As unemployment and inflation continue to rise, politicians will no doubt set their sights on U.S. foreign aid programs as a likely target for budget cuts. But U.S. government assistance to other countries, managed by the Agency for International Development (AID), only amounts to slightly more than one cent out of each federal budget dollar.
In 1978, among the leading 17 non-communist countries providing aid, the U.S. stood 13th in the amount provided in relation to the gross national product (GNP). U.S. foreign aid accounts for one-quarter of one per cent of our GNP--considerably less than what we spend for alcoholic beverages, or pet food, or cosmetics, or toilet articles each year. Americans feeling an economic pinch would be wiser to target runaway military spending, which takes a lion's share of federal money.
Many specialists in Third World affairs have serious questions about the alleged benefits of American aid, arguing that structural change in the recipient countries rather than a larger dole is necessary. They also point out that most U.S. aid takes the form of credit which must be used to purchase U.S. products. AID itself argues this point positively: "One of the misconceptions about foreign aid is that the money appropriated is spent overseas and there is no return." Actually, AID explains, more than 70 cents of every aid dollar committed for goods and services is spent in the U.S., "thus creating and maintaining jobs for Americans. With regard to aid commodities alone, "more than 90 per cent are bought in the U.S." "Jobs for Americans" is always the official political rationale; it would seem cruder to mention profits for the large conglomerates which dominate the export trade.
U.S. loan programs, at comparatively low rates of interest, combine with the much larger credits from the World Bank, the International Monetary Fund (IMF), and the big, private international banks to contribute to the spiraling foreign debt of most Third World countries. In the short term, the loans allow some affluent living for a few. But since there is often little foreign exchange to begin paying off the debt, creditors begin to pressure for austerity conditions to be imposed on the local economy in order to bail out the country. This further impoverishes the poor and concentrates food production on export crops, leaving the poor to starve in the midst of gardens for the First World.
But what is American foreign aid really all about? AID describes its programs as reflecting a tradition of "sharing and helping the needy as well as enlightened national self-interest." Administrators emphasize "helping the needy" in their talks to some religious and academic constituencies, but when it comes time to sell the foreign aid package to Congress and to the general public, the tone is more along the lines of self-interest.
AID says that its role "is essential to the quest for global tranquility, freedom, and progress," and that aid "must be considered as a complement to other elements of foreign policy." Increasingly throughout the Third World, tranquility is seen to be a cover for preserving the status quo, freedom means liberty for big business, and progress refers to the advancement of an elite minority. Foreign aid is indeed a complement to U.S. policy, but many people have serious doubts about whether that policy is for the good of the majority of the world's people.
An AID publication describes in detail how its programs serve the U.S. economic self-interest: "Like every other nation, the U.S. depends to some degree on other countries as sources of supply for basic resources and as markets for our products. The U.S. imports between 50 and 100 per cent of many vital raw materials, including silver, cobalt, aluminum....Substantial portions of these strategic commodity imports come from developing countries." U.S. aid keeps the suppliers of these important items dependent on the U.S. With the recent exception of our oil suppliers, the world's "hewers of wood and drawers of water" have been letting us have their raw materials at bargain prices.
Trade is of course a two-way street, as AID explains: "Another measure of interdependence is the markets where the products of American enterprise are sold." In recent years, about 40 per cent of U.S. manufactured exports have gone to developing countries. AID does not note that this "interdependence" is inordinately profitable for the U.S. For example, if 10 years ago a certain cargo of coffee or other raw material from Latin America could buy one tractor from the U.S., today a U.S. tractor would require many times that amount.
The U.S. and other industrialized nations have fought bitterly to prevent the index pricing which is being demanded by Third World countries. Food and weapons are among the leading U.S. exports to those who can afford them--food which is sold to countries whose rulers monopolize the arable land and use it for profitable export crops; weapons which enable dictators to remain in their privileged positions.
AID also describes a third aspect of global interdependence: "American companies increasingly are finding opportunities in the developing world for productive investment of U.S. capital and technology." In one recent year, almost 60 per cent of all new American investment abroad went to developing countries. These highly profitable investments often require a "good business climate" consisting mainly of "stability" and "labor peace," phrases which frequently translate into the suppression of labor unions, the outlawing of strikes, roundups of worker and peasant leaders, and police repression of groups demanding social change.
AID observes that "a world polarized into rich and poor, haves and have-nots, will remain unstable--a threat to peace, security, and progress." Many critics claim that foreign aid, while providing necessary emergency relief in some cases, gives or lends only the minimal amount necessary to serve the strategic purpose of keeping the Third World pressure cooker from exploding. Critics also contend that AID finances programs, like heavy-handed population control using devices and drugs deemed unsafe for U.S. consumers, which help to manage a world teeming with people.
While the State Department under Jimmy Carter, at least the early Carter, spoke the language of human rights, the U.S. Department of Commerce (DOC) continued to operate on the premise that what is good for American multinational corporations is good for America. In 1977, the Secretary of DOC lamented the fact that the annual U.S. export of $115 billion worth of goods represented a lower percentage of gross national product than in other industrial nations and promised that DOC would "work more diligently than ever to bring overseas marketing opportunities to U.S. business."
Shortly after the start of the Carter administration, Commerce America, the publication of the Commerce Department, spoke glowingly of the Dominican Republic, where "political stability continues under President Joaquin Balaguer. This is a major factor in the country's economic progress, according to a recent assessment by the U.S. Embassy in Santo Domingo." Balaguer had been notorious for continuing the repressive policies of former strongman Trujillo, thus insuring "stability" for the Dominican elite and multinational companies like Gulf & Western, owner of one-third of the nation's sugar industry.
The Commerce Department's magazine also gave high marks to Chile whose dictator, Pinochet, was at the same time being chastised by the State Department. Commerce observed positively that "Chile is going ahead with its plans to attract foreign investors by offering equal treatment with domestic investors and no strict requirements for phasing down to minority ownership--and gradually reducing import duties." What the multinationals and Nixon had wrought in Chile with their support of the bloody coup against Salvador Allende turned out to be a source of profit for the multinationals during the Carter administration; and while the State Department criticized the means, Commerce praised and supported the end result.
Though the Commerce Department's positive reports on various countries contrast sharply with the professed American concern for human rights, it is not surprising that Commerce would look out primarily for the interests of U.S.-based multinationals. More disconcerting is the fact that our foreign aid programs also feed the large corporations' hunger for profits, principally by stimulating the export trade and facilitating multinationals' investments.
But few Americans know that AID offered training and equipment to Third World police forces through its Office of Public Safety until recent years, and now offers them through various "drug-control" programs which skirt the issue of official corruption and tend to strengthen the repressive arm of the state. Thus workers, students, peasants, and others struggling for justice find themselves being attacked by police trained by the U.S. and being shot by U.S.-made weapons.
AID also seeks to control volatile Third World situations by providing about 90 per cent of the funding for the American Institute for Free Labor Development. Other supporters of this Institute are the AFL-CIO and, more surprisingly, a host of major U.S. multinational corporations. The Institute offers housing programs and training courses for those sectors of the Latin American labor movement which accept the premises of free enterprise and the international economic system. By supporting and influencing workers' federations which do not challenge the multinationals, the Institute helps to insure "labor peace" and a "favorable climate for investment." It has also been widely accused of serving as a front for CIA activity.
In the face of these facts, it seems that we should question not only the small amount of aid which our government budgets for the Third World, but also the kind of aid and the interests which it serves. Our brothers and sisters in the impoverished countries increasingly suffer from the exploitative and repressive strings attached to our governmental programs.
Joe Mulligan, a Catholic priest and Jesuit, worked with the Latin America Task Force in Detroit, Michigan when this article appeared.
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