For rich, foreign aid is a tool of persuasion

Foreign aid often is likened to charity. A rich nation gives money to poor countries with the goal of meeting humanitarian needs and speeding economic development - at least in theory.

In reality, when the United States, Japan, or European nations give aid, they generally have important political and security motivations.

"The direction of foreign aid is dictated as much by political and strategic considerations as by the economic needs and policy performance of the recipients," notes a study by economists Alberto Alesina of Harvard University and David Dollar of the World Bank.

A major example is foreign aid to Israel and Egypt, the latter as reward for reaching a peace deal with Israel in 1979. Aid to the two nations has for many years amounted to about one-third of America's total foreign aid. "Israel shouldn't need aid," says foreign-aid expert John Sewell. "It's a rich country."

But for domestic political reasons, plus the fact that Israel stands out as the only US-friendly democracy in the region, the US helps Israel out financially in its violent and costly struggle with the Palestinians. This spring, in the supplemental bill covering the cost of war with Iraq, Congress voted to give Israel an extra $1 billion in military assistance and $9 billion in new loan guarantees. That's on top of the annual $2.7 billion already granted Israel.

In the 1980s, during the cold war, the four top recipients of American foreign aid in Africa were Somalia, Sudan, Zaire (now Congo), and Liberia. To a large degree the money was meant to bolster noncommunist regimes - no matter how awful - in the competition with the Soviet Union for world influence.

Under the late President Mobutu Sese Seko, Zaire got nine loans from the World Bank - with US approval - despite an abysmal economic record. "All of that money was wasted in a development sense," says Mr. Sewell, of the Smithsonian Institution. Some of it fattened the pocketbooks of grim tyrants.

With the end of the cold war a decade ago, idealists hoped that bilateral aid would be directed more for genuine development and humanitarian purposes.

The Bush administration's plan to spend $15 billion over five years in the fight against AIDS overseas may reflect "a greater willingness to devote American assistance dollars to matters of economic development," suggests Tamara Wittes, an analyst at the US Institute for Peace in Washington, D.C . "It may produce positive political benefits down the road in Africa. But it is really a humanitarian gesture."

"I hope the world has changed," says Mr. Dollar, whose study covered 25 years of aid ending in 1995. "But politics is still going to be in play."

That was shown this winter as the US and Britain scrambled unsuccessfully to find enough supporters in the United Nations Security Council to pass a second resolution backing an invasion of Iraq. The US offered Turkey as much as $6 billion in foreign aid if it allowed allied troops to move into Iraq through its territory. Turkey may still get some aid for not moving its troops into the Kirkuk oil field.

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