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Foreign aid and stability

Jul 04,2017 - Last updated at Jul 04,2017

There is nothing free under the sun. What one assumes to be an act of generosity could turn out to be a rational, even deliberate, act that serves the donor’s interests.

In an article published in The Atlantic on April 4, 2017, Andrew Natsios, an ex-USAID director, argues against the proposed 31 per cent reduction in US foreign aid.

The $30 billion aid is less than 1 per cent of the US federal budget’s total of $ 3.8 trillion.

According to Natsios, the US aid usually increases during wars and decreases after them.

He cited two years: 1973, after the end of the Vietnam War, and 1991, the end of the first Gulf War against Iraq.

Those myopic decisions weakened the US influence and eventually contributed to the rise of terrorist groups in Afghanistan and the Middle East.

Saudi Arabia, currently involved in cutthroat rivalry with Iran in Yemen, Syria, Iraq and Lebanon, is facing a financial crunch.

The habitual generosity is being replaced by investments that are economically and commercially feasible.

The same applies to other donor Gulf states, like the United Arab Emirates and Kuwait.

The European aid seems to be more reliably constant. 

The Europeans will have to take care of the problems lurking in their vicinity, in Ukraine, the Mediterranean and in the economically troubled member countries like Greece.

Moreover, the US president is applying great pressure on the rich European members to beef up their aid to the IMF, World Bank and, more importantly, the NATO defence budget.

In light of these facts, Jordan could feel the heat in 2018, but more so in the years after that.

The reduction in the expected foreign aid to Jordan forces the country into a tight corner.

What are the alternatives?

On the one hand, this new situation will put the Jordanian budget to a severe test.

While it has to cope with increased revenues and fewer subsidies to fulfil the IMF programme, Jordan must exert efforts towards more investments, lower poverty rates and more employment opportunities.

Donors’ attitudes will affect Jordan’s ability to cope with all the demands on its public budget.

In the final analysis, aid that is given to Jordan is not free; and its size increased in the last years.

Measures taken to cope with refugees and to secure borders’ protection will have to take priority.

Jordan realises that foreign aid is directly correlated with the degree of tension in our region.

If decreased foreign aid means that wars and terrorism are expected to abate, then a smaller aid package could entail good news. But, if aid decreases and tensions continue unabated, then Jordan needs to prepare itself for harder days.

We will have to look to the orient, to China, for example, for greater cooperation.

Most of the trump cards are not in our deck, and coping with such a situation requires a large degree of alertness, manoeuvring and, above all, a solid domestic front.

 

 

The writer is a former Royal Court chief, deputy prime minister and member of Senate. He contributed this article to The Jordan Times.

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