United States foreign aid
The United States government provides tangible and intangible varieties of aid or assistance to several foreign countries and organizations. While this aid is primarily distributed with the goal of advancing the country's national security and commercial interests, it has also bolstered humanitarian causes around the world. The funding for these foreign aid programs comes from American taxpayers and other appropriated revenue sources as assessed by Congress on an annual basis through the United States budget process. It is dispersed through "over 20 U.S. government agencies that manage foreign assistance programs," although about half of all economic assistance is channeled through the United States Agency for International Development.
Historically, countries of strategic importance to the United States are regularly destined for United States foreign aid. Today, the vast majority of recipients of United States foreign aid are developing countries and countries recovering from war or disaster. Foreign aid as employed by the United States serves three basic functions—to provide security, developmental, and humanitarian assistance. While the United States has given aid to other countries since 1812, it was not until World War II that these efforts expanded to become a sustained part of government policy, as attested by the Marshall Plan and the Mutual Security Act, which were the largest foreign aid programs of the post-war period. The current United States foreign aid spending system was implemented in 1961.
Quantitatively, United States foreign aid is more than that of any country in the world, though as a percentage of GDP, it ranks nearly last in a comparison with foreign aid spending by other developed countries. Foreign aid typically receives bipartisan support in Congress because it is seen as an effective method of promoting global economic development under the United States sphere of influence, thereby promoting national security. Conversely, it is deeply unpopular among the American public, possibly due in part to the spread of inflated figures for the scale of government spending on foreign aid programs.
History
Earliest instances
One of the earliest and least known instances of US foreign aid is also a good example of how aid has a long history of being used as a tool of foreign policy. On May 6, 1812, despite continued hostilities over independence from British colonial rule, US senator from Kentucky Henry Clay submitted a bill appropriating $50,000 for disaster relief food aid to Venezuela after a massive earthquake devastated the capitol, Caracas, that was enacted on May 8 by the 12th Congress. Coincidentally, Venezuela was also fighting a war for independence from Spanish colonial rule, from 1810 to 1823. The food aid was accompanied by diplomat Alexander Scott, who stated that this aid was "." A case may be made that some motivation for this act of generosity was diplomatic in nature, insofar as that both nations were seeking diplomatic recognition as sovereign from colonizers, and that this gesture would elicit such a desired reciprocal response. Later, in 1927, the US Congress appropriated $41,000 for the creation and transportation of to be erected in Caracas, where by all accounts it remains to this day, memorializing Clay as a symbol of US generosity abroad.World War I
During World War I, the Commission for Relief in Belgium, which sent food to the hungry in Belgium, received $387 million from the U.S. government. These government monies were given in the form of loans, but a considerable portion of those loans was forgiven.After the war, the American Relief Administration, directed by Herbert Hoover who had also been prominent in the CRB, continued food distribution to war-devastated European countries. It also distributed food and combated typhus in the Russian Soviet Federative Socialist Republic during its famine of 1921–23. The U.S. Congress appropriated $20 million for the ARA under the Russian Famine Relief Act of 1921.
World War II
Levels of United States aid increased greatly during World War II, mainly on account of the Lend-lease program. United States government aid remained high in the decade after the war because of contributions to European reconstruction, and competition for influence versus the Communist powers in the first years of the Cold War. By 1960, the annual aid amount had receded to about half of what it was in the early post-war years, and, in inflation-adjusted terms, it has remained at that level—with some fluctuations—until the present.The Lend-lease program, which began in 1941 was an arrangement whereby the United States sent large amounts of war materials and other supplies to nations whose defense was considered vital to the defense of the United States. It began with the passage by Congress of the Lend-lease act on 11 March 1941.
Initially, the main recipient was the United Kingdom; the Soviet Union began receiving supplies in June 1941 outside of Lend-lease, and was included in the Lend-lease agreement in November 1941. By the end of the war, most of the Allied countries had been declared eligible for Lend-lease aid, although not all received it. By the time the program was ended by President Harry S. Truman in August 1945, more than $50 billion worth of supplies had been disbursed, of which the Commonwealth countries received $31 billion and the Soviet Union $11 billion. Although formally the material was loaned, in the end only partial repayment was demanded.
A second wartime aid program, the United Nations Relief and Rehabilitation Administration, was founded in November 1943, by 44 Allied governments, for the purpose of assisting and resettling displaced victims of the war.
Its initial focus was on assisting people in areas the Allies had captured from the Axis powers: distributing food, clothing and other essentials, and helping with medical care and sanitation. Later it also assisted in the resumption of agriculture and industry. Each of the 44 signatories was supposed to contribute one percent of its national income.
The chief beneficiaries were China, Czechoslovakia, Greece, Italy, Poland, the Ukrainian SSR and Yugoslavia. UNRRA returned about 7 million displaced people to their countries of origin and provided refugee camps for about one million who were unwilling to be repatriated. UNRRA ceased operations in Europe in mid-1947; some of its activities in Asia continued under other auspices until early 1949. In the end 52 countries had contributed as donors. Contributions from governments and private organizations during the four years of the program totaled over $3.8 billion; more than half of that was from the United States.
Cold War
After the war, the United States began giving large amounts of aid to Greece and Turkey under the Truman Doctrine. Both countries were experiencing civil strife between communist and anti-communist factions, and the President and his advisors feared that their efforts to keep European countries from adopting communism might be about to suffer a serious setback. In December 1946, Greek Prime Minister Konstantinos Tsaldaris visited Washington and requested additional United States aid. Truman promulgated his containment doctrine in early 1947, a major component of which was to be aid to the world's poor countries in order to blunt the appeals of radicalism to their hungry peoples and to bolster their anti-communist political elements. In May 1947 the U.S. government granted Greece $300 million in military and economic aid. Turkey received $100 million. The U.S. government gave Greece $362 million in 1949, and U.S. aid to Greece generally remained over $100 million annually until 1998. After the Chinese Civil War and the Korean War, U.S. military aid both to Europe and the developing "Third World" increased, with military aid composing 95 percent of all U.S. aid by 1954 and going largely to countries in Cold War proxy conflicts against communist forces.The most well-known, and largest, United States aid program in the immediate post-war years was the European Recovery Program. More often known as the Marshall Plan, it was the creation of George Kennan, William Clayton, and others at the U.S. State Department under Secretary of State George Marshall. Publicly suggested by Marshall in June 1947, and put into action about a year later, the Plan was essentially an extension of the Greece–Turkey aid strategy to the rest of Europe. As the realities of the Cold War began to set in, the Marshall plan would replace the Morgenthau plan as it became increasingly clear that Western Europe would need to be rebuilt to serve as a redoubt against Soviet influence. The U.S. administration considered the stability of the existing governments in Western Europe vital to its own interests. On 3 April 1948, President Truman signed the Economic Cooperation Act, establishing the Economic Cooperation Administration to administer the program, and actual disbursements got underway. The focus was on promoting production, stabilizing currencies, and promoting international trade. To be eligible for the aid, a country had to sign an agreement with the United States government committing itself to the Act's purposes. The Communist countries were formally invited to participate in the Plan although Secretary Marshall thought it unlikely that they would accept and they did in fact decline the aid. Also in 1948, the United States and the recipient countries created the Organisation for European Economic Cooperation to coordinate the use of the aid. A large portion of the money given was used to purchase goods from the United States, and the ships used to transport the goods had to be of U.S. nationality. Military aid was not part of the plan. The Marshall Plan ended in December 1951. The United States government gave out about $12.5 billion under the Plan during its three-and-a-half-year existence. The countries receiving the most were Great Britain, France and West Germany.
Meanwhile, President Truman had started the practice of giving aid for the development of poorer countries. This was signalled in the famous Point Four of his second-term inauguration speech. Initially this assistance was mainly in the form of technical cooperation, but during the 1950s, grants and concessional loans came to play a large role in development aid, within the framework of the Mutual Security Act and alongside foreign military assistance and defense support.
From 1945 to 1953 – U.S. provides grants and credits amounting to $5.9 billion to Asian countries, especially Republic of China/Taiwan, India, Indonesia, Japan, South Korea, Pakistan and the Philippines. In addition, another $282 million went to Israel and $196 million to the rest of the Middle East. The main category was economic aid, but some military aid was provided. All this aid was separate from the Marshall Plan.