United States foreign aid: Difference between revisions

United States foreign aid is aid given by the United States government to other Governments. It can be divided into two broad categories: military aid and economic assistance. Other large sums are given to other countries through American foundations, churches and other organizations, as well as individuals. Foreign aid has been given to a variety of recipients, including developing countries, countries of strategic importance to the United States, and countries recovering from war. The government channels about half of its economic assistance through a specialized agency, the United States Agency for International Development (USAID). Government-sponsored foreign aid began a systematic fashion after World War II, with the Marshall Plan of 1948 and the Mutual Security Act of 1951-61. It is been politically highly charged, as most Americans believe the amount of aid is much higher than the reality. In the 21st century, the US government operates five major categories of foreign assistance: bilateral development aid (the largest amount), economic assistance supporting U.S. political and security goals, humanitarian aid, multilateral economic contributions, and military aid.

In fiscal year 2012, the U.S. government allocated the following amounts for aid:

Total economic and military assistance: $48.4 billion

Total military assistance: $17.2 billion

Total economic assistance: $31.2 billion

of which, USAID assistance: $11.75 billion.^[1]

U.S. Overseas Loans and Grants (Greenbook), "Program and Account Reports". Accessed April 4, 2014. ^[1]

In fiscal year 2013, 50.6 Billion dollars.^{[citation needed]}

Aid from private sources within the United States in 2007 was probably somewhere in the $10 to $30 billion range. The Organisation for Economic Co-operation and Development (OECD) estimated that net private grants from the United States to developing countries totaled $12.2 billion that year.^[2] A private think-tank, the Hudson Institute, gave the following figures for U.S. private assistance for 2004.

Whether aid figures should include remittances by immigrant workers in the United States to their families outside the country is disputed. Some writers include remittances as aid, others do not. Though the Hudson Institute includes them in the above table, Daniel Drezner argues that remittances from the United States should not be counted as U.S. aid because, as he says, "Americans aren't remitting this money -- foreign nationals are."^[4] Nils Katsberg of UNICEF notes that remittances undoubtedly are a financial benefit to the families back home, but one must also factor in the negative effect, especially on the children, of the absence of the family member—likely a parent—who is working abroad.^[5]

For the first hundred years of the United States' existence as a country, government aid was practically nonexistent.^{[citation needed]} It was generally considered that the Constitution did not authorize the government to use the people's money for foreign charity.^{[citation needed]} There was, however, some private aid from charitable foundations and religious organizations. Missionary societies, for instance, operated schools in Africa and other areas, and provided some scholarships for foreign students to study in the United States.^{[citation needed]}

Later, the idea of government aid became more accepted. During World War One, the Committee for Relief in Belgium (CRB), which sent food to the hungry in that war-torn country, received $387 million from the U.S. government (as well as $314 million from the British and French governments and about $200 million from non-governmental sources). These government monies were given in the form of loans, but a considerable portion of those loans were forgiven.^[7]

After the war, the American Relief Administration, directed by Herbert Hoover who had also been prominent in the CRB, continued food distribution to war-devastated European countries. It also distributed food and combated typhus in Russia during 1921-23. The U.S. Congress appropriated $20 million for the ARA under the Russian Famine Relief Act of 1921. As is frequently the case with aid, whether from the United States or other donor countries, the food relief was given for political as well as humanitarian reasons: it was given preferentially to towns or regions that opposed communism.^{[citation needed]}

Levels of United States aid increased greatly during World War Two, mainly on account of the Lend-lease program. United States government aid remained high in the decade after the war because of contributions to European reconstruction, and competition for influence versus the Communist powers in the first years of the Cold War. By 1960, the annual aid amount had receded to about half of what it was in the early post-war years, and, in inflation-adjusted terms, it has remained at that level—with some fluctuations—until the present.^[8]

The Lend-lease program, which began in 1941 (before the U.S. entrance in the war) was an arrangement whereby the United States sent large amounts of war materials and other supplies to nations whose defense was considered vital to the defense of the United States. It began with the passage by Congress of the Lend-lease act (PL 77-11) on 11 March 1941.^[9] Initially, the main recipient was Great Britain; the Soviet Union began receiving supplies (paid for in gold) in June 1941 outside of Lend-lease, and was included in the Lend-lease agreement in November 1941. By the end of the war, most of the Allied countries had been declared eligible for Lend-lease aid, although not all received it. By the time the program was ended by President Truman in August 1945, more than $50 billion worth of supplies had been disbursed, of which the Commonwealth countries received $31 billion and the Soviet Union $11 billion. Although formally the material was loaned, in the end only partial repayment was demanded.

A second wartime aid program, the United Nations Relief and Rehabilitation Administration (UNRRA), was founded in November 1943, by 44 Allied governments, for the purpose of assisting and resettling displaced victims of the war.^[10] Its initial focus was on assisting people in areas the Allies had captured from the Axis powers: distributing food, clothing and other essentials, and helping with medical care and sanitation. Later it also assisted in the resumption of agriculture and industry. Each of the 44 signatories was supposed to contribute one percent of its national income.^[11] The chief beneficiaries were China, Czechoslovakia, Greece, Italy, Poland, the Ukrainian SSR and Yugoslavia. UNRRA returned about 7 million displaced people to their countries of origin and provided refugee camps for about one million who were unwilling to be repatriated. UNRRA ceased operations in Europe in mid-1947;^[12] some of its activities in Asia continued under other auspices until early 1949. In the end 52 countries had contributed as donors. Contributions from governments and private organizations during the four years of the program totaled over $3.8 billion; more than half of that was from the United States.

After the war, the United States began giving large amounts of aid to Greece and Turkey under the Truman doctrine. Both countries were experiencing civil strife between communist and anti-communist factions, and the President and his advisors feared that their efforts to keep European countries from adopting communism might be about to suffer a serious setback. In December 1946, the Prime Minister of Greece visited Washington and requested additional United States aid. Truman promulgated his containment doctrine in early 1947, a major component of which was to be aid to the world's poor countries in order to blunt the appeals of radicalism to their hungry peoples and to bolster their anti-communist political elements. In May 1947 the U.S. government granted Greece $300 million in military and economic aid. Turkey received $100 million and the battleship Missouri and the aircraft carrier Franklin D. Roosevelt were deployed there. The U.S. government gave Greece $362 million in 1949, and U.S. aid to Greece generally remained over $100 million annually until 1998.^[13] The aid was at times controversial, since it supported authoritarian governments in Greece from the 1940s to early 1960s, as well as the 1967–1974 military junta. Aid to Turkey was $117 million in 1949, $259 million in 1952, and remained in the hundreds of millions annually until 1998.^[14]

The most well-known, and largest, United States aid program in the immediate post-war years was the European Recovery Program (ERP). More often known as the Marshall Plan, it was the creation of George Kennan, William Clayton, and others at the U.S. State Department under Secretary of State George Marshall. Publicly suggested by Marshall in June 1947, and put into action about a year later, the Plan was essentially an extension of the Greece–Turkey aid strategy to the rest of Europe. The U.S. administration considered the stability of the existing governments in Western Europe vital to its own interests. On 3 April 1948, President Truman signed the Economic Cooperation Act, establishing the Economic Cooperation Administration (ECA) to administer the program, and actual disbursements got underway. The focus was on promoting production, stabilizing currencies, and promoting international trade. To be eligible for the aid, a country had to sign an agreement with the United States government committing itself to the Act's purposes. The Communist countries were formally invited to participate in the Plan although Secretary Marshall thought it unlikely that they would accept and they did in fact decline the aid. Also in 1948, the United States and the recipient countries created the Organisation for European Economic Cooperation (OEEC – it became the OECD in 1961) to coordinate the use of the aid. A large portion of the money given was used to purchase goods from the United States, and the ships used to transport the goods had to be of U.S. nationality. Until after the Korean War, military aid was not part of the plan.^[15] The Marshall Plan ended in December 1951 and its functions were transferred to the Mutual Security Administration.^[16] The United States government gave out about $12.5 billion under the Plan during its three-and-a-half year existence. The countries receiving the most were Great Britain ($3.3 billion), France ($2.3 billion) and West Germany ($1.4 billion).^[17]

Under title IV of the Foreign Assistance Act of 1948, South Korea and the Guomindang regime in China were given aid in a similar manner to the Marshall Plan. Japan was also given aid.

Congress passed the Foreign Assistance Act on September 4, 1961, reorganizing U.S. foreign assistance programs and separating military and non-military aid. The Act mandated the creation of an agency to administer economic assistance programs, the U.S. Agency for International Development (USAID), which was established by President Kennedy two months later. USAID became the first U.S. foreign assistance organization whose primary focus was long-term economic and social development.

President Obama announced to the UN Millennium Development Goals summit in September 2010 that the United States was changing its policy towards foreign aid. The President said the country would focus more on effectiveness, and make sure donated food, medicine, and money help countries get to the point where they no longer require such aid. Infrastructure set up for the President's Emergency Plan for AIDS Relief would be used to build capacity in local health care systems to improve maternal and child health, and also fight tropical diseases. The new policy would increase the profile and participation of the United States Agency for International Development (USAID), which will coordinate more directly with the National Security Council and Secretary of State Hillary Clinton.^[19] Some observers criticized the link with national security and foreign policy as unhelpful for the impoverished, and others lamented the attempted streamlining as only adding more bureaucracy.^[19] Foreign aid is a highly partisan issue in the United States, with liberals, on average, supporting government-funded foreign aid much more than conservatives do,^[20] who tend to prefer to provide foreign aid privately.

• United States military aid
• United States Foreign Military Financing
• Feed the Future Initiative
• Foreign policy of the United States
• Criticism of U.S. foreign policy
• Foreign Assistance Act
• USAID
• Compact of Free Association
• Millennium Challenge Corporation
• Development Assistance Database

General:

• List of governments by development aid

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USG sources of data on United States aid are:

• U.S. Overseas Loans and Grants (a.k.a. the Greenbook). A complete historical record of all foreign assistance provided by the United States to the rest of the world.
• U.S. Official Development Assistance Database provides U.S. Official Development Assistance (ODA) data as defined by the Organization for Economic Co-Operation and Development (OECD), Development Assistance Committee (DAC). Data are for the years 2005 - 2012.

A third USG source, the Foreign Assistance Dashboard provides a view of U.S. Government foreign assistance funds and enables users to examine, research, and track aid investments. The Dashboard is still in its early stages of development.

• http://www.foreignassistance.gov/web/default.aspx

Non-USG sources of data on United States aid are:

• Publications of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD). The OECD offers large amounts of data on line. Complete access is by subscription, but useful amounts are made available free. The DAC does not include private aid in its main category, "Official Development Assistance (ODA)", but reports some of it under other headings.
• AidData provides free access to a searchable database of foreign aid activities by donor, recipient, sector, and other criteria. Using the AidData database, it is possible to search for U.S. foreign aid activities financed between 1973 and 2008, and download them as a CSV file.

• U.S. Foreign Assistance dashboard
• U.S. Overseas Loans and Grants database
• Brief Chronology and Highlights of the History of U.S. Foreign Assistance Activities
• Criticism of U.S. Foreign Aid from the Dean Peter Krogh Foreign Affairs Digital Archives
• Rethinking U.S. Aid from the Dean Peter Krogh Foreign Affairs Digital Archives
• Foreign Aid: An Introduction to U.S. Programs and Policy Congressional Research Service 2012

• Lancaster, Carol. Foreign aid: Diplomacy, development, domestic politics (University of Chicago Press, 2008)
• Morgner, Aurelius. "The American Foreign Aid Program: Costs, Accomplishments, Alternatives?," Review of Politics (1967) 29#1 pp. 65-75 in JSTOR

Bristol, Nellie. 2010. "US Foreign Aid Restructuring: is it "a very big deal?" From World Report. Accessed 4/19/2010.