What Aid Really Is

Today I read Nicholas Kristof's column, "Bono, Foreign Aid and Skeptics". He presented the complexities of aid relief well, and was careful not to gloss over any of the issues. I would consider myself one of those skeptics of direct foreign aid, due to the rock-n-roll economics that some of its policies are based on, but I found myself agreeing with much of what Kristof said.

That is, until I read the following passage:

...when we pay a few hundred dollars for fistula surgery so that a teenage girl no longer will leak urine or feces for the rest of her life, that operation may not stimulate economic growth. But no one who sees such a girl’s happiness after surgery can doubt that such aid is effective, for it truly saves a human being.

As a liberal-minded economics major, I found this appalling. Not the part about aid creating happiness and therefore being effective, but the seemingly innocent statement that a surgery like this "may not stimulate economic growth."

This surgery will most definitely stimulate economic growth. Most would look at this act of aid as a handout, but I see it as an investment in human capital. By creating a better life for this teenager, and substantially lengthening it, this person is free to live as she pleases, while participating in the local and global economy.

People do not like to think of human life in potential dollar amounts, but I think it is necessary when dealing with the type of people that run our world. If people continue to look at aid as charity for helpless, destitute people half-way around the world, it will never effectively solve problems. Aid cannot be useful until it is seen for what it really should be, an investment in humanity and therefore the global economy.

Note: I submitted these comments to Nicholas Kristof on his blog, On the Ground. If he responds, I will post it here.

Changing the farm bill to think globally and act locally

I read an article today in the New York Times regarding food aid to Third World countries and the revision of the current farm bill, Kenyan Farmers' Fate Caught Up in U.S. Aid Rules.

The Bush administration is trying to change the current aid program, which only allows for the U.S. to buy domestic crops to distribute to needy countries. By removing this provision, the government would be able to buy foreign crops (like in Kenya) to distribute to those who need it locally. The Bush administration is trying to change the law so that $300 million in crop aid could be bought locally in cases of emergencies. Even though the "case of emergencies" stipulation makes this proposed law a small concession, it is surprising to see the President advocate for more spending on what seems to be a very effective plan.

Tom Harkin (D-IA), the chairman of the Senate Agricultural Committee, is proposing a $25 million test program to see if the administration idea will work. This proposal, even though it is a small earmark, is being met with resistance from both the House and the Senate. Because US tax dollars would go towards other countries' products, and then those products would go to people with the same nationality of the purchase, Congressmen are not willing to make these changes proposed.

On a basic level, the US shipping food over to needy countries is ridiculous. By buying food abroad to distribute locally, the US will increase growth for those countries and help poor farmers increase their income. Shipping aid crops to foreign countries is costly and ineffective. Policymakers' stubbornness on this issue just shows how reluctant the US is to effectively help those who need it.