losing an instrument

we often rue fewer options later

(I wrote this piece on 3 February but could not send it for technical reasons (I suppose it was operator error but sure didn’t seem like it—cw)

The week began with the announcement that the USAID is closing as a federal agency. Millions of Americans likely are saying “right on!!” They will be enchanted with the idea we are finally ending the practice of sending half our budget abroad as foreign aid.

I confess I know more about the Agency for International Development (USAID or, as I knew it, simply AID) than most because my father worked for them intermittently between 1966 and 1998. But that does not mean I can’t offer a balanced perspective on its use as an instrument of advancing our interests.

Repeat: an instrument to advance our national interests.

AID began during the Kennedy administration as one more mechanism to blunt communist activity abroad, though the less-menacing, as it turned out, Soviet version. The title for the organization was a bit of a misnomer as we have actually rarely provided outright assistance but rather used the Agency for capacity-building. When I lived in Colombia the first time, the overwhelming majority of AID activity was teaching agricultural techniques to improve crop yields. In countries desperate for food, that mattered a great deal. Back in the ‘60s, much of the world was in that condition.

My father’s work was in educating the Ministerio de Hacienda, as Colombia’s revenue agency was called, how to buy computers to increase tax collection. Most of the world confronted profoundly imperfect collection systems, not the least because information was disaggregated in the hands of too many offices which assured too few people paid their taxes.

No one likes to pay taxes. I get it. I GET THAT. But, state revenues are the blood of any political system. Without revenue, most countries cannot do what they want in policy, in defense, in anything. (We have an inherent advantage because we still find bankers around the globe willing to lend us far more than they lend anyone else as long as we maintain our utterly unblemished record of meeting our national debt interest payments on time. Once we fail to meet that obligation—which could occur within this calendar year, all bets on how we are treated are off but that’s another column). My dad’s role was to advise what computer hardware was most appropriate to the specific needs Colombia, then other countries where he worked, required. His and the other programmatic offices operating in the mission in Bogota’ were highly technical advisers on how to craft better governments, pure and simple.

The Soviets could not touch that as the Soviet system was inept, inadequate, stultified, and paranoid. Who really wanted to be part of that system? Those governments installed by Moscow in the 1940s and 50s got true handouts on some forms of assistance to keep their systems going. USAID, instead, was one of many comparative advantages we had during the Cold War, with foreign assistance a specific type of economic power. Technical skills for societal development were an additional subset of that power.

With the end of the Vietnam debacle (where USAID was an important player but hardly one that would turn the tide in a place hollowed out by pervasive corruption), Americans were adrift on national security and the tools we used to conduct ours. The Reagan Administration and extremely conservative Republican critics like Jesse Helms of North Carolina cast fundamental doubts about anything that smacked of a “give away” as if those engaged in USAID’s administration were naive or stupid. Along the same lines as condemnations about the U.S. role in multilateral organizations such as the United Nations, USAID became a target for those arguing these massive give away to maligning and incompetent “anti-American” organizations were not only a waste but evidence the world did not respect us.

Current attacks on USAID only continue to underappreciate the value of foreign assistance. USAID’s FY 2022 allocation of $70 billion in foreign assistance out of a $7 trillion federal budget went largely to contract activities by U.S. companies in the specific targeted programs where we engage with assistance. Most money goes to Americans, I would wager, rather than Jordanians, Egyptians, or Sudanese. According to the Committee for a Responsible Budget, foreign assistance has been 1-2% of the federal budget for twenty years. In other words, no more than 2% of the federal budget has been going to countries primarily in the Middle East and Africa across four programmatic categories: humanitarian assistance, health, peace/security, and economic assistance.

It is true that foreign assistance has gone to Afghanistan and Yemen among the states who oppose the United States around the world. The Afghan aid fell under the category of humanitarian aid primarily; I am not aware of what we are funding in Yemen but suspect it’s peaceful and security along with humanitarian help for a pitiful “state”. That does not in any way justify nor explain away governments or individuals who steal or misuse that aid.

But the key danger here is that China, our now accepted primary adversary, happily uses foreign assistance as a carrot to lure states in what is increasingly a zero sum game of relationships. These Belt & Road Initiative which Americans decry as a “debt trap” and a false hope for development from the southwest Pacific islands to Southeast Asia across Central Asia, into the Middle East, Africa, and Latin America has a component of foreign assistance. I find Chinese statistics problematic so I will not cite how much aid they offer but that isn’t really even the point.

Our rhetoric about aid going “down rat holes” or being used by countries not respecting Americans is not how China portrays its help. Instead, China crafts messaging about the Belt & Road as part of Xi’s determination to create a “community of common destiny”, implying greater advantages for all. Our commentary almost uniformly casts aspersions on the recipients being thankless for our generosity.

Most relevant is that when we withdraw from these engagements, China has learned the value these options offer by watching the advantages foreign assistance provided us as a tool over sixty years. States with little sound capacity find it impossible to turn down the money Beijing offers since no one else is standing at the door with resources they desperately need. Yes, many of those governments are corrupt but that doesn’t change the fundamental needs the societies have. I have no doubt China will view our closure (or subsuming into State under Secretary Rubio’s direction, according to what I see this morning) of USAID and its four tranches of capacity building as a golden opportunity to show up as an alternative funding source.

Finally, USAID does not have an unblemished record of success; it just doesn’t. For five years I worked with a fellow at a midwestern university who never missed an opportunity to utter snarky comments about my father was one of the many CIA operatives under cover as USAID employees. I have definite information to say that was a false accusation but AID did operate as a cover for many spooks abroad. But the Agency has made mistakes: tell me some part of government under any administration that hasn’t, please.

But closing USAID will not make a dent in the federal deficit or debt. Our quarterly debt interest payments—not even touching the principle of the debt itself—as a country are $1.124 trillion so that is a false argument but one embraced because of civic illiteracy.

USAID provided a message—and much of our national security strategy relies on the information instrument—that Americans cared about people around the world as people rather than merely consumers, partners against adversaries, or residents of horrible countries. By severing USAID’s semi-autonomous status (it’s been linked to State for years now), we are burying a relatively cheap instrument of national power. That will come at a cost. USAID was never going to alter the balance of power around the globe but it was emblematic of who we tell ourselves we are as a caring nation hoping to see others improve their status in life.

NO SINGLE INSTRUMENT determines success or failure. Strategy is the orchestration, much as a symphony playing Mozart, of multiple instruments in a sequenced, balanced manner where appropriate to achieve the music we call advancing our national interests. USAID and its functions overseas were one part of that—nothing more nor anything less.

We no longer seek to continue using that instrument, which is the prerogative of any administration. But the decision will have consequences that will be expensive in other ways since we still expect a major position as a global leader. This hampers that leadership more than people immediately recognize.

Thank you for your attention and I genuinely look forward to your reactions, criticisms, and thoughts. I appreciate all readers, especially the subscribers who support this column financially.

Be well and be safe. FIN

“A Breakdown of US Foreign Aid Obligations”, CommitteeforaResponsibleGovernment.org, retrieved at https://www.crfb.org/blogs/breakdown-foreign-aid-obligations

“Federal Government Current Expenditures: Interest Payments“, Fred.StLfed.org, 30 January 2025, retrieved at https://fred.stlouisfed.org/series/A091RC1Q027SBEA