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Cutting US foreign assistance bad for economy, Arab democracy

August 2, 2011 1 comment

Everyone knows US foreign assistance is slated for spending cuts, but recent aid authorization bills show the major differences already forming between the House and Senate. Never has there been a better opportunity and greater need for democracy promotion and US aid than the Arab Spring. But if the House gets its way, that will mean a sharply decreased US role abroad — and, as I will argue, to the detriment of the US economy.

First, let’s start with the facts. The foreign assistance fund — which includes food aid, supporting stable democratic institutions and the like — is not in any way related to the defense budget. Politicians usually lump the two together, whether intentionally or not, because our military missions in Iraq and Afghanistan have undertaken the ostensible role of democracy promotion. But when you look at the numbers, foreign assistance accounts for a mere 1 percent of the US budget. That still hasn’t stopped people like Rep. Paul Ryan, R-Wisc., from suggesting cuts of 44 percent by 2016. By comparison defense budget — cuts to which the House has tried to avoid — is the largest spending item in the US budget, comprising 24 percent of total spending this fiscal year.

Many people believe the US should turn inward — some argue the nation cannot project itself abroad when it cannot take care of its economic issues at home. I don’t buy that argument. US-based nongovernmental organizations will continue to do a lot of the heavy lifting overseas when it comes to international aid, but they will need government grants to keep major operations going. Denying those funds could lead to job loss, so keeping foreign assistance at current funding levels will keep Americans at work.

Also, it is in US economic interests to promote healthy governments and citizens because it will lead to economic rewards in the future. Corrupt, undemocratic governments will generally operate at the expense of their own people largely by keeping growing wealth for the government elite. That means people have less money to spend on more expensive American goods, which in turn dampens US overseas profits.

Curbing corruption will also ensure future US investment is not wasted. Billions of dollars of US investment — both from the federal government and private citizens or corporations — get lost among red tape or swindling politicians in corrupt foreign nations. Some of those nations — such as Afghanistan, Mongolia and India — sit on treasures of natural resources the US lacks, so US business interests are more than happy to invest. Cleaning up those states would produce a greater return on that investment.

In terms of the hopeful new Arab democracies, US foreign assistance can help build trust between those governing in Arab nations and the US officials with whom they will be communicating. It’s no secret that Egyptians oppose US meddling, a fear the military there is exploiting. But it’s not the Arab street the US must win over — it’s the new, democratically-elected leaders with whom the US must curry favor. The US already is training potential political leaders in Libya, Syria and Egypt — certainly a good start. The US wants to be the nation those new leaders look toward for guidance, but cutting foreign assistance will imperil the US ability to help guide new Arab democracies through the troubles they will encounter during nascent stages. In turn, that will dampen the ability to do everything from strike bilateral trade agreements to establishing and supporting sound human rights protections.

On top of the general budget malaise, a Foreign Relations Authorization bill currently going through the motions on Capitol Hill makes it more difficult for the US to use international aid in corrupt nations:

The corruption indicator has a range of uncertainly (especially around the median) and can have time lags of up to two years.  Using the control of corruption indicator as a hard hurdle for all U.S. economic and development assistance without addressing the inherent problems in the indicator could prove highly challenging.

That bill, pushed by the House (there also is a less restrictive Senate version) is not likely to pass in the Senate. But the writing is on the wall for US foreign assistance. If this debt ceiling fiasco proved anything, it’s that the House and Senate are beholden to very different interests and views. The House will champion spending cuts abroad because, rhetorically, it sounds good. The House will stomach defense cuts, but it will not digest those cuts easily. Still, it’s the assault on foreign assistance that should induce gagging.

 

Jordan proposed reforms limit government control over municipalities

Jordan’s Lower House approved reforms Wednesday giving municipalities greater control at the expense of an increasingly corrupt federal government cabinet.

Municipalities will receive a greater piece of the tax pie, which will help balance local government checkbooks. Ethnically diverse communities could splinter into their own municipalities if they get 5,000 or more people, which might be appealing to Christian minorities. Shielding municipal personnel decisions from a corrupt cabinet will ensure stability and long-term planning at the municipal leadership levels. The reforms also promote women on municipal boards.

With protests amplifying in Amman, the nation’s capital, and across the rest of the country, the vote might have been intended to dampen civil unrest. However, protests continue unabated.

In all, the reforms are a positive. If approved, women must comprise 25 percent of municipal boards instead of 20 percent. Also, municipal affairs managers can no longer request the federal government to forcibly remove municipal board members or mayors — now, the courts will review claims against board members and mayors. The municipal councils themselves will now appoint “executive managers” rather than municipal affairs managers making that selection.

The proposed law contains several other provisions. From the Jordan Times:

Under the new law, municipalities will be given 8 per cent of the fuel tax revenues instead of the 6 per cent stipulated in the older version of the law.

Inhabitants of any district with a population of 5,000 or more can request the establishment of their own municipality or disengagement from a merger with a larger municipality.

So not only does the Jordanian government give up control by shifting responsibility for determining whether mayors and city council members should be removed to the courts, it also gives Jordanians a greater right to self-determination and increases fuel tax revenues 33 percent for municipalities.

In all, these reforms promote stability by taking power over municipal decisions from the cabinet’s hands. However worthwhile, the reforms still might have come too late to squelch Jordanian protests.

 

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