Too much military? America, the world’s foreign aid deadbeat

Americans who berate Germany for not spending enough on its army might be better off asking why their own country spends so little on foreign aid. The US has not paid its fair share for years.
America: Bringing more guns and less aid to a country near you.

Over the past fortnight, the Americans have been at it again: Germany-bashing. The country is a “military deadbeat,” they claim. Europe’s biggest economy is a “free rider,” they whine. Germany is not doing enough to meet the agreed NATO goal of spending 2 percent of national income on defense, new US Secretary of state Mike Pompeo recently said. That is why Germany owes the US “vast sums of money”, according to US president Donald Trump.

But if Germany is a military deadbeat, then the US is best described as a “foreign aid deadbeat”.

In the first three months of this year, the US accepted a grand total of 11 refugees from Syria. In the same time period, Germany accepted asylum applications from about 10,000 Syrians, of whom between 80 and 95 percent will end up being allowed to stay in Germany. So Germans have accepted at least 8,000 more refugees than the US in 2018 so far.

It is hard to calculate the exact costs of refugee resettlement, due mostly to the different levels of government involved. Germany’s federal budget shows the nation has spent between €21-22 billion a year on refugees over the past three years. The US, according to 2016 estimates, only spends around US$1.8 billion (€1.5 billion) on refugee resettlement each year.

It’s the same story when it comes to “official development assistance,” or ODA. In 2017, the OECD reported that the US spent about 0.18 percent of its gross national income on this. The average for developed countries is about double that. Germany spends more, coming closer to 0.7 percent over the past three years. And now, while US spending is decreasing under Mr. Trump, Germany’s is rising.

Around 40 percent of what the US government broadly defines as foreign aid goes into what is known as security assistance, which is mostly military in nature anyway.

Americans are fond of boasting — or in Mr. Trump’s case, complaining — about how they are one of the largest individual foreign-aid donors in the world, spending around $42.4 billion in 2017. That number will drop to $28 billion in 2018.

But in fact, around 40 percent of what the US government broadly defines as foreign aid went into what is known as security assistance. This is mostly military in nature, focused on policing borders or smuggling as well as training and equipping US allies in places like Afghanistan, Iraq and Israel. It’s also very good for the American military-industrial complex. For example, Israel got just over $3 billion in security assistance in the 2016 US budget. But one of the conditions of the money was that Israel spent most of it on US-made weapons.

The OECD’s calculations for foreign aid do not include “Security assistance,” which is why the US rates so badly when it comes to comparing ODA levels. As a report by Washington-based think tank, the Center for Global Development, noted in 2017, “the US already pays $26 billion a year less than its fair share of development aid.”

Meanwhile Germany is spending more than its fair share. Official development assistance is carefully defined and only certain kinds of costs for refugees can be included. For example, you can only enter costs incurred in the first 12 months after a refugee arrives in the country.

Of the €20-22 billion Germany spent on refugees, only around €5 billion was added to recent ODA calculations. The rest of the money is given to German states to compensate for costs and is spent on the new central tenet of German government migration policy: fighting the causes of refugee flight. So there 's another €15 odd billion that is not even counted as part of Germany’s official development funding.

The way Germans like to see themselves.

A lot of Germany’s spending decisions are simply part of the country’s long-standing foreign-policy philosophy which prizes soft power over hard. Germany’s reluctance to go down the military road after two world wars, has made it more popular with the rest of the world and some would argue that for Germany, a soft-power offence has been the best defense.

The fundamental difference here is that the US has always seen foreign aid through the lens of security, explains Raimund Zühr, a project manager with SEEK Development, a Berlin-based consultancy working on global development issues. He explains that for the US, security has always come first, and development assistance supports it. In Germany, it is the other way around.

“We are the soft power. We are the ones who come in and build the roads afterwards and focus on our own foreign-policy priorities. This is how Germans like to see themselves,” Mr. Zühr says. “And for historical reasons, linking security and development assistance too much has been seen as controversial.”

Mr. Zühr believes the closer link between aid and defense is actually a good thing. “The old cliché of development assistance being about a bunch of hippies digging wells is gone. Development aid is becoming part of hard politics,” he argues, “which is where it belongs.”

Certainly, given the America’s apparent abdication of its job as the “world’s policeman”, changes are needed in German foreign policy. With great power comes great responsibility. This is why the growing connection between aid and defense spending is spurring a public discussion in Germany about the philosophical underpinnings of foreign policy. Rather than just reprimanding the Germans for not spending enough on guns and bombs, Americans may want to take a long, hard look at the numbers, then talk about why they don’t spend enough on aid.

Cathrin Schaer is an editor with Handelsblatt Global.