U.S. Loses Leadership in Foreign Aid: Japan, France, Germany Are More Generous

Article excerpt

America has lost its leading role as the largest donor of foreign aid to developing countries.

In 1995, U.S. aid - called overseas development assistance, or ODA - was $7.4 billion, compared with Japan's $14.5 billion, France's $8.4 billion and Germany's $7.5 billion.

But while U.S. aid falls in absolute and relative value, compared with other donor nations, America's innovative health, education, family-planning, women's, community, agricultural and other programs devised over the past decades remain on the cutting edge of foreign-aid know-how.

Some question, however, how long the United States will keep its influence and its leadership as Japan, Germany and France surpass U.S. aid programs. Already, Scandinavian nations, which give a far higher foreign-aid donation per citizen than America, are asking for top managerial positions in such agencies as the U.N. Development Program.

But despite diminished contributions, U.S. leadership is seen by experts as critical for the future of the $50-billion-a-year international aid programs. Japan, Germany and France have had a far different approach to development than the United States. It would be useful to examine the way each of the three now-leading donor nations have spun their aid programs, often to enhance their own industries and influence around the world.

FOREWARNED IS FOREARMED

The head of the U.S. Agency for International Development, J. Brian Atwood, has warned that as America cuts aid it stands to lose its influence. This could hurt U.S. exporters, investors and foreign policy goals, Mr. Atwood has said.

Last year, however, all the leading donor nations signed on to a common "Shaping the 21st Century Strategy" for future aid. That strategy, adopted by the 21 nations plus the European Union in the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD), lists the following common targets:

* A 50 percent reduction in the proportion of people living in poverty by 2015.

* Universal primary education by 2015.

* Elimination of gender disparity in primary and secondary education by 2005.

* Cutting infant and child mortality rates by two-thirds of the 1990 level and reducing maternal mortality by three-fourths by 2015.

* Safe access to family planning for all by 2015.

* Reversing the degradation of the environment by 2015.

These are ambitious goals that, in fact, may never be realized. But they represent a shift from past practice in which each donor nation often backed political and military proxies overseas, backed former colonies, supported their own exporters and generally constructed aid programs that served the donor as much, if not more than, the recipient.

THE TIES THAT BIND

Japan, for example, gave aid for years in the form of tied, low interest loans. Tied aid means it had to be spent on equipment, technology, expertise and services produced by the donor nation, even if cheaper and more effective alternatives were available.

In addition, the loans added up to enormous debts that suddenly quadrupled in value when the yen leapt from 600 per $1 to 100 per $1 in the 1980s. Impoverished countries found they were repaying Japan $4 for every dollar they borrowed.

French aid likewise was aimed at propping up friendly regimes among its former colonies in West Africa and Madagascar. About 13 nations are dependent on Paris through French support of their currency, the CFA franc. The United States, too, had wasted billions of dollars on dictators from Somalia to Zaire during the Cold War so long as, one wag said, "they were our bastards."

The common goals of the DAC represent an attempt to coordinate the aid programs of the world's donor nations at a time when the first, and for years the biggest, donor - America - faces a broad, sustained attack on foreign aid by conservatives at home. …