Don't Give In to Aid Fatigue

One concern raised by the global economy is that poorer nations, with little to sell and sparse means to buy, may sink even further into isolation and poverty. The rich-poor gap, globally, could widen.

The traditional way of narrowing that gap has been development aid from rich to poor. And while such aid has rarely lifted nations out of poverty, it has certainly helped provide a floor, improving basics like shelter, education, and health care that pave the way for private investment progress.

In the best instances, aid has given people skills and tools for more productive farming and small industry.

Development aid has been sliding, however. The Organization for Economic Cooperation and Development (OECD) reports that 1997 was a record low year for aid. Total aid from industrialized nations was $48.3 billion, just 0.22 percent of their combined national incomes - well below longstanding targets. Aid from the world's top economic powers, the G-7 nations, fell 29 percent between 1992 and 1997, after adjusting for inflation.

A look at the aid given by individual countries shows Denmark leading the way, with aid equaling 0.97 percent of GNP. The US contributed only 0.09 percent. In dollars spent, the US is second behind Japan, but Tokyo gives more than 0.2 percent of its GNP.

Some countries, like Britain (0.26 percent) are planning to boost aid budgets in coming years. That sets an example for the US and others. And debt relief must be added in as a key move to help the poorest of poor countries escape the treadmill of never-ending interest payments. Aid should be seen as a major investment in long-term global economic health.

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