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Report on U.S. foreign aid statistics

By TheophileEscargot in Op-Ed
Mon Oct 15, 2001 at 06:45:58 AM EST
Tags: Politics (all tags)
Politics

There seems to be a lot of disagreement over the amount of U.S. foreign aid. Some believe that the U.S. distributes a huge amount, some that the U.S. is remarkably stingy. Which is true?
  The United States is the worlds largest economy. A key part in the disagreement is whether the foreign aid budget is considered in total, or relative to the size of its economy.


Total amounts
There is a a useful table showing the foreign aid budgets of 22 nations, from 1995 to 1999. This immediately shows that the U.S. is a significant foreign aid donor, giving between 6 and 9 billion dollars annually over this time period. In the league table, the U.S. ranges between second and fourth place. The foreign aid superpower is unquestionably Japan, which donated from 9 to 15 billions over the same period. The largest donations come from a "big four" of Japan, Germany, France and USA. France in particular is a very generous donor, donating more money than the U.S. in 1995 and 1997.
   These figures are sourced from the Organization for Economic Cooperation and Development (OECD), but displayed on the Japan Economic Institute website.

Amount relative to GDP
The OECD also gives the data relative to GDP, which is a measure of the total size of an economy. They provide an interesting graph of foreign aid against GDP in 1999. This graph shows some startling disparities with the earlier table. Denmark is top of the league, donating a staggering 1% of its GDP to foreign aid (remember that actual tax revenue is much less than GDP). Denmark is closely followed by Norway (0.91%), the Netherlands (0.79%), Sweden(0.70%) and Luxembourg (0.66%). France is next with 0.39% of GDP. The United States is ranked last of the 22 countries, donating 0.1% of its GDP to foreign aid.
  This low relative position probably accounts for the position of some that the United States is somewhat stingy with its foreign aid. Relative to the size of its economy, Denmark is ten times as generous.

What good is it?
Foreign aid is frequently held up by politicians as an example of pure altruism by governments. However, few people are willing to believe that. Foreign aid tends to benefit the donor nation in several ways.
  For instance, there is a BBC article on how the Japanese government has used its massive aid program to get votes in favour of lifting the whaling ban. Foreign aid can provide useful leverage in getting the assistance of the recipient country in international disputes. As the worlds only foreign-aid superpower, Japan has benefited from this effect.
  Foreign aid can also be a good way to quietly subsidise businesses in the donor nation. The Washington Post reports that 80% of the U.S. foreign aid budget actually goes directly to American firms. The same article reports that "53 cents of every dollar spent by the United States on tackling the AIDS crisis in Africa never left the Washington, D.C. area."

The burden
As has been mentioned, Figures relative to GDP do not fairly describe the burden on the taxpayer. According to the appendix 1 of an article by the "Center on Budget and Policy Priorities", foreign aid accounted for 0.56% of total U.S. spending in 1999. This figure appears to have been falling for several decades: in 1962 the figure was 3.06%.
  This figure for 1962 equated to 0.58% of GDP, a level higher than France donates now, a level which approaches the present-day Scandinavian levels. This high figure may account for the perception within the United States that its foreign aid budget is a great burden on the taxpayer. This was historically true.

Conclusions
Although the proportion of its wealth donated to foreign aid is low, the United States is still a significant donor. U.S. foreign aid is roughly equivalent to that of a large European nation.
  However, relative to Japan, or the European Union considered as a single entity, U.S. foreign aid is small by comparison.

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Poll
U.S. foreign aid
o Too little 62%
o About right 25%
o Too much 11%

Votes: 35
Results | Other Polls

Related Links
o foreign aid budgets of 22 nations
o graph of foreign aid against GDP
o get votes in favour of lifting the whaling ban.
o 80% of the U.S. foreign aid budget actually goes directly to American firms
o 0.56% of total U.S. spending
o Also by TheophileEscargot


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Report on U.S. foreign aid statistics | 35 comments (13 topical, 22 editorial, 0 hidden)
One thing I am wondering... (4.50 / 4) (#5)
by Zeram on Sun Oct 14, 2001 at 10:57:45 AM EST

Do the figures presented include incentives that the US (and I would suppose other countries also) dole out to get countries to do specific things. For example the millions of dollars that the US gave the Taliban for their help in slowing the opium trade?

Beyond that I think the point that dispite the numbers we see, most of the money that America give out in forigen aid, just comes right back, because it benifits American companies abroad so much, is an execlent one. I would be willing to bet that Japan sees even more of it's money come back in one way or another, through simmilar means.

If you think about it, America is being stingy no matter how much we give. The governement helps American contries abroad, and even when the government seems to do something as alturistic as helping with the AIDS crisis in Africa, the majority of the money never makes it there, and to top it all off, America in general winds up with egg on it's face because between our companies and our governement we try to rape the AIDS victims in Africa on the price of the drugs they need to fight the epidemic.
<----^---->
Like Anime? In the Philly metro area? Welcome to the machine...
Opium money (none / 0) (#35)
by vectro on Wed Oct 24, 2001 at 12:07:50 PM EST

<BLOCKQUOTE><I>Millions of dollars for the Taliban.</I></BLOCKQUOTE>
Do you have a reference for this? The only thing I'm aware we gave to Afghanistan is humanitarian aid.

“The problem with that definition is just that it's bullshit.” -- localroger
[ Parent ]
Nice to see some numbers on this (4.40 / 5) (#6)
by localroger on Sun Oct 14, 2001 at 10:58:40 AM EST

I honestly had no idea where we stood on this what with all the contradictory claims flying around. This was a good, concise, and value-neutral exposition of something that usually gets spun into the ground.

I can haz blog!

Military aid (4.44 / 9) (#11)
by Best Ace on Sun Oct 14, 2001 at 12:20:47 PM EST

What you fail to mention is that a vast chunk of US foreign aid comes in the form of military aid and 'security assistance'. In fact this accounts for around 50% of total aid.

For example, in 1997, total US aid was around $6.2bn, which included military aid of $3.7bn. Military aid to Israel alone accounted for $1.82bn that year, which excludes the $557m of arms that Israel bought from the US (by comparison, Israel's GDP in 1997 was around $96.7bn).

I do not have figures to hand, but I bet that if you adjust your figures to exclude military aid, then the US will sink even lower in the tables.

Other sources (4.25 / 4) (#12)
by symbiotic on Sun Oct 14, 2001 at 01:08:43 PM EST

Other good sources supporting your argument include http://www.cia.gov/cia/publications/factbook/index.html and http://www.worldbank.org/data.

Why comparing absolute values is stupid (3.00 / 3) (#16)
by greenrd on Sun Oct 14, 2001 at 02:23:02 PM EST

Comparing the absolute values of humanitarian aid between countries is stupid. It's like saying that because Hawaii has less drunks than all the other US states put together, that proves that Hawaians are more careful with their drink. Totally failing to take into account population size etc.

Needless to say, this applies to individual giving as well. Moreover dividing by total wealth is still too simplistic - the reality is, Bill Gates giving away 10% of his wealth would not be catastrophic for him and his family, but a heavily indebted person in the US giving 10% of their wealth could be evicted and become homeless. Amounts of money given are not proportional to utility, from the point of view of the giver - you have to take into account lots of things like diminishing marginal utility, etc. etc.

Although I am not a Christian, I have to say Jesus of Nazareth summed this up very well when he asked (IIRC) if a rich man gives more than a poor man, is the rich man really more generous?

Obviously I would not deny that more money does more good (unless it is a bogus cause). But if we are talking generosity, that's not really the point.

+1FP but more details on the tying of aid to trade would have been nice!


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes

Both absolute and relative values are significant (none / 0) (#18)
by TheophileEscargot on Sun Oct 14, 2001 at 02:59:03 PM EST

...in my opinion. I think it depends whether you look at it from a pragmatic or idealistic point of view.

For instance, it is possible to look at foreign aid from a totally cynical perspective. Just for example, you could look at it as an exercise in buying U.N. votes (Just as an example, I'm not saying that's the only reason in real life).

From that perspective, it could be that every country buys the votes it needs. America could be buying as many votes as it needs, which would incidentally mean that its relative spending is lower. Japan might be spending more because it needs more influence over the whaling issue for instance, or because without large armed forces it needs to exert more influence through other means.

I didn't put that kind of thing in the article because it is pure speculation on my part. I don't have any privileged information on why individual governments spend the way they do.
----
Support the nascent Mad Open Science movement... when we talk about "hundreds of eyeballs," we really mean it. Lagged2Death
[ Parent ]

Private Giving (5.00 / 3) (#21)
by Philipp on Sun Oct 14, 2001 at 03:28:15 PM EST

A couple of people criticized that these statistics do not include private charity giving by individuals. I did some searching on the web, and while I did not find numbers on this for different countries. I did find out that only less than 2% of all U.S. charitable giving goes abroad. Clearly, this does not lift the numbers significantly.

alias kn 'killall -9 netscape-communicator'
Why international aid is good (4.66 / 3) (#24)
by Philipp on Sun Oct 14, 2001 at 03:47:23 PM EST

It is very easy to get cynical about international aid, especially since the poorest countries almost always have corrupt dictators. So just sending money to the governments results frequently in the forwarding of this money to the bank account of the powerful.

It does not have to be this way: Organizations such as UNICEF and other NGOs have people in these countries who channel the money to specific projects. A lot of countries have their own organization which operate like that.

Another point: Food aid, although popular (how could you not help a starving person?), is often criticized for just crowding out local farmers and ruining them. But there are many other areas, where international aid is being used in a positive way: Providing medical assistance, building roads and schools, digging wells, and other basic infrastructure, which should be provided by the government of the country (but isn't because there is not enough money, or the government is corrupt).

alias kn 'killall -9 netscape-communicator'

Been there, done that (4.66 / 3) (#31)
by Sikpup on Mon Oct 15, 2001 at 03:15:22 AM EST

I have worked delivering some of this foreign aid cargo. One summer involved delivering over 200,000 tons of corn to Egypt. This was part of the annual 2.5+ billion the US gives Egypt every year for the Camp David accords (Israel gets around 3 billion, with substantial military aid included). The order of events: US Govt buys corn from farmers at inflated prices. US Govt contracts shipping company to transport corn at lucrative rates. (Said shipping used to be american, but Sen Grassley and others have since killed that requirement so that more money is available for grain purchases. (personal sore spot)). Grain is loaded onto freighter in New Orleans, and is transported to Alexandria, Egypt. As grain is offloaded, it is sacked and loaded onto trucks. Said trucks drive off to Tripoli. (Yes, I asked the drivers where they were going with all this grain). I have hauled various aid cargos to places like Angola, Egypt, Georgia, and Russia. Some of this does what it is supposed to, such as Russia and Georgia. Some gets stolen and wasted, such as Angola, and some gets diverted to line the pockets of very powerful people, like in Egypt. The ideas and values behind foreign aid are noble. However, like all things touched by politicians, and where large quantities of money are involved, it is quickly perverted and destroyed. The plug should be pulled on all foreign aid until a way can be found to keep the corruption out. If nothing else, some kind of oversight commitee needs to exist as a check against absolute corruption.

arrghh (5.00 / 1) (#32)
by Sikpup on Mon Oct 15, 2001 at 03:18:06 AM EST

Sorry, my plain text ended up as html:

I have worked delivering some of this foreign aid cargo. One summer involved delivering over 200,000 tons of corn to Egypt. This was part of the annual 2.5+ billion the US gives Egypt every year for the Camp David accords (Israel gets around 3 billion, with substantial military aid included).

The order of events: US Govt buys corn from farmers at inflated prices. US Govt contracts shipping company to transport corn at lucrative rates. (Said shipping used to be american, but Sen Grassley and others have since killed that requirement so that more money is available for grain purchases. (personal sore spot)). Grain is loaded onto freighter in New Orleans, and is transported to Alexandria, Egypt. As grain is offloaded, it is sacked and loaded onto trucks. Said trucks drive off to Tripoli. (Yes, I asked the drivers where they were going with all this grain).

I have hauled various aid cargos to places like Angola, Egypt, Georgia, and Russia. Some of this does what it is supposed to, such as Russia and Georgia. Some gets stolen and wasted, such as Angola, and some gets diverted to line the pockets of very powerful people, like in Egypt.

The ideas and values behind foreign aid are noble. However, like all things touched by politicians, and where large quantities of money are involved, it is quickly perverted and destroyed. The plug should be pulled on all foreign aid until a way can be found to keep the corruption out. If nothing else, some kind of oversight commitee needs to exist as a check against absolute corruption.

[ Parent ]
This is a lame excuse (none / 0) (#33)
by Philipp on Mon Oct 15, 2001 at 02:27:09 PM EST

As I pointed out in another post, there are problems especially with food aid. Give a man a fish, and he'll eat for a day, teach him how to fish and he'll eat forever. Didn't we already know that?

There are many international aid programs (like UNICEF, or the Peace Corps) that are very valuable, important and underfunded. For this stuff to work, you need organisations in the receiving countries that have a long-term view. Those options exist and are real.

Shipping corn or dropping food packages from air planes is a charade, and everybody knows that. Citing them as evidence that humanitarian aid cannot help is very cynical.

alias kn 'killall -9 netscape-communicator'
[ Parent ]

They don't need charty, they need comerce (4.00 / 2) (#34)
by svampa on Mon Oct 15, 2001 at 06:45:16 PM EST

We protect our farmers by import duties, we try to get 3rd world sign treats that allow our companies to exploit their natural resources.

No matter how much aid, food or money we send. The balance always must be we get more than we give. If we do the inverse we are loosing money and we are in recesion.

I would like to hear a polician saying:

Next 10 years we are going to grow just 0.05% in order to help third world to be a little less poor.
Don't worry even if you are unemployed you are rich man compared to people in Somalia.
Companies wich have their production centers in other countries (mines, etc) will give profits only in the same country, no matter where the stocks owners are from.

We don't want to teach them how to fish, we want to buy an exclusive right to fish in their rivers. And we'll sell their own fishes, and give them some fishes as charty, or worse, we'll use fishes to bribe local caciques

Each country of the 1st world is a competitor, we needn't more players in the game, and we don't want to loose advantange giving money to other countries. It is the sad truth, world can't support all countries like 1st world countries, if 3rd world becomes a little richier we must get a little poorer.

All that numbers of aids, corruption etc, mean nothing, it's like dumping a ton of trash every day and give a toothbush to clean it.
are we arguing where to clean? are we arguing toothbush should be better? are we complainig because we should change the toothbush at least once a week but only change it once a month?. That charty is just hypocrisy and means nothing.



Report on U.S. foreign aid statistics | 35 comments (13 topical, 22 editorial, 0 hidden)
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