When Republican Rep. Ted Yoho from Florida arrived in Washington, D.C., in 2013, he was committed to cutting government spending, including on foreign aid. But he told Devex in a recent interview that he quickly learned slashing assistance wasn’t a viable solution. Instead, he decided to work to reform it.
Yoho is now planning to introduce new legislation to that end in March. The Economic Growth and Development Act would propose reforming foreign aid to bring in more private sector actors and enhance accountability, by funneling more funds to agencies such as the Millennium Challenge Corporation and the Overseas Private Investment Corporation.
New US foreign aid reform bill on the way
The Economic Growth and Development Act is likely to be introduced in the United States House of Representatives in March. The bill would require the Trump administration to create an interagency process for the private sector to engage with development opportunities. Here's a look at what the legislation's drafter hopes to achieve.
The U.S. needs “to redirect our foreign aid and move from a position of giving money out expecting people to do something” and shift the paradigm to “a philosophy of going to trade not aid,” he said.
Devex spoke with Yoho to learn more about his philosophy on foreign aid and how he’s come to think about the reforms he’s proposing. Here is an excerpt of that conversation, edited for length and clarity.
You are getting ready to introduce a new foreign aid bill. Can you share your philosophy toward development assistance?
We need to rethink how we distribute our foreign aid around the world. I came up here promising to cut wasteful government spending, and this is a program that will enhance oversight without increased costs. Eventually, our goal is to wean country by country off aid as quickly as we can. I want to follow what we've done in other countries that has been successful.
The old model was, you'll go into an area or a country and you give all this money and we never have the transparency and the accountability. They don't meet our expectations. We have spent billions of dollars doing this. If you look at a country like Haiti, think of how many billions of dollars we've pumped into that market, and we can go country after country. We have got to change the way we do business, and that's why we need a paradigm shift in the way we give foreign aid out.
I know a lot of people might want to take a hatchet and cut foreign aid off and say we're not going to do it. But as entangled as the world is, and as globalized as we are, I think this is the smarter way to do it. We can help these countries improve their country living standards and by doing that they're better off, we're better off and hopefully we'll all benefit.
What do you see as an example of successful foreign aid?
I think probably the best example of effective foreign aid is if you look at South Korea after the Korean conflict. They [were] one of our largest donor states [receiving aid], but yet today it’s such a success story. They're our ninth largest trading partner. This is something we want to emulate throughout the world where we're helping countries.
Not only do you stimulate an economy that improves their workforce, their economy, their people and their quality of living, but you also increase your alliances and good will.
How has your thinking changed on foreign aid? How did you develop your philosophy toward foreign aid?
I think the biggest thing is my background. Being a veterinarian, you analyze a patient [for] a sickness or an illness. We practice preventive medicine way more than we did the treatment of an illness. What I see up here so many times is we're treating symptoms of an underlying problem. Being a veterinarian, we have to do the diagnostics, take our lab readings, make a diagnosis and treat the patient. One of the options is euthanize the patient, which would be to cut foreign aid off, just cut it off and say, “we're not going to do it, it's not worth it.”
Or, we can find out what is the underlying problem in that country. Is it a corruption problem? Is it an infrastructure problem? Is it rule of law? Then pick a country that is willing to work with us, find a corporation that is willing to invest into that with the guarantees that OPIC offers. [Then we] work hand in hand — U.S. government, private enterprise, foreign government — to treat the disease or the underlying illness so the patient doesn’t die.
I came up here with the attitude, I'm going to do whatever I can to get us out of foreign aid. But then it was a short study when you start diagnosing the problem. If we pull out of a country and another country goes in there, that is not favorable to the U.S. We've just made our situation worse, and our goal is to help these countries become self sufficient on their own and wean them off of foreign aid so they're sovereign nations that are strong allies of America.
That to me is an easy sell, because you can't argue with the results that we've had.
You mentioned the importance of aid in developing allies. Do you think that U.S. foreign aid priorities in this political environment will focus more on national security?
I don’t think foreign aid in itself gives us national security. It's the effective use of [foreign aid]. If South Korea did not become a strong democratic state, [the Korean peninsula] would be a unified country, probably communist, that would be more than likely anti-America and causing more of a threat than North Korea does now. With the success of South Korea, the goal is a unified Korea with no nuclear weapons. That makes us stronger, because we have democracies that are strong allies to the United States. It goes into foreign policy that can help counter a rising China.
The goal is to get off of foreign aid, not using it as a tool to kind of coerce people to do what we believe in. Use it in a situation like this, with a private enterprise that will allow for smart investments that will meet the needs of that country, where we can wean them off. In that process, they become a strong ally.
We've always got to be looking for a new way to do things to get better results. I applaud this direction that OPIC and the MCC take, and our new bill the Economic Growth and Development Act will just add to that.
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