With congressional budget negotiators seeking $1.2 trillion in savings, some Americans question why the United States should be spending money on foreign assistance when we have pressing needs at home. As someone who has dedicated his career to international development, I assure you that cutting foreign assistance would do more harm than good.
When tallying the bottom line, Congress should consider the full price tag: our foreign assistance creates jobs at home by boosting exports and protects our national security by making friends and strengthening economies in emerging societies. Considering how U.S. foreign aid advances America’s diplomatic, economic, national security and humanitarian objectives, it also delivers a great return on the tax dollar — for less than 1 percent of the total federal budget.
With job creation becoming more dependent on expanding American exports overseas, international aid efforts are one of our country’s most effective ways to promote economic growth. Over 50 percent of U.S. foreign trade is with developing countries that are U.S. foreign assistance partners, and 11 of our top 15 trading partners are graduates of U.S. foreign assistance programs. A recent GAO study on U.S.-funded programs focusing on trade development in emerging markets found that for every dollar spent on these programs resulted in a $53 increase in U.S. merchandise exports. Both Republicans and Democrats should be able to support spending that generates these kinds of return!
U.S. development programs also win friends for our country in poverty-stricken — and often unstable — societies that are in danger of falling into hostile hands, from rogue regimes to terrorist groups. The link between American money and American lives could not be clearer. As former Secretary of Defense Robert Gates said last year, “Development is a lot cheaper than sending soldiers.” The State Department estimates that for every four dollars spent on development and diplomacy in Afghanistan, the Defense Department will save $45.
My company, Fintrac, is contracted by the U.S. Agency for International Development to improve the lives of farmers in developing countries. Our work improves food security, increases income and opportunities for jobs for the rural poor and creates a more secure world for both the communities we assist and for us here at home.
For example, Fintrac has been supporting Honduras’ agriculture sector for over a decade, dramatically increasing farmers’ incomes and improving their families’ standard of living. When we began working with the Vasquez brothers, they had four young families working a small plot of land in the middle of the country, subsisting on $1,000 per year. Under pressure to pay bills and keep their land, the brothers would take great personal risk to migrate into the United States illegally to find seasonal work to supplement their farm income. After receiving assistance from our project, farm productivity increased tenfold as they produced vegetables for the local market. The brothers are now using their increased earnings to pay off debt, send their children to school and expand their farm. They no longer need to take the risk of traveling to the United States in search of work.
Job creation in developing countries not only creates new markets for our goods and services, it also reduces inward migration and competition for jobs here at home. These are two important reasons Congress and taxpayers should maintain a modest foreign aid budget. The United Kingdom understands this — it is actually increasing its foreign assistance while it must cut other programs because their leaders know the long-term payoff in trade and security is worth the expenditure.
America is safer and more prosperous because of the investment we make in helping people less fortunate than ourselves. We are not just helping a farm in Honduras, we are building allies and trading partners that will help protect and grow our future. Foreign assistance funding in the federal budget is low, but the stakes are high.
Bob Rabatsky is senior vice president of Fintrac Inc., an international development company.