America has re-invested itself — and its image — in foreign aid. President Biden is reversing Trump-era policies which slashed funding for foreign aid and the current administration is attempting to repair relations with historically exploited nations like Yemen and Chad.
America’s renewed commitment to foreign aid is also observable in its budget. Under President Trump, the Department of State’s foreign aid budget was reduced by $10 billion, and the United States Agency for International Development’s (USAID’s) budget was $41 billion. This year, the President’s budget announced USAID would increase to $58.5 billion.
The return to foreign aid has drawn scorn from many who believe foreign aid doesn’t work. But the reality is more complex — foreign aid does work, but only if our approach to aid is nuanced and occurs under the right conditions.
Foreign aid is an umbrella term used when one nation gives some of its resources to another nation. This usually occurs when a rich country assists a poorer country, with the principal goal of bettering the welfare or development of the poorer nation.
Despite the intense discourse which surrounds foreign aid, it is widely misunderstood. Many falsely believe that foreign aid spending is out of control, or, more simply, a waste of money.
According to data collected by the Organisation for Economic Cooperation and Development (OECD), America’s foreign aid budget represents only 0.165% of its total GDP. In comparison, other nations like France, Germany, Canada, and the United Kingdom commit considerably more to foreign aid, and Scandinavian countries like Sweden and Norway spend over 1% of their total GDP to fund foreign aid efforts.
Foreign aid is also widely effective. Multiple studies find that foreign aid can improve economic growth in recipient nations, and has the potential to save millions of lives around the world.
However, foreign aid isn’t charity — it’s an investment. Powerful countries like America leverage their commitment to foreign countries strategically, with a utilitarian goal of market development or increased political leverage.
During the final days of his presidency, President Obama made this distinction between foreign aid and charity clear. Speaking to Vox, President Obama proposed that foreign aid is a “tool in our national security portfolio, as opposed to charity” and advocated for the idea that foreign aid should be seen as a proactive alternative to military interventions. This lays bare the mechanisms of foreign aid, wherein foreign aid serves the goals of rich nations.
Foreign aid is complex, but, at its best, it has the potential to save lives, promote humanitarian ideals, and advance economic growth in recipient nations.
The Barriers
Not all foreign-aid projects work — and others are simply harmful. For foreign aid to be effective, it must overcome the following barriers.
Debt Traps
Economic aid can be understood as a “tool to project one’s power or exert one’s own sphere of influence in places of strategic significance.” In effect, economic aid allows nations to exploit poorer nations who become reliant on foreign investments.
Many speculate that these policies represent a “debt trap”, wherein poorer countries lose their economic sovereignty to the nations from which they have borrowed capital or received investment under the guise of “aid”.
These kinds of economic policies do not represent well-intentioned aid efforts, and they do little to improve long-term growth and prosperity in developing nations. Nations who make commitments to aid must ensure that their aid does not undermine the sovereignty of the recipient nation, and every effort must be made to guarantee that aid seeks to develop poorer nations with democratic principles in mind.
Lack of Human Resource
Historically exploited nations cannot make the same investments in educational infrastructure that richer nations do. This means that poorer nations, who have paid $16.3 trillion to richer nations since 1980, have been undermined so thoroughly that they may not have the human resources necessary to facilitate the equitable use of foreign aid in communities.
While individuals from rich nations should ensure they do not position themselves as saviors, those who are trained in social work are well-positioned to improve the efficacy of foreign aid efforts.
Well-educated social workers will also be increasingly valuable as the world seeks to exit the pandemic and confront the mental-health crisis left in its wake. In some nations, the prevalence of anxiety and depression doubled due to Covid-19, and those from low socioeconomic status (SES) backgrounds have traditionally suffered more than their richer counterparts.
Nations around the globe are attempting to gain access to vaccines and exit the pandemic, and many are calling for the end of intellectual property (IP) rights for vaccines. When the vaccine eventually does become available to poorer nations in the Global South, healthcare services must be ready to serve patients’ physical and mental health needs. Ideally, nations can provide their own, resilient healthcare system. But, when necessary, human capital from richer nations may help to increase the efficacy of foreign aid.
Cultural Misunderstandings
There’s a simple reality that impacts the efficacy of foreign aid: we’re different. Every nation has different priorities and agendas, and, historically, richer countries have been able to assert their agendas on poorer nations. So, when foreign aid arrives, simple faux-pas like cultural misunderstandings can derail even the most well-intentioned of efforts.
In fairness, those who lead foreign aid efforts are increasingly aware of the history of exploitation and are working hard to ensure that foreign aid policies align with the interests of local communities and the vulnerable populations who receive aid. Increased cultural awareness reduces the scope for misunderstandings to occur and, by centralizing power in communities, governments can ensure that foreign aid is not leveraged to the benefit of the rich.
The US’s reignition of foreign aid policies has faced a meaningful and noteworthy backlash from both sides of the political spectrum. However, billions of dollars have already been invested in foreign aid initiatives. Every effort must be made to ensure these investments help uphold democratic ideals and do not fund neocolonialism under the guise of aid.
Ainsley Lawrence is a freelance writer that lives in the Northwest region of the United States. She has a particular interest in covering topics related to politics, social justice, and workplace issues. The views and opinions expressed in this article are those of the author.
