Organizing U.S. Foreign Aid: Confronting the Challenges of the Twenty-First Century

A New Urgency: International Development and U.S. Foreign Policy

A New Urgency: International Development and U.S. Foreign Policy In September 2002 the White House published a new National Security Strategy for the United States. It was the first fundamental restatement of American foreign policy since the end of the cold war and highlighted three major U.S. goals in the world: defense (especially against terrorism), diplomacy, and development. Earlier that year, the president had announced the creation of the Millennium Challenge Account (MCA), with proposed funding of $5 billion per year, representing a major increase in U.S. aid for international development. The MCA was to be administered through a new independent agency, the Millennium Challenge Corporation. Then, in January 2003, President Bush proposed an additional boost in assistance to fight HIV/AIDS totaling $10 billion, to be spread over five years. The administration’s fiscal 2006 budget request includes an increase of 15 percent in the foreign operations account—the fourth consecutive year that the president has sought a significant boost in the international affairs budget. All these proposals have given a prominence to promoting development and improving lives and livelihoods abroad not seen since the early years of the Kennedy administration. There is, in fact, good reason to elevate development as a major focus of U.S. foreign policy. Many of the most important challenges and opportunities confronting the United States today and in the future emanate from the more than one hundred countries in Asia, Latin America, Africa, the Middle East, and parts of the former Soviet 1 Union—referred to as the “developing world”—where problems of poverty, limited infrastructure, poor education and health services, frequently slow and sometimes volatile rates of economic growth, low levels of investment and high unemployment rates, and, in a number of cases, ethnic, religious, class, and regional cleavages and weak and corrupt governments remain significant. Such conditions can breed terrorism, provide sanctuary for drug and criminal networks, encourage the spread of infectious diseases, and lead to civil conflict, with enormous human suffering and displacement that can spread beyond borders and have a destabilizing effect regionally and even globally. At the same time, these same developing countries offer many vital opportunities for enhancing the well-being of the United States— through increased trade with and investment in those nations, which can serve as important sources of food, energy, raw materials, medicines , and ideas. China, with its extraordinary economic dynamism, has showed how important rapidly developing countries can become to the United States. India appears to be close behind in the scope of its market and rapidity of its economic progress. The countries of subSaharan Africa, with their rich mineral and oil reserves and a population projected to reach over one billion by 2025, have the potential to become a source of economic dynamism if they can get their economic and political houses in order. The terrorist attack of 9/11 brought the importance of the developing world into focus for the United States in a way never before seen. Americans had a tendency, especially after the end of the cold war, to think that problems in distant countries were of little relevance to their well-being and could be ignored. The events of 9/11 underlined the vulnerabilities of the American homeland and served as a wake-up call to the American public and its political leaders that pervasive poverty, disenfranchisement, and disaffection abroad can have consequences for the United States. President Bush observed, “Poverty does not make poor people into terrorists and murderers. Yet poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders.”1 2 ❚ ORGANIZING U.S. FOREIGN AID International development is increasingly a focus of U.S. foreign policy. This shift is a result of emerging international realities and reflects the changing attitudes toward international engagement of American citizens and their political leaders. Public opinion polls, even before 9/11, found growing support among the American public for development aid (even as the public greatly overestimated the size of aid actually provided).2 Charitable private giving to nongovernmental organizations (NGOs) to further development abroad more than doubled between 1999 and 2003.3 Foundation giving for international purposes doubled between 1998 and 2002, rising faster than overall giving by a significant amount, with most of this aid provided to developing countries.4 Corporate giving and engagement in developing countries appear to...