Skeptical Congress Accelerates Foreign-Aid Cuts

Charging waste and poor returns, GOP lawmakers sharply curtail a pillar of postwar foreign policy

For a Congress aiming at budget reductions, foreign aid was an obvious target. It was thus no surprise when Congress agreed recently to big cuts in foreign aid, accelerating a decade-long trend.

What has surprised many diplomatic observers is the extent to which the 104th Congress, convinced that foreign aid has been a waste of taxpayers' money, has turned its back on one of the guiding premises of postwar American foreign policy.

Since the 1950s, aid to alleviate poverty and hunger has been viewed as a means of enhancing economic growth and political stability in nations important to US interests.

Billions of dollars later, many lawmakers are not convinced that the investment has paid off.

''What we're seeing is not just a continuation of a downward trend in the amount of development assistance but a change in attitude on the part of Congress,'' says Peter Shiras, director of government relations at InterAction, a Washington-based consortium of 160 US nonprofit humanitarian organizations. ''It no longer recognizes the positive contribution foreign aid makes abroad and how it serves US national interests.''

The foreign-aid bill, approved by the House Oct. 31 and the Senate on Nov. 1, appropriates $12.1 billion for the current fiscal year, some $2.7 billion less than the amount President Clinton requested.

Final passage of the legislation has been held up by a dispute over an amendment to bar US funds to organizations abroad that perform abortions.

If the issue is not resolved, Congress is expected to pass a long-term continuing resolution at the $12.1 billion level approved in a House-Senate conference committee.

Middle East winners

The big winners, this year as before, are Israel and Egypt, which receive $3 billion and $2 billion respectively - more than 40 percent of the US foreign-aid budget as a continuing reward for signing the 1977 Camp David peace treaty.

The biggest losers are less developed countries.

General aid for education, health care, family-planning assistance, and environmental programs in poor nations was cut by one-third. Funds to alleviate poverty in Africa - home to half the world's poor - are likely to be cut at least 20 percent.

Meanwhile, last year's $1.2 billion US contribution to the World Bank affiliate that provides low-interest loans to poor nations was cut by 42 percent.

In all, at least half the $2.7 billion reduction in foreign aid from last year will be sustained by programs devoted to development assistance.

The cut perpetuates a gradual trend. Development assistance as a percentage of the American gross domestic product has dropped from 1 percent to less than half a percent since the 1960s. The US share of total worldwide bilateral development assistance has dropped from 63 to 17 percent since the mid-1950s. As a percentage of total US foreign aid, meanwhile, development assistance drops this year from 30 to 22 percent.

At the same time, however, substantial amounts are donated by private citizens to support development projects in third-world nations.

Bryan Johnson, a policy analyst for the conservative Heritage Foundation in Washington, says there is no evidence that foreign aid has helped poor nations and much evidence that it may actually have hurt by retarding needed economic reforms.

A forthcoming Heritage study indicates that of 64 nations that have received US foreign aid for a minimum of 35 years, two-thirds have economies that have remained stagnant or actually shrank.

On the other hand, East Asian countries like South Korea, which have received almost no development assistance since the mid-1960s, have experienced spectacular growth.

In the absence of foreign aid, Mr. Johnson says, the Asian nations were forced to reform their economies.

''We know there is evidence that foreign aid does no good,'' says Mr. Johnson. ''Cutting foreign aid is certainly not going to make anything worse.''

''In order for the US to truly help the poorer regions of the world and the conditions of poverty that exist, development assistance as we know it should be zeroed out,'' he adds.

Mr. Johnson's view, which is widely held by Republicans in the 104th Congress, is disputed by many development specialists.

They say it is unfair to draw conclusions about the efficacy of past US aid since so much of it was given with reference to cold-war politics - that is, to nations that were strategically important rather than to those that were truly deserving.

''When aid was given mainly for security and cold-war purposes, it did not have a positive development impact. That money was often wasted,'' says David Gordon, director of US policy programs at the Overseas Development Council in Washington.

But when aid has been devoted to development, Mr. Gordon says, the results have often been impressive, measured in terms of improved levels of education, decreases in infant mortality, reductions in fertility, and improved health.

Refocusing assistance

''In the aftermath of the cold war, development assistance has been refocused overwhelmingly on countries that are engaged in difficult transitions to market economies and democratic government,'' Gordon says. ''It's a shame that we're cutting it just at this moment.''

''It's hard to point to much success in foreign aid in part because not very much has gone to areas where it's really needed - for example, human-resource development,'' says Gareth Porter, International Program Director of the Environmental and Energy Study Institute in Washington. ''It's a little like Christianity: it's never really been tried.''

The legislation includes several amendments long-sought by President Clinton.

One is a waiver that releases $368 million in military equipment paid for by Pakistan but held in storage because of the Islamabad government's nuclear-weapons program. Another gives an 18-month extension to a measure authorizing aid to the Palestinian Authority, which has acquired limited authority in the Gaza Strip and parts of the West Bank turned over by Israel.

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