Talk Big, Spend Small: Our Cheap Foreign Policy

WASHINGTON —  When Prsident George Bush visited Poland last month, he heard from Solidarity leader Lech Walesa that Poland needed $10 billion in external aid to rebuild its economy and avoid the dangers of political instability and social conflict. Predictably, the U.S. reply has fallen far short--even though Bush did say Thursday he was sending additional food aid to Poland.

Now that Poland is on the way to installing its first non-Communist government since World War II, Washington has agreed to help mobilize an international package of assistance worth about $500 million, consisting mostly of World Bank loans. This bargain-basement approach would be understandable if it were based on a hard-headed calculation of how much external financing the Polish government can effectively use or an unwillingness to put any real cash behind our foreign policy priorities. For without cash, U.S. priorities become mere rhetorical statements of preference, which no one knows how seriously to take.

This is the wrong time for Uncle Sam to have become an international Scrooge. Some of the goals that have long been at the heart of American policy may now be within reach, yet we run the risk of losing them for want of money. And new global problems are emerging--drugs and environment, for instance--whose solution will require enormous investments. Cold cash may be more important than military muscle in advancing our interests in today’s world.

Ever since the 1940s a fundamental U.S. aim has been to end Soviet domination over Eastern Europe and the division of the continent into militarily and ideologically hostile blocks. The first hesitant movement in those directions is now under way in Poland, where the Soviet Union is today accepting non-Communist leadership. If the new government succeeds, it will point the way for other countries, and bolster Mikhail S. Gorbachev’s reform efforts in the Soviet Union itself. But Poland’s deep economic troubles could overwhelm the experiment and produce a prolonged political crisis that would reverberate throughout the Soviet Bloc. The curtain might well fall on further political liberalization in Poland or anywhere else in Eastern Europe.

This scenario is not inevitable, but it is a possibility. With more substantial external help than is now being contemplated, the odds favoring a better future for Poland could doubtlessly be improved.

It is not only in Eastern Europe that the United States may end up paying a high price for its penury. Washington has enthusiastically celebrated Latin America’s democratic wave of the 1980s, as elected civilian governments have replaced repressive military regimes in most countries of the region. But the new democracies are still fragile, and their survival remains threatened by Latin America’s prolonged crisis of debt and economic depression.

The United States has responded to their appeals for help, not with debt relief or significant new resources, but with lectures on free-market economics. And even those countries that have sought to undertake U.S.-promoted market-oriented reforms have found their way blocked by shortages of external capital. Turning a cash-starved private sector into a vibrant engine of economic growth is not an easy proposition anywhere.

In a period when Latin America is sending some $25 billion a year abroad to meet its annual debt payments, and when investment at home is at an all time low, U.S. aid to the region totals only $1.2 billion a year--two-thirds of that goes to tiny Central America. The amount for all of South America, where the democratic trend has been most promising, was a meager $110 million in 1988, a negligible fraction of the continent’s revenue from the drug trade.

And what about narcotics trafficking--which Americans now identify as this country’s major foreign-policy problem? Despite our rhetoric about taking the war on drugs to the source, the United States has been allocating only about $100 million a year--less than 2% of our federal drug budget--to help other countries eradicate crops, attack criminal networks and seize drug shipments. This is spare change for the drug cartels, but it is positively munificent compared with what we spend on international environmental problems such as global warming and ozone depletion, which threaten untold harm from global climatic disturbances.

We seem to have lost sight of the fact that many of our major policy triumphs over the years have resulted from the effective and large-scale use of our financial resources--from backing our rhetoric with real money. Our greatest postwar success was the Marshall Plan, which prompted Western Europe’s economic recovery, and thereby helped to avert the political and social breakdown of our closest allies.

The Marshall Plan cost the United States some $13.5 billion over four years (1948-1952), or about 1.2% of our gross national product, the equivalent today of about $48 billion per year--a virtually unimaginable sum. Today, our annual foreign-aid expenditures worldwide--for development assistance, military aid, food shipments and support for multinational financial institutions--are less than one-third that amount. Indeed, we now spend a smaller share of our GNP on overseas aid than any other major industrial country.

In 1961, following Fidel Castro’s rise to power in Cuba, we launched the Alliance for Progress, the greatest U.S. effort ever to spur economic development, social equity and political democracy in this Hemisphere. Although the Alliance fell short of its ambitious (and probably impractical) social and political goals, it did help set the stage for the region’s subsequent rapid economic expansion and modernization. President John F. Kennedy pledged to make at least $1 billion a year available for the aims of the Alliance--the equivalent in today’s dollars of about $5 billion--or five times what we now spend annually in Latin America.

Money was also a crucial element in achieving the Camp David Accords. President Jimmy Carter’s promise of economic assistance to Israel and Egypt now costs us $8 billion a year--more than one-half our total foreign-aid budget. Could we afford another Middle East peace agreement today?

We are, of course, living in a period of Gramm-Rudman-Hollings, of immense budget and trade deficits and of domestic savings-and-loan and health-care crises. But what is most in short supply is not money; it is our resolve to use it to advance our goals and our values overseas. Poll after poll indicates that the American people do not want to spend money overseas. Many, if not most of us, would even cut back further on our current paltry expenditures.

Our tightfisted foreign policy should not be blamed on the American voter, however. Our President and our other leaders have the responsibility to lead, not merely to mirror public opinion; it is up to them to define what, in fact, our vital interests are, to make intelligent choices about how best to use our resources to advance those interests--and then seek to mobilize political support behind their choices, whether that requires increased taxes, defense cuts or whatever.

The United States is, after all, still the richest country in history. We have the resources to act as a great power and to make a constructive difference in today’s world. But we must understand that we cannot do so unless we are prepared to place significant resources behind our international goals. We cannot hope to build a world that reflects our own best values and long-term interests on a shoestring budget.