A New Plan for Foreign Aid

A task force of the House Foreign Affairs Committee has proposed repeal of the Foreign Assistance Act of 1961 and enactment of a new International Economic Cooperation Act. It is a timely plan that the Bush Administration should heed, and promptly.

Foreign aid had declined in the last four years of the Reagan Administration, with most of the resources concentrated on the two primary clients, Israel and Egypt, and on military or military-related aid to nations perceived as having strategic interest. That leaves relatively little for development in the poor nations. The United States now gives less aid, measured as a percentage of the gross national product, than at any time in the history of its aid programs, and ranks on that scale at the bottom of the list of the industrialized donor nations. At the same time, Congress has imposed layer upon layer of regulation so that some 700 assorted reports to Congress are required each year, frustrating any attempt at flexibility.

The task force itself has urged four priorities: (1) Encouraging broad-based economic growth; (2) seeking environmental sustainability through improved environmental, natural resource and agricultural management; (3) alleviating poverty through human resource development aimed at improving the life of the poor and their capacity to become productive citizens, and (4) promoting political, social and economic pluralism.

In effect, Congress would be giving those who administer foreign aid more flexibility in development programs geared to clear and realistic objectives, while congressional oversight--instead of the micromanagement of the present situation-- would be based on a broad review of results. Earmarking and conditionality written into existing law would be eased.

More than organization is at stake. There is a need for a better focus of assistance, and there is a desperate need for more money. Rep. Lee H. Hamilton (D-Ind.), co-chairman of the task force, pointed to the weaknesses of the present program in an address to the Overseas Development Council board in Washington last December: “My own view is that our current program suffers from too great a concentration on the Middle East, too much emphasis on military sales, too many resources going to the bilateral ESF (Economic Support Fund) program and not enough to the multilateral institutions, and too great an emphasis on immediate political objectives.”

The need for change in aid is also reflected in a new study by the Agency for International Development, which implements the foreign assistance act. The title of the report, “Development and the National Interest,” serves to remind the nation that foreign aid, while an important test of the traditional American generosity, also serves national security goals and has its own rich economic reward.

That sense of interdependence is articulated in the House task force report: “The United States is and will continue to be affected by development or lack of it in other countries. Environmental degradation, deforestation, depletion of the ozone layer, trade deficits, drugs, international debt, immigration, over-population, AIDS, Mediterranean fruit fly all affect the well-bring of the United States.”

The task force report is now in the hands of President Bush and Secretary of State James A. Baker III. It provides them with an opportunity to improve the effectiveness of American foreign aid, making better use of scarce federal dollars at a time of growing need for help.