New York Times - 03.15.2002

 

The New York Times

Bush Plans to Raise Foreign Aid and Tie It to Reforms

By ELISABETH BUMILLER

WASHINGTON — President Bush today proposed a three- year, $5 billion increase in American foreign aid to poor nations that support human rights, adhere to strong systems of law and have open markets.

The new money represents a roughly 15 percent annual increase in America's existing $10 billion annual foreign aid budget, which has not grown in a decade and is at its lowest level since World War II. International development experts called the additional $5 billion significant, although not nearly as much as they said was needed.

Mr. Bush made the promise of aid, which must be approved by Congress, contingent on the recipients' undertaking a broad range of economic, political and social reforms.

"We will reward nations that have more open markets and sustainable budget policies — nations where people can start and operate a small business without running the gantlets of bureaucracy and bribery," Mr. Bush said in a speech at the Inter-American Development Bank.

Mr. Bush also linked foreign aid to the eradication of terrorism, at least as a prescription to help "failed states" that harbor terrorists.

"Poverty doesn't cause terrorism," Mr. Bush said. "Being poor doesn't make you a murderer. Most of the plotters of September the 11th were raised in comfort. Yet persistent poverty and oppression can lead to hopelessness and despair. And when governments fail to meet the most basic needs of their people, these failed states can become havens for terror."

Mr. Bush was joined on the bank's stage by Bono, the lead singer of the Irish rock band U2 and an advocate for the poor, who met with the president in the Oval Office just before the speech. Development experts said that in recent weeks Bono had worked extensively with senior administration officials, including Secretary of State Colin L. Powell and Condoleezza Rice, the national security adviser, to push for the increase in aid.

"As you can see, I'm traveling in some pretty good company today — Bono," Mr. Bush said, gesturing to the singer, who had on his signature sky blue wraparound sunglasses. Mr. Bush said that Bono "is willing to lead to achieve what his heart tells him, and that is nobody — nobody — should be living in poverty and hopelessness in the world."

Mr. Bush's speech was in essence a pre-emptive strike before a conference he will attend next week in Monterrey, Mexico, on global aid to the poor.

The United States has come under increasing criticism from Europe and development agencies for its foreign aid budget, which is the smallest, relative to the size of the economy, of any rich nation.

"He had to step forward and assert leadership," said C. Fred Bergsten, the director of the Institute for International Economics and an advocate of increased spending on development assistance. "It takes him to Monterrey in a much more positive vein. Otherwise he would have gone down there as the target of criticism and attacks from everybody else."

Nonetheless, Democrats and some development agencies said that the $5 billion increase, which would not take effect until 2004, was too little, too late, and that it paled beside Mr. Bush's proposed $48 billion increase in military spending.

"Where's the beef?" said George Soros, the billionaire philanthropist and longtime donor to developing nations. "It's totally inadequate as far as the amounts involved — a token gesture instead of something that could successfully impact most of the poor countries. This is unfortunately not receiving the kind of priority that other things are receiving in the government."

Mr. Bush's speech was praised by James D. Wolfensohn, the president of the World Bank, even though the $5 billion increase fell short of what Mr. Wolfensohn has asked for, which is a doubling of foreign aid spending by all rich nations. Mr. Wolfensohn and the Bush administration have been locked in a confrontation over the bank's effectiveness.

Today, with Mr. Wolfensohn on the stage, Mr. Bush called once again for reforms at the bank. Mr. Bush's Treasury secretary, Paul H. O'Neill, has said that the bank has driven poor countries "into a ditch" by lending instead of donating funds.

"We applaud the president for his statement on the importance of increasing development assistance," Mr. Wolfensohn said in a brief statement.

In his speech, Mr. Bush said that the additional $5 billion would expand his administration's fight against AIDS, bring computer instruction to young professionals in developing countries and help African businesses sell their goods abroad.

"The goal is to provide people in developing nations the tools they need to seize the opportunities of the global economy," he said. "In return for this additional commitment, we expect nations to adopt the reforms and policies that make development effective and lasting."

Mr. Bush said that Mr. O'Neill and Secretary Powell would develop "clear and concrete and objective criteria" for determining if a nation met the American standards for foreign aid, and that the standards would then be applied "rigorously and fairly." Mr. Bush was not more specific, and development experts said they could not judge the effectiveness of the criteria until the administration determined how they would be defined, monitored and enforced.

Other administrations as well as the World Bank have set preconditions for foreign aid, but this is the first time that Mr. Bush has announced a clear-cut policy that he wants to make a cornerstone of his administration's foreign aid.

Mr. Bush called it a "new compact for global development" that is to be defined by "a new accountability" for both rich and poor nations. "Greater contributions from developed nations must be linked to greater responsibility from developing nations," he said.

Mr. Bush is to leave next Thursday for Monterrey, followed by visits to Lima, Peru, and El Salvador before returning to Washington on March 24.