Sunday, January 17, 2010

The Trouble with USAID

Why do some people think USAID does more harm than good?

Many people in development circles have feelings ranging from dislike to contempt for the United States’ flagship development organization USAID.

On the surface, there is little to dislike in USAID’s mission to provide US economic and humanitarian assistance worldwide. The issues, however, with USAID aren’t with its stated message, but rather lie in its execution.
As a friend who spent years working with USAID in Nepal once succinctly stated “At its core USAID seeks to fulfill US interests. Where those interests align with the developing country’s interests, great, but when those interests differ US interests will always win out.”

An example of this practice is when the US gives developing country’s millions of dollars in development assistance; it obligates that nation to use those development dollars explicitly to purchase US made goods. That is, if a the local government of Uganda decides that it needs 100 cars, it is obligated to purchase 100 US made vehicles rather than from their own domestic car industry, or say the cheaper Indian made Tata.

Considering that government spending is often one of the best ways of stimulating a local economy, aid given in this way doesn’t just fail to help elevate a nation out of poverty. By forcing governments to purchase US goods from grain to automobile it actually works to undermine local industries and in fact only further deepens a nation’s dependency.

Additionally, USAID is often used as a tool not to help lift poor nations out of poverty, but rather to meet the short term political interests of the United States. It’s not too much of a stretch to believe, for example, that the incidents covered in The Tale of the Creole Pig had less to do with a genuine risk to America’s pig farmer interests and more to do with cow-towing to pressures of America’s pig lobby (which like much of the agriculture sector is powerful).

It’s not surprising that the US would not want it’s aid to conflict with its own interests, but as long as USAID is subject to the whims of political pressure it can never act in a way that truly is in the best interests of those whom it professes to serve.

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