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U.S. bumps up aid, with strings

By DAVID ADAMS, Times Latin America Correspondent
© St. Petersburg Times
published March 21, 2002

MIAMI -- Facing accusations of a tight-fisted response to global poverty, the Bush administration appears to have relaxed the purse strings.

Only a week after the White House announced a $5-billion increase in foreign aid over three years, administration officials now say they got the math wrong. Instead, the aid increase is $10-billion.

Officially the error was put down to a miscommunication between the White House and Treasury Department.

But word of the adjusted figures came just as heads of state gather today for a United Nations summit on aid to developing nations in Monterrey, Mexico.

After decades on the back burner, the issue of Third World poverty has risen on the international agenda after the Sept. 11 terrorist attacks. Increased defense spending is widely seen as one but not the only answer to terrorism; poverty can also breed the climate terrorists operate in.

President Bush is due to address the U.N. summit Friday as part of a three-nation tour of Latin America. Before the U.S. aid figures were revised, criticism of American aid levels was scathing. Since then the tone has softened.

Of course, Congress must first approve the money. That may be easier said than done. Despite record budget surpluses in the 1990s, U.S. foreign aid fell by half during the Clinton administration when measured against economic growth.

Speaking at a meeting of media publishers in the Dominican Republic on Monday, former President Clinton warned that U.S. public opinion was hopelessly misinformed about foreign aid levels. He cited an opinion poll that showed that most Americans believe about 10 percent to 15 percent of the budget is spent on foreign aid, when the real figure is less than half of 1 percent.

In pure dollar terms the United States spends more on foreign aid than any other country in the world ($10-billion) except Japan ($13.5-billion). But relative to the size of its economy the United States has the smallest aid budget of any wealthy country, accounting for only about 0.1 percent of its economic output, compared to Denmark (1.06 percent), Britain (0.32 percent) and Germany (0.27 percent).

Starting in 2003, the U.S. aid initiative would provide about $1.7-billion the first year, about $3.3-billion in the second year and the full $5-billion in the third and subsequent years.

It's still not clear how White House number crunchers missed the additional $5-billion. The error apparently stemmed from confusion over whether the sum was meant as a $5-billion lump sum to be divided over three years, or as a cumulative figure.

To back up claims of a genuine mistake, senior administration officials say the United States' newfound generosity is part of a new approach to fighting poverty. Bush hopes to begin outlining his plans during this week's Latin American tour, which included Mexico, Peru and El Salvador.

Under this initiative the United States is willing to make more money available, but only under certain conditions. Alleging that billions in foreign aid money has been squandered in the past by corrupt recipient governments, Bush says U.S. taxpayers want to see more bang for their buck.

"I'm not interested in funding corruption," the president told reporters from several Latin American news agencies Wednesday. "If a country thinks they're going to get aid from the United States, and they're stealing money, they're just not going to get it."

U.S. officials say they want to see measurable political and economic reforms to strengthen democratic institutions, increase transparency and good government, as well as encouraging foreign investment and free trade.

Many development experts agree the Bush proposal makes sense. Studies show that aid tends to be far more effective in countries where there is a political will for change.

But it still requires a lot of money.

According to the recommendations of a U.N. panel, in order to reduce world poverty by half over the next 15 years, the average aid budget in rich countries would need to be increased by $50-billion a year. That's almost double the amount that all the developed countries together currently spend.

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