When the Department of Defense awarded Halliburton subsidiaries billions of dollars to rebuild Iraq in an uncompetitive bidding process, taxpayers and members of Congress alike cried foul. Liberals at Swarthmore College bemoaned the mixture of domestic business interests with foreign policy and reconstruction efforts. Initially, foreign companies were formally barred from the lucrative reconstruction projects. This spring, Halliburton delayed billing the DOD over $140 million under allegations of overcharging for military meals and energy supplies. Where the DOD controls reconstruction in Iraq, the United States Agency for International Development (USAID) controls foreign development aid. While the bloated and uncompetitive contracts to Halliburton attracted a hail of criticism, USAID emerges largely unscathed from criticism despite a legacy of brazenly self-interested and inefficient foreign aid policy. USAID balances two mandates: protecting American interests and promoting international development. Tied aid-- grants or loans which require consumption of the donor country’s goods and services-- is an obvious and insidious manifestation of this dual mandate. An examination of American aid policy, a colonial precedent to tied aid, and the experience of Egypt from 1974-1989 reveals how tied aid poisons and adulterates the practice of development.
Tied aid: “Seductive” but “seriously wrong” (Hancock 61)
Tied aid is not a win-win situation. A balance between domestic interests and foreign development restricts the full potential of foreign aid. Michael Maren’s The Road to Hell offers a scathing indictment of foreign aid infused with self-interest and laments how “the hum...
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... Philip Publishers Ltd: United States, 2002.
Campbell, Catherine. ‘Letting Them Die’: Why HIV/AIDS Intervention Programmes Fail. Indiana University Press: United States, 2000.
Hancock, Graham. Lords of Poverty. First Atlantic Monthly Press: Great Britain, 1989.
Maren, Michael. The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity. The Free Press: New York, NY, 1997.
Mitchell, Timothy. Rule of Experts: Egypt, Techno-Politics, Modernity. University of California Press: Berkeley and Los Angeles, California, 2002.
Radelet, Steven. Challenging Foreign Aid: A Policymarker’s Guide to the Millennium Challenge Account. Kirby Lithographing Company: United States, 2003.
Student Global AIDS Campaign (SGAC) website. http://www.fightglobalaids.org/files/phatfile/appropriationskit.doc
USAID website. http://www.usaid.gov/about_usaid.
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