Newell Fonda High School
Newell, Iowa
Teacher: Mrs. Doonan

 

Foreign Assistance and the MCA
By Ted Wolff
12th Grade

On March 14, 2002 President Bush announced an increase in foreign assistance to developing countries through a new Millennium Challenge Account (MCA). The MCA funds will be distributed to developing countries that show good governance, attention to the health and education of their people, and put forth sound economic policies. As well as the MCA, President Bush announced a 50% increase over the next three years in foreign aid, an increase amounting [to] over $5 billion in worth. Nevertheless, the United States cannot afford to increase its commitment to foreign aid; although, the Millennium Challenge Account is a step in the right direction to decreasing the level of poverty.

The United States has their heart in the right place with increasing foreign aid, but there is little reason to actually increase it. While 81% of Americans support increasing foreign aid to fight terrorism, there is little proof that increasing foreign aid would actually help. Furthermore, almost every country that has suffered an internal catastrophe has collected abundant foreign aid. As seen in Ethiopia, Somalia, and Zaire, foreign aid actually helped aggravate and create problems, subsidizing the tyrannical rule of their representative dictators. Increasing foreign aid to countries has never shown noteworthy evidence that it helps. The money often lent to countries through loans has disappeared out of sight and most likely will never be paid back. History has shown that sound economic policies in countries experiencing debt and poverty have helped copiously more than foreign aid ever has. After World War II, countries such as Japan, South Korea, and Hong Kong were ill stricken with debt and poverty. The aforementioned countries have now become some of the most successful countries in the world thanks to economic policies, not foreign aid. Increasing foreign aid is a generous and philanthropic idea, but useless all the same. The United States’ debt is above $6 trillion, thus, increasing foreign aid by 50% would only add to that number.

On the other hand, the MCA is a step in the right direction, and a far better plan than increasing foreign aid. The MCA will only admit and help countries that govern justly, promote due health and education for their people, and propose sound economic policies. Through these three admittance requirements, poverty can be rightfully taken care of, rather than just increasing foreign aid and throwing away money. After World War II had ended, Japan, Hong Kong, South Korea, and Taiwan were all poorer than Latin American countries, yet, they’re now doing much better, all thanks to a difference in economic models they adopted. Japan, Hong Kong, and South Korea all focused their economy towards the open market and promoted open trading; in other words, adopted some form of model run by capitalism. Latin American countries, unfortunately, chose to set up trade barriers and other inward-looking policies. The nations of Africa soon followed, sending their economy down as well. Along with the MCA, President Bush announced that funds through the MCA would be distributed as grants, rather than loans. By funding countries through grants, they may receive assistance and not worry about having to pay anything in return. While this may seem harmful to the giving country, it will be beneficial in the long run. By aiding countries through loans, the receiving counties’ debt... mounts [and] they must pay that money back. [Whereas] grants fund countries only... until their economy is prospering... The giving country may suffer a loss for a while, but in time they won’t have to fund the country anymore because they won’t need funding. Thus, the MCA is a wonderful idea and proposes sound economic policies over foreign aid, which has proven to help countries more than foreign aid ever has.

Aside from foreign aid and the MCA, international trade plays a substantial role as well. Currently, the United States assists through government-to-government action, which impedes any growth for countries at all and has often been shown to support corrupted regimes. Moreover, many countries are blocked from international trade by barriers concocted by the United States; this action further halts any growth by poverty stricken countries. Furthermore, the arousal to increase foreign aid was spawned after September 11th, 2001; the day the United States felt the wrath of terrorism. An increase in foreign aid will not prohibit terrorism, and neither will it extinguish terrorist regimes from taking over [poor] countries.... Increasing foreign aid will not stop corrupt, poor nations, as leaders...often [find] it in their own selfish interest to be dependant. While increased foreign aid is a nice thought, it’s useless, unneeded, and the MCA economic policies will be far more affective.

The Millennium Challenge Account is a move in the right direction, but increased foreign aid is not needed and not affordable. The United States debt is far too high and foreign aid has been proven to be useless. The MCA puts forth sound economic policies and justly governed states, tactics that have proven to work effectively. The United States would be far better off increasing their assistance on economic policies in other countries and helping them develop justly, rather than throwing money away. The MCA doesn’t need increased foreign aid to work; rather, the level of foreign aid is adequately fine right now, as well as one of the best in the world.  

Questions

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?

They are: Domestic Capital, Foreign Investment, and Trade.

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?

President Bush mentions financing and literacy.

3.    When is money sometimes counterproductive, according to President Bush?

Money is counterproductive when it is not accompanied by legal and economic reform, according to President Bush.

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

The Millennium Challenge Account is a proposition put forth by President Bush to link greater contributions from developed nations and greater responsibility from developing nations for an economic reformation where donors and recipients root out corruption, respect human rights, and adhere to the rule of law, so that economic freedom may reign forth and diminish poverty, hunger, and increase education.

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

Reforms, policies, and to provide up to half of the funds devoted to poor nations in the form of grants.

6        6.    Describe President Bush’s challenge to development banks and explain why or why not you favor it.

I favor President Bush’s challenge because it helps to provide more funding to help the cause, even if it does seem a little fascist.

7        7.    What percentage of our national income (GNP) do you think the United States government committed to foreign aid in 2002?

About 1%.

8        8.   Describe and defend a “Me First” attitude.

I believe a “Me First” attitude, is an attitude one proposes putting oneself ahead of everyone else. I defend on the grounds that it is human nature.

9        9.    Describe and defend a “Mutual Benefit” attitude.

I believe a “Mutual Benefit” attitude is an attitude where everyone receives benefits based on working together. I defend it on the grounds that no one’s ahead of any other person, even if they are a dirty communist and think everything should be equal.

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

Basically every foreign aid program operated by the U.S. is unsuccessful. (inadequate answer)

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

There are none. (inadequate answer)

1        12.                       Steve Radelet, Senior Fellow at the Center for Global Development, believes we can do both 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 believe we can since we are America and the most prosperous country in the World. If we can’t do it, who will?

1        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 (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.”?

I believe it is a pretty cynical statement and cheap comment at the United States, trying to make them look like Germany in World War II. He should be lynched, publicly.

1        14.                       Which of Mr. Radelet’s three concerns regarding the MCA concerns you and why?

3. the separation of US foreign assistance into two agencies could lead to a lack of coordination and overlapping functions. It concerns me because the riff between agencies could cause another Civil War and I’m too lazy to fight if that happens.

1        15.                       There is evidence of an increase in negative world opinion towards U.S. foreign policy, not necessarily of 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.

I believe the view of using WMAs is completely ignorant and utterly stupid. I believe we should focus our attention on using WMDs and annihilate any country that opposes our totalitarian regime that should be called ‘The Fourth Reich’. Only this way can we achieve peace because there would be no one to oppose us. Then we don’t have to worry about whiney countries and how their people are starving and dying, they’ll already be dead. We should also eliminate the communists and Jews, too.

1        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.

The World Bank proposes an additional $40-60 billion a year. I don’t believe our citizens can afford that kind of increase because we’re forced and taxed just to pay welfare. If the government has to tax lottery winners just to fill their pockets, then how can the normal citizens afford the increase?

1        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.”?

I think it’s stupid. We shouldn’t even be sending money or aid to any other country.

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

83 countries

1        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?

$360 billion

2        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.

Chris Smith and John LaFalce. It will provide an additional $1 billion in debt relief for impoverished countries and is a first step in addressing some of the shortcomings of the current debt relief initiative.                                                                                        Back