United States Agency for International Development Essay

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United States Agency for International Development When the Department of Defense awarded Halliburton subsidiaries billions of dollars to rebuild Iraq in an uncompetitive bidding process, taxpayers and members of Congress alike cried foul. Liberals at Swarthmore College bemoaned the mixture of domestic business interests with foreign policy and reconstruction efforts. Initially, foreign companies were formally barred from the lucrative reconstruction projects. This spring, Halliburton delayed billing the DOD over $140 million under allegations of overcharging for military meals and energy supplies. Where the DOD controls reconstruction in Iraq, the United States Agency for International Development (USAID) controls foreign development…show more content…
American bilateral aid, in the form of outright grants or low-interest loans, often comes highly qualified and redirects wealth back to the United States by design. The United States no longer keeps track of the level of tied aid, citing statistical difficulties, but USAID reports in 1996 estimated that “71.6% of bilateral aid commitments were tied to the purchase of US goods and services” (ActionAid 1). In 1993, USAID generated seven billion dollars in revenue from purchase of American goods and services and claimed it has created “thousands of jobs…here at home” (Hancock 156). Clearly, the United States reaps a handsome reward from its foreign aid policy. Is this what we want from a supposed exporter of development expertise and the richest country in the world? The two most insidious manifestations of tied aid involve distortions of international markets—distortions which bring direct benefit to the United States. Tied aid often requires purchase of American goods and services with markups above international prices. Conversely, tied aid can also involve the sale of goods and services below international prices. Subsidized agricultural exports belong to this category of foreign aid and were the subject of great debate and fury at this year’s trade talks in Cancun, Mexico. Aid tied to the sale of expensive American products results in gross inefficiency: “goods and services purchased with ‘tied’ aid tend to be priced well above their actual market value, with
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