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Danes, Unlike Most in U.S., Favor Their Foreign Aid

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TIMES STAFF WRITER

What to do if you’re already the world’s largest foreign aid donor per capita but have thousands of foreign dignitaries and television cameras in town and want to make a big international splash?

Denmark answered that question last week when it announced it will cancel the debts of five very poor countries. The announcement came during the biggest assembly of world leaders and their entourages in U.N. history, the World Summit for Social Development, meeting in Copenhagen.

Angola, Ghana, Nicaragua, Zimbabwe and Bolivia will have their debts to Denmark erased, while Egypt’s debt will be cut in half.

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“The Danish initiative is perhaps not large in relation to the total debt burden of the developing countries,” said Denmark’s minister for development cooperation, Poul Nielson. “But I hope that (it) will inspire other donor countries, and not the least their representatives in the World Bank and other international financial institutions.”

It’s a long shot, of course, to expect the Danish example to set off a chain reaction in the industrialized world, which has long looked at debt forgiveness with extreme aversion. The question of debt cancellation was extensively debated at the anti-poverty gathering last week, but no new ground was broken.

Still, Denmark’s unilateral move did win considerable international favor for the summit’s small, squeaky-clean host country. And it offers a timely lesson for the United States: Despite the current anti-aid rumblings in Washington, the whole world hasn’t soured on the idea of pumping more money into developing nations.

On the contrary. Denmark stands as proof that there are places in the industrialized world where even rock-ribbed conservatives are pleased that their governments have big foreign aid programs--and even want them increased. One recent poll, by Denmark’s Vilstrup Research organization, showed that 62% of Danes are happy their country gives as much as it does and that 15% wish it would give more.

Even among far-right voters, the pollsters found, Danish foreign assistance is favored by 42%.

“It’s a political issue” whether Denmark gives enough, said John Sewell, president of the Overseas Development Council, a Washington-based policy organization. “The Danes are extremely proud of their level.”

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The mood is markedly different in the United States, where since November’s elections the Republican-controlled Congress has shown itself eager to make drastic cuts in foreign aid. Jesse Helms (R-N.C.), chairman of the Senate Foreign Relations Committee, has set the tone for the debate, saying he doesn’t want American tax dollars poured down “foreign rat holes.”

Recent specific American proposals have included eliminating the vast and well-entrenched U.S. Agency for International Development and the venerable Peace Corps, tying aid to Russia to that country’s arms-control and economic policies, and cutting assistance to all countries outside the Middle East and Europe by 20%.

And outside Washington, Americans seem to agree that some sort of foreign aid cuts are in order, although poll after poll shows that U.S. citizens have wildly inflated notions about how much their government actually gives. One Harris Poll showed that they think 20% of the federal budget is sent overseas and wish the figure was only 5%.

In reality, the United States spends a little less than 1% of its federal budget on foreign aid, and only 0.015% of its gross domestic product.

Here in Denmark, by contrast, the government devotes 1.02% of its gross domestic product to foreign assistance--the highest percentage in the world and substantially more than the 0.7% of national product that international anti-poverty groups have been promoting as a global standard since the 1960s.

Within the European Union, Denmark has been pushing to increase the amount of aid the EU gives to 70 poor countries even as other members, such as Britain, try to cut it.

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And while many countries have recently dug into their anti-poverty budgets to finance unrelated emergency items such as peacekeeping and refugee assistance, Denmark recently said it will keep separate accounts for long-term poverty eradication and short-term emergency relief--and dedicated an additional 0.5% to the short-term pot.

Why does the Danish public respond so enthusiastically to all this spending? Why isn’t there an anti-rat-hole movement here too? Part of the answer is that many Danes harbor a sincere wish to do good in the world and to increase their country’s international visibility and prestige.

But another explanation for the Danish enthusiasm for foreign aid stems from the very different ways in which Europeans and Americans view such spending.

The United States, for its part, spent the 40 years of the Cold War linking foreign aid with security concerns and East-West politics, as did Moscow. Countries whose friendliness was seen as useful to U.S. security interests--not necessarily the poorest of the poor countries, or the most democratic--got the lion’s share of the aid money.

Thus, a country like Pakistan could receive ample U.S. resources in the wake of the Soviet invasion of Afghanistan. Pakistan was governed by the late Gen. Zia ul-Haq at the time and could hardly be described as a showcase for democratic principles--but it stood firmly behind the anti-Soviet guerrillas in Afghanistan and was virtually the only firm friend the United States had in the region.

The result of such security-based giving is a high level of cynicism in the United States. Foreign aid critics on both the left and the right can find plenty of cases where U.S. money was used to help prop up corrupt regimes or was diverted to people who weren’t really poor. Now that the Cold War is over and the United States’ traditional argument for foreign aid is gone, such critics have been easily able to fill the policy vacuum.

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“The absence of bipolarity has been tougher for the United States to adapt to than I ever could have foreseen,” said the Overseas Development Council’s Sewell, who attended the anti-poverty summit as a special adviser to U.N. Secretary General Boutros Boutros-Ghali. “The (Clinton) Administration hasn’t come to grips yet with this issue.”

In Europe, by contrast, Cold War considerations never played a very big role in foreign aid decision-making. What has traditionally mattered here--aside from eradicating poverty--has been promoting trade. Thus, in Denmark--its waters not muddied by a Cold War legacy--voters and business interests alike can clearly see how valuable foreign aid is, both to foreigners and to themselves.

One recent report on Danish aid to Central and Eastern Europe found, for instance, that Danish companies participating in the reconstruction of that crumbling region have made rates of return that Wall Street financiers can only dream of.

“The rate of return to Danish companies is estimated to be approximately 90%,” said the report, written by the Danish Parliament’s auditor general. That is, for every dollar in Danish aid to Central and Eastern Europe, Danish consultants, engineering concerns and others earned 90 cents.

A project to build a 200-mile power line in Tanzania shows how the Danish government ensures that foreign aid makes good business sense. The Danish aid agency, known by the acronym Danida, paid about $300,000 extra to buy Danish-made pylons rather than purchase cheaper ones from rival producer Italy.

“It is reasonable to pay extra in this particular case, because there is an interest in giving the Danish resource base a chance,” Nielson, the government minister, said when asked about this decision by Development Today, a newsletter that analyzes foreign aid in the Scandinavian countries.

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