If it were entirely altruistic, international aid would be allocated to countries based on human need as well as the demonstrated ability of governments in poorer countries to use aid to address deprivation. Rhetorically, foreign aid claims to do just that. However, aid giving is often motivated by geostrategic factors or used as the means to influence economic policies of recipient countries.
Rich and powerful countries like the United States have often used aid as a carrot to entice other countries to secure American interests. The US has also withheld aid from countries when they do not comply. The use of aid to exert influence overseas is not only unique to the US. Foreign aid has also been used as a tool of influence by several former colonising nations, such as France and the UK. Nowadays, China also realises the value of using financial aid to exert strategic influence.
Ideally speaking, aid should not be used to promote political or financial interests of donor nations. Instead, donor countries should provide aid in a manner which promotes self-reliance and sustainability instead of perpetuating donor dependency. The desire to use aid to achieve myopic, short-sighted, and politically motivated gains undermines the ability of foreign aid to help make the world a more equitable place.
As a result, we continue seeing foreign aid being used by corrupt and autocratic leaders of poorer countries to strengthen their own rule as long as they can promote vested interests of donor nations. Deprivation and growing inequality have, however, become transnational problems which manifest themselves in different forms ranging from unregulated refugee flows to spurring growth of militant groups with global ambitions.
Perhaps it was in recognition of the security implications of underdevelopment that President Biden announced that the US Agency for International Development (USAID) will formally be given a seat within the National Security Council. A former UN ambassador, Samantha Power, is now heading USAID, which is the largest international bilateral aid agency in the world.
Although US foreign aid is around 1% of the federal budget, in absolute terms, the US remains the largest international donor in the world due to the overall size of its economy. US aid commitments were cut drastically by president Trump, who also decided to pull out of the Paris climate agreement and the World Health Organization amidst a global health pandemic.
Under a new administration, the US is trying to again project itself as a champion of global development. However, America needs to undertake a massive overhaul of its aid policies to be able to live up to this claim, which must include measures to prevent its bilateral aid being used to secure vested geostrategic or economic interests. Moreover, agencies like USAID also need to ensure that more of the money it allocates for development goes to stakeholders working on the ground rather than routing it via DC-based development consultancy firms and contractors which operate more like corporations than dedicated humanitarian agencies.
Recipient countries also need to rethink how they use incoming aid. Pakistan, for example, has got immense bilateral aid from the US before and after 9/11. Yet, the benefits of these incoming aid flows have not reached the marginalised masses, nor have they been able to unlock the country’s geo-economic potential. While our current leadership has been reiterating the mantra of trade instead of aid, trade by itself can also serve to fill the pockets of the rich on the back of exploited labourers.
Pakistan should take the opportunity of working with a revamped USAID to identify development projects in the country which can address structural inequities within our systems of production and redistribution, instead of supporting elite-led models of growth. Otherwise, foreign aid may continue to enrich the already powerful, but it will not be able to win the hearts and minds of ordinary people.
Published in The Express Tribune, May 21st, 2021.