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Trends in US Foreign Assistance November 2, 2009

Posted by Rebecca Williams in Analysis.
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A CRS report recently highlighted two important trends regarding US foreign assistance: there is more of it and more US agencies are involved in doing it.

According to the report, US foreign assistance funding has increased significantly since 9/11, from roughly $15 billion in FY 2001 to more than $45 billion in FY 2007. Moreover, there as been an increase in the number of agencies implementing foreign assistance, from 19 departments and agencies reported disbursing foreign assistance in FY 2001 compared to 24 in FY 2007.  As BFAD has reported, with no overarching mechanism for coordination, the increased diaspora of foreign assistance programs weakens the strategic integrity of US foreign assistance, as varying agencies objectives may duplicate and/or undermine each others programs.

Foreign assistance

Source: CRS Report 7-5700.  “Other” includes: Institute of Peace, African Development Foundation, Broadcast Board of Governors, Commerce, Justice, Labor, Interior, Transportation, EPA, Federal Trade Commission, Inter-American Foundation, National Science Foundation, Open World Leadership, OPIC, Trade & Development Agency, Postal Service.

As the graph demonstrates, an increased portion of US assistance is being disbursed by the Department of Defense (DOD), largely due to large increases in military and reconstruction assistance associated with the ongoing conflicts in Iraq and Afghanistan.  In FY 2001, DOD disbursed 29 percent of US foreign assistance which has increased to 60 percent in FY 2007.  Conversely, nearly half of US foreign assistance (48 percent) was disbursed by USAID in FY 2001, while in FY 2007 USAID disbursed 23 percent.  The State Department also experienced a decline, from 11 percent in FY 2001 to 7 percent in FY 2007.

CRS also compared total US foreign assistance disbursements from FY 2001-FY2007, excluding funding to Iraq and Afghanistan.  When excluding funding to these two countries, USAID’s portion remains the largest with 38 percent, followed by State at 23 percent, and DOD at 21 percent.  However, while DOD’s share does decrease outside of spending in Iraq and Afghanistan, DOD still remains a significant player in development assistance dispersal.

The report highlights that most analysts believe that US foreign assistance activities need to be coordinated or consolidated into a  modern national foreign assistance strategy that defines objectives.  The executive branch is currently conducting the Quadrennial Defense Review, the new Quadrennial Diplomacy and Development Review, and interagency reviews of security assistance authorities and development programs. Congress is also taking on these issues, as both authorizers and appropriators for defense and foreign affairs are considering legislative and statutory provisions that would extend DOD authorities, reform those of the State Department, or reassign responsibilities for such programs.  These are important steps, as an agile and effective foreign assistance program is vital to US national security.

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