Magazine article Insight on the News

Foreign Aid, or Self-Interest?

Magazine article Insight on the News

Foreign Aid, or Self-Interest?

Article excerpt

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

Although the United States' innovative health, education and agricultural programs continue to lead development around the world, U.S. foreign aid has shrunk to $7.4 billion, compared with Japan's $14.5 billion, France's $8.4 billion and Germany's $7.5 billion.

Some critics are beginning to question whether the United States can sustain its influence and leadership among world donor communities. Already, Scandinavian nations, which give a far higher foreign-aid donation per citizen than America, are asking for top managerial positions in agencies such as the U.N. Development Program.

Last year leading donor nations signed a "Shaping the 21st Century Strategy" that listed the following targets:

* A one-half reduction in the proportion of people living in poverty by 2015.

* A two-thirds reduction in infant- and child-mortality rates and a three-fourths reduction in maternal mortality by 2015.

* Universal primary education by 2015; elimination of gender disparity in primary and secondary education by 2005; and safe access to family planning for all by 2015.

Although these ambitious goals may never be realized, they represent a shift from past practice in which donor nations backed political and military proxies overseas, supported their own exporters and generally constructed aid programs that served them as much as, if not more than, the recipient.

Japan, for example, gave aid for years in the form of tied, low-interest loans. Tied aid 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 quadrupled when the yen soared during the 1980s. Impoverished countries found they were repaying Japan $4 for every dollar they borrowed.

French aid propped 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 United States, too, wasted billions of dollars on dictators from Somalia to Zaire during the Cold War -- so long as, one wag said, "they were our bastards. …

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