If spending money were the only answer to alleviating poverty, then rich industrial nations would have long ago used their wallets to lead the poor nations out of destitution, disease, despair and illiteracy.
The U.S. has spent about $1 trillion since World War II building agriculture programs, schools and infrastructure in impoverished nations. But the results have been disappointing. The level of poverty in the Third World is still incredibly high. Nearly 3 billion people–half the world’s population–still live on less than $2 a day. Most African nations have not seen a rise in longevity or income in 40 years.
Why has foreign aid, despite the best of intentions, failed so miserably? Many of the nations that received it still haven’t repaired the self-inflicted wounds that led to their poverty in the first place–such as price controls, command economies, collective ideologies, official corruption and state-owned enterprises or banks.
Until and unless they make essential reforms for self-sustaining economic growth, it will be hard to dispute critics who argue that much of America’s foreign aid is wasted.
President Bush will step into this debate Thursday when he leaves to attend the United Nations International Conference on Financing and Development in Monterrey, Mexico, along with leaders of 57 other nations.
Bush gave new details Wednesday about a plan to increase foreign aid. The U.S. spends $10 billion a year on development assistance and food and humanitarian aid. That would rise to $15 billion in 2006.
That will be money well spent only if America can find ways of making nations accountable for the dollars they receive.
Bush was right to put the initiative in terms of a grand global bargain: More aid will go to the nations that reform their economies–that most help themselves. They must take measures to end corruption, promote human rights and the rule of law and enact reforms for government, health care and education for citizens.
Just as America helped its people help themselves through welfare reform, so the Bush administration proposes to lift up the world’s poorest nations by striking a very similar deal.
The World Bank, backed by Britain, wants the world’s richest nations to double their foreign aid in a new, global “Marshall Plan” to deal with this grave humanitarian challenge. UN Secretary General Kofi Annan has urged industrial democracies to cut poverty in half around the world by 2015 by spending $50 billion a year, much of it from American taxpayers.
Those are good goals, but the track record is sobering. Monterrey will only add to the list of failures if nations don’t devise better strategies for spending the money, including specifically targeting the funds for programs that produce concrete results, such as the global battle against Tuberculosis and AIDS. Bush has pledged $500 million to the global fund to fight AIDS and other infectious diseases. Here’s a specific area where tangible progress can be made and measured.
Bush also challenged development banks to provide at least half of their aid in grants–not loans–as a way to help nations without burdening them with new debt that would stifle the goal of growth.
Bush’s new initiative has a practical goal as well, given the events of Sept. 11. “The growing divide between wealth and poverty,” he observed, “is both a challenge to our compassion and a source of instability.” In other words, the mission is twofold: lift up the world–and protect the U.S.
