The United States now looks primed to go over the fiscal cliff. As the debate rages on where to cut spending and where to raise revenues, many people are beginning to question the wisdom of handing out billions of dollars in foreign aid, often to governments that are not necessarily friendly with the United States or strong supporters of American interests. Other critics question the actual effectiveness of the aid provided, and argue that much of it is simply wasted away. In the opinion of many critics', the aid money could be put to better use at home. At a time when the United States financials are in shambles and millions of Americans at home are suffering, it is worth questioning whether or not foreign aid should be cut back or reformed to lower costs whilst maintaining its effectiveness.
Perhaps the most stunning example of the failure of foreign aid is the attempted reconstruction of Haiti. Following the 2010 Earthquake, which devastated the capital city Port-au-Prince and killed at least 310,000 people, billions of dollars were poured into the country. Despite the billions of dollars and hundreds of thousands of volunteer hours being dedicated to rebuild the broken nation-state, progress has been minimal. Donor countries alone have poured in some 11 billion dollars, with millions more coming from private individuals, companies, NGO's, and foundations. There are an estimated 12,000 NGOs in the country but many critics are rightfully wondering, what have they accomplished?
It is estimated that less than 10 percent of the rubble has been removed from Port-au-Prince. Cholera still runs rampant, with tens of thousands getting sick and thousands dying. Meanwhile, thousands remain without permanent homes and the efforts to actually rebuild the city have all but stalled. All this in-spite of the massive goodwill and efforts of the international community.
Haiti is merely a case study of corruption and inefficiency. Many of the same charges can be levied against efforts in Afghanistan and Iraq. The United States government and other international donors have poured tens of billions of dollars of development aid into both nations and supported reconstruction efforts with countless hours of military labor. Still, corruption has been rampant, projects have gone uncompleted, poverty and instability is widespread, and on the whole the nations are posting very little progress.
At least USD 6.6 billion dollars of USA Aid has been completely lost in Iraq with no one having any idea where it has gone. Add to that the billions wasted on inefficient and ineffective projects. Afghanistan is just as problematic. The ruling elite in Afghanistan has siphoned away huge amounts of aid money, and numerous wasteful projects remain uncompleted. Afghanistan's economy is still reliant on foreign handouts and poppy production, despite tens of billions of dollars in hand outs. A former senior auditor for the Office of the Special Inspector General for Afghanistan Reconstruction estimates that only 10 percent of aid actually reaches the Afghani population.
While the United States may have a moral commitment in trying to redevelop Afghanistan and Iraq, given that it invaded these nations, these two cases still highlight how inefficient the international aid system is. Additionally, they question Israeli policies in the Middle East. Ironically, almost the same amount of money is sent to Pakistan, but people do not seem to critique it. As we noted, the aid is stolen entirely by the corrupt Zardari administration. Many also point out that foreign aid is often used to support controversial regimes, and this has rarely panned out well for the United States, as is evident by Hosni Mubarak's removal in Egypt. Now, the US is funding an Egyptian Government, which is on the road to dictatorship, as we noted several months ago (as well). Many others also question handing out aid to Libya and Egypt, which have been taken over (democratically or not) by anti-USA parties. Some question the on-going support of Israel, which is a highly-developed country, arguably in better fiscal shape than the USA.
Now, with a looming fiscal cliff, 16 trillion dollars of debt, and tens of trillions of dollars of unfunded entitlement programs, many are beginning to seriously question both the USA's need and ability to continue to fund aid programs. Millions of Americans are struggling to pay their bills, are unable to pay for health care, and live in poverty. Critics ask why money should be spent in foreign countries when it is so desperately needed at home. These critics make a strong point: regardless of the moral righteousness of international aid, the United States may simply no longer be able to afford it.
This view may represent an extreme, but it needs to be taken seriously. With the modern global economy capable of producing so much, there is no excuse for allowing famines to run rampant and leaving tens of thousands to die in the wake of a natural disaster. Still, the United States now has every right to ask and pressure other wealthy nations into donating more funds. Further, critics may be right to point out that large, expensive reconstruction efforts rarely ever pan out as planned. Accordingly the US and international donors should scale back the scope of their donation programs to focus solely on basic needs, such as food, water, security, and access to essential health care. More oversight and stricter laws also needs to be installed to ensure that money is used properly.
Putting foreign aid on the chopping block may be a bit extreme. That doesn't mean, however, that it shouldn't be put on the operating table. The entire system, from who donates to who gets to spend and how, needs to be reformed from top to bottom. Efficiency and results must be prioritized and clear accounting and tracking standards need to be installed. Only through serious and forceful reform will the U.S. be able to reform its aid programs and cut costs, while also increasing efficiency.