Far from Benign: The US Aid Industrial Complex

by Binoy Kampmark / February 13th, 2025

The US aid program began in earnest in the early stages of the Cold War, with an intention to beat off the contenders from the Soviet bloc in the postcolonial world. President Harry S. Truman proposed, in his 1949 inaugural address, “a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas.” In 1961, President John F. Kennedy signed the Foreign Assistance Act of 1961, enabling him to issue the executive order that created the US Agency for International Development (USAID).

In 1962, the American scholar of international relations, Henry Morgenthau, suggested that foreign aid could fall into six categories: the sort that promoted humanitarian objects, the aid that offers subsistence goals and military aims, the sort that acted as a bribe, the attainment of prestige and economic development.

To provide aid suggests a benevolent undertaking delivered selflessly. It arises from the charitable mission, an attempt to alleviate, or at least soften the blows of hardship arising from various impairments (poverty, famine, disease). But the provision of aid is rarely benign, almost always political, and, in its realisation, often self-defeating. The very transaction acknowledges the inherent victimhood of the sufferer, the intractable nature of the condition, the seemingly insoluble nature of a social problem.

Morgenthau also conceded that humanitarian aid, despite being, on the surface, non-political in nature, could still “perform political function when it operates within political context.” And the very provision of aid suggests an accepted state of inequality between giver and recipient, with the former having the means to influence outcomes.

With such views frothing the mix, it is worth considering why the attack by President Donald J. Trump on USAID as part of his axing crusade against bureaucratic waste is not, for all its structural and constitutional limitations, without harsh merit. Over the years, insistent critics have been lurking in the bushes regarding that particular body, but they have been dismissed as isolationist and unwilling to accept messianic US internationalism. The Heritage Foundation, for instance, has been wondering if the whole idea of US foreign aid should be called off. In January 1995, the body produced a report urging the termination of USAID. “Despite billions of dollars spent on economic assistance, most of the countries receiving US development aid remained mired in poverty, repressions, and dependence.”

Such a viewpoint can hardly be dismissed as a fringe sentiment smacking of parochialism. (In the United States, imperialist sentiment is often synonymous with supposedly principled internationalism.) The less rosy side of the aid industry has been shored up by such trenchant critiques as Dambisa Moyo’s, whose Dead Aid (2009) sees the $1 trillion in development aid given to Africa over five decades as a “malignant” exercise that failed to reduce poverty or deliver sustainable growth. She caustically remarks that, “Between 1970 and 1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11 percent to a staggering 66 percent.” Aid, far from being a potential solution, has become the problem.

The report card of USAID has not improved. One of the notable features of the aid racket is that much of the money never escapes the orbit of the organisational circuit, locked up with intermediaries and contractors. In other words, the money tends to move around and stay in Washington, never departing for more useful climes. A report by USAID from June 2023 noted that nine out of every ten dollars spent by the organisation in the 2022 fiscal year went to international contracting partners, most of whom are situated in Washington, DC. USAID funding is also very particular about its recipient groups, with 60% of all its funding going to a mere 25 groups in 2017 alone.

In January this year, the USAID Office of Inspector General authored a memorandum noting accountability and transparency issues within USAID-funded programs. USAID, Inspector General Paul K. Martin insisted, “must enforce the requirement that UN agencies promptly report allegations of fraud or sexual exploitation and abuse directly to OIG.” While the sentiment of the document echoes a long US tradition of suspicion towards UN agencies, valid points of consideration are made regarding mismanagement of humanitarian assistance. The OIG also took issue with USAID’s lack of any “comprehensive internal database of subawardees.”

Despite these scars and impediments, USAID continues being celebrated by its admirers as a projection of “soft power” par excellence, indispensable in promoting the good name of Washington in the benighted crisis spots of the globe. A cuddly justification is offered by the Council on Foreign Relations, which describes USAID as “a pillar of US soft power and a source of foreign assistance for struggling countries, playing a leading role in coordinating the response to international emergencies such as the global food security crisis.”

Stewart Patrick of the Carnegie Endowment for International Peace discounts the politically slanted nature of US aid policies, not to mention its faulty distribution mechanism, by universalising the achievements of a body he cherishes. USAID “has contributed to humanity’s extraordinary progress in poverty reduction, increased life expectancy, better health, improved literacy, and so much more.”

A less disingenuous example can be found in the Financial Times, which encourages “fighting poverty and disease and enabling economic development” as doing so will improve safety, advance prosperity, curb instability and the appeal of autocracy. But at the end of the day, aid is a good idea because, reasons the editorial, it offers expanded markets for US exports. The sick and the impoverished don’t tend to make good consumers. To cancel, however “life-saving projects” at short notice was “a good way to provoke an anti-American backlash” while giving an encouraging wink to the Chinese. US Aid: far from benign, and distinctly political.FacebookTwitterReddit

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Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com. Read other articles by Binoy.

The Demise of USAID: Few Regrets in Latin America

by John Perry and Roger D. Harris / February 12th, 2025

“Take your money with you,” said Colombia’s President Gustavo Petro, when told about Trump’s plans to cut aid to Latin America, “it’s poison.”

USAID (US Agency for International Development) spends around $2 billion annually in Latin America, which is only 5% of its global budget. The temporarily closed-down agency’s future looks bleak, while reactions to its money being cut have been wide-ranging. Only a few were as strong as Petro’s and many condemned the move. For example, WOLA (the Washington Office on Latin America), a leading “liberal” think tank which routinely runs cover for Washington’s regime-change efforts, called it Trump’s “America Last” policy.

While USAID does some good – such as removing landmines in Vietnam (themselves a product of US wrongdoing) – as an agency of the world’s hegemon, its fundamental role is aligned with projecting US world dominance.

Not unexpectedly, the corporate media have largely come to the rescue of USAID. They try to give the impression that they are mainly concerned that some countries would be badly effected by its loss. In fact, the follow-the-flag media understand that USAID is part of the imperial toolkit.

Both the Los Angles Times and Bloomberg suggested that USAID’s shutdown would “open the door” to China. The Associated Press described the withdrawal of aid as a “huge setback” for the region; the BBC echoed these sentiments. The NYT and other mainstream media point to the irony that many of its programs help stem outward migration from Latin America, an issue which is otherwise at the top of Trump’s agenda.

Weaponization of humanitarian aid

The corporate media, not surprisingly, give a one-sided picture. It’s true, of course, that an aspect of USAID’s work is humanitarian. But, as Jeffrey Sachs explained, “true, and urgent, humanitarian aid” was only one element in a larger “soft power” strategy. From its inception, USAID’s mission was more than humanitarian.

A year after President John Kennedy created USAID in 1961, he told its directors that “as we do not want to send American troops to a great many areas where freedom may be under attack, we send you.”

The organization is “an instrument of [US] foreign policy …a completely politicized institution,” According to Sachs. It has mainly benefitted US allies as with the program to limit hurricane damage in Central America, cited by the NYT which omits Nicaragua, hit by two devasting storms in 2020. Needless to say, Nicaragua is not a US ally.

Although USAID provides about 42% of all humanitarian aid globally, the Quixote Center reports that most of the funds are spent on delivering US-produced food supplies or on paying US contractors, rather than helping local markets and encouraging local providers. The Quixote Center argues that “a review of USAID is needed,” though not the type of review which Trump or Elon Musk probably have in mind.

Indeed, the dumping of subsidized US food products undermines the recipient country’s own agriculturalists. While hunger may be assuaged in the short-term, the long-term effect is to create dependency, which is the implicit purpose of such aid in the first place. In short, the US globally does not promote independence but seeks to enmesh countries in perpetual relations of dependence.

Regime change

The third and most controversial element, identified by Sachs, is that USAID has become a “deep state institution,” which explicitly promotes regime change. He notes that it encourages so-called “color revolutions” or coups, aimed at replacing governments that fail to serve US interests.

The State Department is sometimes quite open about this. When a would-be ambassador to Nicaragua was questioned by the US Senate in July 2022, he made clear that he would work with USAID-supported groups both within and outside the country who are opposed to Nicaragua’s government. It is hardly surprising that Nicaragua refused to accept his appointment. The progressive government has since closed down groups receiving regime-change funding.

The history of US regime-change efforts in Latin America is a long one, much of it attributable to covert operations by the CIA. But since 1990, USAID and associated bodies like the National Endowment for Democracy have come to play a huge role. For example, they have spent at least $300 million since 1990 in trying to undermine the Cuban Revolution.

Regime-change efforts in Cuba involved a vast organization known as Creative Associates International (CREA), later shown by Alan MacLeod to be directing similar USAID programs across Latin America. Currently, CREA is working in Honduras whose progressive government is under considerable pressure from the US government. Yet CREA is only one of 25 contractors which, in 2024, earned sums ranging from $32 million to a whopping $1.56 billion.

Culture wars

USAID’s regime-change work often foster ostensibly non-political cultural, artistic, gender-based or educational NGOs whose real agenda is to inculcate anti-government or pro-US attitudes. Examples proliferate.

In Cuba, USAID infiltrated the hip-hop scene, attempted to create a local version of Twitter, and recruited youngsters from Costa Rica, Peru and Venezuela to go to Cuba to run a particularly inept project that risked putting them in jail.

In Venezuela, USAID began work after the unsuccessful US-backed coup attempt against President Hugo Chávez in 2002. By 2007, it was supporting 360 groups, some of them overtly training potential “democratic leaders.” The Venezuelan rock band Rawayana, recent winners of a Grammy, are funded by USAID to convey pro-opposition messages in their public appearances.

In Nicaragua, after the Sandinista government returned to power in 2007, USAID set up training programs, reaching up to 5,000 young people. Many of those who were trained then joined in a coup attempt in 2018.

Astroturf human rights and media organizations

Another tactic is to undermine political leaders seen as US enemies. In 2004, USAID funded 379 Bolivian organizations with the aim of “reinforcing regional governments” and weakening the progressive national government.

It did similar work in Venezuela, including in 2007 holding a conference with 50 local mayors to discuss “decentralisation” and creating “popular networks” to oppose President Chávez and, later, President Nicolás Maduro. USAID even expended $116 million supporting the self-declared “interim presidency” of Juan Guaidó.

In a similar vein, Nicaragua was the subject of a USAID program intended to attack the credibility of its 2021 election. Likewise, after the election of Xiomara Castro in Honduras, USAID set up a democratic governance program to “hold the government to account.”

Creating or sustaining compliant “human rights” organizations is also a key part of USAID’s work. Of the $400 million it spends in Colombia each year, half goes to such bodies. In Venezuela, where USAID spends $200 million annually, part goes to opposition-focused “human rights” groups such as Provea. USAID funded all three of the opposition-focused “human rights” groups in Nicaragua, before they were closed down, and now probably supports them in exile, in Costa Rica.

Finally, USAID creates or sustains opposition media which, as Sachs put it, “spring up on demand” when a government is targeted to be overthrown. Reporters without Frontiers (RSF, by its French initials) reported: “Trump’s foreign aid freeze throws journalism around the world into chaos.” It revealed that USAID was funding over 6,200 journalists across 707 media outlets. In the run-up to the 2018 coup attempt in Nicaragua, USAID was supporting all the key opposition media outlets.

RSF, while purporting to support “independent journalism,” itself is funded by the National Endowment for Democracy (NED), George Soros’s Open Society Foundations, and the European Union – hardly neutral parties.

Few regrets

This is why there may be few regrets about the demise of USAID in Latin America among governments beleaguered by the US. Indeed, opposition groups in Venezuela and Nicaragua admit they are in “crisis” following the cuts to their funding.

Even Trump’s ally President Nayib Bukele is skeptical about USAID: “While marketed as support for development, democracy, and human rights, the majority of these funds are funneled into opposition groups, NGOs with political agendas, and destabilizing movements.”

The evidence that USAID has weaponized so-called humanitarian aid is incontestable. Yet, according to US Secretary of State Marco Rubio, it is the Latin American countries that Washington has targeted for regime change – Nicaragua, Cuba, and Venezuela – who are “enemies of humanity.” In response, Venezuelan Foreign Minister Yvan Gil retorted that the “only enemies of humanity are those who, with their war machinery and abuse, have spent decades sowing chaos and misery in half the world.”

Regrettably, USAID has been a contributor to this abuse, rather than opposing it. While temporarily shuttered at USAID, the empire’s regime-change mission will with near certainty continue, though in other and perhaps less overt forms.

Read other articles by John Perry and Roger D. Harris.