America Falls Short

Foreign Aid

America Falls Short

        How much does the US actually help with foreign aid? In terms of raw dollars, the US provides more official aid than any other country. That is a fact that is a little deceiving though. In 2003 the US government gave $16 billion dollars. That only worked out to a donation of about 15¢ per American per day. In the UK at the time, the aid worked out to be about 29¢ per person per day, 33¢ in France, and $1.23 in Norway. The US does give aid through NGO’s like the Red Cross and church organizations, but that only added about another 6¢ a day, still leaving the US in the dust. (1)
         There are other ways other than aid that the US is connected to poorer countries. The US also does well with migration. People from El Salvador or Mexico, for example, can come into the United States and earn money to send home. It is also relatively easy for people to come into the US and receive training so they are able to return home with skills. Immigrants remitted $32 billion dollars to Latin America and the Caribbean in 2002, and that was 6 times what that region received in foreign aid. On the Commitment to Development Index, a ranking put out by the Center for Global Development and Foreign Policy Magazine, the United States was ranked second on immigration. The US also does well with trading. The United States’ openness to importing goods from developing countries has been credited to facilitating the “rapid industrialization and poverty decline in China, and before that South Korea, and before that Japan.” In fact, on the Commitment to Development Index, a ranking put out by the Center for Global Development and Foreign Policy Magazine, the US is ranked the highest out of 21 rich countries on trade policy. (2)
        Though this “trade not aid” policy is regarded by those whose patronize it as an important part of internal development, it has also been largely criticized as a “excuse for rich countries to cut back on aid that has been agreed and promised at the United Nations.” A recent EU pledge promised to spend .56% of GNI (Gross National Income) on poverty reduction and .7% by 2015. This seems like a reasonable, if not generous, contribution. The thing is, they already pledged to give that much…almost 40 years ago! At a UN general assembly in 1970, donor governments promised to spend .7% of their GNI on ODA (Official Development Assistance). The deadline for reaching this level of donation was the mid-70’s. And in 2015, the projected year to achieve the goal, the target will be 45 years old. (3) The official United Nations General Assembly Resolution states:

“In recognition of the special importance of the role which can be fulfilled only by official development assistance, a major part of financial resource transfers to the developing countries should be provided in the form of official development assistance. Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per cent of its gross national product at market prices by the middle of the Decade”
— International Development Strategy for the Second United Nations Development Decade, UN General Assembly Resolution 2626 (XXV), October 24, 1970, para. 43

As to what the form of aid should be…

“Financial aid will, in principle, be untied. While it may not be possible to untie assistance in all cases, developed countries will rapidly and progressively take what measures they can … to reduce the extent of tying of assistance and to mitigate any harmful effects [and make loans tied to particular sources] available for utilization by the recipient countries for the purpose of buying goods and services from other developing countries.
… Financial and technical assistance should be aimed exclusively at promoting the economic and social progress of developing countries and should not in any way be used by the developed countries to the detriment of the national sovereignty of recipient countries.
Developed countries will provide, to the greatest extent possible, an increased flow of aid on a long-term and continuing basis.”
— International Development Strategy for the Second United Nations Development Decade, UN General Assembly Resolution 2626 (XXV), October 24, 1970, para. 45-47
Sadly, year after year, almost every rich nation fails to meet their agreed obligations. Instead of the agreed .7% most amount of aid has been between .2 to. 4%, about 100 billion dollars short. And according to Pekka Hirvonen, a member of the Global Policy Forum, the quality of aid has been poor. He states that the recent increases in foreign aid do not demonstrate an increase in the generosity of the richer nations, as it may appear. He maintains that the aid has still not reached the .7% goal of the UN and that in many cases the aid has been given with strings attached (3)

“Aid is primarily designed to serve the strategic and economic interests of the donor countries;
Or [aid is primarily designed] to benefit powerful domestic interest groups;
Aid systems based on the interests of donors instead of the needs of recipients’ make development assistance inefficient;
Too little aid reaches countries that most desperately need it; and,
All too often, aid is wasted on overpriced goods and services from donor countries.”

Here’s a look at the Foreign Aid numbers in charts and graphs.

Official Development Assistance (ODA) from 2002 to 2005
		ODA in U.S. Dollars (Millions)				ODA as % of GNI
	Country	2002	2003	2004	2005	2002	2003	2004	2005
Note: The U.N. ODA agreed target is 0.7 percent of GNI. Most nations do not meet that target.
1.	Australia	962	1,237	1,460	1,666	0.25	0.25	0.25	0.25
2.	Austria	475	503	678	1,552	0.23	0.2	0.23	0.52
3.	Belgium	1,061	1,887	1,463	1,975	0.42	0.61	0.41	0.53
4.	Canada	2,013	2,209	2,599	3,731	0.28	0.26	0.27	0.34
5.	Denmark	1,632	1,747	2,037	2,107	0.96	0.84	0.85	0.81
6.	Finland	466	556	655	897	0.35	0.34	0.35	0.47
7.	France	5,182	7,337	8,473	10,059	0.36	0.41	0.41	0.47
8.	Germany	5,359	6,694	7,534	9,915	0.27	0.28	0.28	0.35
9.	Greece	295	356	465	535	0.22	0.21	0.23	0.24
10.	Ireland	397	510	607	692	0.41	0.41	0.39	0.41
11.	Italy	2,313	2,393	2,462	5,053	0.2	0.16	0.15	0.29
12.	Japan	9,220	8,911	8,906	13,101	0.23	0.2	0.19	0.28
13.	Luxembourg	143	189	236	264	0.78	0.8	0.83	0.87
14.	Netherlands	3,377	4,059	4,204	5,131	0.82	0.81	0.73	0.82
15.	New Zealand	124	169	212	274	0.23	0.23	0.23	0.27
16.	Norway	1,746	2,043	2,199	2,775	0.91	0.92	0.87	0.93
17.	Portugal	282	298	1,031	367	0.24	0.21	0.63	0.21
18.	Spain	1,608	2,030	2,437	3,123	0.25	0.25	0.24	0.29
19.	Sweden	1,754	2,100	2,722	3,280	0.74	0.7	0.78	0.92
20.	Switzerland	933	1,297	1,545	1,771	0.32	0.38	0.41	0.44
21.	UK	4,749	6,166	7,883	10,754	0.3	0.34	0.36	0.48
22.	USA	12,900	15,791	19,705	27,457	0.12	0.14	0.17	0.22

Net ODA in 2005 as US dollar amounts (millions)
Country	Aid amount by dollars
For more info CLICK HERE
USA	27,457
Japan	13,101
UK	10,754
France	10,059
Germany	9,915
Netherlands	5,131
Italy	5,053
Canada	3,731
Sweden	3,280
Spain	3,123
Norway	2,775
Denmark	2,107
Belgium	1,975
Switzerland	1,771
Australia	1,666
Austria	1,552
Finland	897
Ireland	692
Greece	535
Portugal	367
New Zealand	274
Luxembourg	264

Net ODA in 2005 as percent of GNI
Country	Aid amount by GNP
For more info CLICK HERE
Norway	0.93
Sweden	0.92
Luxembourg	0.87
Netherlands	0.82
Denmark	0.81
Belgium	0.53
Austria	0.52
UK	0.48
Finland	0.47
France	0.47
Switzerland	0.44
Ireland	0.41
Germany	0.35
Canada	0.34
Italy	0.29
Spain	0.29
Japan	0.28
New Zealand	0.27
Australia	0.25
Greece	0.24
USA	0.22
Portugal	0.21

(3)

Footnotes:

1,2. Roodman, David. "How Much Does the U.S. Help." Center for Global Development. 07 Jan. 2005. 19 Jan. 2007 <http://www.cgdev.org/content/opinion/detail/2959/>.

3.Shah, Anup. "The US and Foreign Aid Assistance." 07 Oct. 2006. 20 Jan. 2007 <http://www.globalissues.org/TradeRelated/Debt/USAid.asp>.