Can the foreign aid bill salvage America’s global leadership?

With a debt of $34 trillion as against its GDP of $25.44 trillion, the United States has passed a foreign aid bill worth $95 billion. This huge spending, approved by the US Congress, will be used to support Ukraine, Israel, Taiwan and for rebuilding of war-devastated Gaza.

The US, emerging as a major power since the end of WWII, embarked on the policy of granting foreign aid. The first major American financial aid was in the form of Marshall Plan in 1947 for the recovery of pro-American west European countries. In March 1948, Congress approved the Economic Cooperation Act which provided funds to the tune of $12 billion for rebuilding of Europe. That money became a catalyst to support drive against Communism in Europe and was then extended to Asia, Africa and Latin America. At that time, the American economy was strong and the US financial edge vis-à-vis erstwhile Soviet Union enabled Washington to use its economic clout in order to deepen its strategic, security and political interest. It was not only the Marshall Plan but also the US Mutual Security Act of 1951-61 which laid the basis of post-WWII foreign aid.

According to the details of the recent American foreign aid bill passed from the Congress amidst a lot of criticism from the Republican members of House of Representatives, $60.84 billion have been allocated for Ukraine, $26.38 billion for Israel, including $9.1 billion for humanitarian needs, and the rest for Taiwan. In case of Israel, the breakdown of aid is: $5.2 billion will go to replenishing and expanding Israel’s missile and rocket defence system; $3.5 billion for buying advanced weapons systems and $1 billion to enhance weapons production; $4.4 billion for other supplies and services to Israel; and $9.2 billion for humanitarian purposes, including in the Gaza Strip and the occupied West Bank. For Ukraine, the US aid has following specifications: $23 billion will be used for replenishing US weapons, stocks, and facilities; $14 billion for the Ukraine Security Assistance Initiative; $11 billion for funding current US military operations in the region, enhance the capabilities of the Ukrainian military, and boost intelligence collaboration between Kyiv and Washington; and $8 billion for non-military assistance, including helping Ukraine’s government pay salaries.

While since the Camp David Accords of 1978, Israel is the recipient of yearly $3 billion American aid. The current US assistance to the Jewish state is shocking because of Israel’s genocide of Palestinians in Gaza and occupied West Bank and its blatant violation of international law. The International Court of Justice (ICJ) also gave a ruling implicating Israel in conducting genocide against the Palestinians. Recently, the US vetoed a resolution in the UN Security Council that recommended admitting Palestine as a member, contradicting its own age-old position of two-state solution.

About Ukraine, mostly Democratic Party members in the House of Representatives actively supported aid for Kiev and displayed posters in support of Ukraine. Ukrainian President Volodymyr Oleksandrovych Zelenskyy wholeheartedly thanked US legislatures for approving the aid bill which will enable Kiev to give a ‘bloody nose’ to Russia. It is yet to be seen how US-NATO military and economic support to Ukraine will help in defeating to Russia or causing it some massive damage in the ongoing war.

Since early 1950s, Pakistan has been a major recipient of American aid till the Kerry-Lugar-Bremen bill of 2010 diminished it. In his New Year tweet of January 1, 2018, the then American President Donald Trump lambasted Pakistan for receiving billions of dollars of US aid but doing nothing to prevent cross-border terrorism into Afghanistan. His allegations were officially refuted by Pakistan arguing that since 9/11 the country suffered thousands of causalities in terrorist related incidents and faced an economic loss of $100 billion.

The global leadership of American, in the wake of the recent foreign aid bill, needs to be analysed from two angles.

First, fragility of American economy can be gauged from the fact that its debt has surged to $34 trillion whereas its GDP is $25.44 trillion which reflects a gap of around $10 trillion. When the American economy is in a bad shape, what was the need to pass foreign aid billion of $95 billion? It is not going to cement the US leadership role in the world while it faces a daunting challenge from China. The only American president after the end of the Cold War who seriously tried to manage the US debt was Bill Clinton. His strategic vision to balance budget and to yield surplus cannot be forgotten. In fact, in his eight years in White House, he succeeded in drastically mitigating US debt by slashing military expenditures and leading to budget surplus. Succeeding Clinton, George W Bush made efforts for balancing the budget, but they evaporated in thin air. The US war on terror after 9/11 — including the attack and occupation of Afghanistan and Iraq — led to several hundred billion dollars of expenditures thus augmenting the total debt. Also, President Barack Obama, while failing to slash the debt, forcefully argued for austerity stating that a nation should live within its means. The more the US sucked in foreign adventures the more its economy suffered starting from the Korean War, Vietnam War and so forth. Despite spending trillions in Iran and Afghanistan, the US failed to win the wars. Now, America is being sucked in the war in Ukraine and Israel’s war against Hamas.

Second, the US aid bill for Ukraine will have a question mark if Trump returns to White House after the November 2024 elections. Trump’s tacit support for Russia and his disdain for Ukraine are not unknown. America must learn from its past failures on using money to assert its leadership role. Wars in Vietnam, Afghanistan, Iraq and Pakistan are vivid examples of how Washington failed to win over people despite spending billions of dollars. It is the ideology, and not money, which plays a pivotal role in establishing the credentials of a viable global leader. Both Israel and Ukraine are a liability for the US in the context of its economy.

The assumption that American military aid will cause a ‘bloody nose’ to Russia is a myth. In two years’ time, billions of dollars were provided to Ukraine by the US and its NATO allies but Kiev failed to cause any major dent to Russia. Same is the case with Israel which is a source of utter embarrassment for America.

Salvaging American leadership globally would require focus on bettering the economy, slashing huge defence expenditures, of $800 billion, and mitigating its domestic fault lines.

Published in The Express Tribune, April 30^th, 2024.

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