Good Foreign Aid Helps U.S. Taxpayers
By Lorne W. Craner
In the best of times, most Americans are skeptical of foreign aid. Many believe that a large portion of their taxes is sent abroad, to be wasted in corrupt foreign countries.
Despite such skepticism, America has a long, well-reasoned tradition of helping the less fortunate in foreign lands. The events of 9/11 reinforced the truism that what happens in poor, remote countries can have real consequences here at home.
But particularly, in these days of economic distress, if we are truly to make a difference in poor countries, our tax dollars must be spent effectively ?— with the goal that, ultimately, they will not be needed.
Development specialists and forward-thinking legislators are evaluating ways to make American assistance much more effective. Their starting point focuses on assistance that benefits the poor in sustainable ways, meaning they will one day be able to take care of themselves. The Millennium Challenge Corporation, an innovative U.S. government development-assistance program, offers significant lessons learned in achieving this goal.
In the African nation of Zambia, for example, it once took up to 11 days to register a business, and corruption might be involved. Zambian Prosper Chanda was reluctant to invest time, energy and perhaps significant sums to register Katetebo Enterprises, his small sign-manufacturing business. He wasn’t alone. Recognizing this as a serious challenge for long-term economic growth, Zambia’s leaders used assistance from the Millennium Challenge Corporation to streamline the country’s business-registration process and reduce opportunities for corruption. As a result, Zambian entrepreneurs can now register a new business or file annual registration updates in a single day. Prosper acted, registering his company in less than a day. Now, as part of Zambia’s formal business sector, he can access Zambian loans and business-development services to grow his business. Prosper’s experience is repeated the world over in various nations that are benefiting from the generosity of the Millennium Challenge Corporation.
Statistically, MCC funding is less than one-thousandth of our government’s budget. But more importantly, it isn’t given to just any nation. MCC insists that, to receive assistance, countries have a proven record of effective and democratic governance, investing in the health and education of their people, promoting economic freedom and fighting corruption. These fundamental prerequisites for ending poverty create a foundation for our assistance to be well-used. It also ensures that our aid won’t be needed forever. Instead, as the proverb says, more people in those lands will learn to fish, and their countries’ economies will more quickly grow to the point where they won’t need our help. As they move in that direction, they will also become markets for American products, creating jobs for American workers here at home.
Now more than ever, Americans have a right to demand that any of their tax dollars spent abroad be spent well. MCC’s smart foreign assistance is beginning to tangibly help some of the world’s poorest countries lift themselves up, and that will ultimately benefit taxpayers here at home.
Lorne Craner is president of the International Republican Institute and a member of the Millennium Challenge Corporation’s board of directors.