SEATTLE, Washington — The United States House of Representatives passed the 2022 State, Foreign Operations and Related Programs funding bill on July 28, 2021, as part of the yearly appropriations bill. The legislation assigns $62.24 billion for a variety of causes relating to foreign policy and development. Much of this funding will go toward humanitarian causes, particularly, in response to the impacts of COVID-19. Other areas of coverage include strengthening global health infrastructure, advancing women’s rights and pushing for democracy worldwide. The 2022 Appropriations bill is important as its funding allocation significantly impacts the United States’ efforts in reducing global poverty.
The New Appropriations Bill
This year’s appropriations bill funding is a significant increase from last year’s, providing nearly $7 billion more in funding. Part of this increase is a $900 million allocation specifically to provide economic aid to developing countries. The COVID-19 pandemic has hurt economic growth all over the world, and for countries with high rates of poverty, economic stagnation can be even more harmful.
When a country’s economy stagnates, or even worse, shrinks, this often results in higher unemployment rates and lower wages. These effects directly hurt the lower-middle-class people of the country and can lead to an increase in the number of people living under the poverty line. For this reason, supporting the economies of developing countries is crucial to reducing global poverty. If the U.S. can successfully boost the economic growth that has stagnated due to the pandemic, this growth can help bring more jobs and better wages to the people of those countries.
Special Drawing Rights
The recently passed appropriations bill also calls for the use of Special Drawing Rights, which are assets that the International Monetary Fund gives out to countries. SDRs came about “as a supplementary international reserve asset” under the Bretton Woods exchange system. After the said system collapsed in 1973, SDRs became less important in the overall monetary system, but they are still used for liquidity and contributing to countries’ reserves.
As aforementioned, economic stagnation is a huge consequence of the COVID-19 pandemic and has severe impacts on poverty worldwide. The use of SDRs would help slow down this stagnation and promote economic growth; the liquidity and “reserve buffers” SDRs provide for economies will lower the effects of stagnation. For this reason, the new appropriations bill advocates for the allocation of SDRs to developing countries. Again, this is just one part of the bill, but it could be a key step toward economic growth for countries hit hard by the pandemic.
Prioritizing Global Health
The new appropriations bill also covers other global issues such as global health. The bill allocates more than $10 billion for improving the health of people in countries around the world amid COVID-19 as well as for preventing another pandemic. The economic effects of a pandemic have proven devastating, making it all the more important for the U.S. to do its best to reduce the likelihood of another pandemic emerging and put in place better measures to deal with future pandemics. Within this sphere is a specific focus on the improvement of women’s health, which is a pressing matter in many countries. The bill allocates significant amounts of money to humanitarian aid in response to natural disasters and violence, which have caused widespread displacement in vulnerable nations.
The challenges of global poverty cannot be solved in just one year, but the allocations and commitments laid out in the new appropriations bill inspires hope. The increased funding for many causes related to global poverty, including economic growth, humanitarian aid and global health, will make a significant difference in the lives of many vulnerable people around the world.
– Ritika Manathara