Kinsley High School
Kinsley, Kansas 
Teacher: Dr. Galen R. Boehme


 Improving Foreign Aid
By Adam Keehbauch
Grade 12


In order to work more effectively, the Millennium Challenge Account needs to distribute funds 
to developing countries based on need and reduce corruption in third world countries.

The Millennium Challenge Account was established in March 2002 by President George Bush.  
The purpose of the MCA is to help developing countries by providing the countries with financial 
aid and health care.  The program will act as a tool for helping developing countries become 
more financially independent.  The MCA is the first significant increase in United States develop-
ment assistance for nearly a decade.  The program establishes guidelines that applicant countries 
must follow in order to receive aid from the United States along with other developed countries.  
Applicant countries that exhibit a just ruling system, show an interest in their people, and encourage
 economic freedom are eligible for the aid.  The MCA hopes to increase United States foreign aid 
by 50 percent, which is a vast improvement.  If accomplished effectively, the United States could 
make billions of dollars in profits each year as the program continues to give aid.  However, the 
MCA does have problems that need to be rectified.

One major issue that exists is the current amount of foreign aid the United States contributes, and 
where that money goes.  During the Reagan administration, the United States gave over $27 billion 
in foreign aid.  Today, the United States only gives $10 billion, a little over one-third of the earlier 
amount.  Of that $10 billion, roughly three billion dollars go to Israel, a country already considered 
developed.  If Israel’s population accounts for about one-tenth of a percent of the world’s 
population, then why should the country receive one-third of the United States’ aid money?   
Many people in the United States feel that the government should not fund the Israeli army, which 
would total in around two billion dollars a year.  For each dollar given to the Israeli army, the Israeli 
people must spend an extra two to three dollars to support its military.  Many activists feel that the I
sraelis wrongfully occupy the Palestinian territories, and as a result has led to the suffering of 
Palestinians.  Surely the United States can give aid money to countries that really need the aid.  
Another disturbing fact about United States aid is that the second leading recipient of aid is Egypt, 
which receives money for the purpose of not fighting Israel.  In reality, we are only paying these 
two countries not to fight each other.  Our aid money can be used more constructively.  Half of the 
world lives on less than two dollars a day.  The life expectancy in some African countries has fallen 
to as low as 38 years old.  Although these facts are disturbing, the United States insists on distribut-
ing nearly half of its aid money to already developed countries.  A change needs to be made.

Another problem the MCA faces is its ignorance about corrupted countries.  President Bush clearly 
states in his MCA proposal that corrupted countries will not be given aid.  It is obvious that countries
that are corrupted need the aid most.  Those countries suffering the greatest are where evil exists.  
The citizens of the corrupted countries seldom take any part in the corruption.  Rather, the govern-
ments are the source of the problem.  The citizens only suffer.  Instead of ignoring the problem, the
 United States should reduce the problem. Restoring order by eliminating corrupted governments 
will eventually lead to aid from the United States and other developed countries.  
One method that we as the United States should consider using in helping countries restore order 
is weapons of mass assistance.  By helping the countries that are corrupted rather than destroying 
them through the use of weapons of mass destruction, we will be helping the developing country 
tremendously.  Sometimes, however, removing a corrupted government can only be accomplished 
by using force, such as the removal of Saddam Hussein from the Iraqi government.  In these 
circumstances, the fighting should be kept to a minimum.  The United States did a very good job 
in its fight against Iraq.  Most of the citizens of the country were kept out of harm’s way.  Only the 
hostile militia was engaged with force.  Now the United States can take huge strides in helping the 
Iraqi people form a government that will help the country develop.  After the fighting ends, we along 
with other Coalition forces can provide humanitarian aid to the Iraqi people.  This is only the first 
step toward helping Iraq develop.  If a corrupted government anywhere in the world can be 
removed without force, the other countries should look at the way we, along with other Coalition 
forces, handled the situation with and use similar tactics of combining weapons of mass assistance
and weapons of mass destruction.

In conclusion, the Millennium Challenge Account is a worthy objective.  However, the MCA will 
not achieve its full potential until it distributes money rightfully and reduces corruption.

Selected Bibliography

Bush, George W.  “Millennium Challenge Account.”  Paper in Singer Packet, 2003, pp. 1-5.  
January 16, 2003.  http://singerfoundation.org

Diamond, Larry.  “Reinventing Foreign Aid in the National Interest.”  April 17, 2003.  
http://www-hoover.stanford.edu

“Facts About the Occupation.”  Stop U.S. Military Aid to Israel. April 17, 2003.  http://www.stop-us-military-aid-to-israel.net

Faith Action for People-Centered Development Policy.  “Testimony before the Foreign Operations Subcommittee Appropriations Committee U.S. House of Representatives.  
May 7, 2003.  Singer Packet 2003.  January 16, 2003.  http://singerfoundation.org

Millennium Challenge Account Brochure.  August, 2002.  April 17, 2003.  http://www.usaid.gov

Natsios, Andrew.  “Health and Education Key to New U.S. Aid Plan.”  Washington File.  
February 17, 2003.  April 17, 2003.  http://www.usaid.gov

Radelet, Steve.  “Initial Reactions to the Announcement on the MCA.”  Singer Contest Packet, 2003.  January 16, 2003.  http://singerfoundation.org

“The U.S. and Foreign Aid Assistance.” 1999-2001.  http://www.globalissues.org

Questions

Question # 1:  President Bush claimed that most funds for development do not come from international aid.  He mentions three things that do fund development.  What are they?

ź        Rather than coming from international aid, most funds come from domestic capital, foreign investments, and trade.  Each of these sources plays a key role in successful development.  Domestic capital is known as funding from home.  Taxes and donations are forms of domestic capital.  Foreign investment is specifically placed in investments.  Businessmen and politicians put these investments into other countries in order to make more money.  Foreign investments help these countries gain money.  When the country gains money for the investors, more investors come to invest in the developing country.  The most important of the three sources is trade, which is known as the “engine of development.”  By promoting trade, we help almost every poor country, and everyone benefits from trade.

Question # 2:  President Bush reminded his audience that successful development in a third world country requires more than funds.  What two items did he mention in this regard?

ź        Bush discusses three factors that affect a country’s success.  A successful country has citizens who are literate, who are healthy, and who are prepared and able to work.  The ability to read leads to an education, which is a fundamental for success.  Healthy people can work and be productive, helping the country’s industry.  And without a work force, a country will not be able to develop.

Question # 3:  When is money sometimes counterproductive, according to president Bush?

ź        Many examples exist dealing with the loss of money.  Corruption can lead to closed markets and unprotected private property.  Under these conditions, fixing poverty is nearly impossible.  Aid money in these situations only leads to more corruption and bad policies.  Bush is right when he declares that financial aid should not be given to these countries.  However, the United States needs to do what it can to help these corrupted countries, for the corruption can only become worse.  One method that the U.S. has often resorted to is the military, and perhaps the removal of the leaders of corrupted countries is necessary.  The United States should try to help restore an effective government in corrupted countries.

Question # 4:  Describe the Millennium Challenge Account and include in your description what is anticipated from donors and recipients.

ź        The Millennium Challenge Account as proposed by President Bush would help developing nations escape poverty.  This proposal sets up certain guidelines that developing nations must follow in order to gain aid from the United States.  Countries that show a just ruling system, show investments in their people, and encourage economic freedom will be given money as well as aid by developed countries to prevent poverty and diseases.  By doing this we as the United States are trying to give all countries more equal opportunity in quality education, health, and economic opportunity.  Countries that are corrupted will not be funded, because giving aid to corrupted countries will likely lead to more corruption.  The United States rightfully does not give aid to corrupted countries.

Question # 5:  What are the three broad standards that President Bush expects the leaders of the developing nations to adopt?

ź        President Bush expects the leaders of developing countries to follow three guidelines in order to receive aid from the United States.  These three standards ask that a country wishing to receive financial aid has a just ruling system, invests in its people, and encourages economic freedom.  A just ruling system greatly benefits a country in that it decreases corruption and helps to promote equal rights and freedoms to the residents of the developing country.  A country that invests in its people will show to the United States that the country wants to make life better for its citizens.  Economic freedom is the freedom to have an economy, an economy not controlled by the country’s government.  This will help the developing country’s economy.  The countries that follow these standards only will need U.S. aid for a certain amount of time, and then will no longer need that aid.

Question # 6:  Describe President Bush's challenge to development banks and explain why or why not you favor it.

ź        Bush challenges development banks to increase their support on education and private sector enterprises to developing countries.  Bush also believes that these banks should give out grants to the poor instead of loans.  The plan has merit if the banks have enough money.  Grants do not have to be paid back, whereas loans do have to be paid back, with interest.  Grants would stop the debt, but not if excess money is given away.  Loans only increase debt, and make life hard on those trying to repay the loan.  Grants would give a jump-start to the country’s economy, especially in increased trade and in domestic investments.

Question # 7:  What percentage of out national income (GNP) do you think the United States government committed to foreign aid in 2002?  First answer this question and then use the Internet to find the answer.

ź        My estimate of percent of the U.S. GNP devoted to foreign aid was five percent, a relatively low number.  However, I was shocked to discover that the actual figure is way below that.  According to www.globalissues.org, the United States only devoted .11 percent of its GNP to foreign aid.  This figure is much smaller when compared to the figure in such countries as Denmark and Norway, which gave one percent of its GNP.  However, all of these figures are shockingly small.  The richer countries of the world need to devote more of their money to those that are poor.  The United States especially needs to eliminate its greed and give more of its money to those that need it most.

Question # 8:  Describe and defend a "Me First" attitude. 

ź        The “Me First” attitude will only work if the situation is looked at correctly.  Foreign aid needs to be given to those who would benefit from the aid most.  Schools can be established for the uneducated.  Food is supplied for the hungry.  With this in mind, we need to realize that some countries need the aid more than others.  The countries that meet our guidelines best should be considered first, but then must be looked at individually.  The country with the worst conditions for its members should be given aid first.  Aid should be given if the country is making an attempt to better itself.  When that country receives aid, we move right along to the next.  As a recipient, it is important to remember to be patient.  Impatience can lead to conflict with other countries receiving aid.  In order to stop this, the United States could give an equal amount of money to those that qualify for aid.

Question # 9: Describe and defend a "Mutual Benefit" attitude.

ź        Giving aid to developing countries certainly creates a “Mutual Benefit.”  Third world countries that receive aid will benefit directly.  The standard of living for the citizens will increase dramatically.  This will lead to a higher level of education.  This education will lead to a stronger economy.  Countries with a strong economy become assets to the United States as well as other countries.  The countries will then be able to trade resources, and both sides will benefit.  The giving of foreign aid can also lead to a potential allied power with the United States.

Question # 10:  Describe three unsuccessful foreign aid programs operated by the U.S. government or private American citizens.

ź          Three unsuccessful programs operated by the United States are the Agency for International Development, African Crisis Response Initiative, and Organization of Economic Cooperation.

   The Agency for International Development was established in 1961 by the Federal Aid Administration.  AID was intended to coordinate development aid, humanitarian assistance, food aid, “free trade unions,” and business promotion programs.  However, AID’s programs have been more of a problem than a solution.  Countries became dependent on AID assistance and began fighting as a result of military aid.  AID also contained no economic modernization strategies.  President Clinton attempted to redefine the mission of the organization.

   The African Crisis Response Initiative was originally conceived to help develop an indigenous capacity to respond to regional emergencies in Africa.  Although the ACRI was funded by nearly 90 million tax dollars, the ACRI had no impact.  U.S. military equipment and training given to the leadership of the Ivory Coast only assisted in overthrowing a democratic government that was replaced by a military dictatorship.  ACRI also failed to give Africans affordable medical supplies, water treatment systems, agriculture products, and a consistent policy that promotes peace and development.

   The Organization of Economic Cooperation and Development is a network of rich countries that contributes a percentage of its gross national product to foreign aid.  The United States is one of the top contributors.  However, the U.S. ranks last among the 22 countries percentage-wise.  The goal given to each country is to contribute seven-tenths of a percent to foreign aid.  The United States has only contributed one tenth of a percent.  Only five of the 22 countries have reached the goal.

Question # 11: Describe three successful foreign aid programs operated by the U.S. government or private American citizens.

ź          Three successful programs operated by the United States are the National Catholic AIDS Network, WildAid, and the Catholic Aid Association.

   The National Catholic AIDS Network was established in 1989 to fight the AIDS pandemic in countries experiencing poverty around the world.  The network is a non-profit organization.  The network relies on volunteers to help support its fight against the pandemic disease.  The National Catholic AIDS Network has raised a large sum of money over its history that is devoted to the treatment of AIDS patients.  By May 2003, the network hopes to raise $100,000 to help those affected with the disease.  As of November 1999, the organization has already raised over half of that sum.  The network also provides a unique fund called the Mother's Fund, which has been established to remember and honor all moms who have given support in response to the AIDS pandemic.

   WildAid is a non-profit organization that was founded by environmental advocates.  The organization has been in existence for nearly 30 years.  WildAid holds headquarters in San Francisco with offices around the world, ranging from Bangkok to the Galapagos to Vladivostok and New York.  WildAid strives to protect the environment in which we live.  WildAid also provides direct protection to wildlife in danger through wildlife law enforcement.  WildAid also stresses the importance of educating people about the environment in which we live.  Last year, WildAid initiated a major conservation education project in Malaysia.

   The Catholic Aid Association is a non-profit organization established in 1878.  The CAA promotes financial responsibility, fraternalism, and the living of faith-filled lives.  The CAA provides its members with life insurance, annuities, and other products that contribute to financial well- being.  In 2001, the CAA raised $93,879 to help those that are less fortunate financially.  The CAA supports the Roman Catholic Church in extending the faith around the world.  Donations are taken to help support religious education and other religious and financial programs.

Question # 12:  Steve Radelet, Senior Fellow at the center for Global Development, believes we can do both -- take care of out own people and lend a helping hand to citizens of less developed countries.  Explain why you think we can or cannot offer aid to both.

ź        Radelet’s belief that the United States can take care of its own people as well as lending a helping hand to other less developed countries has merit.  While some critics argue that the United States needs to take care of its own citizens first, the United States should also help other countries that do not have nearly the number of freedoms and resources that we take for granted every day.  The United States is by far the richest, most powerful country in the world.  Our citizens have freedoms that others only dream about.  As the most powerful country in the world, the United States needs to give other countries aid in order for them to have the same privileges that we do.  The United States has the ability to give aid both to its own people as well as others.  The opportunity for jobs and making money in the United States is there.  That is not necessarily true in other countries. 

Question # 13:  What do you think about Mr. Radelet's assertion that "the administration is leaning towards a system in which eligible countries would write proposals describing their objectives and strategy, how they would use the money, the benchmarks used for evaluation.  Giving recipient countries this responsibility is a revolutionary change in US foreign assistance?"

ź        Radelet is correct in his belief that countries applying for aid should write out proposals to the United States.  Developing countries describing their objectives help the United States know what to expect from the country applying for aid.  If the country does not follow the guidelines or reach the benchmarks it has set, then the United States can eliminate giving aid to that country.  By doing this we can greatly decrease corruption in developing countries.  Only the countries with effective development plans will receive aid.  This procedure will benefit everyone as other developing countries will duplicate the guidelines of countries that have already received aid.  This will lead to development in all countries.

Question # 14:  Which of Mr. Radelet's three statements concerns regarding the MCA concerns you and why?

ź        Radelet’s concern that bothers me the most is the growing number of countries that qualify for aid versus the amount of aid to be given.  As more countries become eligible for aid, fewer funds will be available for each country.  This situation means that even the poorest countries will receive only a small amount of aid from other countries.  That country may even have the best development strategy, as Radelet discusses.  In order to fix this problem, the United States needs to set up stricter guidelines in order to make more funds available for the countries with the best development strategies.  Countries that only need small amounts of money should have to wait, or try to come up with the money themselves.  Countries that need money in order for its people to survive should be given aid first.

Question # 15:  There is evidence of an increase in negative world opinion towards U.S. foreign policy, not necessarily the American people.  To counter this negative perception of the U.S. some people want the U.S. to concentrate more on weapons of mass assistance (WMA) and less on weapons of mass destruction (WMD).  Please comment.

ź        Concentrating on weapons of mass assistance rather than weapons of mass destruction would increase the amount of support the United States would receive from other countries.  Weapons of mass assistance would include helping developing countries provide a better education, more money, better health conditions, or more supplies such as food and water.  However, ridding corrupted countries of weapons of mass destruction is a necessity.  Countries such as Iraq and North Korea contain nuclear and chemical weapons capable of destroying the entire planet if used in a war.  These countries can also sell these weapons to terrorists that can then bomb other countries, particularly the United States.  Before the United States provides mass assistance, it must rid the corrupted countries of their leadership and rid those countries of the weapons of mass destruction.

Question # 16:  What does the World Bank recommend as the United State's "just and appropriate share" to reach the Millennium Development Goals by 2015?  Do you think our citizens can afford that kind of increase?  Defend your views.

ź        The World Bank recommends that the United States sets aside $10-$15 billion by the year 2015 in order to reach the Millennium Challenge Account goals.  In order to provide such a large amount of money, the U.S. will have to raise taxes.  As a result, each U.S. citizen will be required to pay an additional $75-$100 in taxes.  This amount may seem like a lot at first, but the increase will only be temporary, and the extra $10-$15 billion will help the MCA accomplish its goals.  When these goals are accomplished, the American people will have the satisfaction of knowing that they contributed to helping people around the world escape poverty.

Question # 17:  What do you think about the request of Faith Action for People Centered Development Policy's request that tax dollars be used to fund, not only government-sponsored foreign aid programs, but "that funds also go to NGOs and grassroots organizations"?

ź        The request made by Faith Action for People Centered Development Policy that non-government organizations should be funded through tax money is not necessary.  Since the government does not sponsor NGO's, the government should not fund them as well.  Although for a good cause, NGO's should be funded through donations of the people interested in the program.  Many people in the United States today believe that the United States should not be involved in foreign affairs.  Forcing these people to pay for this program will cause a large amount of negative feedback.

Question # 18:  How many countries would be affected positively by health-related investments according to the Commission on Macroeconomics and Health (CMH)?

ź        The Commission of Macroeconomics and Health, if run correctly, will benefit 83 countries.  These countries will experience a positive effect on economic growth and equity.  These effects will be made available through a better education, clean water, and better sanitation.  The entire project should cost around $15.5 billion.

Question # 19:  According to the CMH, how much would be gained annually between 2015-2020 due to saved lives and increased economic growth, if an increased investment were made in global AIDS and other health services?

ź        By the year 2015-2020, CMH estimates that $360 billion would be gained annually due to lives saved and increased economic growth.  This number makes the $15.5 billion investment requested by World Bank look like nothing.  In addition to gaining profits of around $315 billion dollars, CMH expects to save 8 million lives.  Perhaps this is the more important figure of the two.  In order to gain a large profit such as the one stated, the United States would need to invest about $2.5 billion in 2003.  By making this investment the United States will take a major step forward in making billions of dollars and saving millions of lives.

Question # 20:  Use the Internet for your research and name the two congressmen who introduced H.R. 4524.  Give a 2-line synopsis of that bill.

ź        Chris Smith of New Jersey and John LaFalce of Pennsylvania introduced the H.R. 4524 bill into Congress on April 18, 2002.  The primary purpose of this bill was to require the administration to work with other creditor countries and foreign aid institutions to help the developing countries escape poverty.  The bill called for giving financial assistance to developing countries as well as health care and disease treatment and prevention.  The funds would have been given to the designated countries between the years 2003-2005.  The bill, however, died in Congress after adjournment.

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