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Foreign Aid Angst

Prepared by: Robert McMahon, Editor
May 3, 2007

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By a number of measures, foreign aid has been a bright spot for the Bush administration. It gives handsomely to programs combating HIV/AIDS worldwide (VOA), has introduced the innovative Millennium Challenge Corporation, and put in motion a “transformation” aimed at improving the coordination of the country’s unwieldy foreign assistance apparatus. That’s not to mention the U.S. military’s aid to earthquake-stricken Pakistanis (WashPost) and tsunami-ravaged villages in Southeast Asia (the type of aid that rarely appears in international surveys of official development assistance).

But the administration is now beset by challenges and embarrassments that threaten to disrupt its efforts. The most recent case involves the abrupt departure of the country’s first director of foreign assistance. Randall L. Tobias not only headed up foreign aid but was a deputy secretary of state and former head of the government’s emergency relief plan for AIDS relief (PEPFAR). His April 27 resignation came alongside revelations that he had sought massages from a Washington-based service linked to prostitution. The irony was lost on few that Tobias was previously charged with overseeing policy against prostitution and sex trafficking. It is too soon to determine whether the case causes passing chagrin or disrupts the foreign assistance transformation. At the very least, writes CFR Senior Fellow Laurie Garrett, it should highlight that “designing foreign policy to stamp out sexual activity among consenting adults is a fool's errand.” She urges more acknowledgment by U.S. policymakers of what works in preventing diseases like AIDS—condoms, clean needles, and sex education (LAT).

The Tobias case overlaps with a still unresolved controversy involving World Bank President Paul Wolfowitz, a former Bush administration deputy defense secretary accused of conflict-of-interest abuses. Ironies are present here as well. The anti-corruption program he has championed since joining the bank is in danger of swiftly lose credibility as the bank president daily defends himself against charges he arranged for favors for his romantic partner (AP), a long-time bank employee. Wolfowitz has protested strongly against accusations of wrongdoing but recently indicated he would step down if his name was cleared in the bank’s investigation. A poor resolution of the matter could have consequences for the bank’s ability to raise crucial funds from skeptical donor nations, says CFR Senior Fellow Sebastian Mallaby in a new CFR.org Podcast. Also at risk, he says, is Washington’s ability to promote through the bank its own development priorities, such as good governance.

Congress, another key actor in advancing the administration’s aid initiatives, has been relatively supportive of the roughly $25 million sought for foreign assistance in fiscal year 2008. But House Foreign Affairs Committee Chairman Tom Lantos (D-CA) expressed a bit of pique at being left out of the loop on the transformational aid initiative. He told Tobias at a hearing in March, “We are not a potted plant watching the administration function.” Separately, Senate Finance Committee Chairman Max Baucus (D-MT) this week became the most senior lawmaker to call for Wolfowitz to step down to restore the World Bank’s credibility (Reuters).The Congressional Research Service recently took a look at the role of the new director of foreign assistance (PDF). Promoting transformational development was one of five core goals set out by a USAID White Paper on foreign aid in 2004.

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