“Foreign Aid: The Most Generous Nation in the World is the U.S.”

1. “Foreign Aid: The Most Generous Nation in the World is the U.S.” Craig S. Galbraith Entrepreneurship and Technology Management Cameron School of Business, UNCW GlaxoSmithKline Faculty Fellow Lecture for EBD 482

2. What does foreign “aid” have to do with globalization? • “I am astonished that on the one hand, the advantages of globalization are being increasingly recognized, while on the other, one fails to see that the affluence of the industrialized countries can not be secured without the concrete solidarity with the poor parts of the world” (Kohler, IMF director, 2001) • “With the record of corruption within impoverished countries, people will question giving them money. That can be handled by giving them the industry directly, not the money.” (J.W. Smith, Economic Democracy, 2002) • Know-how, institutions, labor, and physical assets

3. Is the US actually “Stingy”? 2005 Globalization Panel, UNCW

4. Is the US actually “Stingy”? http://webnet4.oecd.org/dcdgraphs/

5. Does traditional aid make sense any more? • Official aid may not even have an impact on modern global development • 1) corruption and 2) stage of country development • Need to expand definition of development to “global structural policy” • Germany has redefined, U.S. has practiced • Measurement of “assistance” vs. “compassion” • Impact of Global Policies on Global Development • 7 traditional areas • Non-traditional area – intellectual assets

6. Humanitarian v. Development Aid • U.S. ranks well above average for European Union in government relief aid • Combined with private relief aid, U.S. is #3 in world 2005 Globalization Panel, UNCW

7. UN foreign aid measure, or Official Development Assistance (ODA) is not an accurate measure-Accounts for only about 20% of total U.S. Aid • Doesn’t include • Aid to “part II” countries (Bosnia, etc) • Administrative costs, such as USAID • Grants by private voluntary organizations (60% of U.S. non-OECD aid) • Delivery costs, such as US helicopters • Private transfers from individuals (to families in other countries) • Much of the aid through the DoD ($6.2 billion for East Timor, Bosnia, etc., for building roads and clinics) • Grants to foreign students in US • Forgiveness of certain non-aid designated debt • Value of volunteer time, grants to faculty, etc.

8. Actual total economic engagement with less developed countries, U.S. #3 U.S.

9. U.S. ranks near top of all developed countries U.S. ranks well above average for European Union U.S., in general, has very effective policies assisting developing countries Effectiveness of policies for Global Development 7 Traditional Factors

10. Most important, but “Unreported” development aid is intellectual capital, knowledge, and institutions • Appropriation of Intellectual Property by developing countries is really development aid from corporations • U.S. “transfers” over $150 billion yearly • For example, software piracy (of total market) • 96% China • 91% Russia • 70% Argentina • 60% India • The rising economies of the world are built upon the transferred intellectual capital of the U.S. – we have given the world not just money, but 21st century “industry” – where does it stop?