Is America Renting or Buying Its Friends?

When Spanish marines began squeezing off rounds at a mysterious vessel they intercepted earlier this month in the Arabian Sea, their shots reverberated not only in the war on terror, but in the war for fiscal responsibility.

The marines had seized what turned out to be a North Korean ship carrying 15 Scud missiles, as well as other military equipment, to the government of Yemen.

The discovery on the high seas alarmed U.S. officials. North Korea is a member of the so-called axis of evil, while Yemen is a self-proclaimed ally in the war on terror — but also a haven for al Qaeda terrorists.

The Scuds were hidden under 40,000 bags of cement, and could have been used to deliver nuclear, chemical or biological payloads.

After detaining the ship and its crew, U.S. authorities determined that no international laws had been violated, that the weapons would be for Yemen's use only. The shipment was allowed to continue on.

But while the crisis may be over for U.S. diplomats, it might only be an opening volley for the bean-counters. Yemen received $5 million in U.S. development aid, and as a major battleground in the war on terror, it is on track to receive far more in the future.

Yemen's apparent disregard for U.S. concerns about North Korea and weapons proliferation, however, has revived questions about whether or not Washington can buy friends that will live up to its expectations.

In 2001, the United States gave a total of $10.9 billion in foreign aid, and is expected to give a total of $11.4 billion in 2003. Earlier this month, the White House directed the Pentagon to provide up to $92 million in military equipment and training to Iraqi opposition groups in preparation for a potential war in Iraq.

As the United States gears up for another effort which will send it across the globe in search of allies, the Yemeni incident may remind diplomats who are going out with their wallets in hand: Is it worth it?

The Past Is Precedent

While foreign aid is usually disbursed in response to humanitarian concerns, political interests often play a greater role.

Some of the top recipients of U.S. foreign aid are not the neediest countries in the world. Rather, countries like Israel, Egypt, Colombia and Jordan are key to securing U.S. interests in some of the world's more turbulent areas.

It's an old joke in the diplomatic community to liken the secretary of state to a neighborhood mobster, and call the foreign aid budget his "walking-around money."

This role of foreign aid was especially apparent during the Cold War, when the United States distributed fortunes in the interest of combating communism.

Many dictators of the era couldn't have survived without funds from Washington — despite their flagrant disregard for other American interests, like democracy and free markets, critics said.

But because of their antagonism to communism, Chile's Augusto Pinochet, Panama's Manuel Noriega, the Philippines' Ferdinand Marcos, and even Iraq's Saddam Hussein all received foreign aid from the United States.

Osama bin Laden may have even benefited from U.S. foreign aid because the CIA funded many of the Islamic fundamentalist militias that fought the Soviet Union in Afghanistan in the 1980s.

"Clients during the Cold War professed to blocking Soviet influence, but often they were doing little more than consolidating their power," said Ted Galen Carpenter, a foreign policy expert at the Washington-based CATO Institute.

Perhaps the most profligate recipient of foreign aid ever was Mobutu Sese-Seko, the dictator of what was then called Zaire, who took power in 1965 in a coup reportedly backed by the CIA.

The CIA considered Mobutu an essential ally in the fight against terrorism in Africa, and he received $2 billion from the United States over the three decades he was in power.

Some of it was intended as aid for his developing country, some of it was given to him to distribute to other anti-communist forces in Africa, but the bulk wound up in his pocket, for private planes, European chateaux, shopping sprees, and other hallmarks of the high life.

A New Era?

With the end of the Cold War and the communist threat, many in the aid community expected Washington's foreign aid policy priorities would be much less stark.

And that was the case — at least until Sept. 11, 2001, said Joel Barkan, a former adviser to the U.S. Agency for International Development and consultant to the World Bank.

"Up through the Cold War there was little we could do to promote democratization," said Barkan, who specializes in sub-Saharan Africa. Afterward, there was a more neutral policy, but "what has happened now, under the war on terror, it's begun slipping back to resemble what it was under the Cold War," he said.

Barkan brought up Kenya, which is expected to hold its third round of multiparty elections soon, as an example. During the first two elections, in 1992 and 1997, the United States was very clear about its desire for free and fair elections, he said. "This time, we're probably not going to be as critical as we were in the past."

Kenya has been the site of three high-profile suspected al Qaeda attacks. Last month, an Israeli hotel was bombed and two surface-to-air missiles were fired at an Israeli airliner. Kenya's capital, Nairobi, was also one of the sites of the twin embassy attacks in 1998.

When donor countries have an overpowering priority, they should know recipient countries will be quick to take advantage, warned Ian Vasquez, editor of the book Global Fortune: The Stumble and Rise of World Capitalism.

"There are always fads in foreign aid," he said. It used to be good governance, fighting corruption, but it has moved to fighting terrorism, and good rule of law, good security issues, he said.

Before Sept. 11, 2001, Colombia denied it had a terrorism problem, Vasquez said, but after the attacks, the South American nation did everything to promote its problem.

Self-Interest at Heart

Doug Bandow, who writes the syndicated column The Capitol Eye, and served as a special assistant to the president in the Reagan administration, said there's a very simple calculus that determines whether or not Washington will get full cooperation from a recipient regime: Is it in the regime's self-interest?

"It's very hard to buy cooperation when it's not in their interest," Bandow said.

Experts pointed out a number of areas where the United States has contributed major amounts of aid, but isn't receiving all the results it may want.

Pakistan has profited grandly for its role in the war on terror: It has had decade-long sanctions lifted, been promised $200 million in economic aid and $50 million in military support, and had about $1 billion in loans forgiven.

But Pakistan continues to disappoint Washington. Experts complain that it has not curbed its support for terrorists operating in the disputed province of Kashmir, that President Pervez Musharraf has not fully returned the country to democracy since seizing power in a 1999 coup, and that it has helped North Korea's nuclear weapons program.

States like Uzbekistan and Kyrgyzstan, which also helped in the war in Afghanistan, have also profited from U.S. anti-terror priorities. They are slated to receive $43 million and $4 million, respectively. "In Central Asia, we're forming close relationships, but they have less than savory records on human rights," Vasquez said.

Bandow recognizes these violations may not be enough for Washington to renege on its aid promises and potentially lose a partner on the war on terror though. "I think you can argue there are some places where you have to make some compromises," he said.

A Flawed System

The aid process is "mortgaged," and once it's established, it's hard to change, said Patrick Cronin, assistant administrator for policy and programs at USAID. "Every step of the way in our process there is somebody that has an interest in the status quo," he said.

The vested interests extend from the aid workers that are implementing aid programs on the ground, to the mission overseeing the country, to the regional desks that are seeing a loss in funds.

Outside the aid community there are also construction firms, defense contractors, and thinktanks that are called in to fulfill the aid projects, and the politicians that have arranged them.

John Tkacik, a 23-year veteran of the State Department said the millions given in foreign aid is sometimes illusory. A $5 million grant may not even reach the recipient country — it might be earmarked for high-paid consultants that the country has never asked for.

The other factor that complicates the aid process is that money ascribed to foreign aid may come out of different areas of the government, he said. "There's a whole matrix of international financial support."

But perhaps the biggest danger of foreign aid is the unstated bond between recipient and donor. "It's almost not the literal amount of funds, but the blessing, the imprimatur that matters," said Leonard Spector of the Monterey Institute for International Studies in California.

Taking some aid away may not send a strong enough message to the recipient country, and taking it all away would send too strong of a message. "We see it as a short-term measure. The recipient sees it as a long-term relationship," Carpenter said.

Alternate Policy Instruments

The value of such relationships also hint at ways the United States can exercise foreign policy other than just spreading money around.

Washington can, as it did for a number of Eastern European countries, offer membership in alliance structures like NATO.

Sometimes this may even be more effective than financial incentives, Bandow said. He pointed out how membership in the World Trade Organization may convince China to reform its human rights record more successfully than sanctions have.

Similarly, Washington can provide a physical presence, as U.S. troops do by patrolling the demilitarized zone for South Korea, said Spector.

And diplomats can also grant access to armament — allowing a country to buy sophisticated U.S. weaponry, like F-16 fighters.

Given the number of pitfalls to foreign aid, the solution may actually be for Washington to lose its hubris, Bandow said — to realize that the United States can't make the whole world behave all the ways it wants to, all the time.

"I think its effectiveness is overstated," Carpenter said. "Foreign aid doesn't really buy allegiance, it only rents it for awhile."