Far From Benign: The US Aid Industrial Complex

The US aid program began in earnest in the early stages of the Cold War, with an intention to beat off the contenders from the Soviet bloc in the postcolonial world. President Harry S. Truman proposed, in his 1949 inaugural address, “a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas.” In 1961, President John F. Kennedy signed the Foreign Assistance Act of 1961, enabling him to issue the executive order that created the US Agency for International Development (USAID).

In 1962, the American scholar of international relations, Henry Morgenthau, suggested that foreign aid could fall into six categories: the sort that promoted humanitarian objects, the aid that offers subsistence goals and military aims, the sort that acted as a bribe, the attainment of prestige and economic development.

To provide aid suggests a benevolent undertaking delivered selflessly. It arises from the charitable mission, an attempt to alleviate, or at least soften the blows of hardship arising from various impairments (poverty, famine, disease). But the provision of aid is rarely benign, almost always political, and, in its realisation, often self-defeating. The very transaction acknowledges the inherent victimhood of the sufferer, the intractable nature of the condition, the seemingly insoluble nature of a social problem.

Morgenthau also conceded that humanitarian aid, despite being, on the surface, non-political in nature, could still “perform political function when it operates within political context.” And the very provision of aid suggests an accepted state of inequality between giver and recipient, with the former having the means to influence outcomes.

With such views frothing the mix, it is worth considering why the attack by President Donald J. Trump on USAID as part of his axing crusade against bureaucratic waste is not, for all its structural and constitutional limitations, without harsh merit. Over the years, insistent critics have been lurking in the bushes regarding that particular body, but they have been dismissed as isolationist and unwilling to accept messianic US internationalism. The Heritage Foundation, for instance, has been wondering if the whole idea of US foreign aid should be called off. In January 1995, the body produced a report urging the termination of USAID. “Despite billions of dollars spent on economic assistance, most of the countries receiving US development aid remained mired in poverty, repressions, and dependence.”

Such a viewpoint can hardly be dismissed as a fringe sentiment smacking of parochialism. (In the United States, imperialist sentiment is often synonymous with supposedly principled internationalism.) The less rosy side of the aid industry has been shored up by such trenchant critiques as Dambisa Moyo’s, whose Dead Aid (2009) sees the $1 trillion in development aid given to Africa over five decades as a “malignant” exercise that failed to reduce poverty or deliver sustainable growth. She caustically remarks that, “Between 1970 and 1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11 percent to a staggering 66 percent.” Aid, far from being a potential solution, has become the problem.

The report card of USAID has not improved. One of the notable features of the aid racket is that much of the money never escapes the orbit of the organisational circuit, locked up with intermediaries and contractors. In other words, the money tends to move around and stay in Washington, never departing for more useful climes. A report by USAID from June 2023 noted that nine out of every ten dollars spent by the organisation in the 2022 fiscal year went to international contracting partners, most of whom are situated in Washington, DC. USAID funding is also very particular about its recipient groups, with 60% of all its funding going to a mere 25 groups in 2017 alone.

In January this year, the USAID Office of Inspector General authored a memorandum noting accountability and transparency issues within USAID-funded programmes. USAID, Inspector General Paul K. Martin insisted, “must enforce the requirement that UN agencies promptly report allegations of fraud or sexual exploitation and abuse directly to OIG.” While the sentiment of the document echoes a long US tradition of suspicion towards UN agencies, valid points of consideration are made regarding mismanagement of humanitarian assistance. The OIG also took issue with USAID’s lack of any “comprehensive internal database of subawardees.”

Despite these scars and impediments, USAID continues being celebrated by its admirers as a projection of “soft power” par excellence, indispensable in promoting the good name of Washington in the benighted crisis spots of the globe. A cuddly justification is offered by the Council on Foreign Relations, which describes USAID as “a pillar of US soft power and a source of foreign assistance for struggling countries, playing a leading role in coordinating the response to international emergencies such as the global food security crisis.”

Stewart Patrick of the Carnegie Endowment for International Peace discounts the politically slanted nature of US aid policies, not to mention its faulty distribution mechanism, by universalising the achievements of a body he cherishes. USAID “has contributed to humanity’s extraordinary progress in poverty reduction, increased life expectancy, better health, improved literacy, and so much more.”

A less disingenuous example can be found in the Financial Times, which encourages “fighting poverty and disease and enabling economic development” as doing so will improve safety, advance prosperity, curb instability and the appeal of autocracy. But at the end of the day, aid is a good idea because, reasons the editorial, it offers expanded markets for US exports. The sick and the impoverished don’t tend to make good consumers. To cancel, however “life-saving projects” at short notice was “a good way to provoke an anti-American backlash” while giving an encouraging wink to the Chinese. US Aid: far from benign, and distinctly political.

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He currently lectures at RMIT University. Email: bkampmark@gmail.com

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