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Aid to the Poor: By the Numbers

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See below for an insightful post from MFAN Member and Vice President of the International Rescue Committee Anne Richard. This post first appeared on the Stimson Center’s Will and the Wallet blog.

Aid to the Poor: by the Numbers

March 23, 2011

By Anne C. Richard

Shimelba pre-school classSindh Province

Congress is out to cut foreign aid, but the public doesn’t necessarily agree.  Pollsters find that when we Americans learn about specific aid programs, we support them.   When we hear clear details, we favor aid programs guaranteed to save lives.  But Congress keeps acting on the desires of a misinformed public rather than on the basis of reality.  They should look at the facts.

For millennia the poor have been among us. Today, eight out of ten of the earth’s 6.9 billion people live on less than $10 per day.  But, according to the World Bank, the number of people living in extreme poverty (surviving on less than $1.25 per day) is actually falling.  Between 1981 and 2005, the share of the population in the developing world in extreme poverty was halved from 52 to 25 percent, or 500 million fewer people (from 1.9 billion to 1.4 billion). This is because people in East Asia, especially China, are better off now.  The number of the very poor was on track to shrink even further before the financial crisis and recent spikes in world food and fuel prices. The overall trend is important because it means that the poor are not fated to live in destitution forever – change can happen.

Americans think that foreign aid makes up about 25% of the $3.7 trillion Federal Budget and suggest it ought to be no more than 10%.[1] The reality is that all types of foreign aid, including military and economic aid to allied governments, is about 1%, and aid to the world’s poor is even less (0.78%).  Pollsters find that when Americans are told that health and development aid is less than 1% of the budget, the number of respondents who want to cut aid drops significantly.

Make no mistake: we are still talking about billions of dollars.  But the entire amount (about $26 billion) could be struck from the budget tomorrow, and it would not make a dent in the more-than-$1 trillion annual budget deficit, which is fueled by entitlements and other mandatory spending (60% of the budget), military spending (20%) and interest payments on the national debt (6%).

And the way aid is distributed has improved dramatically.  The Cold-War stereotype is of cash handed to a dictator so he backs the U.S.  Today, aid to the poor is tightly controlled.  Grants to carry out aid programs are competitive,  and in nations beset by corruption, programs bypass governments and instead deliver aid to local groups or directly to the poor.  I’ve seen aid programs where illiterate people give a thumbprint so a receipt exists.  The UN refugee agency uses eye scan technology to ensure refugees preparing to return home do not come back to ask for more repatriation aid. Most aid workers are citizens of the countries in which they work.  They earn modest salaries yet are playing a tremendously constructive role in their own societies.

We Americans say we do not like foreign aid, but if you ask us what we think about vaccinations for infants in developing countries, or preventing deaths from childbirth, or teaching girls to read, or distributing seeds to farmers whose crops have been flooded, you will find that most of us support modest investments like these that can transform lives.  And when natural disasters strike, in Indonesia, Haiti, or Japan, we want to help.

Recently, however, the House of Representatives approved a bill that would slash relief and development aid, cutting refugee aid by 45% and disaster assistance by 67%.  Programs to help poor mothers and infants, to fight the spread of deadly diseases and to support UN peacekeepers would also be cut.

Many House members have gone on record calling for these cuts.   When asked if he should re-think cutting disaster aid in light of the earthquake and tsunami in Japan, House Majority Leader Eric Cantor said, “All of us need to be tempered by the fact that we’ve got to stop spending money we don’t have.” Republican Senator Lindsey Graham of South Carolina has bucked the trend by supporting foreign aid – but aid primarily for running civilian programs in Iraq, Afghanistan and Pakistan, so that the military can come home.  He does not mention aid programs that could prevent or resolve problems elsewhere, potentially saving millions of dollars in future defense spending.

It would help immensely if Americans of all political stripes – including Democrats and Republicans, Conservatives and Independents –set the record straight on foreign aid.  Then an informed American public could choose the priorities and missions that matter to the US.

Anne C. Richard is a vice president of the International Rescue Committee and a board member of the Stimson Center. Send your comments to the editor directly at rwilliams@stimson.org.

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