LF: U.S. gives billions of dollars in foreign aid to world's richest countries

Title: U.S. gives billions of dollars in foreign aid to world's richest countries - then asks to borrow it back
Source: Daily Mail Online
URL Source: http://www.dailymail.co.uk/news/art ... ountries-asks-borrow-back.html
Published: Jun 3, 2011
Author: Daily Mail Reporter
Post Date: 2011-06-04 00:03:01 by Sebastian
Keywords: None
Views: 212

The U.S. is providing hundreds of millions of dollars of foreign aid to some of the world's richest countries - while at the same time borrowing billions back, according to report seen by Congress.

The Congressional Research Service released the report last month which shows that in 2010 the U.S. handed out a total of $1.4bn to 16 foreign countries that held at least $10bn in Treasury securities.

Four countries in the world's top 10 richest received foreign aid last year with China receiving $27.2m, India $126.6m, Brazil $25m, and Russia $71.5m.

Barack Obama

Around the world: Barack Obama on the Great Wall of China. Last year China received $27.2m in foreign aid from the U.S.

And yet despite the massive outgoings in foreign aid, the receiving countries hold trillions of dollars in U.S. Treasury bonds.

China is the largest holder with $1.1trillion as of March, according to the Treasury Department.

Brazil held $193.5bn, Russia $127.8bn, India $39.8bn, Mexico $28.1bn and Egypt had $15.3bn.

Foreign aid is earmarked for causes including HIV/AIDs prevention, combating weapons of mass destruction, fighting tuberculosis, and counter-terrorism efforts.

The news has caused grave concern, with Senator Tom Coburn, R-Okla, who requested the report seen by Fox News, calling the policy 'dangerous'.

In a written statement Senator Coburn said: 'Borrowing money from countries who receive our aid is dangerous for both the donor and recipient.

'If countries can afford to buy our debt, perhaps they can afford to fund assistance programs on their own.

THE TOP 10 COUNTRIES RECEIVING THE MOST AID

Colombia $461.2m

Mexico $316.7m

Egypt $255.7m

Philippines $128.2m

India $126.6m

Russia $71.5m

China $27.2m

Brazil $25m

Thailand $16.75m

Turkey $8.2m

'At the same time, when we borrow from countries we are supposedly helping to develop, we put off hard budget choices here at home.

The news arrives as lawmakers in Washington battle over the conditions for increasing the nation's ability to borrow money before defaulting on its obligations.

The government reached its $14.3trillion borrowing limit last month and both parties agree that spending cuts are needed, although Republicans refuse to raise taxes that Democrats insist on.

President Obama has met with both sides over the issue, but no progress has been made. The State Department did not comment.