U.S. Aid Spent on Foreign Products, Sen. Boren Says

The U.S. Agency for International Development has spent $55 million since 1984 to buy trucks made in Japan and Germany, tractors made in Brazil and other foreign-produced goods to help establish private firms in Mozambique, Sen. David L. Boren (D-Okla.) disclosed Wednesday.

Only 19% of American assistance to the African nation in the last eight years ultimately was used to buy U.S.-made goods, Boren added, saying at a news conference: “In effect, American tax dollars were spent to help establish Japanese truck dealerships overseas. It’s just beyond belief.”

The agency said in a statement that its policy is to ensure that AID funds are used for purchases of U.S. goods and services. But Mozambique was an unusual case. A Marxist country in the throes of war and famine, it had no private sector in 1984, and no American companies then were in a position to provide trucks, tractors, spare parts and other goods, the agency said.

Further, the program that provided U.S. dollars to Mozambican merchants to purchase farm vehicles, seed, fertilizer and tools was suspended last summer, the agency said. Now, a U.S. truck and tractor manufacturer--Navistar, formerly International Harvester--is in line to provide the equipment to the African nation under AID auspices.

Boren’s criticism marks the second time in recent weeks that AID, which is responsible for administering U.S. economic aid programs in developing countries, has come under fire. Labor unions and other critics have reported that some AID programs aimed at boosting Third World economies--particularly in Central America--have encouraged American firms to move their operations abroad to take advantage of low-wage workers.

Boren called for an investigation by the General Accounting Office, saying he wants to ensure that the practice of using U.S. aid to buy foreign goods is not repeated. He also expressed concern that some of the products might have been purchased in South Africa in violation of a U.S. economic embargo.

U.S. taxpayers, he said, paid $16 million to buy foreign-made trucks for Mozambique--53% from Japan and none from the United States.

The AID money was also used to buy items such as $3.5 million worth of tractors made in Brazil and $5.2 million in spare parts from Germany, Japan, England, Brazil and Belgium, Boren said.

“The (Mozambique) program, designed to spur development of the local private sector, has instead created new markets for Japanese, German, Brazilian and British trucks, tractors and spare parts,” Boren concluded.

He said he and other senators have tried to stop AID’s policy of providing cash to foreign countries and have urged that credits be used only to buy U.S. products.