Strings Attached: Foreign Aid Isn’t Charity, It’s Used for Political and Economic Influence

Strings Attached: Foreign Aid Isn’t Charity, It’s Used for Political and Economic Influence

In December 2020, prior to his departure from the US presidency, Donald Trump offered the Philippines a gift: US$29 million worth of military equipment. In response, Philippine Defence Secretary Delfin Lorenzana, called the gift “a symbol of the Philippines and the United States’ continued warm alliance”.

This gift is by no means unusual. According to Reuters, the Philippine’s biggest source of arms is the United States, which has donated almost $1 billion worth of defence equipment to the Philippines since 2000. The weaponry ranges from surveillance drones to small arms. These gifts have continued despite the Philippine government’s track record of human rights violations, the innocent lives taken in its “war on drugs” and its mistreatment of the poor and the displaced.

Some view these donations as clever political maneuvering by the United States– maintaining a strong alliance with its former colony is a hedge against a rising China.

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US Defence Secretary Jim Mattis dismissed these claims, telling reporters in 2017, “I don’t attach very much significance to it, some trucks or guns being dropped off to a country that’s fighting terrorists right now.” The ‘terrorists’ eluded to here are the communist New People’s Army and armed groups such as the Moro Islamic Liberation Front (MILF) and its breakaway faction the Bangsamoro Islamic Freedom Fighters (BIFF).

But does anyone really believe that these ‘gifts’ are just charitable contributions by the United States to help stop the ‘threat’ of communism and Islamic forces in the Philippines? A closer look at the US-Philippine alliance reveals a different story.

Filipinos assorting Manila hemp fiber in a rope factory in the early 20th century under American rule. Source: Flickr.

In 1898, after 333 years of Spanish colonial rule, the Philippines declared its independence. However unbeknownst to them, the US had plans for economic expansion into Asia and purchased the Philippines from Spain for $20 million in what was known as The Treaty of Paris. America’s treachery led to the two-year Philippine-American War, ending with the defeat of the Filipinos and marking the beginning of American Imperialism in Asia. In a nutshell, the Americans ignored the people’s demands for self-governance and instead bought the country illegitimately so that it could expand its white supremacy and capitalist interests in the lucrative markets of Asia. United Senator Albert J. Beveridge said as much in his speech to congress in 1900:

“The Philippines are ours forever. And just beyond the Philippines are China’s illimitable markets. We will not retreat from either. We will not repudiate our duty in the archipelago. We will not abandon our opportunity in the Orient. We will not renounce our part in the mission of our race, trustee, under God, of the civilization of the world. And we will move forward to our work with gratitude and thanksgiving to Almighty God that He has marked us as His chosen people, henceforth to lead in the regeneration of the world.

Our largest trade henceforth must be with Asia. The Pacific is our ocean. . . . And the Pacific is the ocean of the commerce of the future. . . . The power that rules the Pacific, therefore, is the power that rules the world. And, with the Philippines, that power is and will forever be the American Republic.”


Foreign policy under the guise of aid

Even under the guise of foreign aid, the United States is its number one priority. On the USAid website, prior to its removal in 2006, it read: “The principal beneficiary of America’s foreign assistance programmes has always been the United States. Close to 80% of the US Agency for International Development’s contracts and grants go directly to American firms” creating “new markets for American industrial exports and… hundreds of thousands of jobs for Americans”.

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The US isn’t alone in its “me first” attitude when it comes to foreign aid. In 2017, former UK Prime Minister Theresa May announced that the country’s foreign aid budget would serve broader political purposes and promote British trade. “I am unashamed about the need to ensure that our aid programme works for the UK,” she said.

“I am committing that our development spending will not only combat extreme poverty, but at the same time tackle global challenges and support our own national interest. This will ensure that our investment in aid benefits us all, and is fully aligned with our wider national security priorities.”

Even when foreign aid is offered, there is little guarantee that it reaches the people who need it most. The largest donor of development aid in the world, the EU, contributes €50 billion a year but a study found that less than 10% of this aid reaches the world’s poorest nations. It found that some countries were recording domestic spend on students, refugees and security in the aid budget (known as inflated aid) – even though these funds never actually left the EU. In addition, over 50% of all reported contracts were still awarded to organisations in the donor country.

Women at Hawzen Market at Tigray, Ethiopia. Photo: Rod Waddington.

Another research paper titled Why Donors Give Aid and to Whom?concluded that the provision of aid is still largely motivated more by the donors’ own objectives rather than development needs of aid recipients. It states: “Most donors have continued to use aid as a tool for achieving different self-interest. The bulk of the available evidence indicates that by and large there is a weak correlation between what the majority of donors say and what they practice in terms of aid allocation. It is evident from their aid allocation policies, especially of the larger OECD donors, that humanitarian and developmental needs of recipients are secondary and donors’ own interests are primary drivers.”

Then there’s the fact that foreign aid is often given to developing nations in the form of loans; causing crippling debt and resulting in worsening inequality between the wealthiest and poorest countries. In 2017, the Guardian reported that developing countries had paid $4.2 trillion in interest payments since 1980 – an amount significantly higher than the aid that they received in that timeframe.

With COVID-19 devastating economies around the world but undoubtedly hitting the poorest and most vulnerable nations the hardest, what these countries need more than foreign aid is a complete overhaul of the entire system.

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Cover image by Rod Waddington.

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