What is Foriegn Aid?
The term foreign aid refers to any type of assistance that one country voluntarily transfers to another, which can take the form of a gift, grant, or loan. Most people tend to think of foreign aid as capital, but it can also be food, supplies, and services such as humanitarian aid and military assistance.
Broader definitions of aid include any assistance transferred across borders by religious organizations, non-governmental organizations (NGOs), and foundations. U.S. foreign aid usually refers to military and economic assistance provided by the federal government provides to other countries.
The Role of Foreign Aid
- Foreign aid programs played a major role in the polio fight.
- Moreover, government funding played a mostly dominant role in the late 1990s and early 2000s by covering more than 80% of eradication efforts.
- Recently, private donors have been stepping up and providing a significant share of funding.
The Fight Against Polio: A Success Tale
- In the early 1980s, polio paralyzed almost half a million people a year, mostly children. Fast forward to 2023, and the number of polio cases worldwide translated to just two days’ worth of cases in 1981.
Broader Foreign Aid Effects on Health Across the Globe
- This has been polio and much more regarding how foreign aid has saved millions from death. Other examples include:
- HIV/AIDS
- Over 25 million lives have been saved by the PEPFAR program rolled out by the U.S.
- Malaria
- Just providing bed nets and antimalarial treatments reduced infections and deaths by leaps and bounds.
- Tuberculosis
- Significant reduction in the number of TB deaths has been achieved by the Global Fund and USAID.
The Scale of Foreign Aid
- In 2023, total global foreign aid is about $240 billion.
- This is a small fraction of most rich countries’ economies.
- U.S. aid spending: Just 0.24% of its Gross National Income (GNI).
- Norway is the only country exceeding 1% of GNI in aid spending.
Who Finances Foreign Aid
- Is global aid funded by governments or by billionaire philanthropies? Here are the figures:
- Over 95% of the global foreign aid in 2023 derives from national governments.
- Private philanthropic grants contributed just $11 billion (4.5% of total aid).
Why Government Support Matters
- A tiny decrease in government aid can leave an altogether different mark.
- In 2023, the U.S. contributed $62 billion to foreign aid.
- A reduction of 20% would cut its contribution by $13 billion, more than the entire global private aid sector.
- Building public support for government aid budgets is crucial to increasing global assistance.
The UN’s Target for Aid Spending
- The United Nations (UN) recommends that developed countries allocate 0.7% of their GNI to foreign aid.
- Only five countries met this target in 2023
- Norway, Luxembourg, Sweden, Germany, and Denmark.
- If all developed countries were to meet this target, the additional global aid could easily rise to over $216 billion, almost doubling the current budget.
Public Perception vs. Reality
Despite the relatively low levels of foreign aid spending, public perception is wildly inaccurate:
- A 2015 survey asked Americans how much of the U.S. federal budget went to foreign aid.
- The correct answer was under 1%.
- The average guess was 31%—a massive overestimation.
- When asked how much should be spent, respondents suggested 10%, which is 10 times more than actual spending.
Foreign aid has saved millions of lives at a relatively small cost to donor nations. However, global support remains fragile and misunderst
