Title: Think Again: U.S. Foreign Aid – Foreign Policy
Headings: Think Again: U.S. Foreign Aid
Think Again
Think Again: U.S. Foreign Aid
Shortly after a tsunami swept through the Indian Ocean last December, a U.N. official complained that the West was stingy with its relief donations. Stung by this criticism, the Bush administration increased its financial pledge tenfold overnightwhile loudly asserting that the United States actually led the global pack in foreign aid. Is the worlds wealthiest country a scrooge or a savior?

Content: Still, though the United States is one of the most open markets in the world, it imposes tough restrictions on poor countries. In fact, some analysts estimate that U.S. trade barriers inhibit growth in low-income countries much more than U.S. aid helps. Contrast the $350 million pledged in tsunami relief to the $1.8 billion in duties on imports collected from Indonesia, Sri Lanka, Thailand, and India in 2004. The United States collected almost as much in import duties in 2004 from Bangladesh ($314 million) as from France ($350 million), despite importing 14 times as much from France. In addition, U.S. agricultural subsidies undermine the incomes of poor farmers around the world. Economist William Cline estimates that elimination of trade barriers by rich countries could inject $100 billion annually into the economies of developing countries. In the most recent ranking of the Center for Global Development/Commitment to Development Indexwhich ranks 21 rich countries on how their aid, trade, investment, migration, environment, security, and technology policies help poor countriesthe United States places seventh. U.S. policies toward the poorest countries are not the worst in the world as some suggest, but there is clearly ample room for improvement. The Key to Development in Low-Income Countries Is Trade, not Aid. Actually, its both.