An Interest-based Case for USAID

(Image credit - Getty Images)

There is still a search for a unifying theory that coheres the disparate foreign and economic policy actions of the Trump administration. There is now one such theory, “the Mar-a-Lago Accord” theory that is “somewhat implausibly gain[ing] adherents, if cautious ones, in respectable quarters.”

While that search continues, one thing stands out as a central pillar of the administration’s thinking on foreign policy: that the rest of the world is free riding and leaving the United States to shoulder the cost. The preferred response involves downsizing America’s global role and adopting a transactional approach which makes no distinction between friend or foe. The President and key figures in his administration have publicly made this argument. The recently leaked Signal conversation indicates that this outlook guides their thinking in private.

This proposition, however, even in its most compelling form, is contested. The relationship between the United States and the rest of the world is primarily symbiotic. For example, “Foreign portfolio holdings of U.S. securities rebounded to $26.9 trillion at end-June 2023.” Ruchir Sharma elaborates on this point in the FT, noting that “America’s share of the main global market benchmark remains well over 60 per cent even though its share of global GDP is well below 30 per cent.” Significant value from this accrues to American pension funds, 401ks and retail investors. The Shanghai gigafactory produces 51% of all Teslas – not because Elon has an affinity for China but because doing gives Tesla access to low cost high productivity manufacturing, deep supply chain and a high quality talent pool. This obviously creates significant value for American investors holding Tesla stock. The current valuation of American firms is a function of their access to markets outside their home market and the confidence of foreigners. While the administration’s focus has been on the deficit in manufactured goods – the US has a $278.4 billion trade surplus in services after exporting over $1 trillion in services in 2023. But none of these arguments will sway an administration convinced of it is a victim of the global system, so here is an interest-based case for USAID. In this telling, USAID was never about charity – it was always a part of the state’s national security apparatus. Its formation and maintenance was always insurance against emergent threats to the American homeland.

American Interests:

When the Marshall Plan ended, it was replaced by foreign aid programs that provided military, economic and technical assistance to US partners and allies through the Mutual Security Act of 1951. These programs included the Development Loan Fund, which was established in 1957 as the lending arm of the US International Cooperation Administration. These programs were targeted to reduce Soviet expansion, especially in Western Europe, but were essentially global. Under President Kennedy, the multiplicity of programs, spread across the federal bureaucracy were rolled into the United States Agency for International Development – USAID. USAID has thus never been outside the US national security architecture. While the language used to defend, justify and explain its activities evolved to become more humanitarian, it has always been an investment in American security. That organization has now been gutted. The justification for its decimation is that it no longer contributes to the American national interest. This author begs to differ.

3 Questions:

The State Department’s press statement announcing the pause and review of USAID’s programs presents an excellent departure point. It raises three questions the Secretary of State claims will determine how US foreign assistance is justified: “Does it make America safer? Does it make America stronger? Does it make America prosperous?”

So let’s start there.

The primary responsibility of the state in the national interest – whether the Hobbesian leviathan or its current Scandinavian iteration – is the security of persons. As the world has become more complex, a range of new threats emerged to expand the panoply of actors and scenarios for which national security must account. At Pearl Harbor, it was nation-states presenting the greatest threats. The USS Cole and embassy bombings and September 11^th introduced powerful non-state actors. The Covid-19 pandemic reasserted biosecurity as a priority area deserving an increase in attention and resources.

Since 1987, US presidents have sent the Congress a National Security Strategy which lays out each administration’s vision for national security. In the last administration’s NSS, two central strategic challenges formed the basis of its vision of security: a great power competition with China and transnational threats. Whether this administration agrees with either is its prerogative. This blog will focus on an aspect of transnational threats that threaten American security and prosperity – pandemics.

It will be difficult to argue that pandemics do not pose a threat to US national interest. Total US deaths from COVID-19 exceeded the deaths from all its wars combined, from World War I to Iraq and Afghanistan. But COVID did more than devastate families and communities. A team of researchers at USC put the economic cost to the American economy at $14 trillion by the end of 2023. The team used “economic modeling to approximate the revenue lost due to mandatory business closures at the beginning of the pandemic…” Any threat, capable of imposing such cost in lives and gold on the American people must command as much resources as possible to anticipate and neutralize before it spreads. USAID’s work assisting countries to build capacity to prevent, detect or respond to infectious disease outbreaks thus contributes directly to US security and prosperity.

Future Pandemics:

A report from a UK-based disease risk forecasting company, Airfinity, using risk modeling, indicated a 27.5% chance that a “pandemic as deadly as COVID-19 could take place in the next ten years”. Their model also showed that if the initial virus had been as transmissible as Omicron, the death toll in the UK alone would have been “nearly three times more than was the case.” This last point is worth elaborating a tiny bit – COVID’s total case fatality ratio “(CFR, which estimates this proportion of deaths among identified confirmed cases.”) was pretty low – with one report putting it around 1%. That is unlike Ebola with an average CFR of 50%, but varying between 25 and 90% depending on circumstances and response. There is a possibility of a future pathogen that combines the lethality of a virus like Ebola with the transmissibility of a virus like COVID. It is difficult to see how any organization that contributes to detecting or preventing the emergence of such a threat sees its resources decline and not increase.

Circumstances and Response – the Role of USAID

Building relationships and cultivating credibility in the world’s poorest countries is not because they are necessarily the only sources of emerging pathogens, but rather because they are less likely to quickly detect and or contain them. USAID programs then, are not simply altruistic and selfless charity, they are pillars of American biosecurity defense.

USAID programs supporting global surveillance and diagnostics infrastructure, providing technical assistance in biosafety and biosecurity more than justify their contribution to the national interest. These activities improve the “circumstances and response”, enhancing disease surveillance and providing ample lead time to develop countermeasures to emerging pathogens.

Some might argue, “Well let’s only do the biosecurity and health stuff” – fair enough. The administration is pursuing seems to be pursuing this transactional approach. Such an approach, however, discounts the role of trust and credibility. Creating trust in partners means demonstrating solidarity with needs beyond issues of direct benefit to the US government. It requires a long-term relationship that the transactional support would struggle to meet. Governments in Liberia and Guinea struggled to communicate with affected communities during the Ebola outreach because the state lacked credibility. It didn’t matter that government functionaries came promising to help – to deliver direct benefits. The idea that one can pare USAID down to bare bones and still extract the same benefits from its partnerships is wishful thinking. Doing the stuff they want is indispensable to doing the stuff you want.

The Department of Homeland Security and the Directorate of National Intelligence were created in response to 9/11. US posture against threats from state and non-state actors results in its maintenance of about 750 installations and bases in 80 countries across the world. How would the national security community respond to intelligence predicting a 30% likelihood of a 9/11 scale (or larger) attack on US soil by a non-state actor between now and 2033? It would not be to decimate the institutions most useful in countering the threat.

After the devastation of COVID-19, it would be reasonable that the biosecurity response would not be dissimilar to the response to threats from state and non-state actors. One would expect, for example, to see the CDC expand and deploy more staff overseas. The US would pursue a closer partnership with the WHO to maintain global surveillance. Most importantly, the reasonable expectation would be a surge in resources to the US government agency that maintains a massive network of staff, contractors and partnership arrangements with health authorities across the world - USAID. Its relationships around the world are the biosecurity and health equivalent of forward operating bases. Yet the administration has done the opposite. Its purported intent on justifying spending by focusing on actions that make America safer, stronger and prosperous are counter to the policy choices it has made.

Exposure to Biosecurity Risks:

Just how exposed is the US to biosecurity risks? Per the aforementioned Airfinity report, there are several effectively immutable factors driving these risks: “Climate change, the rise in international travel, a growing global population and the increasing threat posed by zoonotic diseases are some of the main factors contributing to the increase in high risk outbreak incidences.” Last year total international visitor arrivals in the US was 72,390,321. The incubation period (the time between exposure and the onset of symptoms) of some viruses exceeds the length of the average international flight. Ebola for an example has an incubation period that can be as short as 2 days or as long as 21 days. Unless one intends to completely end international travel to the US and curtail US citizens’ travel, the risk of an emerging pathogen breaching US borders will remain.

How then could one argue that an agency building capacity in fragile health systems, improving and increasing disease surveillance and containment is not contributing to US security and prosperity. At $42 to $44 billion per annum, its budget was a cheap insurance policy that gave the US national biosecurity infrastructure visibility and access in places which lack the resources for robust disease surveillance. USAID not only created access for US personnel in those places, it built trust and credibility. So while President Trump may have found “$1.5 million for voter confidence in Liberia” derisive – USAID was responding to a request from the Liberian government for assistance building confidence in the electoral system in its nascent democracy. The calculation that this was not in the American interest is both simplistic and flat out wrong. Every line of assistance in USAID’s budget had a constituency somewhere in the world. Keeping those constituencies within the fold was a crucial part of AID’s mission.

CONCLUSION:

Whether USAID was financing circumcision in Mozambique, providing anti-retroviral drugs in South Africa or assisting with food security in the Horn of Africa, its presence on the ground and work building and strengthening health systems delivered direct benefits to the American state at a massive discount. Founded to face down the threat of Soviet expansion, the institution as a steward of US foreign aid was again repurposed after September 11^th. Aid programs were targeted at refugee camps and places in dire economic straits that made them easy recruitment targets of violent extremists like Al Qaeda. With the expansion of threats to include pandemics, the organization’s reach and programs became assets in biosecurity. Its budget is still less than the Department of Homeland Security’s ($62 billion) or the DNI’s $73.4 billion requested in 2025 appropriations. This interest-based defense of USAID was always there for those who wanted to find it.

The idea that every dollar in USAID’s budget must follow a straight line to a direct US interest is a rather simplistic approach to national security. There were obviously pet programs reflecting the preferences of whichever party was in power and such programs were thus subject to suspensions when the supporting party left office – think Mexico City Policy or support for LGBT rights. However, over the last three decades, international development has evolved to provide wiggle room for aid recipients to make minimum input into program design. So, while the direction and implementation mechanism of USAID programs principally reflected American priorities – USAID still needed to make some concessions to local demands and priorities. Billions in USAID spending still flow back to the US economy – from the large contractors who implement its programs, to stipulations that PEPFAR can only purchase drugs that have been approved by the FDA or purchasing 41% of the food used in emergency assistance from American farmers. To deride the less than material concessions USAID makes to its partners as the President did in his address to Congress misunderstands the relationship USAID must maintain with its partners.

The review announced by the State Department eventually cut 5200 contracts from USAID’s programs, an indication that 83% of USAID’s spending did not make America safe, strong or prosperous. One hopes that the Secretary will release the report detailing the analysis leading to that conclusion. One suspects it will struggle under even a cursory interrogation. It is very likely that the USG will, in the not-too-distant future, either pays contractors to do this work or recreate the aid architecture it dismantled to plug the holes that would develop over the next few years. And that would be such a waste.