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USAID: The Humanitarian Face Of Colonial Exploitation

Above Photo: Speaker for the USAID at a conference. Liberation News.

The U.S. Agency for International Development was established by executive order under the Kennedy administration in 1961, tasked with the stated mission of administering humanitarian assistance or international development abroad. But make no mistake: USAID serves as a tool of U.S. capitalist and imperialist interests — it exists solely to direct the money and resources of the Global South into the pockets of the U.S. capitalist class. USAID now operates in 100 countries worldwide, mostly in Eastern Europe, Africa, Asia, the Middle East and Latin America, and has an annual budget of nearly $30 billion to spend on its global development programs. As an arm of U.S. “soft power,” USAID’s intentions are deliberately shrouded within this rhetoric of aid and humanitarian assistance.

The working relationship between USAID and the private sector has only grown closer and closer since its formation. In the first few decades of its existence, USAID was chiefly responsible for developing programs and infrastructure in other countries to attract foreign investment. This meant “easing trade regulations, offering loan guarantees to businesses, providing scholarships for students to study in the U.S., and creating agricultural development programs that opened the markets of poor countries to large agribusiness.”

While these programs were for the benefit of foreign businesses, the businesses themselves were not directly involved in their implementation. However, beginning in the early 2000s, USAID shifted toward more direct engagement with the private sector, a development brought about by the founding of its Global Development Alliance and billed as “a partnership where USAID and the private sector work together to develop and implement market-based approaches to solve development challenges.” What this means in practice is that USAID works closely with private sector firms, handing out multi-million dollar contracts to U.S. corporations like Dupont, Johnson & Johnson, Microsoft and Coca-Cola to carry out “development” and aid projects in the Global South.

And USAID is explicit in this mission of creating new business opportunities for U.S. firms, though it cloaks it in the unassailable language of relief assistance and development aid. As USAID ambassador Mark Green stated in the organization’s Private-Sector Engagement Policy:

Enterprise-driven development means aligning with private enterprises as co-creators of market-oriented solutions, with shared risk and shared reward. It means recognizing the value of engaging the private sector in development and humanitarian assistance to help shape solutions that achieve sustained impact and can carry forward long after USAID’s support has ended, and reorienting our investments to open markets for U.S. firms … Ultimately, increasing our collaboration with the private sector across all areas of our work will make us better development and humanitarian professionals, bring us closer to our purpose of ending the need for foreign assistance, and provide greater opportunities for American businesses. [emphases added]

As an arm of U.S. corporate interests and U.S. imperialism in general, the objective of USAID is to seek new markets and generate profits for western-based corporations, and it does so in one of two ways. The first is through contracting out humanitarian aid and development work, often in the aftermath of a natural disaster or catastrophe, essentially opening up these countries to foreign capital and enriching the U.S. capitalist class at the expense of the local economy. In fact, 80% of all USAID funding goes to just 75 organizations, while only 6% goes directly to receiving countries. The second is through enlisting contractors to carry out “democracy promotion” programs which seek to advance U.S. foreign policy objectives. Often this entails shaping civil society through training programs and seminars, or backing local movements in order to subvert governments resistant to U.S. hegemony, with the aim of overthrowing that government in order to install one more subservient to western capitalist penetration and the demands of U.S. foreign policy.

This article will look at four cases of USAID projects within the last two decades. The first two, Iraq and Haiti, reflect USAID’s disaster capitalism strategy of awarding contracts to the private sector under the guise of reconstruction and redevelopment, both with disastrous results. The last two, Bolivia and Cuba, illustrate USAID’s “democracy promotion” strategy of manipulating discontent among the populace and directing it toward the government, with the intent of regime change. It should also be noted that while similar USAID “democracy promotion” programs certainly exist in Iraq and Haiti, these two additionally provide examples of the organization’s tactic of exploiting natural disasters in underdeveloped countries to direct profits toward U.S. corporations under the guise of humanitarian assistance.

Iraq

Even before the beginning of the U.S. war on Iraq in 2003, USAID had begun seeking bids from various corporations who were interested in rebuilding the country’s infrastructure post-invasion. One of the firms in the running was Bechtel, a San Francisco-based construction company. Seeing a lucrative business opportunity, Bechtel’s Senior Vice President Jack Sheehan used his seat on the Defense Policy Board to advise the Pentagon into invading, while also advocating for public support for the war. Additionally, the firm and its employees had contributed $1.3 million to federal candidates from 1999 to 2002, helping ensure that lawmakers would vote in its business interests in favor of the war to begin with.

Bechtel’s backroom wheeling and dealing paid off: USAID granted the firm $1.8 billion in contracts to rebuild Iraq’s sewage systems, electrical grids, municipal water systems, and other infrastructure after the invasion. Predictably, the results were disastrous. Driven first and foremost by profit rather than the best interests of Iraqis, Bechtel was criticized for mismanagement, poor performance, and not finishing key jobs, including a children’s hospital in Basra after the project fell a year behind schedule.

After pocketing over a billion dollars of taxpayer money, Bechtel left Iraq unable to complete over half of its building projects.

And as the Bush administration intended to turn Iraq into a “free market economy” after toppling Saddam Hussein, USAID also awarded a $9 million contract to Virginia-based consulting firm BearingPoint, Inc. to develop a plan to mass privatize all of Iraq’s state-owned industries — most importantly its oil sector. Soon after, Iraq’s oil, once fully nationalized, was divided among international corporations.

Haiti

On January 12, 2010, a 7.0 magnitude earthquake struck Haiti, killing 220,000 people, injuring another 300,000 and leaving 1.5 million more homeless. In the wake of the catastrophe, the United States provided $1.6 billion in reconstruction funding to Haiti, $651 million of which went to USAID. Rather than employing Haitian construction companies, USAID contracted out the rebuilding projects to international firms. For instance, Minnesota-based construction firm THOR was awarded $18 million in contracts and Mexico-based firm CEMEX received over $7 million.

Described as a “gold rush” by U.S. Ambassador Kenneth Merten in a leaked Feb. 1, 2010, Wikileaks cable, the tragedy of the earthquake was a surefire boon for international companies: For every $1 that USAID spent, less than one penny went directly to Haitian organizations, companies or the Haitian government.

But by far the largest recipient of USAID funding in Haiti was Washington D.C.-based contractor Chemonics International, who received over $200 million to carry out a total of 141 projects. In fact, USAID awarded more money to Chemonics than to the entire Haitian government in the wake of the earthquake.

And just like in Iraq, these foreign contractors produced less-than-desirable results: An audit conducted on Chemonics revealed that the company had a tendency to not finish jobs, evaluated its own projects on arbitrary criteria not having anything to do with the project, and failed to set timelines causing some projects to fall behind schedule. In one case, Chemonics was contracted to build Haiti’s new Parliament building, but what they constructed came out half-finished and unusable: The company only built the framework of the building, not even erecting interior walls to divide office spaces — nor did they bother to furnish the building. Left with this, the Haitian government was forced to draw $775,000 from its public treasury to complete the project. Despite these disastrous results, Chemonics to this day remains USAID’s top contractor — the construction company was awarded $506.4 million in contracts in 2021 alone.

Another USAID project conducted in the aftermath of the earthquake was a “New Settlement Program” to build over 15,000 houses in Caracol. Again, due to mismanagement and improper planning, the number of houses built was drastically reduced to 2,649. This was in large part due to ballooning costs associated with contracting work out to foreign firms and importing materials, which raised the initial $55 million projected cost to $90 million. Of the houses that were built, many of them were found to be of poor quality, often “missing roof fasteners, sub-specification roof materials and concrete reinforcement, and other structural and drainage issues.” Due to shoddy work of the first contractors, USAID quietly awarded another $4.5 million contract to U.S.-based consulting and engineering firm Tetra Tech to provide a plan to repair the Caracol houses.

Bolivia

“Democracy promotion” programs in Bolivia extend back to the mid-1990’s, investing in “decentralization” and “regional autonomy” initiatives. From 1996 to 2003, USAID awarded Chemonics International a $15 million contract to implement a “Democratic Development and Citizen Participation” program in the country. This project aimed to rally support and build trust for the then-government and its state institutions. In turn, this would undermine the growing support of the Movement Towards Socialism (MAS) party and de-radicalize its base, which consisted of Indigenous farmers and peasants opposed to the exploitation and extraction of Bolivia’s resources by international corporations. As Neil Burron explains,

Chemonics was particularly concerned with creating the impression that democracy was working effectively through the decentralization plan, a concern that it, too, linked to the threat of antisystemic forces [i.e, MAS]. One report warned that the 2004 municipal elections would provide the MAS with the opportunity to bash “‘the system’ in general” and hoped that more effective mayors and councils would be put in place to reestablish confidence in Bolivia’s democratic institutions (Chemonics International, 2003: 75). USAID also sought to co-opt MAS strongholds in the coca-producing regions of the Yungas and Chapare by bringing the municipalities into the national main stream and building their capacity to provide services and resolve conflict (USAID-Bolivia, 2003: 8).

In 2004, USAID set up an Office for Transition Initiatives in Bolivia. Billed as a bureau of USAID that “works with local partners to target key political issues such as conflict, democratic backsliding, terrorism prevention, and stabilization,” OTIs in practice function as U.S. intelligence agencies overseas and funnel millions of dollars toward NGOs and opposition parties who align with U.S. policy interests. It was OTI which contracted the Virginia-based consulting firm Casals & Associates to coordinate a series of workshops and seminars to build opposition against 2005 MAS presidential candidate Evo Morales.

Once Morales was elected, OTI shifted focus to funding and supporting separatist movements in eastern Bolivia, with the intent on building a movement to destabilize the newly-elected government. The goal of OTI was to split Bolivia into two states: one governed by the Indigenous majority, the other in the resource-rich areas of the east that are the strongholds of European descended elites and, unsurprisingly, where the separatist factions were based.

After years of this subversion, Morales expelled USAID from Bolivia in 2013.

Cuba

USAID has contracted Washington D.C.-based international development firm Creative Associates International in at least three “democracy promotion” projects aimed at stoking counterrevolutionary forces in Cuba in hopes of mobilizing them against the socialist Cuban government.

In 2009, USAID launched a two-year program in which it contracted Creative Associates to hire a Serbian music producer to recruit dissident Cuban musicians to infiltrate the underground music scene. The music producers would organize music festivals or even try to infiltrate other music festivals. The initiative started out purely cultural, and over time, began to insert more and more political and antigovernment messaging into their music. Contractors sought out Cuban musicians in hopes of boosting their visibility and stoking a movement of fans to challenge the government. Eventually, the Cuban government discovered the program and put an end to it.

USAID again partnered with Creative Associates in 2010 to develop ZunZuneo, a cellphone text messaging and microblogging platform similar to Twitter. Inspired by the Arab Spring protests, coordinators of the program hoped to foment dissent among youth in Cuba against the government — and channel that revolt into a “Cuban Spring.” The platform harvested data from its users — age, gender, political tendencies — with intention to use it for political purposes. And like the underground hip hop operation, the U.S. government planned to grow the platform in the beginning through apolitical “non-controversial” cultural content: sports updates, music, weather, etc. Over time, operators hoped to introduce increasingly political — and eventually antigovernment — content so that mass protests against the Cuban government would erupt across the island. Funding for ZunZuneo ran out in 2012, and the site was shut down.

Finally, from October 2009 to September of 2012, USAID and Creative Associates developed a civil society project in which they sent Venezuelan, Costa Rican, and Peruvian youth — paying them as little as $5.41 an hour — to travel to Cuba and work undercover as tourists to scout Cuban citizens they could train into political activists. Often times, these recruiters were sent to college campuses to find and enlist political dissidents. In another case, the program even went so far as to set up an HIV-prevention clinic to carry out this task. The project went to extensive lengths to hide its activities, and the undercover operatives were directed to communicate in code. For instance, “I have a headache” meant they suspected they were being monitored by Cuban authorities, while “Your sister is ill” was code to cut the trip short. In late 2010, USAID and Creative Associates ended the travelers’ program, opting to shift strategy — rather than sending youth into Cuba for recruitment purposes, they focused instead on getting exit visas for political activists and training them in the United States.

A tool of colonialism and capitalism

Whether through relief assistance or promoting “democracy” in the Global South, the pro-business objectives of USAID remain clear: to create new markets for international capital at the expense of the local population, or to employ a longer term strategy of installing a regime compliant to the whims of international capital and U.S. policy objectives. In this way, USAID serves as the humanitarian face of colonial exploitation.

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