'Trade, not aid'

It didn't work, concludes US foreign aid chief

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President Clinton recently announced that the federal budget surplus will be $1 trillion over the next 15 years, yet we continue to run our foreign-assistance program under budget caps set when we had a deficit. These budget caps are a disaster when it comes to protecting America's international interests.

Every day we are missing opportunities to understand the internal tensions that lead a state to fail or go to war with its neighbor, to create new market opportunities, to control the flow of weapons of mass destruction, to promote democracy and human rights, and to achieve sustainable development in developing nations.

The politics of the budget process is producing back-door isolationism that can please only those members of Congress who boast of not owning a passport. One result of our inaction is the growing global disparity between rich and poor. Today, for every dollar earned in the developing world, $65 are earned in the industrial world. At the turn of the century, the ratio was 9 to 1.

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What will it take to wake our leaders? More failed states? More refugees and migration? More disease? More terrorism?

I had the good fortune to serve a president who advocated using foreign assistance to combat these threats. Yet, the aid budget has been cut along with the rest of the federal budget. We hoped that other factors would compensate. For example, we rationalized that the developing world wanted "trade, not aid." Yet as time went on, we saw virtually no increase of trade with the poorest nations. These nations simply could not afford to buy anything.

We are sending very mixed messages to our developing world partners. We say we want them to embrace democratic, market economies and to enjoy the benefits of globalization - but, at the same time, we withhold the assistance they need to help themselves prepare for this new world of opportunity.

The sad and even dangerous reality is that globalization and the democratic market-economy movement have not closed the gap between rich and poor. Too often, the changes we see in developing nations occur within the ruling classes of these societies. That is a dangerous approach, because when only a small percentage of a population enjoys the benefits of democracy, disillusionment sets in, and unmet needs can unravel a society.

Economic growth can reduce poverty in the developing world, but not without investments in health care, education, job creation, and food security. Economic growth can reduce poverty, but not if corruption is reducing tax revenues by as much as 50 percent, and not if governments worry more about military expenditures than social services.

Today we're irresponsibly undermining an international system that serves our interests. What we're doing to the United Nations system is unconscionable. At a time when the UN is bending under the weight of human crises, most emanating from the developing world, we're sapping its vitality by refusing to pay our bills. Then we turn around and criticize it for failing to do its job. Yet another compromise has been reached in the Senate to pay our debt. We'll pay most of what we owe but only if the UN agrees that we pay less in the future. This is wrong. Would we teach our children to treat friends that way? No. We teach them that bullies are cowards. This is a shameful approach designed to appease people whose real goal is to kill the UN.

It's time to end the hypocrisy. Globalization is leaving out about two-thirds of the world. Either we should invest real money in the global model we are promoting, or we should begin to erect the barriers to keep out these poor countries when their internal problems boil over. The US, with its military budget of $275 billion and its foreign assistance budget of $12 billion, may have already made its choice. But have we done so consciously? Or are we victims of inertia?

We are fast approaching a world in which 10 percent of the people control 90 percent of the wealth. We hear rhetoric about a more equitable world where America's vision of a democratic, market-based globe can be realized, but it isn't matched by resource allocations.

Our own political system and media seem to miss this credibility gap, but the developing world doesn't. The dangers created by the poverty gap are not only war and terrorism, but losing the battle against climate change and disease.

Foreign aid isn't just an investment we make to uphold our values, it's an investment we should make to protect our people and to leave a better world to our children and grandchildren.

*J. Brian Atwood steps down July 9 as administrator for the US Agency for International Development.

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