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  International Economy: US blocks move for big rise in aid to poor countries

By: Alan Beattie and Carola Hoyos
Financial Times, January 28, 2002

The US yesterday blocked an agreement to increase drastically development aid to poor countries struggling to meet the United Nations' target of halving world poverty by 2015.

In negotiations ahead of the UN conference on development financing in Monterrey, Mexico, at the end of March, Washington was unwilling to support a commitment to increase the amount developed countries spend on development assistance to 0.7 per cent of gross national product, from the average of 0.22 per cent.

The UN estimates rich countries would need to double the Dollars 50bn (Pounds 34bn) they spend annually on development to achieve the goals 189 countries agreed at the UN's millennium summit.

Those aspirations include: reducing by half the number of people suffering poverty, hunger or lacking access to drinking water; achieving universal primary schooling; drastically reducing maternal and infant morality rates; and halting the spread of HIV/Aids, malaria and other diseases.

Non-governmental organisations and many members of the G77 group of developing countries reacted with dismay over the significantly weakened Monterrey text agreed yesterday by representatives from more than 100 countries and the world's large financial institutions.

Developing countries and many NGO's had hoped to use the meeting to address some of the shortcomings of the International Monetary Fund and World Bank and carve out a larger say for themselves in decisions over development policy.

But the US and other stakeholders, who wield considerable power within the institutions, were careful to avoid any language that could have weakened the mandate of the institutions or increased the say of the UN General Assembly, where every country holds an equal vote.

"We had great expectations for some of the revolutionary ideas that could have been implemented," said Aldo Caliari of the Washington-based Center of Concern, which monitored the discussions since the 1990s when the Asian financial crisis and anti-globalisation movement prompted developed countries to agree to a greater involvement of the UN and the developing world. "But a lot of concessions were made to keep all the actors on board."

One of those concessions included linking the amount of debt relief on offer to the likelihood of the country meeting the UN's development goals. "Cafod is deeply shocked at the EU and UK objection to integrating debt with the international commitment to achieving the 2015 development targets," said Henry Northover, policy analyst at Cafod, the Catholic relief agency.

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