Global Policy Forum

Monterrey

President Bush travels to Monterrey, Mexico tomorrow to attend the International Conference on Financing for Development, a global summit to discuss reducing world poverty. The two key issues highlighted by the rich donor countries are (1) how much aid should they provide poor countries, and (2) what they will require of poor countries in terms of better governance.

We welcome the momentum toward realistic levels of development assistance, and agree that governments of both rich and poor countries should be held accountable. But we are appalled that the priority concerns of African countries have been largely sidelined.

The cancellation of Africa's illegitimate foreign debts and the full funding of the UN Global AIDS Fund are the essential first steps for saving millions of lives lost each year in Africa to poverty and the closely linked health crisis. These issues should top the agenda.

In Monterrey, Bush will present a new U.S. initiative. On Thursday last week, the President announced a proposed increase in U.S. assistance to developing countries. But the proposal was so hastily prepared that the White House has already had to issue corrections.

As now described, the White House proposes an additional $10 billion in aid to developing countries over three years beginning in 2004. Named the Millennium Challenge Account, the initiative offers increased funding to countries who meet specific criteria including economic policies and governance conditions defined by Washington. Currently, most U.S. aid goes to two strategic allies in the Middle East, not to fight poverty in Africa.

The Bush initiative requires closer scrutiny. It reflects the White House's concern with criticism at Monterrey and from groups like ourselves, pointing out the fact that the richest country in human history is not contributing its fair share. But it does not show serious planning and commitment commensurate to the need.

The essence of the initiative is a bargain: countries deemed to be well behaved will be rewarded with greater U.S. funding. But the planned increase does not begin until 2004, and the requirement for greater resources to fight poverty is immediate. The promised increase is still well below what the U.S. can and should provide immediately to channels for effective delivery of resources that are available now.

It has been clearly demonstrated, for example, that public investment in health is effective in reducing poverty and promoting economic growth. It is correct to demand that resources are used effectively to achieve their intended purposes, but the monitoring mechanisms should be independent rather than unilaterally imposed by donors. These investments by rich countries are an obligation and moral responsibility, not an optional commitment.

The Bush proposal also fails to offer anything new on debt cancellation. The U.S. contribution to the Global AIDS Fund remains a meager pledge of $500 million over two years. Bush's announcement may reap short-term public relations dividends, but it fails to address today's most desperate needs.

Similarly the summit taking place this week in Monterrey has misplaced its priorities. The leaders of the world's richest countries promote free trade and foreign investment as the engines of development, supplemented by small increases in aid. But the principal obstacles to reducing poverty in Africa remain the hemorrhaging of some $14 billion in annual debt repayments to rich foreign creditors and the AIDS pandemic and the larger health crisis it represents.

This year is going to be critical in determining how the U.S. and other rich countries respond to Africa's economic challenges. In the aftermath of September 11th, they are being forced to address the widening divide between rich and poor countries. New international efforts, including those emerging from Monterrey, must be measured by how they respond to Africa's greatest immediate challenges: Debt and AIDS!

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