Some analysts estimate that U.S. trade barriers inhibit growth in low-income countries much more than U.S. aid helps. Contrast the $350 million pledged in tsunami relief to the $1.8 billion in duties on imports collected from Indonesia, Sri Lanka, Thailand, and India in 2004. The United States collected almost as much in import duties in 2004 from Bangladesh ($314 million) as from France ($350 million), despite importing 14 times as much from France. In addition, U.S. agricultural subsidies undermine the incomes of poor farmers around the world. Economist William Cline estimates that elimination of trade barriers by rich countries could inject $100 billion annually into the economies of developing countries.

The article stresses the importance aid:

A great deal of assistance has certainly been wasted over the years, particularly aid provided for political rather than developmental purposes. Corrupt governments pocketed some of the funds, while the United States and the Soviet Union showered money on proxy states during the Cold War with little regard for how it was spent. But aid has successfully supported development in many other countries, such as South Korea, Taiwan, Botswana, and, more recently, Uganda and Mozambique.

(…) Aid has proven particularly effective in boosting health and education, which improved markedly around the world during the last four decades. In developing countries, life expectancy at birth increased from 43 to 59 years between 1960 and 2002, and infant mortality rates fell from 147 to 79 per thousand. Although aid was not the most significant contributor to these trends, many analysts believe it played a key role. The United States could unquestionably increase the effectiveness of its aid by reducing bureaucratic overhead, increasing coordination with other donors, and aiming fewer funds at corrupt or incompetent governments.

Steven Radelet ends by reminding the Bush administration that US security depends on a substantial increase in foreign aid:

In sub-Saharan Africa, the United States provides a paltry $7 per African per year (one quarter of the $28 all donors together provide), with private giving perhaps doubling that amount. Meanwhile, 27,000 children die every day from preventable diseases, half the world’s population lives on incomes less than $2 per day, and resentment of the United States continues to grow. This is no way to create a more stable, secure, and pro-Western world. The United States may or may not be stingy with its aid, but it is clearly short sighted.

Read his full article in Foreign Policy. Click here for more information on the upcoming G8 Africa summit.