What’s Foreign Aid? Why Does the U.S. Provide It?

March 14th, 2011

By Dan Miller

It’s time to reassess the good, the bad, and the ugly.

According to this article, a recent poll revealed that “respondents thought the foreign aid part of the federal budget was an average of 27 percent. The real amount is about one percent.” That suggests either that the amount of foreign aid is small or that the federal budget is very big. The one percent figure is supported by government data. Leaving aside the question of whether we can afford it, some foreign aid is useful because it may in various ways serve the interests of the United States; beyond that, we might supply aid which will do the United States little or no good, or aid which is even likely to harm the United States. With an administration often asleep at the switch and dithering, attempting to figure out which is which is a difficult, but necessary, exercise.

According to the Obama administration’s foreign aid appropriations request for 2011, in many cases slightly less than last year, we should provide direct foreign aid to the following countries in the amounts indicated (not all countries to receive aid are included):

Table I
Afghanistan $3,923,700,000
Pakistan $3,053,600,000
Israel $3,000,000,000
Egypt $1,558,000,000
Jordan $682,700,000
Zimbabwe $99,100,000
Somalia $84,958,000
Russia $68,700,000
Nicaragua $44,457,000
Cuba $20,000,000
China $12,800,000
Venezuela $5,000,000
N. Korea $2,500,000
Libya $875,000
S. Korea $0
Iran $0


Based on the (confusing) data provided by the United States government, the amounts shown in Table I above apparently do not include funds requested for multiple regional foreign aid offices serving two or more countries. Nor do they seem to include the $646,500,000 requested by the Obama administration for demon climate change or the $9,836,600,000 requested for health matters, including approximately $5.85 billion for HIV/AIDS and $231 million for nutrition. They apparently do include funds requested for military assistance, exclusive of the involvement of United States military forces most of which falls under Department of Defense budgets. The various assistance categories are provided here:

Table II
Peace and Security $10,843,000,000
Health $9,386,600,000
Economic Development $4,656,400,000
Humanitarian Assistance $4,005,800,000
Democracy, Human Rights and Governance $3,333,000,000
Education and Social Services $1,585,700,000
Environment $815,300,000


Egypt and Pakistan

Aid requested by the Obama administration for Egypt includes both military and economic assistance. Of the total $1,558,000,000, $1.3 billion is for Peace and Security, which encompasses

peacekeeping, humanitarian, coalition/multinational and peace support operation. Support security sector reform through training and operational support. A host nation’s security forces include military, paramilitary, law enforcement (includes civilian police, specialized units, border security, maritime security, etc.) Security sector reform activities are not limited to post-conflict situations.

Reductions in aid to Egypt have been suggested. Aid to Pakistan, three times more than that given to Egypt, might also be reconsidered.


Aid requested for Afghanistan ($3,923,700,000) also includes both military and economic assistance (exclusive of most U.S. troop involvement). Alas, the United States is increasingly viewed as an enemy. Most recently, President Karzai voiced what appears to be widespread public sentiment that collateral damage inflicted by NATO forces on the civilian population is completely unacceptable and said that

regret is not sufficient … civilian casualties during military operations by coalition forces is the main reason for tension in relations between Afghanistan and United States…. It is not acceptable for the Afghan people anymore. Regrets and condemnations of the incident cannot heal the wounds of the people … repetition of such incidents would affect relations and the environment of trust between us. The continuation of such incidents is not tolerable and not acceptable for the Afghan people and government.

When fighting a war against “civilians” who are not in uniform and are indistinguishable from others, mistakes happen; they also happen in conventional wars with uniforms.

Hundreds of people from a left-wing political party marched through Kabul to protest U.S. military operations and demanded the withdrawal of foreign troops.

They chanted, “Death to America, death to the American government,” and carried pictures of Afghans killed or wounded in recent airstrikes. They burned an effigy of Mr. Obama.

I have seen no reports of similar demonstrations against “civilian” insurgents who also kill civilians, sometimes rather indiscriminately. It seems to be a losing battle for the United States and for NATO, and it may be that when we leave Afghanistan little will remain of what we have tried to accomplish. Unless ways can be found to reverse this unfortunate momentum, the expenditure of nearly four billion dollars in aid as well as American lives and military resources not included in the nearly four billion dollar amount is likely to continue to harm rather than to help the United States.


Consider briefly Jordan’s successful but precarious political history — beginning with King Hussein, a “pragmatic leader,” as the CIA Factbook has it, who

successfully navigated competing pressures from the major powers (US, USSR, and UK), various Arab states, Israel, and a large internal Palestinian population. Jordan lost the West Bank to Israel in the 1967 war and barely managed to defeat Palestinian rebels who attempted to overthrow the monarchy in 1970. King HUSSEIN in 1988 permanently relinquished Jordanian claims to the West Bank. In 1989, he reinstituted parliamentary elections and initiated a gradual political liberalization; political parties were legalized in 1992. In 1994, he signed a peace treaty with Israel. King ABDALLAH II, the son of King HUSSEIN, assumed the throne following his father’s death in February 1999. Since then, he has consolidated his power and undertaken an aggressive economic reform program. Jordan acceded to the World Trade Organization in 2000, and began to participate in the European Free Trade Association in 2001. In 2003, Jordan staunchly supported the Coalition ouster of Saddam in Iraq and following the outbreak of insurgent violence in Iraq, absorbed thousands of displaced Iraqis. Municipal elections were held in July 2007 under a system in which 20% of seats in all municipal councils were reserved by quota for women. Parliamentary elections were held in November 2010 and saw independent pro-government candidates win the vast majority of seats.

Jordan’s economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources, underlying the government’s heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment, inflation, and a large budget deficit…. King ABDALLAH has implemented significant economic reforms, such as opening the trade regime, privatizing state-owned companies, and eliminating most fuel subsidies, which in the past few years have spurred economic growth by attracting foreign investment and creating some jobs. The global economic slowdown, however, has depressed Jordan’s GDP growth…. The budget deficit is likely to remain high, at 5-6% of GDP, and Amman likely will continue to depend heavily on foreign assistance to finance the deficit in 2011. Jordan’s financial sector has been relatively isolated from the international financial crisis because of its limited exposure to overseas capital markets. Jordan is currently exploring nuclear power generation to forestall energy shortfalls.

This suggests that America’s $682,700,000 in aid for Jordan may be highly beneficial to the United States — at the least, to a greater extent than foreign aid expenditures elsewhere.

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