Gifts with strings attached or what you may not have known about US aid for international development

USAID – US Aid for International Development is one of the major institutional donors to fund activities in the areas of international development and humanitarian assistance. with its annual budget around USD 12 billion it’s role cant be underestimated.

Now, though from one side they call this assistance as ‘a gift’, from the other side there is an emerging trend of seeing it more and more as ‘an investment’. Current economic climate has been pushing hard on ‘creativity button’ within the US government generating innovative ways of promoting US business.

Though i have been working on one quite big USAID project for Pakistan, only recently i read properly the small print of the USAID standard provisions (believe me, that’s not a 5 page document) and was rather surprised by the forthright language and unhidden hypocrisy.

Three categories of products – pharmaceuticals, motor vehicles and agricultural goods – charged to USAID funds MUST be manufactured in USA. Principles of cost-efficiency and value for money do not apply to these categories of goods. So, if i am implementing a project in Madagascar and i need a car, i cant buy a locally available vehicle, which may be cheaper or most likely wont be made in USA; so i would have to import it from the States incurring extra cost, but that’s justifiable under USAID grant. Or, if i am a health NGO and support operations of several local hospitals in Namibia, i would not be able to buy anything local or already being imported from Europe, for example, but i would have to get all that from USA disregarding the costs. Moreover, health and food security are among the biggest areas of work in international development sector, so no wonder why exactly medicine and agriculture goods have to be exclusively made in USA.

it is wrong in so many ways. It goes against all versions of free market; it is hypocritical in terms of usage of ‘efficiency’ and effectiveness; and last but not least, let’s be honest – it’s not development, but business. USA through these attached strings make a huge reverence to Detroit, to their farmers (though, how it then links to US programme paying farmers not to farm?) and their giant pharmacy industry.

..and you wonder, why we cant eliminate poverty and lift many countries out of the aid-dependency curse. If this aid would genuinely support through all means the local economies, local producers, allow the aid recipient countries learn self-sufficiency through using their own resources and capitalizing them, the world would look so much different.

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2 thoughts on “Gifts with strings attached or what you may not have known about US aid for international development

  1. It’s horrendous that the main forms of international development aid fall under the category of ‘tied aid’, basically working for government agencies becomes unethical.

  2. Pingback: will aid effectiveness win over US national interests? | About all that matters

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