USAID chief blasts hypocrisy of "globalisers"

by Jim Lobe

Washington, Jun 29 -- The outgoing head of the US Agency for International Development (USAID) gave voice to six years of frustration Tuesday, attacking what he saw as isolationism and hypocrisy in economic globalisation.

USAID Administrator J. Brian Atwood charged that the failure by the United States and other industrialised countries to back up their policy advice to poor countries with significant aid was contributing to a dangerous and growing gap between rich and poor.

He further charged that no neo-liberal nostrum used to justify the decline in development assistance - such as "trade, not aid" and the rising tide of foreign private investment - was reducing the gap.

"We are sending very mixed messages to our developing world partners," Atwood told the Overseas Development Council, a prominent think tank here, in what was billed as a "valedictory" speech.

"We say on the one hand we want them to embrace democratic, market economies and to enjoy the benefits of globalization and,

on the other hand, we withhold the assistance they need to help themselves prepare for this new world of opportunity.

"It is time to end the hypocrisy. Globalisation is thus far leaving out about two-thirds of the world. Either we should invest real money in the global model we are promoting, or we should begin to erect barriers to keep out these poor countries when their internal problems boil over," he declared.

Atwood, scheduled to leave his post July 9, has been considered one of the more effective USAID chiefs. Under his guidance, the agency had begun to shed its Cold War origins and embrace grassroots development.

Atwood had been nominated by President Bill Clinton to be Washington's ambassador to Brazil, but he withdrew himself last month after the far-right chairman of the Senate Foreign Relations Committee, Jesse Helms, indicated that he would block the nomination.

Helms was incensed over Atwood's dogged three-year campaign to prevent USAID from being absorbed into the State Department. Secretary of State Madeleine Albright last year went over Atwood to forge a deal with Helms.

In his remarks Tuesday, Atwood expressed regret at having "wasted so much time" in fighting for USAID's survival and went on to blame "administration colleagues who should have known better," as well as "non-passport-carrying members of the Class of 1996."

The latter was a reference to the crop of right-wing Republicans who were swept into Congress as a result of the 1996 elections which produced a Republican majority in both houses.

That majority has tried to enforce rigid and declining limits on all kinds of government spending, especially foreign aid, despite estimates that the government budget surplus will reach one trillion dollars over the next 15 years.

Under the Congressional caps, Washington provides only about $12.5 billion a year in foreign assistance, the lowest per capita amount for all industrialised nations.

"The politics of the budget process producing back-door isolationism," said Atwood, "and both branches of government are responsible for the current impasse. We cannot fulfil our international responsibilities with a 30% reduction from last year's inadequate appropriation."

The decline in aid was contributing to a growing global gap between rich and poor.

"The industrial world is getting shamelessly rich while most of the world's people are losing ground," he said, noting that for every dollar earned in the developing world, $65 are earned in the West.

"What will it take to wake up our political leaders? More failed states? More wars? More south-to-north migration? More transmissions of infectious disease? More terrorism?"

The West had rationalised its declining aid, he said, by asserting that poor countries wanted "trade, not aid."

However, "as time went on, and despite many well-publicized trade missions, we saw virtually no increase of trade with the poorest nations... (who) could not afford to buy anything."

The sharp increase in private capital flows to poor countries - also cited as a reason why increasing aid was unnecessary - had not benefited the poorest countries, he added. In any event, new investments have been overtaken by repayments of old loans since the outbreak of the Asian crisis two years ago.

While countries have adopted many of the reforms urged by the West, the rich-poor gap has not narrowed, he said.

The expansion of civil society, the increase in elected governments, the effort to provide more autonomy at the local level and the growth of entrepreneurship have all contributed to development progress, but they have not yet closed the poverty gap.

"Why? Because much of the change we are seeing is occurring within the previous ruling classes of these societies," said Atwood. "Some in the donor community seem content to nurture reform without equity," a strategy in which only elites benefit from democracy.

"Reform without equity investments may satisfy the IMF, but it cannot be a recipe for long-term stability," Atwood said.

The aid chief also attacked Washington's failure to pay its arrears to the UN as "unconscionable" and assailed administration attempts to work with Helms in tying the arrears payments to demands for UN reform.

"This is a shameful approach designed to appease people whose real goal is to kill the United Nations," he said, adding that "yes, reform is needed, but reform never succeeds when it is demanded at the point of a gun."

Despite Western demands that poor countries liberalise their trade regimes and adopt world environmental, labour and intellectual property standards, far too little is being done to help poor countries prepare for membership in the World Trade Organisation (WTO), including by the WTO itself.

Only the "vastly underfunded UN Conference on Trade and Development is trying to help," said Atwood. (IPS)

The above article by the Inter Press Service appeared in the South-North Development Monitor (SUNS).