America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
To the Editor:
Carol C. Adelman's enthusiasm for remittances ("The Privatization of Foreign Aid," November/December 2003) raises troubling questions about Americans' generosity and the nature of overseas development.
There is no doubt that the billions of dollars sent home by immigrants in the United States are an important source of income for developing countries. Like the money sent home by U.S. soldiers stationed overseas, however, such giving is not really philanthropic but a form of family income. Even if Adelman were right to classify remittances as a type of aid, this does not reflect well on U.S. generosity: most of these funds come from the very poorest members of society, the majority of whom are not even American.
Remittances, moreover, do not serve the cause of development as effectively as targeted government giving. Although such funds are an important temporary source of income for millions of people in the developing world, they do little to alleviate deep-rooted problems there. Relying on remittances makes it possible for developing countries to avoid the hard work of structural change, which is the only real hope for lasting development. In the case of Cuba, remittance income -- the island's largest single source of hard currency -- indirectly helps Fidel Castro's authoritarian regime remain in power.
It is too easy to argue that public institutions in the developing world are broken and that remittances are a means to circumvent them. Any lasting attempt to lift people out of poverty and to provide equal opportunities for all requires effective health, education, and judicial systems. And that is where public, rather than private, giving can really make a difference.