The Critical 'I'

Read. React. Repeat.

Sunday, January 04, 2004

NEW FOREIGN AID RULES: ULTERIOR MOTIVES
I'm a little surprised that the news of the Bush administration's "revolution in U.S. foreign aid" by linking a recipient country's social and political well-being to its eligiblity for aid isn't causing more of a stir.

Then I remembered: I live in the United States, where foreign affairs draw practically no interest.

Still, it's worth noting the context surrounding these changes, which will be known collectively as the Millenium Challenge Account (MCA). The MCA is finally about to be implemented after being proposed by President Bush a couple of years ago.

In simplest terms, MCA would require a country requesting U.S. foreign aid to meet certain criteria before it gets any help. Chief among them would be that they follow certain generally-accepted democratic standards: Just and responsive government, commitment to social insurance programs like education and healthcare, and (most significantly) markets that are open to foreign investment. The intent is to freeze out dictatorships on the one hand, and institutionally corrupt and weak central governments on the other. Given the need to frame such initiatives in terms of the War on Terror, it's important to note that both such states would be considered fertile ground for terrorist cells like al Quaeda, for different reasons (active courting by authoritarian dictatorships, ineffectiveness at preventing them from setting up shop for weaker governments). So withholding aid would be considered an effective way to accomplish two U.S. policy goals: Promoting democracy (which would bring along other benefits, namely more open markets), and weakening global terrorism networks (by making it harder for them to find bases).

These are laudable goals. But here's the rub:

- At root, the desire for open markets is the driving force here—as is always the case with foreign aid (note that this is different from humanitarian aid, which is a different ball of wax). The War on Terror language is a convenient way to shroud these objectives with a more acceptable goal, as is the stated desire for just governance. Take note of this key example:

... Bolivia, on [Center for Global Development's Steve] Radelet's original list, may have disqualified itself after its pro-American president, Gonzalo Sanchez de Lozada, was forced out last month in a popular uprising. A rising star these days on the Bolivian political scene is Evo Morales, an avowed opponent of free markets.

In other words, protected markets are an automatic black mark, especially when they close out American business interests. Latin America, the traditional U.S. sphere of influence, is an especially touchy area for this. The assumption is that foreign investment is always a good thing, regardless of a particular country's challenges. That such foreign investment could adversely affect domestic businesses and create an economic colonial condition isn't considered.

- As the last superpower standing, the U.S. is in a position to set the terms because there's no apparent source of counter-offers. Unlike the height of the Cold War, when leaders of authoritarian states knew they could turn to the Soviet Union as an alternative (especially if they were in a strategically-important area), the U.S. is the global hegemon, and while it is, it's taking the opportunity to enforce new rules. Note the qualifier "while it is"; China, Japan and the European Union certainly have the resources, if not the motive, to set their own foreign aid agenda, and it's pretty likely that the interests of these powers (and perhaps others) will cross with the U.S.'s in the near future, setting up a future proxy war using aid programs to establish spheres of influence. At that point, Kissinger-style realpolitik concerns will take precendence, and if MCA considerations will fly out the window (assuming they ever take hold at all).

- Desires for "open" countries on the basis of government, society and economy leave lots of room for interpretation. Aside from the aforementioned geopolitical realities of supporting countries depending on practical, strategic reasons (again, realpolitik), there's bound to be resentment over being judged by a Western, Christian-rooted-but-mostly-secular superpower on things like acceptable social openness. Yes, this is cultural relativeness, but it's a valid concern; for instance, the U.S.'s abortion laws, civil right record and corporate governance legal structure are three examples of what other societies might take exception over when being forced to measure up to American-proscribed standards. And again, this is assuming that the U.S. applies such standards evenly, which is unlikely; for instance, the pro-U.S. House of Saud is unlikely to come under any serious pressures to reform when it remains such key source of oil (that'll remain the case regardless of what happens in Iraq).

As you can see, there's plenty of food for thought generated by the President's MCA implementation. In my view, it's sort of more of the same—which makes me wonder if I should have been puzzled in my opening statement. But that's politics!