New transnational challenges to America s prosperity and security have also arisen over the past decade. Aid can be a valuable tool for responding to many of these challenges. Spending on project areas such as U.S. support for agricultural development, education and democracy have also declined at a time when they would be valuable policy complement to new US trade policy initiatives such as the Africa Growth and Opportunity Act and the expansion of the Caribbean Basin Initiative. Spending on projects designed to promote private sector development have also been under considerable budgetary pressure in recent years, at a time when private sectors in former planned economies are struggling to adapt and survive in the global economy. Globalization also presents opportunities, primarily in the form of potential new markets for U.S. products and exported-related jobs for American workers.
Economic aid helps countries expand their participation in global commerce.
Most of today's top customers for American agricultural products were once U.S. food aid recipients. During the 1990s, U.S. firms substantially increased their commercial ties with emerging market countries, many of which were once recipients of U.S. aid. For many developing countries and for nations transitioning from state planned economies to market economies, support for their efforts to create rationale policy and regulatory institutions is vital to their success in building sustainable, competitive and functioning market systems. As private capital flows become the primary source of financial resources for developing countries in the 21st century, investing both public and private resources in development assistance initiatives will continue to be important for increasing opportunities for others to fully participate in globalization. The continued decline in foreign aid spending should give us a reason to pause.