The cost of freezing foreign aid

Summary

Marketplace Morning Report: The Cost of Freezing Foreign Aid Episode Release Date: January 30, 2025

In this episode of the Marketplace Morning Report, host Sabri Benishore delves into the multifaceted implications of the Trump administration's decision to freeze foreign aid, the devastating wildfires in Southern California, and an in-depth analysis of Spain's remarkable economic resurgence. Through insightful interviews and on-the-ground reporting, the episode provides listeners with a comprehensive understanding of these pressing issues.

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1. The Freeze on Foreign Aid: Economic and Humanitarian Ramifications

The episode opens with Sabri Benishore introducing the contentious topic of foreign aid suspension by the Trump administration. While the administration rescinded a previous order freezing federal grants, foreign aid remains on hold pending a 90-day review. This decision has significant implications for global health and humanitarian efforts.

Nancy Marshall Genzer reports on the State Department’s partial relief measures:

"The Department did make some exceptions to its freeze on foreign aid. Secretary of State Marco Rubio issued a waiver allowing deliveries of things like life-saving medicine, food, and shelter."
[00:22]

Despite these waivers, Jeremy Knindyk, president of Refugees International, raises alarms about the broader impact:

"Battling TB. All sorts of global health activities, safe, you know, safe motherhood activities, safe childbirth are also still suspended."
[00:44]

Genzer highlights the confusion surrounding which programs are eligible for the waiver, emphasizing the precarious situation faced by aid organizations. George Devendorf, Senior Director of External Relations at Church World Service, underscores the severity of the freeze on funding:

"We are truly confident in is that we have been instructed to stop work on our US Government funded programs."
[01:14]

Devendorf further elaborates on the uncertainty caused by the funding suspension:

"Process, it remains to be seen how intensive reviews will be done of programs that by the time the review arrives may have frankly already disbanded."
[01:30]

The halt in foreign aid funding forces organizations like Church World Service to critically assess their ability to maintain local staff and ongoing projects in Africa, potentially jeopardizing the lives and livelihoods of thousands reliant on these vital services.

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2. Devastating Wildfires in Southern California: Rebuilding Lives and Homes

Transitioning from international concerns to a local crisis, the report sheds light on the catastrophic wildfires that have ravaged Southern California. These fires have not only destroyed thousands of homes but also personally affected members of the Marketplace team, including host David Brancaccio and his wife, Mary.

Nancy Marshall Genzer captures the emotional toll of the disaster:

"I look around and now all I see is all the hard work it's going to take to bring it back. And I'm wondering if I still have it in me to do it, if I'm still young enough to do it."
[02:05]

This segment sets the stage for a deeper exploration in the next episode, where David Brancaccio will address the challenges of finding skilled contractors to rebuild from the ground up amidst such devastation.

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3. Spain’s Economic Surge: A Beacon of Resilience and Growth

Shifting focus to Europe, the episode highlights Spain's impressive economic recovery, underscored by a 3.2% GDP growth in 2024, as reported by The Economist. This growth surpasses that of major European economies like France, Germany, Italy, and the UK.

Guy Hedgeko from the BBC details Spain's robust rebound:

"In 2024, Spain received a record 94 million visitors, helping drive GDP growth of over 3%. That's four times the eurozone average."
[04:00]

Tourism has been a cornerstone of Spain's economic resurgence. Elena Miron, a tour guide in Segovia, shares her optimism:

"There was a moment in which, when we were around the COVID I thought that maybe the tourism will never ever be like it used to be. Before things became little by little, much better. Now things are very good and I thought this year is going to be also a good year, like it was maybe 2023 and 2024."
[04:41]

Spain's economic strategies have focused on stabilizing inflation and reducing unemployment, which has now reached a 17-year low. Carlos Cuerpo, Spain's Economy Minister, attributes this success to labor reforms and targeted subsidies:

"Spain is proving to be more resilient to successive shocks, including the inflation shock that came with the war in Ukraine. We are getting out of the COVID without scars and we are getting out of that by modernizing our economy and therefore lifting our potential GDP growth up."
[05:30]

The infusion of EU pandemic recovery funds has been pivotal in Spain’s transition towards a greener economy. The automotive sector, particularly the leading car manufacturer Seat, exemplifies this shift. Wayne Griffiths, CEO of Seat, discusses the company’s commitment to electrification and renewable energy:

"So it is one of the key industries in the country and also looking towards the future as well, particularly with electrification. I think as an opportunity not only of maintaining that level of industry, but with the game changer of renewable energy that this country has to make Spain even bigger in terms of car industry in the future."
[06:20]

Despite the positive trajectory, Spain faces challenges such as high public debt and a housing crisis that hampers affordability for many Spaniards. Additionally, recent floods in Valencia have necessitated substantial cleanup efforts, which are expected to slightly dampen GDP growth. Nevertheless, Spain continues to bask in its economic recovery, positioning itself as a resilient and dynamic player in the global market.

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Conclusion

This episode of Marketplace Morning Report offers a compelling examination of critical issues ranging from the suspension of foreign aid and its humanitarian consequences to the devastating impact of wildfires in Southern California. It also celebrates Spain's economic achievements while acknowledging the challenges ahead. Through expert interviews and firsthand accounts, the report provides listeners with a nuanced perspective on how these events shape both local and global landscapes.

Transcript

[Sabri Benishore]

The cost of freezing foreign aid from Marketplace. I'm Sabri Benishore in for David Brancaccio. The Trump administration rescinded an order freezing federal grants but not foreign aid that is still suspended for a 90 day review. In the meantime, aid groups say lives could be on the line. Marketplace's Nancy Marshall Genzer reports the State.

[Nancy Marshall Genzer]

Department did make some exceptions to its freeze on foreign aid. Secretary of State Marco Rubio issued a waiver allowing deliveries of things like life saving medicine, food and shelter. But Jeremy Knindyk, president of Refugees International, says most US Foreign aid is still suspended. He's worried that people will die because vital health programs are on hold.

[Jeremy Knindyk]

Battling tb. All sorts of global health activities, safe, you know, safe motherhood activities, safe childbirth are also still suspended.

[Nancy Marshall Genzer]

There's a lot of confusion over what programs are covered by Secretary Rubio's waiver and can restart. The nonprofit church World Service supports tens of thousands of refugees in Africa. George Devendorf, its senior director of external relations, says they get more than half their total funding from the federal government. And right now the only thing that.

[George Devendorf]

We are truly confident in is that we have been instructed to stop work on our US Government funded programs.

[Nancy Marshall Genzer]

Devendorf says he understands the need for periodic reviews of foreign aid, but with the funding cut off during the review.

[George Devendorf]

Process, it remains to be seen how intensive reviews will be done of programs that by the time the review arrives may have frankly already disbanded.

[Nancy Marshall Genzer]

Devendorf says his organization now has to decide how and whether it can maintain local staffers on the ground in Africa. I'm Nancy Marshall Genser for Marketplace.

[Sabri Benishore]

Thousands of homeowners in Southern California saw the biggest investments of their lives turn to ash in the wildfires there. Among those homeowners were my colleague David Brancaccio and his wife, Mary Brancaccio.

[Nancy Marshall Genzer]

I look around and now all I see is all the hard work it's going to take to bring it back. And I'm wondering if I still have it in me to do it, if I'm still young enough to do it.

[Sabri Benishore]

Tomorrow on the MARKETPLACE Morning Report, David reports on the challenge of finding contractors who know how to build a house from the ground up. Many.

[George Devendorf]

Hi, this is Alex from Petoskey, Michigan. As a college student studying management and finance, I look forward to getting an unbiased report on the US Economy every morning from Marketplace. Even though they aren't there in real life, the Marketplace gang shares every breakfast with me and is the best way to start each day. Join me in supporting Marketplace with the gift Today, go to marketplace.org donate.

[Sabri Benishore]

If you had to guess, what would you say is the strongest economy in the world? According to the Economist magazine, it's Spain. Spain was one of the European economies that suffered the most during the pandemic, but it has bounced back with a vengeance. The Spanish economy grew through 3.2% in 2024. That's faster than France's, Germany's, Italy's and the UK's the BBC's Guy Hedgeko has more on the Spanish surge.

[Guy Hedgeko]

In 2024, Spain received a record 94 million visitors, helping drive GDP growth of over 3%. That's four times the eurozone average.

[Wayne Griffiths]

I'm in the historic city of Segovia, which is just north of Madrid, and I'm looking up at the city's vast famous Roman aqueduct. And this is a place which has become a very popular tourist destination, even though it's not associated with the beaches and the coastal resorts which have made Spain so popular over the years.

[Guy Hedgeko]

Elena Miron is a tour guide in Segovia.

[Elena Miron]

There was a moment in which, when we were around the COVID I thought that maybe the tourism will be never ever like it used to be. Before things became little by little, much better. Now things are very good and I thought this year is going to be also a good year, like it was maybe 2023 and 2024.

[Guy Hedgeko]

There are other reasons for Spain to be cheerful too. After a cost of living crisis. Inflation is now under control and although unemployment is higher than in many neighbouring countries, it's currently at a 17 year low. The socialist led government says labour reform has helped create quality jobs and that targeted subsidies offset the cost of living crisis. Carlos Cuerpo is the economy Minister.

[Carlos Cuerpo]

Spain is proving to be more resilient to successive shocks, including the inflation shock that came with the war in Ukraine. We are getting out of the COVID without scars and we are getting out of that by modernizing our economy and therefore lifting our potential GDP growth up.

[Guy Hedgeko]

Along with Italy, Spain is the biggest recipient of EU pandemic recovery funds and it's using them to create a greener economy.

[Wayne Griffiths]

I'm in a car production factory in Matoreo just outside Barcelona, and this factory belongs to the Spanish car company Seat. And it's one of the reasons why Spain is the second biggest car producer in Europe.

[Guy Hedgeko]

Wayne Griffiths, CEO of the company, believes there's room for further growth.

[Carlos Cuerpo]

So it is one of the key industries in the country and also looking towards the future as well, particularly with electrification. I think as an opportunity not only of maintaining that level of industry, but with the game changer of renewable energy that this country has to make Spain even bigger in terms of car industry in the future.

[Guy Hedgeko]

Spain's growth is expected to remain robust this year, although the cleanup following recent tragic floods in Valencia is expected to lower GDP slightly. There are also some clouds on the horizon. Public debt remains high and a housing crisis is preventing many Spaniards from finding an affordable home, but in the meantime, the country is enjoying its moment in the sun. In Spain, I'm the BBC's Guy Hedgeko.

[Sabri Benishore]

For Marketplace, and in New York, I'm Sabri Benishore with the Marketplace morning Report from 8:00pm American Public Media.

[Phoebe]

Hi, this is Phoebe in Honolulu, Hawaii. The economy shapes our lives and Marketplace helps me keep up with that force without getting bogged down in bad news. I also appreciate their focus on gender and racial inequity and on climate change, and I love the growth agnostic stories about drivers of our economy other than consumption. Join me in supporting Marketplace with a gift today. Go to marketplace.org donate.