Analysis Of U.S.-china’s Foreign Aid To Africa And Its Impact On Liberia’s Socio-economic Development

By: Josephus Moses Gray
Paris, France/ Mobile (+33) 751060690
Email: graymoses@yahoo.com

   Since taking office, President Trump has sought deep cuts in foreign aid spending, aiming to slash nearly a third of the budget with policymakers seeing global economic development as a way to promote U.S. national security.  Despite of President Trump pronouncement, Aid funding levels are at their highest since the period immediately following World War II, when the United States in rebuilding European economies. Aid levels were cut in the 1990s, in the wake of the collapse of the Soviet Union and in 1997 they were less than $20 billion, or 0.8 percent of the overall U.S. budget. Even though USA had had its glorious time in some parts of Africa, in most instances calling the shot and equally stamping its influence and authority in the dos and don'ts in the manner and form things are conducted, however, times have changed, interests have changed and so is priorities changed with the African nations boldly exploring new and additional avenues and partnership of which USA is no longer the only voice of reason and perpetual threat. 
    This study emphasizes that America and China’s foreign aid to Africa was once intended for a win-win benefit for all sides involved in the triangular relations, but due to China and America’s competing interests for Africa, foreign aid from the world’s economic powers has changed to a political and economic weapon purely used for the two countries' common benefit. Several researches have shown that China’s foreign aid to African states and governments is to give Beijing due advantage for oil and other natural resources. Assistant Professor of International Relations at the University of Liberia Graduate School, Josephus Moses Gray offers insight into U.S.-China’s foreign aid on Liberia’s national development and its impacts in Africa.

This work emphasizes that America and China’s foreign aid to Africa was once intended for a win-win benefit for all sides involved in the triangular relations, but due to China and America’s competing interests for Africa, foreign aid from the world’s economic powers has changed to a political and economic weapon purely used for the two countries common benefit. Several researches have showed that China’s foreign aid to African states and governments is to give Beijing due advantage for oil and other natural resources. While for the U.S., the foreign aid assistance helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa.
There are hundreds of definitions but for the purpose of this study, foreign aid is money, materials, and services given or loaned by governments, organizations, and individuals in developed countries to help people in developing countries, while aid flows through several key conduits. For others, it is referred to as development assistance, international aid, economic aid, or, foreign aid but it is different from military aid (OECD, 2013).
According to Source, the most basic definition of foreign aid is resources given from one developed state to another especially under-developed state. In a broad sense it’s regularly understood to mean money, food, materials, goods and manpower given by governments, organizations, and individuals in rich countries to help people of under-developed or poor countries. There are different types of foreign aid and distinct providers of aid. However, the two populace ones are known to be bilateral aid and multilateral foreign aid. Fortunately, many countries that once received lots of foreign aid, such as South Korea, have weaned themselves off from foreign aid.
According OECD (2013) report, the best-known donors of foreign aid are governments, multilateral organizations, inter-governmental, non-governmental, not-for-profit organizations and charities. There are over twenty thousand of them, ranging from tiny grassroots outfits to venerable organizations, such as International Red Cross, Catholic Relief Services, Open Society Initiative, Red Cross, Doctors Without Borders, World Vision and Medicine Sane Frontiers. These charities helped to gathering billions of dollars and thousands of staffers around the world. Some individuals, businesses and institutions also dispense foreign aid.
According to OECD (2017), the U.S. foreign assistance includes loans, contracts, and grants and is categorized in the Green book as either economic assistance or military assistance. U.S., but it does not include debt forgiveness. USAID (2017) accentuated that the Green book is produced to fulfill a congressionally-mandated requirement and legislative authority for the report is the foreign assistance act of 1961.
OECD (2013) states that bilateral aid flows from one government to another and that bilateral aid to poor countries reached its all-time high ofUS$134.8 billion in 2013. While for the U.S., the foreign aid helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa. President Trump in his 2018 address at the United Nations general Assembly in New York pin pointed that “going forward, the U.S. was only going to give foreign aid to those who respect America and, U.S. friends.
A surprise to policymakers, political pundits and stats actors, the leading five countries that provide the largest foreign aid across the globe, China is the winner on the “aid list” rather than the United States (worldatlas, 2018). But according to OECD, by dollar amount, the U.S. is the world’s biggest bilateral aid donor. In 2012 the U.S. handed out $31.2 billion in economic assistance to 182 countries especially poor countries in the world. China Africa Research (2018) argue that China is not Africa’s largest “donor”, that honor still belongs to U.S. (OCED, 2018). However, from 2002, USAID has gradually boosted the total foreign aid budget to a steady amount that rests around $32 billion.
Borgenproject (2018) reported that U.S. gave out $97.67 billion over 18 years in ODA to Africa, with infrastructure projects taking 48 percent of total aid and 26 percent towards humanitarian aid being the top priorities. The analysis of the content of the report showed that the health sector received $6 billion, followed by the agriculture sector$4.2 billion and $3.5 billion was committed to education.
According to the Borgenproject (2018) report, besides states which are members of the Organization of Economic Cooperation and Development(OECD), China does not officially disclose its aid information, but the Chinese government White Paper annually published by Beijing has constantly released figures of its foreign aid assistance. China’s Ministry of Finance has been publishing their annual central government budgets and expenditures since 2003. Relevant budget categories have evolved over the years, though what the budget category of “foreign aid” encompasses has remained fairly unchanged (China Africa Research, 2018).
According to the white paper issued by the Chinese State Council at the end of 2016, China has given around 400 billion yuan ($58 billion, €47.4 billion) in development aid to 166 countries and international organizations over the past six decades. However, studies show that as China’s wealth and influence grows, its development policy is becoming increasingly motivated by a desire to gain access to new markets and economic returns.
Chinese State Council (2017) explained that the overseas Chinese aid” between 2000 and 2014, capturing 4,373 records totaling $354.4 billion (€289.6 billion). This included both traditional aid (about $75 billion, €61.3 billion) and low concessional loans (about $275 billion, €224 billion).
According to the white paper issued by the Chinese State Council at the end of 2016, China has given around 400 billion yuan ($58 billion, €47.4 billion) in development aid to 166 countries and international organizations over the past six decades. However, studies show that as China’s wealth and influence grows, its development policy is becoming increasingly motivated by a desire to gain access to new markets and economic returns.
Chinese State Council (2017) explained that the overseas Chinese aid” between 2000 and 2014, capturing 4,373 records totaling $354.4 billion (€289.6 billion). This included both traditional aid (about $75 billion, €61.3 billion) and low concessional loans (about $275 billion, €224 billion). The William & Mary research paper (2016) about aid data claims that China has committed $350 billion to foreign aid between 2000 and 2014, parallel to the U.S. total of $394.6 billion. The analysis of the publication indicates in terms of aid priorities, similar to the U.S., China committed aid to infrastructure development.
From 2000 to 2013, William & Mary research paper claimed that nearly 60 percent of the total aid went to transportation $29 billion, energy $25 billion and communication $6.9 billion. The Chinese investment in foreign aid to Africa experienced a dramatic increase. By 2009, China gave about RMB 250 billion of foreign aid to the world, with almost half (45.7 percent) of the total Chinese aid going to African countries.
Driven by natural resources and its own international economic development agenda, China drew an obscured line between investment and development assistance. Angola, Ethiopia, Nigeria, Sudan and many other countries rich in natural resources like oil, gas and minerals are on the top recipient list of Chinese foreign aid (William & Mary, 2016). The Chinese development assistance and other transcontinental infrastructure projects to Africa, like $60 billion development assistance has cut the world’s attention, U.S. has reduced its foreign aid budget to Africa.
But the emergence of China as a major player in the development of African countries did heat up the competition with the U.S., especially in terms of using foreign aid as a means to strengthen country’s influence among African countries. China Daily (2018) editorial explained that China is seeking to establish an international development cooperation agency to coordinate its foreign aid, which “gives China get over the U.S. in the approach to managing foreign aid to Africa.
On the critical issue of triangular relations regarding U.S., China and Liberia, political pundits and academics consider the two big economic powers’ aid as not all about just resources, but to undercut one another existence on the African continent, and gain influence over the other. Academics see both U.S. and China’s foreign aid to African governments, nations and states purely based several factors and that factors include domination, security, fight against terrorism, respect for “one China policy. Several researches have shown that China’s foreign aid to African states and governments is to give Beijing due advantage for oil and other natural resources. While for the U.S., the foreign aid assistance helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa. It is against this backdrop that a comprehensive analysis is put into place to determine which country is the larger donor of foreign aid to Africa? Is it the United States or China?
In other to contextualize U.S. and China’s foreign aid to African government and states, I considered it appropriate from a broader background to define and discuss foreign aid. There are hundreds of definitions but for the purpose of this dissertation, foreign aid is money, materials, and services given or loaned by governments, organizations, and individuals in developed countries to help people in developing countries, while aid flows through several key conduits. For others, it is referred to as development assistance, international aid, economic aid, or, foreign aid but it is different from military aid.
According to USAID (2017) report, more than two hundred countries receive U.S. foreign aid, but said it unduly goes to a few, however, the top five all receiving over $1 billion per year as of 2016: Iraq ($5.3 billion, Afghanistan $5.1 billion, Israel $3.1 billion, Egypt $1.2 billion, and Jordan $1.2 billion. In fiscal year 2017, the U.S. government allocated the following amounts for aid: Total economic and military assistance: $49.87 billion. USAID (2017) statistical country by country report across the across Africa, the Liberian-state, a traditional ally of the United States of America (USA) has persistently received foreign aid assistance from the American government. However, figures regarding U.S. FAA to Liberia focus on the period 2004-2017 amounts to US$3,701,080 billion. Africa receives about $133.7 billion each year from official aid, grants, loans to the private sector, remittances (Worldatlas, 2018).
The activities covered under the U.S. FAA to Liberia include energy sector project, forest incomes for environmental sustainability, strengthening political parties Programs, advancing partners and community-base, health care, basic education, good governance, agriculture cooperative development, environmental protection, rule of law and justice, social empowerment and support towards government programs.
Reuters-com (2017) reported that President Trump’s proposed foreign aid cuts have sparked a bipartisan effort in Congress to resist them. Among the proposed budgets, foreign aid to Africa has been affected the most, expecting a 35 percent reduction (David, 2018). On the other side of the world, China is constantly boosting its aid package to African countries. Here is a comparison between the U.S. and China’s foreign aid to Africa over the years. According to a Borgen project publication, in the past decade, U.S. foreign aid has maintained at a steady level of US$32 billion distributed over 200 countries. The Official Development Assistance (ODA) focuses on three regions: Asia, Europe and Africa. Huffington post publication showed that from 1980-2012, almost US 22 billion went to sub-Saharan countries like Sudan, Ethiopia, Kenya and Congo.
Accordingly, while the overall ODA budget underwent a 17-fold increase from 1960 to 2006, aid to Africa has increased by almost 3,000 percent, from US$211 million to US$5.6 billion. The U.S. gave out US$97.67 billion over 18 years in ODA to sub-Saharan Africa, with infrastructure projects (48% of total aid) and humanitarian aid (26 percent) being the top priorities. The health sector was given US$6 billion, the agriculture sector received US$4.2 billion and US$3.5 billion was committed to education. China has generated tremendous impact on the aid landscape in Africa since its rapidly increased activities. Unlike countries in the Organization of Economic Cooperation and Development, China does not officially disclose its aid information. In a research published recently, Aid Data (2014) disclosed that a research lab at William and Mary, claimed China committed US$350 billion to foreign aid between 2000 and 2014, running close to the U.S. total of US$394.6 billion.
According to Brooking Institute, from US$210 million in 2000 to US$3 billion in 2011, Chinese investment in foreign aid to Africa experienced a dramatic increase. By 2009, China gave about RMB 250 billion of foreign aid to the world, with almost half (45.7 percent) of the total Chinese aid going to African countries. Driven by natural resources and its own international economic development agenda, China drew an obscured line between investment and development assistance. Angola, Ethiopia, Nigeria, Sudan and many other countries rich in natural resources like oil, gas and minerals are on the top recipient list of Chinese foreign aid.
According to Aid Data (2014), in terms of aid priorities, like the U.S., China committed aid to infrastructure development, but with different focuses. From 2000-2013, about 60% of the total aid went to transportation (US$29 billion), energy (US$25 billion) and communication (US$6.9 billion). Aid Data (2014) asserted that after China’s arrival in Africa in early 2000, U.S. foreign aid also shifted to prioritize health and education. U.S. spending on the top three sectors for Chinese aid are only at 2.6 percent, 0.8 percent and 0.07 percent of the total ODA amount.
Wan (2018) revealed that China phenomenal economic reform in the post-Mao era, Beijing has built strong relationships with developing economies, continuing to provide aid in a bid to promote South-South cooperation. Chinese foreign aid is often referred to as having “no political strings attached,” and is therefore a more attractive option for many non-Western countries, he, however, wondered if really free of constraints? Chinese foreign aid expenditures increased steadily from 2003 to 2015, growing from USD 631 million in 2003 to nearly USD 3 billion in 2015. Foreign aid expenditures fell by nearly USD 750 million from 2015 to 2016. Foreign aid levels rose in 2017 to USD 2.45 billion. However, this amount is still less than the annual aid expenditures from 2011 to 2015 (China Africa Research, 2018).
According to White Paper (2011) published on China’s foreign aid, published by the State Council, “Financial resources provided by China for foreign aid mainly fall into three types: grants (aid gratis), interest-free loans and concessional loans. Kitano & Harada (2016) explained that the first two come from China’s state finances, while concessional loans are provided by the Export-Import Bank of China as designated by the Chinese government foreign aid expenditure is part of the state expenditure, under the unified management of the Ministry of Finance in its budgets and final accounts system.
China Africa Research (2018) disclosed that from 2000 to 2017, the Chinese government, banks and contractors extended US $143 billion in loans to African governments and their state-owned enterprises. Angola is the top recipient of Chinese loans, with $42.8 billion disbursed over 17 years. Chinese loan finance is varied. Some government loans qualify as “official development aid.”
But other Chinese loans are export credits, suppliers’ credits, or commercial, not concessional in nature. According China Africa Research (2018) report, in 2017, the gross annual revenues of Chinese companies’ engineering and construction projects in Africa totaled US$51.19 billion, a 0.5% decrease from 2016. The top 5 countries are Algeria, Angola, Ethiopia, Kenya, and Nigeria. These top 5 countries account for 53% of all Chinese companies’ 2017 construction project gross annual revenues in Africa; Algeria alone accounts for 15% and that the number of Chinese workers in Africa by the end of 2017 was 202,689.
According to OECD, by dollar amount, the U.S. is the world’s biggest bilateral aid donor. In 2012 the U.S. handed out $31.2 billion in economic assistance to 182 countries especially poor countries in the world. The money is distributed by more than 21 U.S. government agencies, mainly within the departments of State, the Treasury, Agriculture, and Health and Human Services. Afghanistan was the top recipient, taking in close to $3 billion while Kenya and South Sudan placed next; Liberia is persistent receptionist of foreign aid (Organization for Economic Co-operation and Development, 2013).
According to the OECD (2013), multilateral organizations bring together multiple countries and other entities for collective action under the term “international community”. For instance, the World Bank is one of the biggest aid donor; the Bank is funded mainly by the governments of most of the world’s countries, the World Bank gives billions in loans and grants every year conformity with its goals to fight and reduce poverty. But what are the impacts of foreign aid, does it actually work? These are unique but keen argued question. The World Bank and the International Monetary Fund have also come under heavy criticism for the conditions they often impose with their loans, such as insisting recipients eliminate state subsidies for goods, which drives consumer prices way up.
OECD (2013) revealed that during the cold war, countless millions of dollars in aid wound up in the pockets of pro-American dictators from Latin America to Africa instead of going to help their long-suffering people. Source Generators given to power slum neighborhoods break down because no one provides spare parts to maintain them. Laptops gather dust in rural schools because well-intentioned donors didn’t realize the locals have no electricity. Sometimes, despite the best of intentions, aid even backfires. Giving away boatloads of food can wipe out the market for local farmers’ crops, bankrupting them. Worse, aid can fuel conflict. Rival militias battle each other to snatch donated food. Aid to refugees fleeing Rwanda in the mid-1990s ended up subsidizing rebel Hutu fighters (source).
On the other hand, there are plenty of examples of aid making things better. The Green Revolution spearheaded by Norman Borlaug, an agricultural scientist backed by the Rockefeller and Ford foundations, brought new strains of high-yielding wheat and rice, pesticides, synthetic fertilizers, and other modern agricultural techniques to many poor countries in the 1960s and 1970s, enormously boosting their food production. Source The Global Alliance for Vaccinations and Immunizations, launched in 2000 by several governments, international organizations, and foundations, including the Bill and Melinda Gates Foundation (which supports Take Part World), has immunized more than 370 million children in 77 countries against a range of diseases.
Sadly, the last two decades have seen historically unprecedented gains in almost every significant measure of human well-being. In the early 1990s, for instance, some 12 million kids under age five were dying every year, mostly because of preventable diseases. . Aid can’t take all the credit for all these gains, but it can claim some.
Source After his takeover in 1949, Mao Zedong’s China went unrecognized for years by the United States. China was also barred from the United Nations by an American veto. Instead, the U.S. supported the Chinese Nationalist government in Taiwan. Unlike his predecessor, Richard Nixon longed to be known for his expertise in foreign policy. Although occupied with the Vietnam War, former President Nixon also initiated several new trends in American diplomatic relations. Nixon contended that the communist world consisted of two rival powers — the Soviet Union and China. Given the long history of animosity between those two nations, Nixon and his adviser Henry Kissinger, decided to exploit that rivalry to win advantages for the United States. That policy became known as triangular diplomacy.
The United States had much to offer China. Since Mao Zedong’s takeover in 1949, the United States had refused recognition to the communist government. Instead, the Americans pledged support to the Chinese Nationalist government in Taiwan. China was blocked from admission to the United Nations by the American veto, and Taiwan held China’s seat on the Security Council.
Source in June 1971 Kissinger traveled secretly to China to make preparations for a Presidential visit. After Kissinger’s return, former President Nixon surprised everyone by announcing that he would travel to China and meet with Mao Zedong. In February 1972, Nixon toured the Great Wall and drank toasts with Chinese leaders. Soon after, the United States dropped its opposition to Chinese entry in the United Nations and groundwork was laid for the eventual establishment of diplomatic relations. As President Nixon’s national security adviser, Henry Kissinger made a secret trip to arrange the first-ever Presidential visit to China in 1972.
Impact of Foreign Aid on Liberia’s Socioeconomic Development
This work delves into the impact of foreign aid on post-conflict Liberia’s socio-economic development and looks deep into how Liberia has made used of aid in its post conflict recovery program, to positively impact national development. Besides, it also seeks to determine how funds and knowledge are transmitted to Liberia and interaction between recipients and donors with respect to the processes of foreign aid on the country’s socio-economic recovery and development program. It further analyzes how aid is being delivered and managed at sectorial level with particular focus on mutual accountability and results attainment. The flow of foreign aid to Liberia has been a subject of discussion especially following the notorious war and its aftermath.
However, on the critical issue of triangular relations regarding U.S., China and Liberia, political pundits and academics consider the two big economic powers’ aid as not all about just resources, but to undercut one another’s existence on the African continent, and gain influence over the other. Academics see both U.S. and China’s foreign aid to African governments, nations and states purely based on several factors and such factors include domination, security, fight against terrorism and respect for “one China policy. Several researches have shown that China’s foreign aid to African states and governments is to give Beijing due advantage for oil and other natural resources. While for the U.S., the foreign aid assistance helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa.
The importance of foreign aid on Liberia’s socio-economic development has always been a topical subject of interest and debate among political pundits, professionals, intellectuals, ordinary citizens and aid workers respectively. The nation’s reconstruction in the areas of socio-economic growth and development, and eradication of extreme poverty and hunger largely hinges on the foreign support from Liberia’s development partners. During the period of the case of this thesis Liberia was blessed to have received from various corners of the world international support in the form of loan, grant, projects and technical assistant
It is moreover the conviction of this study to make a strong motion that Liberia’s socio-economic development entirely depends on the magnitude at which various stakeholders join hands and aim at managing and properly utilizing foreign aid and other international assistance. World Bank (2002) recommends that, one of the ways of fighting poverty across the globe is realizing the goal of provision of aid to less developed countries (LDCs) by more developed countries (MDCs). Such aid is supported by WB & IMF – directed economic structural adjustment programs. One may underscore the fact that the various programs have been tailor-made to focus on specific developmental targets hence attainment of socio-economic development in some way.
The pivotal or multi-million dollar question that arises then is: to what extent has foreign aid contributed to the socio-economic development of post-war Liberia’s development? And to answer this question, one needs to remember what Mushi (1982) says about positive aid: that aid is developmental only if it lays the foundation for its future rejection. Since World War II, foreign aid has been fueled by both political and economic motivations of the ruling classes in the western donor nations. A classic example is the United States of America Foreign Aid, the Marshall Plan (1948) that was aimed at rehabilitating the shattered economies of Western Europe When the balance of Cold War interests shifted from Europe to the World in the mid-1950s, the policy of containment embodied in the U.S. aid program dictated a shift in emphasis toward political economic and military support for friendly less developed nations especially those considered geographically strategic (Todaro, 1983).
Liberia, like other post conflict countries in the world today is no exception to the dependence on foreign aid. While Liberia enjoyed relative peace and stability since the end of the civil war in 2003, the country remains fragile on the environmental, economic, security, political and societal dimensions according to the 2016 Organization for Economic Co-operation and Development (OECD) fragility framework. Most notably are the economic aspect of fragility due the country’s weak economic fundamentals, low-skilled human capital and high vulnerability to exogenous shocks, as well as the political dimension due to issues of capacity, corruption and concentration of power.
The end of 14 year civil war brought with it the assurance of greater international economic assistance. Along with the global presence of non-for-profit organizations, and official donors stepped up their aid commitments. According to the OECD, in 2012, Liberia received $571 million dollars in Official Development Assistance from the World Bank and IMF. In the same year, the United States provided Liberia with $181 million aid dollars. As a result, Liberia received three-times more ODA than the Sub-Saharan average (Organization for Economic Cooperation and Development OECD, 2014).
Liberia has benefited from many other donors such as the United States of America, Republic of China, European Union, Federal Republic of Germany, Economic Community of West African States (ECOWAS), African Union (AU), France, Norway, Danish, SWISS, and Sweden Governments, Arab League, United Nations, IMF, WTO, and ILO. Liberia also became entitled to generous debt forgiveness in 2006 under the World Bank/IMF HIPC initiative (World Bank, 2014).
The Ministry of Finance and Development Planning (MFDP) established 2013 by an Act of the National Legislature, replaced the Ministry of Finance and the Ministry of Planning and Economic Affairs. It is responsible for the formulation, institutionalization and administering of economic development, fiscal and tax policies for the promotion of sound and efficient management of financial resources of the government. As a custodian of the country’s economy, the MFDP combines public finance, development planning and economic management expertise and experience to effectively manage the economy.
Its mandate is in line with international financial management best practices. Within the MFDP is situated the Aid Management and Coordination Unit (AMCU) the center for all aid operations. AMCU is responsible to ensure effective coordination of donor funding, it works closely with Ministries Agencies and Commissions (MACs) as-well as Development Partners on every step of the Aid Cycle to secure and implement external assistance and in line with the Public
U.S –China foreign aid to Africa: Political and Economic implications
According to USAID, the current U.S. foreign aid system was created 1961 Foreign Assistance Act which attempted to streamline the government’s efforts to provide assistance around the world. The statute defines aid as “the unilateral transfers of U.S. resources by the U.S. Government to or for the benefit of foreign entities.” These resources include not just goods and funding, but also technical assistance, educational programming, health care, and other services.
In order to present an accurate analysis of U.S. foreign aid assistance to African governments and states, and compare that to China’s foreign aid assistance to African government, this study analyzed U.S. Overseas Loans and Grants”, informally known as the “Green book”, is an annual report submitted to Congress required by the Foreign Assistance Act of 1961. The detailed report summarizes U.S. government foreign assistance data from 1945 to the present on a country by country basis. It is the official record of the level and geographic distribution of U.S. foreign assistance (USAID, 2017).
However, on the critical issue of triangular relations regarding U.S., China and Liberia, political pundits and academics consider the two big economic powers’ aid as not all about just resources, but to undercut one another existence on the African continent, and gain influence over the other. Academics see both U.S. and China’s foreign aid to African governments, nations and states purely based several factors and that factors include domination, security, fight against terrorism, respect for “one China policy. Several researches have showed that China’s foreign aid to African states and governments is to give Beijing due advantage for oil and other natural resources.
While for the U.S., the foreign aid helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa. It is against this backdrop that a comprehensive analysis is put into place to determine which country is the larger donor of foreign aid to Africa? Is it the United States or China? In other to contextualize U.S. and China’s foreign aid to African government and states, the researcher considered it appropriate from a broader background to define and discuss foreign aid.
The emergence of China as a major player in the development of African countries did heat up the competition with the U.S., especially in terms of using foreign aid as a venue to strengthen the donor’s power among developing countries. Chinese development assistance and other transcontinental infrastructure projects to Africa, like US$900 billion to the One Belt One Road Initiative, are growing, but the Trump administration aims to slash the foreign aid budget in 2018, especially the aid to Africa, citing corruption as the main reason. The proposed cut encountered fierce opposition in Congress and was deemed simplistic and arbitrary by Senator Patrick Leahy, the Senate Appropriations Committee’s top Democrat.
According to Reuters (2018) report, China is seeking to establish an international development cooperation agency to coordinate its foreign aid, which “gives China an advantage over the U.S. in the approach to managing foreign aid to Africa,” said China Daily in an editorial on former Secretary Rex Tillerson’s visit to China. Congress will continue to challenge Trump’s proposed cuts and the fight against poverty in Africa will continue.
Foreign aid as a political and economic weapon?
According OECD (2013) report, the best-known donors of foreign aid are governments, multilateral organizations, inter-governmental, non-governmental, not-for-profit organizations and charities. There are over twenty thousand of them, ranging from tiny grassroots outfits to venerable organizations, such as International Red Cross, Catholic Relief Services, Open Society Initiative, Red Cross, Doctors Without Borders, World Vision and Medicine Sane Frontiers. These charities helped to gathering billions of dollars and thousands of staffers around the world. Some individuals, businesses and institutions also dispense foreign aid.
OECD (2013) states that bilateral aid flows from one government to another and that bilateral aid to poor countries reached its all-time high ofUS$134.8 billion in 2013. According to OECD, by dollar amount, the U.S. is the world’s biggest bilateral aid donor. In 2012 the U.S. handed out $31.2 billion in economic assistance to 182 countries especially poor countries in the world. The money is distributed by more than 21 U.S. government agencies, mainly within the departments of State, the Treasury, Agriculture, and Health and Human Services. Afghanistan was the top recipient, taking in close to $3 billion while Kenya and South Sudan placed next; Liberia is persistent receptionist of foreign aid (Organization for Economic Co-operation and Development, 2013).
According to the OECD (2013), multilateral organizations bring together multiple countries and other entities for collective action under the term “international community”. For instance, the World Bank is one of the biggest aid donor; the Bank is funded mainly by the governments of most of the world’s countries, the World Bank gives billions in loans and grants every year conformity with its goals to fight and reduce poverty. Another example is specialized UN agencies like United Nations International Children’s Emergency Fund (UNICEF) raises money from governments, individuals, corporations, and foundations to promote education, health care, and disaster relief around the world.
But what are the impacts of foreign aid, does it actually work? These are unique but keen argued question. According to Independent UK(2016), on the macroeconomic level, some economists say that foreign aid fosters dependency and corruption in the recipient countries. The World Bank and the International Monetary Fund have also come under heavy criticism for the conditions they often impose with their loans, such as insisting recipients eliminate state subsidies for goods, which drives consumer prices way up.
OECD (2013) revealed that during the cold war, countless millions of dollars in aid wound up in the pockets of pro-American dictators from Latin America to Africa instead of going to help their long-suffering people. Source Generators given to power slum neighborhoods break down because no one provides spare parts to maintain them. Laptops gather dust in rural schools because well-intentioned donors didn’t realize the locals have no electricity. Sometimes, despite the best of intentions, aid even backfires. Giving away boatloads of food can wipe out the market for local farmers’ crops, bankrupting them. Worse, aid can fuel conflict. Rival militias battle each other to snatch donated food. Authored by Josephus Moses Gray, Assistant Professor of International Relations and Foreign Policy Studies at the University of Liberia Graduate School of International Studies, Monrovia, Liberia. Contact (Monrovia) (231) 880330299/ Paris, France/ Mobile (+33) 753467742/ Email:graymoses@yahoo.com