Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Own Goal: Cuts in U.S. Aid to Russia

Republicans in the U.S. Congress may well boost their own short-term popularity in the increasingly introverted United States by advocating large cuts in aid to Russia, but they will not be doing it in the best interests of America.


In what may turn into a classic example of shooting yourself in the foot, the proposed cuts in the aid budget stand to hurt U.S. businesses here the most and will damage America's political and economic interests in the long run, allowing shrewder competitors to fill the void.


There is no denying that foreign aid is out of favor back in the United States, where the popular perception is that it accounts for a large chunk of the federal budget. But the Republicans are using this issue as a political football. In reality, the level of U.S. foreign aid -- and especially aid allocated to Russia -- is low by international standards.


The $16 billion dollars the United States spent on foreign aid last year amounts to just 1 percent of U.S. budget spending and less than 0.3 percent of gross domestic product. Much of this is military aid to America's Middle East allies Egypt and Israel.


Nonmilitary foreign aid, which amounts to less than 0.2 percent of U.S. gross national product, is less than half the level allocated for assistance abroad by other members of the Group of Seven leading industrialized nations. If troubled economies like Britain and Italy can afford it, why can't the United States?


A more appropriate criticism, perhaps, is that too much aid to Russia is wasted on overpaid consultants and lavish apartments to house the fatter cats within aid organizations' expansive bureaucracies. The aid organizations have not done themselves any favors here.


But the solution to this, surely, is to restructure aid so that less is spent on junkets and well intentioned but cost-ineffective consultancies and more targeted at helping Russian businesses to turn around.


Some critics in Congress are singling out Russia as a candidate for aid cuts because of its poor human-rights record during the war in Chechnya and its agreement to sell a $1 billion nuclear reactor to Iran, which Washington considers a pariah state.


A better starting point for exerting pressure on the Kremlin over its conduct of the Caucasus conflict would be strong protests through diplomatic channels, something Washington has been hesitant to do.


The United States risks missing out on a lot if it fails to nurture close links with Russia during this formative stage of its capitalist economy. Russia promises to be a massive market for U.S. exports. More than this, experience shows that having Russia as an enemy is extremely expensive.