How Doing Good Can Help Corporations

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SEATTLE — America’s moral obligation to assuage the suffering around the world is supported by fundamental humanitarian principles. However, the altruistic motive behind foreign aid is an ethical prerogative and cannot be argued objectively. Its positive impact on the U.S. economy is, however, an undeniable fact. The evidence of how doing good can help corporations is in the tangible returns on U.S. global engagement.

Poverty alleviation fosters economic independence which translates into consumers with enhanced purchasing power for American exports. America’s history is decorated with staggering examples of its economy benefiting from acts of altruism. Out of the top 15 U.S. trading partners, 11 were once recipients of U.S. assistance.

The U.S. decision to aid South Korea to rebuild itself after the Korean War in 1953 was a strategic gesture of generosity. Today, South Korea is America’s seventh-largest trading partner and one of its strongest allies. The U.S.-Korea Free Trade Agreement signed in 2012 increased trade from $126.5 billion in 2011 to $150 billion in 2015. Similarly, the $8.6 billion U.S. spent on military and economic aid to Columbia helped to abate the narco-insurgency threats in 2001 and initiate a flourishing democracy. Trade with Columbia has tripled since then and amounted to $12 billion in 2011, which illustrates how doing good can help corporations.

U.S. investment in Europe and Japan post-World War II (WWII), besides being America’s greatest legacies of compassion, was also a fiscally prudent strategy transforming enemies into allies. America’s investment of approximately $182 billion (in 21st-century dollars adjusted for inflation) to repair the catastrophic destruction in Europe is a testament to American leader’s foresight. The $250 billion earned from goods exported to Europe yearly represents a substantial return on investment. The third-largest economy, a vibrant democracy and a significant U.S. ally, Japan received $18 billion in aid from the U.S. post-WWII. In 2013, U.S. good exports to Japan totaled $65 billion.

By using compassion driven foreign aid to create mutually beneficial opportunities for foreign trade. A good example is sub-Saharan Africa, where unreliable access to electricity for 70 percent of the population seriously hampered education, healthcare and economic growth. The bipartisan bill, Electrify Africa Act, passed in 2016 would not only improve the quality of life for millions but also boost commercial growth generating new market and job opportunities in the U.S.

Currently, six out of the 13 fastest-developing economies are in Africa and $5 trillion in purchasing power resides in the poorest two-thirds of the world’s population. In 2016, U.S. foreign exports totaled $2.2. trillion dollars. An estimated 11.5 million jobs were supported by exports of goods and services in 2015 which represents an increase of 1.9 million jobs since 2009.

U.S. assistance programs, such as Feed the Future, strengthen the local economy and supporting small farmers enhance their income by sustainably cultivating crops. U.S. foreign aid also encompasses prevention and treatment of malaria, polio and tuberculosis and providing food aid for millions of malnourished people in addition to relief efforts towards approximately 70 disasters yearly.

The President’s Emergency Plan for AIDS Relief (PEPFAR), launched in 2003, is the acme of global engagement born out of empathy to save millions of lives with treatment and prevention programs. Approximately 11.5 million men, women and children are alive due to PEPFAR-funded antiretroviral treatment. With 74.3 million receiving HIV testing and 6.2 million vulnerable children being taken care of, PEPFAR has been monumentally transformative.

The answer lies in the strategic use of skills, resources and expertise to benefit economies around the world. In addition to enhancing America’s image and strengthening its diplomatic position, it also positively impacts the lives of American citizens. In 2015, foreign trade earned Tennessee about $33 billion and supported 830,000 local jobs. This is how doing good can help corporations and it is not an isolated incident.

However, despite its proven fiscal benefits and potential for improving the lives of millions, foreign aid is allocated less than one percent of the $4 trillion U.S. federal budget. The Trump administration’s proposed 28 percent cuts to the United States Agency for International Development (USAID) and the State Department’s budget are inaccurately perceived as cuts to charity. USAID’s mission of sustainable growth through collaboration in the public and private sector to develop innovative solutions transforms stagnant economies into thriving democracies thereby advancing the goals of U.S. corporations by creating new markets and jobs in the U.S.

The question of how doing good can help corporations has been answered by global business and political leaders. The CEO of GE, Jeff Immelt, said, “It’s in our country’s best interest to get economic development in every corner of the world.”

Preeti Yadav

Photo: Flickr

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About Author

Preeti Yadav

Preeti lives in Portland, OR. She has a Master’s degree in Biomedical Engineering and has worked as a biomedical engineer for 6 years. Preeti recently transitioned out of this role to pursue her passion for writing and utilize her skills towards affecting positive change. Preeti’s dream is to live in a bamboo cottage on a beautiful beach in Asia with her husband, pursue local humanitarian work and continue writing.

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