Wed, Mar 20, 2002 - Page 9 News List

George W. Bush's Monterrey mess

While Bush administration plans for foreign aid offer far more than former US president Bill Clinton ever proposed, the total is far less than needed, far less than meets the eye and will only hinder efforts in the ongoing war on terrorism

By Bruce Stokes

This week President Bush meets in Monterrey, Mexico with 50 other heads of state to discuss financing for Third World development. Last week, the president announced that he would ask the US Congress to set aside US$5 billion for a special development aid fund. This aid will be on top of the 10 percent increase in bilateral foreign assistance the White House has asked for in its new budget and a proposed 18 percent increase in US donations to the low-income loan fund at the World Bank.

The Bush plan is a callous, cynical attempt to make headlines and avoid international criticism in Monterrey. The funds the president has put on the table are a drop in the bucket compared with what's really needed. More important, Bush's gesture shortchanges the poor and it shortchanges the current war on terrorism, denying the US and its allies a major weapon in their fight against Bush's "evil doers" and the poverty that breeds them.

To his credit, Bush has proposed more aid money than his predecessor Bill Clinton ever did and Bush is doing more than any of his liberal critics ever expected. The multibillion dollar increases in bilateral and multilateral aid are not chicken feed. They just aren't enough.

The numbers only sound big. The new US$5 billion chunk of change is spread out over three years and doesn't start until fiscal year 2004. That's only US$1.7 billion dollars per year, which works out to be about one half of one percent of the likely growth of the US economy in those years.

This is hardly a big sacrifice on the part of American taxpayers. The proposed increased contributions to the World Bank are contingent on meeting controversial performance indicators and thus the funds may never materialize. And even when taken at face value, the administration's proposed combined increases in foreign aid will still give the world's poor less, as a portion of America's income, than any other industrial nation.

More important, the president's proposal falls woefully short of the need. The World Bank estimates that foreign aid from all sources will have to increase by US$50 billion dollars a year if there is to be any hope of cutting in half the number of people who currently live on a dollar a day by 2015. Surely the US can afford to contribute more than an additional US$2 billion a year toward that total. If only because its in America's and the world's self interest.

Per capita income has not increased in Africa since the nineteen sixties. Is it any wonder that there is a civil war in the Congo, that there has been genocide in Rwanda and that terrorist-harboring regimes have emerged in Somalia and Sudan. Africa is a swamp that is breeding the next generation of terrorists. And the only way to drain that swamp is to reduce poverty.

President Bush says that trade and foreign investment are the best way to help people help themselves. He's right. And governments in Europe and Japan agree with him. But the vast majority of foreign investment flowing to developing countries goes to a handful of nations, principally China. Chad could clean up its act and still not attract or retain much investment simply because its too small, too remote and too poor. Similarly, the 49 least-developed countries -- those nations at the center of the foreign aid debate -- exported only US$19 billion in merchandise and non-oil commodities in 2000. More trade would help them, but its no panacea because their export base is so small.

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