Foreign aid is governed by the U.S. Foreign Assistance Act
of 1961, signed into law by President John F. Kennedy. But
the world has changed dramatically since 1961. The United
States needs a flexible approach to development assi stance
that allows creative approaches to the complex realities on
the ground. Dramatic spikes in food prices, escalating climate change, and a billion people still living on less than $1
per day are among the “big problems” of 2008. The United
States must update its policies so assistance programs will do
the most good.
Improving foreign assistance would also improve the United States’ international reputation, and beyond that, it would
be part of a more sophisticated and realistic approach to national security. Enabling people in poor countries to acquire
the skills and opportunities to break the cycle of poverty is
not only the right thing to do, but will serve the U.S. national
interest by creating a more secure and stable world.
has not been driven by political concerns. U.S. foreign assistance to Bangladesh has been based almost entirely on a
development rationale—reducing hunger and poverty and
ensuring adequate health care and family planning services.
The United States has maintained a stable, consistent development assistance program in Bangladesh virtually since the
country’s independence in 1971. Assistance over the past 10
years has averaged $75 million annually and has never fallen
below $23 million.
It is extremely difficult for aid programs to make progress on development challenges in the absence of a long-term
commitment, something that has largely been absent in Pakistan. Given the history of dramatic increases and cuts in U.S.
aid, all governed by political considerations, Pakistani policymakers and the public might well be justified in concluding
that our “aid” is really more about us than them.
Perceptions and Realities
U.S. Prerogatives and Foreign Aid
www.bread.org
There are three main purposes of U.S. foreign aid: humanitarian, political and development. Humanitarian aid
responds to both natural and man-made disasters (e.g. Pakistan earthquake response) and ongoing crises (e.g. food aid
in Darfur). Aid for political purposes is determined primarily by U.S. political, economic, and national security interests
(e.g. counter-narcotics, peace in the Middle East, the war on
terror, and access to markets). Development assistance programs are designed to reduce poverty and encourage economic growth in low-income countries. They help meet the
U.N. Millennium Development Goals, which include cutting
hunger and extreme poverty in half.
When all three streams (humanitarian, political, and development) are lumped together as “foreign aid,” the distinctions between the goals and activities of the various programs
are blurred. It is much harder to measure effectiveness, leading to the frequent criticism of foreign aid as ineffective and
wasteful. But much of the aid was not, in fact, intended to
U.S. Aid Flows to Pakistan and Bangladesh
(1970-2006)
1000
800
600
Bangladesh
400
200
Pakistan
0
-200
5
20
0
0
20
0
95
19
19
90
5
19
8
80
19
19
7
5
Year 19711974 197719801983 1986198919921995 199820012004
19
70
Amount, Current Prices USD Millions
U.S. assistance to Pakistan is a good example of how political and development goals can become conflated to the
detriment of development. Pakistan is an important ally of
the United States in the war on terror, receiving a generous
share of total U.S. foreign aid. Non-military aid to Pakistan
has totaled almost $1.9 billion since 2001.1
This recent increase in U.S. assistance since 2001 is consistent with the whole history of U.S. engagement with Pakistan. The early 1970s was a similar period because the Nixon
administration needed Pakistan as an intermediary for its
China opening and a counter to Soviet aid to India. When
the geopolitical need passed, aid fell again. U.S. aid spiked
in the 1980s as Pakistan served as the base for efforts to oust
the Soviets from neighboring Afghanistan. When the Soviets
left Afghanistan, U.S. aid plummeted. It dried up completely
after Pakistan successfully tested a nuclear weapon in 1998.
Now it’s back up. Although clearly a number of other factors
prevented Pakistan from making sustained progress on
development, one culprit is the “on again, off again”
nature of U.S. assistance.
A comparison with Bangladesh, a much poorer
country, makes the point very clearly. Both countries
have enjoyed roughly similar rates of per capita economic growth (4.9 percent in Bangladesh vs. 4.1 percent in Pakistan during 2005-2006), but Pakistan’s
infant mortality rate, 84 per thousand, is 60 percent
higher.2 Pakistan’s rate of child malnutrition remained
constant from 1990-2006 while Bangladesh reduced
its rate by almost one-third. Bangladesh has more girls
than boys in school and a higher primary school completion rate.
Unlike in Pakistan, U.S. engagement in Bangladesh
Year
Source: OECD Data. DAC ODA Total Net Disbursements by Donor Country.
April 2008.
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