January 25th, 2014
12:49 PM ET

The myths of foreign aid

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By Fareed Zakaria

I’m in Davos, Switzerland, the site of the World Economic Forum's annual meeting. I usually use our “What in the World” section to give you my thoughts about something that struck me. But I’m going to cede this space to someone else today – Bill Gates.

His annual letter is out. It debunks three myths about fighting poverty and has gotten attention for its claim that by 2035, there will be no more poor countries in the world (using today’s definition of poor, of course).

But what caught my eye was myth number two: foreign aid is a big waste. Actually, this might not strike many as a myth. Lots of people believe that what we send abroad doesn’t really help countries alleviate poverty and develop. Well, Gates does a very nice job carefully explaining why foreign aid has in fact been a pretty spectacular success. The largest piece of evidence for this is literally the life-saving effect of aid.

Gates gives us the numbers:

– Since 2000, 440 million children have been immunized against vaccine-preventable diseases

– Since 1988, 2.5 billion children have been immunized against polio

The results are stunning. Twenty-five years ago, the number of polio cases each year was 350,000. In 2013 it was 400.

And it’s not just about health either – the percentage of children in school in Africa has gone from the low of the 40 percents to 75 percent over the last forty years.

Savings people’s lives, making them healthy and ensuring that they get an education is not simply and deeply a moral thing to do – it has practical benefits as well. These people now work, earn a living, and help make their countries less reliant on aid. Many countries that received large amounts of foreign aid from the West are now developed enough that they don't need it anymore: among them, China, Mexico, Brazil, Malaysia, Singapore, South Korea, Morocco, Peru. In fact, China is now a big donor of foreign aid.

Part of the problem here is that we lump together all kinds of aid. There’s aid that was given during the Cold War – say to Mobutu Sese Seko, who led what was then Zaire – for purely strategic reasons with no attempt to develop the country. There is aid for research and science. There is aid for public health. And then there is aid for general economic development.

The reality is that foreign aid programs have to be well designed, properly targeted, and well implemented – just like any other effort in the real world, whether it be public or private. They must be monitored for corruption and unintended effects. But when these conditions apply – and they do in many, many cases – foreign aid has a big positive effect.

And how much are we spending to get these benefits? Americans guess that their government spends 25 percent of its annual budget on aid. How much should it be spending, they are asked? Ten percent is the answer. Well, the fact is that the United States spends less than one percent of its budget on aid. That’s $30 for every American. Is this money a waste?

If you add up all the money spent on health-related aid since 1980, and divide that by the number of children's deaths that have been prevented, you get a figure of just $5,000 to save a child's life.

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Topics: Aid • Development • United States • What in the World?

soundoff (59 Responses)
  1. chrissy

    @ sly, NOT american CITIZENS! The vast majority of the CITIZENS are against this country going to war in ANY country! Unfortunately we dont get a say in it! And the warmongering twits in congress do not care what the people in this country want they only care what their special interest groups want!

    January 27, 2014 at 8:56 pm | Reply
  2. chrissy

    And they (whomever) can have as many phony polls they want, they are never accurate because they dont ask PEOPLE what they feel about whatever topic they are talking about!

    January 27, 2014 at 9:00 pm | Reply
  3. Rick McDaniel

    The issue here, is the same as IN America.

    If all you do is give hand outs........what does that accomplish? Dependency.

    If you do not empower people to EARN their way......they will not!

    So your argument is clearly debunked by a single example. Haiti. The world poured billions of aid into that country.......but they still sit in their tent cities, and wait for others to come and restore their country. They are doing NOTHING for themselves.

    January 28, 2014 at 11:30 am | Reply
    • Ashley Walker

      Hey Rick, I would suggest that you look at the actual article that Bill Gates put out...because he proves against exactly what you are saying. Also check out another article http://www.micahchallengeusa.org/blog/item/5-more-myths-busted .... When you do the research you will see how beneficial these investments are not only to the countries, but to ourselves in return.

      April 7, 2014 at 4:06 pm | Reply
  4. chrissy

    Only one problem with your theory @ Rick. The people of Haiti didnt get those Billions youre talking about, their government did! Thats why theyre still living in tents.

    January 28, 2014 at 7:09 pm | Reply
  5. dion

    Thats all well and good but how about using that money on the Citizens who paid for all that aid. If every American was fed, lived nicely and had a job yeah..we can give but we have homeless, we have sickness, we have infrastructure that needs rebuilding: roads, bridges, schools and public facilities. Why is it we always GIVE GIVE GIVE? and we never GET GET GET? As many here have said this charity is endless and the recipients are getting used to it. I don't get it when some official want to give some country money when if you look in their backyard they need it as well. The USA cannot be a ATM for the world. Let them fix their own problems but again.....charity starts at home.

    February 2, 2014 at 11:53 pm | Reply
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