US aid to the third world

This article indicates that the US provides nearly 0.7% of GDP to third world nations, compared with the usually quoted figure of 0.15%. It also notes the importance of other forms of aid such as private capital to establish so-called sweatshops that provide a ladder of opportunity for the local population.

Extract:
“When we add all of these together we get to some 0.67% of GNI being spent upon alleviating the griefs and sorrows of the destitute in other countries.”
“Well, actually, not quite so fast. For there are three more things to consider. The first is that line of private capital flows. This is, in fact, the one piece of spending that does more to alleviate poverty than anything else. This might be portfolio investment but most of it is what is known as Foreign Direct Investment (FDI) and it is this that lifts the poor up by providing them with jobs, a factory to work in, machines to raise their productivity, in short, makes them rich as it did us. Those people sending their hard earned money abroad to invest in sweatshops, for example. The reason the people of Cambodia, Indonesia, Swaziland, flock to these factories is because they get twice the prevailing wage in the wider economy. If you’re going to try and spend money on eradicating poverty, doubling people’s real wages sounds a pretty effective way of doing that.”
“The second is that portion of US military spending that helps poor countries. Some of this is indirect, like the protection of the sea lanes, the general but unquantifiable benefits that come from having someone acting as a global policeman. There are more direct effects too, like the interventions in Bosnia, the garrisons in the Gulf and at Diego Garcia protecting the flow of oil. Under the rules by which aid is counted these are not to be mentioned, not included in what benefits the US provides.”

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Al Bundy
Al Bundy
2022 years ago

Aieeeeeee!!! Heresy.

Don’t you know that you can only help the developing world by giving money directly to corrupt leaders or to the BCOs (Big Conscience Organisations)?

The Consigliere
2022 years ago

Of course FDIs and other forms of foreign investment are the most advantageous options when it comes to the reduction in poverty, but it is extremely disingenuous to claim that USA is meeting is aid quota by sneaking in private investment figures.

All the other countries who signed on to the IFF don’t add figures of private investment flows from their own country to pass it off as if they had reached the quota.

Let’s play fair shall we?

Tim Lambert
2022 years ago

Oh come on, to get that figure he is counting individual remittances, which makes up most of the private aid. If someone works in the US and sends money home to their family, it is a reach to call that “foreign aid”.

Rafe
2022 years ago

The issue of meeting so-called quotas is almost entirely beside the point because the real challenge is to ensure that aid does more good than harm. Up to date most government to government aid has done more harm than good, especially aid in the form of advice to implement government controls and planning. This has been described by open-eyed obververs like Peter Bauer for about fifty years but it is a fact that has hardly got a mention among the warbling welfare warriors.

derrida derider
derrida derider
2022 years ago

I reckon its just hilarious that he tries to count a portion of US military spending as aid to third world countries. I think most people in the third world and elsewhere wish the US would do rather less of such “aid”; spending more than the rest of the world combined on “defence” (ie war) is just a touch egregious.

Next he’ll be talking about “taking up the white man’s burden” – the same arrogant, hypocritical self-delusion that the British allowed themselves to indulge in during their heyday.

Al Bundy
Al Bundy
2022 years ago

“If someone works in the US and sends money home to their family, it is a reach to call that “foreign aid.”

Oh, why? The US could easily ban currency transfers to protect its own revenues. When the numbers get large enough, the transfer of people’s wages offshore is a burden on the domestic economy. I see no basis, other than your usual axiomatic anti-Americanism, to quarantine this money from any broader definition of ‘foreign aid’.

Oh, and Tim, after your gratuitous swipe at Chrenkoff viz electricity in Iraq, I’m sure you’ll join me in celebrating for the Iraqi people now that the electricity load served is again above the summer 2005 target (110,000 MWh) in the last week (June 27 – July 3), averaging 111,500 MWh.

Al Bundy
Al Bundy
2022 years ago

Do’h – ‘for the week June 27 – July 3’.

Tim Lambert
2022 years ago

No Al, the US could not easily ban currency transfers unless it decided to forgo the advantages of trade with the rest of the world.

It’s great that they met the target, but that was achieved by reducing the target, which was 120,000 for summer 2004. Iraqis still only average 12 hours of electricty per day.

And why do you feel that injecting a little reality into the “Good News” is a gratuitous swipe?

Al Bundy
Al Bundy
2022 years ago

Okay, ‘easily’ is probably not the right word. But it could be achieved. To use the Australian situation, you could extend the definition of laundering to include currency transfers for the purpose of supporting non-citizens not involved in a recognised trading activity offshore. The Financial Transactions Reports Act could be extended to cover all offshore currency transfers. Yeah, trying to transfer money to operate business interests offshore would be a nightmare, but probably no worse than filling out a typical BAS.

And, actually, I don’t overly care about electricity targets. I’d like to see Joe Iraqi with the same access to cheap electricity that I have. I am of a belief that the main reason progress has been so slow is the efforts of murderers, ransomers, bombers and foreign mischief makers in undermining the good work being done. I only need watch the news at tea-time to be reminded of the gloom surrounding poor old Iraq. If Chrenkoff can find a bit of good news in the face of children and peaceful worshippers being blown to bits – well good on him.

Gloating over the fact that electricity production went into a slump following the peak of August 2004 was, IMHO, unwarranted and unnecessary – ie a gratuitous swipe.

Cameron Riley
2022 years ago

Rafe, This is an interesting method on collecting and distributing private aid;

http://www.globalgiving.com/

mark
2022 years ago

So, Al, if $IncrediblyUnlikelyScenario were to occur, a writer for the well-known credibilityless rag TCS would not be *entirely* off-base? Well, I for one am relieved to hear you say that. Viva la USA!

Tim Lambert
2022 years ago

I did not gloat over the decline in electricity production. That is your fabrication, Al.

Evil Pundit
2022 years ago

Speaking of fabrications, are you still pushing the discredited Lancet study which falsely claimed 100,000 civilian deaths in Iraq? Or has the magazine’s continuing record of bias and inaccuracy exceeded even your high threshold of disbelief?

Tim Lambert
2022 years ago

It’s amazing how many people who are profoundly ignorant of basic statistics are somehow none the less utterly certain that the Lancet study has been “discredited”. No, it hasn’t been discredited, no expert in epidemiology thinks it has. Instead you rely on folks like Blair and Bolt who probably didn’t even study maths past high school.

Since the topic of Rafe’s post was a TCS column by Tim Worstall, I think it is appropriate to note that one of the very first “discreditings” was a TCS column by Tim Worstall which prompted my very first post on the Lancet study, and unlike most other critics, Worstall had the good sense to admit that he was wrong.