Philanthropy

One of the recurring themes here is that public and private philanthropy have many driving purposes. There probably isn’t a better example of this than the US current aid policy in Africa. Not only is aid is the dominant feature of US foreign policy on the continent, but we also see the three major purposes of public foreign aid all at once.

Those purposes are morality, economics, and security and this article discusses them all. The article discusses that in addition to a genuine desire to help people, the US also has an interest in gaining access to large oil reserves and other resources as well as addressing the security concerns presented by Africa’s several “ungoverned spaces”. The article also suggests that this strategy is working. The US Government-sponsored Voice of America agrees with this assessment, directly tying US foreign aid to Mali with the Global War on Terror.
As a closing thought, the US doesn’t have a monopoly on using aid for its own economic benefit. China is pretty good at it too.

For the most part I don’t notice when the dollar is weak or strong. Unless I’m travelling it just doesn’t register with the prices of things I buy. Economics isn’t my best subject, so I can’t really say why. Maybe it is the pegged Yuan, or the fact that oil is priced in dollars? Maybe I’m just unobservant?

But the falling dollar doesn’t just affect those travelling abroad or buying European stocks. It also affects those who depend on remittances. The Phillipine peso has been rising against the dollar, and families who count on remittances for their income will lose between 3,800 and 6,000 pesos a month (about 100-160 dollars on an estimated average family remittance income of 350-400 dollars). That’s a pretty significant decrease in purchasing power.

Armenia is also complaining that the appreciation of the Dram against the dollar is hurting their economy.

This example shows that foreign assistance isn’t simply a matter of giving money. The trade, military, environmental, and basic economic choices that a wealthy country makes affect those in poorer countries as well. This is especially true for a superpower. Good global citizenship matters.

The FY09 budget request is out. Foreign aid comes under international affairs. In addition to the staffing increases I wrote about earlier, here are some highlights I picked out from the press release:

• $2.3 billion to help Iraq, Afghanistan, Pakistan and West Bank/Gaza achieve necessary economic, democratic, security and political stabilization and to advance their overall development.

• $2.1 billion for State Department and USAID programs in Africa to address non-HIV/AIDS health, economic growth and democratic governance needs and to help promote stability in Sudan, Liberia, Zimbabwe and Somalia in support of the President’s 2005 commitment to double aid to Africa by 2010.

• $4.8 billion for the Global HIV/AIDS Initiative, which directly supports the first year of the President’s new five-year, $30 billion plan to treat 2.5 million people, prevent 12 million new infections, and care for 12 million afflicted people.

• $1.75 billion to promote democracy around the world, including support for the President’s Freedom Agenda. The President has more than doubled funding for democracy, governance, and human rights programs since taking office.

• $385 million to support the President’s Malaria Initiative to reduce malaria-related deaths by 50 percent in 15 target African countries by 2010.

• $94 million for the President’s International Education Initiative to provide an additional 4 million students with access to quality basic education through 2012. The FY 2009 budget includes funding for basic education that will lead to well over a four-fold increase in funding since the President took office.

• $64 million for the State Department and USAID to support the President’s Climate Change Initiative to promote the adoption of clean energy technology, help countries adapt to climate change, and encourage sustainable forest management.

• The President’s Budget also includes $400 million for a new international clean technology fund in 2009 as part of an overall three-year contribution of $2 billion.

• $2.4 billion to improve responsiveness to humanitarian crises, including food emergencies and disasters, and the needs of refugees.

• $2.2 billion for the Millennium Challenge Corporation to improve agricultural productivity, modernize infrastructure, expand private land ownership, improve health systems, and improve access to credit for small business and farmers.

Henrietta Fore, Director of Foreign Assistance and USAID Administrator, has announced her plan for reforming the US Foreign Aid system. The Center For Global Development gives a solid analysis of what she had to say. The CGD tracks this issue closely, and just started a new project on modernizing foreign assistance. The four main points they drew out were:

• Increasing the foreign assistance budget to meet the challenges of the 21st century to ensure “that development is an equal and essential element of our national security strategy and budget”

• Rebuilding the capacity of USAID — the FY09 budget released today requests the largest personnel increase ever, a doubling of the USAID training budget and a “surge capacity” to respond rapidly in crisis situations

• Streamlining budget and planning processes, with a shifting of emphasis to the field

• Reestablishing U.S. intellectual leadership on foreign assistance

In addition to adding 1,000 new diplomats to the State Department, the President’s new budget calls for 300 new USAID Foreign Service Officers and 250 people for the Active Response Corps - a group of pre-vetted civilians to respond to emergency situations.

As someone who may one day want to take one of these new jobs, this makes me happy (although the active response corps will remain hopelessly small, if we believe the estimates of required personnel in this RAND monograph). The diplomatic capacity of the country has been in doubt for a while, and both agencies have been slowly ramping up.

The most recent, call for increased manpower for US development and diplomacy came from the Secretary of Defense. His lecture at Kansas State was fantastic, and well worth reading if you missed it the first time around.

When the President spoke last night he categorized most foreign aid under the heading “compassion”. He specifically mentioned 1) Food Aid Reform, 2) HIV and Malaria Control and Prevention, 3) Basic Education Assistance, and 4) the Millenium Challenge Account.

Compassion was also mentioned briefly as a side note to “Keeping America Safe by Fostering the Freedom Agenda”. (One interesting thing, when you go to that link, notice that the URL still refers to the “Freedom Agenda” as the “Global War on Terror”, or “GWOT”).

I’m most interested that the President is still pushing for his food aid reform. This is a rational policy that I hope he is able to get through Congress this time. All the President wants to do is use some of the Food Aid budget to buy food from farmers who are close to the beneficiaries.

The way we do it now is to buy from US farmers and ship the food around the world using US shipping companies. It costs as much as 2-3 times more to do it this way and depresses local food prices (sometimes that might be a good thing, but falling prices discourage local farmers to grow food.)

Before when the administration tried to change to a mixed approach they were blocked by lobbying forces in the food and shipping industries. The Center for Global Development posted on this issue when it came up in 2005.

The Foreign Policy Association already has a blog on the 2008 elections. But as we get them narrowed down, I’ll also be keeping track of what the candidates say about foreign aid. The One campaign asked all of the candidates to explain their plans to address global poverty. Many replied with video as well as written explanations of their specific inititatives.