DATE=03/12/02

TYPE=CORRESPONDENT REPORT

TITLE=AID DEBATE (L-O)

NUMBER=2-287474

BYLINE=BARRY WOOD

DATELINE=WASHINGTON

INTERNET=YES

CONTENT=

VOICED AT:

INTRO: A European proposal that rich nations double their foreign assistance budgets is sure to be debated next week in Monterey, Mexico at a United Nations conference on financing development. V-O-A's Barry Wood reports, a top U-S official suggests a different strategy needs to be developed.

TEXT: U-S Under-secretary of State Alan Larsen told foreign journalists that it is impossible to determine the exact financial needs of developing countries.

///LARSEN ACT///

How much ammunition is enough to win the war on poverty? I think the honest answer is no one knows. I don't know. I don't think the World Bank knows. I've read their study. I know what they're trying to do and I support what they're trying to do. And that is to get more attention and more commitment to development.

///END ACT///

The World Bank is calling for foreign assistance budgets to be increased by 40 to 60 billion dollars annually. Mr. Larsen, a career diplomat who has worked for two decades on development issues, said other components are equally important to boosting living standards.

///LARSEN ACT///

We need to use all the ammunition we've got. And that ammunition includes development assistance, to be sure. But it includes remittances. It includes foreign investment. It includes export earnings. And it includes domestic savings of developing countries. And all of these need to be brought together.

///END ACT///

Also speaking in Washington, United Nations Development Program Administrator Mark Malloch Brown said the Monterey conference (March 18-22) to be attended by several dozen world leaders will launch a new partnership for development. Mr. Malloch Brown urged European aid advocates to stop complaining about what they regard as an unacceptably low level of United States development assistance. He said the Americans are correct in suggesting that the costs of some U-S led military operations could be counted as foreign aid.

///MALLOCH BROWN ACT///

If you look at Afghanistan, the ability of people like myself to now be active in a reconstruction effort there was entirely contingent on the coalition campaign led by the U-S to free the country of the Taliban and al Qaida. So there is an artificiality in which Europe and the rest of the world focus on the U-S foreign aid account without giving any credit to the major role the U-S plays in critical international defense issues, which are as important to a poor Afghan as they are to an American.

///END ACT///

Mr. Malloch Brown said it is equally counter-productive to suggest that all rich countries should give an amount equal to three quarters of one percent of their gross domestic product as aid.

///MALLOCH BROWN ACT///

Even in a favored (U-S) program like the Defense Department, it would be a perverse way round to say it should be some fixed percentage of American G-D-P and then secondly say how many warships that would buy you. You obviously start with what you need and then work back to cost it.

///END ACT///

The Europeans and Americans are engaged in a bitter dispute about funding the World Bank's program for the poorest countries. The Europeans oppose an American plan to turn low interest loans into grants. Instead, they favor an outright increase in aid programs. (signed)

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