Why American Foreign Aid Works

By Christopher Griffin & Patrick Christy

President Obama's visit to South Korea next week will highlight not only a critically important alliance, but also one of the greatest success stories of foreign aid in American history. South Korea, which once ranked among our aid recipients, is now a global partner that plans to increase its budget for foreign assistance by 11 percent this year. South Korea's success shows how U.S. foreign assistance can advance both America's security and economic prosperity.

The Korean War decimated South Korea's population and destroyed much of the country's economic and military capacity. The United States worked to rebuild its shattered ally over the following decades, investing roughly $35 billion in economic foreign assistance (adjusted for inflation), and working to secure Korea from future North Korean aggression. Today, of course, South Korea is a mature democracy with a flourishing economy, and Seoul an essential bulwark of security and stability in the Asia-Pacific.

South Korea's transformation was both a diplomatic triumph for the United States and a smart investment for American businesses and workers -- the entire $35 billion in economic foreign assistance that the United States provided its ally amounts to less than what the United States exports to South Korea annually. Because of its economic miracle, South Korea is now the tenth largest export market for U.S.-made goods, and is set to import even more U.S. goods as Seoul continues to implement the U.S.-South Korean free trade agreement reached in 2012.

South Korea has also transitioned from being a heavily dependent foreign aid recipient to a major international donor. In 2010, South Korea became only the third Asia-Pacific nation -- after Australia and Japan -- to join the OECD's Development Assistance Committee (DAC), a prestigious group of the world's largest funders of foreign assistance.

South Korea has used foreign assistance to further the U.S.-South Korea alliance's shared interests and values throughout the Asia-Pacific region and around the world. For example, Seoul has contributed approximately $680 million to reconstruction efforts in Afghanistan, where it has helped build medical facilities and police training stations, pave miles of roads and train Afghan civil servants. In December 2013, Seoul pledged an additional $43 million to improve women's rights and access to medical services in Afghanistan.

Of course, South Korea is not the only example of a foreign assistance success story. Time and time again, U.S. aid has promoted economic development, security and self-reliance abroad, while at the same time expanding international consumer markets for U.S. businesses and workers.

In Colombia, for example, U.S. economic and security aid has played a key role bolstering Bogota's ability to combat the insurgent groups that threatened the existence of the government as recently as 2001. Colombia's growing security and stability has helped to turn the country into a market for American goods: annual U.S. exports to Colombia have grown from roughly $3.6 billion in 2000 to over $18.6 billion in 2013. What did the United States invest to achieve this turnaround? Roughly $8 billion in combined economic and military assistance dollars.

The power of America's foreign assistance programs has even helped to transform sub-Saharan Africa, where then-President George W. Bush initiated a nearly five-fold increase in U.S. support for the region when he established the President's Emergency Plan for AIDS Relief in 2003 (PEPFAR). Under this program, the United States now supports nearly two-thirds of all antiviral treatments for HIV/AIDS in the world, and has provided medication preventing some 740,000 infants from contracting HIV from their mothers. As the crushing pressure of AIDS and other ailments has eased, Africa has achieved previously unimagined growth rates, and may already have more middle class consumers than all of India, which has a larger population.

Over the past decade, Washington has taken positive steps to retool foreign assistance programs in an effort to make them more transparent, accountable and effective. The Millennium Challenge Corporation (MCC), an independent foreign aid agency established by Congress in 2004, is paving the way. An October 2013 report released by Publish What You Fund, a leading aid transparency organization based in London, ranked MCC the top agency among 67 international donor organizations for aid transparency in 2013.

While leading Republicans and Democrats in Congress acknowledge the important role that development can play in achieving America's short- and long-term interests abroad, some lawmakers continue to question the effectiveness of foreign assistance. Dramatically reducing -- or even eliminating -- this important tool of statecraft, however, would undermine America's national security and economic interests, as achieved from South Korea to sub-Saharan Africa.

When President Obama visits Seoul, we hope he will use the opportunity to pull together these threads of America's foreign aid success, explaining how the United States remains essential to economic development around the world. South Korea provides a model for U.S. development assistance as the U.S. works to transform today's foreign aid partners into tomorrow's foreign trade partners.

Christopher Griffin is the Executive Director of the Foreign Policy Initiative. Patrick Christy is a senior analyst at the Foreign Policy Initiative.

(AP Photo)

Sponsored Links
Related Articles
Christopher Griffin & Patrick Christy
Author Archive