Trump Embraces Foreign Aid to Counter China’s Global Influence


Shortly after being picked as budget director last year, Mick Mulvaney — with the president’s enthusiastic support — proposed slashing the State Department’s foreign aid budget by one-third, a plan that zeroed out O.P.I.C.’s budget.“It is not a soft-power budget,” Mr. Mulvaney explained at the time. “This is a hard-power budget.”Soft power has, however, proved hard to kill.Congressional Republicans rejected Mr. Mulvaney’s cuts. And Secretary of State Mike Pompeo fought Mr. Mulvaney’s attempts to claw back $3 billion in foreign aid spending this year, telling Mr. Trump that the cuts would weaken the country’s position in the world and his own standing with the department’s pro-foreign-aid career staff, according to two administration officials with knowledge of the exchanges.In the end, Mr. Yoho sold Mr. Mulvaney on supporting the expansion of the investment fund, arguing that its expansion would probably cost taxpayers nothing.Senator Bob Corker, the chairman of the Senate Foreign Relations Committee, emphasized that the initiative represented a strategic shift. Mr. Trump seems to be learning that the projections of military power alone will not be enough to compete with China, he said.“We’re seeing what China is doing throughout Africa and South America, especially Venezuela, and people are waking up and realizing we have to have involvement with the countries, not just for a return on investment, but to move them toward a market-based approach,” said Mr. Corker, a Tennessee Republican who is not running for re-election. “So much of our foreign policy now is focused on trying to check China, especially their nefarious activities.”Significant questions remain about how the fund will operate in its new expanded form. The key to its success, development officials said, is to create a new system that will carefully vet investments for maximum economic and political impact — and to ensure that projects don’t fail as a result of corruption and mismanagement, a problem that has plagued China’s investments in Malaysia and elsewhere.A bigger question is whether it will do anything to reduce China’s global influence.“I’m pretty skeptical,” Mr. Scissors said. “The whole concept is that we give more money to big players who make investments in places where they don’t lose money. We’ve finessed the public relations problem. But we aren’t really competing with the Chinese.”

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