#42 - Foreign Aid - A Relatively Sober and Hinged Discussion Regarding Three Particular Expenditures

There are questions of substance—what the government does—and process—how the government does it. The Department of Government Efficiency’s cull implicates both. Today, I want to look at the substance of three payments or categories of payments that have been in the news over the last few weeks or are likely to be soon. For the moment, try to leave aside your feelings, be they positive or negative, about the way this is happening, and just think about why you would support or oppose these payments, and why someone else might feel differently. There is much less of a clear party-line distinction in foreign affairs than in domestic, but, speaking very generally, it is probably fair to say that there are going to be payments both parties generally agree should be made, even if there’s some disagreement as to how the payment should be made; payments one party supports and the other doesn’t; and payments both parties generally agree should be reconsidered.

Before we get into the discussion, five prefatory notes:

1. Foreign aid is not popular (and thanks to Gabe Fleisher for his excellent article on the subject). An October 2024 poll by YouGov found that 59% of voters agreed with then-candidate Trump’s proposal to “reduce spending on foreign aid,” including 82% of Republicans and 39% of Democrats (an unusually high percentage of Democrats for a Trump proposal). This isn’t a new phenomenon: according to the Gates Foundation’s John Norris, the author of The Enduring Struggle: The History of the U.S. Agency for International Development and America’s Uneasy Transformation of the World, the percentage of Americans who think the U.S. spends too much on foreign aid skyrocketed during the Vietnam era, and has remained above 50% all but one year since—that’s one year out of the last fifty.

2. There is not a direct connection between cutting foreign aid and boosting support for American citizens. It’s not like Congress is sitting there, hearing the pleas of disaster-stricken Americans in North Carolina, Florida, or California, and unable to act because it just sent too much money to the good people of Zimbabwe. For one, foreign aid accounts for under 1% of the federal budget, but that’s not really the point (for what it’s worth, federal health insurance, Social Security, and defense spending combine to account for 58%). The point is that foreign aid and domestic programs are separate: there is nothing preventing Congress from supporting both, either, or neither. If Congress wants to pass a bill providing exceedingly generous benefits to American disaster victims, it can do so. If it wants to cap federal disaster assistance at $1 and borrow $1 trillion to support the construction of a 400,000-seat camel racing arena in the middle of the Arabian Desert, it can do that too—if you want to be mad about it, fair enough, but blame Congress, not the camels.

3. The real world is messy—really, really messy. If you’re looking for a payment, foreign or domestic, that we absolutely should make—for which there is no possible downside, no conceivable second- or third-order effect that would go against our interests or those of any ally or allied people, no question as to whether the payment’s benefit outweighs its cost, and no way the funds could be spent more efficiently in pursuit of the same outcome—good luck. If you’re looking for a payment, foreign or domestic, that we absolutely should not make—for which there is no imaginable upside, no theoretical down-the-road impact for which we would be grateful—again, good luck. In terms of second- and third-order effects—impacts beyond the topline cost—we are guessing. Our guesses might be good, but they are guesses, and if there’s anything the history of the world, the history of our country, or our personal histories will tell us, it’s that guessing is hard. None of this means that we shouldn’t continue to make payments we think are good, and stop making payments we think are bad. It means that nothing is certain; nothing is foolproof. To live is to act without knowing, despite not knowing; to govern is the same. We are all playing the odds.

4. To that point, it is worth remembering that nothing we do happens in a vacuum—where we choose to divest, other countries may invest; where we choose to withdraw, other countries may choose to enter. Think, for example, of China’s Belt and Road Initiative (BRI), a massive global infrastructure development effort to invest in more than 150 countries and international organizations. The BRI’s development of overland and sea routes is estimated to boost world GDP by $7.1 trillion per annum by 2040, and is expected to reduce “frictions that hold back world trade.” The question may not just be whether we want America to keep its seat at the table in Bulgaria, to pick a random example from the list of BRI countries, but whether we want to give that seat to China.

5. Fifth, and finally, although sunlight may be the best disinfectant, there are some things we may not want disinfected. One of the difficulties in looking at individual payments—and something I think we should keep in mind for every payment discussed in this article and elsewhere—is that the public explanation for why a payment is made may differ—by necessity—from the private explanation for that payment. Whatever you think of our intelligence services, it is true that payments have been funneled through legitimate channels (e.g., the State Department, USAID, etc.) for clandestine purposes. Perhaps this is really more of a process point—what information do we want the people approving or cancelling payments to have?—but it’s something for us to keep in mind too: no matter how clear the case for or against a payment may seem, remember that there might be key information—decision-changing information—that we, the ever-grumbling public, don’t have.

Anyway, to business.

Sorry—forgot the commercial break. Now, actually to business.

Sure, the Taliban Isn’t Getting None of It—What’s Your Point?

In November, a friend sent me a clip from a popular conservative podcast. The host and guests alleged that, since September 2021, the United States has been sending upwards of $40 million a week in cash shipments to Afghanistan, and that the money, in so many words, is going to the Taliban. As a dutiful internationalist lib, my immediate reaction was to think, “I’m willing to bet that’s not 100% right,” but I took a look. As best as I can tell, it is true that the U.S. has sent a considerable amount of cash to Afghanistan; true that the Taliban is benefiting, albeit not directly; and worth questioning whether the payments would be in the best interest of the Afghan people even if the Taliban was not benefiting.

According to early 2024 reports from the Special Inspector General for Afghanistan Reconstruction and Center for Strategic & International Studies (CSIS), which should in theory be about as complete and non- or bipartisan as we’re going to get, since August 2021, the United Nations “has purchased, transported, and transferred at least $2.9 billion to Afghanistan using international donor contributions. The U.S. is the largest international donor, having provided about $2.6 billion in funding for the UN, other [public international organizations (PIOs)], and [nongovernmental organizations (NGOs)] operating in Afghanistan since August 2021. More than $1.7 billion of that funding came from [the State Department] and the U.S. Agency for International Development (USAID) to support humanitarian activities implemented by PIOs and NGOs, including the UN, the World Bank, and the Colombo Plan. However, SIGAR found that donors make contributions to pooled UN accounts, and individual donors—including State and USAID—cannot determine how much of their contributions are used to purchase and transport cash for use in Afghanistan.”

So how is the Taliban benefiting? From the CSIS report, “The ban on the use of U.S. dollars in local transactions has required humanitarian agencies to exchange dollars for afghanis to fund their operations; because the local currency is in short supply, this has resulted in many private banks using UN-supplied dollars to purchase afghanis from the Taliban-controlled [central bank, Da Afghanistan Bank (DAB)].” This has allowed the Taliban regime to rapidly accumulate a large supply of U.S. dollars. It is not difficult to see why that, in and of itself, would prove reason enough for some to cancel the program entirely: the U.S. has sent a considerable sum of money to Afghanistan, and some percentage of that money has enriched the Taliban. However, I think the case can be made—and it is certainly reasonable to suggest—that losing some portion of a grant to parties we don’t like very much is effectively unavoidable in difficult areas of the world, and that the benefits of the payments still outweigh the clear cost.

Which is why, in my view, the better argument against the payments is that, as the CSIS report claims, “large-scale humanitarian aid has allowed the Taliban to abdicate their responsibility to meet the needs of the Afghan people, effectively outsourcing the country’s social safety net to UN agencies and a handful of other international NGOs. With respect to the use of cash shipments, the weekly inflow of $40 million may have initially relieved pressure on Afghanistan’s moribund banking sector, but the money now stands in the way of the financial system’s revival.”

Assume for the sake of argument that the money is mostly spent well and wisely; that people are benefiting directly in a measurable way. Assume also that, without the money, people would have suffered. People we left to the Taliban would have suffered. Assume that stopping the payments now will lead directly to struggle, strife, and hunger.

Assume, finally, that continuing to make the payments will do what CSIS alleges, in standing in the way of the Afghan financial system’s revival and allowing the Taliban to outsource the country’s social safety net.

What would you do now? What would you have done then? I think some would likely lean toward never making the payments in the first place; some might feel like we have no option at this point but to continue the payments, or, at least, announce a sort of gradual reduction over time. How many of you would have favored the Goldilocks approach, with payments made initially but stopped after they “relieved pressure on Afghanistan’s moribund banking sector”? Sounds appealing in theory (and maybe that was the general idea in the first place), but it’s worth remembering that real life doesn’t have a lot of helpful “It Worked!” alarms to remind you to stop making your foreign aid payments. Plus, the best case we’re discussing currently—an independent Afghanistan that funds its own social safety net—involves moving Afghan people from a state of dependence on foreign—and largely American—aid to a state of increased dependence on the Taliban. Given two decades of American efforts and sacrifices, that’s not necessarily an easy pill to swallow.

Governing is not for the faint of heart (regrettably, it does often seem to attract the faint of brain and backbone).

Diversity, Equity, and Inclusion in Serbian Workplaces

At a press conference on February 3rd, White House Press Secretary Karoline Leavitt highlighted a number of payments she said were emblematic of “the waste and abuse that has run through USAID over the past several years,” including “$1.5 million to advance DEI in Serbia’s workplaces[.]”

I’m not sure White House press secretaries are typically known for their absolute fidelity to the truth, and there are reasons to doubt Secretary Leavitt will depart from that proud tradition—for one, there was no plan to send $50 million of condoms to the Gaza Strip (not for nothing, at USAID procurement prices, that would be one billion condoms, or 1,952 per Gazan male of at least 15 years of age). However, on Serbian DEI, it would be hard to quibble with her choice of words.

From the grant itself, made to a Serbian LGBTQI+ advocacy group: “This activity aims to advance diversity, equity and inclusion in Serbia’s workplaces and business communities, by promoting economic empowerment of and opportunity for LGBTQI+ people in Serbia.” From Brooke Aysham, director of the USAID mission in Serbia, “At USAID, we know that inclusive development is important for driving economic growth and also for creating a healthier democracy. I want to note that we know the challenges to expanding the inclusion of LGBTQI+ people in the economy are real. But big companies like 3M, Hewlett Packard, and Yamaha have shown that diversifying their teams to include LGBTQI+ people actually improves their economic efficiency.” (I believe that might be the translation of a translation, so, if you know Brooke, please pass on my apologies for any shortcomings in the quoted language).

So, fair enough. For those who, in alignment with the current administration, oppose DEI policies virtually across the board, eliminating grants like this one seems like a fairly easy decision, at least as a policy matter.

But, for the sake of argument, let’s assume you support DEI policies generally, and let’s further assume that you have a gay cousin in Serbia, which is not very high on the list of places you’d want to be gay. You are personally supportive of the Serbian grantee organization, and you are deeply interested in its success.

Is it the responsibility of American taxpayers to support diversity, equity, and inclusion initiatives in Serbia? Is it the responsibility of American taxpayers to subsidize any efforts (perhaps excluding those of our intelligence services) to influence domestic policy or activity in Serbia?

The reality is that we cannot save the world, however you might define “save.” There are more worthy causes than what we can support, and, as always, real doubt as to whether money spent on those worthy causes will yield the desired ends. Does that mean we should withdraw, or claim, somewhat nihilistically, that we are effectively powerless to remake the world in our image? I don’t know. My personal answer is no, but I don’t know that I’m right on that.

At minimum, I think it’s fair to say that each administration, where it has discretion, will pursue the implementation, here and abroad, of its own policy aims. It will make judgment calls—calls some Americans support, and others oppose. The Trump administration opposes DEI policies; it also opposes American money spent where there is no clear benefit to American interests, as it defines them. There will be money spent over the next four years that would not be spent during a Democratic administration, and costs cut that would not be cut. Whereas $1.5 million to advance inclusion in Serbian workplaces was once likely a fairly easy yes—a small grant in support of a cause the administration supported—it now stands out enough to merit a punchline at a press conference.

PEPFAR - The United States President’s Emergency Plan for AIDS Relief

Over the last 20 years, the United States has allocated more than $110 billion to fight the global HIV/AIDS epidemic. Initially, funding went to 15 resource-limited focus countries with high HIV/AIDS rates: Botswana, Côte d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Vietnam, and Zambia. When PEPFAR was reauthorized in 2008, the approach shifted, with PEPFAR now working in partnership with 55 different host nations to support prevention and treatment.

PEPFAR, which began during the first term of President George W. Bush with the U.S. Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003, is credited with saving the lives of over 26 million people. The numbers are staggering: in just fiscal year 2024 (October 2023 - September 2024), PEPFAR provided antiretroviral treatment to 20.6 million people; PrEP injections (pre-exposure prophylaxis) to 2.5 million; HIV testing for 83.8 million; comprehensive HIV prevention services for 2.3 million adolescent girls and young women; and critical care and support for 6.6 million orphans, vulnerable children, and their caregivers. 342,000 healthcare workers are directly supported by PEPFAR.

This article is not really about the process—about how PEPFAR has been impacted over the last two weeks, even as it has theoretically been exempted from the 90-day pause in foreign aid spending. Suffice it to say for now that the impact so far has been significant, and has raised bipartisan concern.

No—this article is about the substance. Do you approve of PEPFAR, of the government spending $110 billion to save the lives of people halfway around the globe? $110 billion for 26 million people comes out to approximately $4,230 per person—$4,230 per life, many of those belonging to children born with HIV. It might seem like a fairly easy question to answer now, but what if we were transported back to 2003, and I asked you whether you were willing to appropriate $15 billion over five years to fight HIV/AIDS, tuberculosis, and malaria in the developing world? You wouldn’t have any idea as to whether the program would actually work. Would your answer be any different? What would you say if I asked you whether PEPFAR serves America’s interests?

At the time PEPFAR was announced in Bush’s 2003 State of the Union, Colin Powell believed that HIV “posed a dire threat to global security, given the masses of Africans dying during the primes of their lives and the fact that much of the continent's military was infected with HIV.” (If you read the article at the link, you’ll see a recently-pardoned name you’ll recognize—before he became a household name, for better or worse, during COVID, Dr. Anthony Fauci was director of the National Institute of Allergy and Infectious Diseases and the architect of PEPFAR). Secretary Powell may not have been exaggerating: at the time PEPFAR was announced, Sub-Saharan Africa “was on the precipice of broad-based societal collapse due to AIDS. Life expectancy had plunged by 20 years, infant mortality had doubled, child mortality had tripled, and millions of children had been orphaned by the disease.” Average GDP was dropping 2 to 4 percentage points per year across the continent.

But Bush’s reasoning, it seems, was primarily moral: he felt we had a moral responsibility as a rich nation to stop people dying from a treatable, preventable disease merely because they had the misfortune to be born in a poor nation. That same reasoning could clearly apply to other issues too: at the same time we save lives with PEPFAR, other lives are lost for lack of food we don’t eat, or medicines we don’t need. As I noted above, there are more worthy causes than we can possibly support, and there is often a question as to whether, by intervening, we actually make a problem worse or introduce new complications. The world is messy, a never-ending cycle of trolley problems.

And that focus on morality returns us to the fundamental question we have at present. It isn’t difficult, if you’re so inclined, to frame the Trump administration’s skepticism on foreign aid and immigration as some form of soft-ish bigotry—many Democrats would happily accept that construction. However, I think a more generous way to look at it—and the way it is framed by Republicans—is that the skepticism is born out of concern that American citizens—the people that are here, that are unequivocally under the care or subject to the jurisdiction of our government—are being disregarded and left behind.

That, I think, explains why foreign aid hasn’t enjoyed majority support in so long. I don’t think Americans, writ large, are fundamentally opposed to the idea of helping foreign countries (and might be much less opposed now if they understood how little we spend on foreign aid as a percentage of the whole federal budget). I think they’re opposed to the idea that we’re sending billions and billions of dollars overseas when there are people struggling and dying here—people that need something they currently don’t have, whether it be a job, better medical care, a lifeline in the wake of a disaster, or a chance at a better life writ large. As I wrote above, this is not an either/or scenario: foreign aid doesn’t need to take away from domestic spending and vice versa, and, when you see money going to Africa after a hurricane in the Southeast, you shouldn’t blame the Africans. The reality, though, is that perception matters.

To consistently be great abroad, to be a dominant force for good worldwide, we have to be great here at home.

* Maybe. I mean, hopefully. Sharing can’t hurt. Well, probably. Oh, whatever—just share it anyway. Thanks for reading!

Random Fact

There are 14 mountains worldwide with peaks over 8,000 meters (26,248 feet), each of them in the Himalayas and Karakoram mountain ranges of China, India, Nepal, and Pakistan. The first person to climb all 14 eight-thousanders was Reinhold Messner, an Italian climber from the German-speaking province of South Tyrol. Messner completed the feat in 1986 without the use of supplemental oxygen. He was the first person to ascend Mount Everest solo, and, along with Peter Habeler, the first to ascend without oxygen. He also was the first to cross Antarctica and Greenland with neither snowmobiles nor dog sleds, and also crossed the Gobi Desert alone. Today, Messner is 80, with the sort of hair that makes me wonder if I should be doing a lot more climbing.

Random Recommendation

If you can stomach a bit of violence (might be a double meaning there), Shōgun is worth the watch—one of the best and most gut-wrenching (again, double meaning) shows I’ve seen in a long time.