Op Ed: Why Foreign Aid is Good Business for the U.S.

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Don Girskis is the Former Head of Boost Mobile and serves on The Borgen Project’s Board of Directors.

Orange, CA — Growing American jobs is key to helping lift the economic strength of our country, and reduce our ever growing deficit.  Given the hole we find ourselves in today, does it make sense to invest in foreign aid, and spend dollars on helping selected developing countries elevate their poor?  Absolutely!!

As someone who has spent years working in international  business, I believe our ability to help developing nations out of poverty not only helps the poor, but ultimately drives American jobs creation.  As we help people move from barely surviving to becoming consumers, we open new markets for the U.S.  History and data supports this – today 45% of our exports are sent to developing nations, and they are our fastest growing trading partners. With 1 in 5 U.S. jobs being export based, our economic health depends upon developing nation’s growth.  Think about Boeing’s $22B sale of jets to Indonesia’s Lion Air just over a year ago, our aid helped create that market. How about all the semiconductor chips our very own Broadcom sells in communications devices such as cell phones in developing countries?  Broadcom is an excellent example of a local company that benefits from growth in developing markets.  In reviewing California’s agricultural business, professors emeritus Warren Johnston and Alex McCalla at UC Davis write, “rising incomes in developing countries provide additional opportunity for… crop exports”.   The food that California farmers send overseas – these are markets our aid has helped developed.

In June 2011, 50 major U.S. corporations, under the U.S. Global Leadership Coalition umbrella, signed a letter to congress urging continued investment in the International Affairs budget, based upon the economic opportunity this creates for the U.S. Companies such as Google, Cisco, Coca Cola, Johnson and Johnson, Caterpillar, Northrup, Microsoft and Wal-Mart all urged continued funding.  On May 21, 2012, The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, urged Congress “ to support full funding for the U.S. International Affairs Budget”, because it’s good for US business.  As 80% of the world’s purchasing power lies outside the U.S., we need develop to these markets.

Even our key military leaders endorse a strong foreign aid budget. On March 27th of last year, 80 of our retired generals and admirals urged leaders of congress for strong support of the FY 13 International Affairs Budget, as “these programs represent one of the most cost effective measures we have to confront the many threats we face today.”  Good for our economy and good for our security.

Why do so many U.S. companies support this?  They understand our investments pay big dividends.  For example, between 1960 and 2005, we provided Mexico $1.7B in aid.  Today we export $16.3B to Mexico annually.  Same with Brazil – $2.8B in aid over the same 14 year period now results in our exports of $35.4B annually.  Today, 10 of our top 15 trading partners had previously been recipients of development and security assistance from the U.S.

But now we have deficits larger than ever in the history of this country, we can’t afford to help the poor lift themselves up, can we?   How much does the U.S. spend on Foreign Aid, helping developing nations combat poverty?  Most U.S. citizens believe the number is 20% of the Federal Budget, in reality the number is less than 1%, which includes the cost of operating our embassies.  Our deficit wouldn’t materially change if all foreign aid was eliminated, but ultimately the price would be paid in U.S. jobs.  Support foreign aid and the U.S. leadership position it provides us –  it’s good for the U.S. economy, it’s good for U.S. employment, it’s the right thing to do.

Photo: Flickr

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About Author

Donald Girskis

Don Girskis serves on The Borgen Project’s Board of Directors. He is the former head of Boost Mobile. Girskis had previously been Senior Vice President of World Wide Sales at ShoreTel, a publicly traded global telecommunications company. During his four year tenure at ShoreTel, Girskis also served as interim CEO. Prior to ShoreTel, he spent 5 years at Boost Mobile, a wholly owned subsidiary of Nextel Communications. He joined Boost Mobile as Chief Operating Officer when it was just forming. He was promoted to run the entire operation as Senior Vice President and General Manager of Boost Mobile after one year, and developed the business from an idea to $1.8B in revenue in just 5 years.

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