Foreign Aid Dilemma: Dictators on our Dole
Business + Economy

Foreign Aid Dilemma: Dictators on our Dole

Sean Gallup/Carlos Alvarez/Michael Crabtree/Getty News

As violence rages in Libya and antigovernment protests spread across the Middle East, the Obama administration faces a diplomatic dilemma freighted with important budgetary implications. For decades, the U.S. government has showered foreign aid on countries with authoritarian governments – from Egypt to Yemen to Bahrain – that are now targets of protesters.

There is growing pressure on Capitol Hill to either cut aid or use it more skillfully to extract reforms and concessions, as the Obama administration struggles to forge a more pragmatic policy in order to influence governments to adopt reforms in this explosive region.

“We’ve been slow, a day late and a dollar short all along the way, not knowing what to say because we don’t understand what’s going on,” said Kurt Volker, who served as U.S. ambassador to NATO under President George W. Bush. “We’ve seen in the Middle East that a series of short-term decisions put us in a bad situation in the long term. We should reevaluate our policies, but the reality is that I’m not convinced we’ll be doing that,” Volker said.

Rep. Ron Paul, R-Tex., has offered a plan to cut $6 billion in aid to Egypt, Israel, Jordan and Pakistan. His proposal comes amid a bruising battle between congressional Republicans and the White House over spending and a mounting budget deficit projected to total $1.6 trillion this year.

“Borrowing money from China — or printing it out of thin air — to hand out overseas in [an] attempt to purchase friends has been a failing foreign policy, as we see most recently in Egypt, where there is not even a government in place!” Paul wrote in his Dear Colleague letter. “We should seek friendly relations and trade overseas, but we cannot justify lavish gifts to foreign leaders when American taxpayers are increasingly feeling the pain of our economic crisis.”

A Drop in the Deficit Bucket
Foreign aid constitutes less than 1 percent of the total U.S. budget. However, with a 2011 budget of nearly $4 trillion, this comes to $41.09 billion. These funds are spread throughout the world, including a huge chunk in the Middle East. The United States provided former Egyptian President Hosni Mubarak with $83.7 billion throughout his reign dating back to 1982. It has provided $1 billion to Jordan annually since 2002, and tens of millions of dollars in recent years to Yemen for both humanitarian and military aid, for example.

Top Ten Recipients of U.S. Foreign Aid

Top Ten Recipients of U.S. Foreign Aid

Afghanistan$4.1 billion
Israel$2.77 billion
Pakistan$1.8 billion
Haiti$1.7 billion
Egypt$1.5 billion
Iraq$1.1 billion
Jordan$843 million
Mexico$757.7 million
Kenya$687.7 million
Nigeria$614 million
Source: U.S. State Department

The highly generous U.S. aid strategy toward Egypt under Mubarak was confounding to many: For sure, Mubarak supported U.S. efforts to advance the Middle East peace process with Israel and was a moderate Arab Islamic voice in world affairs. Yet the U.S., a self-proclaimed champion of democracy and human rights, backed a regime that did not allow free elections, suppressed free press and independent media and ruled its citizens with emergency law.

After a halting initial response to mass prodemocracy demonstrations in Egypt last month, Obama abandoned a 30-year alliance with Mubarak to help force his departure. The president has also demanded the resignation of Libya’s leader, Col. Muammar el-Qaddafi, who is attempting to crush a rebellion and protests throughout that North African country.

At the same time, however, Obama has supported attempts by the royal family of Bahrain – the home of the Navy’s Fifth Fleet – to survive mass protests. And he has toned down administration critiques of Yemen’s repressive government, which is helping the United States root out a terrorist threat.

With the outcomes of the Middle East protest movements far from certain, the White House is reevaluating its long-term strategies toward countries with autocratic rulers who are friendly to U.S. strategic interests, according to experts familiar with U.S. foreign policy deliberations. These experts warn that the relative silence of the White House indicates uncertainty about if and how U.S. foreign aid policies to suppressive regimes might change in the wake of the uprisings

In addressing the continuing violence in Libya at a White House news conference last week, Obama said he had not taken any options off the table as the government and its allies sought ways to force the Libyan leader out of the country. Some have criticized the administration for failing to move quickly in imposing a no-fly zone above Libya. “I do take very seriously making sure that any decisions I make involving American military power are well thought through,” Mr. Obama said.

During a recent hearing on the State Department’s 2012 budget proposal, Sen. Patrick Leahy, D-Vt., said the U.S. should use foreign aid as leverage to stand up for people, including those in the Middle East, who are living under corrupt, repressive regimes and are fighting for their freedom. Leahy recalled his role in the creation of the Leahy Law a decade and a half ago, which ensured that U.S. aid funds were not used to stifle human rights and the rule of law.

Secretary of State Hillary Clinton testified at the hearing that Americans are seeing returns on their investments in Iraq, Afghanistan, Iran, Sudan and across the Middle East, where we have been working to “open up political systems,economies and societies,” and are supporting orderly, peaceful, long-term democratic transitions. Sanam Vakil, a professor of Middle East studies at the Johns Hopkins School of Advanced International Studies in Bologna, Italy, said that one likely and near-term policy change toward these regimes will be imposing contingencies on aid money. As in the case of Egypt, the United States often simply gives money to authoritarian leaders that advance U.S. interests.
“Everything has always been done within the paradigm of keeping access to energy sources, and a defensive posture dealing with Iran, as well as our relationship with Israel,” she said. “If there’s a massive shift in government policy we might have to revaluate these positions. Our national interests could become fluid.”

Related Links:
How to Protect Foreign Aid? Improve It (The New York Times) 
Eric Cantor Defends Foreign Aid Cuts in Aftermath of Japan Earthquake, Tsunami (Huffington Post) 
Clinton Trip to Boost Democracy in Egypt, Tunisia as Libya Actions Debate (Bloomberg)