leave this site and be required to register [once] with the Post.)

Iran and Nicaragua in barter deal. US has warned Nicaragua that closer ties with Iran could harm its relation with Washington BBC News  August 5, 2007 (You will leave this site.)

The US military presence in Africa is increasing.

Mali

US military plane hit by Tuareg gunfire in Mali while supplying government troops  The Independent  September 14, 2007  

Somalia

U.S. troops went into Somalia after raid. No top targets confirmed dead. Stephanie McCrummen Washington Post  January 12, 2007 (You will leave this site and be required to register [once] with the Post.) Somalia at the crossroads (commentary)   Harun Hassan January 13, 2007 Somali Capital Awash in Anger At Ethiopia, U.S., Interim Leaders  Stephanie McCrummen   Washington Post  January 11, 2007  U.S. air strike in Somalia targets Al-Qaeda figure  Karen DeYoung  Washington Post  January 9, 2007 Ethiopia urged to leave Somalia  BBC News  December 27, 2006 (You will leave this site.)  SOMALIA: Continuing fighting forces hundreds more to flee homes  IRIN  December 21, 2006 (You will leave this site.)  Somalis 'at war' with Ethiopia  BBC News  December 13, 2006 (You will leave this site.)

Analysis

 Africom: the new US military command for Africa Daniel Volman African Security Research Project November 15, 2007 See Africom's home page

The new military frontier: Africa Frida Berrigan Foreign Policy in Focus September 18, 2007

AFRICOM: wrong for Liberia, disastrous for Africa Ezekiel Pajibo and Emira Woods Foreign Policy in Focus July 26, 2007

Into Africa Conn Hallinan Foreign Policy In Focus  March 15, 2007

U.S. military assistance for Africa: a better solution James Jay Carafano and Nile Gardiner  Heritage Foundation October 15, 2003

The following articles illustrate the role of  US security and self-interest concerns in US spending related to foreign countries, including foreign aid. These concerns, always by far the most important element of U.S. foreign policy, have become even more important in recent years.  The cost of the war(s) in Afghanistan and Iraq have dwarfed ordinary development assistance. 

The politics of United States aid in Venezuela Tom Barry Americas Program, Center for International Policy  August 7, 2007

US in $80m Palestinian aid deal for security services BBC News  August 2, 2007 (You will leave this site.) This article gives an example of how the United States uses foreign aid to advance its political interests.

Pentagon hopes to expand aid program: legislation would help fund foreign governments' military, security forces Walter Pincus Washington Post May 13, 2007 (You will leave this site and be required to register [once] with the Post.)

War in Iraq and Afghanistan become the second most expensive war in U.S. history--$609 billion  Lori Montgomery Washington Post May 4, 2007 (You will leave this site and be required to register [once] with the Post.) 

Aid and Hunger  A central part of U.S. and other countries' foreign assistance is responding to food emergencies.  Malawi, Niger and Ethiopia are important examples of countries where people have been hungry and quite a bit of assistance has gone to these countries to reduce hunger. The aid response has been principally emergency response, with the main component being food aid. One key issue: is too much assistance being given as emergency response--responding to short term needs--and not enough given to address the key problems that result in hunger?

The answer to this question is no, Hunger Notes believes.  Barely enough is being given as emergency response to hunger. The problem is that a  very inadequate amount is going for the larger aspect of reducing hunger. Thus it is not a question of the proportion--shifting money from emergency response to addressing root causes--from the same total amount of money.  This would not reduce hunger, and in fact would increase the number of deaths due to hunger.  What the problem is,  is increasing the non-emergency response to hunger. Why a lot of 'hunger assistance' is given as emergency assistance is that when people in a particular developing country such as Niger get to the point where they are starving, people and institutions in the developed world respond, while if people are not starving, exactly, but living lives of 'quiet desperation' the response is much less full.

Why it is much less full is an complicated question.  Some key elements are:

• Development assistance as a percentage of developed countries income has fallen dramatically since the 1970s. In the current decade it has increased, but to nowhere near previous levels. Thus various major concerns such as helping to improving health, nutrition and democracy must compete for a very limited amount of funds.

• Addressing hunger involves addressing a variety of issues and thus are difficult for aid agencies such as the United States Agency for International Development (USAID) to incorporate.  See The Hunger Dilemma by John Osgood Field for a good explanation of this phenomena.

Delivery of food assistance.  Photo: WFP

CARE rejects $45 million US food aid grant saying non-emergency food aid destroys agriculture BBC News  August 17, 2007

FAO calls for a better way of delivering food aid  IRIN  February 9, 2007 (You will leave this site.)

Other aid  issues

Sudan kicks out the director of CARE in Sudan BBC News  August 24, 2007 (You will leave this site.)

Bush's sweeping push for democracy sinking Peter Baker Washington Post August 20, 2007 (You will leave this site and be required to register [once] with the Post.)

Contractors in Iraq have become US crutch  Walter Pincus Washington Post August 20, 2007 (You will leave this site and be required to register [once] with the Post.) See the full Congressional Research Service report "Private Security Contractors in Iraq: Background, Legal Status, and Other Issues"  (40 page PDF file).

Making relief aid count IRIN May 28, 2007 (You will leave this site.)

Randall Tobias, Asst. Secretary of State in charge of foreign aid programs (including a large HIV prevention program based on abstinence that he formerly directed) quits after query over his use of  an 'escort service'  for 'massage'  Glenn Kessler Washington Post  April 28, 2007 (You will leave this site.)

The World Bank has had a bad track record on corruption.  Until the appointment of James Wolfenson, the previous World Bank president (by Bill Clinton, the U.S. president then--the United States gets to name the World Bank president, in spite of the World Bank being an ostensibly international member organization), the World Bank was not allowed, by its code of conduct, to mention corruption, as this would reflect badly on member states. This led to a large amount of unsuccessful/failed loans, both because loans for development purposes were siphoned off, and because the governments that were running many countries were in other ways not good managers. Since Wolfenson, corruption has taken on greater importance at the Bank.

Announcing the candidacy of Muhammad Yunus to head the World Bank Robert Naiman Just Foreign Policy June 1, 2007 (Commentary) United States nominates Robert Zoellick, former U.S. trade representative, as new World Bank president. Election is assured as 'that is the way its done.'  BBC News  May 30, 2007 (You will leave this site.) World Bank president Wolfowitz resigns; United States searches for replacement BBC News  May 16, 2007 (You will leave this site.)  The three C’s of World Bank practice: corruption, clientelism, and cronyism Aldo Caliari Center of Concern April 23, 2007 Pressure grows on World Bank boss  BBC News  April 13, 2007 (You will leave this site.)

The persistently poor: an internal report criticizes World Bank's efforts on poverty  Peter S. Goodman Washington Post  December 5, 2006 (You will leave this site and be required to register [once] with the Post.)

Pledges of Increased foreign assistance

Chávez builds his sphere of influence: Venezuela increases foreign aid to counter US Juan Forero and Peter S. Goodman Washington Post February 23, 2007 (You will leave this site and be required to register [once] with the Post.)

Basic analysis of United States foreign aid

U.S. Foreign Aid Explained  Lane Vanderslice  June 5, 2005

This article describes the four principal components of U.S. foreign aid: 

• development assistance ($8.4 billion in 2005) to assist in the development of poor (and other) countries.  The  principal components assisting poor countries are the USAID Child Survival account, the USAID development assistance account,  the State Departments Global HIV/AIDS initiative, the Millennium Challenge account, and contributions to multilateral development banks such as the World Bank.  There are also two accounts assisting Eastern Europe and countries of the former Soviet Union, most of which are higher income countries.

• humanitarian assistance ($2.3 billion in 2005) goes to those very much in need, because they are in a natural or man-made disaster (such as war) or because they are refugees.

• military and security assistance ($7.8 billion in 2005) provides assistance to U.S. allies, principally through  financing military purchases by these countries or making budget support payments to their governments.

• narcotics control initiatives ($1.0 billion) to assist countries in eradicating drugs and providing alternative employment.  Assistance to country police forces is also made.

Official Development Assistance. How much are developed countries contributing to developing countries?   What is official development assistance--what is counted and what is not?

Half of total assistance, $9.7 billion in 2005,  is development and humanitarian assistance that goes to poor countries. (Some development and humanitarian assistance goes to countries that are not classified as poor, such as many countries in Eastern Europe and the former Soviet Union.)

Official development assistance (ODA) measures how much each developed country gives to developing countries, both in terms of United States dollars and as a percentage of each countries gross national product. The United States gives the largest amount of  development assistance, but it only gives .17 of one percent of its gross national income (GNI), substantially below the average country contribution of .41 of one percent of GNI, and far below the agreed upon target of .7 percent (in 1992 at the Rio Earth Summit). For more information see How much are developed countries contributing to developing countries??

Official development assistance (ODA) is slightly broader than development assistance to developing countries--the $9.7 billion mentioned above.  It is difficult to find a good explanation of what exactly ODA is and what it counts. Hunger Notes provides two:   What is official development assistance? (based on information from the United States Agency for International Development) and a fuller explanation,  "Foreign aid: understanding data used to compare donors" (six page pdf file) by Larry Nowells,  a researcher with the Congressional Research Service of the Library of Congress.  This article was originally done for Congress.

Debt and developmentt

Zambia pays 'vulture fund'  $15 million  BBC News  April 22, 2007 (You will leave this site.) Jubilee USA is working to oppose vulture funds.  For more information see Jubilee USA

United States offers debt relief to Liberia IRIN February 14, 2007

Inter-American Development Bank to offer debt relief for Haiti and four other Latin countriess  Hunger Notes  December 1, 2006

2006 Development Assistance Page Global Page  Hunger Notes Home Page