Economic illiterates are running rampant in India.
Although Anna Hazare (who only studied till class 7) developed the capacity to lead a major movement for reform in India, he has never understood the basics of economics.
Arvind Kejriwal, a graduate of IIT, has NO excuse, however, for his MAMMOTH ignorance of basic economics.
I suggest that these people try to read and understand this SIMPLE lecture by India's greatest economist, B.R. Shenoy. (Shenoy gave this lecture in February 1975 at the H A College of Commerce, Ahmedabad.)
If its leaders don't understand BASIC economics, India is doomed.
Economics of Corruption
In the outside world — unfortunately, not in India — there are two distinct camps in economics: interventionists and non-interventionists. Communists represent the extreme case of interventionists. Interventionists of the socialist hue were in control when we came to direct our own economic-political affairs after Independence in 1947; and with the growth in economic chaos which attended the pursuit of socialist policies, communists have been on the ascendant through infiltration and the propagation of their theory which blames capitalism on the growing chaos. Their strategists argue that there is no hope whatever of any escape from the chaos other than via the adoption of communism.There is little indication of any shift to non-interventionism among economists in the academies, in government and its agencies, in business firms and in chambers of commerce. This applies, too, to publicists and intellectuals, though there is increasing recognition of the failure of socialist policies. Strange as it may seem, the strongest opposition to a policy U-turn would be mounted by the chambers of commerce and industry.It is not widely known in India that interventionism has invariably undermined the viability and progress of all breadline economies which adopted interventionist policies, and that no country, whether developed or underdeveloped, which entrusted the direction of its economic affairs to the price-market mechanism, has had anything but bumper returns. If we are to be saved from economic-political disaster, it is time that we abandoned ideological predilections and subjected our policies to a basic transformation.Both theory and experience have shown that corruption is among the inevitable by-products of the policy of interventionism. Corruption necessarily grows as these policies progress. Indian is a classic illustration of the functional link between corruption and interventionism.
Some people have stated that corruption is an age-old institution in India, that it goes back to the Mughal days. We are told that, in the Punjab and elsewhere, when the income of a young official of marriageable age is considered by interested parties, due note is taken not only of his recorded income but also of the unrecorded — though nonetheless real — income opportunities which his official position offers. Corruption certainly dates back to the Public Works Department of the British days.We will not linger on this argument. Corruption and its ally inflation do not hurt us any less because they are old and universal ailments — they undermine character and mass well-being all the same. Our concern here is the effect of corruption on mass well-being. And this effect is considerable.Corrupt payments financed by monopoliesNow, what is corruption? The corrupt incomes we are concerned with are illicit payments made to officials and politicians in power, or payments to party funds, for monopoly documents which bring windfall monopoly incomes. It is a matter of detail whether the payments are made directly, through intermediaries, or indirectly, as contributions to election funds or payments at fantastic rates for advertisements in the souvenirs issued on the occasion of party functions. Payments are made by the recipients of the monopoly documents to those who issue these documents, i.e., the officials who work under the general or specific directives of politicians in office.It follows that corrupt payments are part of the monopoly gains. If monopolies did not exist, there would be no monopoly gains, and the question of this category of corruption does not arise. Monopoly gains are unearned windfalls, payments are made to gain those windfalls; and, looking at the phenomenon from the standpoint of accounts they debited, by the recipients of monopoly documents to the monopoly incomes. The net gain from the monopoly documents is the windfalls less the corrupt payments made for acquiring the documents. The transactions being illicit are, of course, not recorded.Corruption from import licensingThe most highly sought after monopoly instruments are import licenses, as the total amount of the windfalls they bring are enormous. Total imports in 1972-73 amounted to Rs 2,150 crore, of which Rs 780 crore (36.3 per cent) were on private account and Rs 1,370 crore (63.7 per cent) on government account.The 'premium' that a license fetches continues to be enormous. In the case of copper, the market price is over 3.5 times the landed cost. The controlled price (which is based on the landed cost) is Rs 10,000 per ton, the market price Rs 36,000 per ton. The price of copper import licenses would therefore be of an order of 2.5 times the face value of the licenses. The prices of or 'premiums' on import licenses may vary from 30 to 35 per cent to five times or more of the landed costs. This means that, on an average, imports worth Rs 10crore bring windfall profits ranging from Rs 3 to Rs 50 crore, depending on the commodity. At an average premium of 75 per cent, the monopoly gain from private sector imports alone will amount to an annual order of Rs 585 crore.IT IS NOT AS IF nationalisation of imports eliminates the windfalls and the corruption. So long as the windfalls obtain, corruption will go with it. Nationalisation may shift the recipients of the corrupt payments. If the corrupt among the officials and politicians controlling the operation of the State Trading Corporation (STC) are no longer in a position to claim the payments, corruption may change form. The windfalls may get absorbed in over-staffing, raw material leakages (which are but a variant of corruption) or production inefficiencies:As a rule, licenses are non-transferable, so transactions in the market for import licenses are not legal. The Alladin's lamp of import licensing produces fortunes as though from nowhere for a large community of importers and dealers in import licenses. The cost of production of import licenses being zero, the premiums they fetch are windfalls, and when to the gains from private sector imports are added the gains from the nationalised import trade, the total amount of the windfall gains may be of an order of Rs 1,600 crore annually.Unearned monopoly gains on so large a scale cannot be wholly retained by the recipients of the import licenses. The inevitable competition to acquire the import licenses would necessarily bring a share to those responsible for issuing the licenses — the administrators and the politicians. As a practical matter, there is nothing that anyone can do to prevent this.If Mr Afrom among those responsible for the issue of the import licenses is beyond corruption, the only outcome will be that Mr A will forgo his share of the corrupt payments. Possibly, the shares of B,C,D and the rest who collaborate in the issue of the licenses, would go up. The chances are that these others would conspire to have Mr A transferred to another department, in order to make things safe for them. The possibility of the entire body of people, including politicians, responsible for the issue of import licenses being beyond corruption is too unreal to merit any analytical notice.Corruption from public sector contractsImport licenses are not the only goldmine of corruption. Government contracts and contracts in public sector undertakings are among the other documents in great demand for the fabulous incomes which they yield. When Rs 100 crore is accounted to have been 'invested' in public sector projects, the whole of it does not go into the projects concerned. At some places, the amount actually invested would be at 60 per cent, others at 80 per cent.What happens to the balance? The balance is the windfall of the contractor. For the same reason that the windfalls from import licenses cannot be all kept by the recipients of these licenses, the windfalls from public sector contracts cannot be all retained by the contractors. They have to share a part with the persons whose responsibility it is to accept and issue these contracts. Contractors have to make corrupt payment to the administrators, engineers and politicians concerned before they may get the contracts,What are the amounts involved? The RBI Report on Currency and Finance for 1973-74 places total public sector plan outlays in 1972-73 at Rs 3,960 crore. If contractors have to distribute 10 per cent of these amounts to get the contracts, the total corrupt payments under this head are of the order of Rs 400 crore. If they have to distribute 15 per cent, corrupt payments in 1972-73 were of the order of Rs 600 crore.Corruption from smuggling and other illicit transactionsTo this must be added corrupt payments on account of:
- Other control measures — every control creates monopolies, and payments are demanded and made for acquiring the monopolies concerned
- International trade — smuggling in gold, watches, radios, razor blades, cloth, art-silk yarn and other such goods, and smuggling out silver, rice and the like
- Internal trade — smuggling, mainly of rice and wheat, from the sur plus to the deficit state and urban areas
- Various administrative services, hurdles or penalties — petty or large bribes paid for pushing files and to the income-tax, customs and police officials.By the very nature of things, the total amounts of the corrupt payments are not known or ascertainable, even their orders of magnitude. The actual amounts in each corrupt deal can be known only to the two parties to the deal and the intermediaries. But, quite obviously, the totals would not be tens of crores of rupees but several hundreds of crores of rupees.By far the largest amounts of the corrupt payments would be from import licenses, public sector contracts, and smuggling.Any administration exposed to these Himalayan corruption potentialities would succumb to the temptation. With so much money to be had, even the German civil service, reputed for its integrity and efficiency, may fall a victim.If I may quote notorious smuggler Haji Mastan Mirza's statement: "Smuggled goods do not rain from the heavens, they move on roads." They cannot move so freely without the active co-operation of the officers of the various customs and excise departments.Eradicating corruptionHow can corruption be prevented when an import license — a piece of paper which costs nothing but the signature of the concerned official to produce — authorising the import of, say, copper worth Rs 5 crore fetches in the market over Rs 12 crore?Competition for the document would necessarily bring into being corrupt payments. Schemes to prevent this are not worth a moment's notice. The various reform schemes will only shift the parties receiving the corrupt payments. Corruption will continue. If, for instance, the issue of import licenses is entrusted to an independent board of men of the highest integrity, corrupt activity will move from the government departments concerned to the independent Board and its staff.The only hope of eradication of corruption on the current scale is a complete U-turn in our policies — abolition of import control and exchange restrictions, a drastic scaling down of public sector outlays, auctioning away to the highest bidders in the private sector the existing public sector undertakings, removal of the system of permits, licenses and quotas as Professor Erhard did in Germany and limiting government activities to their natural sphere.There is, however, little hope of any U-turn in our policies. Prime minister Indira Gandhi, addressing a public meeting at Mangalore on 11 January 1975, declared that she would not budge from her party's policies merely for political exigency. She added, "We have not done it and we will not do it. We feel strongly about our policies and we are not going to listen to anybody." Corruption being a by-product of the prevailing policies, this means that corruption will continue; this will not only undermine national character but also economic growth and social progress.Black market incomesImport licenses, government contracts and other instruments of statist control over the economy yield phenomenal illicit incomes to the recipients of these instruments. Their total magnitude can be placed at an order of Rs 750 crore annually. The largest bulk of it — of an order of Rs 460 crore — ensued from the traffic in import licenses; an order of Rs 260 crore from contracts in public sector undertakings and other programs of 'development', and the rest from price controls, permits and concessions.This phenomenon adds unduly to the undeclared cash transactions in the economy as distinguished from transactions paid for by cheque. First,the recipient of an import license who has incurred illicit payments for acquiring it cannot enter these payments in his books. But being part of his costs, he has somehow to recover the amount from the sales of the goods imported against the license; he arranges to get some of his receipts in unaccounted form, i.e. cash. This may take the form of fictitious inter-sales to non-existent parties or receipts of payments partly in cash and partly by cheque, the receipt being made out only for the latter.
Secondly, being illicit earnings, they cannot be entered in the books or figure in the income-tax returns. The earnings must be held in cash — not as deposits with a bank — and payments from them, whether for consumption or for invest-merit, must be in cash.
The amount of the black incomes being so considerable, the attendant necessity for cash transactions has, in recent years, altered the currency component of the Indian monetary circulation. The amount of currency with the public has risen relatively to the amount of bank money. In 1951¬52, the amount of currency with the public represented 69.5 per cent of the total monetary circulation. Since then the industrial sector of the economy, where the banking habits of the people are better developed than in the rural sector, has expanded by 92 per cent, or at an annual rate of 9.2 per cent.ORDINARILY, THIS SHOULD have led to an increase in the ratio of bank money — cheque currency — to the total monetary circulation. Yet, it is the currency part of the monetary circulation that has gone up; the latter has fluctuated upward with the intensification of statist economic policies, the ratio of currency to the total money at the close of 1961-62 being 73.2 per cent. The currency part of the circulation has grown to meet the pronounced increase in black market transactions.
The annual accruals of illicit incomes are much more than the annual average increase (Rs 470 crore) in the Indian national income of the decade ending 1960-61. If such large incomes were to remain permanently illicit, their cumulative effect might soon become intolerable, through black market transactions growing in extent and volume. But 'black' incomes are being continually converted into 'white incomes. We may briefly recall some of the devices though which this is effected.Probably the most common device — because it is the simplest to operate — is to understate domestic expenditures. If a black marketeer's household expenditure is Rs 3,000 per month, it may be shown in the books as, say, Rs 1,000 per month. This would permit monthly overdrafts on black incomes of Rs 2,000 to meet household expenditures. Equivalent open incomes being thereby left unspent, they take the place of the black incomes utilised for household expenditure: we have here a case of the conversion of black earnings into white. But the amounts that may be transferred into white incomes in this manner are limited by the magnitude of domestic expenditure, and one would have to wait for a long time to transform large amounts of black money.The application of this technique to marriage expenditures and to the costs of buildings and equipment might enable larger sums to be redeemed from the black label. One is often struck by the comparatively low declared costs of impressive residential structures put up by businessmen and corrupt state officials. The explanation frequently is that a house costing, say, Rs 150,000 is accounted to have cost but Rs 60,000; the balance represents payments from black income. This is a case of Rs 90,000 of black money being baptised into white money, through the former now becoming an openly marketable asset — a residential building.Considerable amounts of illicit earnings may be converted into white with the collusion of bullion dealers. An individual Bulchand with illicit earnings ofRs 200,000 may engage in a fictitious 'sale' of 'ancestral jewelry' of this value to a bullion dealer, Chimanlal. Chimanlal will then make an entry in his books of purchase of Rs 200,000 of jewelry from Bulchand and of payment to the latter of Rs 200,000, thereby converting black funds into white. He can now deposit the amount in a bank, entering it in his books as the proceeds of the sale of inherited jewelry.But the transaction presents a problem to Chimanlal, the bullion dealer. His accounts will show a purchase of non-existent jewelry. The security of his position from the clutches of income-tax authorities requires that the 'purchase' must be balanced by equivalent 'sales'. To make the fiction realistic, Chimanlal gets the jewelry 'melted' at a refinery or goldsmith, the costs of such melting being duly entered in the books of Chimanlal and of the refinery or goldsmith, this operation calling for collusion of the latter. Having 'melted' the jewelry into bullion, Chimanlal straightens out the position in his books by showing in it 'sales' of bullion to numerous benarni parties (fictitious individuals). Once the purchase is cancelled by such sales, Chimanlal's position is well fortified.For the services thus rendered by Chimanlal to Bulchand, the former charges the latter a commission at the market rates for such services, the current rates being placed at 8 to 10 per cent of the sums involved. This covers the payments for 'melting' the jewelry paid to the refinery or the goldsmith.SINCE HOUSE CONSTRUCTION cannot go beyond needs and 'ancestral jewelry' may have limits, black-marketers may resort to other techniques of changing the label of their earnings. One such is to 'purchase' the business losses of individuals. This is a rather complicated operation and needs clarification. A businessman Premchand, who has suffered a business loss of Rs 200,000 may 'sell' this loss to another businessman Mansukhlal, who has black money for conversion into white. Premchand would then make after-the-event entries in his books to show that the losses suffered by him represented the balancing profits of Mansukhlal; the relative transaction being stated to have been effected with the latter. This fiction would enable Mansukhlal to bring out his black funds into the open, as they would be now declared as business profits. Forward transactions, especially on the stock exchange, are rather easily amenable to the application of this technique. It is believed to be in vogue extensively, the transactions being put through specialist brokers and go-betweens who have come into existence to meet the large demand for such services.Considerable demand exists, too, for the concealment of open incomes, the chief motivation behind this being tax evasion, as the tax rates on the upper income slabs are exorbitant. We have developed police-proof techniques to bring this about — these latter are generally the reverse of the techniques for converting black money into white. They include overstatement of domestic and marriage expenditure and of cost of buildings and equipment, and 'purchase' of business profits.With two decades of experience behind us, the needs of the black market have been by now well institutionalised. As has been aptly remarked by one writer, the black market sector of the Indian economy today is well past the take-off stage of development. The phenomenon is revolting to the national conscience, and there is no remedy to it other than to strike at its roots — abandonment of the policies of statism. So long as statist policies remain, corruption too will remain.
simply added one more nail to the coffin of freedom in India. By the time the Janata Party formed the government, only a sliver of property rights was still left in India.Land reform legislation had already not only been enacted but had been placed under the Ninth Schedule of the Constitution, sheltering it from judicial review. However, the risk, no matter how remote, of a constitutional challenge to these laws prompted the Janata Party to abolish the right to property through the 44th Amendment of 1978. In particular, Article 19(1)(f), that had till then, even through Nehru’s time, guaranteed to the Indian citizens a right to acquire, hold and dispose of property, was repealed.
Economic constituents of a free society
A free society is so called because its citizens and individuals are free in the sense of 'independence of the arbitrary will of another.' Individuals in a free society function, in the economic sphere, under the guidelines of the doctrine of pragmatism, pursuing a line of success and discarding the path of failure, success and failure being assessed by their own subjective criteria. Viewed functionally, a free society may also be termed, therefore, as a pragmatic society. As the terminal aim of the individual's activity is the maximum satisfaction of his consumption needs, and he is unfettered in this as in other matters, a free society is described as a society of consumer sovereignty.The principal economic constituents of a free society are as follows:
- The economic affairs of a free society are controlled, directed and governed by truly sovereign consumers. Therefore, by definition as it were, all economic activity other than that delegated by consumers to the government — which they do in their capacity as sovereign voters — have, for their end objective, maximum consumer satisfaction.
- Consumer control and direction of the economy is effected through a price-regulated market mechanism. Consumers continually register, in the shopping centres or other markets, their votes regarding their requirements, and their preferences get reflected in commodity price changes and in turnover.
- Traders interpret these prices and turnover signals, and direct producers to adjust their production programs to match the consumer needs thus recorded.
- Available investment resources, i.e. domestic savings and inflows of foreign savings get shifted, through such activity of traders and producers, and via the capital market —which is an integral part of the overall price-regulated market mechanism — or otherwise, into production channels which meet consumer preferences.
- In a modem society — whether it is free, communist or socialist — production involves time, and the production process has, for technological reasons, to commence in anticipation and in advance of demand. The forward market, which is another integral part of the overall price regulated market mechanism, helps such anticipatory production. The forward market may reduce to a minimum — or eliminate — the resource wastage from production errors, by projecting the changing market situations.Operationally, the first link in the chain of the consumer-directed economic system is trade, which interprets and transmits consumer decisions to producers. That trade is the spearhead of all economic development emerges graphically when we imagine a community cut off from the rest of the country of which it has hitherto been an integral part. Production for the national market will soon be replaced by production to meet the limited needs of a small community; and its people are consequently destined to slip down into poverty and, possibly, into a more or less primitive way of life, depending on the size of the isolated community's market.A precondition for the full and efficient functioning of a free society is, therefore, the absence of barriers to internal and external trade. Logic and experience have shown that this freedom will permit continued prosperity for the economy — the result of the use of capacity of its specialised talents through integration of the national economy with the world markets, the demand of which — unlike the demands of the limited national markets — may not be easily satisfied.Second, the full and efficient functioning of a free society demands recognition of the institution of private property, not only in respect of a family house, durable consumer goods in it and a car, but also in respect of capital assets, the means of production. In a free society, because of discipline of a most ruthless consumer, the management, on pain of survival, has to keep continual watch over cost, quality and turnover. This calls for perpetual flexibility of decisions. Consumer discipline operates, in the case of the larger corporations, through its impact on the stock market quotations for the scrips of corporations. It is just not practical to achieve the requisite decision flexibility under social ownership — i.e. the ownership of no-one in particular! — of the means of production. Experience has shown the magic of ownership is among the most powerful forces making for progress.The power of the magic of ownership of the means of production is nowhere more convincingly demonstrated and highlighted than in Soviet agriculture.In 1964, the output of 3 per cent of the land and the collective farms, the private plots allotted to the workers, accounted for no less than one-third of the gross farm output of USSR and half of livestock production. Russia's dependence on the capitalist world for its food and other agriculture needs — this dependence is, incidentally, rather amazing as about one-third of the Soviet labor force is engaged in, and an equal proportion of total population lives on, agriculture — would have assumed disastrous dimensions if communist ideologies were to prevail and abolish completely private ownership of the means of production in Soviet agriculture. Will our own ideologues ever learn from this experience?The third pre-condition for the full success of the consumer-directed economic system is economic freedom of the individual, particularly in respect to the following:(a) The distribution of his income between consumption and saving(b) The choice of consumption and the power to direct entrepreneurs through a price-regulated market mechanism, to import, or to fabricate at home, the commodities of his choice;(c) The distribution of his savings among the several alternatives; and(d) The choice of his occupation.
These four freedoms constitute fundamental economic freedoms of free citizens. When the same freedoms are infringed, the charms of mundane life correspondingly diminish.Quite obviously, the consumer-controlled system cannot come into being, nor function, without freedoms a) and b). Freedoms c) and d) are essential to ensure that the material and human resources of production get drawn into channels where the output is highest. These latter freedoms will, through continual resource shifts, minimise or eliminate less effective resource deployments, and thus make for the maximisation of the national product from the given quantum of resources.(i) Tendency to maximise production, employment and incomeUnder consumer sovereignty, four desiderata are integral to the functioning of the system. First, to seek consumer patronage, entrepreneurs would strive to reduce costs and improve quality. With consumer approval and appreciation of such effort, high cost and low quality products would continually tend to be replaced, through resource shifts and technological progress, by low cost and high quality products. As already pointed out, this will continually tend to lift up production, and hence employment, income and the level of living.(ii) Expansion of employmentSecond, rapid expansion of employment is built into the economic system where everybody's concern is to meet the demands of the consumer —which, it may be noted, are most exacting, in addition to being ruthless. The expansion of employment at current, or rising, wage rates is not a function of investment — as Indian experience has shown — nor of a stepdown in the technology of production. It is solely a function of the expansion of overall production. Since consumer sovereignty makes for rapidity of growth of the national product it may, therefore, liquidate unemployment with corresponding rapidity.
The case of Japan illustrates the working of this built-in urge to expand employment. With the heavy pressure of population on land (291 persons per square kilometre), the average land-holding is but 1.01 hectare. The scarcity and high cost of capital induced farmers to adopt labor-intensive methods of cultivation in agriculture. Yet Japanese agricultural output is well above the world average, and Japanese agriculture employs 2031 workers per 1,000 hectares of cultivated land.In USA, on the other hand, capital is less scarce, the average holding is 157.6 hectares, population density is but 22 per square km; and the country adopted capital-intensive methods of cultivation, the labor employed per is 1,000 hectares of cultivated land there being a mere 17. These differing systems of cultivation were adopted, not under the direction of a planning commission, but by independent farmers in free economies, the course and destinies of which are, on the whole, determined by sovereign consumers. By contrast the Russian Gosplan copies the American methods of capital-intensive cultivation, notwithstanding low wages, with none too complimentary results.(iii) Social justiceThird, under full consumer sovereignty, there is no need, nor room for monopolies in production, distribution, imports or exports; and incomes of all individuals — wages, interest, rent and profits — would correspond to their respective contribution to the national product. Such a situation permits no windfalls. Hence none can appropriate someone else's earnings i.e. there can be no social injustice. Social injustice, on the other hand, is inevitable under socialist economic systems, which abound in monopolies, privileges and subsidies; and hence bring to privileged individuals and groups unmerited incomes, at the expense of the rest of the community.(iv) Reduction of income contrastsFourth, income contrasts tend to decline as economic development progresses. This is so not merely because of the absence of social injustice but and profits, the earnings of the economic elite, and the natural increase, on the other, of wages and salaries. As a free economy progresses, the proportion of wages and salaries to national product tends to increase and the proportion of interest, rent and profits tends to decline.In Japan, wages and salaries rose continually from 41.3 per cent of GDP in 1960, to 50.8 per cent, in 1974. In West Germany, this percentage rose from 46.9 to 54.7 per cent. By contrast, in socialist India, the percentage fluctuated within a narrow range and was, in 1974-75, 28.2 per cent or lower than in 1960-61 at 29.9 per centThe growing prosperity of the masses of the people in free societies is evidenced by the overwhelming proportion of economic activity being directed to turning out articles of mass consumption and by the vast multiplicity of departmental stores, shopping centres and retail shops which purvey these products. The shoppers that crowd these places are not plutocrats but farm and factory workers and salaried people.Except in communist countries, cars are no longer a luxury transport, accessible only to the favored top crust of the community.In a communist society, none of the economic constituents of a free economy hold true. The state determines the needs of consumers, arranges the distribution of goods and services and allocates resources among alternative uses. Individuals do not enjoy fundamental economic rights; and forward markets do not exist. [Sanjeev: This continues to be true of many aspects of the Indian economy even today]
Individual freedom is worth having not only for its own sake; economic development is apt to be in proportion to the freedom which the individual has in the choice of his occupation, in the disposal of his income, and investment of his savings. If the individual is deprived of these economic freedoms — and we have been engaged in this nefarious business under the guise of planning — how different would such an individual be from a slave? Under the policy measures mis-called planning, we forgo both freedom and progress.Given correct policies, the same quantum of domestic savings and foreign aid may take us strikingly fast on the road to prosperity. If, on the other hand, our policies are misconceived, no amount of foreign aid, as Indian experience has so conclusively demonstrated, can save us from economic chaos and social and political instabilities. The way out of this chaos is in our own hands. What we need most, today, is basic policy changes, not massive foreign aid.