 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
  |
|||||||||||||||||||||||||||
Alan put together an extraordinary document that did change the thinking within AID in a lot of areas. And that was 14 years ago. We thought it was time to do that again. Carol worked on the first report and she helped, of course, write the last chapter on private foreign assistance: Carol was the principal researcher and writer of it. I'd like to tell you all that I wrote all this myself, but I didn't. We got the help of some very prominent academics like Carol Adelman on this report. We had Peter Timmer, one of the premiere development economists in the world, and Larry Diamond. We had Michael Porter at the Harvard Business School, who was a professor of President Bush's. President Bush is the only President to ever have an MBA. I won't say which university he received it from, but it is in Cambridge. Actually, it's in Boston, just over the river from Cambridge. Michael Porter is still teaching there and a little older now, but he wrote part of the chapter on microeconomic reform. I can go through the list of other people, but many people worked on this report and did some important editing. And there were negotiations, of course. Most of the report was written by scholars from the outside. Sharon Morris is the only career officer in AID who wrote a chapter. She wrote the difficult chapter on conflict management, and I'm very comfortable with that chapter in the report. This is a look at foreign assistance in a general sense, not specifically reviewing AID, per se, although, obviously, that counted for something. It is a scholars' review. It is not an official document, a policy document of the Administration, nor does it necessarily reflect the views of everybody in the Administration. I have to say it does reflect my views. You can count on every word. I read this document nine times. They locked me in chairs sometimes to make sure of each paragraph. I would review it, edit it, make sure I was comfortable, since I was going to have to speak to this over a long period of time. So the authors are highly respected scholars and researchers, people from think tanks and universities and development professionals.  In his cover letter to the National Security Strategy, President Bush said this: "The United States will use this moment of opportunity to extend the benefits of freedom across the globe. We will actively work to bring the hope of democracy, development, free markets and free trade to every corner of the world. In the 21st century, only nations that share a commitment to protecting basic human rights, guaranteeing political and economic freedom will be able to unleash the potential of their people and assure future prosperity." Several chapters of the National Security Strategy speak directly to the importance of our work in the development area, as well. As these chapters make abundantly clear, the Bush Administration is committed to improving people's lives and reducing poverty in the developing world. The President and Secretary Powell have made this point innumerable times. And they have backed it up with $5 billion in new funds proposed in the Millennium Challenge account. As the President said in his cover letter to the National Security Strategy -- and I quote again -- "The United States will stand behind any nation determined to build a better future by seeking the rewards of liberty for its people. The United States will deliver greater development assistance through the New Millennium Challenge account to nations that govern justly, invest in their people and encourage economic freedom." The President went on to state in the overview section that "the aim of this strategy is to help make the world not just safer, but better." The importance that both the National Security Strategy and the Millennium Challenge Account place on this country's international development efforts has been made more explicit than ever before. Development now takes its place alongside defense and diplomacy as one of the three essential components of American foreign policy. There are six parts of this report. There's a 30 page overview at the beginning. And there's 150 page report behind it. The first chapter is promoting democratic governance. Larry Diamond wrote that, from the Hoover Institute. I think it's a very powerful statement about the importance of good governance -- of good government, of freedom, of democracy, and of corruption-free governance in the third world in terms of development. Driving economic growth is the second. Third is improving people's health. Fourth is mitigating and managing conflict. Fifth is providing humanitarian assistance. And finally is what I call it privatizing foreign aid, although the title of it is a full measure of assistance. Before I turn to these subjects, I would like to make a couple of points. For some reason there seems to be a perception that international development has largely failed since the end of World War II. We have had our failures - absolutely, no question at all on this. It has been reported in a lot of research, much of which I agree with. However, we have had some notable successes and I want to review some of those. The first was the Marshall Plan. One of my great heroes was George Marshall. George Marshall had the office in the State Department which the USAID Administrator -- until four years ago when we moved to the Ronald Reagan Building and Trade Center -- had when he was the Chief of Staff of the United States military. The roots of AID are actually in the Marshall Plan. We just had a lady retire who is 83. She worked on the Marshall Plan as the secretary in the 1940s, she's very proud of that. She worked in the Legal Counsel's Office in AID. She was our last employee who actually had a connection historically to what went on in the Marshall Plan. The vision for the Marshall Plan was very interesting. Many Europeans don't know the connection between the European Union and the Marshall Plan. The first time in European history that the European governments actually worked together on something was the Marshall Plan, because what George Marshall said is: you must work together or you don't get the money. The European democracies and governments had been at war for centuries, literally, off and on. And as a result of that there was a lack of cooperation and collegiality. People will tell you, historians who understand Europe, that what led to the creation first of the Common Market, then the European Commission and the European Community was, in fact, the Marshall Plan. So foreign assistance does sometimes have good consequences -- not always, but sometimes. But that built the base for modern Europe. The most spectacular development gains, though, over the 20th Century, were not in Europe, because this was a reconstruction of a continent that was already developed, but in Asia. South Korean, Taiwan and Singapore were all economic basket cases in 1950; they were among the poorest countries of the world. They have all moved from low to high income status in the space of two generations. Why? There are several factors. They used the assistance they received from the United States to good advantage. There's actually a book that has never been published, that I saw the manuscript of, that was done at the National Defense University some years ago on the secret successes of AID, one of which was the programs of these countries. The second is they pursued strategies that led to equitable long-term economic growth. The most successful land reforms in world history, other than Japan, were in Taiwan. The best distribution of wealth in the world right now is in Taiwan. And it's rooted in their reforms of the 1950s. AID actually had something to do -- the precursor of AID had something to do with advising the government of Kaomintang, the Government of Taiwan, how to do that. They pursued strategies that also encouraged education, health sectors and export strategies. That was very important. Training counted in terms of the Asian high school. They also invested, first, before they industrialized, in rural economic growth for a better distribution of wealth. They balanced their industrial development with rural growth and rural strategies. All of them built up their agricultural base prior to industrialization. The Green Revolution in the 1960s was actually pioneered with the Rockefeller Foundation, the World Bank, and USAID. Norman Borlauch received the Nobel Prize for his work in that. He is, I think, 88 now. I sat with him at dinner very recently in Kansas. He's still going very strong and wants to bring that revolution to Africa in a different form, because we tried to bring the exact template of the Green Revolution in Asia to Africa and it did not work. It needs to be in a different form because Africa is a different culture and a different society than Asia is. Bangladesh, for example, has steadily progressed economically, doubling rice production over a 15 year period. So increased production can lay the basis in agriculture for industrialism. This is what's happening in Bangladesh now. In addition to these three countries I mentioned, the Asian Tigers, Malaysia, Thailand, the Philippines and China have all made enormous advances in the quality of life for their citizens. It is not just in Asia, however. Today infant mortality in the developing world has been lowered to the point that it equals what it was for industrialized democracies in 1950, 69 deaths per 1,000 live births. In 1951, 40 percent of the people in industrial countries had secondary education. Today 50 percent of the people in developing countries do. Half a century ago 1.8 billion people lived on fewer than 2200 calories per day. Today, despite a huge increase in the population of the world, only 430 million people have such low caloric intake. And while that is still far too many, it represents a reduction from 57 percent to 7 percent of the world's population are hungry based on this. I do not want to suggest here that these gains are entirely attributable to foreign assistance, because they are not. In many countries they were attributable to economic growth. But when economic growth and foreign assistance are connected to each other, it can accelerate growth, which is precisely what one of the lessons of this report is. In economic terms worldwide gross national product per capita has risen 29 percent since 1980. Only sub-Saharan Africa is showing a decline. Further, the percentage of people living on less than $1 a day has dropped in every decade since 1950. Life expectancy is rising worldwide too. In the early '50s, 27 percent of the world lived in countries where the average life expectancy was less than 40 years. Today, it is only under 1 percent. Only 4 percent of the world's people live in countries where it is less than 50 years old. The growth of democratic governance is another positive trend. The last quarter of the 20th Century saw the greatest expansion in democracy and individual freedom in human history. While there may be differences of opinion over how many countries can be considered genuinely democratic, the number of people living under freely elected leaders has risen dramatically in the past generation. According to the report, only 39 countries could be considered electoral democracies in 1974. In 1987 that had grown to 66. And today, according to Freedom House, 121 of the 192 countries of the world are at least somewhat democratic. These statistics, of course, mask important regional differences. The 28 countries in Western Europe and the Anglophone countries are democracies. Only 17 of 48 can be considered democratic in sub-Saharan Africa. And only 2 of 19 meet that standard in North Africa and the Middle East. One effect of the worldwide democratization trend is that even in the most authoritarian states today, genuine democracy movements are present. Another dramatic change over the past half century has been the spread of literacy. In 1950, 35 percent of the world adult population was literate, about 366 million people. Today, 2.4 billion people are literate. That is 74 percent of the planet's adult population. Equally important has been the rise in secondary education. In 1950, only 5 percent of the world's teenagers were enrolled in school. By 1997 that was 52 percent. Girls and women have played a significant part in these gains. For example, a woman's life expectancy is now 4.2 years higher than men's. Girls' enrollment in primary school has risen from 56 to 95 percent over the past five decades. I'm not suggesting everything is rosy. It's not. The HIV/AIDS pandemic is reversing many of the gains, particularly in sub-Saharan Africa, in east Africa, and southern Africa. Absent some change, this devastation from the pandemic will affect sub-Saharan Africa in a devastating way unless a cure is found. We talk about these problems all the time. So I thought it was good for a minute just to talk about the successes. And there is a detailed chart indicating this. Now, there are some people in the development community who only put emphasis on the failures, because they want to argue for more foreign assistance. But by doing that, they have created the impression that everything is a failure. This undermines the argument that some things do work sometimes. And we need to separate out those things that work from those things that do not work. In my April 25th lecture at Heritage, I described the principles and policies that have promoted development from the earliest days of the United States. And front and center in my remarks then were good political leadership, free markets, honest, transparent governance, and investing in peoples' health and education. Now let me talk about the chapters of this book. The first chapter is, as I said before, by Larry Diamond on democratic governance. Without good governance and a strong commitment to the rule of law and a genuine will to control corruption, all of which are essential for accountable government, development would be difficult if not impossible. I was invited to speak at the Kennedy School (at Harvard), at a lecture series. And when I spoke there --I think it was about three months ago -- I was asked to speak on the Millennium Challenge goals. I gave my entire speech on democratic governance. And there was -- I don't want to exaggerate this, but it was a somewhat hostile crowd -- and a young lady stood up and said, you spent an entire hour giving us a lecture on democratic governance, how important it was to development, how essential, but you didn't say one thing about the Millennium Challenge goals. And I said maybe people didn't get the message here. Unless countries move to democratic governance, control corruption, and improve the quality of public administration, there isn't going to be any meeting of the Millennium Challenge goals. There is a direct connection between governance and the achievement of these goals. The notion that western governments simply go in and do these things in the absence of good governance and the right economic policies is nonsense. It's difficult for some people to sort of get the connection. I don't see why that it's so, why that requires an argument, but apparently it does. This is what the report says: "Most urgent and pervasive is the weakness and the often decay of the rule of law. No problem does more to alienate citizens from their political leaders and institutions and to undermine political stability and economic development than endemic corruption among government and political party leaders, judges, and bureaucrats. The more endemic the corruption, the more likely it is to be accompanied by other serious deficiencies in the rule of law, smuggling, human trafficking, the drug trades, criminal violence, human rights abuses and personalization of power." "The spread of democracy," the report says, "around the world is thus impressively broad but worrisomely thin. The next decade will thus be a time of great danger and great opportunity for democracy. Without lasting reforms to improve governance by reducing corruption, professionalizing state bureaucracies, particularly in the economic governance area, and strengthening judicial administrative political institutions, many more democracies are likely to disappear... But improvements in governance, even incremental ones, would buy time for democracy, allowing it to gradually sink deeper roots in political party life, in civil society, and in national culture." That is the challenge facing us: how to encourage reforms in governments then make them permanent. We have learned a great deal about democracy-building since we began democracy programs in the Reagan Administration. They implemented them during Peter McPherson's term in office and then Alan Woods' after they had done the beginning. Toward this end, the report’s suggestions are the following around the democracy area: 1) The level of foreign assistance must be clearly linked to the country's performance in the democracy area; 2) Good performance must be tangibly rewarded; 3) Where there is no political commitment to democratic governance reforms, the United States should work only with non-governmental actors and the private sector; 4.) The United States should work with the World Bank and other international financial institutions to terminate assistance to bad governments and work more closely with other bilateral donors to coordinate pressure on recalcitrant governments; and 5) We should identify and work more closely with committed reformers. Let me emphasize that. In every country in the world I have been, there are democratic reformers, there are free market reformers. The problem is overcoming the domestic opposition to these reforms. Sometimes they don't succeed. You know, it's very difficult even in our society to get vested interests to stand aside for needed reforms. The President wisely used some of the crisis that's been going on in our foreign affairs establishment to make changes in foreign policy in a way that will protect the United States. He would not have been able to do that as well had there not been a crisis. What we need to do is identify the reformers in the developing world and then support them in an aggressive way through our foreign assistance program. The second issue is economic growth. Without equitable long-term economic growth, development is ultimately not sustainable. Governments must generate tax revenue to support public services if countries are to graduate from international assistance. The challenge for us, therefore, is to help developing countries find policies that promote economic growth over the long term and be sure that these are distributed across society. One very important point in all of this is sustainability. Since 1776, the United States has grown in per capita income by only 1.7 percent a year. But that has been sufficient for wealth to have grown 44-fold. Thus, as our report suggests, "High U.S. living standards are explained by the persistence of growth, not its speed." Another is agriculture. Most development agencies, including USAID, cut severely their investment in agriculture in the late 1980s -- when Peter McPherson left AID -- and then particularly severely in the 1990's. This was a dreadful mistake, for it overlooked the major role agriculture plays, particularly now in sub-Saharan Africa and Central Asia and South Asia. The fact is that most developing countries are primarily agricultural even now. Most of the poorest people live in rural areas. With the exception of a few city-states like Singapore, no country has risen to developed country status without first investing heavily in increased agricultural productivity. The United States did, Europe did, and so did the Asian Tigers. We must reinvigorate our investment in this critical sphere. The President has said, and I quote, "Success in the global economy comes to countries that maintain fiscal discipline, open their borders to trade, privatize inefficient state enterprises, deregulate domestic markets, and invest in the health and education of their people." Our report says this, "Globalization has been a boon for countries willing and able to integrate global markets, particularly developing countries that have adjusted prevailing positions and mindsets. Countries resistant to globalization or lacking capacity to develop investment and trade have not fared as well. Contrary to widespread expectations, income gaps have shrunk among countries that have integrated with global markets." Some people blame globalization for the persistence of poverty in the developing world. The exact opposite is true. The exact opposite is true. Globalization has led to reductions in poverty, the better distribution of wealth. And the data clearly shows that. The importance of economic freedom cannot be stressed enough. Unless developing countries establish transparent regulations, predictable laws and low trade barriers, then the funds they need for development will go elsewhere. Secretary Powell likes to say: "Capital is a coward." Last but not least is microeconomic policy. This is one of the Michael Porter's contributions. The international development community has learned to manage macroeconomic policy reasonably well. "Sound fiscal and monetary policies contribute enormously to a healthy economy, but they are not enough," our report concludes. "Though they provide opportunities to create wealth, they do not create it. Instead, wealth is created through an economy's microeconomic foundation rooted in company operations and strategies as well as in the inputs, infrastructures, institutions, regulations, and policies that constitute the business environment which a nation's firms take. To succeed political, legal, fiscal and monetary reforms must be accompanied by microeconomic improvements." After the disastrous collapse of the Massachusetts economy in the late 1980s -- I will not make a comment about which governors were governing Massachusetts when that happened -- but in the late 1980s the Massachusetts economy tanked and we came close, were 49th in the country in terms of our credit rating, 49 out of 50 states. We were at the edge of bankruptcy. When Paul Celucci was elected governor, he appointed Michael Porter Chairman of the New Council of Economic Policy Advisors. The Commonwealth. Massachusetts followed his theories to rebuild the Massachusetts economy. When I left -- I had nothing to do with this - as the Secretary of Administration and Finance who years ago under Paul Celucci, my good friend who is now Ambassador to Canada, the economy had the fourth most powerful economy in the world. In the world. There is a connection between good microeconomic policy and economic performance. Our strategy, therefore, is focused on microeconomic factors and competitiveness. Michael Porter says we must support the creation of an entrepreneurial class, establish MBA programs at local universities to train these people, reduce the time it takes to create new business, eliminate corruption, and create an environment that will attract foreign and domestic capital. The next chapter is on people's health. The issue is very important because the health of the work force does affect a society and its work force. Increasingly the developing world, according to the report, can be divided into two groups. One consists of those countries with rising life expectancies, expanding work forces, and decreasing deaths from communicable disease. Latin America, with the exception of Haiti, is in that category and much of Asia. These countries are expected to achieve international objectives for their basic health indicators by 2020. The other, smaller group includes badly managed or conflict-driven economies that have seen little or no growth in recent years. The author, Jared Diamond, I don't know if you've ever read his books, if you have time to read it, it's called "Guns, Germs and Steel: the Fate of Human Society." This is a very interesting book. I'm not sure I agreed with all of it, but it is very dense, a lot of research in it. And he's argued that "high infant mortality rate and short adult life span as resulting from preventable disease can paralyze economies in multiple ways." And there is evidence historically on that. He says it does "sap the productivity of workers who are often sick and die young." I've been to many villages in Africa where literally every farmer is sick during the harvest because of malaria. I went to the [inaudible] Province, I'll never forget it in 1991. The harvest was being eaten by the birds. It was a very good harvest and I asked why. And literally the entire village, we thought was completely empty, but it wasn't. People were so sick from malaria, they were in their huts, and they could not get out of bed. So it does affect productivity.  Our Foreign Aid in the National Interest suggests our strategy will have to adapt to the needs of both of these categories of countries. For the first group, the report recommends, I quote, "Global health programs can begin to shift their focus from women of reproductive age and children under five, which is the focus of our program now, to entire families, including income earners and elderly dependents. Better health outcomes will require better management of chronic diseases from prevention to treatment. Sustainable progress in health will require health care institutions with both capital and recurrent financing. Systems will need to respond to rising expectations for health care and the dominance of private flows in its funding." I have to tell you an amusing story. I won't tell you which development official I'm speaking of. It's a friend of mine, she's on the left and we get along well even though we don't agree on many issues. She was criticizing one of my speeches saying Andrew keeps trying to talk about the private sector in health and her staff, her career staff said, "Well, why don't you look at the statistics from where people get their health care?" Fifty percent of health care in Africa, according to our report, is from the private sector. Seventy percent of health care in India, the second most populous country in the world, is from the private sector. If you don't deal with the private sector, you can't deal in many countries with the health care system. It is not all run by the Ministry of Health. For the second group in our report we recommend, "Public health interventions will have to remain focused in these second group of countries that are not achieving these goals on reproductive and maternal and child health. By 2020 nearly 9 out of 10 people in this group will be African." And so we need to desegregate the health population we serve in our foreign aid programs in those countries that are making progress economically and in their health systems from those that are still current mode of operation in the area of health. This means we will need to consider a number of factors in our foreign assistance program. One is in our approach to the private sector, our approach to quality control and our view of chronic disease, because in the developed world infectious disease is not really an issue anymore. For most of us, you know, malaria is not something we worry about. Infectious disease has been basically done away with in most Western countries. It is non-communicable disease and noninfectious disease, cancer, heart disease, and Alzheimer’s, those kinds of diseases. It's a different category, and AID is not prepared to deal with those and needs to become prepared, if we wish to help those countries that are moving along in this category that I mentioned earlier. The next chapter is on mitigating conflict and providing humanitarian assistance. Early in the overview section of the National Security Strategy there was one sentence that almost jumps off the page for those of us who have the responsibility for dealing with failed and failing states. By the way, we created a new bureau in AID: it's my old bureau from the first Bush administration, the humanitarian bureau. We added in --it's very controversial and I admit I had a lot of people criticize it -- two functions: conflict management and democracy and governance. People said: "Why did you put democracy and governance in the bureau of AID that deals with failed and failing states?" I said: "Why do you think they're failing? They're failing because of a failure of governance." Unless you connect your programs in the governance area with weak state structures, we're going to have more state failures. This is what the President's National Security Strategy says, and I quote: "America is now threatened less by conquering states than we are by failing ones." There are two dozen failed states in the world. One of them, a principal one is Afghanistan. Somalia hasn't had a government in ten years. Guess where al Qaeda sent some of its troops at one point? Where was bin Laden and al Qaeda before he went to Afghanistan? Another failed state. Sudan. The notion that failed states have nothing to do with the national security of the United States is nonsense. There's a direct connect. The President says it, clearly, in his National Security Strategy. I don't know why more people don't read the Strategy. We deal with failing and failed states all the time, and we have now an integrated strategy with all of the offices within this bureau -- it's called Democracy, Conflict, Humanitarian Assistance. It also deals with human rights issues, and the person who is the assistant administrator of that is Roger Winter, one of the great figures in the human rights community, and the NGO community, who was the head of the U.S. Committee for Refugees. He was instrumental in helping make the Sudan civil war one of the most important foreign policy issues to domestic constituencies in the United States. He is now the head of the bureau and is viewed as one of the premier figures who understands failed and failing states. The end of the Cold War was hardly the end of history. Our reports notes, in the 1990's there were 111 armed conflicts in 74 locations. By the end of the year 2000, internal conflict and repression had caused 14 million refugees and 25 million internally displaced persons. The danger of these failed and failing states is very, very clear, and September 11th taught us that we need to pay attention to this. "Conflict," our report says, "is complex. It does not happen just because people are unhappy or greedy, because a country has resources to sustain it or because state and social institutions are weak or perverse." It does not create failed states, necessarily. "It happens when causes, at multiple levels, come together and reinforce one another." It is the product of deep grievances, of violent political and economic competition, irresponsible -- in fact predatory -- leadership and weak and unaccountable institutions. Thus interventions to contain conflict cannot focus on a single dimension of it, such as ethnic tension or political exclusion. I was just in Nigeria and I met a Muslim imam from an old family, and a evangelical pastor who formed an NGO supported by DFAD, the British aid agency, who had formed a reconciliation NGO to go into the middle of highly-charged religious conflicts in Nigeria, which is one of the most serious political problems they have. They actually have now developed a template of interventions that will stop violence. I was there when 200 people were killed, and I was interviewing these two men who were being supported by the AID mission, and they got a call because this riot was beginning and they had to leave the meeting. They have teams of Muslims and Christians that go in. Actually, they have a set of interventions at work. BBC has done a full hour program on them. So we do know that these programs can work. There's a program in the Fergana Valley in Central Asia where we have a conflict management program. This jurisdiction was created by Stalin, deliberately, deliberately to cause tension in the area, which, when the countries were liberated, became Uzbekistan, Tajikistan, and Turkmenistan. This valley is one of the tinder kegs of Central Asia. The program is now working effectively to calm some of the frictions that exist there. even small-scale violence. We don't want an overt civil war going on there. This is a very important part of what we do. Ahmed Rashid, who wrote the book, "Taliban," has done some extensive writing on our program in the Fergana Valley which I'm very proud of. The report also talks about natural disasters. I'm not going to go into that because we're running out of time here, but I do want to mention, finally, the final chapter, or the final two chapters. There's a chapter on humanitarian assistance, one of my areas of writing. There are seven rules we propose in terms of dealing with conflicts and our humanitarian efforts. One is to do no harm, and our program, in the future, is going to make sure that integrated in our programs is an understanding of the political and economic reality in these countries, so that we do not exacerbate in any of these conditions. Second, the President has said food aid will not be used as a weapon of diplomacy, but we also will not let food aid be used for political purposes by people like Robert Mugabe, for example, or anyone else. We have to be able to ensure accountability in governance. No famine has ever occurred in a democracy, as Amartya Sen has written. More emphasis must be placed on protecting vulnerable people from human rights abuses and atrocities. We have to develop a more rigorous conflict prevention and conflict management program. Thirdly, we need to harmonize our efforts with other branches of government, in our diplomacy and our military force, so that our disaster response programs are consistent with what other agencies are doing in the U.S. Government. Finally, let me talk about our, the last chapter on full measure of foreign assistance. When AID was founded in 1961, ODA, or official development assistance, accounted for 70 percent of all U.S. capital flows to the developing world. Seventy percent. While our foreign assistance budget has remained relatively constant over the years, ODA now accounts for only 18 percent of the money that goes from the United States to developing countries. Other government assistance accounts for 22 percent. The rest, a full 60 percent, comes from private and nonprofit foundations, businesses, colleges and universities, non-governmental organizations, PVOs, religious organizations, individuals, and remittances that the ethnic diasporas in the United States send back to their relatives. In the year 2000, ODA was almost $10 billion. But when all other contributions were factored in, our authors calculated that the amount of money the America people devoted to foreign assistance that year was $56 billion. $56 billion. Private aid given is largely an America phenomenon, American and a couple of other countries in Eastern Europe. The Spanish came to be one of the leaders in private donations, too. They have a similar, very robust private sector, probably because of the power of the Catholic Church in Spain and their religious traditions. But they have a much more robust private foreign aid program than the public programs. We try to adjust the definition of ODA based on a Spanish initiative, not an American initiative, and I have to say -- I won't mention which countries in Europe -- but in these countries there is no private giving. All the foreign aid programs in these countries, they're democratic governments, but they have a tradition of a more social democratic model, and all of their giving goes through government ODA, and so it's inconceivable to these other countries that this private foreign assistance exists. Carol points out in her research that American colleges and universities provide $1.2 billion in private scholarships. We don't even have all the data, either. I would be intrigued, if we could get more. I suspect it's even higher than that. There's a large number of foreign students in the United States who do not get scholarships, and they are not wealthy enough to pay the tuition themselves. They're given private scholarships by private endowments at private universities. $1.2 billion is larger than the total aid program of half of the smaller European democracies. Now anyone who says those scholarships are a loan--I brought this up at an international meeting, they said, well, you can't count that as foreign aid. I said well, why not? It's a transfer of technology through capacity building. Don't you think scholarships are a good thing? Are you saying that only a public sector scholarship is good and private sector scholarships don't count, or are bad somehow? And it was very difficult for them to make the argument, obviously, because training is a central part of what development assistance is about. The Millennium Challenge Account will add $5 billion to ODA in the United States but it still will not match the challenges we face in the international development arena. So the President and Secretary Powell have introduced the notion of a much clearer and much more intimate connection between what we do in AID and what we do in the private sector, called the Global Development Alliance. We've signed 75 public/private partnerships and generated $130 million in private sector funds to go along with $130 million of our money. We don't give them the money, they don't give us the money. We spend the money together. Let me conclude with four quick principles that are essential to this report. One, in the future, there are going to be many more of these public/private partnerships between the Government and the private sector. Two, there is no substitute for powerful local leadership, and three, encouraging political and economic reform must drive our thinking at all levels. Fourth, investing in people pays off. It's the foundation upon which long-term development and economic growth are built. I believe that as we begin to reorient our foreign assistance program toward this vision, that it will become more powerful, more effective and can encourage those countries that are in fact trying to change the direction of those societies. Thank you very much and I'd be glad to take some questions. |
||||||||||||||||||||||||||||||
 |
||||
|
