Foreign Aid - Conclusion



While U.S. economic and military aid continued to grow modestly at the turn of the century, it comprised a far smaller percentage of total global assistance than was the case in the early Cold War. In the late 1940s, during the height of the Marshall Plan, the United States provided 60 percent of the globe's foreign aid; by 1993, its portion had dropped to 16 percent. But the United States has not been alone in decreasing its foreign contributions. In the 1990s, international development assistance declined by one-third in real terms, dropping from $61 billion to $52 billion between 1992 and 1998. Development assistance fell to an average of 0.24 percent of GDP in advanced countries by 1998. The most generous country was Norway, which gave away nearly 1 percent of its GNP; the United States, by contrast, donated only 0.1 percent, the smallest of all members of the Development Assistance Committee of the Organization for Economic Cooperation and Development. However, the United States did furnish the second-highest dollar figure in 1998, $8.8 billion; Japan topped the list with $10.6 billion.

Owing to such expenditures, by the mid-1990s Third World governments owed almost $2 trillion to Western loan agencies and governments. The African debt alone surpassed $230 billion. Beginning in 1996, the IMF and World Bank launched the Heavily Indebted Poor Countries Initiative (HIPC), an attempt to provide significant debt relief (up to 80 percent) based on a program of economic restructuring in the debtor nations. However, when few countries proved able to sustain the restructuring requirements, the funding institutions announced HIPC II in 1998, a bolder initiative that targeted $100 billion in debt reduction. By April 2001, $20 billion in debt had been cancelled for twenty-two countries, eighteen of which were in Africa. Over time the reductions were to bring associated total relief of $34 billion to these countries. When combined with other existing debt relief programs, reductions would amount to $55 billion, about a twothirds reduction. The millennial year also saw the launching of the international Jubilee 2000 coalition to lobby for further debt relief, using the biblical terminology of a jubilee year, based on ancient Israel's practice of forgiving debts on a fifty-year cycle. To the great enthusiasm of a crowd gathered for a Jubilee 2000 meeting in December of that year, British Chancellor Gordon Brown announced that Britain would cancel or "hold in trust" the debt payments of forty-one countries.

Debt-relief efforts were certainly expected to provide a break for poor nations. However, the fact remained that in 2000 the average person in the richest twenty countries earned thirty-seven times more annually than the typical resident of the poorest twenty nations, double the gap since 1960. Foreign aid, which USAID claims has been responsible for a great deal of the progress in lessening poverty, disease, and illiteracy, indeed may have stopped that gulf from being even wider. The reasons for a continuing gap defy easy explanation, and in general are tied both to rising growth rates in the First World, including a great expansion in private capital, as well as the continuing political, social, and economic problems of the developing world.

With the end of the Cold War's communist threat and a widening perception that foreign aid monies have been ineffective, wasted, or turned to corrupt purposes, America's foreign aid program underwent increasingly close scrutiny. As noted, humanitarian relief and child rescue emerged as the most notable new priorities in the 1990s, supplanting the development paradigm and its oftdiscredited large-scale projects. Moreover, a new ideological purpose arose to replace the old Cold War consensus. Upon entering office in January 2001, President George W. Bush cut off U.S. funding to all foreign NGOs with family planning programs that provide abortion or abortion counseling, restoring a policy that his father, George H. W. Bush, and Ronald Reagan also employed, dating back to 1984. At the same time, the longtime critic of foreign aid Jesse Helms called for channeling foreign aid funding directly to religious charities and NGOs, separate from the efforts of USAID's "cold, heartless bureaucrats," as he put it.

American economic and military aid programs, for all their shifting priorities, contested results, and popular distaste, have long outlived the span that their early adherents predicted, and at the turn of the twenty-first century it appeared likely that foreign aid would continue. One may hope that in the next half century, either owing to aid, investment, political reform, or some other set of factors, the developing world will have come much closer to reaching the results predicted by John F. Kennedy for the 1960s "decade of development."



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