Development

I met Taymor  Kamrany in 2003, just over a year after the U.S.-led invasion of Afghanistan had ousted the Taliban. We were both in Kabul, working on a USAID program to improve the environment for business and help government institutions rebuild their capacity to support a market economy. It was not an easy task. I was working with the management and staff of the Export Department of the Ministry of Commerce. Apart from the Head, a man in his fifties who had worked in the ministry throughout all the upheavals of the previous 30 years, no one in the Department could speak any foreign language. Though Afghanistan had once a thriving export economy – until the civil war of the 1990s, it was the world’s largest exporter of raisins, which were the most delicious I have ever eaten – its productive capacity was largely destroyed, its fields strewn with landmines, its best and brightest long ago departed. I was there for just a month, but in spite of these daunting challenges facing the country,  I sensed a lot of optimism among both Afghans and foreigners.

Taymor, an Afghan-American, born in Afghanistan and relocated with his family to the U.S. when he was a small child, was bright, ambitious, idealistic, and very American in demeanor and outlook. Apart from speaking Dari, the main language of Kabul and the northern part of the country, and having some relatives he visited from time to time, he seemed to be little more at home there than I did. After we had each left Afghanistan, I learned that he had entered an MBA program at the University of Southern California, and still later that he was working for one of the Big 4 consulting firms. Then we more or less lost touch. But most people never prune their e-mail address books, so a while ago I received  a broadcast e-mail from Taymor, linking to an article he wrote, which is published on the web site of the Middle East Institute, entitled Afghanistan 2002-2012: A Decade of Progress and Hope. No question mark. [click to continue…]

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About 10 days ago I sat at breakfast  in Lomé, the capital of Togo, a sliver of a country in West Africa, watching French TV news of the capture, and what turned out to be false reports of the liberation, of seven French tourists in northern Cameroon by the Nigerian radical Islamist group Boko Haram. It was hard not to feel concerned about the future of this part of the world. Lomé is a good 800 miles as the crow flies from where this most recent drama occurred – and a similar distance from northern Mali, where fierce fighting continues for control of the city of Gao – and I was in far more danger there from motorcycles going the wrong way down one-way streets than from terrorist kidnappers. But the fairly recent emergence of economic dynamism in much of Africa after decades of stagnation due to poor governance and political and ethnic strife remains fragile, and these developments highlight the risk. [click to continue…]

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In these dark days of an ever-widening political divide, it is nice to know there is still something on which Republicans and Democrats can agree: foreign aid. Both sides are against it. John Sides, writing in his “The Monkey Cage”  blog, cites a YouGov poll conducted in early March of this year, in which a sample of Republican primary voters and a sample of all voters agreed that foreign aid is the budget item they would most like to cut. Okay, it was 90% of the Republicans and only 73% of all voters, but in the sample of all voters no other item came even close to 50%, while among Republicans, the environment, housing, and unemployment benefits – no surprise there – were the only other items that got more than a 50% share.

 

 

 

 

 

 

These numbers are unsurprising in light of another poll  conducted last November, in which respondents, asked “Just based on what you know, please tell me your hunch about what percentage of the federal budget goesto foreign aid,” gave an average response of 27%. When asked what they thought an appropriate percentage would be, the mean answer was 13%. When told that we spend much, much less than this on foreign aid, most people said it still should be cut.

Not that cutting foreign aid would have the slightest effect on the deficit. In an excellent analysis of the cuts the Romney-Ryan budget – which would cap Federal spending at 20% of GDP and maintain defense spending at 4% of GDP – would require, Richard Kogan and Paul Ven de Water of the Center on Budget and Policy Priorities demonstrate that “if policymakers repealed [Obamacare] and exempted Social Security from cuts, as Romney has suggested, and cut Medicare, Medicaid, and all other entitlement and discretionary programs by the same percentage to meet Romney’s overall spending cap and defense spending target, then they would have to cut nondefense programs other than Social Security by 22 percent in 2016 and 34 percent in 2022 If they exempted Medicare from cuts for this period, the cuts in other programs would have to be even more dramatic — 32 percent in 2016 and 53 percent in 2022.”

It’s not easy to make sense of the Federal budget for foreign assistance (try it yourself and see what numbers you come up with http://www.state.gov/documents/organization/183755.pdf ) but 2012 commitments amount to about $35 billion, less than one percent of the total budget of $3.8 trillion, and barely a third of that amount consists of the kind of humanitarian, public health, and economic development assistance most people think of when they think of foreign aid. The big-ticket items include:

  • Roughly $10.4 billion in foreign military and security assistance – things like fighting terrorism abroad, military training, underwriting foreign arms purchases, the war on drugs, and the annual payments of $3 billion to Israel and $1.3 billion to Egypt (the price we continue to pay for the Camp David accords);
  • $8.1 billion on global health and child survival programs;
  • The $5.8 billion Economic Support Fund, which gives direct grants to foreign governments for them to spend on infrastructure and development projects (thus freeing up funds to buy U.S. arms); and,
  • About $4.1 billion on economic and agricultural development.

Except for Ron Paul supporters, most Republicans and not a few Democrats would resist cutting foreign military assistance and our annual subsidy to Israel. Indeed, to judge by his recent pronouncements on the subject, Mitt Romney would be more than happy to increase support to Israel, though it might come out of Egypt’s share.

A Romney-Ryan budget would probably keep all or most of the $10.4 billion for security-related foreign assistance and the $5.8 billion Economic Support Fund (at least those portions most directly linked to arms procurement) and take an axe to the aggregate $12.2 billion health, child survival, and economic and agricultural development budgets, which in the context of the overall budget are hardly more than a rounding error.

Dana Millbank, writing in The Washington Post, tells us that Rep. Darrell Issa, Republican chairman of the House Oversight and Government Reform Committee, called a hearing earlier this week to probe the security lapses that led to the recent deaths of Ambassador Christopher Stevens and three other Americans in Benghazi, Libya.

“The purpose of the pre-election hearing, presumably, is to embarrass the administration for inadequate diplomatic security. But Issa seems unaware of the irony that diplomatic security is inadequate partly because of budget cuts forced by his fellow Republicans in Congress…House Republicans cut the [Obama] administration’s request for embassy security funding by $128 million in fiscal 2011 and $331 million in fiscal 2012. Ryan, Issa and other House Republicans voted for an amendment in 2009 to cut $1.2 billion from State operations, including funds for 300 more diplomatic security positions. Under Ryan’s budget, non-defense discretionary spending, which includes State Department funding, would be slashed nearly 20 percent in 2014, which would translate to more than $400 million in additional cuts to embassy security.”

Romney has criticized the Obama Administration for trying to “lead from behind” in situations like Libya and Syria, and says he wants the United States to lead from the front, “using the full spectrum of our soft power to encourage liberty and opportunity for those who have for too long known only corruption and oppression,” in the words of his September 30 op-ed piece in The Wall Street Journal. What is soft power, if not effective diplomacy and assistance in – to use Mr. Romney’s own words again – “promoting human rights, free markets and the rule of law?” Much of the development assistance provided by he U.S. Government and U.S. Government-supported institutions such as the World Bank promotes precisely these values.

Cutting foreign assistance and State Department budgets sends a very different message. Since the proposed diplomacy and foreign aid budget cuts are so insignificant in fiscal terms they must have been chosen for their symbolic value, effectively consigning emerging and transition countries to the international equivalent of Mr. Romney’s famous 47 percent: food stamp and welfare recipients and miscellaneous moochers he is not going to worry about.

There are certainly ways to improve foreign assistance, which could involve reducing or eliminating aid to some current beneficiary countries, but which would equally involve innovative new approaches to the problems of poverty, disease, climate, and growth, which could end up costing less, more, or about the same amount as we currently spend.

Lord Leverhulme, the founder of Lever Brothers – now Unilever –  is reputed to have said, “I know half my advertising isn’t working, I just don’t know which half.” Foreign aid is a bit like that. As much as half, but not all, of it is wasted, and if we could figure out which half to chuck out and which to keep we, together with the recipients, would be all the better for it. But just as Lever Brothers kept on advertising and, presumably, wasting half of what it spent, eliminating the foreign aid budget or cutting it in half is a lousy idea.

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It must come as some reassurance to Mitt Romney that he is not the only would-be President who says remarkably silly things while visiting foreign lands. Last month Hillary Clinton, on a tour of sub-Saharan Africa, delivered a speech in Senegal in which she said that the United States would stand up for democracy and universal human rights “even when it might be easier or more profitable to look the other way, to keep the resources flowing.” In a barely veiled dig at China, she added, “Not every partner makes that choice, but we do and we will.”

China is widely seen as engaging in an aggressive grab for Africa’s energy and mineral wealth in ways many African leaders find irresistible. Unlike the United States and multilateral institutions such as the World Bank, in which the U.S. has a dominant position, the Chinese offer money and technical assistance without attaching bothersome conditions on human rights, democracy, and free markets. [click to continue…]

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If any event could illustrate the fragility of the BRICS conceit, it is the recent blackout in India, which left as many as 600 million people without power for up to two days. More than anything else, it reveals the sorry state of India’s governance. Yes, there are some extenuating circumstances: an unusually hot and dry monsoon season, which has reduced the available flow in hydroelectric plants while also causing the wealthy to use more power to run their air conditioners, while at the same time farmers are using more power to run pumps bringing up irrigation water from deep wells.

But the real story is under-investment in power generation, in coal production, and in transmission and distribution infrastructure, which in turn are attributable to monopoly pricing, hugely inefficient subsidies, endemic corruption, and political stagnation. The power outage was unique only in its extent and duration. Businesses, households, and public institutions all rely on diesel generators, which to a large extent have gone from a backup to the primary source of electricity, as “load shedding” – the system of rolling blackouts that utilities impose to reduce the strain on an overtaxed network, which often deprive whole areas of a city of power for as much as 14 hours a day. The event, and the global publicity it has attracted, has put a dent in India’s self-image as a nascent superpower. India has nuclear weapons and a space program – it launched a lunar probe in 2008 and has announced plans to send an orbiter to Mars next year – but it can’t keep the lights on. [click to continue…]

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