For U.S. Foreign Aid, Better Strategy is the Answer

For U.S. Foreign Aid, Better Strategy is the Answer

In the Nov. 22 Republican presidential debate, several candidates argued that the U.S. can no longer afford its foreign aid budget. In previous debates, former Massachusetts Gov. Mitt Romney went even one step further, explaining that the United States should not borrow money from China just to give it to other countries as aid. Instead, he argued, we should let the Chinese give aid directly to foreign countries if that is what they want to do.

Romney is right to mention China, but he draws the wrong conclusion. China already provides large amounts of aid to countries throughout the developing world, much like we do. The difference between the United States and China, however, is that China deploys this aid as part of a broader strategy to open markets to Chinese companies and gain access to valuable natural resources. The lesson for the United States, then, is not to do away with foreign aid, but to take a page out of the Chinese playbook and begin deploying aid in such a way that it will yield economic benefits -- both in the short and long term -- for the United States.

Take Africa, for example. China has forgiven large amounts of debt, provided low-interest loans and dispensed aid to emerging markets throughout the continent, all as an explicit quid pro quo in exchange for access to business opportunities, infrastructure projects and natural resources. In Guinea, for example, the Chinese are investing $7 billion in infrastructure in return for a “strategic partnership” in all of the country’s future mining projects. In Angola, China has invested $8 billion in irrigation canals, railroads and low-interest loans, in return for which Angola has granted Chinese companies the rights to the country’s most productive oil fields.

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