NCPA - National Center for Policy Analysis

Thinking Foreign Aid? Think Again

January 29, 2001

The U.S. Agency for International Development is promoting foreign aid as a benefit to U.S. businesses. Its official website proclaims that "the principal beneficiary of America's foreign assistance program has always been the United States."

  • U.S. AID programs last year cost taxpayers about $7.5 billion.
  • The agency says that nearly 80 percent of its contracts and grants go directly to American firms -- and others note that such funds are often spent on U.S. consultants, their rents, office equipment, cars, and support staff in Washington.
  • Many of the Washington companies that get aid contracts are staffed by retired U.S. AID employees skilled in writing proposals to appeal to their former government colleagues, according to reports -- and some employ spouses of current U.S. AID officials.
  • One of the largest and most successful companies in the field is Chenomics -- majority shares owned by a former assistant U.S. AID administrator -- which reported $85 million in revenue for the last nine months of 1999 and net income of $1.7 million, for a return on equity of 34 percent.

Source: Michael Dobbs, "Aid Abroad Is Business Back Home," Washington Post, January 26, 2001.


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