U.S. Foreign Assistance 101

U.S. Foreign Assistance 101

Alleviating and Addressing Hunger

U.S. Development or Foreign Assistance

• The international affairs budget “150 Account”

• Foreign aid

• Official development assistance (ODA)

• Poverty-focused development aid

What is U.S. Foreign Assistance?WHO ?

• Transfer of resources from the USA -> developing countries and to some strategic allies

What is U.S. Foreign Assistance?HOW ?

• Money (via loans or grants), • contributions of goods

(i.e. food aid), • and technical assistance

What is U.S. Foreign Assistance?WHY ?

• For a variety of reasons, not all having directly to do with development...

What is U.S. Foreign Assistance? WHAT ? (the Categories)

• National security and foreign policy interests -

i.e.. Uzbekistan and Pakistan in exchange for use of their territory for military operations in Afghanistan.

What is U.S. Foreign Assistance? WHAT ? (the Categories)

• Political development and stability –

conflict prevention, to build peace after conflict, and to strengthen failing states

Camp David Accords – Egypt and Israel

Humanitarian crises to countries and people

suffering famine,

recovering from a natural disaster,

or displaced by conflict

Long-term development purposes –

• fight poverty • support agriculture• build roads • educate children • build health care capacity• create small businesses• spur economic growth

“Foreign Aid” - broad category of grants

• Economic development• Emergency response to disasters-----------------------------------------------• Security and military assistance• Counter-narcotics and terrorism

activities• Programmes to fight corruption

and increase public transparency

Foreign Aid – funds to military and political allies for strategic purposes

• Israel, Egypt and Jordan – US strategic interests in the region

• Pakistan – cooperation against terrorism

• Colombia – counter-narcotics programmes

(some programmes may benefit the poor, but this is not their primary purpose)

U.S. INTERNATIONAL FOOD AID PROGRAMMES: BASIC DESCRIPTIONS

• P.L. 480 (Titles I, II, III & V)

• Food for Progress Act of 1985

• Agriculture Act of 1949, Section 416 (b)

• McGovern-Dole International Food for Education and Child Nutrition Programme

• Bill Emerson Humanitarian Trust

US National Security Strategy – the Three Pillars:

1. Defense

2. Diplomacy

3. Development (Post 9/11 – since 2002)

- Millennium Challenge Corp (MCC)

- President’s Emergency Plan for AIDS Relief (PEPFAR)

MCC – Millennium Challenge Corporation

Five year grants - Countries rewarded = Conceptual Basis for effectiveness of aid (eligibility criteria):

1. Good governance 2. Economic freedoms3. Investments in people

MCC - $ 7.9 billion programmes in 22 countries to date

• Countries must design programmes themselves

• Benchmarks of progress to receive each round of funding

• US Congress impatient with slow disbursement rates

PEPFAR• $ 15 billion for 5 years to

target 2 million people on anti-retroviral treatment

• 15 Focus countries

• Broad support within US Congress

US Official Development Assistance by Agency CY (calendar year) 2006

NET OFFICIAL DEVELOPMENT ASSISTANCE IN 2009

Source: OECD, 14 April 2010

Percentage spent on Foreign Aid from the US Federal Budget ?

• 30 percent ?

• 13 percent ?

• Total International Affairs Budget (including diplomacy, development, etc.) – i.e. 150 Account equals...

• 1.3 percent of US Federal Budget

Less than 1 percent...(0.55 %)• for programmes that improve

livelihoods and create lasting solutions to world poverty

• Canada - 0.30 % (double the US %)

• UK – 0.51 % (triple the US percentage)

Percentage (poverty-focused portion) =

Lawns vs. Foreign Aid

Americans spend asmuch on maintainingtheir lawns—$30 billionannually—as the USgovernment spends onforeign aid

Pets vs. Foreign Aid

Americans spend more oncaring for pets—$45 billionannually—than the USgovernment spendson foreign aid

Candy vs. Foreign Aid

Americans spend as muchon candy—$30 billion annually—as the US governmentspends on foreign aid.

US Foreign Aid

• At $ 30 billion, US largest bilateral (plus multilateral!) donor in absolute terms

• But, compared to the US income, aid levels have fallen over the past 40 years

• Increases in the past few years, due to PEPFAR, MCC and debt relief (Iraq and Nigeria, plus Afghanistan, Pakistan...)

NET OFFICIAL DEVELOPMENT ASSISTANCE IN 2009

Source: OECD, 14 April 2010

as percentage of gross national incomeUS ODA

GNP = Gross National ProductGNI = Gross National Income

COMPONENTS OF DAC DONORS’ NET ODA

Source: OECD, 14 April 2010

Current Events

• The US Global Development Policy

• Feed the Future

• USAID Forward

Foreign Aid has increased in last 5 years, but...

• Despite new resources and renewed attention, US ODA system remains:

• Fragmented (too many players/agencies)– USAID – overseas only 45 % of US Foreign Aid

• Cumbersome/bureaucratic – US laws on foreign aid = 33 different goals, 12 Departments, 25 different agencies, 60 separate Gov’t offices

U.S. Leadership• Key Issue – given the absolute

amounts of foreign aid

• When the US fights poverty, everybody wins... (beneficiaries, host countries, Aid agencies around the world, the planet...)