Strategic foreign aid in the ‘Age of Sequestration’

Strategic foreign aid in the ‘Age of Sequestration’

The Age of Sequestration has seen rising public and governmental concern about the ineffectiveness of foreign aid.

Articles like U.S. Move to Give Egypt $450 Million in Aid Meets Resistance and Attaching Strings to Foreign Aid Often Proves Ineffective focus on Egypt in the midst of a changing Middle East and changing U.S. influence, but this geographic focus could be anywhere that the United States has national interests including the Asia-Pacific. The aid in question, part of the $1 billion in assistance that the Obama administration has pledged to Egypt after the overthrow of former president, is challenged by concerns over the new government’s policies. Having aid on the table proved to be a successful tool in convincing the Egyptian government to allow American NGO workers to leave following a crackdown on prominent Washington-based pro-democracy organizations. However, U.S. aid was arguably unsuccessful when Cairo, in spite of U.S. threats to cut aid, continued its broader crackdown on civil society, dissolved parliament, and stripped the civilian presidency of many powers. The United States reportedly lost much of its leverage with the Egyptian military and lost credibility with Egyptian activists looking to Washington for support because of the understanding that the threat to cut off aid was hollow.

Much of the debate here seems to be about the application-to-benefit ratio. When the United States gives money to a country, can we guarantee that it will behave as we wish? Will it necessarily put said money into the development of its people? While the United States has striven and has arguably achieved a greater likelihood of an affirmative answer to this question (e.g. Millennium Challenge Corporation), the unfortunate answer is no. It is an open secret that the threat to cut off aid to Egypt is hollow. This is because Egypt is a strategic investment, receiving $1.3 billion a year in military aid since 1979. Egypt and other countries that the U.S. provides strategic aid to do not do everything the U.S. tells them to. After all, the policies of Egypt and Bahrain’s governments served to inspire their countries’ Arab Spring experiences. Arguably what matters most is that they are obedient in areas that really matter, such as limiting the risk of Arab-Israeli conflict (Egypt) and hosting U.S. forces (Bahrain).

In analysing the success and value of foreign aid, one must keep in mind the ends of its use. Is U.S. aid, now and historically, aimed at democracy? Is it aimed at long-term economic development? Or is it strategic? Foreign aid need not be practical in only one of these areas, but a history of strategic aid does soften the threat of its removal if said aid is still strategically important. While the discussion of foreign aid in a strategic sense has often been downplayed in the post-Cold War years, its use is still very of-the-moment. As President Obama emphasized at the 2010 Millenium Development Goals Summit, “(U.S.) national security strategy recognizes development not only as a moral imperative, but a strategic and economic imperative.”

China, the boogieman of anti-expenditure and in turn anti-foreign aid arguments, realises this in full. As noted by the U.S.-China Economic and Security Review Commission, “China’s foreign assistance has grown dramatically over the last decade, challenging established notions of what foreign aid consists of and how it should be invested. China often focuses its assistance on its own strategic objectives and economic needs, such as developing infrastructure to expand access to oil, gas, and other natural resources needed for China’s development, and increasing market access for Chinese products.” According to CQ Researcher’s Foreign Aid and National Security: Will Cuts in Assistance Undermine U.S. Safety, China has increased its foreign aid significantly over the past few years, particularly in Africa, where it grew from $300 million in 2001 to $2.1 billion in 2009. The Obama administration has responded to this analysis in kind, with former Secretary of State Hillary Rodham Clinton telling the Senate Foreign Relations Committee, “Let’s put aside the moral, humanitarian, do-good side of what we believe in, and let’s just talk, you know, straight realpolitic. We are in competition with China.”

It may not make Americans feel good knowing foreign aid has purposes other than development. Indeed, this reality has led to criticism, but not from the countries the U.S. supports via aid. Ultimately, while the impact of such aid may not be always clear the impact of its removal would be plain to see. This understanding becomes even more important recognising that the Age of Sequestration is still an Age of Great Power Politics. It is time for Americans to make a clear-headed analysis of not only the costs but also the strategic benefits of foreign aid in a competitive world.

Categories: Finance, North America

About Author

Taylor Wettach

Taylor is a participant in the Government of Japan-administered Japan Exchange and Teaching (JET) Program. Previously, Taylor worked for the Office of the Senior Vice President for Asia and Japan Chair at the Center for Strategic and International Studies (CSIS). He graduated magna cum laude graduate of Georgetown University’s Edmund A. Walsh School of Foreign Service.