us budget deciphering myth reality foreign aid 2008 org

8/9/2019 US BUDGET Deciphering Myth Reality Foreign Aid 2008 org

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www.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.org

Analysis of the International Affairs Budget

US Foreign Policy &

International Development:Mutually Exclusive?

Aid MonitorAnalysis and advocacy for effective aid

[email protected]

Separating Myth from RealityDeciphering the Destination and Purpose of Funding

Javier Arguello


2/23


Analysis of the United States International Affairs 2008 Budget

InternationalAffairs

StateDepartment

NationalBudget Development Top Recipients Observations

Analysis

Aid Monitor

Aid Monitor seeks to improve the quality of foreign aid by making it moretransparent, accountable and effective with results that can be objectively

measured. The end objective is to influence donors and practitioners in thefield of international development assistance. The belief is that this can onlybe done through sound analysis and advocacy to advocate for aid reform.

Aid Monitor seeks to do this in three ways:


[email protected]: US International Affairs Function 150Fiscal Year 2008 Budget Request (Analysis)

1. Research: Identify the appropriate metrics by which to measure the impact offoreign aid and the policies that affect donor performance.

2. Disseminate: Create a broad network of like-minded organizations and expertscollaborating to publish articles that analyze results and provide recommendationson aid effectiveness by donor.

3. Influence: Provide a platform (aid effectiveness conferences) for industryexperts and leaders from developing countries to raise awareness, spark informeddebate, provide specific policy recommendations and increase demand for donorsfor improve performance and accountability.

Source: US GovernmentInternational Affairs Budget (150)


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www.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.org2 0 0 8 B U D G E T

The total budget for

NationalBudget


USA Federal Budget 2008US$ 2,9 Trillion

Defense

21,6%

State Department

1,2%

Other

11,3%

Education


DepartmentOf Defense

InternationalDevelopment



international affairs consists of

multilateral aid (world bank,IDB, IMF) and bilateral aid(USAID, MCA, HIV Fund) as wellas domestic agencies andinternational operations(embassies and projects).

Soc.Sec.

21,0%

Medicare

13,3%

Welfare

11,2%

DEBT

9,0%

Health

2,4%

1,9%

Medicaid

7,2%


4/23



NationalBudget


100:1 RatioFor every 100 dollars spent ontools of war (defense) one dollaris spent on tools of peace andprosperity (health / economicdevelopment).

$626$608

$500

$600

$700

US Federal Budget 2008$2,9 Trillion





represents 1.2% of the Federalbudget, almost two thirds of which isadmin. and military aid spending,leaving a little over 0.4% of thebudget for economic developmentand humanitarian assistance.Defense represents 22% of thebudget (another 10% of the budge isallocated for indirect defensespending).

$386

$324

$261

$209

$91$69

$56$40 $35 $36 $34 $24 $20 $20 $17 $12 $12 $11 $11

$0

$100

$200

$300

$400


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Budget line items reveal howoperating expenses, embassy

NationalBudget

Interpreting the $36 BN International Affairs BudgetPolitics and Wars instead of Development

Health(AIDS & Children):Economic Dev.:







,

agricultural subsidies (PL 480)make up 2/3 of the Intl Affairsbudget ($24 BN)

Only 1/3 of the budget is forhealth and economicdevelopment ($12 BN)

Humanitarian(PL 480 & Relief):

$1.5 BN4%

Military Aid:$7.3 BN

20%

.

16%

.

17%

Admin. & Other:$15.6 BN

43%


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The budget for internationalaffairs is divided into fourcategories with overlapping

NationalBudget

Official Classification of the International Affairs Budget$36 BN Distribution







unctions an inc usive o

military aid ($7,2 BN).

Analyzing the budgetcategories is necessary forunderstanding how the fundsare spent by purpose / region.

Department of Stateand USAID BilateralEconomic Assistance$20,266,913: 56%

Independent Dept.and Bilateral Agencies:

$4,373,509: 12%

Multilateral

EconomicAssistance

$1.788.350; 5%

Operationsand Related Programs;

$9.757.746; 27%


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International Affairs Budget $36 B2006 2008 Comparison

2 0 0 8 B U D G E T

NationalBudget


$20.266.913

18.074.969$20.000.000

$25.000.000






$4.373.509$1.788.350

$9.757.746

$3.012.408$1.581.124

$8.721.112

$0

$5.000.000

$10.000.000

$15.000.000

Department of Stateand USAID Bilateral

Economic Asst

IndependentDept. andAgencies

MultilateralEconomicAssistance

State DepartmentOperations and

Related Programs

FY 2008

FY 2006


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Interpreting the $20 BN State Department Budget2006 to 2008 Comparison

$1.516.700$609.000

$1.078.110

$812.307

$18.000.000

$20.000.000

$22.000.000

State Department budget hasincreased 11% in the past 2yrs primarily due to HIV/AIDS

-

NationalBudget







Other

Administrative (USAID)Humanitarian (PL 480 & Relief)

Military

Health (AIDS & Children)$4.124.835 $4.360.815

$3.566.475$5.714.279

$7.181.999

$7.253.812

$1.499.850.

$0

$2.000.000

$4.000.000

$6.000.000

$8.000.000

$10.000.000

$12.000.000

$14.000.000

$16.000.000

FY 2006 FY 2008

Economic Development

.

However, AIDS is preventedthrough faith-based initiativesdelivered by US organizationspromoting abstinence.Infection rates have increased.


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0,17

Italy

Greece

United StatesThe US is the worlds laggard inforeign aid as a percent of itsGDP -agreed to be 0.70% forOECD donor nations to achieve0.70% of GDP

How does Americas share of developmentassistance compare to its peers as a percent of its GNI?

NationalBudget





[email protected]: OECD Database

1,03

0 0,2 0,4 0,6 0,8 1 1,2Sweden

Luxembourg

Norway

Netherlands

Denmark

Ireland

United Kingdom

BelgiumAustria

France

Finland

Switzerland

Germany

Spain

Australia

Canada

New ZealandJapan

the millennium development

goals of halving poverty by 2015.Of the 0.17% only 1/3, or.06% of GNI is actually spenton development (11 timesbelow the commitment).

Goal


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NationalBudget

Of the $36 Classified as International Development Only $12 BN is for Development

Only 1/3 of the Intl Affairs Budget is for Health and Economic Development the rest is military and operational

Bilateral Econ. Dev;






,

ESF Econ.State Dept;

$3,319

DevelopmentAssist (DA)

$1,041MM

Health(Aids);

$5,714


11/23


2/3 of foreign assistance is


NationalBudget

Top Recipients of $12 BN BudgetUS Interests Concealed as International Development Assistance

Iraq; $1.067






concentrated on eight countries

and reactive to wars on terrorand drugs. America is fightingin few countries and ignoringthe rest while relying on apropaganda to transmit amessage of assistance to theworlds poor.

Note: Israel receives $32 BN inaid annually, which is notaccounted for in the internationalaffairs budget.Iraq, Colombia and Egypt are alsoallocated more funds through the

Dept. of Defense.

South Africa; $607

Uganda; $325

Tanzania; $341

Ethiopia; $501

Egypt; $415

Nigeria; $528

Pakistan; $393

Afghanistan;

$1.041

Kenya; $532

er

Countries$2.743


12/23


NationalBudget

Of the $6 billion in economic

Of the $12 BN half ($6BN) is for Economic of DevelopmentMultilaterals & State Dept Distribute 5/6 of Econ. Dev. Assistance

1.788.350

$6.000.000







billion is for direct economicdevelopment (DA), the rest iseither multilateral assistanceor state department aid (ESF)- politicized aid.

$1.508.760$1.041.248

$2.616.075 $3.319.567

$1.581.124

$0

$1.000.000

$2.000.000

$3.000.000

$4.000.000

$5.000.000

FY 2006 FY 2008

Multilateral Economic Development

(World Bank, IMF, ADB, IDB, etc)ESF (Economic Support FundDiscretionary Political AidAdministered by State Department)

DA (Development Assistance - USAID)

-33%


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www.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.orgwww.AIDMonitor.orgUnderstanding ESF


NationalBudget


Development Top Recipients Observations

AnalysisState

DepartmentWhat Exactly is ESF (Economic Support Fund)?

Political Coercion & Economic Threats

Nethercutt Amendment

This provision mandates withholding antiterrorism funds andother aid from countries that refuse to grant immunity for U.S.

citizens before the International Criminal Court.


[email protected]: Human Rights Watch

The amendment threatens aid available under the EconomicSupport Fund (ESF)intended to help U.S. allies promote

democracy, fight terrorism and corruption, and resolve conflict.

The United States is bullying smaller, weaker countries because

of an ideological obsession with an illusory threat, - RichardDicker, director of the International Justice program of Human

Rights Watch.

Source: Global Policy Forum and Human Rights watchhttp://globalpolicy.igc.org/intljustice/icc/2005/0629hr3057.htm


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NationalBudget

$35

$40

$45

$4.000

$4.500

$5.000No correlation between poverty levels anddevelopment assistance. Militarily driven aid!






$0

$5

$10

$15

$20

$25

$30

SouthAfrica

Iraq

Egypt

Pakistan

Nigeria

Kenya

Tanzania

Uganda

Afghanistan

Ethiopia$0

$500

$1.000

$1.500

$2.000

$2.500

$3.000

$3.500

GDP Per CapitaDA Per Capita


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NationalBudget

Top Recipients of Foreign AidWant AID? Sell drugs or start a war

Ira 1.067 War & Debt for iveness






Pakistan $393 War on TerrorAfghanistan $1,041 War on TerrorColombia $600 War on DrugsEgypt $415 Middle East / MilitaryNigeria $528 Oil producer

Ethiopia $501 AIDS

Uganda $325

AIDSTanzania $341 AIDS

Total $8 BN

Top 10 countries

receive 2/3 of GlobalAid which is drivenby wars (terror, drug)

and AIDS.

The remaining 5-BNpoor receive $2,7 BN(less than 50 cents per

capita)


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Regional Distribution of US Foreign Aid2001 2006

2 0 0 8 B U D G E T

NationalBudget


$489

$523

$474$14.000

$16.000 East Asia/ Pacific

Southern Asia

Europe & Eur-asia

Africa

Near East






$1.585 $1.713 $1.662 $1.545 $1.333$749

$5.878 $5.343 $5.556 $5.467$5.312

$5.401

$2.803

$2.444 $2.091$1.561

$146 $1.313

$1.266

$1.401 $1.577

$1.776

$1.877

$2.017

.

$1.772$2.484

$637

$307

$204

$484

$494

$442

$0

$2.000

$4.000

$6.000

$8.000

$10.000

$12.000

2006 2005 2004 2003 2002 2001

Year

Millions

Western Hemisphere


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OECDGlobal Aid Awarded

It is all about DEFENSE

Billions for War :: Pennies for Poor

OECDGlobal Aid Shortfall

NationalBudget





[email protected]

1956-2006

$2,3 Trillion

US Expenditures onWar in Iraq2003-2007

$500 BN$300 MM/ Day

$ 20,000 per Iraqi

1970-2006

$3,1 Trillion

US Expenditures onEcon. DevelopmentAssistance Awarded

2003-2006

$22 BN$1.25 per capita per yr


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Foreign Policy Strategy: One Big D and two little dsPillars of American Foreign Policy: Defense, Diplomacy and Development

Development

Diplomacy

Defense

The international affairs budget includes military, development and diplomacy

NationalBudget






conom c ea

$12 BN

BilateralEcon. Dev;

1.788

ESF Econ.Asst.

State Dept;

3.319

DevelopmentAssist;

1.041

Health(Aids);

5.714

a e ep . pera ons

$16 BN

ep o e ense ary

$630 BN

Military state dept; 7.254

Dept of Defense

623.000

State

DepartmentOperations


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Share of Global Defense Spending

55% of

Share of Global Foreign Aid

17% of

Americas Market Share

Proportionality of Investments

NationalBudget





[email protected]: GlobalSecurity.org

OECD Database (DAC countries + China)

$1,1 Trillion Industry

Rest of World

(except USA)

45%

United States

55%

$110 Billion Industry

United States

17%

Rest of World

83%


20/23


NationalBudget


Americas TOTAL Expenditure on DEFENSERepresents 1/3 of the FEDERAL BUDGET

(Education is 1% and Diplomacy/Development is 1%)

National Security Outlays

$1.1 TRILLION

$43$9

$232

80%

90%

100%






$19$28

$78

$79

$623 BillionDirect Spending

Dept. of Defense

0%

10%

20%

30%

40%

50%

60%

70%

2008 Forecast

Net interest attributable to past debt-financed defense outlays

National Aeronautics & Space Administration (1/2 of total)

Department of the Treasury (for Military Retirement Fund)

Department of Justice (1/3 of FBI)

Department of Homeland Security

Department of Veterans Affairs

Department of State

Department of Energy (nuclear weapons & environ. cleanup)

Department of Defense


21/23


NationalBudget


$934.900

$1.113.680

$900.000

$1.000.000

$1.100.000

$1.200.000

US represents over 50% of the worlds defense spending,

adding $50 billion every year (on average) since 2002. The indirect spending required to support the DoD, represents

an additional $490 Billion in 2008 for a total of $1.1 Trillion.

The piece dividend that was expected at the end of WWIIhas only led to tripling of the budget in the last decade tofight wars of choice






(in

Million

s)

$356.720

$415.223

$464.676

$504.638

$546.018

$623.000

$280.292

$306.170

$293.093$297.637

$278.856$274.278

$301.697

$200.000

$300.000

$400.000

$500.000

$600.000

$700.000

$800.000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Direct Spending Dept. of Defense

Including Indirect Spending

Consistent spend of approx. $300 billion / yr


22/23



NationalBudget

Key Observations Misplaced the Self-Interest

GWOT (Global War on Terror): Through the international affairs budget as well assupplemental emergency funding Iraq and Afghanistan are poised to receive $2,6 BN in aidfor the war on terror, almost doubling its budget. The counter-effects of this are a clear dangerto America as is the ability for these countries to process such large amounts of military aid.






,over 2007). An important challenge here is to allow local customs and culture into the strategyto combat aids. BY 2008, promoting abstinence through US faith-based missions has increasedinfection rates in UGANDA one of the major recipients of aid.

MCC (Millennium Challenge Corp.): MCCs 2008 budget is supposed to increase from $1,1BN in 2007 to $3,0 BN in 2008. However, bottlenecks in the system have preventeddisbursements. Less than 5% of the allocated funds are being distributed.

ESF (Economic Support Fund): The ESF funds consistent increase in budget reflects theempowerment of the State Department as a provider of foreign aid. The 2008 budget is $3,3BN. This politicizes aid through the Nethercutt Amendment, which ties ESF funds to coercion(exceptionalism).

DA (Development Assistance): Dwindles to less than 1/3 of the ESF budget at $1 BN,marking the reduced importance that is being placed on USAID which continues to see its

budget and staff levels fall for the fifth year in a row.


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US Foreign Policy &International Development:

Mutually Exclusive?


[email protected]

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us budget deciphering myth reality foreign aid 2008 org

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