Romney Takes on Foreign Aid at CGI 2012

This week marks the official opening of the UN General Assembly in New York. As a result, several other events are taking place in New York to take advantage of the heads of state in town for the General Assembly and to focus on the many different facets of international affairs. This morning at the annual meeting of the Clinton Global Initiative, Mitt Romney addressed the conference to outline his vision on foreign aid as a candidate for the American presidency.

Early on, he set out his vision of what the goals of American foreign aid should be: humanitarian relief, to protect and bolster American strategic interests, and development. Most of his speech focused on this third point, with public-private partnerships the central mechanism he proposed to accomplish this objective. This is hardly surprising as it speaks to Romney’s own experience within the corporate world and as the former governor of Massachusetts. In this vein, he repeatedly stressed the importance of free enterprise in building not only economic stability but also free societies, stating that

“Free enterprise has done more to bless humanity than any other economic system not only because it is the only system that creates a prosperous middle class, but also because it is the only system where the individual enjoys the freedom to guide and build his or her own life. Free enterprise cannot only make us better off financially, it can make us better people.”

Using this foundation along with the now classic story of Tunisian fruit vendor Mohammed Bouazizi whose self-immolation sparked the Arab Spring, he stressed the importance of business and employment in creating stability and giving people dignity in their lives. To promote this, he announced his plan for “Prosperity Pacts”, a new program that would provide assistance to businesses in developing countries using mechanisms such as microfinance and link trade policies with development.  This was the only information given in the address that hasn’t been stated by the campaign before. While short on details, in a press release on foreign aid concurrently issued on the Romney/Ryan campaign website, he claimed such a program would represent a “bold break from the past” as the first US program to create “an integrated strategy that links trade policy with development policy.”

The only problem with that is there is no reason to believe that such a program would be anything other than a continuation of current programs active within the US government such as Aid for Trade which provides technical assistance and dedicated aid to developing countries to increase their participation in the global market and thereby grow their economies. Likewise, microfinance is and has been a major focus of development aid over the last four years. For example, the Obama administration announced in 2009 the creation of a Microfinance Growth Fund for the Western Hemisphere and Hillary Clinton stated the importance and need to focus on microfinance in her confirmation hearings for the position of Secretary of State. There is no reason to believe what Romney proposed is wrong, but it is far from a radical departure from what we already have in place today. Without more details, it is impossible to gauge what type of change this may or may not represent, but for now appears to be a re-branding of current programs rather than a new agenda.

The other main point of Romney’s speech was the issue of corruption and aid effectiveness. Highlighting American charity and compassion, he tempered this with its disappointments:

“But too often our passion for charity is tempered by our sense that our aid is not always effective. We see stories of cases where American aid has been diverted to corrupt governments. We wonder why years of aid and relief seem never to extinguish the hardship, why the suffering persists decade after decade.”

His proposed solution for this is again free enterprise:

“For American foreign aid to become more effective, it must embrace the power of partnerships, access the transformative nature of free enterprise, and leverage the abundant resources that can come from the private sector….Work. That must be at the heart of our effort to help people build economies that can create jobs for people, young and old alike. Work builds self-esteem. It transforms minds from fantasy and fanaticism to reality and grounding. Work will not long tolerate corruption nor quietly endure the brazen theft by government of the product of hard-working men and women.”

Again, economic growth which will inevitably increase the private sector in developing countries is something that development seeks to accomplish. But to pretend that corruption only occurs in the public or non-profit sectors and can never be found or persist in the private sector is a bit of a pipedream. The issue of corruption, and by extension the effectiveness of the foreign aid in funding and accomplishing its goals, is something that needs to be tackled in all sectors by using partnerships and engaging actors from every type of economic enterprise and across the public-private spectrum. Yet there was no mention of how the US would engage aid recipient governments, be it at the local or national level, nor any mention of NGOs and international organizations that are already active in these areas. This is not a small oversight. While it may be understandable why Romney focused on ways to tap into the private sector, to completely leave out all other actors in a major address on foreign aid undermines the strength of the programs he proposes.

In the end, this was a campaign speech that sought to differentiate Romney from Obama on foreign aid and policy. It proposed some program ideas while also sprinkled with some subtle and not so subtle digs at foreign countries, leaders and the Obama administration’s handling of the unrest in the Middle East. That may be the speech’s biggest failing; not only did he not propose anything really new for American foreign aid policy, but in a room filled with international political and business leaders at an event seeking to bring different parties together for the advancement of the least advantaged among us, the political tone hit a sour note. Nonetheless, there are kernels of useful information here and time will only tell if we get to see what could come out of the ideas presented by Romney today.

Originally published on September 25, 2012 at www.foreignpolicyblogs.com