False assumptions on foreign aid

A concordat of sorts has apparently been reached within the Reagan administration on its fiscal 1982 budget request for foreign aid. Whatever the fate of that request in Congress, it is worth examining the explicit assumptions in the administration's widely quoted "foreign aid retrenchment" document.

Two key assumptions were made, apart from the general requirement that every program bear some reduction. The first assumption was that "bilateral aid has priority over multilateral aid programs." The document states that the "primary impact of this proposal would be to eliminate or reduce US participation in a range of multilateral organizations which are not responsive to US foreign policy concerns and which in many cases may be ineffective in producing sound economic development."

The second assumption is that "security assistance has priority over development assistance." Based on frequent assertions by Secretary of State Haig , our economic support to a third-world country will apparently be dictated primarily by whether the Soviet Union poses a significant threat to that country.

Both assumptions are dangerous. Whatever the utlimate foreign-aid levels, those two assumptions should be examined closely, for they may well structure our foreign policies for years to come.

As to the first assumption, it is quite true that US contributions to the multilateral development banks, and other international development institutions , are not responsive to short-term maneuvering for US diplomatic advantage -- whether, for example, a particular country will vote our way on an issue before the United Nations Security Council. The history of the past two decades amply demonstrates, however, that the attempt to use foreign aid in any form -- bilateral or multilateral -- to buy political allies on particular issues of immediate concern will ultimately fail. Moreover, even if a country's friendship were for sale in the short run, it would be enormously expensive. One does not have to go back to the Vietnam experience to realize that the costs over time of shoring up even a single nation's economy can be staggering.

More basic, however, our contributions to the multilateral development banks do directly support US foreign policy, although not always in immediate terms. The long-term global problems of primary concern to the United States -- terrorism and nuclear non- proliferation, for example -- are susceptible only to international solutions that third- world countries actively support. Their willingness to work cooperatively with us on these problems depends in large part on their perception of our willingness to help with the development issues that are their primary concerns.

To third-world countries, the multilateral development banks are the most effective instruments of development support. The banks, and the UN programs such as UNICEF, have a proven record over the last two decades of making a dramatic difference in scores of developing nations throughout the globe. The evidence to that effect is overwhelming.

Taken with the expressed views of President Reagan on the current US-Soviet confrontation, the second foreign-aid assumption -- giving priority to "security assistance" -- is dangerous because it implies that US relations with third-world countries should be seen primarily in the context of that confrontation. Every developing nation wants to be, and should be, considered in terms of its own needs and interests in relation to our own, not through an East-West prism. Forcing third- world countries to choose sides could preclude the kind of invaluable help that Algeria recently provided during the hostage crisis. More generally, the dichotomy is simply inadequate to deal with the enormously complex international relations of such important countries as India and Tanzania.

A budgetary balance must be struck between short-term security needs and long- term development requirements. The current administration is obviously under pressures to mortgage the latter to the former. But those pressures should be resisted. Development assistance, through multilateral institutions as well as bilaterally, is essential if the United States is to establish and maintain a foreign policy of effective leadership.

Over the next decade new third-world political crises affecting the entire globe -- like those that recently occurred in Afghanistan and Nicaragua -- will surely emerge. No amount of foreign aid will check all those explosions. But development assistance, provided in a spirit of long-term cooperation, will be far more effective than any other means -- including military aid -- in increasing the chances for the US to promote a peace ful and prospering world.

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