US World Aid Chief Calls for Reforms. FOREIGN AID

ALAN WOODS, the United States chief of development aid, has joined the chorus of voices calling for reform in the US program. But he has left the public speculating about what he actually has in mind for the organization he runs, the Agency for International Development (AID).

In a report issued yesterday, called ``Development and the National Interest: US Economic Assistance into the 21st Century,'' Mr. Woods makes no recommendations. Instead, he poses a series of questions designed to stimulate debate over the future of an aid program that has had limited success at best. Some development specialists here who had seen early copies of the report are calling it ``anti-development.''

``The reality is that there have been no graduates from less-developed to developed in 20 years,'' Woods said in a briefing with reporters. He added that a number of countries have become less developed over that time.

``Where development has worked, and is working, the key has been economic growth,'' the AID report says.

``And this is largely the result of individual nations making the right policy choices and making the most of their internal human and material resources.... Direct US development assistance, overall, has played a secondary role and has not always succeeded in fostering growth-oriented policies among recipient states.''

All too often, the report says, US aid promotes dependence on US aid, not development, and America cannot afford that.

The report devotes an entire chapter to third-world economic performance and the need for growth-promoting policies. But Bob Berg, director of the International Development Conference, says the International Monetary Fund and the World Bank - not AID - are the proper forums for promoting such policies.

The report expresses much more enthusiasm for nongovernmental US involvement in the third world - private voluntary organizations, universities, and corporations - which operate with much lower overhead and bureaucratic red tape than AID.

``Sustaining a domestic climate that continues to encourage private altruism - and pursuing economic policies that will keep the American economy strong enough to support it - are two of the most important contributions the US government can make to global development,'' it says.

One of the subthemes that runs through the report is the need to boost the US's trade competitiveness. Japan has just replaced the US as the No. 1 dispenser of development aid, and that aid is tied directly to boosting Japanese exports.

``How can we compete with export-promoting programs that other countries call development assistance?'' the report asks. ``Is the answer to redirect existing aid flows to promote commercial advantage or to take a stronger negotiating stance, backed by a big war chest, with our competitors?''

Some development-aid experts say these are leading questions, which may provide clues about AID's future direction.

Janet Brown, a senior associate at the World Resources Institute, got additional interpretations from the report: that most of the development undertaken has not worked, and that people involved in development did not know what they were doing. ``It makes you wonder why we should spend any money at all on development assistance,'' she says. She faults the report for not acknowledging the lessons learned over the years about the role of environmental concerns in development and about long-term sustainability.