U.S. international aid does not aid

The new Millenium Challenge Corporation’s ability to give aid is questionable.

Thanks to Alan Greenspan, U.S. citizens are now squarely focused on how the ballooning federal deficit will impact Social Security. But the deficit also has enormous ramifications on the level of U.S. international aid, which falls far short of our nation’s global economic responsibility. The United States spends less on foreign aid than the 22 richest nations in the world. In addition, President George W. Bush’s fiscal year 2005 foreign aid proposal disproportionately focuses on defense funding and democracy-based aid initiatives.

For the first time since the end of the Cold War, the United States will allocate approximately one-third of its international aid to defense and economic support of political allies in the so-called war on terror. The plan increases subsidies to foreign militaries for the purchase of U.S. weapons from $700 million to $5 billion. In the past this money has gone to countries such as Israel, Egypt and Turkey to promote purchases of U.S. weapons and ensure U.S. geopolitical agendas.

In addition, Bush’s plan allocates $2.5 billion for the Millennium Challenge Account, a fund Bush created last year and launched in February. The Millennium Challenge Corporation, a new organization created to disburse the account’s funds, received $1 billion in the recent omnibus spending bill but has yet to administer those funds. While the program’s general purpose is strong – to increase U.S. spending on international development – its ability to give aid is questionable.

Aid from the account will be distributed to countries with per capita incomes of less than $1,455. There are 41 nations in Africa that meet these criteria, but to receive aid each country must also meet three of six governance indicators, two of four social investment indicators, three of six economic indicators, and receive a qualifying score on their “Control of Corruption,” leaving only three African countries eligible for aid.

In his recent speech at St. Olaf College’s Nobel Peace Prize Forum, Nobel laureate and former President Jimmy Carter noted that many impoverished countries are able to use only about 20 percent of the economic aid allocated to them. This is because of poor internal infrastructure and administrative loopholes set up by donor countries. U.S. economic aid is already far below that of other industrialized nations – we must make those funds more readily accessible.