Since the events of September 11^th, the issue of U.S. foreign assistance has been brought to the forefront of budget debates.  U.S. foreign aid is seen by many as an essential component of U.S. foreign policy.  A 2001 poll conducted by the University of Maryland Program on International Policy Attitudes (PIPA) found that: “The American public continues to show strong support for giving foreign aid in principle.  Nearly eight in ten (79%) agreed that ‘the United States should be willing to share at least a small portion of its wealth with those in the world who are in great need.’”[1]  Foreign aid is used to provide assistance for; peace; development; supporting U.S. political and security goals; fostering democratization and free market economies; fostering stability for countries in crisis; stopping international drug trafficking; military aid; and humanitarian assistance.  “Foreign aid is a tool of U.S. foreign policy.”[2]  However, despite the importance of providing foreign aid, assistance has declined considerably in recent decades.  Today, only one percent of the U.S. budget is allocated for foreign aid.  The U.S. is the smallest contributor of foreign aid among major donor governments in terms of national wealth (GNP).[3]

 

U.S. foreign aid traces its roots to the Marshall Plan.  The Marshall Plan was created after World War II as an emergency assistance program to help Europe recover from its great losses.  Also responding to Europe’s need for assistance, the international community established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank) in 1945.  While the IMF and World Bank were created as permanent institutions, the Marshall Plan was a temporary program which ended in 1951.  For the following ten years, Congress debated and passed various acts to unify U.S. military, economic and technical aid efforts.  Growing dissatisfaction with the way U.S. foreign aid was being managed led President John F. Kennedy to urge Congress to pass legislation that would provide for a comprehensive foreign aid program.  In 1961, Congress passed the 1961 Foreign Assistance Act, which still serves as the framework for foreign aid.  The 1961 Foreign Assistance Act provided for management rules on development and economic assistance.  The Act also established the United States Agency for International Development, better known as USAID.  “USAID became the first U.S. foreign assistance organization whose primary emphasis was on long-range economic and social development assistance efforts.”[4]  USAID conducts programs that provide direct assistance to developing nations around the world.  Since the passage of the 1961 Foreign Assistance Act, many attempts have been made to reorganize the foreign assistance management structure, as many have continued to argue that there are still major problems with the way in which U.S. foreign aid is managed. Unfortunately, these attempts have not been successful. 

 

The foreign operations budget, also known as the 150 account, is part of the overall U.S. federal budget.  There are six major categories of foreign assistance to which money is allocated from the federal budget.  These categories include: bilateral development aid, economic assistance supporting U.S. political and security goals, humanitarian aid, non-emergency food assistance, multilateral economic contributions and military aid.  Bilateral development assistance includes direct assistance to countries to help them with economic reform, private sector development, democratization, environmental protection, population and human health.  In FY2001, 23.3% of total foreign aid appropriations ($3.5 billion) went to bilateral development assistance.  Economic aid supporting U.S. political and security goals is used to help countries to stabilize their economies and to pay off foreign debt.  Many argue that helping these countries now will help to prevent greater economic and political problems for those countries in the future.  Congress appropriated $4.44 billion dollars for this category in FY 2001, which accounted for 29.7% of total foreign assistance.  

 

Humanitarian aid is used as emergency assistance.  In FY 2001 Congress appropriated $1.46 billion, representing 4.7% of total foreign aid.  The U.N. high Commission for Refugees and the International Red Cross are among the many relief organizations that receive funding through the humanitarian aid budget.  Since disasters are unpredictable, supplemental budgets are requested from Congress throughout the year.  The non-emergency food aid program, also known as the Food for Peace program, provides U.S. agricultural goods to developing countries.  This program is administered by the Department of Agriculture and accounts for 2.7% of the foreign aid budget.  In FY 2001 Congress appropriated $1.43 billion (9.5% of total foreign aid) for multilateral assistance.  This assistance includes funding for international organizations such as the United Nations, IMF and World Bank.  Unfortunately, the U.S. is in arrears on a lot of the payments that are owed to these international organizations.  Military assistance is the second largest category of foreign aid operations.  In FY 2001 Congress appropriated $3.76 billion, 25.1% of the total foreign aid budget, for military assistance to U.S. allies.  This assistance is used to buy U.S. military equipment for allies and to provide them with U.S. military training.  A portion of the funds also goes to non-UN peacekeeping efforts.[5]

 

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The United States provides some form of foreign aid to more than 140 countries.  The largest recipients of foreign aid are Israel and Egypt.  Israel receives about $2.1 billion per year in military aid, which is used to buy U.S. military equipment, and $600 million per year for economic support.  Egypt receives about $1.3 billion in military aid and about $615 million for social programs.[6]  Colombia, mostly for anti-drug trafficking efforts, and Jordan are the third and fourth largest recipients of U.S. foreign aid.  “The top ten recipients of aid in FY 2001 account for 41% of total U.S. assistance appropriated worldwide and 63% of all assistance allocated to individual countries.”[7] 

 

With the large majority of the world’s poor living in areas where the U.S. is giving the least aid, it is hard to relate American foreign assistance to the advancement of poor women.  “Women-headed households make up a majority of the poorest of the poor both in developed and developing countries.  More than 900 million women live on less than one dollar a day, and the number of rural women living in absolute poverty has risen by 50% over the past 20 years, as opposed to 30% for men.”[8]  In 1973, Congress passed the Percy Amendment which requires U.S. bilateral assistance programs to enhance the integration of women into the national economies of developing countries and instructs the State Department to consider progress on women’s issues when making decisions about funding international organizations.  In 1974, USAID established the Office of Women in Development (WID) “to help ensure that women participate fully and benefit equally from U.S. development assistance programs.” Even with an $11 million budget, some women advocates have indicated that WID “lacks the technical staff and resources to adequately assist them.”[9]

 

At the U.N. Summit on Development in Johannesburg, South Africa, U.N. members pledged to reduce poverty by one half by the year 2015.  In March of 2002, President Bush proposed to increase foreign aid by $5 billion by FY 2006.  The new funds would be placed in a Millennium Challenge Account (MCA) and would be administered by the Millennium Challenge Corporation (MCC).  For the first two years, countries with a per capita income below $1,435 may compete for MCA funds.  Countries will be chosen on a competitive basis, based on governance, economic policy and investment in people.  Many issues are still unresolved about the MCA, such as country eligibility criteria, the way in which the MCC will operate and budget considerations.

 

Although the United States is the largest source of foreign aid, it still is the lowest provider among developing nations when calculated according to national wealth, or GNP.  According to the Organization for Economic Co-operation and Development (OECD), the top donors in relation to GNP in 2001 were Denmark, Norway, the Netherlands, Luxembourg, and Sweden.  Also according to OECD, after the United States, the largest providers of foreign aid in absolute dollars were Japan, Germany and the United Kingdom.

 

Foreign assistance not only helps recipient countries, but also helps donor countries.  President John F. Kennedy stated, “The answer is that there is no escaping our obligations:  our moral obligations as a wise leader and good neighbor in the interdependent community of free nations—our economic obligations as the wealthiest people in a world of largely poor people, as a nation no longer dependent upon loans from abroad that once helped us develop our own economy—and our political obligations as the single largest counter to the adversaries of freedom.”  Foreign aid is a tool for change.  “Over the past 40 years, life expectancy at birth in developing countries has increased by 20 years.  Over the past 30 years, adult illiteracy in the developing world has been cut nearly in half.  In India, the literacy rate for women rose from 39 percent to 54 percent in just the past decade.  In Uganda, the number of children in primary school has doubled.  Six million Ethiopians are now benefiting from better education and health services.”[10]  As data indicate, foreign aid can result in providing longer, healthier and more productive lives for those in need. 

 

 

Action:

·    Urge your congressional leaders to provide more funding for foreign aid programs, specifically for development programs

 to areas such as Africa, Asia and South America where people live on less than $1 day.  Also urge your leaders not to cut                 funding for current foreign operations accounts and humanitarian programs and to support the new Millennium Challenge Account (Millennium Challenge Account of 2003, Senate Resolution 571), without cutting funds from other foreign aid programs.  Write to your congressional leaders or contact the House of Representatives Appropriations Committee at (202) 225-2771, the House Committee on International Relations at (202) 225-5021, the Senate Committee on Appropriations at (202) 224-7363 and the Senate Committee on Foreign Relations at (202) 224-4651.

·    Women’s development must be a component of our foreign aid.  Urge the White House and your congressional leaders to further the integration of women’s and children’s issues into foreign aid programs.  You may contact the White House at (202) 456-1111.

 

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[1] University of Maryland Program on International Policy Attitudes. Americans on Foreign Aid and World Hunger: A Study of U.S. Public Attitudes. Feb. 2, 2001.

[2] Curt Tarnoff and Larry Nowles.  Foreign Aid: An Introductory Overview of U.S. Programs and Policy.  Congressional Research Service.  Updated. April 6, 2001.

[3] See Organization of Economic Co-operation and Development web page at www.oecd.org.

[4] See USAID web page at http://www.usaid.gov/about/usaidhist.html.

[5] Curt Tarnoff and Larry Nowles.  Foreign Aid: An Introductory Overview of U.S. Programs and Policy.  Congressional Research Service.  Updated. April 6, 2001.

[6] Council on Foreign Relations.  Terrorism: Q&A.  http://www.terrorismanswers.com/policy/foreignaid_print.html.

[7] Curt Tarnoff and Larry Nowles.  Foreign Aid: An Introductory Overview of U.S. Programs and Policy.  Congressional Research Service.  Updated. April 6, 2001

[8] Sharma, Ritu R.  Women’s EDGE.  Foreign Policy in Focus.  Women & Development Aid. Volume 6, Number 33, September 2001.

[9] Ibid.

[10] World Bank website.  Now More than Ever, Aid is a Catalyst for Change. March 11, 2002. www.worldbank.org.                                                                             

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