As I watched the speakers at the Republican Convention rant about dangers of immigrants, dangers of foreign trade, fears of Muslims, extolling our police, fears of the Democratic opponent taking away the 2nd Amendment rights, I saw a message from our President Obama, which directs us to a much higher and more valid calling. He’s asking us to focus on global development.
“Development” to economists means finding ways to help countries grow, especially “third world countries,” developing countries, low income countries. If we can do this better–direct more of our resources very thoughtfully and effectively, we can accomplish the following: We can reduce the enmity that many people in disadvantaged countries feel for us as the economically elite; we can improve the economies and jobs opportunities in those countries, thus reducing the demand for immigration to developed countries; we can reduce terrorism, which is in part based on anger that we enjoy such wealth and help the rest of the world so little ; we can improve foreign trade because healthier foreign countries and customers would buy more US products.
What are we doing now? Our current budget for foreign aid is less than 1% of our federal budget. NPR explains what is included: “The largest portion of the money goes to health: a third of the U.S. foreign aid budget in 2014, or more than $5.3 billion. The next two biggest portions go toward economic development and humanitarian assistance. Small sums of aid support democratic elections in other countries. A tiny portion goes to protect forests in countries where logging is destroying natural habitats. Some aid funds programs that train local law enforcement to combat drug trafficking.” Only 1/6 of this small 1% of budget, so about .15% (that’s .0015X) goes to economic development. And NPR reports we have one of the lowest percentages of budget to foreign aid. Many other nations are more generous.
Complicating matters is the fact that much of our foreign aid has strings attached–the products and services they cover are often required to be purchased from US vendors, thus denying the local workers the advantage of the jobs that might have been created.
Such programs by US and others have received enormous study and criticism over the years. Some studies find some programs programs do not yield sustainable results in the foreign country, for lots of reasons. It’s a complex undertaking.
So one question is whether it is even possible for us to make an impact, if we should want to. This alone is a big enough question to potentially deny any serious consideration, given the current attitude in the US (and elsewhere) regarding the ability of government to do anything effectively and efficiently–to positively impact foreign governments’ economic development.
Republicans generally distrust government. Much of the current Right wing political campaign is built on stoking distrust in government. The impact is to support legislation that continues to starve government (at all levels) in budget, resulting in continuing reduction in funding for education, social services, and infrastructure, while protecting and increasing spending for military. But the Right trusts this one huge part of government–the military. They seem to think we do have the capability to do efficient work in our vast military budget, which is equal to the next 7 countries’ budgets combined, according to the Peterson Foundation. The Washington Post finds that when all associated with defense and international security is added, we allocate 20% of our budget to this, vs the 1/6 of 1% on economic assistance to other countries. If that’s true, why couldn’t we become good at development, as arguably (to the Right) we are at defense–why can’t we be good at helping foreign countries succeed–at a fraction of the cost of our military budget. It can’t be more complex than waging war.
In fact, there are many parts of our government (at all levels) which perform as well as private industry or better. Our private sector has frequent failures, which end up costing consumers in time, money, and also costs investors in lost value. There is no universal truth that either the government or the private sector is better in performance. That the private sector is invincible and the public sector can never do anything right is the myth propagated by the Right. One suspects the ultimate goal of the Right is to gather support for reduced taxes on the wealthy. Criticizing and starving government is just the political vehicle to galvanize voter support. And, there is great question among many economists as to the old “supply side argument,” still made by Art Laffer, Reagan’s economic advisor–that reduced taxes on the wealthy automatically goes into investment, creating jobs. In fact, lately, more and more of those tax savings go into market investments, increased savings and wealth, and luxury homes and other luxuries–jets, art, etc. This has the effect of increasing inequality in wealth, which has risen dramatically.
And, scholars find some of the foreign aid provided by rich countries does indeed yield results. There is an abundance of literature on what works and what doesn’t. Programs must be crafted to the particularities of institutions and customer in each country.
I argue that we have the capability to do this well. We have the financial capacity to significantly increase our dollar investment. If we reduce military spending gradually as we ramp up economic development spending, I argue that we will find over time that we no longer need the amount of military spending. The world will gradually become more peaceful.
So, sorry my wonderful country, America, God bless you. But I am not in favor of America first. God is not the God of only America. God is the God of all. All mankind should be equal in the great destiny of all time. People in Gambia and Bangladesh are just as important in my eyes and in the eyes of God as those of us so very privileged to be born here. Just as important as me and my daughters and my wonderful grandchildren. Just as important. Let us not forget the great advantage of birth here, and let us seek to provide the same to all citizens of this planet.