How the International Affairs Budget Strengthens America’s Economy

March 22, 2010 | Jordan Smith

“U.S. businesses understand that diplomacy and development assistance play vital roles in building economic prosperity, protecting national security, and promoting America’s humanitarian values. Although it represents less than 1.5 percent of the total federal budget, the International Affairs Budget funds America’s development and diplomacy. These investments are critical to creating jobs…”

–U.S. Chamber of Commerce

International Affairs Budget Snapshot–Strengthening America’s Economy

Representing 1.4% of the entire federal budget, the International Affairs Budget funds America’s “smart power” tools of development and diplomacy.
America’s economic growth is inextricably linked with world economic growth. Over the past 40 years, trade has tripled as a share of our national economy. U.S. exports account for approximately 13% of our gross domestic product and 1 out of every 5 American jobs.
As global markets evolve, programs supported by the International Affairs Budget increase economic opportunities, promote our business interests around the world and create American jobs through increased exports.
Today, developing countries are America’s fastest growing markets representing 40 percent of U.S. exports.

Benefits from Programs Funded by the International Affairs Budget

Funds U.S. Export Promotion
The Overseas Private Investment Corporation’s investment funds program has invested almost $4 billion in more than 400 private enterprises in 53 developing countries.
Builds and strengthens stable, open societies and markets
In 2009, there were over $2.3 billion in new exports of U.S.-manufactured goods and services attributable to the activities of the U.S. Trade and Development Agency. That amounts to over $40 in U.S. exports for every dollar invested in the Agency.
Advocates for American businesses abroad
The Export-Import Bank authorized nearly $3.4 billion in direct support of U.S. small businesses as primary exporters in FY 2006.
Protects agricultural investments and food security.
In fiscal 2010, more than 204,000 metric tons of U.S. food will be purchased on the U.S. market and donated by the Foreign Agriculture Service to foreign governments to expand international markets.
Creates jobs in the United States
One in five factory jobs depends on exports, and one in three acres on American farms is planted for hungry consumers overseas.

Business Leaders Back a More Robust International Affairs Budget

Chris Policinski, President and CEO of Land O’ Lakes, Inc.

“The work of the USGLC benefits American business in many ways. It’s important to understand that U.S. foreign assistance programs help stabilize markets in struggling and emerging economies around the world. Good governance allows businesses to thrive and create opportunity in the private sector. Providing clean water for communities improves health outcomes and allows for increased productivity because people are sick less often from water-borne diseases. Educating young people is key to creating a stable, qualified workforce for industry and commerce. These are just a few of the ways a robust International Affairs Budget helps American businesses succeed in the global marketplace.” – USGLC Interview (October 2009)

James Bell, Corporate President, CFO and Executive Vice President, The Boeing Company

“American businesses understand the critical role our foreign policy toolkit plays in protecting Americans’ national security and building economic prosperity. In a globalized economy, our security and prosperity are linked with that of other nations. U.S. companies also recognize the vital importance of these programs in demonstrating Americans’ moral values. Developing countries are America’s fastest-growing export markets, accounting nearly 45 percent of global trade. For just a little more than one penny of every dollar, investments in the international affairs budget are crucial to creating the stable market conditions in many developing nations for U.S. goods and services.” – USGLC Tribute Dinner (December 7, 2009)

Bill Lane, Washington Director of Caterpillar and USGLC co-President

“What happens in one country’s economy today affects the global economy. There is now a firm consensus among business leaders about the importance of U.S. development and diplomacy efforts as they help to build strong markets for U.S. goods overseas.”
- USGLC Dialogue on the QDDR (October 2009)