Why Congress and the American people should support foreign, non-military aid
In the United States today, there is a continuing need to explain to the American public what most of their elected representatives understand very well: It is critical to maintain non-military relations with 95 percent of the world’s population who pledge allegiance to other flags and often other values. While foreign aid is a tough sell to the American people, it is on many legislative “to do” lists. What these lawmakers understand is that the consequences of leaving overseas development finance to countries who are aggressively pursuing it, like China, leaves the United States vulnerable and reduces markets.
Rather, assisting countries in the development of their own economic assets has corollary benefits for the investing country. If we can boost the chances for a healthy country, we have a trading partner. South Korea was once a recipient of U.S. taxpayer generosity, and now many Americans work to produce and sell Samsung and Hyundai products. In fact, 11 out of 15 of our major trading and export markets have been recipients of American aid at some point. In my state, Ohio, there are 1.5 million good-paying jobs that supported $50 billion worth of exports just last year. Conversely, if a country cannot offer the jobs, health care and education that accompany a developed economy, a refugee crisis and desperate immigration may ensue.
It is also generally accepted that it is dangerous for us to leave the function of foreign development aid mostly to other power players while we fall back to humanitarian relief aid. With as much as $2 trillion invested in developing countries’ infrastructure, many of them have committed generations of extractive resources to China in exchange. China plans not only to reap the benefits of enhanced trade relations, but also stabilized supplies of critical resources, and political support in the world community.
Fortunately, there are lawmakers and thought leaders working to ensure that our global leadership remains. One significant group, the U. S. Global Leadership Coalition, is composed of over 500 global businesses, NGOs and faith organizations, 30,000 military veterans, and over 200 retired three and four-star admirals and generals. They have consistently encouraged the federal legislative branch to enact a robust overall foreign affairs budget, which funds everything from foreign service training of professionals in our embassies and USAID, to the Peace Corps volunteers.
In addition, the “Better Utilization of Investments Leading to Development Act of 2018 or “BUILD Act” (H.R.5105) is one proposed piece of legislation that could help to maintain non-military relations with other countries. Introduced by Rep. Ted Yoho, (R-Fla.), a Freedom Caucus member, and co-sponsored by Rep. Adam Smith (D-Wash.), the legislation has launched a broad bipartisan effort to create international friends and markets. Indeed, members in both houses of Congress have cosponsored the legislation.
The BUILD Act would streamline foreign development investment and facilitate more private investment than is currently available through the Overseas Private Investment Corporation and three USAID agencies – Enterprise Funds, the Development Credit Authority, and the Office of Private Capital and Microenterprise (which would all be combined). The combined agencies would be named “U.S. International Development Finance Corporation,” and a cap of $60 billion would effectively double the funds available. It would have authority to underwrite political risk, to issue direct loans and guarantees in local currency, fund first losses, participate in equity investments, make grants on which larger investments are contingent and provide technical assistance. Sen. Chris Coons (D-Del.) and Senate Foreign Relations Committee Chair, Bob Corker (R-Tenn.) have introduced the legislation in the Senate.
The BUILD Act may also be supported by the White House, which has often exhibited nontraditional executive views toward foreign assistance and is proposing huge cuts overall in this budget. Apparently, there is interest in trying to make up at least some of the difference by private investment, which is thought by the sponsors to possibly dwarf government assistance if some minimum government protections can be assured.
Critics fret that the new resource allocation might not be yoked to the critical rule-of-law foundation that is essential for private enterprise to succeed in building new economies. The administration has proposed almost a 40 percent cut for the part of the foreign affairs budget that targets development assistance for the promotion of good governance. However, coordinating agencies, like USAID and the Export-Import Bank, can provide the necessary guidance, and the administration has shown repeatedly that it intends to hold other nations accountable.
It is our hope that the bipartisan, bicameral approach to critical international development finance will endure, and that the draft will incorporate some of the requirements for sustainable development, such as dispute resolution processes and basic human rights that will allow the private sector to engage, invest and flourish. Moreover, the idea that Congress could work together to enhance the American brand, create new markets, consolidate several government agencies and improve our national security should be a change welcomed by the American people.