U.S. to Direct Dwindling Aid to Fewer Nations

The Clinton administration Tuesday announced a radical transformation in the way the United States will use its dwindling funds to help impoverished and developing countries overseas.

Assailed by Congress for spending too much and by industrial allies for spending too little, the administration promised to cut its foreign aid missions abroad, concentrate on helping fewer countries and work more closely with private organizations engaged in economic development.

The administration also promised to help countries free themselves of foreign aid and generate wealth by participating in world markets.

Under the revamped program, administration officials, facing the reality of a hostile Congress, would make clear that the United States regards itself no longer as a major donor of funds but instead as a vital source of know-how and a force for development.

In the view of some private Americans involved in development, however, no amount of redirection could make up for the budget reductions.

“These cuts mean that more families will suffer the effects of poverty and more children will die,” said Kay Bunting, a Washington official of CARE, one of America’s best-known private humanitarian organizations.

Others were far more enthusiastic about the new policies.

Under the plan, the number of countries helped would drop from 120 in 1993 to 75 in the year 2000. Only a few of these would enjoy programs fully staffed by U.S. government aid officials; some programs would have no staffs at all.

Congress has appropriated $5.7 billion for the Agency for International Development (AID) this fiscal year, a cut of 15% from the 1995 appropriation. U.S. sources said, however, that the transformation probably would not affect the sensitive programs of countries such as Israel and Egypt that eat up a huge proportion of the annual foreign aid budget.

The announcement of the new policies was made by Brian Atwood, administrator of AID, an agency that has been targeted for abolition by one of the main foes of foreign assistance, Sen. Jesse Helms (R-N.C.), chairman of the Senate Foreign Relations Committee.

“I am convinced that one day the political realities will change,” Atwood told a meeting of officials of private development organizations, “but we cannot get from here to there by wishing. The Cold War consensus in support of adequate funding for international programs no longer exists.”

The administration’s blueprint for American foreign assistance is unlikely to satisfy European governments such as France that often berate the United States for spending too little on foreign aid. According to the Paris-based Organization for Economic Cooperation and Development, the United States spends a smaller percentage of its gross national product on foreign aid than any other industrial country.

“Atwood is capturing a future,” said Lou Mitchell, the chief executive of PACT, a private group that encourages the growth of voluntary organizations overseas. “We’ve been living with despair. Brian offered us a future, and the future is filled with optimism and hope. . . . He is living with the cuts and looking to the future.”

Among the changes promised by Atwood when he unveiled the administration’s new look in foreign aid:

* Pilot missions in seven countries (the Philippines, Bangladesh, Sri Lanka, Haiti, Kenya, Guinea and Zambia) where U.S. officials will work with private American organizations and with local business people, politicians and volunteer organizations. “We have a new grasp of the importance of attacking development challenges at the grass roots, by strengthening local capacity,” Atwood said.

* An Office of Emerging Markets that would provide technical assistance to countries, especially in Latin America and Asia, that are almost ready to attract private foreign investment and enter world markets with their exports. The U.S. aid agency would be able to scale back its programs in these countries or close them altogether.

* A group of 20 countries, which Atwood did not name, that would have development programs planned by U.S. officials but carried out by private American organizations on contract. Atwood described this as “franchising.”