Essay/Term paper: Foreign aid

Essay, term paper, research paper:  Economics

Foreign Aid


There are two words that many politicians like to shy away , and those
two words are, "foreign aid." Taking a firm stand on either side of this topic
is usually side stepped by decision makers. Their opinions are usually based
on a case by case analysis. This extremely controversial topic involves whether
or not to support the policy of foreign aid to needy or sometimes not so needy
countries. What benefits does foreign aid have for the countries that receive
it, and does it have any benefits for the countries who give? Some may say that
instead of spending money on foreign aid, money should be spent on domestic aid.
Those who argue in favor of foreign aid say that it is an investment in the
future of both countries that will eventually pay off. There is also another
factor to consider when discussing foreign aid: what kind of foreign aid is
being offered. There are three different types of foreign aid: first, there is
military foreign aid; second, there is foreign aid for the advancement
of business; third, there is emergency foreign aid for food and medicine.
Foreign aid to countries can help in many ways. It can be used as a
tool in bargaining. For instance a country that has just received foreign aid
or is expecting to get their regular installment of foreign aid will be more
likely to listen to new ideas. Because some countries are so dependent on their
regular installments of foreign aid, they are willing to appease countries such
as the U.S who are giving it. When looked at closely, foreign aid may be
considered an elaborate system of legal bribery. This becomes evident when
countries do what they would normally not consider doing in order to continue
receiving foreign aid. The U.S supplies financial foreign aid to many different
countries; sometimes this foreign aid is in a form of a loan. For example,
recently the U.S. supplied Mexico with a loan in order to save the falling value
of the Peso. This loan was denigrated by much of the U.S. population because
many people don't understand why the U.S. should care about the falling value of
the Mexican Peso. First of all, deflation of the Peso means a loss of jobs in
Mexico which would in turn send an influx of illeagal immigrants from Mexico to
the United States. In addition, Mexico is a large economy that imports
American goods. If the Peso's value were to drop, it would mean less buying
power for the Mexican public, and that in itself would hurt American business.
Some people would still be against this type of aid, and their argument would be
that if money that goes to Mexico was invested in helping small business get
started, America would be less dependent on other countries for their goods or
services. In this case the nay-sayers were proven wrong because Mexico recently
repaid the United States in full, plus interest, and a year in advance.
Another form of foreign aid is a certain amount of credit is given to
the receiving country in order to buy American made goods only. This form of
aid not only helps the country in need, but it also pumps money into the US
economy. Still some may wonder why should we care about a country such as
Russia, to whom the U.S. has recently given aid to recently. The U.S. can't
afford to have an ex-superpower unstable economically because of their nuclear
capabilities. Because Russia is in the unstable beginnings of a democracy the
U.S. wants to keep Russia on the right track. If that includes giving them aid
in order to help feed their people, then that is what the U.S must do. Because
reinstatement of the old regime would result in turmoil throughout the world.
After communism was overthrown in the former Soviet Union the world went through
big changes. There was no longer two world super powers, and all of a sudden a
40 year cold war ended. As stated the U.S. uses foreign aid as a tool to
implement their political views in other countries. In January of 1996 Robert
Dole, the speaker of the House, commented that if Russia didn't pull out of
Chechnya the U.S. would rethink the up coming aid package to Russia. In 1997
the U.S. has over 800 million budgeted for aid to Russia and other former Soviet
republics. This is an excellent example of how the U.S. uses its economic
prowess to influence the politics of other countries. A few days later Mr.
Clinton defended Boris Yelstin and his government for their actions in Chechnya .
He criticized the attack on the women and children but defended the overall
effort. President Clinton has clear goals and although he can't defend the
carnage that went on in Chechnya, he still must defend Yelstin and Russia
because he needs them to complete his goals. "Now more than ever, it is
important to help Russia dismantle its nuclear arsenal;" Secretary of State
Warren Christopher reminded everyone, it is in the US's best interest to see to
it that Russia no longer has nuclear capabilities. This shows that the U.S. and
other countries will overlook bloodshed of innocent woman and children in order
to keep their' political goals intact.
There is also another type of foreign aid that not many people know
about: is military foreign aid; the U.S. spends by far more money on this type
of foreign aid then on any other. Military foreign aid consists of two
elements: either the U.S gives the weapons, and troops for defense or it awards
straight cash payment. Many may wonder why the U.S. would supply other
countries with military foreign aid. The answer to this question is not a
simple one. As with other types of foreign aid the U.S. usually has more than
one objective in mind. Sometimes the U.S. will supply troops as a form of
military foreign aid; Other times the U.S will supply retired U.S. arms to
countries. The primary recipient of military foreign aid is Israel. The U.S.
budgets over three billion dollars every year in military and other types of
foreign aid to Israel. Many see no reason for supplying Israel with money. The
U.S. justifies the contribution with many different reasons. First and foremost,
Israel sits in the middle of a hotbed of political unrest. Surrounding Israel
are countries such as Lybia, Lebanon, Iraq, and Iran, and these are just a few
countries in which the U.S. has no a political foothold. By supplying Israel
with military aid the US expanded their sphere of influence in an area where
they are disliked and where they have little political clout. In addition to
having a foothold in the Middle East by preserving Israel as an ally the US has
a friend in a centralized location in the Middle East which can be used for such
things as intelligence.
The Gulf War is an excellent example of how the US used its political
clout to influence Israel in their decision making processes. Sadaam Hussein,
the leader of Iraq, decided to use Scud missiles against Israel who had no part
in the Gulf War until the Scud attacks started. Sadaam intended to drive Israel
into the war in order to stir up controversy with the coalition of forces
gathered to defeat Sadaam and drive Sadaam out of Kuwait. Israel's military
reputation is an intimidating one. They have never been attacked without
retaliating, but the US convinced Israel not to retaliate. They accomplished
this by promising to supply them with patriot missiles in order to protect
themselves against future attacks, they reminded Israel of the hefty amount of
foreign aid that comes their way every year. If Israel had retaliated it might
have disrupted the coalition and, if that had happened, it would have been
played into the hands of Sadaam Hussein. America's small investment in Israel
turned out to be crucial in the Gulf War. This is just one example of how
military foreign aid benefits to the US.
Emergency foreign aid is another type of aid, not many people argue
against emergency aid. When U.S. citizens see hunger or horrible living
conditions their heart goes out to those people in need. Many people want to
help with their own checkbooks. When such emergency aid is needed the US
usually comes through very quickly. Emergency foreign aid to feed and/or give
medical attention to those who need it was once thought to be a purely
altruistic form of foreign aid. It can longer be considered this. Recently
the US tried to help a country full of starving people who were dying because of
poor medical facilities. The US tried to step in and deliver food and medical
supplies, but because of warring factions the food and supplies were either
being stolen or they lay dormant in warehouses. The relief workers could not do
there job for fear of being killed. The decision was made to bring in US forces
to Somalia to help protect the relief workers and to distribute the goods. Soon
it seemed that the US was not wanted in Somalia, and it seemed as if they were
biting the hand that feeds them. With such negative feelings about the US
troops staying in Somalia, an ethical decision had to be made. Do we help
these starving people, or do we leave to protect ourselves. Somalia was
supposed to be a strictly humanitarian effort, but it turned out to be a
military effort when the US had to fight against all sides.
When every aspect of foreign aid is looked at, a decision about who is
right or wrong by each individual on their own. Foreign aid is most likely a
necessary evil for a superpower such as the United States. The US, just because
of the sheer size and strength of its economy and military might has to watch
over the rest of the world in order to keep balance and peace around the world.
When considered, it turns out to be that all the foreign aid combined is such a
small percentage of the United States GDP that we really have little to complain
about. I believe that foreign aid is blown out of proportion by the media. It
is hot topic that generates controversy and kicks up the ratings.