Bush puts strings on aid

President pledges U.S. to international development accord

On condition of reforms

Of promised boost in foreign aid, some might come this year

March 23, 2002|By NEW YORK TIMES NEWS SERVICE

MONTERREY, Mexico - President Bush called yesterday for a "new compact" for global development by insisting that rich nations give foreign aid to poor nations only if poor nations undertake a broad range of political, legal and economic reforms.

"Pouring money into a failed status quo does little to help the poor, and can actually delay the progress of reform," Bush told the presidents and prime ministers of 50 nations gathered here for the International Conference on Financing for Development. "We must accept a higher, more difficult, more promising call."

Bush spoke on the closing day of the U.N. anti-poverty summit, when 171 nations signed the Monterrey Consensus, an accord committing them to the goals of doubling development aid to the poor and halving world poverty by 2015.

The president reiterated a promise of a 50 percent increase in U.S. foreign aid over three years and added that some money might be available as early as this year - a counter to complaints from development agencies that the United States was moving too slowly in its new foreign aid commitments.

Bush's pledge meant that the total American foreign aid budget, if approved by Congress, would be $15 billion by 2006. The current American foreign aid budget is $10 billion, an amount that has not grown in a decade and has been sharply criticized by development agencies and other rich nations.

Although Bush's pledge of aid fell short of the goals of the conference, the American commitment - along with a promise of $4 billion more per year from the European Union - were considered the most important developments of Monterrey. They proved, development experts said, that poor nations could exert powerful pressure on the richest nation in the world, particularly when the United States is asking many nations for help in the fight against terrorism.

Bush's pledge of aid, which he first announced in a speech last week in Washington, was considered an abrupt change in Bush administration policy.

"It's a shift in political attitude that is very important," said Mexican Foreign Minister Jorge G. Castaneda. Bush, Castaneda added, clearly did not want to come to Monterrey "without anything to propose, without anything to put on the table."

In his speech yesterday, Bush said he would "jump-start" his new aid program and work with Congress to make some funding available to nations that meet U.S. standards of reform within the year. Last week, development agencies criticized him for delaying the aid increase until 2004.

But first Congress must approve that money, and the Bush administration must develop the specific standards for economic, political and legal reform. So it is unclear how much new money will actually flow from the United States to poor nations this year.

Bush has given the task of developing those standards to Secretary of State Colin L. Powell and Secretary of the Treasury Paul H. O'Neill, who this week in Monterrey expressed considerable skepticism about foreign aid.

"If we are going to have real economic development in the world, most of that will come from capital coming into those countries to create jobs," O'Neill said. "We are not going to do it with welfare."

White House press secretary Ari Fleischer called Bush's move to speed up the aid an "indication by the president to do a little more, a little earlier."

Fleischer said the White House had no specific number in mind but it might be "a couple hundred million." Adding aid this year would not be part of the president's proposal for a 50 percent increase, Fleischer said.

Under that proposal, the foreign aid budget would grow by $1.7 billion in 2004, by $3.3 billion in 2005 and by $5 billion in 2006. Taken together, that would amount to a $10 billion increase in the foreign aid budget over three years.

But Bush, sounding a similar but more diplomatic call than his treasury secretary, said trade and foreign investment were far more important to the economic health of a poor nation than any level of foreign aid.

"All of us here must focus on real benefits to the poor, instead of debating arbitrary levels of inputs from the rich," Bush said. He added that "to be serious about fighting poverty, we must be serious about expanding trade."

But Bush, as he has before, linked development aid to the fight against terrorism, and also cast it in terms of religious and moral obligations.

"We fight against poverty because hope is an answer to terror," Bush said. "We fight against poverty because opportunity is a fundamental right to human dignity. We fight against poverty because faith requires it and conscience demands it."

Yesterday evening, Bush was to hold a joint news conference with President Vicente Fox of Mexico, who had urged Bush to attend a conference crucial to his popularity, which is sagging at home.

Bush was to visit Peru today and El Salvador tomorrow before returning home.

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