EDITORIAL Beyond war, daring to think of foreign aid
Even as the Bush
administrations ill-defined war on terrorism lurches on from one
objective to another, voices are beginning to raise questions about what
follows. In most of the analysis that arises out of that question, some
consideration is given to the need to treat the root causes that often
contribute to widespread discontent and ultimately, terror.
Such considerations come with a price tag in the form of foreign
aid.
But with the budget surplus gone, military spending skyrocketing
and talk anew about deficits, dare anyone speak of an increase in foreign
aid?
Misconceptions about foreign aid are widespread. In a survey made
last year, half the respondents thought that foreign aid accounted for 20
percent of the federal budget. The current budget exceeds $2 trillion, and aid
is about $16 billion. That is considerably less than 1 percent.
Many assume the $16 billion goes to relieve starvation and improve
health conditions in the poorest countries in the world. Regrettably, this is
not the case. U.S. Sen. Patrick Leahy told the World Economic Forum in New York
in February that two-thirds of U.S. aid goes to Israel and Egypt, and that much
of the other third is used to promote U.S. trade and to fight drugs.
Leahy exaggerated a bit. The expenditures for the year 2000 showed
$4 billion to Israel and $2.1 billion to Egypt (slightly more than a third).
But a look at the figures over a 40-year period confirms the point the senator
was making. Of a total $258 billion, only $42 billion went to the two most
needy continents, Africa and Latin America.
U.S. aid has two clear policy objectives: to expand the market for
U.S. goods and services and to influence domestic policy in the recipient
countries. More than 70 percent of all aid is tied to the purchase of U.S.
goods and services. Increasingly, a condition for aid is the elimination by the
recipient countries of duties on imports from the United States. Given the
extreme disparity that normally exists in the infrastructure and technology of
the two parties involved, this condition is fatal for small-scale
agriculture.
While we use our economic clout to pressure poor countries to open
their markets, we do not reciprocate. As the chief economist for the World Bank
noted last December, protection by the rich countries costs the poor countries
twice as much as they receive in aid.
British Chancellor of the Exchequer Gordon Brown made brief
headlines a few months ago when he urged the rich nations to repeat the
Marshall Plan, this time on behalf of the worlds poor countries. The
original plan was a 4-year multination program the United States initiated in
1947 to rebuild a Europe devastated by war.
Brown proposes is something far more modest. He would have the
rich nations double their current annual contributions to foreign aid. The sum
total of this aid was $53 billion in the year 2000, almost half of it ($25.4
billion) from the European community. Japan was next with $13 billion, followed
by the United States with $9.6 billion.
In percentages of GDP, the United States comes out even worse.
While Britains contribution is 0.31 percent and Japans 0.27
percent, we now give less than 0.1 percent. In 1990 we were giving 0.2 percent,
and in 1970 it was 0.3 percent. To quote President Carter: We are the
stingiest. Not a single one of the major industrial nations comes
anywhere near the 0.7 percent goal set by the United Nations. It is met only by
Denmark, Luxembourg, Norway, Sweden and Ireland.
As the United Nations Conference on Development opened in Mexico
March 19, U.N. Secretary General Kofi Annan expressed the hopes of the poor
countries. What they ask for, he said, is a fair chance to
trade their way out of poverty, without having to face challenges or quotas or
to compete against subsidized products from rich countries. Many are also
asking for relief from unsustainable debts. And many are saying that in order
to make the full transition to sound, open economies, they need increased aid
from wealthier countries.
These are modest demands. It is well within our ability -- and our
self-interest -- to fulfill them.
National Catholic Reporter, March 29,
2002
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