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Aid Watch

The Oakland Institute’s Aid Watch is a research center, information clearinghouse, and early warning system for activists, educators, policy makers, journalists and the general public on international aid operations.

Publicly funded U.S. aid activities occur in different ways: through bilateral programs with recipient countries and contributions to multilateral institutions such as the World Bank.

In May 2001 Andrew S. Natsios, head of the USAID admitted that economic and humanitarian assistance to developing and transitional countries “serves to accomplish our foreign policy objectives.” In January 2005, Condoleezza Rice, U.S. Secretary of State, sparked a controversy by describing the tsunami as “a wonderful opportunity” that “has paid great dividends for us." It is thus not surprising that over the years, aid from the United States has come under severe criticism.

At the Monterrey Conference on Financing for Development in 2003, the U.S. along with other governments agreed to make concrete efforts towards the target of 0.7 percent of gross national income as official development assistance. Despite these assurances, today the U.S. ranks the last among the world’s wealthiest countries. The official giving in 2005 will be about $16 billion of development assistance in a $12 trillion economy. That's about 0.15 percent of U.S. gross national product. If you add up the private charity, total U.S. giving is about 0.2 percent, or about 20 cents of every $100.

To top that, the U.S. continues to cut back on its promised obligations and responsibilities. In March 2005 about $570 million for Afghanistan reconstruction and $45 million for relief in tsunami-stuck countries in South and Southeast Asia were cut from the White House budget request while allocating $76.8 billion for U.S. defense needs, principally for military operations in Afghanistan and Iraq.

The quantity of aid has not been as much as it should be. But what about the quality of aid?

Aid for the Third World or for the U.S. Industry:
Today reconstruction work, following wars and natural disasters is a tremendously lucrative industry. There are massive engineering and supplies contracts ($10 billion to Halliburton in Iraq and Afghanistan alone). “Democracy building,” has exploded into a $2 billion industry with public-sector consultants-the private firms that advise governments on selling off their assets, often running government services themselves as subcontractors.

The impact of this is evident in Afghanistan and Sri Lanka. President Hamid Karzai recently blasted “corrupt, wasteful and unaccountable” foreign contractors for “squandering the precious resources that Afghanistan received in aid.” In Sri Lanka, over 600,000 people who lost their homes in the tsunami are still languishing in temporary camps. Herman Kumara, head of the National Fisheries Solidarity Movement in Negombo, Sri Lanka, sent out a desperate e-mail to colleagues around the world, “Sri Lanka is now facing a second tsunami of corporate globalization and militarization, potentially even more devastating than the first. We see this as a plan of action amidst the tsunami crisis to hand over the sea and the coast to foreign corporations and tourism, with military assistance from the U.S. Marines.”

Food aid is another arena where U.S. benefits its own industry. The USAID website candidly states, “The principal beneficiary of America's foreign assistance programs has always been the United States... Foreign assistance programs have helped create major markets for agricultural goods, created new markets for American industrial exports and meant hundreds of thousands of jobs for Americans.” The current program of aid donation is designed to facilitate the introduction of U.S. developed GE crops into Africa. At the same time this aid system effectively works as a huge covert subsidy for U.S. farmers by selling U.S. wheat reserves on behalf of aid recipients and then making these countries buy the most appropriate commodities from U.S. companies. Thus the U.S. wheat, maize and soybean farmers have a guaranteed market.

Aid Money Tied to Conditionalities:
As a condition for aid money, United States ensures welfare for its industries by applying conditions that tie the recipient to purchase products only from it. In 1995, the director of the U.S. aid agency defended his agency on the basis that 84 cents of every dollar of aid goes back into the U.S. economy in goods and services purchased. In 2000, 71.6% of U.S. bilateral aid commitments were tied to the purchase of goods and services from the U.S.

Aid & Militarism:
While less than 1% of the U.S. budget goes to foreign aid, making it rank low among developed nations in the amount of humanitarian aid it provides to poorer countries, the U.S. government has given aid more often to reward political and military partners than to advance social or humanitarian causes abroad.

Following September 11, the war on terrorism has had an impact on determining where aid goes where and how much is spent. For example, credits for foreign militaries to buy U.S. weapons and equipment have increased by some 700 million dollars to nearly five billion dollars, the highest total in well over a decade. This aid again benefits the donor!

In addition to Israel and Egypt being the biggest bilateral recipients, Washington has restored military ties with Indonesia, which were severed following public pressure in 1999. This restores two military aid programs cut off from Indonesia for years because of their military's long track record of brutal repression. Military training assistance pays for U.S. soldiers to train the Indonesian military in everything including close-quarter combat. Additional spending will provide loans and credits to buy new U.S. weapons and technology.

Indonesia is not alone. Following the violence unleashed by the riot police and army at the Guatemalan activists protesting the ratification of CAFTA in March 2005, U.S. defense officials are considering giving more military aid to Guatemala. This aid was cut off a decade ago due to country’s human rights abuses during its 36-year-long civil war.

How Effective is the U.S. Aid:
In recent years, Central American countries have received millions of dollars of development assistance, a portion of which has gone to local labor ministries. This aid, characterized by some as a solution to address workers’ human rights abuses in the region, has however failed to address the fundamental obstacles to workers’ human rights: inadequate labor laws and enforcement agencies that lack the political will to uphold labor rights.

To address the challenges outlined above, The Oakland Institute initiatiated AID Watch, to provide an independent perspective on U.S. aid. Working with partner groups around the world, we are monitoring, researching and evaluating project impacts to effectively campaign on U.S. overseas aid policies and programs. We are a research center, information clearinghouse, and early warning system for activists, policy makers, educators, journalists and the general public. We believe increased awareness about the reality of international aid will lead to truly beneficial programs for local communities.

To Read Latest Publications and Action Alerts From the Aid Watch, Click Here.