Newell-Fonda
High School
Newell, Iowa
Mrs. Doonan
Millennium
Challenge Account and Foreign Aid
By Tiffany Rubendall
12th grade
Shouldn’t foreign aid really aid the country? One of the main causes of poverty lies in most of the trade and aid policies today. These policies are more to do with maintaining dependencies on industrialized nations, providing sources of cheap labor and cheaper goods for populations back home and increasing personal wealth, and maintaining power over others in various ways. These so-called lending and development schemes have done nothing to help the poorer nations progress. So what difference is the Millennium Challenge Account going to make when all these other policies were supposed to help underdeveloped countries? The Millennium Challenge Account is already headed in the wrong direction, and an increase in foreign aid is going to be non-beneficial to third world countries.
In order to receive the foreign aid, countries must write a business proposal. This is a smart idea because then Americans will know that the money is going for specific things. These countries also have to show results, so the government is going to know whether they are succeeding or not. If they are not, they are not eligible for the aid anymore. President Bush also mentions that he wants grants instead of loans. It is a good way to try to stop the debt, but may be bad in the long run. He has also set a good goal for these countries; “We ought to double the size of the world’s poorest economics within a decade.” It does seem a little out of reach, but it is good to set a goal. This way people have something to try to reach.
One of President Bush’s standards is in order to receive more foreign aid from America, the country must rule justly. Countries should not be forced to do this because they may be forced into reconstructing a government they may not want. This reconstruction of government may create even more problems because of the instability of the country already. For example, bad governance has caused Africa’s poverty. According to the UN Conference on Trade and Development, economic conditions imposed by the IMF and the World Bank were the dominant influence on economic policy in the two decades to 2000, a period in which Africa’s income per head fell by 10%, and income of the poorest 20% of people fell by 2% per year.
The U.S. should not increase their foreign aid to other countries. The extra money that the government wants to give to third world countries should be put towards the homeless here in America. Americans should first worry about educating, sheltering, clothing, and receiving medical attention to the people in the U.S., who cannot afford these things. This money used in foreign aid is coming from the pockets of people in America, so why not see the results here? On top of that foreign aid doesn’t really aid anyway. In 1995, the director of the U.S. aid agency stated, “Eighty-four cents of every dollar of aid goes back to the U.S. economy in goods and services purchased. For every dollar the U.S. puts into the World Bank, an estimated two dollars actually goes into the U.S economy in goods and services. In 1995, severely indebted low-income countries paid one billion dollars more in debt and interest to the IMF than they received from it.” Foreign aid is supposed to be benefiting third world countries, not taking money away from them.
Grants should not replace loans because nothing is free anymore. Even though the grants are not costing the countries money, there will be some sort of commitment attached to it. This commitment will more than likely not benefit the smaller country, but the bigger country. The bigger country will do this so they can get what they want. Switching to grants would hurt the World Bank very much. Forty percent of the IDA’s resources come from reflows from previous loans. If the IDF provided grants, this gap would have to be filled be a substantial increase in donors and contributions. The only problem with this would be reducing the business of the bank. European and NGOs agree that the U.S. cannot be relied on for future pledges.
The Millennium Challenge Account is planning to increase foreign aid, which is going to be non-beneficial to other countries and could be in the wrong direction. So over all people are seeing how the larger more powerful nations are taking advantage of the smaller countries, through governments and grants. These underdeveloped countries are not going to put up a fight with the more powerful nations because they want the aid. The larger nations are going to be getting the better end of the deal because they are going to be getting what they want. Before Americans go and start “helping” other countries, the people need to help the ones on American streets first. So making changes in foreign aid, other countries governments, and switching to grants are not helping third world countries at all.
Q1- 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?
The three things that fund development are: domestic capital, foreign investment, and especially from trade.
Q2- 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?
The two items he mentioned are citizens who are literate, healthy, and prepared and able to work.
Q3- When is money sometimes counterproductive, according to President Bush?
Money is sometimes counterproductive when nations refuse to enact sound policies, progress against poverty is nearly impossible. It is impossible because it subsides bad policies, delays reform, and crowds out private investment.
Q4- Describe the Millennium Challenge Account and include in your description what is anticipated from donors and recipients.
The goal of the Millennium Challenge Account is to provide people in developing nations the tools they need to seize the opportunities of the global economy. In return we expect nations to adopt the reforms and policies that make development effective and lasting.
Q5- What are the three broad standards that President Bush expects the leaders of the developing nations to adopt?
Three broad standards that leaders of the developing nations are expected to adopt are: ruling justly, investing in their people, and encouraging economic freedom.
Q6- Describe President Bush’s challenges to development banks and explain why or why not you favor it.
President Bush’s challenge to development banks is each bank should adopt a growth agenda, increasing their support for private sector enterprises and focus more on education. He wants the development banks to provide up to half of the funds devoted to poor nations in the form of grants, rather the loans. I can see where he is coming from when he says he wants to stop the debt, but I do not think this should be done. Things are not free anymore. Simply if money is lent out, it should be repaid back.
Q7- What percentage of our 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.
I think our GNP the US government committed to foreign aid in 2002 was about 35%.
Q8- Describe and defend a “Me First” attitude. (Use your head ¾ you won’t find the answer in the required reading.)
Q9- Describe and defend a “Mutual Benefit” attitude. (Use your head ¾ you won’t find the answer in the required reading.)
Q10- Describe three unsuccessful foreign aid programs operated by the U.S. government or private American citizens. (Do not use the programs discussed in the testimony of Faith Action for People-Centered Development Policy included in your required reading. Conduct research using the Internet. Duplicate examples from the same class will not be accepted.)
Q11- Describe three successful foreign aid programs operated by the U.S. government or private American citizens. (Do not use the programs discussed in the testimony of Faith Action for People-Centered Development Policy included in your required reading. Conduct research using the Internet. Duplicate examples from the same class will not be accepted.)
1) The American-Jewish World Service is an independent non-for-profit organization to help alleviate poverty, hunger, and disease among the people of the world regardless of race, religion, or nationality. It breathes life into Judaism’s imperative to pursue justice and helps American Jews act upon a deeply felt obligation to improve the chances for all survival, economic impendence, and human dignity for all people.
2) Oxfam International is an independent international non-governmental confederation of twelve organizations working together in more than 100 countries to find lasting solutions to poverty, suffering, and injustice.
3) Global AIDS Alliance is a non-profit organization with a mission to put and end to the global AIDS crisis through mobilizing enhanced awareness, increase funding, and improved policies.
Q12- Steve Radelet, Senior Fellow at the Center for Global Development, believes we can do both ¾ take care of our 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.
I think America could afford to take care of our own people and lend a helping hand to less developed countries, but I think we need to focus on our own poverty in America first. I think we should take the time and money for people in America who cannot even afford to set food on a table for a family, send their children to school, or even get medical help when they need it. Instead of snubbing them like most people tend to do here, why not use our money to better America to be the best we can be.
Q13- What do you think about Mr. Radelet’s assertion that “the administration is leaning towards a system in which eligible countries would write proposals (or business plans) 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?”
Q14- Which of Mr. Radelet’s three concerns regarding the MCA concerns you and why?
Mr. Radelet’s first statement concerns me the most because soon there is going to be more countries that need our help, and we will be taking money away from the poorer countries that need our help even more. I feel if more and more countries incomes keep going down, we will be supporting the most of the world soon.
Q15- 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.
Q16-
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.
The just and appropriate U.S. share that the World Bank recommends would be approximately an additional $10-15 billion annually for these programs. Yes I think we could afford it, but I don’t think we should give it to other countries. This is our hard earned money, and in return we should get something out of it. We shouldn’t be working to support other countries.
Q17- 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?”
Q18-
How many countries would be affected positively y health-related investments
according to the Commission
on Macroeconomics and Health (CMH)?
According to the CMH eighty-three countries would have a positive effect on economic growth and equity.
Q19-
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?
Between 2015-2020, $360 billion would be gained annually due to saved lives and increased economic growth.
Q20-
Use the Internet for your research and name the two congressmen who introduced
H.R. 4524. Give a 2-line synopsis of that bill.
The
two congressmen who introduced this bill earlier this year were Rep. Chris Smith
(R-NJ) and Rep. John LaFalce (D-NJ). A
shortened version of the bill is it mandates action by linking debt relief to
criteria that addresses human need and responds to the stunning tragedy that is
the AIDS pandemic
Works Cited
Bertrand Aristide, Jean. “Eyes of the Heart” Seeking a Path for the Poor in the Age of Globalization.” Common Courage Press, 2000. Back