Module 24: Global Poverty and Foreign Aid in US Foreign Policy

1. How do different measures such as national GDP, average income (GDP per capita), and average rate of economic growth influence which countries are perceived as economically powerful and prosperous in the global economy?

• GDP is the aggregate sum of goods and services sold by private and government actors, and this measurement shows the US and China as the most prosperous countries. 

• GDP per capita/average income shows European and North American countries along with Japan as being the most prosperous. Average rate of economic growth shows China and India being the most prosperous.

• In general, GDP just shows countries with large economies. This measurement usually means countries with a lot of people. GDP per capita adjusts for that, and shows the average person's influence. Average rate of economic growth shows the up and coming countries that are likely to play a large role in the future with some like China already being important.

2. Which countries or regions have the most national wealth? Which countries have the highest average income per capita? Which countries have had the highest rate of economic growth over the last 30 years?

• Most national wealth: China, US, India, Japan, Russia

• Highest average income per capita: United Arab Emirates, Ireland, Kuwait, Sweden, Switzerland, and US followed by general European and North American countries and Japan

• Highest rate of economic growth: China, Bosnia and Herzegovina, Myanmar, India

3. Describe the general level of extreme and moderate poverty in the world. Which countries and regions have the highest concentrations of poverty? Why has the percentage of the world’s population living under extreme poverty declined significantly since 1990?

• Global poverty levels have decreased significantly since 1990. Poverty levels went from 35% in 1990 to 26% in 2002 and less than 20% in 2008. Africa and Asia both have high concentrations of poverty. Most of this poverty decline was due to China and India's rapid economic growth because of their large populations.

4. Why is alleviating global poverty so important? How is poverty a main driver of other social ills such as lower life expectation and poor education?

• Alleviating global poverty will reduce child mortality rate, decrease crime and corruption rates, increase education, and improve gender and ethnic inequality. Having a higher level of income will allow people to have access to health care, prenatal care, etc. All countries are interested in alleviating global poverty because that means more people are getting the opportunity to live a better life.

5. What is foreign aid? How does the amount of foreign aid provided by the United States compare with contributions from other wealthy countries? What percentage of national government spending in the US goes to foreign aid?

• Foreign aid - monetary assistance provided to developing country governments or particular groups or actors within developing countries.

• While the US contributes the most towards foreign aid in raw dollar amounts, the US gives a relatively low percent of its Gross National Income compared to other countries. The US spent 48 billion on foreign aid out of the 4.4 trillion federal budget. So, we spend about 1% on foreign aid.

6. How does the US target its foreign aid? What objectives get more or less funding? Which countries receive the most foreign aid from the US?

The US mainly targets its foreign aid to economic aid(71%) with relatively little going to military aid(29%). The US gives 25% of all foreign aid to Afghanistan, Israel, Jordan, Egypt, and Iraq

7. Why doesn’t foreign aid work better to alleviate global poverty?

• Three reasons:

  • 1. The richest countries do not provide enough to alleviate poverty to make a difference.

  • 2. Receiving states do not use the foreign aid effectively (lost to corruption).

  • 3. Donor countries and organizations do not target foreign aid effectively.

8. Why do countries give foreign aid at all if it does not really seem to help that much? What political, security, and economic goals are met through aid?

• Some humanitarian reasons, but also for political influence. This influence helps keep a power that shares the US's interests in power.

• Some goes to other countries to divert migrants and refugees. For example, The US gives aid to Central America to divert some migrants there, and the EU gives aid to Turkey to divert Syrian refugees there.

• Also, it is cheaper to give military aid to build up another country's defenses than actually go to war or station troops there