Rich Nations Pressured for Aid
Firing back in a mounting clash with the Bush administration, World Bank President James D. Wolfensohn yesterday issued an impassioned plea for increased aid to poor nations.
Without mentioning names, Wolfensohn brushed aside criticism by Treasury Secretary Paul H. O'Neill that aid has produced paltry results. He made it clear that he isn't backing down in his effort to convince rich countries that winning an enduring victory over terrorism will require them to contribute significantly more money toward alleviating poverty.
"We will not create a safer world with bombs or brigades alone," Wolfensohn said in a speech at the Woodrow Wilson International Center. While poverty does not itself lead to violence, it "can provide a breeding ground for the ideas and actions of those who promote conflict and terror," he said.
Wolfensohn's speech came two weeks before President Bush and other world leaders are scheduled to meet in Monterrey, Mexico, for a United Nations conference on financing for development. There the battle over the aid issue will be joined.
Wolfensohn's allies include Gordon Brown, the British chancellor of the exchequer, who has called for a "Marshall Plan" for the developing world that would double aid to about $100 billion a year. His chief foe is O'Neill, who argues that aid hasn't been effective enough to justify such a major increase, especially considering the persistence of wretched conditions in many countries that have received substantial sums from foreign donors.
The United States has already blocked an effort by Britain and other nations to insert specific targets for increased aid into the Monterrey conference communiqué. But Wolfensohn referred to Monterrey as "our opportunity to take the next important step," and he said that while "budgetary realities may make it impossible to double aid overnight," rich countries ought to endorse a phased-in increase -- "say, an additional $10 billion a year for the next 5 years, building to an extra $50 billion in year five."
The extra $50 billion would cost "only an extra one-fifth of 1 percent of the income of rich countries," Wolfensohn said, and it is within the range of what the World Bank estimates is needed to meet U.N. goals of halving world poverty by 2015. Rich countries also must lower trade barriers and cut agricultural subsidies that hurt the exports of poor nations, he said.
U.S. Treasury Department spokesman Tony Fratto noted that the Bush administration has proposed an 18 percent increase in U.S. contributions to the World Bank's lending facility for the poorest countries, contingent on measurable improvements. "The real problem is that we cannot be satisfied with the results of the last 40 years of development assistance," Fratto said.
Wolfensohn said, "Despite difficulties and setbacks, we have made important progress in the past." He cited data showing that over the past four decades, life expectancy in developing countries has increased by 20 years, and over the past three decades, illiteracy has been cut nearly in half, from 47 percent to 25 percent in adults.
He also cited successes. Among them, he said, are "China, where the number of rural poor people fell from 250 million to 34 million in two decades of reform; . . . India, where the literacy rate for women rose from 39 percent to 54 percent in just the past decade, [and] Uganda, where the number of children in primary school has doubled."
World Bank critics question how much of a role aid played in cases of successful development. China, in particular, owes very little of its economic success to aid and even ignored much advice from the World Bank, the critics say.
Wolfensohn said the advances he cited resulted "first and foremost [because of] action by developing countries countries, but also from action in partnership with the richer world and with the international institutions, with civil society, and the private sector."
In cases where aid failed, it was often during the Cold War years "when monies were lent for the sake of politics, not development," and development experts have learned from their mistakes, Wolfensohn said.
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