Fighting China with Foreign Aid: USAID Becomes a Critical Tool in Battle for World Influence

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An intensifying rivalry between the United States and China has renewed the importance of “the soft-power component” of American national security: the U.S. Agency for International Development.

“The challenge of China is worldwide,” USAID Acting Administrator John Barsa told the Washington Examiner. “We’re cognizant of it, we’re working very closely with State Department on countering China in a number of ways.”

Such an emphasis on a global rival marks a return to the agency’s roots, to some degree. USAID was established “at the height of the Cold War,” Barsa recalled, and John F. Kennedy exhorted agency officials to help other nations “solve their problems without resorting to totalitarian control” and aligning with the Soviet Union.

“This is the lens by which USAID activities need to be viewed,” said Barsa, who took over from the outgoing administrator, Mark Green, in March. “USAID should not be doing, and does not do, works untethered from national security policy.”

That dynamic has grown more pronounced during the coronavirus pandemic, especially following President Trump’s decision to freeze financial aid for the World Health Organization. He took that step on the grounds that WHO senior leaders allowed China to cover up the danger posed by the virus in the early days of the outbreak, but it sparked international complaints that the U.S. might be undermining the global response to the pandemic.

Enter Barsa. The acting administrator, in his first appearance in the State Department briefing room last month alongside Secretary of State Mike Pompeo, touted $775 million in American aid “across more than 100 countries.” He put special emphasis on the support given to Italy, a major European ally that nonetheless has joined China’s Belt and Road Initiative and is one of the chief targets of Beijing’s campaign to tarnish Western cooperation and portray China as Italy’s true benefactor.

“One of the best tools we had during the Cold War and great power competition there was truth,” Barsa told the Washington Examiner. “So, to the extent that we can shine the light on lies and disinformation from the Chinese or any number of hostile powers, the better off we are. So it’s a war not just of action but of perception, as well.”

Pompeo and other U.S. officials regard China’s Belt and Road Initiative as a “predatory” scheme to provide financing to corrupt or impoverished governments and then seize control of strategically significant ports when the debt comes due. “It is looking out for how to extend China’s hegemony,” Barsa said of the initiative.

American allies see USAID as a crucial player in blunting those efforts, especially in regions such as the Pacific Islands — far from the diplomatic limelight, but central to any effort to maintain free access to the world’s most important shipping lanes. “We’re not talking about carrier fleets in Fiji; we’re talking about more day-to-day interactions,” an official from a Five Eyes government — the intelligence-sharing network that includes the U.S., Canada, the United Kingdom, Australia, and New Zealand — told the Washington Examiner.

“This is where organizations like USAID are quite important, because they provide an opportunity to have a couple of people in the country doing a few small things over a longer period of time, so people get to understand and build that relationship and build the association,” the official said.

China and Russia are also trying to gain influence in that part of the world — and not only because of the potential to control natural resources or vital ports. The 15 Pacific Islands nations can punch above their weight in disputes at the United Nations, which could prove significant for U.S. efforts to roll back Beijing’s influence at international organizations such as the WHO.

“In multilateral fora like the UN, that’s 15 votes, so they’re a bloc that can be encouraged to think one way or another about important issues where numbers do matter,” the Five Eyes official said.

The public health and economic crises brought on by the pandemic likely will create opportunities and potential vulnerabilities among the allies of the U.S. and its chief rivals alike. And that increases the need for USAID and other agencies to plan on “countering China or any other malevolent or semi-hostile power,” Barsa said.

“Soft-power projection has a role in the national security toolkit,” Barsa added. “The wins that we might have aren’t the short-term wins. So certainly, during my tenure, I’m looking to make those investments … in economic development, democracy, and governance systems, which better position us for the long-term wins.”